Letter from Rome: Pope Francis’s Economic Examination of Conscience


Dear Friends of Istituto Acton,

It didn’t take long for commentators to jump all over Pope Francis’s remarks on the “idolatry of money” and the “dictatorship of the economy” and portray him as an anti-capitalist. The more stridently anti-market pundits seem to be positively giddy that the Pope is critical of the global economic system and wonder what those of us at the Acton Institute now have to say for ourselves.

Well, I don’t know Fr. Sirico’s emotional state, but I can say that I’ve tried to do more than simply react to the Pope’s remarks based on whether they conform to my opinions, and tried to understand what he wants to teach us, especially with his general emphasis on pastoral rather than political activity. (See my comments in a recent article for the National Catholic Register.) The role of Catholic social teaching is not to propose new economic or political systems but to “serve as leaven” for the ones we currently live in, to improve them from the inside. So when Pope Francis speaks about “savage capitalism,” we should realize that he is describing a social reality, even if it may not be the full picture of why people are suffering or directly lead to obvious reforms. I, for one, readily and willingly admit that money can and has become an idol for many people, rich and poor alike, and that the promotion of commerce may make the problem worse. That’s what happens when something that’s meant to be an instrument becomes an end in itself. The question is: What are we going to do about it?

What does it, in fact, mean to place “people before profits”? As a slogan, it sounds great; no one but an Ebenezer Scrooge or a Gordon Gekko would disagree. But does it mean a company should never lay off workers or close down operations? Those of us who live in Italy know that this is a recipe for stagnation because no one is going to start a new business if he knows that he can’t easily close it when it fails. Regardless of the motives of the businessman, it’s impossible to guarantee that everyone succeeds in whatever they do and does so in perpetuity; all we can do is give people a fighting chance to escape poverty and provide some kind of basic assistance if they can’t care for themselves. But beyond that, shouldn’t we realize that failure has a positive function in a free society, so long as people can learn from it and try to do better in their next venture? Isn’t this similar to how Catholics think of sin and redemption, i.e., we are not so depraved we need God to do everything for us; instead He calls free but wounded men and women to get up and try again? (For a good example of how Catholic teaching and economics can complement each other, see this Forbes piece “Everything I Know About Good Economic Policy I Learned From Mother Teresa”.)   

Asking these kinds of questions makes me realize that Pope Francis’s comments on economics are better understood as a kind of examination of conscience rather than a papal policy paper. As with everything he has done so far in his brief pontificate, the emphasis is on the pastoral rather than the political. It’s also worth remembering that his own experience in Argentina and the type of economic mismanagement he saw there are far from what free-market advocates would like to see. The rule of the rich and powerful is not a necessary feature of capitalism; in fact, it’s what capitalism fights against by promoting competition in order to raise the overall prosperity of society. Ever since Adam Smith, we’ve come to realize how society gains when individuals are allowed to follow their self-interest without intending to achieve the common good. But this was never meant to be a complete description of a good society, which is why Smith also developed his own Theory of Moral Sentiments as well as promoted universal public education and other measures designed to counteract the dehumanizing aspects brought on by the division of labor.

It seems to me that those who are gloating about what Pope Francis has said about markets think they’ve found an advocate for their preferred policies of higher taxes, more regulations, and an expanded role for government in the economy. And for all I know, the Pope may agree with them; like other Popes before him, he sees the State as the primary guarantor of the common good, even if we have now come to regard the public sector (e.g. the United States Department of Justice and the Internal Revenue Service) as just as corruptible as the private one. But that does not make support for these policies obligatory for all Catholics. The problem for those on the Catholic left is that their political allies are moving in an increasingly hostile direction against the Church on matters such as abortion, same-sex marriage and other issues that the Church has held to be non-negotiable. That doesn’t mean that all political parties of the right are automatically and perfectly aligned with Catholic social teaching, but it does present a more difficult problem for modern-day liberals more than for modern-day conservatives. While they’re not mutually exclusive, issues affecting unborn life and the sanctity of marriage between one man and one woman tend to take precedence over those concerning taxes and spending. If faithful Catholics think they can come up with an alternative to capitalism that better protects the unborn and the family while still providing the same kind of living standards, I’m all ears.

In the meantime, if the highly improbable happens and the Pope asks me, a former economist and ex-official of the Pontifical Council for Justice and Peace, for advice on what to say about the economy, I’d encourage him to consult the Pontifical Council for Justice and Peace’s The Vocation of the Business Leader, which presents the opportunities and challenges of the market economy in a more balanced and helpful way than blanket criticisms of the way things are. That’s because we live in a commercial society that makes all of us merchants in some sense. None of us is able to provide all that one needs to live individually and the interdependence we have on one another is a sign of the solidarity the Catholic tradition has always promoted. It may be for better or worse, but don’t you think this is preferable to the direct dependence we would have on a single master or lord in a more feudal or hierarchical (and thus even more unequal) society?

Our modern economic system was intended to raise the material living standards of all (though not equally) in such ways that would have been inconceivable to earlier societies, and for many if not most of those who’ve lived in such a system, the promise has been largely fulfilled. This general success does not and should not be an excuse to justify the injustices that still occur, such as the shoddy construction and utter lack of oversight at the collapsed garment factory in Bangladesh, or the corporatist, “crony capitalist” ways to limit competition and keep the poor poor. Nor should material prosperity be confused with spiritual fulfillment. But it’s a pious wish to think these problems will go away just because we want them to; the key is to find ways to limit the moral and spiritual damage that comes with a societal emphasis on commerce while still allowing us to work and trade freely. That’s why I read the Pope’s calls as a form of spiritual direction. Those of us who were not born into privilege and have to work for our daily bread need to find ways of expanding, not limiting, economic opportunities and we would appreciate hearing positive as well as negative appraisals from our Holy Father of what we are called to do.

Kishore Jayabalan

Director