The Pope’s Real View of Capitalism, in Three Sentences

Popes, really. Francis owes a nonfinancial debt to his predecessors.

Eric Roston

September 23, 2015 — 2:00 PM CEST, Bloomberg – Business Week

Pope Francis rankles critics who, seeing his campaigns against poverty and climate change, wish he would drop the economist act and stick to theology. The debate, already under way for months, should peak as the bishop of Rome starts on a six-day U.S. trip.

The pope’s take on the market economy boils down to three sentences, two of which don’t even belong to him. They do belong to the Vatican, which over the last 125 years has established a body of social doctrine intended to champion the poor and the vulnerable while protecting the natural environment. The positions of Pope Francis and his predecessors on economic matters are largely consistent and can be distilled into one statement from each of the last three popes.

1. No “-isms,” please, we’re Catholic

Judging by Twitter (note: don’t judge by Twitter), Francis is a socialist. The truth is that the Vatican claims to eschew particular schools of economic thought. Pope John Paul II in 1991 wrote an encyclical, or teaching letter, that marked both the centennial of Vatican social teaching and the emergence of market economies in Europe after communism failed. In it, he addressed the question: Is capitalism a good idea?

“The answer is obviously complex,” John Paul wrote in Centesimus Annus. When capitalism is defined by enterprise that frees creativity and takes responsibility for all impacts of its work, he wrote, “then the answer is certainly in the affirmative.” But if capitalism is marked by unfettered personal gain and, critically, fails to serve absolutely everybody—“human freedom in its totality”—then not so much.

The trick is only to achieve one without the other.

2. Economics = morality

Economic and moral decisions are entwined at every level, from the individual to the international, Pope Benedict XVI wrote in a 2009 encyclical, Caritas in Veritate. “It is good for people to realize that purchasing is always a moral—and not simply economic—act,” he wrote.

Read literally, that’s a tall order. If everyone needed to consider the moral implications of everything, all the time, nobody would get anything done. Still, the idea that mindful business is good business has independently permeated some of the world’s largest companies. It’s done so even more quickly than it has the general public, and certainly faster than it has Washington. Intel, for example, has spent the past several years cleaning up buying practices within its supply chain of 16,000 companies. The company’s not doing it necessarily to be “moral,” although that’s part of it, but because it understands there’s more to procurement than pricing.

3. Big problems call for big solutions

So what’s Francis adding to this conversation? To review:

• If it’s true that the Vatican in principle supports capitalism as a creative force, as Pope John Paul II wrote …
• If every business decision should help build “moral” people, as Pope Benedict XVI wrote …
• If a billion people live on less than a dollar a day, as the United Nations says, and if the community of nations wants to confront the scale of the risk from climate change …

Then to solve the Vatican’s large-scale moral concerns, large-scale economic behavior would need to change. That’s only if you accept all the ifs.

Francis puts it this way in a critical paragraph of his environmental encyclical, Laudato Si’, published in June: “Humanity is called to recognize the need for changes of lifestyle, production and consumption, in order to combat this warming or at least the human causes which produce or aggravate it.”

Even accepting all the ifs, that leaves this question to chew over: How can markets—generally recognized as the best way to change the world—best solve problems created by markets? There’s probably no pope who has an easy answer to that question.