If Pope Francis Wants to Help the Poor, He Should Embrace Capitalism

Markets and globalization have lifted billions out of poverty and lessened global inequality. So what's behind the pope's agenda?



He has been called the "slum pope" and "a pope for the poor." And indeed, it's true that Pope Francis, leader to 1.3 billion Roman Catholics, speaks often of those in need. He's described the amount of poverty and inequality in the world as "a scandal" and implored the Church to fight what he sees as a "culture of exclusion."

Yet even as he calls for greater concern for the marginalized, he broadly and cavalierly condemns the market-driven economic development that has lifted a billion people out of extreme poverty within the lifetime of the typical millennial. A lack of understanding of even basic economic concepts has led one of the most influential and beloved human beings on the planet to decry free enterprise, opine that private property rights must not be treated as "inviolable," hold up as the ideal "cooperatives of small producers" over "economies of scale," accuse the Western world of "scandalous level[s] of consumption," and assert that we need "to think of containing growth by setting some reasonable limits."

Given his vast influence, which extends far beyond practicing Catholics, this type of rhetoric is deeply troubling. It's impossible to know how much of an impact his words are having on concrete policy decisions—but it's implausible to deny that when he calls for regulating and constraining the free markets and economic growth that alleviate truly crushing poverty, the world is listening. As a libertarian who is also a devout Roman Catholic, I'm afraid as well that statements like these from Pope Francis reinforce the mistaken notion that libertarianism and religion are fundamentally incompatible.

There's no question that the pope at times seems downright hostile to much of what market-loving Catholics believe. In this summer's lauded-by-the-press environmental encyclical Laudato Si (from which the quotes in the second paragraph were drawn), Pope Francis wrote that people who trust the invisible hand suffer from the same mindset that leads to slavery and "the sexual exploitation of children." In Evangelii Gaudium, his 2013 apostolic exhortation, he chastised those who "continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world."

Even more frustratingly, he asserted that such a belief in free markets "has never been confirmed by the facts." Worse still, this year he stated in an interview: "I recognize that globalization has helped many people to lift themselves out of poverty, but it has condemned many other people to starve. It is true that in absolute terms the world's wealth has grown, but inequality and poverty have arisen." Globalization has caused poverty to "arise" and "condemned…many people to starve"?

A man Politico described as insisting "reality comes before theory" could not be more mistaken about the empirical truth of capitalism's role in our world. While income inequality within developed countries may be growing, the income gap between the First World and the rest of the world is decreasing fast. As the World Bank's Branko Milanovic has documented, we are in the midst of "the first decline in global inequality between world citizens since the Industrial Revolution." In 1960, notes the Cato Institute's Marian Tupy, the average America earned 11 times more than the average resident of Asia. Today, Americans make 4.8 times as much. "The narrowing of the income gap," Tupy found, "is a result of growing incomes in the rest of the world," not a decline in incomes in developed nations.

Markets: The Greatest Anti-Poverty Tool

"Entrepreneurial capitalism takes more people out of poverty than aid." With those 10 words, spoken to an audience at Georgetown University in 2013, philanthropist rock star Bono demonstrated a keener understanding of economic reality than the leader of global Catholicism.

The U2 frontman clearly has it right—and Pope Francis is wrong to suggest that poverty is growing, or that capitalism, free markets, and globalization are fueling the (non-existent) problem. In just two decades, extreme poverty has been reduced by more than 50 percent. "In 1990, almost half of the population in developing regions lived on less than $1.25 a day," reads a 2014 report from the United Nations. "This rate dropped to 22 per cent by 2010, reducing the number of people living in extreme poverty by 700 million."

How was this secular miracle achieved? The bulk of the answer is through economic development, as nascent markets began to take hold in large swaths of the world that were until recently desperately poor. A 2013 editorial from The Economist noted that the Millennium Development Goals "may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution."

The image of economic growth as an "engine" that drives progress and lifts people up is nothing novel, of course. In his book The Road to Freedom, American Enterprise Institute president Arthur Brooks discussed the transformation the U.S. underwent in the 1800s as a result of the Industrial Revolution:

Average prosperity in the 19th century began to rocket upwards…In 1850, life expectancy at birth in the United States was 38.3. By 2010, it was 78. The literacy rate in the United States rose from 80 percent in 1870 to 99 percent today. And real per capita GDP increased twenty-two-fold from 1820 to 1998. 

