Figure 1. Pope Francis addresses U.S. Congress in September of 2015.7
Lily Sebastian (Period 6)
In America today, capitalism, characterized by one’s ability to garner profit and own property, is the economic system that governs our nation.1 In the fall of 2015, Pope Francis visited the United States for the first time. During his visit, he “criticiz[ed] the evils of capitalism and its spirit of profit’ while also “push[ing] for an end to poverty”.2 The pope’s words raise one very important question: does capitalism cause poverty? His statements seem to butt heads, though, because capitalism does offer people paths to accumulating wealth and making a decent living. Pope Francis’ implications that capitalism contributes to increased poverty rates seem contradictory because capitalism actually appears to alleviate poverty by incentivizing people to innovate as well as offering them the liberty to practice morality.
Capitalism incentivizes people to create, which brings more convenient, more efficient, and more useful goods and services into the market and ultimately into the hands of the consumers. Pope Francis may not be seeing the impact of how innovation leads to wealth for everyone living in a capitalist economy. For example in Liberty and Property, Ludwig von Mises describes how a prominently non-capitalistic country, such as Russia, “in giving away liberty as the price to be paid for the acquisition of prosperity … [has] neither one nor the other.”3 He goes on to explain that as a result of a communistic economic system, tons of poor Ukrainians in the East starved to death while “the standard of living was incomparably higher in the free countries of the West.”4 Furthermore, in the U.S. today, people are motivated to pursue more challenging careers for higher pay, such as medicine, law, or business. It is important to note, however, that these challenging professions are the ones that primarily serve and produce for the mass population. As a result, the average person is able to have access to health care, legal services, and products such as food and cellular devices. This is capitalism: by incentivizing one person to earn higher profits by working hard, the masses benefit as well.
In addition, the pope’s words stem from his desire that people do good for the sake of doing good; however, the government cannot make that happen.5 In highlighting the negatives of capitalism, the pope was suggesting excessively increased government involvement. But can the government instill in people a moral compass? Mises says that “… [it is] a rather crude and materialistic view in assuming that moral and spiritual culture could be… built by the government…”6 In a communistic society, there is no wage disparity because of forceful government regulation, not because of human compassion. Capitalism, on the other hand, gives people the economic freedom to practice morality and, potentially, practice kindness of their own accord.
Overall, capitalism offers many avenues for one to gain wealth. In addition to providing people with incentives to work hard, it also allows people to own shares of a company and trade them on the stock market as well as the right to own private property. Some caveats to this may be that stock trading and investing require some knowledge that those in poverty lack; however, the remedy to this problem is to create programs that help educate the needy, not to eradicate capitalism.
1 Tejvan Pettinger, “Capitalist Economic System,” Economics Help, Accessed April 27, 2017, http://www.economicshelp.org/blog/glossary/capitalist-economic-system/.
2 Liya Palagashvili, Donald J. Boudreaux, “The Contradictory Pope,” US News, Accessed April 27, 2017, https://www.usnews.com/opinion/economic-intelligence/2015/09/28/pope-francis-critique-of-capitalism-contradicts-his-call-to-end-poverty
3 Ludwig von Mises, Liberty and Property, 5.
4 Mises, Liberty and Property, 5.
5 Palagashvili, Boudreaux, “The Contradictory Pope.”
6 Mises, Liberty and Property, 8.
7 Meghan Keneally, “Read Pope Francis’ Historic Speech to Congress,” ABC News, Accessed April 29, 2017. http://abcnews.go.com/US/read-pope-francis-historic-speech-congress/story?id=34004178.