Skip to comments.Pope Francis and the economists
Posted on 12/12/2013 8:00:51 AM PST by Academiadotorg
Editors Note: This article first appeared at Forbes.com and The Center for Vision & Values at Grove City College.
The recent economic statements by Pope Francis in his apostolic exhortation Evangelii Gaudium (EG) read as a call for a Third Way economic system ruled by experts and people of good will. Pope Francis writes, Growth in justice requires more than economic growth, while presupposing such growth: it requires decisions, programs, mechanisms and processes specifically geared to a better distribution of income, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality.
Pope Francis does not call for the socialization of the economic system and he does not point to any totalitarian country as a model. He states that this is not a social document and recommends the Compendium of the Social Doctrine of the Church as a more substantial guide for study and reflection. Nevertheless, as he did not include references to point 42 of John Paul IIs seminal encyclical Centessimus Annus, which legitimizes a free-enterprise system based on a rule of law respect of human dignity, and as Francis language sometimes seems hostile to free markets, many Christian economists, and policy pundits, are alarmed. Several have questioned if the Pope has been negatively influenced by the Peronist culture of Argentina. Peronism has, as one of its pillars, an economic system that falls between socialism and capitalism. Juan Domingo Peron was an early champion of the Third Way.
In EG, the Pope reaffirms that the Church does not have a monopoly on the interpretation of social realities or the proposal of solutions to contemporary problems. Within the hierarchy of the Church, many different economists are consulted. One economist who has a strong influence on the Vatican is Nobel Laureate Joseph Stiglitz, who some credit for dressing the Third Way economic system in academic garb.
There is no doubt, however, that Stiglitzs writings had an impact on the second most influential Argentine at the Vatican: Monsignor Marcelo Sánchez Sorondo, chancellor of the Pontifical Academy of Science. Stiglitz was appointed to the academy in 2003 and had been chairman of the Council of Economic Advisers under President Bill Clinton. John Allen, a respected Vatican observer, wrote in 2003 that Stiglitz, in that capacity, will help guide Vatican policy on global economic issues. Allen also added that Stiglitz was a personal favorite of Sánchez Sorondo. During a program sponsored by the Acton Institute, I had the privilege of sitting next to Sorondo and he told me that Stiglitz was indeed his favorite economist. John Allen further added: Stiglitz argues that the Clinton team made a mistake by accepting that the government should stay out of economic policy, leaving the finance sector to dictate the rules of the game. Stiglitz is thus likely to bolster what has already been the strong line of John Paul II, that public authorities must intervene in economic affairs to ensure that the benefits of globalization work for the common good.
Most of the statements on economics coming out of the Vatican that disturb free-market champions have been preceded by similar statements from noted economists. Such is the case with Francis apostolic exhortation. The paragraph that has garnered the most critical comments from market-oriented scholars is the one chiding the notion that economic growth will always trickle-down and inevitably succeed in bringing about greater justice and inclusiveness in the world. It is hard to find an economist who would argue that there are no exceptions to this theory. We can easily find high rates of growth coexisting with injustice and lack of inclusiveness. China and India are good examples.
The use of the word trickle-down, difficult to translate and usually used to denigrate the free economy, has opened the door for many discussions. It is likely that EG was originally written in Spanish. The Pope used the term derrame (spillover). Scottish philosopher and political economist Adam Smith wrote about the universal opulence which extends itself to the lowest ranks of the people in a well-governed society. When translated, derrame has been used for Smiths word extend. Smith never defended the absolute autonomy of the marketplace and financial speculation. He did not have an absolute trust in the unseen forces and the invisible hand of the market and he understood the importance of a well-governed society.
An incomplete litany of other laments and economic admonitions from the Pope include: a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system; accepting the dominion of money over ourselves and our societies; the dictatorship of an impersonal economy lacking a truly human purpose; the widespread corruption and self-serving tax evasion; and the invasion of ways of thinking and acting proper to cultures which are economically advanced but ethically debilitated.
Since the publication of EG, Catholic economists have been providing answers and criticisms to each of these points. We can note that empirical studies show that economic freedom is the best antidote to corruption. Also notable is the work of free-market scholars of great prestige, such as the late Wilhelm Roepke, who created blueprints for a Humane Economy.
The best contribution that free-market champions can make is to become outstanding and convincing economists so that influential leaders incorporate all economic truths into their moral admonitions. A good example to follow is that of Gary Becker, the Nobel Laureate from the Chicago School, who has been a member of the Pontifical Council of Science longer that Stiglitz. Beckers sound economic research and his respectful demeanor during meetings at the Vatican earned him that spot. The writings of Nobel Laureates from other schools of thought sympathetic to free enterprise, such as F.A. Hayek and James Buchanan from the Austrian and Public Choice schools, also deserve more attention from the Vatican.
