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Pope Francis, His Predecessors, and the Market
Andrew M. Yuengert
"JUST AS THE COMMANDMENT 'Thou shalt not kill' sets a clear limit in order to safeguard the value of human life, today we also have to say 'thou shalt not' to an economy of exclusion and inequality. Such an economy kills." "Once more, we need to reject a magical conception of the market, which would suggest that problems can be solved simply by an increase in the profits of companies or individuals." You do not have to look hard to find passages like these two in the latest pope's written exhortations. He expresses a conviction that markets are instruments of an inequality that "kills" and that those who defend markets have an unreasonable, "magical conception" of markets' power to solve social problems. It certainly seems that Pope Francis, compared to his predecessors, is a harsher critic of markets and is friendlier to statists and socialists who would suppress markets in the name of some state-defined common good.
It is difficult, however, to separate his opinions from how those opinions are reported by a left-leaning press eager to recruit and promote a hoped-for ally to progressive causes. To be sure, Pope Francis's large personality, his pastoral experience among the poorest of the poor, and his Argentine roots shine through in his writings. He is less cautious in his language and less careful in his distinctions. He speaks passionately in simple and direct phrases.
Despite his open and unguarded style, however, Pope Francis is still a pope, writing from within a centuries-old social tradition. Even in the area of ecology, he can cite "Green Pope" Benedict XVI and John Paul II, from whom he gets the term ecological conversion. The most natural interpretation of Francis's contributions to the Catholic Church's teaching and analysis is through what Benedict XVI called the hermeneutics of continuity (or reform), not the hermeneutics of rupture. To do Francis full justice, we must place his economic analysis in the context of his predecessors, whose documents he generously quotes and in whose footsteps he conscientiously treads.
Sam Gregg has respectfully but forcefully criticized Pope Francis's economic worldview. My primary purpose in this article is not to critique the pope's economics but to highlight the continuities and discontinuities of his economic opinions with those of his predecessors. Modern Catholic social teaching covers a vast range of topics stretching back 125 years. I cannot hope to keep the comparison of Francis with his predecessors manageable except by sharply limiting the range of the comparison. At this point in his papacy, Francis has almost entirely confined his economic analysis to global poverty and the ecological crisis. Although ecological questions have become increasingly important in Catholic thought, concerns about poverty in the developing world have a richer pedigree and provide a richer backdrop for a comparison.
The poverty of the developing world took center stage with John XXIII's encyclical Mater et magistra and the Pastoral Constitution Gaudium et spes, developed at the Second Vatican Council, in which Paul VI gave it his full attention. I begin with Paul VI's analysis and trace papal teaching on development through John Paul II and Benedict XVI to Francis. As a basis of comparison, from the writings of each of these popes I formulate answers to the following questions:
1. What are the causes of the deep poverty in the developing world?
2. What is true development, and where do material goods fit in?
3. What role should markets play in development?
4. How should markets be regulated so that they can promote full human development?
When Francis is read in light of his predecessors' analysis and concerns, his own survey of the economic terrain can be seen to follow in paths they laid. Paul VI, John Paul II, and Benedict XVI developed an account of development in which markets can serve as an outlet for creative human agency in promoting the efficient provision of goods. Markets cannot, however, be left to function without the constraints of a healthy culture and a government able to place markets at the service of the common good. All three popes warned that markets should not be allowed to function autonomously, and, if unchecked, markets might undermine both culture and politics. Where his predecessors warned of the danger that markets might overrun culture and political control, Francis asserts that they have in fact done so. As a result, he pays less attention to the role of markets in a healthy social order and more attention to their bad effects in an unhealthy social order.
Paul VI and the New Developing Nations
Pope Paul VI wrote two documents commonly listed in the canon of Catholic social teaching: Populorum progressio (1967) and Octogesima adveniens (1971). In the post–World War II era, the "social question" expanded worldwide to include relations between wealthy Western countries and the extremely poor countries of the Third World, many of which were newly independent. Paul VI called for a coordinated effort to help impoverished nations, which would require contributions from the wealthy nations.
The Causes of Poverty. Paul VI suggested a range of causes for the "flagrant inequalities ... in the economic, cultural, and political development of the nations." He blamed primarily the lack of economic and political institutions capable of supporting economic growth and integration into the world economy. He was reluctant to blame the colonial era for all of the problems of the developing world; there were real abuses but also some institutional benefits. He did not mention corruption directly, although one might interpret his call for better institutions as an oblique reference to it. He placed greater blame on fluctuations of prices in commodities and agricultural export markets. The pope also expressed a growing concern about "new economic powers emerging," multinational corporations. These new entities were difficult to regulate by national governments; they were "not subject to control from the point of view of the common good." Their unregulated power was leading to a "new and abusive form of economic domination on the social, cultural, and even political level."
