Virtuous poverty, christian liberty: a free-market appreciation of Pope Francis.

Juurikkala, Oskari

Pope Francis has touched on economic issues in many public statements and documents since his elevation to the papacy. These statements have received heavy criticism by supporters of the free market, worsened by misleading representations in mainstream media. In response, this article is divided into three sections: (1) an outline of key ideas in Francis's message concerning the economy, (2) an analysis of certain critical responses that are relevant but ultimately insufficient, and (3) an examination of the deeper unity between free-market economics and Francis's message.

Introduction

Pope Francis received a range of reactions when he published his second major magisterial document, the apostolic exhortation Evangelii Gaudium. (1) These extended from those who praised the critique of so-called unfettered capitalism (2) and libertarian economics, (3) to those who labeled the pope a leftist, even a "Marxist." (4) Still others, however, sought to understand Francis from within his pastoral background and Argentinian experience and downplayed the references to economic questions. (5) Similar debates followed the publication of the encyclical letter Laudato Si'. (6)

Francis, obviously, is anything but a Marxist. (7) Yet it cannot be denied that his posture on some economic questions has tended to upset those who, in European terminology, are called economic liberals. They have expressed that the pope fails to appreciate the benefits of the market economy and that his insistence on aiding the poor lends undue support to political programs that undermine entrepreneurship, private property, and economic growth. In this article, I wish to go beyond impressions and address a more fundamental question: What exactly is Pope Francis's message on the economy, and what does it mean for the advocates of economic freedom?

Let me first clarify this essential term. When I speak of free markets or economic freedom, I essentially refer to the two principles that may be called the market principle (freedom and respect of contracts; freedom to start a business) and the property principle (recognition and protection of private property). More broadly, economic freedom includes closely related ideals such as low taxation, frugal public spending, the absence of corruption in public office, and monetary stability. (8) Obviously, by economic freedom I do not mean greed or selfishness or any other absence of moral constraint. Nor do I mean the type of capitalism that is typical of Europe and Latin America--what economists call crony capitalism. I will shortly argue that both of these are ultimately incompatible with economic freedom.

My choice of topic was motivated by two factors. The first was the impression that Francis's thinking and message have been too easily labeled as simply leftist. This has facilitated its exploitation by the political left for objectives that the pope may not share. It has also promoted an unfortunate estrangement among Catholic conservatives and free-market advocates. I am not convinced that the pope really is so leftist at all, and I believe he deserves at least an attempt of appropriation by the friends of economic freedom.

My second motivation is that many free-market economists have dismissed Francis's message on economic questions as either mistaken or irrelevant. Of course, the pope is not pretending to be an economist. We would do well, however, to remember Hayek's famous saying that one can only be a good economist if one also understands history, psychology, politics, and ethics. (9) Economics is ultimately about man, and Francis has deep and practical insights into how the human condition is enlightened by the Gospel of Christ. If those insights are true, they should also have a bearing on the way in which we think about economic questions and relationships.

In what follows, I will proceed in three steps. First, I will outline certain key ideas in Francis's message concerning the economy. Second, I will analyze several critical responses that I will argue are ultimately insufficient. Third, I will advance a perspective that seeks to find a deeper unity between free-market economics and Francis's message.

Francis and the Idea of Christian Poverty

To provide a synthesis of Pope Francis's thinking on the economy is both difficult and easy. It is difficult, because he has never offered extensive and systematic reflections on such questions; his pronouncements are found here and there, inseparable from a broader moral and spiritual message. At the same time, he has said quite a few things about economic questions, and he is deeply interested in economic values and outcomes. Of course, he views them not as isolated technical questions but as something that also touches on a Christian pastor of souls. That is what makes my task relatively easy.

Francis's thinking can only be understood within the context of his moral and spiritual principles. These, in turn, are inseparable from his simple and straight-forward personality. I will leave it to others to study specific texts in detail; I will simply summarize the pope's message around the notion of Christian poverty. Perhaps we could almost say that Francis is a prophet of Christian poverty, and his papal name is no accident in this respect.

Poverty as a Christian concern is twofold, insofar as the Christian understanding of poverty necessarily entails two different dimensions. First, there is the attitude toward the poor. We might also call it the social and charitable dimension, which highlights the calling to exercise not only justice but also efficacious charity toward those in need. This has always been a fundamental dimension of Christian ethics, and we find it insisted on in Evangelii Gaudium. (10)

Concerning the principles cherished by liberal economists, the papal document also acknowledges the value of private property and of the "noble vocation" of entrepreneurship, as long as they are seen in a broader framework and inspired by ethical values. (11) Evangelii Gaudium repeatedly rejects the idea of an "absolute autonomy" of the marketplace not governed by laws and morals. (12) It is critical not only of those who use the markets for selfish purposes but also of those economists who tend to look at poverty as a secondary problem that should be resolved almost automatically as a side product of economic growth. (13) In a much-cited passage, he laments: "How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?" (14) What troubles the pope is not the stock market itself but the tendency to direct our attention to it in a way that turns it into a new idol and to show practical indifference toward the plight of so many human persons. (15)

There is, however, another dimension in Francis's message that I will argue is fundamental for understanding his thinking as a whole. When it is ignored, the social dimension cannot be fully understood. This second dimension is the more interior and spiritual dimension, namely poverty as a Christian virtue. (16)

