Pope Francis’ recent speech in Bolivia has rekindled the debate over Pope Francis’ views on economics and inequality. Francis’ defenders have argued that the pope is merely offering a robust presentation of Catholic social teaching. His more fevered critics see him as a herald of a resurgent Marxism.
The frustrating thing about this debate is that it usually operates at a level of abstraction, as if the choices facing policymakers really did boil down to a choice between capitalism and, well, something else. To a great extent, this reflects the penchant of American conservatives branding even modest efforts to redress economic inequality as “socialism.”
As fond as I am of Francis, however, I think the pope also bears some responsibility for this. Phrases like an “economy that kills” and “an economy of exclusion” remind me of John Paul II’s “culture of death” and Benedict XVI’s “culture of relativism.” In none of these cases do I find the phrases adequately descriptive of the phenomenon in question or analytically helpful in developing remedies.
Even when he delves into details, the pope’s prophetic language sometimes obscures a more nuanced picture of the problems he is describing. In Evangelium Gaudium, for example, the pope wrote that “the majority of our contemporaries are barely living from day to day.” As a statement of fact about a point in time, it is arguably correct. About half the world’s population lives on less than $2.50 a day and close to one-fifth live on less than $1.25 a day, the World Bank’s international poverty line.
One gets the impression from the Pope’s rhetoric, however, that the problem is getting worse. That is demonstrably not the case. Again, according to the World Bank, the proportion of people in the developing world living in extreme poverty (<$1.25 per day) fell from 47% in 1990 to 22% in 2010, reaching the UN Millennium Development Goal for this indicator five years ahead of schedule.
Now this is not, as conservatives often like to argue, merely the result of the world embracing the “magic of markets.” It’s true that China’s economic liberalization has played an important role in its economic growth. It’s equally true that the country has invested massively in infrastructure (e.g. airports, railroads, ports, etc.), without which it could never have become the export powerhouse it is today.
At the same time, there is no question that the spread of markets as the basic organizing principle for a modern economy has played an important role in improving rates of economic growth. As anyone who has spent a few hours on the phone with their cable, mobile phone, or insurance company can attest, competition is a good thing. As anyone who owned a Ford sedan in the 1980s can attest, allowing foreigners to invest in your country and compete freely with domestic producers can benefit consumers and--as anyone who currently owns a Ford sedan can attest--force domestic producers to improve performance as well. Making it easier for individuals with new ideas to create businesses and reach customers really does help create more jobs and wealth.
Growth matters, because without it even the most aggressive efforts to redistribute income still leave the majority of people with very little money (something that Karl Marx understood better than many of his 20th century disciples). Consider Bolivia, the site of the Pope’s speech, where per-capita-income is equivalent to about $5,000 worth of purchasing power in the United States. That means even if the Bolivian government redistributed every dime of national income, the people of that country would still be very poor.
The trick in all this is to get the policy balance right. If taxes are too high, business formation will suffer. If taxes are too low, you can’t make needed investments in infrastructure or income support. If regulation is too onerous, businesses won’t invest. If it’s too loose, you’ll get sick from contaminated food or drugs or choke on the pollution. A country can, however, lean pretty hard on the side of high taxes, income redistribution and regulation and still be a “market economy.” Even under the golden age of social democracy in Sweden, the country was still an export powerhouse (e.g. Volvo, Ikea) where most investment decisions remained in private hands and profit remained an important consideration.
Brazil, I would argue, is a developing nation that has (generally) tried to get the balance right. Under the Cardoso administration of the late 1990s, the government privatized a number of state-owned enterprises and loosened economic regulation, which contributed to a modest increase in economic growth. When Workers Party (PT) candidate Luiz Inácio Lula da Silva was elected in 2002, there were concerns that the government would move sharply to the left, perhaps re-nationalizing a number of enterprises. The PT surprised many people, however, by maintaining a relatively tight fiscal policy and resisting calls to re-nationalize. What the government did do, however, was spend more on both income distribution (though the well known Bolsa Familia program), education and infrastructure. The combination of a strong economy and willingness to redistribute income led to Brazil moving more than 40 million people into the middle class.
Brazil remains a relatively poor country with a great deal of income inequality, severe poverty, and a number of other social ills. Its governance has not always been perfect (yes, hosting the World Cup was probably a bad idea). Taking the long view, however, have things been improving? I think the answer is “yes.”
You can argue that the prophetic rhetoric of Pope Francis is actually what we need to build support for these kind of balanced, social-democratic policies. I worry, however, that loose talk about “new colonialism” and “the mentality of profit at any price” will give aid and comfort to those advocating a return to policies of the past (e.g. nationalization of industries, currency controls) that ultimately failed to deliver the “land, lodging and labor” that all people, particularly the poor, demand and deserve.
Mario Cuomo used to say that “you campaign in poetry, you govern in prose.” It’s true that “new business formation, infrastructure investment, and income redistribution” is hardly the kind of rhetoric to move hearts and minds to action. In the end, though, it is the responsibility of a leader to ensure that the “poetry” does not shape the public argument in ways that make it impossible to enact effective policy. The pope is certainly an able poet. Is it too much to ask for a little more prose?
