According to Pope Benedict, “The economy cannot be measured by the maximum profit but by the common good.”
I’m still waiting for him, or anyone else, to explain exactly how one measures the common good. Should we measure it in median income, chicken dinners per household, or perhaps dinners per chicken coop?
Come to think of it, one cannot “measure the economy” at all; neither by the common good nor by maximum profit. Maximum profit is only a useful measure for a private enterprise. It is the key measure to know whether the company is producing more value than it is costing. Every company should aim for this goal. The economy as a whole is an impossible and meaningless aggregate like GDP and is used for political aims, not economic gains.
He continues, “The economy cannot function only with mercantile self-regulation but needs an ethical reason in order to work for man,” But this fails to realize that these interests are one and the same. It is ethical and necessary for man to work because God commands us not to take from others. In our pursuit of profits the market is regulated by supply and demand. This is not a “self” regulation but a product of the free market system. Nowhere, this side of heaven, will people “self-regulate” their actions.
Tom Woods, a vocal Catholic and Austrian economist, has written a great book on the church and the free market. I wish the Pope would read it.
Editor’s Note: Although we think the Pope is completely wrong on this issue, we do not wish to be disparaging in total. (The alliteration was clever, though, don’t you think?) We will freely criticize leaders of any denomination who promote bad economics and seek power, and herald those who speak truth to power.