We find this ideal toward the very beginning of Evangelii Gaudium. In an important passage that laments the problem of consumerism, the pope takes the question to a deeper level and argues that "the great danger" of our time "is the desolation and anguish born of a complacent yet covetous heart, the feverish pursuit of frivolous pleasures, and a blunted conscience." (17) This is not just a private issue; it has profound consequences for our social and religious life: "Whenever our interior life becomes caught up in its own interests and concerns, there is no longer room for others, no place for the poor. God's voice is no longer heard, the quiet joy of his love is no longer felt, and the desire to do good fades." (18)

This message is at the heart of Francis's thinking and mindset concerning the economic sphere. We find it repeatedly in his personal preaching such as the morning Mass homilies that, in fact, rarely focus on the social aspect of poverty. (19) In his homilies he insists on detachment from temporal goods and on the battle against worldliness, (20) on the relationship between spiritual poverty and praise of God, (21) and on the search for the true treasure. (22) We find the same idea in statements surrounding the theme of reform of the Roman Curia: the pope is not so much interested in institutional reforms as he is in the fidelity of the servants of the Church to the spirit of the gospel, which includes material detachment and poverty of spirit.

The two dimensions form an intimate personal connection. The social dimension of justice and charity toward the poor can only be effective when there is an interior commitment to treat temporal goods as gifts that ultimately come from God and belong to him. According to Francis, moreover, the relationship goes the other way too. There is true charity only when it is accompanied by acts that establish a personal connection with the person in need: "Tell me, when you give alms do you look into the eyes of the man or woman to whom you give alms?... And when you give alms, do you touch the hand of the one to whom you give alms, or do you toss the coin?" (23)

The pope has explicitly disassociated himself from what he calls pauperism. Moreover, regardless of the specific methods of helping the poor, to Francis, the key issue is not institutional philanthropy but the divine call to come out of oneself. It is not so much a question of giving material goods to the poor, as of giving oneself. (24) This is what helps to restore the dignity of the poor: not things alone but the personal touch and contact that recognize them as truly human persons.

It is interesting to note that it is precisely the more personal texts of the pope (especially his homilies) that highlight the second, personalistic dimension of his vision of poverty. It is here that we discover Francis's deeper contribution to economic thinking. It is not a technical contribution; it is a vision of anthropology, morality, and spirituality that also has tangible economic consequences.

Francis versus Free-Market Economics: A Preliminary Assessment

From the viewpoint of a free-market economist, there are essentially three possible ways of evaluating the pope: (1) Francis's message is incompatible with free-market economics, (2) his message can be reconciled with liberal economics but only by rendering it irrelevant for economics, and (3) there is a deeper compatibility that is relevant for our understanding of economic freedom.

Incompatible with Free Markets?

The first alternative cannot be entirely dismissed, as we have already seen. In Evangelii Gaudium, there are sections that are openly critical of an unconditional reliance on the markets. For example, in one paragraph the problem of inequality is attributed to "ideologies which defend the absolute autonomy of the marketplace and financial speculation" and that "reject the right of states, charged with vigilance for the common good, to exercise any form of control." (25) However, this criticism should not be hastily applied to any and all positions favorable to free markets. (26) The ideology mentioned in the papal document is very rare even among economic liberals, and there are practically no countries that would follow such an ideology. (27)

No doubt there are expressions in Evangelii Gaudium that suggest an antagonism toward market-based thinking. (28) One might argue that these questions could be given a more nuanced analysis, but in any case Francis has made it clear that he did not intend to take a specific position on strictly economic questions; what he had in mind is moral attitudes within the economic realm, including those that take no real and effective interest in the poor. (29) Such attitudes can be condemned without contradicting the principles of economic freedom.

When we interpret Francis, it is important to remember that he is mainly focused on the personal moral dimension, and may ignore some of the political implications of these debates. As Rich Lizardo pointed out in relation to an earlier papal pronouncement that lamented "the cult of money," (30) this was spun in the media "as a mere economic speech in which Francis was calling for increased government intervention and denouncing capitalism" even though he made no reference to either capitalism or government intervention. (31)

Those of us who are used to public-policy debates are sometimes too prone to interpret any statement in terms of those categories, and politically motivated journalists and intellectuals will be keen to find apparent papal support for their policy preferences. In an important paragraph of Evangelii Gaudium, however, the pope expressly tries to avoid this. He insists that he does not intend to favor any specific political ideology or attack anyone. He states that he is "interested only in helping those who are in thrall to an individualistic, indifferent and self-centered mentality to be freed from those unworthy chains and to attain a way of living and thinking which is more humane, noble and fruitful, and which will bring dignity to their presence on this earth." (32) This may be in tension with some of the expressions of the document, but if one accepts this as a declaration of intent, it should also influence our interpretation of the rest.

I should add that when Francis shows interest in practical solutions to reduce poverty, he is not totally naive about the challenges involved. As Samuel Gregg has noted, Bergoglio wrote a statement of skepticism toward traditional welfare policies in a 2001 publication entitled Hambre y sed de justicia: "There are Argentinians facing poverty and exclusion, and who we must treat as subjects and actors of their own destiny, and not as patronized recipients of welfare doled out by the State or civil society." (33)

The same personalistic principle can be found in Evangelii Gaudium, which states, Growth in justice requires more than economic growth, while presupposing such growth: it requires decisions, programs, mechanisms and processes specifically geared to a better distribution of income, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality. I am far from proposing an irresponsible populism. (34)

Francis does not rule out state intervention in these areas; what really matters is that the means are truly effective, and he knows that the assessment of those means is beyond his competence. What is in his competence is the moral message--a message of solidarity that should influence the way in which we think about economics. (35)

According to Phil Lawler, the "argument can be made that capitalism, tempered by a Christian moral framework, is the best available solution to the problem of poverty. Nothing that Pope Francis said... would rule out that approach." (36) Beyond the general problem of poverty, one might further argue that many of the values that Francis insists on can only be safeguarded by following the principles of economic freedom outlined earlier.

