Another Response To The Pope On Capitalism

This is what I just sent to the San Antonio Express-News. They printed an article on this on Saturday. Here is the link: Pope urges 'legitimate redistribution' of wealth.

"It is unfortunate that Pope Francis continues his hostile and ignorant attacks on capitalism (“Pope urges nations: Share wealth,” May 9).

He thinks the poor are being excluded and he “has frequently lashed out at the injustices of capitalism.”

The mainstream media gives the pope a free pass and rarely criticizes his policy views. The pope seems to think that government intervention never causes harm and that capitalism never does any good.

Government intervention often causes unwanted and unintended consequences. Minimum wage laws reduce employment (just ask the Congressional budget office). Rent controls cause housing shortages.

When the U. S. subsidizes sugar producers or puts up tariffs, this hurts poor farmers in third world countries, people the pope worries about.

According to the book The Economics of Macro Issues, “a tax increase of just over 12 percentage points induces the average adult in Europe to reduce work effort by over 120 per year.” The pope’s redistribution has to come from higher taxes which have a clear downside.

What about the good that capitalism does? It serves the poor well. The poorest 10% of the population in the most capitalist countries have incomes about nine times higher than in the least capitalist countries.

Life expectancy is much higher. Infant mortality and child labor rates are much lower, too.

From 1949-1961, as Charles Murray has pointed out, the poverty rate in the U. S. was cut in half, a time when we had few government programs.

Robert Rector of the Heritage Foundation reported in 2011 that 75% of poor households had air conditioning while 92% had microwave ovens. These are products that once even the rich could not buy. Capitalism brought them, and many other goods, to the masses, with constantly increasing ownership rates.

Economists Bruce Meyer and James Sullivan showed that "median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009." They also pointed out that the quality of housing for the middle 20% greatly improved.

Economists Christian Broda, Ephraim Leibtag, and David Weinstein reported in 2009 that the "real wages of low-wage U.S. workers (the bottom 10%) have risen substantially over the last 30 years" due to corrections to the Consumer Price Index.

Let’s not forget that market reforms in India and China have lifted millions out of poverty since the 1980s.

And what about the pope’s idea to “attack the root causes of poverty?” We could start by cutting our sugar subsidies, but that would be less government intervention.

Maybe we could make it easier for people to start their own businesses or be their own boss. But again, that is the state getting out of the way, so the pope won’t like that.

Here is the problem. In the 1950s, about five percent of jobs required a license. Now it is about thirty percent.

Female African immigrants come to this country and get told they need to spend much time and money just to get a license to braid hair. That is the government excluding people from opportunities to bring themselves out of poverty. Why doesn’t the pope mention this?

Pope Francis doesn't even understand the economy of his home country, Argentina. It has been hurt over the years by turning away from the market.

The Economics of Macro Issues reports that Argentina fell from being one of the ten richest countries in the world to seventieth over the last hundred years. Why?

"Government spending (and taxes) in Argentina has been growing relative to the overall size of the economy."