Pope Francis: economic system is failing billions of people

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Bruce Duncan

pope francis with media_opt
Pope Francis met with media Catholic Church of England & Wales flickr cc

A blog in the Economist accused Pope Francis of following the founder of the Soviet Union, Vladimir Lenin, in adopting an “ultra-radical line” on capitalism. The blog, “Francis, capitalism and war: the Pope’s divisions”, was reacting to the Pope’s interview on 9 June in the Spanish journal, La Vanguardia, in which he linked an earlier form of capitalism with imperialism as the main causes of the First World War.

In response the Pope said “the Communists have stolen the flag. The flag of the poor is Christian… The poor are at the centre of the gospel.” He pointed to the Beatitudes, and Matthew’s Last Judgment scene when God will judge us on how we treated the hungry, naked, the prisoners (in interview with the Italian daily paper, Il Messaggero, 30 June). “The communists say that all this is communist”. Yet Christians said this 20 centuries earlier. One could say to the communists: “you are Christians” in your concern for the poor.

Pope Francis’s views are arousing controversy, since few people seem to realise just how strongly Catholic social thinking is opposed to the neoliberal policies of the free-marketeers. In the La Vanguardia interview, Pope Francis was distressed that in some countries unemployment levels exceed 50 percent of workers. “That is an atrocity, discarding an entire generation to maintain an economic system” that was collapsing, and that depends on the armament industry to survive. He supported the possibilities of globalisation, but deplored the discarding of the young and the elderly. It was “incomprehensible” that so many people in the world are still hungry. He said “the world economic system is not good”, and “we have put money at the centre, the god of money”.

Others disputed the Pope’s critique of inequality. In the UK Telegraph (17 June), Allison Heath contested the views of Francis for his attack on economic inequalities and the “new tyranny” of the “absolute autonomy of markets”. “Francis’s wholesale condemnation of inequality is thus tantamount to a complete rejection of contemporary economic systems. It is not a call for reform… but a radical denunciation.” She rejected Francis’s criticism of “trickle-down economics” as a caricature of free-market arguments. Instead, she regarded capitalism as “the greatest alleviator of poverty and liberator of people ever discovered.”

According to Paul B Farrell in the Wall Street Journal (25 June), in 2014 there were 1645 billionaires, together worth $7 trillion. And the rich are getting richer. In the United States, the most wealthy 400 people own more productive capital than the bottom 150 million Americans. The Waltons of Walmart family have more than the net worth of the bottom 40 percent of Americans. By contrast, Australia has 39 billionaires, according to the BRW Rich 200 in July 2014.

Farrell’s suggestion is for Francis to support Bill Gates’s “Giving Pledge” for the super rich to give away half their fortunes in their lifetimes. So far 122 of the super rich have agreed to do so. But, alas, this would do nothing to challenge the causes of the perverse distribution of wealth in most capitalist economies.

As Archbishop of Buenos Aires, Bergoglio experienced the trauma of Argentina going into the biggest financial default in history in 2002, owing nearly $100 billion, much of it lost by mismanagement and war under earlier military regimes. The percentage of the population plunged into poverty rose to 50 percent, compared with seven percent in the 1970s. Millions lost their savings, a quarter of workers lost their jobs, and a quarter of the entire population was left destitute and hungry. While most of the debt was restructured, so-called “vulture funds” bought up some of the debt for a pittance and demanded that Argentina pay $1.33 billion, making a return of 1000 percent to these 1.6% of original bondholders. Despite a German court striking out similar “vulture fund” claims in 2013, astonishingly the US Supreme Court in June 2014 ordered the full debt be paid. Pope Francis is speaking against the background of such predatory forms of capitalism.

Francis and economic inequality

On 28 April the Pope tweeted that “Inequality is the root of social evil”, quoting from his exhortation, The Joy of the Gospel, #202. The message quickly drew 10,000 retweets, some critical. The director of the Acton Institute, Joe Carter, tweeted: “Seriously, though, what was up with that tweet by @pontifex? Has he traded the writings of Peter and Paul for Piketty?” Thomas Piketty’s massive tome, Capital in the Twenty-first Century, had recently appeared arguing that the capitalist economy was inherently geared to greatly increasing inequality.

Pope Francis considers extreme “unbridled consumerism combined with inequality” outrageous, and he fears that resentment by impoverished populations will fuel revolutions, as it has in the past.

Francis is not arguing for absolute equality, as some of his critics have claimed. The Catholic Church has never called for absolute equality, but it has argued for a just distribution of goods and services that ensure everyone the possibility of a reasonable life and standard of living. Perhaps “social equity” is a better translation for what the Pope has in mind, but this implies more than the notion of equality of opportunity, since outcomes matter as well.

Church social teaching is based on the claim to a just wage, enough to support one’s family and provide against sickness and old age. It has seen the duty of governments as being to foster the social and economic circumstances to make this possible. The Church has long supported private property, and encouraged personal initiative, enterprise and technological development to increase productivity and living standards. For centuries it has been in the forefront of hospitals and education, and is still one of the major health and education providers, especially in developing countries.

While sharply critical of the neoliberal ideology that exacerbated the global financial crisis, the Pope strongly supports economic policies that promote material and social uplift equitably. Pope Francis also supports business investments that are not geared solely to maximising profits but include in their planning social benefits for poorer groups.

Speaking at a conference in Rome on 16 June on “Impact Investing for the Poor”, he endorsed forms of responsible investment that would benefit local communities and the environment, as well as providing a reasonable profit. “Impact investors” try to bring their business skills to improve unjust situations of extreme poverty and social inequality, to create jobs, access training and increase agricultural productivity. Francis said ethics must play its role in finance so that markets truly serve all the people.

“It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences.”

Unfair economic system is failing billions of people

Another conference in Rome indicates what the forthcoming papal letter on the environment is likely to contain. Organised by the Pontifical Council for Justice and Peace, Catholic Relief Services and Mendoza College of Business in the University of Notre Dame, the “Investing for the Poor” conference on 17-18 June warned of the environmental consequences of bad economic policies. “Market forces alone, bereft of ethics and collective action, cannot solve the intertwined crises of poverty, exclusion, and the environment.” The failure of markets has been accompanied by the failure of institutions to ensure the common good. The growth in GDP has not been evenly shared, leaving “one billion people suffering from chronic hunger and another billion or so suffering from the hidden hunger of micronutrient deficiencies”.

The conference called for support for the Sustainable Development Goals to lift living standards, safeguard the environment, limit “the enormous power of transnational corporations” and ensure a fair distribution of wealth. “Extreme poverty can be ended through targeted investments in sustainable energy access, education, health, housing, social infrastructure and livelihoods for the poor”, and social inequalities addressed. The conference continued: “inequality, global injustice, and corruption are undermining our ethical values, personal dignity and human rights.”

The statement said that people of all religions could unite on these aspirations. “Our message is one of urgent warning, for the dangers of the Anthropocene are real and the injustice of globalization of indifference is serious. … A healthier, safer, more just, more prosperous, and more sustainable world is within reach.”

The Pope is clearly intent on pursuing his critique of the failures under our current global economic system, which advantage a minority while leaving millions in acute want.

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