I will only mention two examples. One of these values is the principle of inclusion that demands access to labor markets in which one can be socially useful and economically productive, thus supporting oneself and one's family and community. At this time, a labor-market economist would be right to point out that this can in fact be best achieved by improving the conditions for vibrant entrepreneurship and for investment in productivity-enhancing capital, and by making labor markets flexible and adaptive. These conditions alone may be insufficient, but they are necessary conditions for inclusivity in labor markets. In contrast, restrictions on entrepreneurship and excessively protective measures can only produce an appearance of stability, which over time transforms itself into structural unemployment, that is, systematic exclusion.

Another key value of Francis is the personal connection with those in need. On a superficial level, one might think that a generous welfare state reflects a wider culture of solidarity, which would also be manifested in other forms of spontaneous charitable activity. In reality, the experience in European welfare states is the opposite. As governmental social involvement increases, civil society institutions begin to retreat because they are seen as unnecessary. Moreover, the growing tax burden caused by the welfare state makes ordinary citizens reluctant to make voluntary donations ("I already pay so much in taxes!"), and the existence of government safety nets becomes the perfect excuse for personal indifference toward the poor ("Why should I help him? Besides, it is his own fault if he fails to get the benefits provided by the state!"). Thus an excessive welfare state is not only impersonal and bureaucratic but also fosters precisely that culture of practical indifference that Francis has heavily criticized.

Irrelevant to Economics?

There is, however, a subtle danger. It is to take this reconciliation to extremes and to argue that the pope does well to advocate these values, but they have no real economic relevance. They belong to the sphere of moral and spiritual values, and that sphere has no connection with the value-free science of economics.

This would imply that, even considering moral and religious principles as potentially relevant for the economy, they would be rendered scientifically neutral by classifying them as subjective preferences, as is typical in mainstream economics. Therefore, charity, poverty, and detachment are by definition excluded from the consideration of economics. In consequence, any potential conflict between ethics and economics is resolved by maintaining that there is no dialogue because the parties are talking about entirely different issues.

This view is rarely proposed systematically, but it is a common attitude among liberal economists--perhaps because it may seem advantageous for the defense of free-market economics--it evades the wishy-washy talk about charity and social justice by declaring them subjective concepts that cannot challenge the objective truths of economics. On closer inspection, though, this is a dangerous mistake that jeopardizes the entire program of economic freedom.

Toward Integration: A Deeper Connection

Extrinsic Reinforcement

In the remainder of what follows, I will advance a different view, according to which Francis's message is relevant for free-market economics as such. Correctly interpreted and appropriated, it positively reinforces the advocacy of economic freedom. I will argue that it does so in two ways, first by insisting on the social framework that is extrinsically necessary for a Christian vision of economic freedom and second by pointing toward the moral framework that is intrinsically necessary for economic freedom.

I would like to illustrate the first point by sharing a personal experience--a kind of a change of heart. Some fifteen years ago, when I was a young and enthusiastic libertarian, I often came across the following counterargument to my convictions: "Sure, if everyone were as good a person as you are, then your proposal would work, but it won't because people are so selfish!"

Was I flattered? No. I felt completely misunderstood. I was not trying to say that people are good; therefore, you can give them freedom. I was arguing almost on the opposite premises: people on the whole are not good, and they tend to abuse whatever coercive power is available to them--that power tends to corrupt, as Lord Acton famously said--so that we need to design our political institutions in a way that minimizes the opportunities for abuse. I was convinced that this would be achieved both by reducing the scope of state intervention in the lives of individuals and communities and by maximizing the scope of personal freedom and responsibility.

I still insist that there was a kernel of truth in my youthful convictions, but over the years, I came to see that my polite opponents had a point. This can be illustrated by considering a kind of a virtuous liberal utopia and contrasting it with some common arguments against economic freedom.

Vices and Freedom

If we imagine a society of saints--that is, a society of perfectly virtuous persons--we would expect to find no fraud, no theft, no breaking of promises, no deceit, and so on. In summary, there would be no need to protect oneself against violence or abuse. In consequence, a large part of law enforcement could be done away with, as well as a large part of specific legislation. This would imply huge economic savings as well as an increase in the scope of personal freedom. Naturally, there might be persons who suffer due to an illness, an accident, or old age, but their needs would be met by the generous charitable activity of the others. Hence there would be no motive for coercive intervention by a state; if one can speak of a state at all in such a society, its role would be reduced to a minimum, covering some coordination of functions that facilitate the various voluntary activities.

Now, contrast this apparently silly utopia with our normal condition, and it becomes evident that one of the principal reasons why many people are skeptical about liberal ideas is that they fear--rightly or wrongly--that freedom would be abused by the strong and the cunning. For example, it is felt that companies will abuse the weakness and ignorance of laborers and consumers. Therefore it is necessary to impose restrictions and compulsory contract terms that favor those workers and consumers. Likewise, large companies will tend to develop into monopolies. Therefore we need to control the growth of firms and to restrict certain activities to state-owned enterprises. Most importantly, free-market rhetoric is seen by many as an excuse for greed and avarice by the wealthy, and this can only be counteracted by redistributive taxation.

