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Dawn Bennett, Host of Radio Show "Financial Myth Busting," Interviews Don Boudreaux, Senior Fellow with F.A. Hayek Program for Advanced Study


Washington, DC -- (ReleaseWire) -- 10/01/2015 --DAWN BENNETT: Don Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University. He is also a professor of economics at George Mason University, and the author of the book Globalization. We're going to discuss Pope Francis's visit, and especially the attacks he's been making on capitalism. Don, welcome.

DON BOUDREAUX: I am happy to be here.

BENNETT: The world press has been in high gear this week for the Pope's visit to the United States. What's fascinating to me about his visit is that he's really stirred up a stew of ideas about the wealthy causing world poverty, and with that, the evils of capitalism. Do you see the Pope's dreams as a possible socialist totalitarian agenda?

BOUDREAUX: I don't know what his agenda is. My best guess is that the man, while well-intentioned, is economically poorly informed, and that explains it all. His knowledge of theology is astounding, I'm sure; his knowledge of economics is not.

BENNETT: George Will wrote in the Washington Post this week that Pope Francis's "fact-free flamboyance" reduces him to a shepherd with a dwindling flock. I thought that was perfect.

BOUDREAUX: I like George Will a lot, and I thought that was a particularly A+ column of his.

BENNETT: The US Catholic Church has lost millions of its members in the past 14 years, due to the child abuse scandals and its tarnished reputation, so it's been forced to sell assets to pay billions of dollars in settlements. Do you think that's in the back of the Pope's mind?

BOUDREAUX: I can't help but believe that it is there. But you mentioned this George Will column, and there's another thing. He made a great point that the pope is latching the Catholic Church on to the modern, secular religion of environmentalism. And so if the Church has a need for new adherents, by creating around, you know, a worshipper of Gaia and the environment—I don't know intentional it is, but the Pope is certainly making the Catholic Church more acceptable to radical greens.

BENNETT: Would you categorize that as socialist?

BOUDREAUX: I would. The term socialist, of course, is disputed. It obscures his status. The Pope is a believer in top down direction. He does not trust ordinary men and women to make their own decisions; he wants to put those decisions in the hands of politicians and bureaucrats. And I call that, if not capitalist, certainly some kind of socialism.

BENNETT: Progressive state-run economy, maybe?

BOUDREAUX: Yeah, progressive in, of course, quotation marks, because those kind of economies regress; they don't progress, as Venezuela and the Pope's own home country of Argentina justify.

BENNETT: Like many critics out there on capitalism, the Pope has actually singled out capitalism for creating vast inequality among the classes. How do you respond to that argument? Do you find any truth to that?

BOUDREAUX: No, no. I mean, it depends where your focus us. The first thing to point out is that even if capitalism creates inequalities, there is no institution in human history that has created riches for the masses, as has capitalism. People don't like to hear this, but the poor in America live like kings compared to ordinary people in the pre-industrial stage. So insofar as capitalism raises us all from the level of systems where we were all equally poor, you might say in that sense, capitalism creates inequality. But it only does so by making everyone richer.

BENNETT: Do you think he's getting these points of view because he was raised in Argentina during a time period where there were significant anti-capitalist movements in Latin America? Was he influenced by this period of corrupt crony "capitalism."

BOUDREAUX: Yes, and I also saw the musical Evita, which illustrates that. I read somewhere, although I don't know how true it is, that the Pope at one point considered himself to be a Peronist. I don't know exactly what that means if you're a native Argentine, but to an American ear, to my ear, that sounds kind of crazy. I mean, this is a failed economic system. It's the economics of envy, it's the economics of anti-capitalism, and certainly anyone who has that attitude toward the economy is not going to be someone who speaks wisely about it, regardless of how sterling that person's intentions may be.

BENNETT: Many are saying that the Pope is actually just echoing teachings of the Catholic Church, but certainly not every Pope has said what Francis is saying. Do you detect that Pope Francis is indeed more left-wing than his predecessors? John Paul II, for one, was an ally of Ronald Reagan and certainly helped Poland overthrow the communists.

BOUDREAUX: You know, I'm not a Catholic, I don't follow these things very closely, but I follow them closely enough to know that this particular Pope is speaking in a way that's far more left-wing and, indeed, socialist—I don't mind using the term in this case—than his predecessors. This Pope makes John Paul II look like Milton Friedman.

BENNETT: He keeps talking about how capitalism creates human selfishness.

BOUDREAUX: That's absurd.

BENNETT: Yes. What do you feel is the best economic approach to either mitigate human selfishness, or even channel it into something socially beneficial? If you were to suggest something to him, what would you suggest?

BOUDREAUX: Well, I would say capitalism. You know, human beings are what they are. No economic system creates selfishness or creates a charitableness; human beings are what they are. What an economic system does is channel those motivations. Capitalism allows you to get rich only by serving others. Socialism allows you to get rich by tyrannizing others. The Pope wants socialism. I don't have any doubt that he really believes somehow humans will become angelic, or more angelic, under socialism than they are under capitalism. I think that's just unrealistic nonsense. Under capitalism, we can accept the fact that human beings are imperfect, self-interested, in some cases even downright greedy. But the imperfect and selfish and even, in some cases, downright greedy people can only benefit under capitalism by serving others, and that constraint is wiped away when you loosen the bonds of capitalist competition.

BENNETT: While in DC, Pope Francis visited a homeless shelter, where he called homelessness immoral and unjust, especially in a country as rich as the United States. I don't know what homelessness is like in Cuba, but when he appeared in Cuba before he came to the United States, he seemed to find fewer things to criticize. I would certainly assume more people there are living in poverty than they are here.

