Here we go again. I’m inclined to give people the benefit of the doubt when they say talk about inequality, and at least assume that it’s possible that they could mean that legal or political inequality is the problem. That is, we could agree that it’s bad when states favor certain groups (rent seekers) at the expense of other groups (taxpayers), or when agents of the state abuse the powerless more than the powerful because they know they can get away with it. That’s certainly a damaging type of inequality. But we know from numerous past comments that this is not what Francis means when he draws attention to inequality. He seems to believe, contrary to all honest empirical evidence, that free economies cause economic inequality.
In reality, the sin of the free(ish) markets is merely that they’ve been unable to totally eliminate the crushing inequality and poverty that defined virtually all humanity prior to the industrial revolution. Anyone remotely familiar with economic history knows that economic inequality between the richest and poorest was far worse in, say, the 14th century than it is now. And worse yet, when we speak of poverty in the 14th century, we’re talking about everything from lack of air conditioning to famine.
No market economy since industrialization has famines at all, and thus, poverty in the modern industrialized context can’t even be compared to poverty in the days before industrialization and the relatively free markets that made the enormous improvements in the standards of living of most people in the industrializing world. Some people, however, including Francis, seem to be under the impression that things were humming along just fine until markets came along. But in reality, its relatively-free markets that made it possible for humanity to escape the grinding poverty that was the lot of almost all of us (except a tiny caste of murderous nobles and monarchs) who ground the rest of us under the heels of their pointy shoes.
In the 19th century, the rise of freer markets and liberal politics paved the way for millions to rise to a point where they could afford automobiles and washing machines and air conditioning. Indeed, most of us attained a standard of living undreamed of by even the wealthiest nobles of old.
Francis has used an absurd analogy: “there was the promise that once the glass had become full it would overflow and the poor would benefit. But what happens is that when it’s full to the brim, the glass magically grows, and thus nothing ever comes out for the poor.” I honestly can’t understand this statement even after having read it multiple times, but I can tell you that it’s obviously false that “nothing ever comes out for the poor.” If that were true, then only a tiny class of people would have cars and refrigerators and personal computers, and obesity would not be a problem in places like China.
It’s also demonstrably true that it’s better to be poor in a country with relatively free markets than in a country with more controlled markets. Nicolas Cachanosky demonstrates that in detail here.
And Ludwig on Mises relates how capitalists saved Europe from starvation.