Pope Francis is Right to Criticize the World Economy, but He’s Wrong in Calling it a Free Market

Pope Francis has just released an apostolic exhortation entitled Evangelii Gaudium, which ostensibly describes the joy of the Gospel. He makes some excellent points about the pitiful state of society and the lack of faith throughout the world, which has led and will lead to further ruin.

VATICAN: POPE FRANCESCO MEETS CARDINALSHe makes some controversial statements, however, about the free market, which need to be rebutted by a devout Catholic. I’m a great fan of Pope Francis and believe he is truly a man of God, but he is not an economist and he is not infallible with regard to economic matters. I will present his argument and where I think he is misguided.

In section I: SOME CHALLENGES OF TODAY’S WORLD, Pope Francis decries the free market and “autonomy of the marketplace” as “an economy of exclusion and inequality.” He implies that capitalism is the root of the current economic crisis and the wealth inequality seen growing throughout the world.

And it seems like a pretty obvious point to make. After all, as he explains, the worship of money does lead to the “denial of the primacy of the human person” and reduces him to one role alone: that of consumer. That is unacceptable for a civilization of truth and love.

Pope Francis is right to tie the violence of inequality and the recent disastrous economic turndown to the current world economic system but he is wrong that the world’s current economic system is a free market. In no country is there a complete autonomy of the marketplace. As Samuel Gregg writes, “In most Western European countries, for instance, governments routinely control an average of 40 percent of their nations’ GDP. In many developing countries, the percentage is even higher.” The woes of the world can rightly be attributed to the current global economic system, but it’s not a free market system; it’s a bastardization of the free market: crony-capitalism.

As Hunter Lewis describes in his book, Crony Capitalism, government and business are in a predatory partnership in America and the broader Western economy that extracts wealth to its own benefit. “[And] taking into account companies and other organizations that are directly or indirectly controlled by the government, it becomes clear that most of the economy is in the ‘public’ sphere.” And that’s not a free market; it’s the opposite of that. What’s more is that intervention by the government/corporate partnership increases the income disparity and led to the world financial crisis.

It’s important to define our terms here. The free market is nothing more than the sum of all voluntary economic transactions. When force or coercion is involved (as is the case when government is involved), it is no longer free. The free market hasn’t led to an economy of exclusion and inequality. Quite the contrary. The free market has led to the greatest increase of wealth the world has ever seen and the free market has raised more people out of poverty than any other economic system in the history of mankind.

If the Supreme Pontiff cares about helping the poor and not just glorifying them (and I know he does), he should encourage actual free market capitalism along with condemning its evil twin crony capitalism that pervades today.