- Friends of human well-being, market-based enterprise, and civil society have a grand opportunity to address widespread misconceptions about the economy, the environment, and charity, thanks to Pope Franciss call for a worldwide dialogue on these subjects. The opportunity for engagement applies not only to the worlds 1.3 billion Roman Catholics, but also to the pontiff himself, who many in the economics profession believe has significantly overestimated the ability of government intervention to foster prosperity, social advancement, and care for the planet. He has also failed to appreciate the crucial roles of free markets, property rights, and private charity.
- Allaying Pope Franciss worries, world poverty is not rising but falling. From 1988 to 2008, real incomes rose 15 percent for the incredibly poor at the fifth percentile of the worlds income distribution. Those living at the thirtieth to fiftieth percentiles saw their real income rise by more than 50 percent. The worldwide trend toward freer markets especially progress in China and Indiahas played a significant role in global poverty reduction.
- Contrary to Pope Franciss suggestion that capitalism is the economy of exclusion, private charitable giving is strongest when economic freedom and private-property rights are strong. Private charity is unleashed by applying natural-law, moral and economic principles and can be far more effective and efficient than the government redistribution favored by Pope Francis. The pontiffs concerns about the nature of capitalism therefore undercut his call to help the poor.
- Pope Francis links what he calls the environmental crisis to the market economy, but most environmental problems result from the tragedy of the commons created by governments failure to embrace and uphold a key pillar of the market economy that fosters free markets: private-property rights. Effective stewardship of what the pope calls our common home is unlikely if we appeal only to peoples virtue and not also to peoples material self-interest, which property rights and the market economy incentivize. By overlooking the importance of property rights, Pope Francis ignores a long tradition of Catholic teaching.
- Pope Francis does not merely offer caution regarding potential pitfalls of the market economy as his recent predecessors didsometimes he rings the alarm. Yet since the time of Adam Smith (and earlier, in the writings of the Late Scholastics at the School of Salamanca in the late Middle Ages), economists have explained how markets can channel the pursuit of self-interest into creating virtuous communities serving the common good. Pope Franciss lack of appreciation for this benevolent outcome is a clear blind spot.
- As Pope Francis and the Caring Society demonstrates, intellectual dialogue need not be discourteous (or, at the opposite end of the spectrum, fawning). It can be both respectful and criticalindeed, mutual respect and sensitivity to each sides context are essential foundations for constructive engagement. Contributors to this volume share a commitment to Judeo-Christian teachings and institutions, are conversant in papal history, and are mindful that it is first necessary for two parties to understand one another before they can begin to connect with and educate each other.
With his emphasis on service to the poor and care for the planet, Pope Francis (born Jorge Mario Bergoglio) commands the attention of not only the worlds 2.2 billion Christians, including 1.3 billion Roman Catholics, but also of people across the religious divide. In his 2015 encyclical, Laudato si, the pontiff called for an open dialogue about poverty and the destiny of what he calls our common home. This invitation is the inspiration for the Independent Institute book Pope Francis and the Caring Society.
Edited by economic historian Robert M. Whaples, Pope Francis and the Caring Society involves the work of eleven scholars well versed in the economics of poverty and the environment, conversant in Church doctrine and history, and attuned to the societal foundations of compassion, stewardship, and charity. While its tone is respectful, the book offers a vigorous engagement with the popes views when they disregard basic economic reasoning and research findings regarding the causes and cures of abject poverty, free markets, and environmental protection.
Pope Francis and the Caring Society offers something for people of any creed or worldview. Readers especially concerned about poverty, economic opportunity, and effective charity will gain a clearer understanding of the role of markets, property rights, and wealth creation, as well as a better grasp of the challenges ahead. Those who yearn for a healthier environment will learn what contemporary research says about the role of property rights in ensuring that future generations can enjoy the earths blessings.
Spanning the fields of economics, history, theology, and ethics, Pope Francis and the Caring Society shows that compassion without comprehension is folly, that objective analysis is a prerequisite of moral insight, and that a market economy is an essential ingredient for human flourishing. Rather than merely preaching in the public square, it builds a badly needed bridge over the gulf between contemporary scholarship and the head of the worlds most enduring and influential institution.
As the late Catholic writer Michael Novak states in his foreword to the book, Now with Pope Francis and the Caring Society we have the essential and enlightening book to equip us all to understand the crucial issues of economics, the environment, and charity in order to serve and uplift the lives of others.
Market Economies and Human Well-Being
A major gap between Pope Francis and many economistsone that leads many to conclude that the pontiff is antagonistic toward market economiesinvolves differences in their views of the causes and cures for poverty. Some of the divergence results from differences both in terminology and in purpose. To help ensure that economists and the Vatican get past the language barrier, Robert Whaples couches the popes statements in the language of economics.
Doing so, he shows, offers enormous value: it enables a clearer understanding of precisely where the pontiff and the economists differ, especially as they relate to the poor and the rich. Whapless translation reveals that many differences involve matters of economic fact and causation, and therefore can in principle be resolved if everyone considers the same lines of evidence. The clash involving conflicting values, on the other hand, may be far more difficult to cover.
