In a May 22 opinion piece for The Wall Street Journal, "The Pope's Case for Virtuous Capitalism," Cardinal Timothy Dolan of New York criticized the media for giving the impression that "the only thing on the pope's mind was government redistribution of property, as if he were denouncing capitalism and endorsing some form of socialism."
They overlook, the cardinal argues, "the principal focus of Pope Francis' economic teaching -- that economic and social activity must be based on the virtues of compassion and generosity."
Cardinal Dolan believes that "the spread of the free market has undoubtedly led to a tremendous increase in overall wealth and well-being around the world," but he also agrees that "far too many people live in poverty and have few opportunities to achieve prosperity."
He argues that "all people, including the poor, benefit from a general increase in the overall wealth of society" caused by capitalism, but "the church certainly disapproves of any system of unregulated economic amorality, which leaves people at the mercy of impersonal market forces, where they have no choice but to sink, swim or be left with the scraps that fall from the table."
Cardinal Dolan, whose archdiocese includes New York's financial district, believes that "few people subscribe to an inhumane philosophy of radical economic individualism, and even fewer consider the 'Wolf of Wall Street' to be a good role model."
In short, he argues that the capitalism criticized by the pope is not the kind of capitalism practiced in the United States. "For many in developing or newly industrialized countries, what passes as capitalism is an exploitative racket for the benefit of the few powerful and wealthy."
The proper response to the problems of the free market is "not to reject economic liberty in favor of government control," he writes. "The church has consistently rejected coercive systems of socialism and collectivism, because they violate inherent human rights to economic freedom and private property."
After briefly acknowledging that "when properly regulated, a free market can certainly foster greater productivity and prosperity," he emphasizes that "the church has long taught that the value of any economic system rests on the personal virtue of the individuals who take part in it, and on the morality of their day-to-day decisions."
As a result, "people, acting justly, compassionately and honestly, are the foundation of good economic or business activity," he writes. "A just economic order relies on both material wealth and on people's openness to the transformation of their hearts in love and solidarity."
Larry Kudlow helped Dolan
Larry Kudlow of CNBC tweeted that he worked with Cardinal Dolan on the piece. On his show back in August, after quoting the pope's tweet that people are "unemployed, often as a result of a self-centered mindset bent on profit at any cost," Kudlow commented, "That doesn't sound like much of a free market message to me."
Many of the themes in Dolan's column can be heard in Kudlow's show. "I hope sincerely that the pope does not believe that his native Argentina was an example of capitalism," Kudlow said. "That was state-run fascism, and that was cronyism and stealing."
He argued that what Pope Francis is saying is, "businesses, politicians, and everybody, we all have to have a conscience. As we go about our business in this system, we must have a conscience and we must not forget those who are less fortunate." Kudlow said he believes that "Judeo-Christian values, meritocracy values, that is where the rising tide lifts all boats." He acknowledged, "That does not mean poverty ends, but that is where the rising tide comes from."
In contrast, Kudlow said "Pope John Paul II had a much more market-friendly approach to all this" because he lived under Soviet Communist rule. "He understood that the socialist systems or even the quasi-socialist systems have no freedom," he opined. "I am not sure this pope really understands that."
When his guest asked Kudlow whether he would be willing to go along with very stringent regulation of the economic activity in order to make sure the playing field is actually fair, Kudlow responded, "No, I would not. I don't believe in stringent economic regulations. I do believe in safety regulations. I think that economic regulations gets us back to state socialism."
In sum, "On the morality point, I agree with the pope, but on a regulatory point, I don't want to go back to Soviet-style regulation."
The cardinal's column did not sit well with theologians who specialize in Catholic social teaching.
They strongly disagree with Dolan's equating the American economic system with "virtuous capitalism." Pope Francis was talking about American capitalism, the theologians say.
"It wasn't Argentinean populist economics, Eastern European crony capitalism, or African kleptocracy that threatened the world economy with the worst recession since the 1930s," said Jesuit Fr. Drew Christiansen, professor of ethics and global human development at Georgetown University. "It was no-holds-barred American capitalism that did that."
"It is a shame that the Cardinal seems more interested in making Pope Francis' statements seem less threatening to free-market-celebrating Americans than he is in applying the Pope's critique to the American scene as it really exists," says Joseph A. McCartin, director of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. "One doesn't need to travel to a developing nation to see a system that is functioning as 'an exploitative racket.' The signs are all around us in the United States."
Professor Gerald Beyer of Villanova University quotes John Paul II as contradicting Cardinal Dolan. "[A]spects typical of the Third World also appear in developed countries," he writes in Centesimus Annus (33). Or more pointedly, in Ecclesia in America:
More and more, in many countries of America, a system known as 'neoliberalism' prevails; based on a purely economic conception of man, this system considers profit and the law of the market as its only parameters, to the detriment of the dignity of and the respect due to individuals and peoples.
Some argued that many problems in the developing world (low wages, corruption, environmental devastation) are caused or exploited by American companies or their suppliers.
