Hans G. Despain
Pope Francis has become the pre-eminent voice of those in need economically and of the environment. Ever since his election as Pope, Pope Francis has insisted that we need a new economic system that better meets the basic needs of the world’s poor, along with guaranteed jobs and land.
Regarding the environment, Pope Francis urges that we “must not be indifferent to or reconcile with the loss of biodiversity and the destruction of ecosystems, often caused by our irresponsible and selfish behavior.”
He warns, “Thousands of species will no longer honor God by their mere existence because of us. … We have no such right.”
For Pope Francis, economic hardship and environmental degradation are symbiotically linked. “Climate change,” said Pope Francis, is displacing people, increasing poverty and “contributing to the heartbreaking refugee crisis. The world’s poor, while least responsible for climate change, are the most vulnerable and are already suffering its effects.”
Pope Francis emphasizes that there are a series of “profoundly interconnected crises” in “healthcare, environmental, food supply and economic areas” worldwide, not to mention regional wars, “social, humanitarian and ethical crises” all of which require a ” new vision” to “rethink the future of the world” and establish “a renewed sense of shared responsibility for our world”.
Most recently, in May, Pope Francis challenged his audience: “We cannot live with the economic pattern that comes from neoliberalism and the Enlightenment. Nor can we live with an economic pattern born out of communism. We need … a Christian economy.”
These comments coming from the papacy are amazing.
Neoliberalism does not refer to liberal politics in the American sense, rather the Pope uses “neoliberal economic patterns” to refer to various pro-market views.
Much like former President Trump’s criticism of “globalists” and Sen. Bernie Sanders’ criticism of multinational corporations, Pope Francis is clear that global supply chains are both a blessing and a curse.
Global supply chains are now coordinated by gigantic multinational corporations that easily cross borders to avoid taxes and circumvent trade regulations at the national level. Meanwhile, workers are prohibited from crossing borders freely. Multinational corporation profits are trending up while wages are trending down. These economic patterns have exacerbated income inequality in both developed and emerging economies.
Pope Francis claims that “as much as we are asked to believe this dogma of the neoliberal faith. Whatever the challenge, this impoverished and repetitive school of thought always offers the same recipes. Neoliberalism simply reproduces itself by resorting – without using the name – to the magical theories of ‘spillover’ or ‘trickle’ as the sole solution to societal problems.”
With “spillover” and “trickle” effects, Pope Francis refers to the supply-side economics that prevailed from 1980 to 2008, promoted by theories of economic prophets Milton Friedman and Friedrich Hayek.
According to Friedman and Hayek’s prophecies, markets indirectly solve social problems such as racism, sexism, poverty, inequality and environmental degradation. For example, corporate tax cuts would increase corporate profits and “spill over” and “trickle down” to workers in the form of higher wages.
The only problem is that wages don’t usually go up.
Pope Francis claims that supply-side economics is wrong and that Friedman and Hayek are false prophets. The Pope fears that too many “people continue to defend trickle-down theories that assume that economic growth fueled by a free market will inevitably lead to more justice and inclusion in the world. This opinion, which has never been corroborated by the facts, expresses a crude and naïve faith in the goodness of those wielding economic power and in the sacred workings of the dominant economic system.”
The Pope insists that “the market alone cannot solve every problem”.
In fact, according to Pope Francis, the neoliberal market order inevitably generates regional conflicts and “unjust wars” and exacerbates refugee crises, global poverty, food insecurity and environmental degradation.
“The most important lesson we can learn from these “deeply interconnected” crises is our need to build together so that there are no longer borders, barriers or political walls to hide behind.”
Since the 1980s, labor’s share of national income has fallen around the world while corporate profits have risen.
The United States’ labor share of income has fallen by 8%.
Economic research shows that the share of labor income has fallen by around 10% on average worldwide over the past 30 years and is currently at its historical minimum. A major definitive study confirms that global trade over the past 40 years has reduced the share of the labor force in both developed and emerging economies. All of this supports Pope Francis’ criticism of the supply economy.
The Pope has called for a new global economic system that puts people first and not “an idol called money”. For the past three years, Pope Francis has rigorously promoted a highly inspiring initiative called “Economy of Francesco” that encourages an open international dialogue of particularly young economists, entrepreneurs and change makers committed to global change and social justice met in Assisi, Italy to discuss and promote Francesco’s economy.
An uncritical theology of global free trade lies shattered. We need to better promote the pros and cons of global free trade.
Francesco’s economy aims to do just that, to create socio-economic patterns that put people ahead of profits and to create a healthy environment.
Hans G. Despain, Ph.D., is Chair of the Business School and Honors Program at Nichols College.
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