By Bruce Duncan, C.Ss.R.*
Pope Francis is arousing growing opposition from US conservatives for his criticism of failures in capitalist economics. “Pure Marxism” is the verdict of US conservative radio commentator, Rush Limbaugh, on the recent document of Pope Francis, The Joy of the Gospel.
Yet the Pope insists this “was not communism! This is pure Gospel!” He is calling for a more equitable distribution of wealth and opportunity. He opposes allowing the market alone to decide outcomes, and argues that free markets need to be better regulated to ensure fairer results.
When asked his response to accusations he was promoting Marxism, he replied: “The Marxist ideology is wrong. But I have met many Marxists in my life who are good people, so I don’t feel offended.” He said: “I was not, I repeat, speaking from a technical point of view but according to the Church’s social doctrine. This does not mean being a Marxist.”
As Alan Kohler noted in Business Spectator on 2 December, the Pope’s critique of economics could have been more nuanced. But Francis is speaking for hundreds of millions of people who are burning with outrage at the injustices inflicted on them by perverse economic developments.
Francis speaks out of his experience of repeated economic crises in Latin America. He has had extensive personal contact with people in the slums of Buenos Aires in Argentina, seeing the extreme hardships they suffer, including malnutrition and high infant mortality.
One of the prime causes of such social distress has been the failure to regulate and control the power of special interests, particularly those profiting from volatile flows of speculative capital and the neoliberal economic policies in western countries.
Argentina had the greatest debt default in history to that time in 2001-02. As banks closed, millions of people lost their savings, unemployment soared and half the population was forced back below the poverty line. The Pope now sees at first hand the economic trauma in Europe, with youth unemployment in some countries reaching nearly 60 percent.
Francis is of course acutely aware of political and economic problems in many countries, but it was systemic corruption in the citadels of western capitalism that precipitated the Global Financial Crisis, not the developing countries. He wrote that “A new tyranny is born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules.” (#56).
In his view, this ideology of neoliberalism downplays social and moral considerations, reducing economics to simplistic assumptions that the free market would almost automatically produce fair outcomes, with minimal regulation.
Yet in the United States and elsewhere the very rich have profited enormously at the expense of others. From the mid-1980s, massive wealth poured into the bank accounts of the richest one per cent of households, exacerbating inequality and depriving millions of a decent livelihood.
In the USA, as Kohler noted, 40 years ago the income of the top 1 per cent was 10 times the average of the rest. Now it is nearly 30 times, and is rising rapidly again. Yet the average income of the bottom 99 per cent has hardly increased in all that time.
Many leading economists have described how this ideology undermined the integrity of markets and economic stability, including Joseph Stiglitz, Amartya Sen, Robert Kuttner, Paul Krugman and Jeffrey Sachs. They decried the GFC as fundamentally a moral crisis, in which ideology and powerful special interests cut economics from its ethical foundations. Some of the economists above have been advising Vatican agencies, seeing the Church as an important ally in rescuing the value framework in economics.
Pope Francis’s attack on neoliberal ideology is not new. As Cardinal Bergoglio he played a major role in the bishops’ conference of Latin America in Brazil in May 2007, and was charged with writing the final 160-page document. Its key themes prefigured the Pope’s new document.
Nor are Francis’s economic views new in papal thinking. You can trace the critique of laissez-faire economics from Leo XIII’s Rerum Novarum in 1891 through to Pope Benedict’s 2009 encyclical, Caritas in Veritate.
No longer obscured by the threat from communism, this critique does not reject capitalism in principle; it recognises that forms of capitalism have lifted hundreds of millions out of severe poverty, but Francis insists the world should be doing this for all people since we now has the means to do so.
He calls on business circles and politicians also to help renew the moral framework to promote universal human wellbeing, most urgently for the hungry and impoverished.
Key elements for a just economy include
the right to work and a just wage so workers can support their families with decent living conditions and opportunities;
- the right to form unions or business associations to restore reasonable equity in workplace bargaining;
- support for private ownership, but with more equitable distribution so all share in ownership, including through co-operatives;
- astute regulation of the economy to ensure greater social equity and to resist manipulation by the rich or politically powerful;
- a strong legal and political system to protect human rights and provide essential social services.
According to Francis, the ‘trickle-down’ theories that were supposed to promote wellbeing for everyone have proved naïve because of the failure in moral underpinnings. “We can no longer trust in the unseen forces and the invisible hand of the market” (#204). “Money must serve, not rule!” (#28). He added later that his criticism of “trickle-down theories” referred to those that did nothing to help the poor.
“Pure Marxism”? Hardly.
*Dr Bruce Duncan lectures at Yarra Theological Union, is Director of the Yarra Institute for Religion and Social Policy within Melbourne’s University of Divinity and is one of the founders of Social Policy Connections.