Dolan's "playing into this myth of 'virtuous American capitalism' and the developing world corruption," said an untenured theologian who did not want to be identified, "is a complete delusion, especially when the global reach of U.S. transnational interests are considered." Such arguments, she said, are "paternalistic, neocolonial, and imperialistic."
Nor do the theologians believe that American capitalism has produced such wonderful results at home.
"The Pope's critiques have direct relevance to economic inequality and injustice that clearly exist in the United States today," says Jesuit Fr. David Hollenbach, professor of human rights and international justice at Boston College. The cardinal "needs to reflect on the extraordinary growth of inequality of income and wealth in the United States when he suggests that Pope Francis' criticisms of capitalism do not apply in this country."
"Cardinal Dolan misses what Pope Francis sees so clearly," Father Christiansen says. "The growth of inequality everywhere including the U.S. is a result of American-style capitalism and the financialization of the economy." He continues:
Stagnation in wage growth and the trickle-up economy has shrunk the U.S. middle class and hollowed out the economic power of those who remain in it. Pope Francis understands this when he links addressing poverty to reversing inequality.
For generations, Catholic social teaching has understood and taught that improving the condition of the poor means holding inequality in check. Thanks be to God, that Pope Benedict and Pope Francis have underscored that teaching in the most emphatic ways.
Unfortunately, too many well-to-do Catholics prefer getting their economic ethics from the Acton Institute rather than the Vatican.
For McCartin, "Reading the cardinal's statement makes me appreciate all the more the great service that the French economist Thomas Piketty has done us recently by demonstrating that the rate of return on capital exceeds the rate of economic growth under capitalism -- not just in one nation, but in all the nations for which data exists, and by persuasively arguing that, given this trend, systemic government intervention is necessary to keep capitalism from sliding toward oligopoly."
Jesuit Fr. John Langan, who holds the Cardinal Bernardin Chair of Catholic Social Thought at Georgetown University, faults Dolan for crediting all the positive accomplishments of the economy "to the private sector, while exempting it from serious criticism for the actual defects of our system, the problems of 'real existing capitalism.'"
"Virtuous American capitalism," Langan argues, "is an abstraction. The key question is whether the notion is being used to prick or to lull our consciences."
For Langan, "The real arguments which need to be faced have to do with achieving the right balance of private initiative, redistributive programs, fair regulations, opportunities for the young and for the previously excluded, equitable and realistic taxation, a style of management that treats workers with dignity and respects the environment."
Unfortunately, he says, "far too many of the friends of American capitalism devote their energies to denouncing, defunding, and otherwise restricting efforts to face the immensely complex set of problems that confront us. They are devoted to a powerful but incomplete method of economic thinking that marginalizes important human needs and values that Catholic teaching is committed to proclaiming and defending."
What especially caught the ire of the theologians was Cardinal Dolan's focus on personal morality and virtue while excluding structural issues.
"Cardinal Dolan's stress on personal virtue as the solution to issues of economic injustice does not give sufficient attention to the structural causes of poverty," Hollenbach complains.
"These structural issues have long been a major emphasis in Catholic social teaching, especially since Pius XI placed high stress on social justice as a reality that goes beyond the justice of individuals," he says. "Pope Francis is clearly aware of these structural issues when he argues that markets do not lead to justice by 'trickle down.' The Pope's critique is another way of calling for structural change."
Dolan's column "reflects a heavily individualistic understanding of morality," says Professor Mark Allman, chair of Religious & Theological Studies Department at Merrimack College.
"He seems to reduce the bad behavior of the financial districts to individual choices, which ignores John Paul II's teaching on 'social sin' as 'institutionalized evil,'" Allman says. "Granted John Paul said all sin is traced back to individual choices, nevertheless there are structural and cultural practices that contribute to a culture or status quo that can be inhumane." But in Dolan's piece, "There's no mention of the need for structural change."
John Gehring, Catholic program director at Faith in Public Life, agrees: "There is little analysis of how unfettered markets and financial systems in our own country can perpetuate structural injustice and social sin that often keep people trapped in poverty."
"These arguments provide moral cover to free-market fundamentalists and anti-government zealots who preach a gospel of radical individualism that Catholic teaching rejects," Gehring said. "Instead of applying the pope's critique of trickle-down theories to a U.S economy marked by glaring inequalities, the cardinal veers close to echoing GOP talking points."
Terrence Tilley, who holds the Cardinal Avery Dulles chair of Catholic theology at Fordham University, puts it more diplomatically by expressing amazement that Dolan refuses "to acknowledge the possibility that 'virtuous capitalism' narrates a 'cover story' for those who would continue increasing economic inequality" since "over the last 35 years, the rich have been getting relatively richer and the poor getting relatively poorer so that inequality has reached levels not seen since the 1920's in advance of the Great Depression."
Cardinal Dolan's column has stimulated a lively discussion about Catholic social teaching and American capitalism. Maybe the next time Pope Francis holds a press conference, someone will ask him what he thinks of American capitalism.
[Jesuit Fr. Thomas Reese is a senior analyst for NCR and author of Inside the Vatican: The Politics and Organization of the Catholic Church. His email address is email@example.com. Follow him on Twitter: @ThomasReeseSJ.]