Tuesday, November 26, 2013

The Pope Links The Tyranny of Markets To Rising Income Inequality

Many economists have been concerned about rising income inequality.  Some believe that it has led to stagnation and others argue that it has corrupted democracy.  The Pope took this to a new level by stating that the tyranny of a market mentality is inconsistent with the gospel of Christ.   The implication is that the gospel of neo- liberalism is a rival to religious sentiments.  He illustrated the problem by asking why the plight of the homeless is less newsworthy than a drop in the value of a stock index.  He also instructed the church hierarchy to address the concerns of the people and to set examples for others to follow.

It will be interesting to see how the Pope's message is received by evangelicals in America who have linked market ideology and conservative politics to their religious ideology.  The poor are often blamed for their misfortune, and social welfare programs are regarded as immoral handouts to the unworthy.  They have provided a moral justification for poverty and moral support for an economic ideology that refuses to accept the moral implications of the assumptions that underlie it.  Income inequality is simply the result of "natural" market forces that reward everyone for their marginal contribution to production.  Social welfare is also optimized by allowing market forces to operate with minimum government interference.  Externalities are acknowledged but they are regarded as minor problems that are easily managed without distorting the market.  The problems of growing income inequality, and the misery of the "moochers" are not viewed by the Pope as minor externalities.  Furthermore, allowing market forces to operate without concern for the environmental damages that will harm future generations, so that this generation can indulge in luxuries, is a serious moral issue that is absent in a morally blind market mentality.

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