Free Markets and Morality—PART II

PART I of this series explained how capitalistic economic/political systems are morally superior to the non-capitalist/collectivist economic/political systems the Pope advocated in the apostolic exhortation,  EVANGELII GAUDIUM, and how capitalistic systems provide greater incentives for participants in such markets to be moral compared to more collectivist economic/political systems.

In this PART II, let’s put the Pope’s economic proposals (which are perhaps more extreme than the proposals of prior popes, but are nevertheless generally simpatico with Catholic tradition) into a historical context and compare and contrast how well the poor have fared in those systems the economic/political systems that have grown out of other religious traditions. The differences are important, significant, and stark.

Over the last millennia, countries with Judeo-Christian heritage have achieved greater economic progress for their citizens, especially the poor and middle-income people, than have non-Judeo-Christian countries. (In percentage terms the poor in both China and India have recently improved more, but the standard of living of the poor in those countries remains far below the standards of living of Judeo-Christian heritage countries.) Those better economic results were largely achieved because of a greater adherence to free market capitalism by Judeo-Christian countries.  With a long history of robust data, the correlation between greater capitalism and better economic results has proven to be very high. It is also true that significantly better economic performance and moral outcomes have been achieved by some Judeo-Christian countries than others. Let’s sort out the salient differences and the differential results in these countries.

AUTHOR’S NOTES: By no means am I suggesting that northern European people are innately better than any other people. I am saying, however, some economic/political ideas are better than others, and that over the last millennia, the northern Europeans’ ideas have proven to be better than others in advancing human living standards— especially for the poor. In earlier times, other people had better ideas than their peers and, consequently, rose above their peers. For example, the ideals of Catholic Holy Roman Empire achieved the best results until a better set of ideals came along. Many other empires rose before that because of better ideas. Hopefully, in the future, a different set of people will develop economic/political ideals that are superior to those of the northern Europeans and will eclipse what the current ideals. 

It must also be noted that the northern Europeans also came up with some of the worst ideas ever (e.g., nazism, socialism and communism) that inevitably led to the killing of over 200 million people. Moreover, northern Europeans and their colonies were slow to implement its good ideas (they just happened to be faster than most, if not all, other peoples). That they imposed their anti-slavery ideology on most of the rest of the world is of mixed morality.

What Pope Francis said in the EVANGELII GAUDIUM is generally consistent with views of previous popes, i.e., the poor should be helped by alms and the rich are to either give “enough” to the poor or else be guilted and/or condemned to eternal damnation if they do not.[i] Catholics also opposed (1) the state getting involved in dispensing alms to the poor, and (2) anyone judging whether a poor person deserves alms. A rich person’s chances of salvation were improved by charitable giving to the poor—regardless of how “deserving” the recipient of the charity is. For many centuries, that Catholic economic ideology has been more widely accepted and fostered in southern European countries and the countries in the Americas colonized by those southern European countries.

By contrast, the economic ideology concerning helping the poor and dealing with the rich that was widely accepted and fostered by the mostly Protestant northern European countries and their colonies in the Americas is very different from Catholic ideology. An important feature of the ideology is known as the “Protestant work ethic.”[ii] Very roughly speaking and omitting much,[iii] Protestants more generally considered the honest rich to be praiseworthy for both creating a wealthier and advanced world, and for their honoring a duty to be charitable. Protestants were more likely to support state involvement in giving alms to the poor, with the proviso that alms be given only to the “deserving poor.” Begging was prohibited. Protestants disagreed with Catholics “placing a halo” over the heads of the poor (the poor were to be helped, not judged, and the path to salvation was in the giving without regard to why the recipient was poor, i.e., why a person was poor was irrelevant). Consider these quotes:

“Luther’s theological understandings of the priesthood of all believers and of Christian freedom helped redefine poverty, toppling it from its pedestal of theological virtue. The theological redefining of poverty, accompanied by a widespread contempt of begging, created are [sic] invigorated need to discern those “deserving” of relief from those who were “undeserving.”  This shift is demonstrated in the common chest ordinances of sixteenth-century German-speaking Protestant cities. The common chest was Luther’s alternative to the Catholic system of poor relief, a system that relied on indiscriminate dispersal of alms by the wealthy.”[iv] “By giving poverty its “halo,” Protestants argued that the Church was systematically preserving poverty.”[v] (Note how similar this charge is to charges made against leftists today.[vi]

Note also how today’s leftists have expanded the halo so that it will go around the heads of everyone who is not part of the supposed white male power structure.

