Capitalism and Pope Francis

Capitalism is not moral because it works; it works because it is moral.
Capitalism and Pope Francis
By: George Noga – September 9, 2018

       As someone born Catholic, who attended parochial school and was observant much of his life, I take no pleasure in this posting. But Pope Francis is astoundingly callow and ignorant of even elementary economic concepts. Because 1.25 billion Roman Catholics (1 of every 6 souls on the planet) look to the Pope for enlightenment, it is important to set the record straight. Go to our website to see our related March 13, 2016 posting entitled “Pope Francis Enters the Twilight Zone”.

      Recently, the Pope (directly and via Vatican pronouncements) has criticized capitalism for, inter alia, consumerism, fossil fuels, environmental harm, materialism, lack of charity, speculation, seeking profit, promoting individualism, harming the poor, credit rationing, injustice, legal tax avoidance and credit default swaps. He advocates more government intervention, regulation, politics, taxes and central planning.

        If you missed it, read the September 2nd post on our website. It reports capitalism cutting extreme poverty in the world by 75% and lifting 1.2 billion humans out of the grip of poverty in the past 25 years. Every day, capitalism raises 135,000 more living, breathing people out of extreme poverty. Again thanks to capitalism, every metric of human well being is improving. Capitalism has produced a cornucopia of wealth and is the greatest human success story of all time for the common man. Yet strangely, there is never any mention of this economic miracle by Pope Francis – only vitriol.

         Capitalism is effective and also moral. A market economy is based on voluntary transactions in which both parties benefit; that’s why, upon concluding a transaction, both buyer and seller say “thank you”. Capitalism is peaceful and non-coercive; it channels human nature and self interest toward the common good. Capitalism is a positive sum game since both parties win in all transactions; there are no losers. The most powerful force on earth is a consumer armed with a free choice and even the biggest and most powerful corporation cannot make someone buy its product.

         There is space to address only a few of the Pope’s naif criticisms. Nations must be wealthy (capitalist) to be good environmental stewards; the worst degradations of all time took place under the commies and now are  being cleaned up by capitalists. The Vatican labels credit default swaps “economic cannibalism that profits from the misfortune of others“. Such swaps are merely insurance against defaults and make it easier for poor countries to borrow. The Pope condemned derivatives and speculation, both of which make markets more orderly and especially help third world agriculture.

          Pope Francis doesn’t grasp that squandering trillions for uncertain, infinitesimal climate benefits means the money cannot be spent now to alleviate suffering from unsafe water, malnutrition and lack of electricity and medicine. The last thing a poor child in an African slum needs is a solar panel. The Pope has called money “the dung of the devil” – no riposte needed. Capitalism doesn’t cause consumerism; it responds to it. If consumers demanded more bibles, the market would instantly supply them.

        The Pope is concerned for the poor but attacks the greatest anti-poverty engine in human history. Poor countries suffer due to insufficient capital; wealth must be created before it can be shared and private charity is much more effective than government redistribution. Pope Francis said building a wall is “unchristian”. Is the US unchristian for creating great wealth amidst liberty and becoming a magnet for emigrants?  Or, are socialist nations unchristian for creating great poverty, stifling liberty, fomenting civil unrest and making life so miserable that their people desperately flee their homes?

        Capitalism is not moral because it works; it works because it is moral. Capitalism has achieved, and continues to achieve, miracles that in earlier ages could only have been ascribed to the gods. However well-meaning Pope Francis may be, he fails to understand the morality of free markets and the immorality of statism and collectivism.

Our next post on September 16th addresses reality and denial in America.