Poverty may never be fully a thing of the past. But if you're looking to increase global prosperity and decrease global hardship—something Christians as a rule are pretty concerned with and Pope Francis has expressed a particular interest in—history has shown us the way to do it: through industrialization and mass production, trade liberalization that lets goods and people flow across borders to serve each other better, and property rights that give everyone the ability to put their wealth to work for them. 

Ultimately, hindering the free market system is the surest way we know of to slow the pace of growth. And it's growth that leads to quality-of-life improvements not just here in America but also—especially—in the developing world. Pope Francis thinks free marketeers have been deluded by a "myth of unlimited material progress." If we have, it's because we've seen for ourselves the wonders that economic development and technological advancement can bring—from modern medicine stopping diseases that were the scourge of civilizations for centuries, to buildings more able to withstand natural disasters than at any time before, to ever-widening access to the air conditioning he wishes us to use less of. 

The pope is enamored of the idea of "small-scale food production systems … using a modest amount of land and producing less waste, be it in small agricultural parcels, in orchards and gardens, hunting and wild harvesting or local fishing." He does not seem to understand that it is mass-market production—including often-vilfiied biotech crops—that has freed millions of people from hunger by allowing us to reap far more food from far fewer resources. 

Productivity gains have been so great that humanity is on the brink of being able to release enormous tracts of farmland back to nature while feeding more people than ever before, according to researchers at the Program for the Human Environment at Rockefeller University. But resisting such advances out of skepticism or nostalgia can have devastating consequences. Take for example the story of Golden Rice, a genetically modified crop fortified with Vitamin A, whose introduction has been delayed since 2000 by government regulations. The grain has the potential to save up to 3 million poor people a year from going blind, and to alleviate Vitamin A deficiency—which compromises the immune system—in a quarter of a billion people a year. But unwarranted fears of "frankenfoods" have kept Golden Rice from widespread use in the developing world. In a study published last year in the journal Environment and Development Economics, scholars at Technische Universität München and the University of California, Berkeley estimated those delays resulted in the loss of 1.4 million life years over the past decade—and that was just in India

There are moments when Pope Francis seems to comprehend all this. In his encyclical, he quotes the now-sainted Pope John Paul II that "science and technology are wonderful products of a God-given human creativity," and asks, "How can we not feel gratitude and appreciation for this progress?" But a few short pages later he suggests that "a decrease in the pace of production and consumption" would yet be for the best. The lasting impression is not of a staunch anti-capitalist tirelessly advocating for a well-thought-out alternative to the present system, but of a man confused about how to achieve the things he wants. 

Nowhere is that confusion clearer than when Pope Francis discusses the environment, the overarching topic of Laudato Si. To preserve the earth he wants us to live simpler lives, as by the example he's set by eschewing the lavish trappings of the papacy. But he goes further than that, not just calling for individual restraint but also for government enforcement of what amounts to a reduction in overall economic activity. It does not seem to occur to him that this prescription might have adverse effects for the people still struggling to pull themselves out of desperate conditions and into the type of comfortable life he's asking the rest of us to forgo. For the poor, the problem isn't too much consumption, but too little wealth to afford the basic things the First World takes for granted. 

To Save the Planet, Empower More Consumers 

But perhaps, as the pope suggests, slower economic growth really is required if we are to save the planet? 

Here, too, Pope Francis suffers from a blindness to empirical reality. Over and over throughout Laudato Si, he writes about the importance of protecting "God's handiwork," of providing access to green spaces, of "learning to see and appreciate beauty," and of living in "harmony with creation." But over and over we've seen that the type of concern for the environment he's describing is a luxury good—that is, a thing people consume more of as they become richer. 

This should be surprising to no one. It's been more than 70 years since Abraham Maslow introduced the idea that human needs can be organized into a hierarchy—and that until a person has satisfied her basic requirements for food, shelter, safety, and the like, she won't be motivated to pursue higher-level needs, like friendship and "self-actualization." While Pope Francis is not wrong to suggest that clean air and beautiful vistas matter, he seems to overlook how much less they matter to the mother in Burundi who cannot feed her children than they do to the white-collar professional in the U.S. or his native Argentina. 

