Is the Pope's capitalism Catholic?

Francis’ capitalism is indeed unjust. But it is caricature, useful for making points but distortion nonetheless. In another place he says “wild capitalism” and communism must be condemned with “the same vigor” (OHAE: 160), really, with the latter killing 100 million of its own people? Adam Smith, the inventor of the “invisible hand” analogy, would agree Francis’ capitalism is unjust since Smith insisted upon the necessity of charity and even local welfare. Today’s reality is the over-regulatory welfare state, not wild markets, which Francis implicitly recognized by saying now we must go beyond “a simple welfare mentality.” He argued that the “great temptation” in aiding the poor “is falling into an attitude of protective paternalism that does not allow them to grow” (OHAE: 169). He understands the benefits of decentralization for the church and recognizes the need for subsidiarity but he despairs that it is becoming “difficult to find local solutions.” He concedes that business can be a “noble vocation” in creating jobs but he simply presupposes growth, which is the economic justification for the market.

My 1978 book Does Freedom Work? critiqued Paul VI’s encyclical Populorum Progresso and argued his morality was sound but his empirical understanding of economics was not. Popes are not infallible on empirical matters and the book presented hope that a future pope could understand them. And then there were John Paul II and Benedict who looked deeply into the market. John Paul lived under communism and was required to ask why capitalism had produced the sounder society. Benedict lived under Nazism and was forced to consider the other major economic systems. Sufficient study could not fail to notice the obvious, that capitalism worked better and reduced world poverty. They even questioned the welfare state for “its bureaucratic way of thinking” rather than “concern for serving its clients” and proposed decentralization and “perceiving the deeper human need” instead (Centesimus Annus: 48), placing much of this sounder reasoning into their encyclicals and their updated Catechism.