Whether the Pope knows the market better than British conservatives

In a speech commemorating Margaret Thatcher, the Mayor of London Boris Johnson has reproposed, in a provocative and effective manner, a certain "laissez-faire" [liberista] commonplace that normally one attributes – not without a good deal of accuracy – to the most significant political couple of the 80s: Ronald Reagan-Margaret Thatcher.

I would like to start by saying that I used the term [liberista] in quotes because it is not my term, I feel it to be insignificant and indefinable, except within the four walls of Italian political debate. We know that it is a term that is not easy to translate into other languages and certainly finds no corresponding term in English, whose best rendering is laissez-faire.

In any case, beyond this preliminary terminological clarification, I have attempted to grasp the meaning of certain statements by Mayor Johnson, in order to compare them with the debate opened by Pope Francis, who in his apostolic exhortation: Evangelii gaudium, does not fail to intervene also on economic themes.

Johnson reiterated a position that is far from original, namely, that greed and inequality are the engine of the economy, and thus evidently attributing to such elements a positive value. Honestly, in addition to not being scandalised by such a position, I am not even surprised by it. Basically, it is a commonly shared point of view and, unfortunately, one put into practice at various levels; although the logic of profit at all costs and at any price is not exclusive to the economy, nor much less to that special form of economic organization that we call "market economy" or "free economy". It is a logic that can be accepted by financial speculators, entrepreneurs, politicians, academics and others.

At this point, I imagine what the objection would be: "Johnson is not referring to unlawful situations, but to the healthy selfishness referred to by Smith: that of butcher and brewer, for instance". Except for the fact that for Smith, self-interest does not rise to the high and anything but noble rank of selfishness, let alone of greed, having accepted sympathy as virtue that qualifies the free market, a virtue that highlights the empathetic character of the relational dimension, where the other is not a tool to be used, or a lemon to be squeezed. However, the well-known expression with which the moral philosopher concludes the passage dedicated to individual interest as the motor of market processes: "the invisible hand", highlights an epistemological rather than a moral perspective. It does not advance any claim with regard to how we should behave within the market processes, it does not involve the normative dimension of the market, it is not prescriptive. Rather, the expression tells us that social phenomena are most often, if not always, the unintended outcome (unreflected, in the words of Carl Menger) of voluntary human actions, of intentional decisions. In practice, Smith's famous "invisible hand" can be traced back to a theory about the genesis and the development of institutions, starting with the primary problem any social scientist is faced with: understanding the how and why of a phenomenon.

It is clear that, with this in mind, appealing to greed and selfishness does not mean in any way that one stands in the tradition of Smithian liberalism, indeed, if anything, it means distancing oneself strongly from it and venturing into the traditions and practices that have little or nothing to do with the history of such liberalism. In hindsight, however, the appeal to such moral sentiments doesn't have much to do even with theorists of that capitalism that goes by the name of Reaganism or Thatcherism, to which Mayor Johnson appealed.

Consider, for example, the reflection of a leading exponent of so-called Reaganomics, American scholar George Gilder. Gilder is convinced that a system such as capitalism needs a "culture of giving" and a moral force based on the values of the Jewish-Christian tradition, and that, accordingly, it cannot rely on mere self-interest utilitarianly understood and writes: "It is impossible, starting from the mechanism of the rationality of self-interest, to establish a regulated and safe system that will not end up weakening the sources of the will and limiting its potential in front of danger and conflict, that will not diminish the spontaneous flow of gifts and experimentation that extend the size of the world and the circles of human sympathy."

Gilder, therefore, judges in an extremely negative manner the utilitarian vulgarisation of the Smithian principle of self interest that heralds the theory of a "capitalism without capitalists", a competition without rivals and a market of homogeneous goods, with operators in possession of a perfect knowledge: a place where the interests of omniscient men would tend toward a perfect balance, moved by an "invisible hand". On the other hand, he is convinced that there is no other way to respond concretely to the tragedy of poverty that does not pass through expanding the "creative circle of giving", that doesn't harmonize with the exponential increase of those who courageously bear the reasonable risk of entrepreneurial investment; people confident in the future, open to Providence, in love with life and with their neighbor.

I couldn't say, and frankly I'm not interested in the motivations that led Johnson to hold such unoriginal and slightly irritating theses. Maybe there are reasons of internal competition in the British Conservative party to obtain leadership, a strong reaction to the alleged moderatism of the current Prime Minister Cameron; in this respect, the world is the same wherever you go.

But one thing is for sure, the Johnson's words clash horribly with those Pope Francis used in the recent apostolic exhortation: Evangelii gaudium. Far from denying the importance of the market and the need for economic growth, the Pope affirmed the impossibility of reducing development mechanically to mere growth, so as to identify the complex dynamism of the human person with trade relations alone, typical of the market.

Development, for Pope Francis and the tradition of the social doctrine of the Church, is a qualitative notion and requires more dimensions, those of education and culture, values that the market does not produce on its own, though it needs and makes use of them, even conditioning them, both for the better and for the worse.

Market processes always have to do with the person and only with people, i.e. the anthropological perspective of which such processes are bearers, and which the political, economic institutions and cultural associations are able to implement, in order to confirm or refute blatantly the irritating but unoriginal perspective of Mayor Johnson.

 Flavio Felice is Adjunct Fellow at the American Enterprise Institute in Washington, D.C.

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