One of Pope's Top Advisers Makes a Direct Attack on Free Markets and Libertarianism

By Robert Wenzel

The Religious News Service reports:

Taking direct aim at libertarian policies promoted by many American conservatives, the Honduran cardinal who is one of Pope Francis’ top advisers said Tuesday (June 3) that today’s free market system is “a new idol” that is increasing inequality and excluding the poor.

“This economy kills,” said Cardinal Oscar Rodriguez Maradiaga, quoting Francis frequently in a speech delivered at a conference on Catholicism and libertarianism held a few blocks from the U.S. Capitol.

The pope, Maradiaga said, grew up in Argentina and “has a profound knowledge of the life of the poor.” That is why, he said, Francis continues to insist that “the elimination of the structural causes for poverty is a matter of urgency that can no longer be postponed.”...

A charismatic churchman who speaks fluent English, Maradiaga was animated in his criticism of the effects of today’s free market capitalism and he peppered his remarks with digs at economic conservatives....

Maradiaga at one point brushed aside the fierce criticism that many conservatives have leveled at Francis by noting that “many of these libertarianists do not read the social doctrine of the church.”

“But now they are trembling before the book of Piketty,” he said with a laugh, referring to the controversial best-seller on the wealth gap by the French economist Thomas Piketty. “At least it is making them think,” he added.

Maradiaga was the keynote speaker at the conference, called “Erroneous Autonomy: The Catholic Case Against Libertarianism.”

For the record, there are many ways a person can become wealthy, some do so by producing goods and services the public desires, others are simply cronies that avoid free markets and get government to grant them crony market-hampering privileges. It is this latter form of wealth gain that must be objected to, and not gains by honest businessmen who provide products that people desire.

Maradiaga and the Pope don't seem to understand this distinction.

It should also be noted that inflation (which Argentina has certainly had its share of) causes distortions which benefit the rich at the expense of most everyone else. Even Keynes understood this. In The Economic Consequences of Peace, Keynes wrote with great astuteness:

 By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers," who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat...

 These "profiteers" are, broadly speaking, the entrepreneur class of capitalists, that is to say, the active and constructive element in the whole capitalist society, who in a period of rapidly rising prices cannot help but get rich quick whether they wish it or desire it or not. If prices are continually rising, every trader who has purchased for stock or owns property and plant inevitably makes profits. By directing hatred against this class, therefore...Governments are carrying a step further the fatal process which the subtle mind of Lenin had consciously conceived. The profiteers are a consequence and not a cause of rising prices. By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract and of the established equilibrium of wealth which is the inevitable result of inflation, these Governments are fast rendering impossible a continuance of the social and economic order...

(ht Jason Peirce)
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Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.com and author of The Fed Flunks: My Speech at the New York Federal Reserve Bank.