#105 The Free Market Feeds the Poor

Father Robert Sirico has become the Lord Acton of our generation for telling Pope Francis that the free market feeds the poor. How else would there be enough “leftovers” to give away?

I am a great admirer of Father Robert Sirico.  He founded the Acton Institute in Grand Rapids, Michigan.  The Acton institute has produced some of the best work on Christian Economics.  I have read many of their books, shown their videos in my classes, and attended the Acton Institute Forum.  Perhaps most importantly, there are multiple citations in my book Biblical Economic Policy from Father Sirico’s very good book Defending the Free Market.

But today, my respect has increased even greater.  An article in Fox news recently announces, “Rev. Robert Sirico says Pope Francis makes an enemy of the poor’s best friend – the free market.”  In the article, Father Sirico asks, “Without a market, how do we feed anyone?”  Ok, it’s one thing for a loud-mouthed protestant like me to take on the Pope.  But it takes an extra measure of character for a Catholic Priest to contradict his own Pope.  

Matter of fact, Lord Acton did it, in the act that made him famous, he stated, “Power corrupts.  And absolute power corrupts absolutely.”  He said that about the Pope.  I recommend the book by Gertrude Himmelfarb.  

So, is Father Sirico the next Lord Acton?  He has the strength of character to be.   

If you Love Your Neighbor

Love Your Neighbor is the title of my podcast #18.  The Pope denounced the “Cold logic of the market.”  Will the Pope refuse donations that were earned in the market?  They are from this very same, “Cold logic of the market.”  Cold?  What’s cold about supplying the demands of your neighbors?  In economics we call it consumer surplus.  Here’s how it works.  A poor person shops at Wal-Mart and puts some things in her basket.  When she gets to the check-out counter, those items are run over the scanner.  The customer stands at that counter and says, “I would rather have this can of green beans, than the 78 cents in my purse.  She willingly makes the exchange.  Who gets richer?  BOTH!  Wal-Mart gets richer by the 78 cents, and the poor person gets richer by a can of beans.  People who have NOT had economics would say that Wal-Mart gets richer because they get the 78 cents.  That is correct, that Wal-Mart get richer FINANCIALLY, but the consumer gets richer by one can of beans. 

This information is old, but the last study I saw, indicated that Wal-Mart produced $2,600 in consumer surplus for every American family.  The specific amount is not important.  The concept is.  Free Market Capitalists suppliers like Wal-Mart make the poor richer, but providing the highest quality goods and the lowest prices because they are in a competitive market.  In the book, Economic Shalom, John Bolt writes, “The biggest poverty-reduction measure of all is liberalizing markets to let poor people get richer.” Of course, by “liberalizing markets” he means the free market. 

I was speaking at a University last week and a student asked, “But Wal-Mart has billions of dollars….”  And I asked, “How did they GET the billions?”  They GOT the billions by providing consumer surplus for their neighbors.  

If you love your neighbor, you will supply the products and services she demands.  If you love yourself, you will make a profit while doing so. 

The Pope decries a system in which BOTH parties get richer.  So that means, he would favor a system where one party gets richer, while the other gets poorer?  That’s Socialism.  Socialism is cold,