Free-market advocates will think that this framework is unbalanced. It is too skeptical of firms and employers, and excessively optimistic about politicians and bureaucrats. It fails to acknowledge the limits of what can be achieved through law and state intervention, and it is ignorant of the efficiency losses and of the resulting opportunities for corruption. It is too harsh on the wealthy, and it does not appreciate the long-term economic, social, and moral damage produced by high taxes and generous welfare policies.

Absolutely true. But that is not all. In a debate along these lines, it is common that both parties take the underlying moral factors as something inherent, stable, and unchangeable, as if the vices of humanity were a physical constant determined by natural laws. This is typical in economics today: The relevance of the moral sphere is rarely even recognized, and if it is, it is treated as an exogenous factor--something that cannot be influenced. Consequently it was possible for one economist to argue that the socially optimal level of crime is a positive amount (because the so-called supply of crime is taken as an exogenous factor, and the means to completely eliminate crime has a high social cost). (37)

This view is understandable, of course. The saintly utopia is not accessible to us. At the same time, the level of virtues or vices does vary depending on time and place (the common virtues and vices are also subject to variation, as C. S. Lewis once noted). (38) Moreover, virtues can be influenced through a range of personal, social, and institutional means. In fact, the growth of virtue and discouragement of vice was the traditional scope of education in all civilizations until very recently; it continues to be an important component of the criminal justice system.

Charity and Social Justice

Let me connect charity and social justice with Francis. He does not speak of endogenous and exogenous factors in economic policy, but his entire discourse implies the conviction that every man and woman is capable of personal, moral, and spiritual change, or conversion, and that they need to be encouraged to change. Ultimately, that change can never be imposed by force because it belongs to the sphere of freedom and grace that will always be a mystery to us. Yet it can be encouraged, facilitated, and promoted.

The direction that Francis encourages is precisely the direction that is necessary for a free society and a free economy. The argument here is limited to the issues of poverty and inequality, which are themes dear to Francis. Without examining the limits of legitimate distributive taxation, we can hold that the practical need for redistributive policies will be inversely proportional to the charitable generosity of the better-off members of the society. Ultimately, in a society fully inspired by Christian solidarity, the political argument for government intervention in this area would be close to nothing. In contrast, the greater the indifference and inaction, the stronger the pressure against economic freedom and private property.

The fact is that freedom without charity is not a genuinely Christian option--and even more so, charity without freedom is definitely not Christian. It follows that, in the end, the only fully Christian approach with respect to poverty is freedom with charity--charity in freedom and freedom in charity.

That is the utopia, but it is also relevant in an imperfect world. There is scope for debate on what can and should be done in any specific context. Francis has not proposed specific policies; he has issued a call to take the question seriously. My interpretation is that if a Christian wants to defend economic freedom, he must take the message of charity to heart and put it in practice in word and deed.

Free Markets and Solidarity

This does not exclude the search for market-based development and growth. One thing that economic science demonstrates is that you can only have sustainable development if you are able to produce profitably, and the growth of productivity can only be achieved by an entrepreneurial system coupled with flexible labor markets. Nevertheless, there will be people who are unable to produce, and there will be people who stand to benefit from economic growth only after very long time spans. In these circumstances, sound economics must not become an excuse for selfishness. Economic freedom is compatible with charity that seeks to help the poor more quickly (39) This is the message of solidarity that Francis offers everyone: It means working to eliminate the structural causes of poverty and to promote the integral development of the poor, as well as small daily acts of solidarity in meeting the real needs which we encounter. The word "solidarity" is a little worn and at times poorly understood, but it refers to something more than a few sporadic acts of generosity. It presumes the creation of a new mindset which thinks in terms of community and the priority of the life of all over the appropriation of goods by a few. (40)

What Francis insists on is that this is not so much a question of economic policies as of an interior transformation that makes it possible to create solutions that are truly effective: These convictions and habits of solidarity, when they are put into practice, open the way to other structural transformations and make them possible. Changing structures without generating new convictions and attitudes will only ensure that those same structures will become, sooner or later, corrupt, oppressive and ineffectual. (41)

I am not suggesting that free-market economists should adopt the language of poverty and detachment for tactical purposes. They should make it their own and live it out personally. We can oppose socialist and totalitarian ideas for many reasons, but the truth remains that a free society will only be fully acceptable when it is inspired by charity--and by a spirit of Christian poverty.

Intrinsic Reinforcement

However, is a spirit of poverty truly compatible with free-market economics? It may seem that there is an inherent contradiction, but I argue that, in reality, it is precisely the other way around. We can only truly love freedom, when we love true freedom. Grasping this may be one of the key challenges that define the future of liberal economics.

