Saturday, November 30, 2013

Does the Pope read Tom Woods?

Pope Francis created a hubbub last week when he decided to weigh in on economic policy.  From page 45 of the Evangelii Gaudium:
Some people 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. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacra­lized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.
Reactions from the left were predictably rapturous, often trying to use the Pope's moral authority to close the policy debate. The Washington Post has an especially transparent example of this lame tactic:
“There’s no way a Catholic who is a serious intellectual can ever again not address the issue of income inequality, of the structural sins of our economic system. This is so front and center,” said Michael Sean Winters, a fellow at Catholic University’s Institute for Policy Research and Catholic Studies. “This is a pastor’s voice. He’s saying, ‘If we’re serious Christians, we need to be knee-deep in this stuff.’ ”
Well, Mr. Winters, you've certainly made me feel knee-deep in something, but it's not concern about the evils of free markets.

As with his predecessors, Pope Francis has an extremely limited understanding of how markets actually work and seems to be ignorant of the fact that it is capitalism that is responsible for raising the masses out of abject poverty.  Perhaps he should be more catholic in his reading and put this book by Tom Woods onto his reading list. Being pope seems pretty demanding in terms of time, so this article by Woods providing a Catholic defense of free markets should do.

Greg Mankiw has a few comments about Pope Francis's rhetoric, and the NY Post has a nice editorial suggesting how the pope should redirect his concerns:
In truth, the pope’s real enemy is crony capitalism, which he has had long experience with because it dominates his native Latin America. This is a capitalism that insulates the rich and powerful from competition at home and abroad. Under crony capitalism, the poor pay more because they are denied access to better-priced goods and services from abroad; and they have fewer opportunities to use their talents and enterprise to better their conditions. And it is highly corrupting.
We fully share the pope’s concern about an “economy of exclusion and inequality.” We would only say that in the effort to help the poor and marginalized take their rightful place at the banquet of life, Pope Francis will find some of his strongest allies among the ranks of those who champion a free market that plays no favorites.