The Pope's Five Mistakes

By Carlos Alberto Montaner (*)

Pope Francis bases his economic ideas on the Social Concern of the Church (SRS), a mixture of good purposes and empty statements, some of them contradictory, that the Vatican has been accumulating since 1891, when Leon XIII proclaimed the Encyclical Rerum Novarum to deal with “the social issue.”

The SRS, from the Latin Sollicitudo Rei Sociales, was conceived to confront the communists, but without clearly espousing the market economy. Nevertheless, it contains at least five important mistakes that invalidate it as a serious instrument to foster development and combat poverty.

• First: The idea that private property is justified only “in its social function.” That assertion in the SRS opens the door to all kinds of abuses from the big bosses. Who decides if having one comfortable mansion in Miami, another in a Caribbean resort and a nice yacht to commute between them is morally acceptable in their social function?

What is the social function of owning a Botero, a Picasso, a Mercedes Benz or a Rolex President? Where does “the social function” begin or end? What does this phrase mean, exactly?

• Second: The erroneous notion of “the common good.” That concept wielded by the SRS -- but not only by the SRS -- serves to justify the intervention of the State for the alleged purpose of correcting the errors of the market. It is relatively easy to understand that the notion of the common good is a camel, given that the needs of society tend toward infinity, while the available resources are limited. The goods and services offered to some are always denied to others.

The airport being built comes at the price of the hospital or school that is not constructed. The resources utilized to build a magnificent temple to praise God are not used to build an orphanage. And the people who make the decisions do not do so after racking their brains to establish what the common good is, but to satisfy their supporters or, in the worst of cases, to benefit themselves personally.

It might be useful for the Holy Father and his advisers to review the well-based proposals of the “Theory of Public Choice.” Maybe then they would keep from making a few blunders.

• Third: The disastrous belief that a “fair price” exists for everything and that the functionaries are capable of determining it. That old debate begun by the ancient Greeks has been translated by the SRS in the certainty that there is a “just wage” or “just material conditions” in which man's dignity is verified.

Strictly speaking, that stance is the fruit of ignorance, demagogy or excessive kindness. The wages and living conditions of workers (and proprietors) do not depend on the subjective needs described by the SRS but on objective conditions of the society in which people work and the quality of the productive apparatus. A society that obtains its resources from selling coffee cannot achieve the quality of life of another society that manufactures computer chips, airplanes and pharmaceutical products.

If one works like a Dutchman, he can and should hope to live like a Dutchman. If one works like a Congolese, he will have to live like a Congolese even though the SRS futilely insists on its kind discourse, unless the government forces a continuous transfer of resources from the productive to the unproductive societies, or from the productive to the unproductive sectors, an attitude that ends up destroying the foundations of the economic system.

• Fourth: Inequality. The stance of the SRS regarding inequality is dangerous and can worsen the situation. It is absurd to suppose that those who manage the State must and can determine the quantity and quality of goods that a person should have, in order to combat the scourge of “inequality.”

I know that what worries the Vatican is that the CEO of some company earns 200 times more than the janitor, but somehow it's the society itself that must decide or allow such discrepancies, the same way that it makes multimillionaires out of its favorite artists or athletes without worrying about the inequality being created.

Who establishes those limits? Is it immoral for the cardinals to have air conditioning, secretaries, automobiles, while churchgoers -- the exponents of inequality --are starving and begging for alms outside the church doors?

• Fifth: Austerity and non-consumerism. The SRS's defense of austerity and non-consumerism is foolish, because it does not admit the subjective nature of such attitudes and does not understand the inherent contradiction in fighting poverty and condemning consumption.

If the First World heeded the Vatican and suddenly assumed an austere life, hundreds of millions of people all over the world would be plunged into misery and hunger. (I presume that Pope Francis knows that 70 percent of the  United States' GNP derives precisely from consumption and that every point in its decline means more unemployment and poverty.)

Fortunately for the Catholics, it is not necessary for them to subscribe to the SRS to save themselves. On these issues, the popes don't talk ex cathedra. They know that they could be mistaken. 

*Journalist and writer. His latest book is the novel A Time for Scoundrels; President of the Interameican Institute for Democracy.