The Moral Foundations of a Free Society

My argument is based on the question concerning the moral foundations of a free society. The question concerning moral foundations has attracted limited attention among twentieth-century economists. Many of them hold that free competition and private property do not necessarily presuppose egoistic or materialistic values (they add that egoism and materialism may thrive in nonmarket settings too). Yet they often suppose that such values are ultimately irrelevant because market-based institutions are able to produce good social outcomes even from selfish private motives. This view receives support from the legacy of Adam Smith, who famously argued, "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest." (42)

This is, however, a misunderstood legacy. Smith was not trying to justify selfishness. He sought to highlight the fact that self-interest and benevolence are not always opposed to each other and that we need social institutions that enable us to cooperate for mutual benefit even when there is no altruism involved. (43) Moreover, Smith was aware that his argument was only true within an adequate legal and institutional framework. He elsewhere insisted on the importance of a reliable system for the administration of justice, and he was worried that businessmen might tend to collude and form cartels or monopolies--in other words, the profit-maximizing logic might turn toward activities that undermine the market itself. (44)

As we already saw, we cannot expect people to be faultless, but I would argue that social and economic development has always depended on the extent to which there are men and women who are able to recognize fundamental moral truths and to practice them in business, politics, and other fields of social life. This conviction was broadly shared by Adam Smith and other representatives of the Scottish Enlightenment who argued that a commercial society depends on certain underlying virtues without which a market-based social order can be neither established nor maintained. (45)

Allow me to insist on this because it is not uncommon to find those who think that the idea of free markets implies that "everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless." (46) This, in reality, is a corruption of free-market principles, and such a corruption is ultimately incompatible with those principles.

Free-market economics does not necessarily imply a specific moral outlook, and its advocates represent a wide variety of ethical and religious convictions. Economic freedom cannot, however, be consistently defended by a moral relativist, because it depends on certain fundamental rights. These include, among others,

* the recognition and protection of private property,

* the right to have one's contracts enforced in efficient and impartial courts,

* the right to start an honest business without having to bribe public officials,

* the right to seek employment or hire an employee without undue restrictions by vested interest groups that violate both fundamental rights and the common good,

* the respect of the principle of subsidiarity in the provision of public services,

* fair and minimal taxation,

* frugal public spending,

* the absence of corruption in public office,

* and a stable and honest system of money and banking.

It is easy to write down these and similar principles--it is very difficult to put them into practice. They can only be obtained and maintained if there are significant moral and institutional constraints on the use of violence, deception, and other antimarket means. A market economy may tolerate some morally dubious activities, but this does not mean that it can be based on a law of the jungle. The notion of free competition is highly misleading if taken literally; it presupposes a delicate framework of moral and legal obligations.

Therefore the foundational principles of economic freedom are ultimately connected to broader principles of social, political, and religious freedom. Additionally, they all depend on a range of social institutions (including the family) as well as on cultural norms and moral commitments without which a free society can be neither established nor maintained.

Maintaining Freedom

If we wish to defend economic freedom in today's world, we must start asking some serious questions about the relationship among freedom, virtues, and economics. This merits careful thought, because influential thinkers have argued that capitalism undermines virtue. (47) Some free-market advocates have responded to this challenge, but they have tended to go to the other extreme. (48) This would ultimately imply that economic freedom is all you need, and everything else--both wealth and morality--will follow.

It is probably true that a free-market system will encourage many virtues and positive values, including thrift, honesty, prudence, and peace. (49) Yet it may also have harmful moral consequences, such as the growth of utilitarian and impersonal relationships and lower esteem for economically unproductive persons. Free-market principles may also be excessively permissive of activities that undermine social morality. An example of this is advertising, which plays a legitimate role in business, yet it may promote an unhealthy culture of consumption or employ methods that violate the dignity of the person. (50) Competitive markets may also create challenging conditions for fundamental social institutions such as the family. (51) This is an issue that economists should be interested in not only as human persons but also as economists because the viability of the market order crucially depends on these social institutions.

The point is not that government intervention is necessarily needed or justified; it is that economic freedom should not be considered as an isolated and autonomous social reality. The excesses of the market-based order may need to be moderated by other cultural factors and institutions. We might say that the market needs the support of other social and cultural institutions, which in turn merit protection. Promoting and protecting those institutions and values should not be seen as something that does not concern economics; they are necessary for the moral viability of a free society and a free economy.

The Relevance of Francis

This proposal is not entirely new. Important work in this direction was made by some of the classical economists, and it has been continued in the twentieth century by economists such as Wilhelm Ropke (52) and Michael Novak. (53) Yet I argue that Pope Francis adds something new to the picture. I identify two things.

First, Francis does not propose a system--he calls us to conversion. Systems are important, but they are never enough. Thinking in terms of systems is a constant danger for economists and social scientists because their methodology demands abstraction that cannot incorporate all the complexity of real human persons. Nevertheless, in reality, a great deal depends on those human factors that cannot be scientifically modeled.

Second, Francis insists on the Christian idea of the spirit of poverty and detachment. This is fundamental, precisely because when correctly understood it strikes at the heart of the challenge. It is not money but the disordered love of money that is the root of all kinds of evil (1 Tim. 6:10). That challenge is always present, and it is especially present when there are great opportunities for wealth creation. However, the problem of greed touches on everyone, not just the rich, and the temptation cannot be removed by laws. It can only be overcome by moral conversion, by grasping the true meaning of freedom, and, in this sense, freedom is something that must be constantly conquered anew--not only in each generation but also in each day of each human person.

Conclusion

I have offered a market-friendly interpretation of Pope Francis. I have not argued that Francis is personally favorable to free-market ideas, but that his moral convictions can be rendered compatible with sound free-market economics. Not only that, but correctly understood, Francis's message in the realm of economic ethics is not only acceptable but also beneficial for economic freedom. That is the paradox. Freedom-friendly economists need not be afraid of the pope--they should follow him, seek to advise him on his own terms, and make their own message more credible, more attractive, and more consistent.

