The Fatal Errors of Capitalism: Laudato Si’ & the Economy

June 22, 2015

A group within a people has no claim to being favored in the distribution of goods and honors because it produces a large quantity of useful consumer goods.

Max Scheler, Ressentiment


The world received Laudato si’  this week and, as a result, has a lot to consider. The 190-pages of Francis’ second encyclical demands a universal examination of conscience and begs a critical re-thinking of our ways of living and the social structures we have in place.

Reading the encyclical is, I think, a necessary venture for those who can access it and have the time. By “have the time” I mean to reference the many men and women, Catholics and non-Catholics alike, who really do not seem to have the time. Overworked, underpaid, undernourished, on the cusp of total exclusion from society, these people must receive the good news of the encyclical by the positive change that comes from those of us who read it.

It is crucial to understand the encyclical as it is written. Reading commentaries or quick news bits that include a few quotes and mesh it together either with an ideological attack or an ideological defense, whether left or right, typically seems to reinforce and rationalize a comfortable embrace of various brands of cafeteria Catholicism, for some, and à la carte reasoning, for others. In other words, Laudato points out and rebukes various brands of the same relativism in today’s society.

Here are some of the themes we can rationally extract from Laudato: a consistent ethic of life; an urgent transition to renewable energy; cooperation and dialogue; property, the means of production, and (an appropriate understanding of) subsidiarity; technology, power, and consumerism; the continuity of Laudato within the papal magisterium, the magisterium in general, the lives of the saints, the scriptures, and natural law; changes in lifestyle; the relationship between politics and the economy; the social and ecological problem as indistinguishable; inconsistencies found in leftist and rightist ideology; the ecological problem, in general; the intrinsic value of all creation; needs of the poor and the planet; the universal super-religious call to action; the value of religion; the new evangelization; and the prevailing economic order.

The encyclical also contains an underlying message that challenges us socially, politically, culturally, and economically: everything is connected. I mentioned that themes above were extracted only rationally to provide some distinction; but the distinction is not as real as some would believe. Everything is connected. This is difficult to grasp for many in Europe and North America. Our desire to compartmentalize and hyper-specialize areas of life has been an obstacle to true progress. However, in order to present Laudato in a way that expresses its message and, at the same time, enters into conversation with it, I would like to present the encyclical in relation one of themes mentioned above. This is a lengthy task. It is also a complicated task as this will require plenty of overlap, lest we fail to connect the dots and show how everything is connected. Therefore I will go over some of what Francis has to say on the prevailing economic order and consider the realistic possibility that the Holy Father has laid out an argument in favor of moving beyond capitalism.

Political comedians readily suggest that Francis is a Marxist because of his critique, which is actually consistent with the Catholic wisdom tradition, of the prevailing economic order. In the past, Cardinal Dolan was quick to insist that Francis wouldn’t advocate socialism or denounce US capitalism-as if one could make a distinction between the different capitalisms in the world-after wealthy donors in the New York Archdiocese were made uncomfortable by parts of Evangelii Gaudium (Francis’ first Apostolic Exhortation). In fact, the same Apostolic Exhortation led to defenses of US capitalism by Samuel GreggRobert Sirico, and Jay Richards – ‘Francis refers to cronyism, not our capitalism’, they want us to foolishly believe.

While mentioning capitalism by name could be imprudent for Francis, any reader could make the following conclusion not only after reading Laudato, but after familiarizing ourselves with moral theology: the church invites us to go beyond capitalism. Not merely crony capitalism, nor mercantile capitalism, nor industrial capitalism, nor monopolistic capitalism, nor any other capitalism that could in reality be distinguished from US capitalism. Capitalism has got to go.

While not mentioning capitalism by name, Francis does mention Nazism, communism, and totalitarianism, only after mentioning the United States (not by name), when considering the destruction of life in systems that lust for power and control. A major concern for Francis is therefore perfectly modeled in the US social structure, capitalism included.

