Introduction
WASHINGTON, DC – ¡Habemus papam! (“¡Tenemos Papa!”). Catholics worldwide rejoiced when Pope Leo XIV was elected as the 266th successor of Saint Peter. As a Roman Catholic, I hold high hopes for the new pope, including his potential support for free markets.
The Significance of Pope Leo XIV’s Name
The choice of his name is encouraging. Leo XIII authored the 1891 encyclical Rerum novarum (“Of New Things”), a foundational text in the Catholic Church’s economic teachings, written in response to the rise of socialism, which was itself a reaction to the Industrial Revolution. In it, Leo XIII clearly rejected socialism while offering careful support for the market economy, including a firm defense of private property’s importance.
Subsequent Papal Support for Free Markets
On the centenary of Rerum novarum, Pope John Paul II published Centesimus annus (“The Century’s Anniversary”), reaffirming Leo XIII’s emphasis on private property’s importance. He went further, stating that in our time, “possession of know-how, technology, and skill” is as crucial as owning land. John Paul II praised “initiative and entrepreneurial ability,” believing that people in a market economy can “discover the productive potential of land and various ways to meet human needs.” He explicitly acknowledged the legitimate role of profits, writing that they indicate “that factors of production have been properly employed and that corresponding human needs have been adequately met.”
Contrasting Views: Pope Francis vs. Pro-Market Stance
In contrast, Pope Francis highlighted the negative aspects of markets. For instance, in Evangelii gaudium (“The Gospel of Joy”), he questioned, “How can it be that it is not news when an elderly homeless person dies of cold, but it is news when the Stock Exchange loses two points?” He criticized those who “continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably trickle down to the poor.” According to Francis, they were naive and complicit in perpetuating an “economy of exclusion” that violates the commandment against murder.
Balancing Critique and Support
The richness and depth of teachings from these popes cannot be condensed into a few paragraphs. Leo XIII and John Paul II also critiqued aspects of the market and attempted to limit its excesses, sometimes through what I’d describe as strong state intervention. Pope Francis occasionally appreciated some advantageous qualities of the market.
Hoping for Continuity with Pre-Francis Teachings
I hope Pope Leo XIV will choose continuity with the economic teachings of his predecessors before Francis. By doing so, he would demonstrate fidelity to the Catholic Church’s traditional economic teaching since the dawn of modern economics. He would also show an understanding of the historical empirical record and moral virtues of the market economy.
The Catholic Church’s Historical Support for Free Markets
Since Leo XIII and the dawn of Catholic social doctrine, the Church has supported free markets. It has advocated for limiting their excesses within a context that often elevates and ennobles market activity. Thus, John Paul II maintained that the foundation of modern market economy is human freedom but taught that economic freedom implies certain obligations and responsibilities. He argued that businesses are not merely profit-generating machines but should be understood as “a community of people striving in diverse ways to meet their basic needs and forming a particular group serving all of society.”
Pope Leo XIV at a Critical Time
Pope Leo XIV ascends to the papacy when the moral foundations of free markets are under attack. It would be a fascinating and powerful historical twist if the first American pope provided a corrective to the U.S. president’s lack of faith in free markets. Following Pope Francis, rediscovering the significant moral value that the Church has historically seen in free exchange would be a great service to the faithful.
About the Author
Michael R. Strain, Director of Economic Policy Studies at the American Enterprise Institute, is most recently the author of The American Dream Is Not Dead (But Populism Could Kill It) (Templeton Press, 2020).
Copyright: Project Syndicate, 1995 – 2025
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