Pope Francis doesn’t have to thank capitalism, a system that has done far more to alleviate poverty, his pet crusade, than the institution he leads. But he should at least stop demonizing it—not least because it enables the very activity that he cherishes most: charity.
For about the 6th time since assuming office eight months ago, the Pope last week offered a sweeping condemnation of “unfettered” capitalism, blaming its alleged obsession with the “golden calf” for perpetuating poverty, oppression, tyranny and much else.
The Pope claims that the “opinion” that “economic growth, encouraged by the free market, will inevitably succeed in bringing about greater justice and inclusiveness” has “never been confirmed by the facts.” (He obviously hasn’t been listening to Bono, which isn't entirely a bad thing.)
Therefore, governments “charged with the vigilance of the common good” must take strong steps to “exercise any form of control,” including redistributive taxes, to stop the march toward a society where “those excluded are no longer its underside or its fringes or its disenfranchised—they are no longer even part of it.
No doubt such purple prose about “exclusion” will gain him adoring fans among the left—notwithstanding the irony that he is speaking for an institution that excludes half of humanity—women—from the ranks of priesthood. But is capitalism the cause of poverty and is redistribution the cure?
No and Nyet.
Poverty is the default condition of humanity. It is the given. What needs explaining is wealth. And the greatest engine of wealth creation is the market. By raising productivity and lowering the price of goods, markets certainly help the rich, but they help the poor more. Capitalism’s most impressive achievement, Joseph Schumpeter noted, was not providing more silk stockings for the Queen, “but in bringing them within reach of factory girls.”
Indeed, far from promoting Social Darwinism that thrives on “the survival of the fittest, where the powerful feed upon the powerless,” as the Pope claimed, capitalism does the opposite: It fosters economic competition among producers so that consumers don't have to compete for scarce goods. In 1900, it took an average worker in the West about an hour to earn a half a gallon of milk. In 1930, half an hour. And today? Scarcely a few minutes.
If all the profits of the rich in America were handed over to workers, notes economic historian Deirdre McCloskey, the workers would only be 30 percent better off. “But in the last two centuries we’re 3,000 percent better off.”
But capitalism hasn’t only produced gains in the West. Between 1990 and 2010, the number of people in extreme poverty as a share of the total population in developing countries has been cut in half from 43 percent to 21 percent—a reduction of one billion people. Why? Because China and India jettisoned Big Government Socialism, the very thing the Pope advocates, and liberalized their economies.
It is no exaggeration to say that charity is a balm for poverty but capitalism is the cure—or in Bono’s evocative mixed metaphor capitalism’s “job creators and innovators are the key, and aid is just a bridge."
Indeed, without capitalism, even this balm would be in short supply or this bridge too short.
Capitalism puts more discretionary income in the pockets of people to devote to charitable pursuits. It is hardly a co-incidence that America donates over $300 billion annually toward charitable causes at home and abroad, the highest of any country on a per capita basis.
The church itself is a big beneficiary of this capitalist largesse with its U.S. wing alone contributing 60 percent to its overall global wealth. Some of this money comes from donations, but a big chunk comes, actually, from directly partaking in capitalism: The church is reportedly the largest landowner in Manhattan, the financial center of the global capitalism system, whose income puts undisclosed sums into its coffers.
So the new Pope needs to be careful not to bite the hand that feeds his institution and its work. Otherwise, neither he nor the poor in whose name he is speaking will have much to be thankful for.
A version of this column originally appeared in the Washington Examiner.