It would be challenging to come to the conclusion that capitalism is no longer tolerable simply with the above reference – and without seeing the word capitalism anywhere in the encyclical. To be sure, “market” is used several times, often negatively – but not capitalism. Yet, being reminded by Francis that everything is connected can aid us in realizing the imperative for a reality beyond capitalism.

One of the few non-Bishops or non-(canonized-)saints cited by Francis is the Italian-born priest, Romano Guardini (LS, 105-108), his influential The End of the Modern World to be specific (which ironically features a foreword from Neo-Conservative stalwart Richard John Neuhaus). Guardini’s thought, which was influential for early-20th century Eastern European Christian socialists, has a serious role in Francis’ discussion on consumerism, globalization, and the technocratic paradigm. This conversation takes place in the third chapter of Laudato, titled ‘The Human Roots of the Ecological Crisis’. The ecological crisis has, as part of its cause, the marriage of technological power and consumerism.

While technology has proven itself to be beyond helpful for humans, especially in the field of medicine and communication, it has a tendency to dominate the life it was intended to assist. Advances in technology drive and are driven by an unsustainable consumption of precious resources. The consumption is unequal and the benefits of technology do not seem to make their way to the world’s poor. The pursuit for newer products, with increased efficiency, and greater power, turns the world into a mere commodity. It’s as if the world, and the life it sustains, has a binary value, useful or useless – the useful are consumed and destroyed, the useless are excluded and left to die. Of course, this is intimately related to the relativism addressed later in the chapter (LS, 122-123).

This technocratic paradigm sustains and is sustained by various “-isms” the church has repeatedly rejected: relativism, consumerism, individualism, capitalism, and materialism, to name a few (see par. 117 in the Pontifical Biblical Commission’s The Bible and Morality, for example). These ‘-isms’ are very much related to and can all be found in our capitalist world. These ‘isms’ are detrimental to the weak and the planet, they participate in the formation of a ‘culture of death’, which can be identified as a war of the powerful against the weak (see pars. 12 and 19 in John Paul II’s Evangelium Vitae). This is typical of a capitalist system, its centers of power, and its dominated periphery.

[Tying together relativism, the technocratic paradigm, and consumerism with free market ideologies, abortion, euthanasia, drug use, trafficking, environmental destruction, and the plight of the poor, etc., can be done another time. Until then, consider the second half of chapter three in Laudato. Matthew Tan’s excellent piece, Abortion in/as a Consumer Structureand James Smith’s Imagining the Kingdom, for example, are particularly useful for understanding how social habits and attitudes are formed in relation to culture, social and economic structures, at the expense of the pre-born, the poor, and the earth, etc.].

Francis is not shy about connecting capitalism-all of capitalism, that is-with the technocratic paradigm, consumerism, death (human and organic), individualism, and relativism. In pointing out the technological advances of the last two hundred years, on several occasions (LS, 46, 51, 53, 102) the Pope can be seen making a reference directly to capitalism. At least, it seems probable that he is referring to capitalism if we consider what exactly has been happening for the previous two centuries. Karl Polanyi, for example, writes, “Not until 1834 was a competitive labor market established in England; hence, industrial capitalism as a social system cannot be said to have existed before that date” (ch.7 of The Great Transformation) – about two centuries ago. The capitalism we have is a descendent of industrial capitalism, which grew out of a mercantilism that was already global. (Enrique Dussel dates the origin of global capitalism, which entails for both he and Francis a violence against the other, at 1492.)

Francis slams the destruction wrought by the last two centuries of development, which goes hand in hand with the technocratic paradigm that lives off of and fosters materialism, individualism, relativism, and consumerism; and all this perfectly identifies with what we call capitalism today. Are these our only reasons to believe Francis is encouraging us to move beyond capitalism? No. The capitalists should have a say.

