LEO XIV AND THE PRO-MARKET TRADITION OF THE CHURCH / PROJECT SYNDICATE

Leo XIV and the Pro-Market Tradition of the Church

In his brief remarks introducing himself to the world, the new pope, Leo XIV, proclaimed his desire for the Church always to try “to be close especially to those who suffer.” It is a worthy goal, and one that can best be achieved by promoting the most effective anti-poverty tool in history: free enterprise.

Michael R. Strain

WASHINGTON, DC – Habemus papam! (“We have a pope!”). 

Christians around the world rejoiced when Pope Leo XIV was elected to be the 266th successor to Saint Peter. 

As a Roman Catholic, I have many hopes for the new pope, including that he offers strong support for free markets.

His choice of name is encouraging. 

Leo XIII was the author of the 1891 encyclical Rerum novarum (“Of revolutionary change”), a foundational text of the Church’s teaching on economics that was written in response to the rise of socialism, which itself was a reaction to the Industrial Revolution. 

In it, Leo XIII clearly rejected socialism, while offering a careful endorsement of the market economy, including a strong defense of the importance of private property.

On the one-hundredth anniversary of Rerum novarum, Pope John Paul II published the great encyclical Centesimus annus (“The hundredth year”), reaffirming Leo XIII’s emphasis on the importance of private property. 

But he didn’t stop there. 

“In our time,” John Paul wrote, “the possession of know-how, technology and skill” is no less important than the possession of land. 

Praising “initiative and entrepreneurial ability,” John Paul saw that people in a market economy are able “to discover the earth’s productive potential and the many different ways in which human needs can be satisfied.” 

He explicitly acknowledged the legitimate role of profits, writing that they indicate “that productive factors have been properly employed, and corresponding human needs have been duly satisfied.”

The late Pope Francis, by contrast, emphasized the negative aspects of markets. 

For example, in Evangelii gaudium (“The joy of the gospel”), he questioned: “How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?” 

And he criticized those who “continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.” 

According to Francis, they were naive and guilty of participating in an “economy of exclusion” that offended the commandment against murder.

Of course, the richness and depth of these popes’ teachings cannot be summarized in a few paragraphs. 

Leo XIII and John Paul II also criticized aspects of the market and sought to circumscribe its excesses, including through what I would describe as heavy state intervention. 

And Francis did occasionally show an appreciation for some of the market’s advantageous qualities.

Still, I hope the newly elected Leo XIV chooses continuity with the emphasis of his pre-Francis predecessors. 

To do so would exhibit fidelity to the traditional economic teaching of the Church since the dawn of the modern economy. 

It would also exhibit an understanding of the empirical record and moral virtues of the market economy.

Popes since Leo XIII, including Francis, have emphasized the Catholic mandate to give priority to the needs and well-being of the poor, marginalized, and powerless; and in his own introductory remarks to the world, Leo XIV proclaimed his desire for the Church always to try “to be close especially to those who suffer.” 

It matters, then, that the free-enterprise system is the most effective anti-poverty tool in history. 

In 1970, over one-quarter of the world lived on less than $1 per day. 

By 2006, around one in 20 lived in extreme poverty. 

This remarkable achievement was driven by the adoption of free markets across the developing world.

Free markets enable flourishing lives by allowing for aspiration, creativity, and meaningful work. 

Marking the 90th anniversary of Rerum novarum, John Paul II began Laborem exercens (“Through work”) by arguing that humans are “called to work,” which was “a fundamental dimension of human existence” even before the fall and the expulsion from paradise. 

We are “the image of God” partly through our biblical mandate “to subdue, to dominate, the earth.” 

In carrying out this mandate, John Paul argued, every human being “reflects the very action of the Creator of the universe.”

Free markets place great respect on the preferences, knowledge, and choices of individuals and families. 

Capitalism encourages a wide range of virtues, including prudence, thrift, honesty, reliability, innovativeness, and ambition. 

Market exchange requires voluntary cooperation, which in turn makes society as a whole more cooperative. 

It confers a mutual dignity and equality among participants, and therefore among citizens. 

Moreover, markets enable economic growth, which fosters tolerance, pluralism, democracy, and pro-social economic policy. Dynamism allows people to aspire.

Since Leo XIII and the dawn of Catholic social teaching, the Church has supported free markets. 

It has argued for limits on their excesses, but in a context that often serves to elevate and ennoble market activity. 

Thus, John Paul II argued that the basis of the modern market economy is human freedom, but taught that economic freedom implies certain obligations and responsibilities. 

Businesses are not merely machines to generate profits, he taught, but should be understood as “a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society.”

Leo XIV occupies the Chair of Saint Peter at a time when the moral foundations of free markets are under attack.

It would be a fascinating and powerful twist of history if the first American pope provided a corrective to the American president’s lack of faith in free markets. 

And after the Francis pontificate, it would be a great service to the faithful if the new Holy Father rediscovered the great moral value that the Church has historically seen in free exchange.

Michael R. Strain, Director of Economic Policy Studies at the American Enterprise Institute, is the author, most recently, of The American Dream Is Not Dead: (But Populism Could Kill It) (Templeton Press, 2020).