Pope Francis has shown himself to be a thoughtful, sincere and scholarly pontiff. So itâ€™s with respect, even some fear and trembling, that we have to say heâ€™s wrong about capitalism. The Holy Fatherâ€™s first apostolic exhortation, â€śEvangelii Gaudiumâ€ť (â€śThe Joy of the Gospelâ€ť), has much to say, including a passage condemning capitalism and greed.
â€śToday everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless,â€ť he wrote. â€śAs a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.â€ť
Thatâ€™s something of a straw man; Pope Francis equates the free market with social Darwinism, and mistakes correlation for causality. Yes, there are poor people. There are many who are truly marginalized. But where theyâ€™re marginalized the most is where the markets are the least free. The few remaining socialist economies (Cuba, Venezuela), food is rationed and hope is repressed.
History has shown that free markets are the best way to lift people from poverty. There are solid, even theological reasons for this. Greed is a sin, of course, but itâ€™s also a fact. Capitalism is the only economic system that recognizes this fact, and employs it to everyoneâ€™s benefit.
Thereâ€™s nothing selfish about capitalism, writes Daniel Hannan, a member of the European Parliament. â€śLike every economic model, it is a matrix within which individual actors can behave morally or immorally. But hereâ€™s the thing: No one has yet come up with a system that rewards decent behavior to the same extent.â€ť
As Adam Smith wrote in the 18th century, â€śIt is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.â€ť
The baker bakes bread because heâ€™s rewarded for the effort â€” and we have bread to eat. We all gain.
â€śUnder the various forms of corporatism tried by fascist and socialist regimes, by contrast, someone else â€” generally a state official â€” gets to allocate the goodies, guaranteeing favoritism and corruption,â€ť Hannan writes.
Adds economist Anthony Gregory of the Ludwig von Mises Institute, â€śIt is simply a fact that capitalism, even hampered by the state, has dragged most of the world out of the pitiful poverty that characterized all of human existence for millennia.â€ť
Capitalism, not its alternatives, has transformed the world dramatically.
â€śIt was industrialization that saved the common worker from the constant tedium of primitive agriculture,â€ť Gregory explains. â€śIt was the commodification of labor that doomed slavery, serfdom, and feudalism. Capitalism is the liberator of women and the benefactor of all children who enjoy time for study and play rather than endure uninterrupted toil on the farm.â€ť
Pope Francis is right to pray for more political leaders who empathize with the poor. We should, too. But that empathy must be followed with intelligent policies that have the right result â€” lifting more people out of poverty.
The lesson of history is that capitalism and free markets are the best way to achieve that.