It would be too much to say that combining Francis's spirit with sound economics would be a way of baptizing economics. Economic science is not foreign to Christianity: scientific economic analysis was first discovered by the theologians of Salamanca. (54) Yet Chesterton was right in saying that "the modern world is full of old Christian virtues gone mad." (55) In some sense, this is also true of liberal economics.

There is much to be done. Francis has issued a challenge. He insists on values and principles--poverty, charity, solidarity--that resonate in the hearts of people because they contain important moral and spiritual truths. Our task is to correctly discern and interpret that message in a way that is both deeper and more practical, making use also of our understanding of economic realities. Naturally, this reflection should be done mainly by lay people who are competent to judge these temporal matters.

Let me emphasize: Francis's message and language may sometimes seem to be in tension with ideas dear to free-market advocates, but instead of a contradiction that can be a positive tension that helps to purify and enrich our economic thinking--just as sound economics is needed to complete the message of Francis. The outcome of such a synthesis will not be free-market economics closer to the left; it will be free-market economics closer to Christ--and thus closer to true freedom, lasting freedom, attractive freedom.

Notes

(*) This article was originally delivered as the Calihan Lecture on Reception of the Novak Award 2014 on December 4, 2014, at the Pontifical University of the Holy Cross in Rome. The author is especially grateful to Carlo Lottieri as well as Arturo Bellocq, Robert Gahl, Samuel Gregg, Kishore Jayabalan, Michael Severance, John Wauck, and other participants at the Novak Award ceremony for valuable comments.

(1.) Francis, Evangelii Gaudium (November 24, 2013) [hereinafter EG]. I am referring to the aspects related to social and economic issues, found especially in nos. 53-58 and 186-216 of the document. It should be remembered, however, that the central message is concerned with the Church's mission of evangelization, and the specific texts must be read within this wider context.

(2.) "Pope Francis calls unfettered capitalism 'tyranny' and urges rich to share wealth," Guardian, November 26, 2013, https://web.archive.org/web/20131126131159/http://www.theguardian.com/world/2013/nov/26/pope-francis-capitalism-tyranny. In reality, the words unfettered and capitalism do not appear in the document at all. In EG, no. 56, however, it laments the gap separating the rich and the poor, and argues that the "idolatry of money" and the "ideologies which defend the absolute autonomy of the marketplace and financial speculation" give rise to a "new tyranny."

(3.) Matthew Yglesias, "Pope Francis Strafes Libertarian Economics," Slate, November 26, 2013, http://www.slate.com/blogs/moneybox/2013/11/26/evangelii_gauddium_pope_francis_vs_libertarian_economicshtml.

(4.) Broadcaster Rush Limbaugh apparently said: "This is just pure Marxism coming out of the mouth of the pope." See Neil Ormerod, "Is the Pope a Marxist?" Eureka Street 23, no. 24 (December 16, 2013), http://www.eurekastreet.com.au/article.aspx?aeid=38645.

(5.) For example Michael Novak, "Agreeing with Pope Francis," National Review Online, December 7, 2013, http://www.nationalreview.com/article/365720/agreeing-pope-francis-michael-novak.

(6.) Francis, encyclical letter Laudato Si' (May 24, 2015). The present article was delivered before the publication of this encyclical, and it has been decided to maintain its original content. Although the discussion following Laudato Si' provides further illustration of the issues discussed here, the substance of the argument is not affected.

(7.) Genevieve Jordan Laskey, "Pope Francis: Liberation Theologian? Not So Fast," Millennial Journal, June 12, 2013, http://millennialjournal.com/2013/06/12/pope-francis-liberation-theologian-not-so-fast.

(8.) More detailed distinctions can be found in the indices of economic freedom produced annually by the Heritage Foundation and the Frasier Institute.

(9.) See F. A. Hayek, "The Dilemma of Specialization," in Studies in Philosophy, Politics and Economics (Chicago: University of Chicago Press, 1967), 122-32.

(10.) See EG, nos. 202-16.

(11.) EG, nos. 189 ("The private ownership of goods is justified by the need to protect and increase them, so that they can better serve the common good"); 203 ("Business is a vocation, and a noble vocation, provided that those engaged in it see themselves challenged by a greater meaning in life; this will enable them truly to serve the common good by striving to increase the goods of this world and to make them more accessible to all.").

(12.) EG, no. 56. See also no. 204: "We can no longer trust in the unseen forces and the invisible hand of the market."

(13.) See EG, no. 54.

(14.) EG, no. 53.

(15.) See EG, no. 55: "One cause of this situation is found in our relationship with money, since we calmly accept its dominion over ourselves and our societies. The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols."

(16.) For a synthesis of the Francis's Christian notion of poverty, see Samuel Gregg, "Pope Francis on the True Meaning of Poverty," Crisis Magazine, June 5, 2013, http://www.crisismagazine.com/2013/pope-francis-on-the-true-meaning-of-poverty. See likewise Robert Cardinal Sarah, "Reflexiones sobre el sentido de la pobreza en el Papa Francisco," Palabra, March 2014, 8-13.

(17.) EG, no. 2.

(18.) EG, no. 2.

(19.) See for example the published collection of homilies in Papa Francesco, Omelie del mattino (Vatican: LEV, 2013).

(20.) Francesco, Omelie del mattino, 111-13 ("Lontani dalla mondanita," April 30, 2013), 231-34 ("Per smarcherare gli idoli nascosti," July 6, 2013).