True Development and the Economy's Role in It. Paul VI was careful to distinguish mere economic growth, as important as it is to human well-being, from what he called "a full-bodied humanism" capable of satisfying spiritual as well as material needs. He expressed concern that economic prosperity is a "two-edged sword: ... necessary if man is to grow as a human being; yet it can also enslave him, if he comes to regard it as the supreme good and cannot look beyond it." Along with economic growth should come "social progress"; developing nations should seek to "reduce inequities, eliminate discrimination, free men from the bonds of servitude, and thus give them the capacity, in the sphere of temporal realities, to improve their lot, to further their moral growth and to develop their spiritual endowments." Paul VI highlighted the crucial role of both equality and participation in social progress.
Markets and Development. Paul VI enunciated an already-established principle in Catholic social teaching: that market exchange (including free trade) can be just and beneficial when it is between equally situated agents but results in unjust and unequal outcomes when the parties to exchange are unequal inpower: "The principle of free trade ... can work when both parties are about equal economically; in such cases it stimulates progress and rewards effort. ... But the case is quite different when the nations involved are far from equal. Market prices that are freely agreed upon can turn out to be most unfair." This judgment — that market exchange can lead to injustice when one of the parties is more vulnerable than the other — leads to a respect for markets tempered by an insistence that they cannot be free of government regulation and that the poor need support beyond access to markets. This qualified respect for markets is closely related to Catholic teaching on private property. Just as markets should not be fully autonomous of government, private property is not a principle of personal autonomy but a practical tool by which access to the goods of the earth (and the creative initiative those goods make possible) can be guaranteed to all.
Because the church rejects the autonomy of markets, along with any right to private property free from social obligation, it also firmly rejects the ideology of liberalism, which promotes a reliance on "profit as the chief spur to economic progress, free competition as the guiding norm of economics, and private ownership of the means of production as an absolute right, having no limits nor concomitant social obligations." Paul VI did not attribute the abuses of capitalism to business enterprise itself but to the ideological promotion of a reliance on markets and an ideological hostility to market regulation.
Similarly, the pope qualified his support for technological advances by insisting that they also must serve human development. When technology becomes an end and not a means, we ask of it, "What can we do?" not "What should we do?" Without guidance from ethics, technology can become a barrier to development: "The reign of technology — technocracy, as it is called — can cause as much harm to the world of tomorrow as liberalism did to the world of yesteryear. Economics and technology are meaningless if they do not benefit man, for it is he they are to serve." This concern about technocracy would be taken up by Paul VI's successors.
Markets and Government. Because markets can promote or impede full "social progress," market competition must be evaluated in light of and placed at the service of the common good, which is the sphere of politics. At the international level, this placement will require some sort of world political and regulatory authority to make sure the globalizing economy serves the full human good. Paul was somewhat vague about what form regulation should take. Like many of his contemporaries in the 1960s, he was confident that once the world committed itself to development, the details of the appropriate regulation could be left to technical experts (working closely with ethical and religious leaders).
Urgency and Optimism. Rereading this pope's social teaching five decades after his papacy, one is struck by the sense of urgency that pervades his discussion of the challenges facing poor countries: "We must make haste. Too many people are suffering. While some make progress, others stand still or move backwards; and the gap between them is widening." "The matter is urgent, for on it depends the future of world civilization." The suffering of the poor in developing nations, when other countries had generated such prosperity, was intolerable.
The grievances of ongoing poverty and powerlessness presented both dangers to world peace as well as moral challenges. If they were not addressed, the pope feared that revolution and violence would make the poor nations vulnerable to revolutionary ideology, which would lead not to real reform but to "new injustices, introduce new inequities and bring new disasters," merely "a change of masters." His concern was an echo of a common theme going back to the beginnings of modern Catholic social teaching: that failure to reform the economy would tempt the poor to believe what Leo XIII called "the lying promises" of socialist revolutionaries, which "will only one day bring forth evils worse than the present."
At the same time that Paul VI expressed a sense of urgency, he expressed confidence that problems of extreme poverty would yield to coordinated programs crafted by experts motivated by solidarity. His optimism would give way to disappointment in the writings of future popes, including Francis.