Again, Pope Francis comes maddeningly close to acknowledging this in his encyclical. "In some countries," he writes, "there are positive examples of environmental improvement: rivers, polluted for decades, have been cleaned up; native woodlands have been restored; landscapes have been beautified thanks to environmental renewal projects; beautiful buildings have been erected; advances have been made in the production of non-polluting energy…" But he ignores that it's in the most developed parts of the world where the push for sustainability and green energy, for living slow and eating local, for highway beautification and Earth Day and nearly every other conservation effort originate. 

The pope decries "the unruly growth of many cities, which have become unhealthy to live in." He does not seem to recognize that the cities that are true horrors to live in are the very places that would benefit most from robust economic activity. He condemns "the pollution produced by the companies which operate in less developed countries in ways they never could do at home." He does not consider that rich Americans and Europeans can afford to care about such things because we're not malnourished or dying of malaria. 

The World Health Organization (WHO) released data last year showing that the most air-polluted cities on the planet are all in India, Pakistan, and Iran. The lowest concentrations of particulate matter are meanwhile found in Iceland, Australia, and Canada. 

Both the economics and the history are clear: The more prosperous the developing world becomes, the more it too will be able to demand and achieve livable conditions. If your goal is to move the world to concern for the preservation of biodiversity, the answer is economic growth. If you want to increase access to clean water, the solution is to increase global wealth, and the consumer power that comes with it. Studies have shown that deforestation reverses when a country's annual GDP reaches about $3,000 per capita. While some environmental indicators do get worse during the early stages of industrialization, the widely accepted Environmental Kuznets Curve hypothesis convincingly argues that they quickly reverse themselves when national income grows beyond a certain threshold. If the pope wants a cleaner world, the best way to get there is by creating a richer world—something Pope Francis' own policy recommendations will make more difficult. 

Why This Matters to Me 

Watching someone a billion people look to for moral guidance—and who's been known to broker political agreements between world leaders—assume a critical posture toward capitalism is troubling to me as a believer in free markets. But it's not just that I fear the pope is weakening public support for the economic freedom that increases standards of living while minimizing poverty. It's also that when Pope Francis slanders the "magical" thinking of people who trust markets more than government, he's reinforcing the already widespread idea that libertarianism and religion aren't compatible. 

As a churchgoing, Christ-loving Catholic, I feel duty-bound to push back against that notion. It's not the case that Rome demands fidelity on matters of economic policy—or that everything a pope teaches must be accepted by the faithful as correct. Actually, the ability to make unerring declarations is narrowly circumscribed according to Church teachings. To quote directly from the Second Vatican Council's Lumen Gentium (emphasis mine), "The Roman Pontiff, head of the college of bishops, enjoys this infallibility in virtue of his office, when, as supreme pastor and teacher of all the faithful…he proclaims by a definitive act a doctrine pertaining to faith or morals." 

In practice, such "definitive acts," in which a pope makes clear he's teaching "from the chair" of Jesus, are almost vanishingly rare

"Catholic social teaching is not a detailed policy platform that all Catholics are obliged to sign on to," says Catholic University's Jay W. Richards. "It's an articulation of what I'd refer to as 'perennial principles.'…The encyclicals themselves frequently recognize that it falls to Catholic laymen and laywomen, in their respective roles, to take the principles and apply them in concrete situations." 

Even Pope Francis himself has noted that "neither the Pope nor the Church have a monopoly on the interpretation of social realities or the proposal of solutions to contemporary problems." The passage, from Evangelii Gaudium, continues: 

Here I can repeat the insightful observation of Pope Paul VI: "In the face of such widely varying situations, it is difficult for us to utter a unified message and to put forward a solution which has universal validity. This is not our ambition, nor is it our mission. It is up to the Christian communities to analyze with objectivity the situation which is proper to their own country. 

