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The Pope and the market

Published in Insights, The New Zealand Initiative’s newsletter, 26 June 2015

popePope Francis’ encyclical Laudato Si’ has been both praised and criticised for its focus on the environment. That is indeed what a large chunk of this circular letter sent to the bishops of the Catholic Church is about.

However, the pope’s tractate on the environment is just an application of his general lament on the modern world. Anthropocentrism and relativism are identified by the pope as evils of our time.

Yet reading through the encyclical, I am not sure that Francis actually understands what he is writing about. Some of his observations are so far off the mark that they would be offensive if one took them seriously.

He explains that “[w]hen human beings place themselves at the centre, they give absolute priority to immediate convenience and all else becomes relative”. This is what he means by anthropocentrism.

What Francis does not say is whether or not a practical alternative exists. Was that not where the Bible assigned humanity (Genesis 1:28)? Besides, humanity being at the centre does not mean that immediate convenience rules – otherwise there would be no long-term planning, no saving, no investment. The pope clearly confuses anarchy with property rights.

This confusion continues in his discussion of ‘relativism’, which the pope regards as any form of treating each other as objects. This leads him to claim that this “kind of thinking leads to the sexual exploitation of children and abandonment of the elderly who no longer serve our interests. It is also the mindset of those who say: Let us allow the invisible forces of the market to regulate the economy, and consider their impact on society and nature as collateral damage.”

With all due respect, this is utter, offensive nonsense. Economists favouring markets do not share the same level of morality as child molesters.

What the pope does not understand about markets becomes clear in this passage: “We need to reject a magical conception of the market, which would suggest that problems can be solved simply by an increase in the profits of companies or individuals.”

Markets are not about increasing individual profits but about allocating scarce resources. They do so best when property rights are clearly defined. And then they effectively deal with those environmental problems that the pontiff can only preach about.

As a Catholic economist, reading this papal drivel masquerading as an encyclical is both embarrassing and infuriating. Thank God Catholics are free to disagree with this personal position of the Pope.

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