One need not look beyond the advocates of the capitalist system to see its inconsistency with Christianity. For example, F. A. Hayek’s The Fatal Conceit: The Errors of Socialism, and Ludwig von Mises’ The Anti-capitalistic Mentality do a fine job of demonstrating the position that the values of solidarity, simplicity, modesty, restraint, fair prices and just wages, mutual aid, and moderation are destructive when it comes to supporting a capitalist way of life. Instead, their level of support for competition, individualism, self-interest, materialism, relativism, autonomy of the market, etc., along with their poorly masked embrace of social Darwinism which converts into a passive economic genocide of the poor, contradicts the Christian faith, in general, and Laudato si’ (79 and 210)in particular.

One can stumble upon other treatments on the inconsistency between capitalist values and those of Christianity. Catholic values are irreconcilable with- and their disappearance is connected to-the values sustaining and sustained by capitalism, according to the non-Catholic authors Max Weber and Peter Singer. It’s awfully consistent, then, for Francis, along with his predecessors, to suggest moving beyond the prevailing economic order – or, to be precise, capitalism.

This movement beyond the capitalist system is suggested time and time again in Laudato, as Francis insists that we develop new models of production, distribution, and consumption, along with re-examining our understanding of progress and advancement, and embracing new lifestyles. Indeed, he affirms a more ascetic way of living, an agrarian life style, a culture of solidarity and participation, respect for the earth, and putting people before profit – in fact, the only mention of capital is a negative one.

We do see other challenges posed by capitalism, especially here in the United States and in countries/markets directly connected to us. Concerning a lack of response to environmental destruction, Francis sees that “It is remarkable how weak international political responses have been. The failure of global summits on the environment make it plain that our politics are subject to technology and finance. There are too many special interests, and economic interests easily end up trumping the common good and manipulating information so that their own plans will not be affected” (54). The wealthy and the political powers are too interwoven – mutual service to respective interests is evident. A failure of democracy is connected to a massive accumulation of and desire for wealth, resulting in taking away the voice of the poor and the earth. This should not be surprising in our experience, as Joseph E. Stiglitz makes a similar argument in The Price of Inequality: How Today’s Divided Society Endangers our Future (2012).

Is socialism the answer? The lack of nuance in Cardinal Dolan’s WSJ piece would lead us to believe that socialism is not the answer. Robert Sirico, Samuel Gregg, Michael Novak, and Jay Richards would rather perform an intellectual circus to defend some form of capitalism before positing that socialism has a place within the Church’s teaching. But, interestingly enough, the compatibility of a socialism with the teaching of the church is not far-fetched.

We need to distinguish totalitarian or “real-existing” socialism, of which the Church will have no part, with democratic socialism, as John Paul II did in Centisimus Annus. We should note that then-Cardinal Ratzinger describes the closeness of democratic socialism with Catholic social thought in Without Roots (pg. 72). Again, there has to be a distinction between the totalitarian models and the non-totalitarian ones, otherwise we may not understand what is said when the Bishops of France wrote, “By condemning the actions of communist parties, the Church does not support the capitalist regime,” (see Anne Fremantle’s The Social Teachings of the Church, 1963.)

While the Catholic bishops of Peru in 1971 insisted, “Christians ought to opt for socialism”, we should wonder if a swap of systems needs to take place. Francis doesn’t say use this or that system, but suggests we change our lives, work according to various principles, and try for something better. I’ll close with considering what one possible set of principles may look like. It should not be surprising that these principles, produced before Laudato si’, are also written by a Latin American thinker and liberation philosopher, Enrique Dussel.

To begin, Enrique Dussel’s study of capitalism finds that the same economic system is unable to comply with the first principle of social activity, that is, of safeguarding life in perpetuity, humans in particular and the life of all creation in general. Consistent with Laudato, these principles manifest a love for the poor that includes their participation, as well as a respect for the rest of the created material universe. The conditions of this general principle, applied economically, can be expressed as follows: a) the rate in which we use renewable resources should not exceed the rate in which they are replaced; b) the rate in which we use non-renewable resources should not go beyond the rate in which new sources of energy are implemented – solar energy gets special mention for Dussel and in Laudato; and c) the rate of environmental contamination and industrial waste should not go beyond the possible rate of recycling and reversing previous negative effects, including global warming and its causes. One wonders whether Francis got these principles from Dussel!

