Ruminations, December 8, 2013
The Pope from the Pampas
How do we get to know a pope? The same way we get to know anyone else. The pope is a product of his vocation (Roman Catholicism), his own persona and his environment. We have a basic idea of his Roman Catholicism, and not enough time to psychoanalyze him so let’s look at the environment in which the pope’s perceptions were formed.
The environment can be telling. For instance, it would be hard to rationalize many of Pope John Paul II’s actions without taking into account his experience in Nazi occupied and Soviet occupied Poland. Would a pope of a different background have challenged the Soviet Union and contributed to the downfall of the communist bloc? Would a pope who had not experienced the communist bureaucracy first hand have issued an encyclical that chastised social assistance states for contributing to an “enormous increase in spending” and “a loss of human energies”? It’s unlikely.
And then there’s Pope Benedict XVI who spent his teenage years in Nazi Germany. Given Germany’s experience with hyperinflation, it is small wonder that Benedict wrote in an encyclical that “financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers” – i.e., don’t print money and cause inflation. And having experienced the financial catastrophe that the Nazis inflicted on their own people, Benedict in his book, Light of the World mused that the debt the United States and other countries were accumulating is an “insanely big moral problem … because we are living at the expense of future generations. In this respect it is plain that we are living in untruth.”
While we in the Western world are familiar with the history of Europe, we are less familiar with the history of Argentina. To understand Pope Francis and his economic pronouncements, we should begin with understanding the Argentina in which he grew up.
Instability in Argentina
Pope Francis was born in 1936 and throughout his life, Argentina had a dysfunctional government. Argentina had 36 heads of state since 1936. (As a comparison, in the same period the United States had 13 heads of state.) In addition, of those 36 heads of state, 12 were from the military and 24 were civilian. It had six constitutions to 1852 and, since then, six major overhauls with the 1994 version including 129 articles.
The Dirty War
In the late 20th century, Argentina fought the Dirty War when as many as 30,000 predominantly left wing activists, students, trade unionists, guerillas and Marxists were rounded up and “disappeared.” The start date for the war is set by some as early as 1969 when Marxists and socialist Peronists went after trade unionists, and its end date is generally set as 1983. During this time, governmentally sanctioned street gangs (similar to Hitler’s Brown Shirts) went after dissenters.
The Argentine Catholic Church participated in the Dirty War on both sides. Archbishop Caggiano wrote that “Marxism is the negation of Christ and his Church” and of the Marxist conspiracy for which the Church must prepare for the decisive battle. A priest was later found guilty of seven homicides, a number of kidnappings and instances of torture. A lawsuit was instituted against Pope Francis himself with the charge of kidnapping two Jesuits priests, although the case failed to gain traction.
It is understandable that, given the political turmoil of Argentina, their economy has faltered as well. Over the years, in order to stabilize and control the economy, banks, energy and other key industries have been nationalized and subsidies paid to other industries. Inflation, a perennial problem, peaked at 12,000 percent per year in 1989. In an effort to correct Argentina’s foreign currency balance, in 2008 President Fernández de Kirchner raided private pension funds of $30 billion. And now, some 60 percent of Argentines are below the poverty line.
An attempt to control inflation, in 2005 the Argentine government imposed price controls but, as the law of supply and demand tells us, goods priced below the market disappear. Also, most people ignored the government diktat and relied on the market.
Currency controls have been imposed but are stifling the investments. In addition, interest rates on bonds are climbing adding to Argentina’s payments problems. In 2001, Argentina defaulted – the largest default in history – and is still paying for it.
Argentina’s new minister for the economy is Axel Kiellof a Marxist who has called for more economic intervention.
One of the most widely read books in Latin America is, Open Veins of Latin America: Five Centuries of the Pillage of a Continent. While we don’t know if the Pope has read the book, it seems reasonable to assume that he has and/or is familiar with its content. Author Eduardo Galeano, is definitely anti-American, anti-capitalist and firmly believes that Latin Americans are losers while North Americans are winners.
Galeano’s winner-loser take is interesting. In North America, we regard winners with esteem and losers are to be encouraged to become winners. In Galeano’s world, winners are the bad guys – real bad – while losers are their victims.
More a student of polemics than of economics, Galeano equates capitalism with slavery – another reason to be against capitalism, if you accept his premise. Without a foundation in economics, Galeano cannot see that slavery is antithetical to capitalism; without labor being free to sell their services or to begin new enterprises, capitalism falters.
He attributes the “Great Depression of 1929” solely to the United States. Although the Depression was world wide, we would have to admit that as the world’s preeminent economy, the United States did play a significant role in the downturn; but, by placing all blame on the United States and capitalism, the victim (loser) can claim to be pure as the driven snow.
Galeano quotes Che Guevara (a doctor by training and a revolutionary by experience) on economics: “The nation that buys, commands. The nation that sells, serves.” This simplistic aphorism ignores the supply demand price curve but is consistent with the notion that capitalism and the United States, by buying raw materials from Latin America, are the winners that exploit the losers.
The Pope’s economic theory
Like the Puritans before him, this Pope is a critic of free-market economics and more a devotee of “moral economics” – that theory that good outcomes are all that matter and economic laws (e.g., markets, supply and demand) are immaterial.
The Argentina experience (1936 -2013) is one of continued tinkering with the economy in order to get political advantage. In general, policies were often implemented which at their base were socialistic or Marxist in nature – and those policies have a poor track record – but often seem moral to their backers.
Supply-side economics (aka “trickle down”) has a track record of building strong economies while its antithesis, demand-side economics, has failed noticeably – especially during the current American administration. While the Pope rails against supply-side economics, he seems also to oppose demand-side economics in which “Human beings are themselves considered consumer goods to be used and then discarded.” Confusing?
Father Robert Sirico of the Acton Institute notes that the Argentina of Pope: Francis is a country that is “corporatist, mercantilist and almost fascist.”
The Pope’s political theory
Having experienced first hand the disaster of non functional and ever changing governments – not to mention the border line civil wars, this Pope wants some stability. He looks for a strong government and for a larger role for the state in the economy. Like Galeano (see above), he seems to have little respect for people except as victims to whom the government can minister.
The Pope fails to recognize the interdependence of the economy. In his Evangelii Gaudium, the Pope states that “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…” This is a confused statement. Policy not economics sets justice.
“Inequality,” says the Pope, “eventually engenders a violence.” That certainly seems true in Argentinean history and the Pope projects this to all societies. While it may be true in Argentina and other similar countries, it does not seem to be true in the west.
As Archbishop, Pope Francis charged that Britain "usurped" the Falkland Islands from Argentina and that Argentina was merely trying "to reclaim what is theirs for the fatherland." Never mind that Britain held a referendum of the 3,000 Falkland Islanders and 99.8 percent favored British rule. Argentina (and one would presume the Pope as well) believe that self-determination does not apply to the Falklands.
So what about the Pope?
Time will tell but to understand his views, you must understand Argentina. Which is harder to understand? Good question.