During his whirlwind tour of the United States, Pope Francis used his speeches to the U.S. Congress and the United Nations to articulate his views on the family, human life, violence, the environment, social justice, and many other issues. No one doubts the sincerity of the Pope’s pursuit of goodness. And surely no one disagrees with his condemnation of aggression and hatred against the young, the vulnerable, and the poor. But too often, his political naiveté got the better of him. As a result, many of his controversial pronouncements, if rigorously implemented at the policy level, would pose a threat to overall human welfare. Specifically, his ideas about violence, the environment, and markets deserve a critical look.
The Pope responded tepidly to the epidemic of violence rocking the world today. These are not good times. The massive slaughter of Muslims, Christians, and others in Syria and across the Middle East has spawned a refugee problem of unparalleled proportions, along with the systematic destruction of cultural artifacts and religious shrines in Palmyra and elsewhere. It is all well and good for the Pope to demand that the more fortunate aid refugees in their time of need. But the reality is that the refugee crisis will never be solved unless resolute action is taken to fix the problem at its source, which could mean developing a coherent military program to meet force with force.
Here, though, the Pope goes wobbly by saying that the use of force against the Islamic State might be justified if done on a multilateral basis—a sure recipe for impasse and drift, even as thousands more are killed or sent packing until some collective response is found.
The Pope also sounded a sour note regarding violence in his remarks to Congress: “To imitate the hatred and violence of tyrants and murderers is the best way to take their place. That is something which you, as a people, reject.” But the U.S. and its Western allies do not “imitate” hatred and violence by using force to resist and destroy those who threaten innocent lives. If the Pope had encouraged the prompt use of force against evil, his credibility could have been restored. But he is simply encouraging the lack of American leadership in its categorical reluctance to commit ground troops to stop the bleeding in the Middle East.
President Obama’s lack of resolve has neutralized American military superiority, encouraged Putin to back the tyrant Assad in Syria, and let the Islamic State wreak havoc. Constant bromides about the need for “cooperating generously for the common good” is a recipe for standing passively to one side as a worldwide disaster plays out. The Pope’s musings, like Obama’s, mask a weak form of moral relativism that encourages the enemies of human liberty and human dignity and abandons its friends.
The second count against Pope Francis relates to his views on the environment and, in particular, on global warming. A preservation of the global commons is not just the concern of the Pope with his transparent left-wing politics; since a landmark 1954 article by H. Scott Gordon, it is common knowledge across the political spectrum, driven by Chicago-style economics, that overhunting and overfishing of unowned fish and game can lead to a tragedy of the commons. Each taker from the common gets the full benefit of the catch, but suffers only a portion of the depletion of the commons. The release of carbon dioxide or methane into the atmosphere could have the same effect.
But the science of global warming is a lot more complicated than that of the fishery. Awareness of the problem does not explain the best techniques for dealing with the threat. On this score consider two related problems. The first is to design a system that works well to curb excessive warming, chiefly from minimizing the amount of human-produced carbon dioxide and methane gas. The second is to assess the seriousness of the threat. On the first point, market economists have worked out a system of transferable pollution permits that incentivizes firms to achieve the highest level of useful output for each unit of pollution. More efficient firms can afford to buy permits from less efficient firms and still make a profit. This system has worked extremely well for pollutants like sulfur dioxide, where the damage for pollution is evident.
But the second point asks the more difficult empirical question, which is just how dangerous are additional units of carbon dioxide to the environment. Even the EPA acknowledges that this is a nightmarish calculation at best. On this point, the Pope does no one any good by making strong empirical claims of the imminent peril of global warming, when there is still no clear picture as to the threat, if any, that global warming poses to the world at large.
It is clear that temperatures continue to rise, albeit slowly, but it is very difficult to establish how much of that temperature increase relates to increases in carbon dioxide. Indeed, there is some question as to whether small temperature increases will have positive or negative effects on overall human welfare. No one says that about sulfur dioxide.