John Paul II and the Persistence of World Poverty
John Paul II continued the Catholic analysis of poverty in the developing world in three social encyclicals: Laborem exercens (1981), Sollicitudo rei socialis (1987), and Centesimus annus (1991). In spite of the urgency that saturated Paul VI's pleas and after two decades of development initiatives, John Paul II noted an air of disappointment and frustration in his time: "the hopes for development, at that time so lively, today appear very far from being realized." He contrasted the continuing poverty in many countries with "superdevelopment" in Western economies, driven by empty consumeristic desires.
Twenty years after Paul VI, John Paul II had to reiterate the intolerability of the ongoing problem. However convincing the excuses and explanations, and however difficult the ongoing challenges, the continuing delay was unacceptable, "a betrayal of humanity's legitimate expectations ... a harbinger of unforeseeable consequences ... a real desertion of a moral obligation." Against this backdrop, he reexamined the persistence of underdevelopment. In doing so, he formulated a richer description of a healthy social order and of the place of markets, culture, and politics in that order.
The Causes of Poverty. John Paul II was clear-eyed about the responsibilities of the developing countries themselves for their predicament. Those holding economic and social power in developing nations often serve their own interests. As a result, there are few competent and trustworthy people to govern and administer the state. These elites set up political institutions that violate the rights of their citizens, especially the rights of free initiative so crucial for a vibrant, innovative society.
That being said, John Paul did not exonerate the developed nations of responsibility for developing nations' poverty. Developing-country debt, undertaken on easy terms but poorly invested, resulted in crippling debt-service burdens. The Cold War had made the developing nations a battleground in the service of the competition between the United States and the Soviet Union. Finally, a lack of equal access to the international trade system, particularly in agricultural products, harmed developing-country economies.
True Development and the Economy's Role in It. John Paul II situated the economic sector within a larger model of society in which the cultural and political sectors are crucial. In the arena of politics, the common good is formulated and pursued through governing structures; in the cultural arena, answers to the deeper questions of meaning and purpose are formulated; in the economic arena, goods are exchanged and material needs are met in an efficient way. A thriving society requires that all three of these sectors be healthy, each able to shape and constrain the others.
The most important human goods are produced and nurtured in the culture; although the economic and political sectors have their own goods (even spiritual goods), their primary purpose is to support community and culture. Life in healthy human societies is lived in a network of interlocking communities, including (most importantly) the family. These "networks of solidarity" generate many important human goods (love and support, growth in virtue and trust, the goods of cooperation) and are critical arenas in which people live out their freedom in community. They are also important preconditions for robust and sustainable economic growth — John Paul II attributed the economic failure of communism in eastern Europe to the destruction of these networks.
The pope's diagnosis of the evil of consumerism located its ultimate source in the culture. A materialistic secular culture provides neither sources of meaning nor spiritual goods. Without any "other horizon than the multiplication or continual replacement of the things already owned with others still better," the free market and the goods it delivers will move into the spiritual vacuum to provide an alluring but unsatisfying alternative. An abundance of goods leads to a "throw-away culture" that fails to liberate the spirit.
The Free Market and Development. John Paul II expressed a genuine appreciation of the benefits of the free market, but his support for it should not be overstated; he did not represent a rupture with the tradition of previous popes. He did not abandon the Catholic tradition's insistence that the market cannot be left to operate autonomously, with the state doing no more than guaranteeing property rights and enforcing contracts. He accepted both the promise and the limits of the market: "It would appear that ... the free market is the most efficient instrument for utilizing resources and effectively responding to needs. ... But there are many human needs which find no place on the market."
Excerpted from "Pope Francis and the Caring Society"
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Table of Contents
Foreword Michael Novak,
Introduction: The Economics of Pope Francis Robert M. Whaples,
1 Pope Francis, His Predecessors, and the Market Andrew M. Yuengert,
2 Understanding Pope Francis: Argentina, Economic Failure, and the Teología del Pueblo Samuel Gregg,
3 Uneven Playing Fields: Markets and Oligarchy Gabriel X. Martinez,
4 Pope Francis, Capitalism, and Private Charitable Giving Lawrence J. McQuillan and Hayeon Carol Park,
5 Pope Francis on the Environmental Crisis A. M. C. Waterman,
6 Property Rights and Conservation: The Missing Theme of Laudato si' Philip Booth,
7 The Family Economics of Pope Francis Allan C. Carlson,
Conclusion Robert P. Murphy,
About the Editor and Contributors,