Juan Carlos de Pablo, one of the best professors at the Pontifical Catholic University in Buenos Aires, where I studied and taught, told his classes that, if economists do not know economics, how can you blame the bishops for their economics? Pope Francis has acknowledged the role of the laity in many areas, not only economics. Those of us who are Roman Catholics and are convinced about the economic and moral superiority of the free economy have a duty to engage the Vatican in a fruitful and respectful dialogue.
Dr. Alejandro A. (Alex) Chafuen 84 is president of the Atlas Economic Research Foundation and a member of the board of advisors for The Center for Vision & Values at Grove City College. (The opinions expressed by the author are his own and do not necessarily reflect those of Grove City College, Atlas Economic Research Foundation, or their boards of trustees.)
Ping for later
His heart is in the right place—but his head is another story.
I know exactly where his head is and you would need a proctologist to remove it.
The Third Way has always been a call by communists shalom b'SHEM Yah'shua HaMashiach
to end Freedom and Liberty.
This is classic modernism. The trouble is there are no good, benevolent, wise, just humans to administer such a system. Only corrupt individuals whose evil hearts will swell with pride when given such power and the cure will always be worse than the disease. For all its faults, the amorality of the invisible hand is always more just than the political machinations of corrupted man.
Yep. He seems utterly blind to the fact that government officials NEVER really act out of altruism.
Makes little difference, as I concluded some time ago that “unfettered capitalism” (i.e. capitalism as we have known it since Reagan) is basically toast anyhow. At least for the remainder of my lifetime. Fewer and fewer people seem to support it, or are willing to stand-up for it.
Having a high-profile figure railing against it from the Vatican surely won’t help matters any.
That does it. He's a SOCIALIST.
I don't care how you try to parse or justify that one. He's done in my book. A leftist socialist totalitarian centralizer.
WHO gets to decide his "better distribution of income?" Precisely who is the elevated superior omniscient decider of "better"?
G-d would not elevate decisions above individuals to superior individuals. That's slavery and antithetical to the prime message of Exodus.
I reject this Pope.
I have little patience with the Catholic haters who spew their vile on this forum, but one made an excellent point once like a blind squirrel finding an acorn.
That point was that the Protestant Reformation saved the church from itself, and perhaps Christianity along with it.
The church had grown so corrupt by the early 16th century that government power and the perks which went along with it had grown more important than propagating the Gospel of Jesus Christ.
Good men like Martin Luther and evil men like Henry VIII played the role of ending the government power monopoly and forced the church to refocus on it core spiritual mission. Prior to that time, many Popes has become as corrupt as the church itself and, in fact, led it down the wrong path. After that time, competition forced the church to refocus on spiritual matters just in time to allow it to save southeastern Europe from another invasion by the Muslim hordes in the late 1600s.
“He’s a SOCIALIST.”
And you are an idiot.
He never said that income should be taken from the rich and given to the poor.
He is only saying that the poor should have the opportunity to have a better income.
The Pope is not an anarchist. He believes in the rule of law.
“requires decisions, programs, mechanisms and processes specifically geared to a better distribution of income”
“unfettered capitalism (i.e. capitalism as we have known it since Reagan)”
You are delusional. Unfettered capitalism is the free market operating without a government to regulate it. In the time since Reagan socialism has taken root in unprecedented ways.
And by the way, the Pope never used the expression “unfettered capitalism”. That came from a Huffington Post article describing what he wrote. He never used the word ‘capitalism’ at all.
Count me among the many, many Catholics who would agree with you that Martin Luther did the Catholic Church a HUGE favor.
Church leadership at that time was out of control, and certainly not acting Biblically.
FYI, at Christmastime you will often hear Away in a Manger played at Catholic Mass. Martin Luther is credited with being the author of that hymn. Perhaps a tacit admission by the Church that he had a point. Hearing that at Mass 50 or 60 years ago would have been unthinkable.
He's quacking like a socialist. Maybe he's not? The spiritual principal is help those who can't help them selves. Got it.
“Juan Domingo Peron was an early champion of the Third Way”
Juan Domingo Peron was a Nazi (literally) and a child molester. He married the mina (prostitute) Eva Duarte because the people who knew about his perverted lust for prepubescent girls were losing patience with him.
I pray that Pope Francis doesn't take today's Catholic Church in a similar direction.
“Church leadership at that time was out of control, and certainly not acting Biblically.”
Sort of like the American clergy today, no?
Every Pope for over 2000 years have said that Christians should care for the poor.
Maybe you are out of the loop.
This Pope hasn’t said anything different from his predecessors. He is not calling for higher taxes or greater government control. He is only offering moral guidance. People will ultimately decide what they want to do.
The full text is here:
You won’t find anything resembling socialism in there.
I think this would describe the majority of liberals.