To help build a bridge across the divide, Whaples creates a platform on which connecting links might be constructed: he discusses capitalisms strengths (as seen by its advocates) and weaknesses (as seen by those skeptics who agree that business can be a noble calling). The two sides can learn much by seeing the contrasting assumptions laid out in plain view.
Pope Francis isnt the first pope to express concerns about the potential ills of a market economy, explains Andrew M. Yuengert. However, unlike Popes Paul VI, John Paul II, Benedict XVI, and other predecessors, Pope Francis claims that the harmful potential has become a grim realityand will remain so unless market forces are brought under deliberate human (i.e., government) control. This hostility to markets, according to Yuengert, runs the risk of hindering constructive engagement with business leaders and market advocates. It can also stir cultural and political currents that lead to restrictions and predatory bureaucracy more likely to drown out economic progress than to encourage it.
How did Pope Francis come to hold views so critical of the free market? To shed light on the origins of those attitudes, Samuel Gregg examines the economic failures that have plagued the pontiffs country of birth, Argentina. Once among the richest countries of the Western Hemisphere, Argentina long ago fell victim to corruption and cronyism that have brought wealth-destroying inflation and economic stagnation. One early cause of those failuresthe populist collectivism and legacy of Juan Perónis, ironically, an ideological relative of the popes teología del pueblo (theology of the people).
Pope Franciss mistrust of the market economy does not, however, necessarily mean that free-market advocates can pin the label of socialist on the popes ideas. According to Gabriel Martinez, Pope Francis does not generally oppose increases in prosperity and economic liberty; he criticizes pro-market rhetoric when its used to justify indifference to the poor. Their plight, Martinez argues, is often caused or compounded by anti-market institutions embedded in the economies in which they live, especially where entrenched oligarchies use the state to hobble their would-be competitors and redistribute wealth from the public to those in power.
Societies marked by oligarchy, that is, rigged to help the privileged elites at the expense of everyone else, require more than merely the removal of anti-competitive rules and regulations. The reason, according to Martinez, is that not all forms of economic liberalization are equally good: some reforms can be so inadequately designed as to harm the interests of the poor, especially in the short term.
This raises the questions: Are the poor better off under a market economy? Is the invisible hand conducive to giving people a hand? Pope Franciss assessment is often negative. [U]nbridled capitalism, he has claimed, has taught the logic of profit at any cost, of giving in order to receive, of exploitation without looking at the person. Such a bleak assessment, however, is not an accurate description, according to Lawrence J. McQuillan and Hayeon Carol Park.
Contrary to the popes pronouncements, McQuillan and Park argue, capitalism and its core institutionsprivate-property rights and economic freedomare enablers of philanthropy, not its enemies. Economic freedom and the enforcement of property rights, they show, are positively correlated with charitable giving. In contrast, the government redistribution often advocated by Pope Francis is neither effective (it slows down wealth creation, the source of charity) nor at all charitable (its funded through coercive taxation rather than voluntary means).
Care for Our Common Home
Going beyond care for the poor, how well does a free-market system treat the environment? A. M. C. Waterman examines Pope Franciss analysis of the environmental crisis. Although the pope is on target in his admonition against worshipping the false god of a deified market, according to Waterman, his encyclical Laudato si is flawed, due in no small measure to its failure to acknowledge the good that markets do by channeling self-interest to serve the common good. This includes the incentives that free markets and private property create for promoting environmental stewardship.
It is hardly news that private-property rights, when they are tradable and enforced, prevent the rise of environmental problems created by the tragedy of the commons. Less known, Philip Booth explains, is that a growing body of research (the kind that won Elinor Ostrom the 2009 Nobel Memorial Prize in Economic Sciences) shows that property rights can be structured in numerous ways that empower communities to manage common-pool resources in a manner consistent with church doctrine. This is further reason why Pope Francis should not overlook the importance of property rights in Catholic social teaching.
The family, even more than the marketplace and the environment, is the foundation of human well-being. Pope Franciss family ethic rests, Allan C. Carlson explains, on a rejection of individualism, equity feminism, current gender theory, and consumerism. The pontiff s economic alternative to the contemporary, liberal social order involves communalism and a return in significant ways to a home economy featuring traditional gender roles.
Nevertheless, Carlson believes that Pope Francis overlooks a major source of stability for the traditional family. Francis gives too little attention to the importance of private property as a guarantor of family security and basic well-being, he writes.
Mutual Benefits of Respectful Dialogue
The tension between economics and religion is not an outcome inherent in the nature of either domain, Robert P. Murphy argues in the concluding chapter. The problem stems from a failure of both camps to fully recognize that (1) economic principles were first discovered from Christian teachings by Catholic scholars in the Middle Ages, and (2) the economics profession and the Catholic Church have different areas of expertise.
The role of the Church, Murphy explains, is to teach people the ends to pursue, while economists can offer guidance on the best means of achieving them. This division of labor enables both groups to benefit from what economists would call gains from trade. But such a dialogue requires that each side undertake a more thoughtful reading of the others perspective, Murphy writes. It is our fervent hope that the present collection of essays has contributed to such a foundation of mutual respect.