Pope Francis Misunderstands Markets, Squanders Moral Authority
“The fragility of world systems in the face of the pandemic has demonstrated that not everything can be resolved by market freedom,” proclaims Pope Francis in Fratelli Tutti, (Brothers All) a new encyclical that manages to sidestep a few realities.
Adam Smith (The Wealth of Nations), F. A. Hayek (The Road to Serfdom) and Milton Friedman (Capitalism and Freedom) did not say that everything can be resolved by market freedom. These economists only contended that voluntary economic exchange performs better than a command economy in which a political elite makes the economic decisions.
A command economy is the keystone of socialism, which has a poor record of promoting prosperity, liberty and the kind of brotherhood Pope Francis would like to see. If the pope has exemplary socialist countries in mind, he fails to name them.
In his encyclical, His Holiness seeks “an economy that favors productive diversity and business creativity.” In reality, the free-market economy does that very well. Men and women in business make their own decisions, and that results in a diversity of goods and services to the public. People worldwide flock to such societies but that is not what Pope Francis seems to have in mind.
A free market is necessary for a free society but not sufficient. A free society also needs a democratic political system that allows the people free choice to remove and replace those in power. That also calls for free speech and freedom of information, conditions in which the people can openly express political, economic, and religious ideas without fear of reprisal.
Religion advocates a moral authority beyond the government, which is why socialist regimes tend to be hostile to the church. When it comes to repressive regimes such as Cuba, Venezuela, and China, Pope Francis seems to come up short on criticism. On the other hand, he never hesitates to target the free market.
The pope contends the Covid-19 pandemic has proven that the “magic theories” of market capitalism have failed and that the world needs a new type of politics. He seems unaware that market capitalism provided for rapid production of ventilators, medications and work on a vaccine at incredible speed.
In China, with a command economy, Communist Party bosses locked people into apartments, and medical researchers suddenly disappeared. China also threatened to withhold medical supplies during the coronavirus crisis, something the United States, Britain, Italy and other free societies did not do. That contrast is missing in the pope’s encyclical, which is revealing.
The closest thing to a “magic theory” is the belief that a political elite can command the economy to achieve ever-increasing prosperity and happiness for all, with no ill effects whatsoever. The record shows otherwise.