Let’s set aside the question of which of the two ideologies concerning the treatment of the rich and the poor is theologically superior. (Let’s also not deny that capitalism did and does spawn great evil—as every other ism does). Rather, focus on the differences in economic standards of living of the poor (which was the focus of the Pope’s exhortation) that are achieved by the two ideologies. (Is this ideology the only relevant distinction between nations with Catholic and Protestant heritages? No. Is it a very significant distinction with respect to the disparate improvements in the standards of living of the poor? Yes.)

The clear results from a very robust “natural experiment” over hundreds of years has conclusively proven that the Protestant ideology is far superior to the Catholic ideology at (1) achieving improved standards of living for the poor, (2) being the source of vastly more charitable contributions to the poor at home and around the world, and (3) being the source of the vast majority of the medical and other technological improvements that the poor people today enjoy that earlier generations of poor people did not. As Danial Hannan so poignantly and vividly described in “Inventing Freedom: How the English-Speaking Peoples Made the Modern World,” the assertions above are clear from a comparison of the results of the northern European/American countries with the results of the Southern European/American countries to behold the dramatic differences in outcomes. In particular, that natural experiment dramatically proved which approach was better at improving the material well-being of the poor. For example, the poor in northern countries suffer when their economies experience depressions and depressions, but that is nothing in comparison to the plight of the poor in they collectivist countries collapse—not an uncommon occurrence.

Perhaps as important, it was primarily ideas that sprung up in Scotland and England that resulted in almost universal worldwide abhorrence to slavery—something that had been commonplace throughout prior history. While Pope Paul III condemned the enslavement of indigenous peoples by in 1537,[vii] it was the English, after they accumulated sufficient wealth and power to suppress slavery, who bore most of the cost of strangling the transatlantic slave trade (with much of that effort being against transporters from and to Catholic countries).[viii]

By essentially all economic and moral measures, the Catholic approach that the Pope urged on all nations as a means of helping the poor has been less successful in freeing slaves and raising the standards of living of the poor than the one he decries.

I have no doubt that that Pope Francis was well-meaning when he issued the EVANGELII GAUDIUM. Having grown up in a Catholic country with Catholic schools, he was, no doubt, taught that what he believes about economics is sound and his exhortation would lead to a better life for both the rich and the poor. History, economics, and logic, however, suggest he is economic/political beliefs will result in more evil than good.


[i] Some have called this ideology a “guilt ethic” in contrast with the “work ethic.” I find that label to be too glib and harsh. It strikes me, however, that there is some merit to the claim that Catholics are more likely to promise eternal damnation and to guilt rich people for not giving to poorer people while Protestants are more likely to praise the goodness of those who so give. None of this, however, is to say that all of the differences in prosperity between the north and the south are attributable to this one element.

[ii] See “The Protestant Ethic and the Spirit of Capitalism.”

[iii] These issues are so vigorously debated among scholars with very different takes on what happened that only rough approximations are possible. It is doubtful that any two knowledgeable people would agree with each other in extensive detail. Some proof of this can be found in the fact that there are many sects of each of the two strains of Christianity.

[iv] See “The Deserving Poor: The Reimagining of Poverty in Reformation Theology and Poor Relief

[v] Id. Footnote 25

[vi] See “What Democrats Really Care About.” Also not that Democrats are much more apt to extend this “halos” over a near limitless list of “oppressed,” “excluded,” “marginalized,” “disenfranchised,” . . . people.

[vii] See “Catholic Church and slavery.”

[viii] See “The Abolition Project,” particularly “Suppressing the trade.”

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