"The curious task of economics is to demonstrate to men how little they know about what they imagine they can design."
- F.A. Hayek
Apparently in a vision from the good Lord, Pope Benedict XVI has learned that it is both Marxism and "unbridled capitalism" which has led to the downfall of the people in South America.
Well that is interesting. The Pope now has the answers to the problems that we see in South America and the answer is not a reduction of transaction costs, more clearly defines and enforced property rights and a tax structure that favors growth, its rejection of both capitalism and Marxism. While I applaud the Pope for his insight in rejection of Marxist thought, I find his condemnation of capitalism both deeply disturbing and hilarious.
Rome has not been known for it's acceptance of the ideal of free thought, free speech, and freedom in general. I understand that the Catholic church is a "moral" entity in nature, but at the same time I would rather live in a free society than one governed by the whims of a group of individuals with an agenda.
This comment especially grated against me:
He also warned of unfettered capitalism and globalization, blamed by many in Latin America for a deep divide between the rich and poor. The pope said it could give "rise to a worrying degradation of personal dignity through drugs, alcohol and deceptive illusions of happiness."
Wow... Now this coming from a Catholic... just wow... allow me to elaborate.
1.) Given that the Pope is the Leader of a church that believes that man is a fallen creature, you would think that he would want to engender the creation of the system which best takes advantage of that fact. You cannot change the nature of man, the Church acknowledges this. As such, it would seem that favoring capitalism which plays to the greed of human beings would be the best possible system to live in, especially if it is a free society where people are capable of making their own decisions based on their own subjective valuations of any given good or service.
2.) Trade never makes either party worse off. John Stossel recently had a great piece on this here. It is painfully clear to anyone who is versed in trades and free-market Econ that we call it "mutual gains" from trade for a reason. How much worse off would we all be if we didn't trade?
3.) So what we see here is a Pontiff signaling and playing to the masses, which is usually what religion does. Papal signaling, who would have thought?
Now to be charitable, I'm not sure what exactly the Pope mean by "unbridled" capitalism. Hayek himself says that capitalism and exchange work under a set of very clear and strict guidelines (e.g. Property rights), but I don't think that is exactly what the Pope was saying ... I think he's talking about a mixed economy, which is really just mild socialism....
So thanks Popa Pope, you've displayed your ignorance.