BOUDREAUX: Oh, absolutely.

BENNETT: Why do you think he did that?

BOUDREAUX: Oh, it plays to his flock. People like emotions. They like this kind of stage show. I don't really question the man's motivation; I have no reason to think he's insincere. But he just doesn't think deeply about these issues. And I'm certainly not claiming that the US economy's perfect, our policies are ideal, there's no room for improvement. Of course it's not perfect, there is room for improvement. I'd like to see it move to become even more capitalistic and free market. As bad as the problem is, and we can debate how to deal with it, many of the people who are homeless in the United States, in a poorer country, in a country without capitalism, they would be dead; the fact is, they'd be in even worse condition. And so in a way, capitalism, it helps a lot of the people that the Pope claims it is harming.

BENNETT: When you say people like emotions, I'm wondering if that is 100% of what's motivating him. The sad part is a billion people look to him for moral guidance, and here he is saying what he's saying, and he doesn't know what he's actually saying about the economy; he's putting out bad facts. I fear that the Pope is actually weakening public support for economic freedom, which we know, through research and through history, has increased standards of living, while minimizing poverty. Do you think the Pope will actually continue this movement, where he's actually condemning free markets and espousing the value of large government, and that the government should be giving more handouts?

BOUDREAUX: I see no reason to think he's going to stop. He's on a roll, and he's getting adoring crowds and the press certainly loves him. I heard on the news just the other day that something like 60% of people without any religious affiliation think favorably of him. My guess, again, is that a lot of these people are the environmentalists, who love what he says about the economy. And so I think the Pope's going to continue to do that. I share your concern that this only makes a widespread acceptance of capitalism in markets more difficult, because the Pope's telling the masses differently. But also I think it's true that the Pope comes along at a propitious time. We have Obama in the White House, the hostility to free markets is greater today than it was back when Reagan and Thatcher were in office, and so the Pope's message is falling on friendlier ears, which amplifies it a bit. So there's both a cause and effect here. He's causing it, but he's also kind of an effect; he's playing to his audience.

BENNETT: You've talked about how he's jumped into the environment. Under free markets, according to Pope Francis, big corporations pollute the environment because they have no profit incentive to spend more to keep their local environment clean. How do you respond to that kind of criticism? Do you see any truth in it?

BOUDREAUX: Well, again, look at the facts. Which societies are cleaner, capitalist societies or non-capitalist societies? I've traveled in non-capitalist societies; they're dirty.

BENNETT: So have I. Agreed.

BOUDREAUX: We in America live in a virtual operating room clean place, compared to places before the industrial revolution.

BENNETT: That's right. That's a good way to put it.

BOUDREAUX: It's not perfect. There are certain environmental issues; I don't deny that. But these issues are minimized by capitalism. Or put it a different way. This is going to sound radical, but capitalism gives us the privilege, the privilege of worrying about remote economic issues, like species loss and global warming 100 years from now, compared with our ancestors, when they were worried about very direct environmental issues, like bacteria in their food, their children dying of diarrhea, sleeping under thatch roofs with vermin defecating on them. That was the environment before capitalism; it was really filthy. The capitalist environment today is far, far cleaner that it would be without capitalism. The Pope doesn't realize that; he has this vision of—I don't know what he has a vision of, but he gets his facts wrong.

BENNETT: I think he sees the environmental catastrophe being 100% perpetrated by big, insufficiently regulated industries. Of course, the various proposals to fix the climate always involve big government, which I find scary. If the Pope is really concerned about the weather, is capitalism really the culprit, or might it just be the big guy in the sky?

BOUDREAUX: Well, it could be. I'm not a climate scientist, but I've read enough to know that there is no one perfect global temperature. Global temperatures have fluctuated over the millennia, very long before capitalism, long before human beings came around. And so there's no reason to think that the average global temperature of the 19th Century or the first half of the 20th Century was somehow some ideal. And again, I'm neither denying nor confirming that humans caused global warming. My position on this is the benefits of capitalism far outweigh whatever consequences human industrial activity is having on the temperature of the globe. And so we can deal with any rise or decline of temperature, as long as we have these flexible and entrepreneurial innovative free markets that have bestowed great wealth upon us, bestowed wealth upon us that allows a Pope living in Rome to traverse the Pacific, the Atlantic Ocean in a few hours, to come to America to complain about the capitalism that allows him to get into a machine and complain about capitalism, 5,000 miles from where he lives.

BENNETT: Do you think the Pope is simply encouraging people to resist greediness and to demonstrate more Christian charity at an individual level? Is that his basic agenda?

BOUDREAUX: I think that's part of it, and that's fine. We do want to live in a world where people are more generous and more civil. But you don't do that by perpetrating these myths. You don't do that by irresponsibly speaking about things about which you know nothing, and that's what he does on these matters.

BENNETT: That's right. He just hasn't made a careful study of the environment and its issues, and the world economy, which is surprising to me. You would think that the Vatican would at least have speech writers and researchers that would help him out on this.

BOUDREAUX: Well, there's a whole bunch of stuff that he's ignorant of. It's not a crime to be ignorant of economics. It is a crime, almost, though, to speak with alleged authority about matters about which you know nothing. I don't know anything about brain surgery, but I don't go around talking about brain surgery, because I don't know anything about it.

BENNETT: Don, I want to thank you for being on Financial Myth Busting.

BOUDREAUX: My pleasure.

BENNETT: Don Boudreaux is the author of the book Globalization.

All data sourced through Bloomberg
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About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.