In a series of articles, The Australian newspaper has strongly criticised the new encyclical Laudato Si: On care for our common home by Pope Francis as being wrong about climate change and ignorant about economics. Editor-at-large, Paul Kelly, charged on 24 June that the Pope’s
language was “almost hysterical. Profound intellectual ignorance is dressed up as honouring God”.
“Page after page reveals Francis and his advisers as environmental populists and economic ideologues of a quasi-Marxist bent.” He wrote that the Pope has “delegitimised as immoral” pro-market economic forces. “Francis is blind to the liberating power of markets and technology”.
The Weekend Australian’s long editorial of 27-28 June reiterated these views, and dismissed the Pope’s warnings of catastrophic climate change.
These are very serious allegations, and if true would be very damaging for the Pope. Let me take up the Pope’s alleged attack on free-market principles and his critique of neoliberalism and inequality.
Pope Francis is not opposed to the free market in principle, but insists that it be well regulated to ensure social justice for all involved. He strongly supports socially responsible forms of capitalism which enhance social equity and cohesion. He has repeatedly appealed for investors and business people to help eradicate global hunger and severe poverty, to lift living standards and opportunity, and to restrain excessive consumption to secure an equitable and sustainable future.
It is not socially responsible forms of capitalism which are the target of the Pope’s criticism, but the neoliberal versions of economics that have dominated conservative circles. This critique is not new in Catholic social thinking.
John Paul II, in his 1991 encyclical Centesimus Annus, called for markets to be adequately regulated to ensure just outcomes for everyone involved. He warned that after the collapse of communism “a radical capitalist ideology could spread”, blindly entrusting societies to unregulated free-market forces. He rejected ‘neoliberal’ capitalism, saying in 1993 that the Church had “always distanced itself from capitalist ideology, holding it responsible for grave social injustices”.
In 1998, John Paul again attacked “a certain capitalist neoliberalism that subordinates the human person to blind market forces”, placing “intolerable burdens” on poor countries. Later, Benedict XVI warned against growing inequality and “ruinous exploitation of the planet”.
Neoliberal thinkers, on the other hand, have tried to reduce regulation and constraints on business as much as possible, in the belief that markets will almost automatically produce the best outcomes. Yet, as many economists attest, failures in neoliberal economics helped precipitate the global financial crisis and widening inequality in and between countries.
The Pope is speaking for millions of people in the developing world, protesting against the unfairness in economic outcomes, the despoliation of much of their resources and environment, and that their peoples will be hit hardest by the effects of global warming.
Francis was closely involved in writing this encyclical, and is convinced that reform of capitalism, global warming, and environmental sustainability are among the most urgent moral issues of our time.
In Buenos Aires, the future Pope witnessed Argentina’s economy collapse in 2001-02, following the largest financial default in history until then. Argentina had been a prosperous country, with only 4 percent of people living in poverty in 1990. By 2001, however, half the population fell below the poverty line. The global financial crisis was a replay of what Francis had seen in Argentina and elsewhere in Latin America.
In preparing his new encyclical, Francis consulted widely with leading economists and academics: the Pontifical Council for Justice & Peace which worked closely with specialists (including Joseph Stiglitz) in the Pontifical Academy of Social Sciences, until recently headed by the Harvard Law Professor Mary Ann Glendon, the Pontifical Academy of Sciences, with many Nobel laureates among its members, the Vatican Secretariat of State with its extensive diplomatic networks, and episcopal conferences around the world.
Francis met some of the leading specialists personally, including Joseph Stiglitz, a Nobel laureate who was senior vice-president and chief economist at the World Bank from 1997 to 2000, and numerous world leaders, including Barack Obama and the UN secretary-genera Ban Ki-moon, who have both welcomed the encyclical enthusiastically.
The Australian claims that “present debates about inequality within rich countries, while of academic interest, remain a footnote in the bigger story of falling global inequality and poverty.” That claim would surprise many economists, since it ignores the concentration of economic power in the global economy.
Stiglitz’s famous article in Vanity Fair in March 2011, Of the 1%, by the 1%, for the 1%, demonstrated the increasing extent of inequality, and sparked the Occupy Wall Street movement. Even in the United States, most of the wealth has gone to the top income groups, and the incomes of most people has hardly increased at all over recent decades. The top 1 percent had accumulated astronomical wealth, and with that came unprecedented political influence and power.
In his 2010 book Freefall Stiglitz deplored the “’moral deficit’ that has been exposed [by the] unrelenting pursuit of profits and elevation of the pursuit of self-interest”. (278) In The Price of Inequality (2012), he added that globalisation had unsurprisingly left many behind, given that largely it “has been managed by corporate and other special interests for their benefit”. (277).
Stiglitz is not alone in thinking that the crisis is fundamentally an ethical one. Many eminent economists think the problem is systemic in neoliberal economics, resulting in growing inequality and economic instability.
Kelly alleges that the encyclical is “flouting science”, and that this “has smashed Christianity from the time of Darwin”. Yet the overwhelming opinion among scientists and governments of most developed countries, along with China, strongly supports the Pope’s alarm about the dangers of climate change and growing inequality, endorsing his calls to conscience and responsibility.
Originally posted on http://www.eurekastreet.com.au.