It is, therefore, risky to overreact to the threat if that response diverts resources that could be better devoted to dealing with other woes of the world, including the still crushing poverty in much of China, India, and Africa. Many steps are available to advance pro-environmental and pro-energy policies that do not require us to pull out all the stops on climate control. A shift to natural gas, a tax on dirty coal, and a willingness to modernize nuclear power all make far more sense than paying continuing subsidies for wind and solar power, neither of which can be stored. Inspiring rhetoric does not advance basic understandings of technical issues of institutional design.
The third count against the Pope concerns his basic—and deeply problematic—misunderstanding of economic behavior. The simple truth is that there is no substitute for economic growth in dealing with both poverty and the declining fortunes of the middle class, two issues with which the Pope is concerned. The only engine that can drive growth is a competitive market economy to which the Pope—raised in Juan Peron’s Argentina—displays an unhealthy aversion.
His papal announcement is a massive misdiagnosis of the basic situation: “Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.”
The Pope’s observation that “everything comes under the laws of competition” is both descriptively and normatively false. Beyond that, the government’s regulation of wages, prices, and entry into the market has exacted a huge toll on the poor by reducing their opportunities for advancement. Minimum wage and rent control laws offer some short-term benefits to a few, but they create massive and permanent structural dislocations for many more, by reducing the supply of jobs and housing respectively, leaving too many people “excluded and marginalized.” The single most important insight from modern economics is that the removal of a barrier to entry will always outperform the addition of a new subsidy to existing structures. Knocking out restraints reduces administrative costs and increases production. Price controls do the opposite.
Normatively, the Pope misses the critical ingredient of “imperfect obligations” to help the poor, enforceable not by the state but by social, moral, and religious sanctions. These decentralized forms of aid do far better, dollar for dollar, than any centralized government program that is far less able to target its assistance and monitor the aid that is given. Laissez-faire capitalism always supported this project, which helps explain the huge outpouring in charitable aid for medical, religious and educational purposes in the late-nineteenth century.
Within markets, the Pope does not understand the profound difference between competition and survival of the fittest. The former refers to laissez-faire capitalism. The latter is to a form of social Darwinism. In nature, any creature may freely use force and fraud to achieve its ends. The survival of some necessarily depends on the killing and eating of others. A tenet of social Darwinism was to reject the notion of imperfect social obligations: the fortunate should not afford any aid or assistance to weaker members of the group who should be allowed to die in order to strengthen the human race.
Nor does the Pope understand how market competition works. Firms are not allowed to conscript or kill their potential customers. They must obtain their consent in order to sell them goods and services or to hire them. People with scarce resources and limited opportunities will not accept deals that in the long-term work to their systematic disadvantage. They will instead hold out for the best terms that they can obtain either in the purchase of goods and services or in the sale of their labor. A system of open competition means that no one party sits atop the market, at which point wages will be bid up and prices will be bid down so that the firm gets a normal risk adjusted rate of return, and no higher.
The situation with monopoly power, especially monopoly power controlled by the state, may call for a different response. In these cases, the monopolist knows that the potential customers or employees have nowhere else to turn, and hence the monopolist can exact a supra-competitive rate of return. It is for this reason that standard economists understand the need for some system of rate regulation to control monopoly power that often rises in transportation and communication markets. The details of these systems are enormously complicated, and it is not possible to give a categorical answer as to how this is best done, or indeed whether in light of dynamic possibilities for competition, it should be done at all.
The Pope’s broad pronouncements offer no sign that he is aware of the related question of institutional design. And they make it all too clear that he is prepared to commit the one clear transgression in economic theory, which is, especially through his uncritical support of labor unions, to support the use of government power to create monopoly institutions where competition works. That move, which has been the cause of so much human misery throughout the world, becomes a greater tragedy when it receives the moral backing of the Pope, who misuses his religious authority to speak out on secular affairs over which he has scant knowledge. The dangers of politicization are clear enough with Pope Francis. So too is the mischief that his ill-conceived progressive politics can wreak for the very people whom he most wants to help.