Pope Francis’s Apostolic exhortation Evangelii Gaudium is a manifesto for evangelisation that challenges every reader at every point in the development of the narrative. In nearly all parts of the document the challenge leads to a positive response. The Holy Father has the reader thinking, ‘Is he talking to me?’ and then, like a good pastor, he prompts constructive responses in the reader’s mind.

The sections of the document on the economy are certainly challenging. However, they often seem rash, misdirected, negative and pessimistic. The use of language is also a surprise. Although there is talk of human dignity and the common good, much of his criticism of the market economy is couched in terms of inequality and inclusiveness.

As the Economist pointed out in its critique of the exhortation, totalitarian societies are ‘inclusive’, but they are also corrupt and do not promote the common good. On the other hand, the right of economic initiative for all in the context of a free economy is necessary for human flourishing, but it will not lead to equality of outcomes.

The Pope’s perspective on the economy and globalisation is common among Catholics in South America. He seems implicitly to equate the idea of a market economy with the exploitation of the poor, corruption and cronyism — that is the manifestation of so-called capitalism that people often see on that continent. But a teaching document should make proper distinctions between a market economy and ersatz versions.

If Pope Francis was intending to criticise the market economy as such, then he is mistaken. After all, a market economy simply involves free human interaction in the economic sphere. As the important Catholic teaching documents make clear, economic action needs to take place within an appropriate juridical framework and in a cultural climate conducive to ethical behaviour.

Taking one or two specific issues the Pope raises, it can be seen how he hits the wrong note. Finance and banking are criticised as part of a general attack on the supposed autonomy of markets free from the constraints of government. However, the banking system is wrapped up with government regulation and state guarantees that underwrite reckless risk-taking and unethical behaviour.

The Pope is desperately concerned about youth unemployment, but this is a phenomenon that rears its head most notably in countries where the market is not allowed to operate properly, such as Italy and Argentina, which the Pope, as it happens, often uses as examples. Competition in the economic sphere is not, as the Pope suggests, a process of the survival of the fittest but a process that leads to economic progress for all.

And what about inequality? Pope Francis says that the imbalance between rich and poor is growing exponentially as a result of ideologies which defend the absolute autonomy of the market. However, the most important news is that the peoples of previously poor nations are seeing dramatically higher living standards — they are catching up. Indeed, the speed of reduction in world poverty is without precedent and is a product of globalisation.

Nobody idolatrises the market in the way the Pope suggests. However, many people do sincerely believe that a free economy best serves the poor and is most compatible with our created human nature. A free economy under the rule of law with economic action cloaked in virtue is needed in Argentina, in Italy, in the countries that experienced the aborted Arab Spring. Socialist systems and corporatist systems serve rich and powerful interests at the expense of the poor. It is they that should be the target of the Pope’s proclamations.

This article was originally published in Standpoint.

Philip Booth 154x154

Academic and Research Director, IEA

Philip Booth is Academic and Research Director at the Institute of Economic Affairs and Professor of Finance, Public Policy and Ethics at St. Mary's University, Twickenham. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. Previously, Philip Booth worked for the Bank of England as an advisor on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs and on the editorial boards of various other academic journals. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.

1 thought on “Papal pessimist”

  1. Posted 28/12/2013 at 17:46 | Permalink

    ‘Holy Father’..nothing holy about him!

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