(21.) Francesco, Omelie del mattino, 247-49 ("I segni della gratuita," June 11, 2013).

(22.) Francesco, Omelie del mattino, 283-85 ("Alla ricerca del vero tesoro," June 21, 2013).

(23.) Pope Francis, "Vigil of Pentecost with the Ecclesial Movements" address by the Holy Father Francis, Saint Peter's Square (May 18, 2013), http://w2.vatican.va/content/francesco/en/speeches/2013/may/documents/papa-francesco_20130518_veglia-pentecostehtml.

(24.) See, for example, Lenten Message of Our Holy Father Francis, 2014, http://w2.vatican. va/content/francesco/en/messages/lent/documents/papa-francesco_20131226_mes-saggio-quaresima2014html.

(25.) EG, no. 56.

(26.) See Philip Booth, "Has Pope Francis Misunderstood the Market Economy?" The Tablet, December 4, 2013, http://www.thetablet.co.uk/blogs/1/164/has-pope-francis-misunderstood-the-market-economy-.

(27.) See Nicolas Cachanosky, "Pope Francis, Income Inequality, Poverty, and Capitalism," Mises Blog, December 11, 2013, http://bastiat.mises.org/2013/12/pope-francis-income-equality-poverty-and-capitalism, providing a good synthesis of relevant economic data. See also Gary Galles, "In Trusting Politics and Politicians, It Is the Pope Who Is Naive,"Mises Daily, December 28, 2013, http://mises.org/daily/6618/In-Trusting-Politics-and-Politicians-It-Is-the-Pope-Who-is-Na239ve, concluding that what he objects to is not, in fact, caused by capitalism. It is caused by its crony capitalist caricature, which is a form of government control, not the individual self-determination enabled by capitalism. The confusion in Evangelii Gaudium is highly problematic. Spurred by this document, politicians may, in trying to 'fix' capitalism, which is a massive economic blessing rather than the problem, turn to the transfer of even more individual choice to government diktat, resulting in even more crony capitalism. It would eviscerate the widespread benefits of capitalism, and in turn, harm the very people Francis wishes to protect.

(28.) See for example EG, no. 54, stating that "some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world." In a somewhat knee-jerk reaction to the document, Gregory Mankiw nevertheless rightly pointed out that "'trickle-down' is not a theory but a pejorative used by those on the left to describe a viewpoint they oppose. It is equivalent to those on the right referring to the 'soak-the-rich' theories of the left. It is sad to see the pope using a pejorative, rather than encouraging an open-minded discussion of opposing perspectives." Greg Mankiw, "The Pope's Rhetoric," November 30, 2013, http://gregmankiw.blogspot.it/2013/11/the-popes-rhetoric.html.

(29.) Pope Francis stated this explicitly in an interview made after the publication of Evangelii Gaudium: I wasn't speaking from a technical point of view, what I was trying to do was to give a picture of what is going on. The only specific quote I used was the one regarding the "trickle-down theories" which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and social inclusiveness in the world. The promise was that when the glass was full, it would overflow, benefitting the poor. But what happens instead, is that when the glass is full, it magically gets bigger--nothing ever comes out for the poor. This was the only reference to a specific theory. I was not, I repeat, speaking from a technical point of view but according to the Church's social doctrine. This does not mean being a Marxist.

Andrea Tornielli, "Never be afraid of tenderness," Vatican Insider, December 16, 2013, http://vaticaninsider.lastampa.it/en/the-vatican/detail/articolo/30620. Note that the "trickle-down theories" described by Francis are not a reference to academic theories within development economics, but to arguments made by some free-market advocates (naturally described as Francis has understood them).

(30.) Address of Pope Francis to the Non-Resident Ambassadors to the Holy See: Kyrgyzstan, Antigua and Barbuda, Luxembourg and Botswana (May 16, 2013), http://w2.vatican.va/content/francesco/en/speeches/2013/may/documents/papa-francesco_20130516_nuovi-ambasciatori.html.

(31.) Rich Lizardo, "Why Progressives Are Wrong about Pope Francis and Poverty," The Spectacle Blog, June 6, 2013, http://spectator.org/blog/53986/why-progressives-are-wrong-about-pope-francis-and-poverty.

(32.) EG, no. 208.

(33.) Gregg, "Pope Francis on the True Meaning of Poverty," 16n.

(34.) EG, no. 204.

(35.) See EG, no. 58: A financial reform open to such ethical considerations would require a vigorous change of approach on the part of political leaders. I urge them to face this challenge with determination and an eye to the future, while not ignoring, of course, the specifics of each case. Money must serve, not rule! The Pope loves everyone, rich and poor alike, but he is obliged in the name of Christ to remind all that the rich must help, respect and promote the poor. I exhort you to generous solidarity and to the return of economics and finance to an ethical approach which favours human beings.

(36.) Phil Lawler, "What Capitalists Should Learn from the Pope's Critique," Catholic Culture, May 16, 2013, http://www.catholicculture.org/commentary/otn.cfm?id=981. This was written in response to a lower-level papal pronouncement (see above, note 30), but it is largely applicable to Evangelii Gaudium also.

(37.) See the classic paper by Gary S. Becker, "Crime and Punishment: An Economic Approach," Journal of Political Economy 76 (1968): 169-217.

(38.) See C. S. Lewis, "On Ethics," in Christian Reflections, ed. Walter Hooper (Grand Rapids: Eerdmans, 1967), 44-56.

