Will the Pope Overthrow Neoliberal Economics?

Will the Pope Overthrow Neoliberal Economics?

REUTERS/Alessandro Bianchi

This week, Time magazine named Pope Francis its man of the year, an impressive accomplishment for a man who has held his position as head of the Catholic Church for less than a year and was largely unknown before that. It is a testament to the power of his ideas, which have revitalized the progressive tradition in economics. Indeed, Franciscan economics may displace neoliberal economics in coming years.

Until the 1970s, the economics profession was largely dominated by progressives. Almost all economists supported the idea that government spending on public works was the best policy in an economic recession, that tax policy ought to equalize incomes and reduce inequality, and that the Federal Reserve should use monetary policy to reduce unemployment.

Related: 5 Years after the Crisis: Why the Income Gap Is Widening

But in the inflationary 1970s, these progressive ideas came under fierce attack from economists associated with supply-side economics, the Chicago School and others on the right who argued that government fine-tuning made recessions worse, that tax policy should eschew redistribution and concentrate only on increasing growth, and that the Fed should stick to maintaining price stability and ignore unemployment in the conduct of monetary policy.

Eventually, this conservative view was even adopted by Democrats, who called it neoliberalism. So widespread is the neoliberal view today that even those who claim to be on the political left, such as the group Third Way, attack “economic populism” and demand cuts in Social Security benefits.

One reason for the success of neoliberalism is that progressive economic thought has lacked an effective and articulate spokesman. Bill Clinton famously declared that the era of big government was over and worked with Republicans to abolish the entitlement to welfare and slash the capital gains tax. He also reappointed Republican Alan Greenspan as chairman of the Federal Reserve. On balance, Clinton governed as an Eisenhower Republican.

Barack Obama is little better. Objective analysts have known for years that he has governed as a moderate conservative who has consistently rejected progressive demands to reduce unemployment, who adopted a health reform designed by Republicans and conservatives, and reappointed Republican Ben Bernanke as chairman of the Fed. Like Clinton, he has pursued free trade and done nothing to halt the outsourcing of American jobs to China.

Those on the left know that Clinton and Obama were not progressive presidents, but were forced to circle the wagons around them because the alternative of right-wing Republican control was worse. And conservative attacks on Clinton and Obama for being radical socialists fooled some progressives into thinking they were men of the left rather than, as was actually the case, moderate conservatives.

Related: Obama’s Risky Strategy on Closing the Income Gap

As a consequence, true progressivism has withered almost to the point of death, with most political debate in the U.S. taking place between moderate conservatives and those on the far right. In fact, many people have simply forgotten what a true progressive even sounds like.

Into this policy vacuum, Pope Francis has breathed new life into the progressive tradition. His most powerful statement came in his November 26 “Apostolic Exhortation,” which is a personal statement not necessarily reflecting official Catholic Church doctrine.

In it, the pope attacked inequality, saying, “Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless.” He attacked “trickle down theories” with which those on the right continually justify tax cuts for the wealthy. The culture of prosperity, Francis said, is often reduced to empty consumption of mere “things” devoid of meaning or inspiration.

Just yesterday, the pope issued another progressive blast in his new year’s message. He said that the lack of fraternity is a major cause of poverty. That is, we no longer care enough about our fellow man to be concerned or take action when he is suffering from joblessness or loss of income.

While some on the right, such as talk show host Rush Limbaugh, attack the pope for promoting Marxism, Catholics know that he is simply reciting long-held church doctrine. Everything Francis has said can be found in the “Compendium of the Social Doctrine of the Church,” a document that brings together various statements by church leaders over the centuries.

Paragraphs 346 through 360 of the Compendium are a concise statement of progressive public policy. They make it clear that Francis is not making up a new philosophy at odds with church tradition, but is merely restating the church’s historical philosophy. It only sounds new because it hasn’t been heard from such a prominent spokesman for many years.

Related: Who’s Being Swallowed Up by the Income Gap?

Some on the left think the pope can finish what the Occupy Wall Street movement failed to accomplish. Sensing the threat that a compassionate, articulate progressive message represents to the neoliberal consensus, those on the right have ratcheted up their attacks. Marian Tupy of the libertarian Cato Institute cites a bunch of random data to claim the pope has no idea what he is talking about. Actually, everything is getting better, he says, not worse, as the pope says.

Adam Shaw of Fox News says Francis represents the “Catholic version of New Coke.” New Coke was, of course, the ill-conceived replacement for the classic cola beverage that failed spectacularly. Shaw says Francis is simply pandering to the church’s enemies and professional grievance mongers. He says the pope is an embarrassment to true Catholics like himself.

The pope’s words would not resonate as they have if they were made up out of whole cloth, as his conservative critics charge. It is obvious that unemployment is a terrible problem that the federal government has done little to redress. In fact, Republicans demand that extended unemployment benefits be cut off in order to reduce spending. Moreover, the vast increase in income and wealth inequality is obvious. Polls show that those on the religious left and right share concerns about whether capitalism is working for most people today.

Of course, the pope is not running for president and it is a big leap from issuing statements to putting together a political coalition that might move policy in a progressive direction. But it’s a start. If, as I suspect, the political pendulum is moving in a leftward direction, after several decades of moving right, we may in the future see the ascension of Pope Francis as a key turning point.

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