The difference between populism and neoliberalism isn’t that populists are the ones who care about the poor. It’s that populists don’t understand neoliberal arguments.
I am Catholic. Thankfully, nothing that was said was spoken ex cathedra. I believed that the economist Peter Bauer was overstating his case in his essay, “Ecclesiastical Economics: Envy Legitimized,” that earlier statements from the Vatican were nothing but populist economics. But that’s what Francis’s statements were.
We get things like this time and time again. Right now in Massachusetts (and much of the rest of the country), the issue is the minimum wage. Any analytic way of looking at the issue suggesting the minimum wage is bad is perceived to be made up intellectual blah-blah erected to oppose something that certainly sounds good for the poor. The veneer of being good for the poor is apparently much more weighty for the moralists than the intellectual arguments (whether for or against).
I do not think theology as a study has nothing to offer. But the fact is that for economic policy, the takeaway from theology is “care about the poor” (or at least it’s 98% of it). Okay, we get that. We’ve understood that. There is nothing to be gleaned from repeating it in theological language as if the neoliberals do not understand it, because one of the reasons neoliberals favor the policies that they do it out of the belief they will best help the poor over time. What the Pope has done is to assume the worst in neoliberals while ignoring any of the ways their policy preferences reflect a belief in helping the poor.
This is frankly disgusting in the context of economic development. Neoliberalism has pushed a billion out of poverty in the span of twenty years. One may wish to consider ways of improving that rate, or otherwise do that even better. Or one may suppose that the causal relationship isn’t nearly as straightforward as I’m making it out to be, but it certainly isn’t inconsistent with the data. In any case, you’d have problems convincing me that the Pope has critically assessed the historically unprecedented success of the poor in recent decades. As Sumner put it,
The Pope’s entire statement might make a bit more sense if applied to the developing world. Certainly the suffering in that area is much greater, as is the social exclusion and savage inequalities. But there is one fundamental problem in applying the statement to the developing world, those countries tend to be much less market-oriented than the countries of the developed world. Instead, they are often ruled by oligarchs that have their foot on the throats of the poor, and who favor non-market regimes precisely because barriers to competition make them rich. Nobody “deifies” free markets in the Congo or Afghanistan.
Is this uncharitable for me to say, especially as a Catholic? Well I would hope that someone who is speaking for the Church in an official communication to view the other side of the argument charitably. I’m just some jerk with a blog. This is why Ryan Avent’s denunciation of Mankiw is so strange. Mankiw’s tongue gets a bit sharp when pointing out that Pope Francis used the pejorative term of “trickle-down economics” in reference to free market ideas. I find in far worse that an important religious leader would use a partisan pejorative to describe his political opponents in the first place. In contrast, Mankiw’s blog is a forum for the Harvard Economics Department to lip sync to Call Me Maybe.
The way in which the Church has responded to developments (and potential developments) in the natural sciences is admirable. What it’s attacking may not be as mainstream to economics as evolution is to biology, but the analogy isn’t completely off. In practice, the Church has said more or less regarding evolution, “well if that’s what science says the history of the life is, then our understanding of the world should incorporate that.” Is it too much to ask that Pope Francis even tries understanding that neoliberals want to help the poor and the arguments in favor of neoliberal policies?
PS – Ross Douthat has a column up on the topic that I very much agree with, even though I have a much harsher tone.
PPS- Take a look at Sowell’s pamphlet on why trickle-down economics is a straw man if you haven’t already.