(39.) Of course, such help will be truly effective only if it contributes to the development of skills and capabilities that enable persons to help themselves. In most cases, this requires investment in professional education, and the persons in question may be unable to finance such investment, or they may fail to see its long-term advantages. A free-market advocate may argue that there are reasons to oppose tax-funded financing; that means, however, that it is necessary to find the resources through other means. A not uncommon attitude among liberal economists is to think, more or less, that it would be good if people were more generous and charitable, but that is not their turf. Yet people are not generous with their talents, time, and wealth just because they feel like it. They need to be encouraged to be so. That encouragement can take many forms, both personal and institutional. It can be embedded in preaching or in a friendly conversation or in tax policy.

(40.) EG, no. 188.

(41.) EG, no. 189.

(42.) Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan (1776; repr., Chicago: University of Chicago Press, 1976), 1.2.2, available at http://www.econlib.org/library/Smith/smWN.html.

(43.) "Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only." See Smith, Wealth of Nations, 1.2.2.

(44.) This is what free-market economists call crony capitalism, that is, the exploitation of political connections to obtain subsidies, entry barriers, and other antimarket privileges. For this reason some have argued that we need to protect capitalism from the capitalists, that is, it is necessary to protect a system of open competition, equal entrepreneurial rights, and flexible labor markets from those producers and other interest groups that are prepared to use dishonest social and political means including bribery and corruption. This is a huge challenge not only in the so-called underdeveloped economies but also in Europe and the United States.

(45.) Adam Smith dedicates some attention to this in his earlier work The Theory of Moral Sentiments, ed. D. D. Raphael and A. L. Macfie (1759; repr., Oxford: Clarendon Press, 1976), available at http://www.econlib.org/library/Smith/smMS.html. For an excellent study, see Ryan Patrick Hanley, Adam Smith and the Character of Virtue (New York and Cambridge: Cambridge University Press, 2009); Ryan Patrick Hanley, "Social Science and Human Flourishing: The Scottish Enlightenment and Today," Journal of Scottish Philosophy 7 (2009): 29-16. On other thinkers of the Scottish Enlightenment that influenced Smith on ethics, see Samuel Gregg, "Metaphysics and Modernity: Natural Law and Natural Rights in Gershom Carmichael and Francis Hutcheson," Journal of Scottish Philosophy 7 (2009): 87-102. More generally on the history of reflection on the moral foundations of the commercial order, see Samuel Gregg, The Commercial Society: Foundations and Challenges in a Global Age (Lanham: Lexington Books, 2007), chaps. 1-4.

(46.) EG, no. 53.

(47.) This perspective has a long history and includes the Scotsman Adam Ferguson, a contemporary of Adam Smith. See Andrew M. Yuengert, "Free Markets and Character," Catholic Social Science Review 1 (1996): 99-110, esp. 100-105 (examining the arguments of such thinkers as Ferguson, Marx, Karl Polanyi, Charles Wilbur, and Amintone Fanfani). An influential recent argument is that of Richard Sennett, The Corrosion of Character: The Personal Consequences of Work in the New Capitalism (London and New York: W. W. Norton, 1998).

(48.) For a critical assessment of the literature, see Yuengert, "Free Markets and Character," 47n.

(49.) The classic argument is that trade has a civilizing impact and will reduce revolutions and wars: see, for example, Alexis de Tocqueville, Democracy in America, ed. J. P. Mayer, trans. G. Lawrence (New York: Perennial Classics, 2000), 637.

(50.) On the problem of consumerism, an excellent reflection by an economist that shares free-market principles is Andrew Yuengert, "Free Markets and the Culture of Consumption," in Catholic Social Teaching and the Market Economy, ed. Philip Booth (London: Institute of Economic Affairs, 2007), 145-63. Obviously, unhealthy consumerism may also be promoted by antimarket policies such as artificial credit expansion.

(51.) On the interactions between labor markets and the family, see Nuria Chinchilla and Consuelo Leon, Female Ambition: How to Reconcile Work and Family (New York: Palgrave Macmillan, 2005); Nuria Chinchilla and Maruja Moragas, Masters of Our Destiny (Pamplona: EUNSA, 2008); Nuria Chinchilla, "The Business of Looking after the Family," MercatorNet, August 7, 2009, http://www.mercatornet.com/articles/view/the_business_of_looking_after_the_family.

(52.) See especially Wilhelm Ropke, A Humane Economy: The Social Framework of the Free Market, trans. Elizabeth Henderson (Chicago: Regnery, 1960). For a systematic analysis, see Samuel Gregg, Wilhelm Ropke's Political Economy (Chichester: Edward Elgar, 2010).

(53.) See especially Michael Novak, The Spirit of Democratic Capitalism (New York: Simon and Schuster, 1982). See George Weigel, "American and Catholic: Michael Novak's Achievement," City Journal, Winter 2014, http://www.city-journal. org/2014/24_1_michael-novak.html; Flavio Felice, "The Spirit of Democratic Capitalism: Thirty Years Later," Avvenire, August 30, 2012, http://www.aei.org/article/politics-and-public-opinion/the-spirit-of-democratic-capitalism-thirty-years-later.

(54.) This seems to have been for the first time clearly acknowledged by Joseph Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), 98.

(55.) G. K. Chesterton, Orthodoxy (London: John Lane, 1909), 53.

Oskari Juurikkala (*)

University of Helsinki