Pope Francis has issued an "apostolic exhortation," a lengthy and detailed exposition of how the Catholic Church should focus its energies. And there's a lot in there about the economic forces shaping the lives of people around the world. We've compiled some excerpts of his comments that are relevant to economics and public policy.
Unfortunately, this 84-page apostolic exhortation is woefully lacking in illustrative charts. But Wonkblog is here to help! Here are the pope's comments on economic topics, annotated and charted.
"In our time humanity is experiencing a turning-point in its history, as we can see from the advances being made in so many fields. We can only praise the steps being taken to improve people’s welfare in areas such as health care, education and communications," writes Pope Francis. Sure enough, people are living longer.
Across much of the globe:
Those longer lifespans have a strong correlation with how much countries spend on health care (with the United States as an outlier in terms of spending vs. results).
"At the same time we have to remember that the majority of our contemporaries are barely living from day to day, with dire consequences," the pope continued. Also true. In India and sub-Saharan Africa alone, there are more than 700 million people living on an income of less than $1.25 a day, the World Bank's definition of extreme poverty.
"A number of diseases are spreading." Here, for example, is global prevalence of HIV.
"The hearts of many people are gripped by fear and desperation, even in the so-called rich countries." Yep.
"The joy of living frequently fades, lack of respect for others and violence are on the rise, and inequality is increasingly evident. It is a struggle to live and, often, to live with precious little dignity. This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology, and by their instant application in different areas of nature and of life. We are in an age of knowledge and information, which has led to new and often anonymous kinds of power." The chart below isn't exactly on point, but shows how a vast proportion of the things Americans buy are made by just five powerful corporations.
"Just as the commandment 'Thou shalt not kill' sets a clear limit in order to safeguard the value of human life, today we also have to say 'thou shalt not' to an economy of exclusion and inequality. Such an economy kills. 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?"
Our research finds some support for Pope Francis's argument that the media is paying much more attention to the vicissitudes of financial markets than to more human issues. For example, in the last six months, 1,477 articles in major newspapers in the Nexis database have mentioned the Standard & Poor's 500. Only 142 have mentioned the phrase global poverty.
"This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving?" Yep, it's true. Food waste is a big issue.
"This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape."
Here, for example, is evidence of how Americans with low incomes feel themselves marginalized and vulnerable, from a story this week by The Washington Post's Jim Tankersley and Scott Clement.
"Human beings are themselves considered consumer goods to be used and then discarded. We have created a 'disposable' culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. . .. . The excluded are not the 'exploited' but the outcast, the 'leftovers.' In this context, some people 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. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting."
Here's what the data show on who is accruing the benefits of rising global wealth, in the United States. at least.
"The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption."
Next, the pope turns even more explicitly to questions of inequality and offers his theory of what has ailed national economies in this post-crisis era.
"While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation."
"Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power."
Well, yes and no. It is true that southern European countries such as Spain and Greece (and Italy, which surrounds the Vatican) are suffering under the burden of high debts. And the proximate cause is austerity policies that were demanded as a condition of getting aid to meet the countries' debts. But crucial to this dynamic is the fact that the nations involved are linked to the common euro currency, and thus cannot easily pursue the usual strategies of countries overburdened by debt, namely devaluing their currency.
And many of the countries that have relatively high debt levels, such as the United States, Britain and especially Japan, have continued to have low interest rates, in no small part because they maintain control of their currencies. Here is a chart of the interest rates different countries face and their debt burdens; the original data are from a paper by David Greenlaw et al., and economist Paul Krugman manipulated it to put in place different symbols for countries that use the euro and those that do not.
As shown, the high interest rate burden caused by high debts is the story for the euro zone, not for elsewhere, which suggests it has as much to do with a flawed currency regime as debt per se.
"To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions."
Yep. Here's one estimate at the scale of the tax evasion and corruption problems, via Thomson Reuters.
"The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule."
Those words may defy any easy charting, but they have a lot of important ideas buried within.