Catholic Economist: Pope Has 'Measured' Critique of U.S. Economy

Harsh criticisms meted out by Pope Francis on free-market capitalism have sparked backlash from some fiscal conservatives and have led some people to call him "anti-capitalist" or even Marxist.

Ahead of his apostolic visit to the United States in September, some are bracing themselves for more criticisms from the pope, this time directed specifically at the U.S. culture and economy.

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Joseph Kaboski, a professor of economics at the University of Notre Dame and president of CREDO, an international organization of Catholic economists, said, "As an individual, the pope probably views redistribution programs as a more effective way of tackling poverty than economic growth," though "most mainstream economists would disagree."

In addition, he said, the pope would probably "like more government involvement in the economy than many Americans would be comfortable with."

However, Kaboski said he views the pope "as neither pro- nor anti-capitalist, but instead a measured critic."

Kaboski said he is "confident Pope Francis finds much to commend" in U.S. economic life, such as private property, the entrepreneurial spirit, human creativity, technological advances, the way it creates jobs, income and products, and the way charities, government and the private sector pitch in to provide services to those in need.

At the same time, the pope "would also criticize the vast disparities in income and wealth ... point to the poor in the inner cities, and argue that they are not fully participating in society," Kaboski said. In addition, the pope would "point to the fact that the global economic crisis started in the U.S. financial sector and wound up shaking economies of many poor nations," he said.

Kaboski said he is "very excited" about the pope "emphasizing the needs of the poor, but then if he talks about the roots of the financial crisis, it's hard for me to fully go along with his confidence because academic economists are still debating the root causes of the Great Depression."

"There are some statements [he makes] that can leave people scratching their heads," he conceded.

However, it is important to keep in mind that the pope is "never teaching economics," added Kaboski, who is also a consultant for the U.S. bishops' Committee on Domestic Justice and Human Development. Rather, the pope is "catechizing on how our Christian view ought to impact our view of a good economy and society."

Christians are called to evaluate economic activity through the lens of their relationship with God and others, which must be central to their lives, he added.

In homilies and at various audiences throughout his two-year pontificate, Pope Francis has sought to raise awareness and inspire action that would narrow the imbalances between the world's rich and poor. He has criticized the current global economy, which is says is based on a "throwaway culture" that encourages consumption and waste, and marginalizes or even discards people seen as economically unproductive.

His main criticisms of "unregulated capitalism" are spelled out in his apostolic exhortation, "The Joy of the Gospel," which calls people to turn from the idolatry of money and indifference to the needs of the poor. The economy must be based on the primacy of the person, honor human dignity and care for the poor, especially by including them in the economy, he said.

Pope Francis' encyclical on the environment, "Laudato Si', on Care for Our Common Home," took up the same themes and extended his reflection to the devastating impact of the throwaway culture on the environment and on the poor who live closest to nature and rely most heavily on the land for their livelihood.

"This is related to what the pope has been talking about long before the environment: lifestyle," said Greg Burke, senior communications adviser to the Vatican's Secretariat of State. "This encyclical is as much about wealth and poverty as it is about the environment."

The call to action in "Laudato Si'" is "not just taking out your trash," Burke told Catholic News Service, "but how much trash ... you produce because of rampant consumerism."

Carolyn Woo, president of Catholic Relief Services and a former business professor, told CNS that the encyclical also includes a call to action for the business sector.

"Pope Francis actually invites business to be a part of the solution," she said. "But it cannot be business as usual." Rather, businesses need to shift out of "the same short-term thinking or the same obsession with short-term profits and disregard for people," she said.

Practically, it means businesses would need to adopt the values of "solidarity and sustainability, oriented toward the common good and the true development of all peoples" and engage in more environmental impact assessments of their activities, she said at the Vatican's official launch of the encyclical June 18.

Ralph McCloud, director of the Catholic Campaign for Human Development, said cooperatives and other community-based businesses already operate according to the values of sustainability, solidarity and subsidiarity. He said they also are well-positioned to implement green initiatives and "look for green opportunities" that answer the needs of their local communities.

Pope Francis has praised cooperatives as a viable model that fights exclusion and puts people before profit.

"To speak of an economy that we can all share in is not very popular," said McCloud. But CCHD shares the pope's concern about how "a broken economy breaks families, communities and the human spirit," he said. Furthermore, he said, the pope's comments have been "an inspiration for low-income Americans."

