Pope Francis the radical

It is very clear what Pope Francis is against when it comes to economic systems or ideologies. He is clearly opposed to capitalism or free market economy. In his Papal Exhortation, he says trickle down theories encouraged by a free market” is being defended as a system which will inevitably succeed in bringing about greater justice and inclusiveness in the world.

His judgment on trickle down capitalism is clear: “This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system.”

It seems to me that the Pope also does not have trust in the good intentions of business and financial leaders.  

On the other hand, reading through his 288-paragraph Papal Exhortation released last Nov. 24, it was not clear to me what economic system was being advocated by the Pope. While he has the tone of a Marxist or at least a socialist, I did not see it in his writings. He does not advocate government ownership of all means of production. He is clearly against violence as a means of attaining social goals.

The closest thing to an economic idea was in Paragraph 56 of his exhortation where he said: â€œWhile the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and finance speculation. Consequently, they reject the right of states charged with the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual which unilaterally and relentlessly imposes its own laws and rules...The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenceless before the interests of a deified market, which become the only rule.”

What amazes me is the graphic language used by the Pope in describing capitalism and the profit motive which is supposed to be the growth engine for business. He sounded almost sarcastic when he called those getting rich as “those happy few.” And he calls the free market as motivated by “the thirst for power and possessions” rather than simply referring to the profit motive as the goal of business.

My own interpretation of his Exhortation, with respect to economic systems, is that the Pope is probably advocating a Social Democratic system, or more popularly known in ideological circles as SOCDEM.

Just like capitalism and socialism, social democracy has many shades. But there are certain attributes that is common to all its practitioners.

First, modern social democracy is committed to the extensive use of government policy to promote economic and social opportunity to the poorer sectors of society and expand opportunity and ensure rising quality of life for all socio-economic classes.

This extensive use of government policy and regulation goes against the mantra that deregulation is the best path to inclusive economic growth. In fact social democracy believes that only through active government intervention can there be inclusive growth.

For the first time since the collapse of communism, we have an international personality that is advocating government intervention as a means of redistributing wealth. What does this mean in practical terms

It could mean, for example, that in the energy industry, prices in the petroleum and power sectors should again be regulated and subject to government regulation. And the assumption would be that market forces have failed as a mechanism for controlling and optimizing the profits of firms in these industries and the main victims are the common people.

Social democracy also means maintaining an extensive public safety net for those in the lower socio-income classes. One example is that the minimum wage should now be computed on the basis of a “living wage.” This means that the minimum wage should be adequate to provide decent shelter, adequate nutrition, necessary health care, and proper education for the average-sized Filipino family. All these can be satisfied through a minimum wage or by the government which would mean increasing taxes for the rich.

In recent decades, this provision of a safety net has also been supplemented with generous social programs like services aimed at boosting employment, publicly funded child care centers, job training and job placement and infrastructure projects. India and Thailand have rice subsidy programs for the poor.

One way that has been proposed, in certain countries, to pay for these programs is through conspicuous consumption taxes. This refers to special taxes targeted at the rich. Some examples would be taxes on club memberships, expensive wedding receptions, residences above a certain price, business class travel and other similar examples.

This combination of government regulation of business, public safety net programs and conspicuous consumption taxes will certainly not be welcomed by those whom the Pope calls the “happy few.”

But the Pope is right when he says that throughout the world, income inequality is the root of social ills. And those who still defend these trickle down theories should heed the Pope’s warning:

“Today, in many places we hear a call for greater security. But until exclusion and inequality in society and between peoples are reversed, it will be impossible to eliminate violence. The poor and the poorer peoples are accused of violence, yet without equal opportunities the different forms of aggression and conflict will find a fertile terrain for growth and eventually explode.”

Perhaps this is the most radical message of the Pope. For radical change towards social equality to begin transpiring, it’s high time the “happy few” allow the Pope’s message and warning to penetrate the walls surrounding their ivory towers and gated communities.

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Email: elfrencruz@gmail.com