In other words, a faithful Catholic need not always agree with a sitting pope. The New York Times columnist Ross Douthat has repeatedly encouraged the faithful to consider that we might actually have a responsibility to resist the pope so as to help preserve the Church from error. The Catechism of the Catholic Church says that "in all he says and does, man is obliged to follow faithfully what he knows to be just and right"—that is, to listen to his "moral conscience." And so, although I respect Pope Francis' office, I feel no compunction in saying I think he needs to reassess his beliefs about the power of free markets to make the world a better place. 

The Freedom to Be Better Christians 

Responding to the pope's statements and writings on these topics is made harder by the fact that, like many non-libertarians, he often blurs the line between private vs. public action. Is he simply encouraging people to resist avarice and demonstrate more Christian charity at an individual level? Or is he condemning the capitalist system and suggesting it be replaced at a government level? We know the pope distrusts "the unregulated market." But does he think extensive laws are needed to constrict people's choices and redistribute their property? Or can moral actors, making ethical consumption decisions and voluntarily sharing what they have with the less fortunate, provide regulation enough? 

Much of what the pope writes seems to be concerned with micro-level, personal behavior. Consider this passage from Laudato Si: "We are speaking of an attitude of the heart…which accepts each moment as a gift from God to be lived to the full. Jesus taught us this attitude when he invited us to contemplate the lilies of the field and the birds of the air…and in this way he showed us the way to overcome that unhealthy anxiety which makes us superficial, aggressive and compulsive consumers." 

To the extent he's simply urging his followers to better live out our Christian vocations, I find little on which to disagree. A pastor's job is to be concerned with the eternal souls of his flock. It's true that "an appreciation of the immense dignity of the poor" is "one of our deepest convictions as believers," and the Church has always encouraged its members to be good stewards of natural creation. Moreover, the Holy Father is right to warn that "the mere amassing of things and pleasures are not enough to give meaning and joy to the human heart." Economists describe people as utility, not profit, maximizers. Even the most rigid libertarian knows the pursuit of happiness is more than the pursuit of material wealth. 

But Pope Francis often goes beyond just reminding Christians of our "call to sainthood." In a speech at the World Meeting of Popular Movements this summer in Bolivia he said: "Let us say no to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth." Note that here it isn't just "compulsive consumerism" and "unfettered greed" in his crosshairs—it's the economy itself. This gives credence to the idea that he thinks the very structures of the market system need to be upended. 

"The problem is [Pope Francis] doesn't clearly make distinctions between capitalism and trade and greed and corporatism," like the kind he would have seen in Argentina, Catholic University's Richards says. "My sense is he's skeptical of what he thinks capitalism is, but also that he hasn't made a careful study of these things." 

Evidence that the pope is working with an inaccurate picture of what capitalists really believe comes from Evangelii Gaudium, wherein he wrote that we exhibit "a crude and naïve trust in the goodness of those wielding economic power." Richards thinks Pope Francis fundamentally misunderstands Adam Smith's key insight: that even if the people who "wield economic power" are narrowly self-interested, the market will orient their behavior in a way that benefits others. 

"Now as a matter of fact we live in a fallen world, and so the question is: What is the best economic arrangement to either mitigate human selfishness or even to channel it into something socially beneficial?" Richards asks. "Precisely the reason I believe in limited government and a free economy is because it's the best of the live alternatives at channeling both people's creativity and ingenuity, but also their greed." 

The pope doesn't see it that way. From his perspective, either you support unfettered capitalism or you care about poverty. Among free marketeers, he says dismissively, the problems of the poor "are brought up as an afterthought, a question which gets added almost out of duty or in a tangential way, if not treated merely as collateral damage." But that is a deeply uncharitable characterization of those who see things differently than he does. The people I know who invest their time and talent into defending economic freedom do so not in spite of the effect we think a capitalist system has on the least among us, but because of it. As John Mackey, the co-founder of Whole Foods (a company that's a leader in philanthropic giving), argues in a recent interview with Reason, one of the strongest moral arguments for capitalism is that it alleviates poverty. 

That's not to say we shouldn't still be working to transcend our fallen nature. Within a free society there's plenty of space, for those who are so inclined, to heed Pope Francis' appeal—to be less materialistic, more selfless, truer disciples of Christ. In fact, I've argued that only a liberalized economic order grants people the autonomy to choose for themselves to be generous. If you don't have the freedom to accumulate treasure, how can you possibly share it with the world?