CCHD, an organization of the U.S. Conference of Catholic Bishops, educates for community-based development and funds community start-ups and cooperatives. Since its founding, CCHD has supported 99 cooperatives, including Golden Steps in Brooklyn, New York, which provides assistance to the elderly, and Opportunity Threads, a textile manufacturing co-op in Morganton, North Carolina.

Co-ops are increasingly understood as "a viable option in a capitalist economy," he said. In addition to benefitting the families of co-op members, McCloud said co-ops in the U.S. promote the type of personal and community development the pope has called for, including greater participation in education and in the political process.

Kaboski pointed out that recent popes have often used the term "unbridled capitalism" to refer to an economy that is "indifferent to the poor and ideologically rejects any need to circumscribe the economy within a legal, political and cultural framework."

"A market without rules and morals doesn't remain free," he continued. "What [the popes] are really arguing for is an economy that is truly free in the Catholic sense of the word free: an economy that more fully enables people to attain their own perfection."

In line with the Catholic understanding of freedom, which involves discernment, Kaboski said, the economy requires "reflection and guidance" in order to "best fulfill its proper function, serving all the members of society."

"The pope is not an economist and his job is not to (propose) concrete economic policies," he said. "But he is called to be a prophetic voice in the world, praising the work of God and the collaboration of mankind where he sees it" and calling for repentance "where he sees serious social problems."

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Chuck Kotlarz
2 years 5 months ago
"…the pope probably views redistribution programs as a more effective way of tackling poverty than economic growth, though most mainstream economists would disagree.” Progressive federal income tax rates eroded from 94% in 1945 to a low of 28% in 1988. The top tax rate was 25% the year of the 1929 Stock Market crash. Former Federal Reserve Chairman (1935 to 1948), Marriner Eccles, felt a system of taxation conducive to a more equitable distribution of income was essential to preventing economic depressions. “The pope would probably like more government involvement in the economy than many Americans would be comfortable with." Key bank regulation, Glass-Steagall (1933-1999), is gone. The gravity of what followed Glass-Steagall's repeal shows in a comment by former Federal Reserve Chairman Ben Bernanke. “September and October of 2008 was the worst financial crisis in global history, including the Great Depression.” Overall, FDR’s New Deal legislation, including Glass-Steagall, had grown the US economy 85% of the time. Prior to FDR’s New Deal, the economy was mired in recessions, economic panics and depressions 50% of the time (1856-1933). Social Security is credited with virtually wiping out poverty among US elderly.
J Cosgrove
2 years 5 months ago
Would you stop writing that the repeal of Glass-Steagall had anything to do with the financial crisis. That fact that you continually use this example is an indication that you do not understand what caused the Sub-prime crisis. Some readers here might actually believe there is something to it
But there is not evidence that having Glass-Steagall in place would somehow change the dynamic. Lehman Brothers wasn't a commercial bank, it was an investment bank. AIG wasn't an FDIC-insured bank, it was an insurance institution. So the problem in today's financial sector can't be solved simply by re-imposing models that were created in the 1930s.Barack Obama
And
In my conversation with Ms. Warren she told me that one of the reasons she’s been pushing reinstating Glass-Steagall — even if it wouldn’t have prevented the financial crisis — is that it is an easy issue for the public to understand and “you can build public attention behind.”She added that she considers Glass-Steagall more of a symbol of what needs to happen to regulations than the specifics related to the act itself.
Interview in that notorious right wing rag, The New York Times.
J Cosgrove
2 years 5 months ago
A couple things: There is no link to the professor's speech or document, only to Laura Ieraci's reporting. Even on the Internet all one gets is her reporting. What was all that was said and in what context. There are no prescriptions, lots of criticism and many inconsistencies and some vague nonsense suggestions such as cooperatives in this brief article. There is nothing wrong with cooperatives but they are not even a drop in the bucket solution if they are even a solution. This is the problem with those who want to change the world, criticism but no plan that is positive. Which is why all of Professor Kaboski's document should be available. By calling him a Catholic economist, it implies that his economics are consistent with Catholic doctrine and maybe all that is consistent. My guess there will be much disagreement amongst economists who are Catholic on what to do if anything in response to the Pope's encyclical. A longer version of this article is at http://www.catholicsun.org/2015/07/02/catholic-economist-pope-has-measured-critique-of-u-s-economy/ In it there is more discussion of cooperatives.
J Cosgrove
2 years 5 months ago
Professor Kaboski is the president of CREDO. Catholic Research Economist Discussion Organization http://www.credo-economists.org/about/executive-board/

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