William McGurn

…In his apostolic exhortation Evangelii Gaudium, the pope says this: “Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.”

“Such an economy,” he goes on to say, “kills.” This description is music to some ears. In his speech welcoming the pope to Havana on Saturday, Raúl Castro noted that Cuba shares the papal disdain for an economic order that has “globalized capital and turned money into its idol.”

But this pope’s assault on the global economy suggests he believes the whole idea fundamentally disordered, leading to a world where competition is exalted over cooperation and people grow rich by exploiting the poor.

Only one problem. Even the most cursory look at the world confirms the opposite: The more fetters imposed on competitive markets, the harder life gets for those stuck at the bottom.

In fact, the poor fare much better in places such as Hong Kong, Taiwan or Korea, where markets and competition are relatively open, than they do in Latin America or Africa, where competition is far more limited. To put it another way, it isn’t global competition that makes nations poor but their isolation from it.

Why do critics such as Pope Francis have such a hard time seeing this? A big part is that they misconstrue the nature of market competition. They want what the pope calls a “cooperative economy.”

But competition in a free market is not like competition in a boxing match, where the outcome is one winner and one loser. It’s about sellers vying to please a third party: the customer. This is why capitalists do not think of themselves as pro-business. To the contrary, capitalists insist that businesses must earn their success by competing to please customers.

Look at it this way. Brazil has a state-run, quasi-monopoly called Petrobras, the largest company in South America. The government shields it from competition on the grounds that the people of Brazil will benefit.

But who have actually benefited? Prosecutors say it is Petrobras execs, who grew rich on kickbacks, and the Working Party politicos they are said to have bribed. Anyone really want to argue that Brazil’s downtrodden are better off with an economy that protects Petrobras at the expense of competitors who might offer workers more jobs and customers better products?

Or what about Venezuela, where Hugo Chávez nationalized huge chunks of the economy and appropriated the property of foreign companies. Are we surprised that Venezuela’s richest woman turns out to be the late Chávez’s daughter?

Come to think of it, what about Argentina? The pope’s native land used to rank among the world’s wealthiest. Today it is a synonym for crony capitalism—and decline.

Can it be just a coincidence that governments that fetter their economies in the name of social justice generally end up with more corruption and a class of elites enriching themselves on political connections while all others are left to fend for themselves? In this light, is it not a tragedy that a pope whose heart belongs to the poor reserves all his moral outrage for the one economic system that has already lifted billions of desperate people out of poverty?

Might not some papal outrage be directed at governments and leaders who, in the name of workers and justice, intervene in the economy in ways that make everyday life more costly, crush opportunity and cheat the have-nots of a future of hope and dignity?

A gentle way of suggesting that perhaps the best fetters for an economy are not regulatory and interventionist but legal and moral: a functioning rule of law operating inside a healthy, humane culture. Because if we’ve learned anything from Latin America, it’s that the opposite of market competition isn’t, as the pope seems to believe, cooperation.

It’s collusion.