Dussel offers three principles for a pro-life economy beyond capitalism in his 16 Theses of Political Economy, as yet untranslated into English:

  1. We must, as it is our right and duty, produce, distribute, exchange and consume, in the economic realm, products of human labor, making use of the economic institutions of a system created to this effect, always maintaining and ultimately aimed at affirming and growing the quality of human life of all members of the community, and ultimately of the whole of humanity, according to the demands of the status of necessities and ecological resources determined by the human history of the time in which we live.  
  1. A decision made in the new productive model is legitimate (whether technological, productive, organizational, or having to do with advertising, etc.), even within the context of policy decisions related to the economic field, when those affected (workers, employees, etc.) can participate in a symmetrical fashion in the process of making practical decisions on all institutional levels (of production, distribution, exchange, etc.), guaranteeing such participation by means of social or community ownership of the means of production, maintained discursively (though specialists in different fields, techniques, or practices exercised in the productive community may have a greater weight to their reasons), taking into account necessities of every kind, not only of the productive community, but especially of, and as a service to and in responsibility for, society as a whole, and ultimately of all of humanity, within the limits framed by the principle of feasibility (principle 3) and of affirmation of human life as a common good (principle 1).  
  1. Do what is possible! Because, attempting the impossible is a chimera (a mythical illusion), and failing to attempt what is possible is conservatism or cowardice.  
(Pardon any confusion from the quick translation, you can look at the original text here.)

Dussel and Francis both agree, as was mentioned earlier, that a swap of systems is not the appropriate proposal. Instead, let us be aware of the damages done, and which continue to be materialized, in the current, capitalist, economic order, change our lives and act according to principles that respect life.

For those of us who are anxious over how familiar this all may seem to liberation thought (theology and philosophy), do not be anxious: All theology liberates. We should participate in the effort to liberate the poor and the planet, it is our Christian and human duty. Liberation, which is the active force of love, reveals God in all of creation.

(Ah, but some are worried that this sounds like A Theology of LiberationThat is not a bad thing. The recent pontiffs have not hidden their admiration for certain thinkers. Oscar Romero. Gustavo Guttiérez, and Hélder Câmara. If you read Laudato, you’ll notice Francis using two times, almost exactly, the following phrase: “Cry of the earth, cry of the poor” (LS, 49 and 246). This is also the title of liberation theologian Leonardo Boff’s, 1997 text. It is scathing to capitalism and does quite a bit to demonstrate all of the things we have said above. I suggest you read it; in fact, have fun and realize how Sirico’s Acton Institute rebukes consistent moral theology by reading their review of the text.)

The end prescription can be summed up in Jesus’ commandment to love one another. The reality of this, for Christians, requires on-going conversion, especially if we are to take Laudato seriously. None of us are exempt from this call to love. We can be insincere with the words of the Holy Father for the sake of our agenda or simply be blunt about our decision to publicly denigrate Laudato, like Robert Sirico and Samuel Gregg did yesterday. Even the Acton Institute is called to Jesus Christ – the pains of conversion are obvious.

There is more that can be considered or connected to in this brief treatment on an economic life beyond capitalism. We need to take action right away. This is a social and ecological problem. For now, as most commentators seem to be addressing the encyclical without admitting the invitation within it to move beyond capitalism, this is what I leave you with.

This and the Acton Institute’s confused and ideologically rigid response to Laudato. Whose side are you on?


Keith Michael Estrada


Keith Michael Estrada is the founder of Students for a Fair Society at Franciscan University of Steubenville, where he is finishing his MA in philosophy, and is a member of the International Observatory of Young Catholics (Rome). He writes from Seattle, Washington. This article previously appeared at Patheos