Since the Pope Francis promulgated the Apostolic exhortation Evangelii gaudium, liberal-libertarian blogs have been wondering about the meaning of the Pope's words in the context of economics. In particular, we see on the Catholic-libertarian front some concern about the Pope's judgements regarding the market, as if he had written a treatise on economics and not a pastoral document on the theme of evangelization. Indeed, the parts in which Pope Francis addresses the issues related to the market are limited and do not deal with market processes, their lawfulness and appropriateness, how much of the culture animates market operators and the existential consequences of processes triggered by operators who, at any cost and at any price, make self-interest the only and decisive parameter and, to which their expectations should conform and in virtue of which their strategies are implemented.
I will not dwell on this aspect, since I have already dedicated many articles to it. I thought instead of offering some modest reflections on a point that seems to have aroused an incomprehensible dispute in those liberal-libertarian circles of Catholic bent. The offending sentence is the following and is taken from paragraph 54 of the second chapter, in the context of the challenges of today's world and, in particular, is the refusal of an economy of exclusion. At the beginning of the paragraph, Pope Francis says: "In this context, 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". With the expression, Pope Francis means that complex of theories that go by the name of "trickle-down theories"; at least this is what one deduces, examining the English and Spanish translations of the document. For trickle-down means the "favourable impact", in economic terms, with regard to low income earners, of the tax advantages granted by the State to high income earners. More trivially, it is refers to the confidence that a dynamic and flexible market is able to produce positive effects for everyone, even for those who do not act immediately on the market, but who, thanks to the dynamism of the market, can be included and participate in turn in its dynamism: a kind of pulling effect due to a dynamic market.
Therefore, it is a theoretical system and, like all theoretical systems, individuals may agree with it and appreciate it to a greater or lesser extent, and it is always being critiqued and is besieged by the continual attempts at falsification. A theoretical system, by definition, is characterized by its quality of describing a reality, it offers us a grammar and syntax to answer the question about the how and the why of the existence of a phenomenon, it does not, or should not, make any pretence of being normative. In short, it should help us to describe and explain reality, highlighting the gap when comparing reality to the model, and should not proscribe reality or shape it, as if it were an ideal toward which to strive and not a tool to measure it.
At this point, what is Pope Francis telling us in that sentence and in the others contained in paragraphs more immediately dedicated to economic issues? Firstly, I do not think that the Pope is rejecting or condemning the market, on the contrary, he acknowledges that the market promotes economic growth. However, the Pope correctly and fittingly tells us something very simple and of common sense that only those who read the document ideologically seem not to grasp: growth, driven by the market, is not a direct synonym for development; and how could one argue with that? The market, open and dynamic, is the best instrument to boost growth, but this growth (a quantitative element) does not translate necessarily into integral human development (a qualitative element), which is what interests the social doctrine of the Church and that should matter for each Christian.
Secondly, reading and rereading the paragraphs devoted to the issue of economics, I understand that the Pope claims that this inability to reduce development mechanically to economic growth is attributable to the market as such. The market is a mechanism-process for the collection and transmission of information, coordinated by the pricing system as a parameter, which moreover is always changing. In practice, the market is the tool used by traders and does its job to the extent that it optimizes the process of collecting and transmitting information regarding the demand for goods and services. We cannot ask it to say and do what it does not know how to say and cannot do. Integral development cannot be reduced to mere economic growth because it requires the educational, cultural, value-based dimension that the market does not produce itself, if except through the people who work in it. As we were taught by the fathers of the social market economy, beginning from Wilhelm Röpke, and echoed moreover by Pope Benedict XVI in Caritas in veritate, but as even Adam Smith taught us, a bare market simply does not exist. There are values, cultures, faiths and traditions that form the institutions that, in turn, erect the markets and qualify the market processes. In short, the choices and actions of the operators are what lend the human aspect to a market, its face, its history.
At this point, Pope Francis is very clear and I believe intends to provoke our consciences. He tells it like it is: think of the girls who prostitute themselves and the parents who go along with it, and he shifts the focus from the theoretical to the existential dimension; exactly what a pope should do; in the end, theorists are the ones who must think about theories, not pastors.
To speak of the poor, appealing to the rich, as did Luigi Sturzo in his "Appeal to the free and strong men", and to say that a "throwaway culture" is underway, does not mean denying the market. Rather it means pushing those who have decision-making responsibility at various levels and in various spheres (economic, political and cultural), to do their part in the ongoing work of the institutional implementation of market processes, so that they may be truly dynamic and increasingly open and not the closed kingdom occupied by the owners of income.
To affirm that development is irreducible to mere economic growth, then, means recognizing the primacy of culture, the centrality of the person and an idea of political, economic and cultural institutions, including the market, whose moral element is given by the anthropological perspective expressed by those who operate within them. In practice, it means admitting that there can be growth without development, because there is a profit that derives from a monopoly, and a profit from war; there is the profit of those who pretend to gather without having first sown, who take advantage of their close relations with those in power, a profit of those who devastate the Earth, those who traffic in drugs and arms; because there is a profit of those who unwisely consume the riches that previous generations have been able to produce and of those who unload the costs of the present on future generations.
It's just common sense and, these days, that's no small thing.
Flavio Felice is President of Centro Studi Tocqueville-Acton and Adjunct Scholar at the American Enterprise Institute in Washington, D.C.