Why the Pope is Less Wrong Than Keith Farrell

Pope Francis’s remarks on poverty, inequality and capitalism — most recently at his open air mass in Seoul — don’t sit well with many conservatives and right-leaning libertarians. The Pope’s remarks include criticism of growing economic inequality and a call to “hear the voice of the poor.”

Among those who take issue with the Pope’s statement is Keith Farrell, a Students For Liberty campus coordinator at the Univerity of Connecticut (“Why the Pope is Wrong on Inequality,” City A.M., Aug. 21). He accuses the Pope of “scapegoating world poverty on the wealthy” and credits Marx with first coming up with the idea “that the success of some hurts others economically and that the rich have only gotten rich at the expense of the poor.” Farrell quotes a South Korean: “If someone has made a fortune for himself, fair and square, and has a lot of money, I don’t think that’s something to be condemned.”

An interesting hypothetical, but just how much of the economic elite’s growing concentration of wealth actually was made “fair and square?” Throughout his op-ed, Farrell implicitly equates the system we live under now with “economic freedom” and “free enterprise.” But that’s an example of what I call “vulgar libertarianism,” defending actually existing corporate capitalism as though it were a free market, and using “free enterprise” rhetoric to defend wealth and economic power which corporate capitalists have actually amassed through an overwhelmingly statist system of power.

Marx was hardly the first to figure out that in a class society, ruled by a class state, the rich get rich at the expense of the poor. It probably dawned on some Sumerian or Chinese peasant busting his hump with a hoe trying to produce enough to live on after paying rent to a temple priesthood. And plenty of radical free market thinkers — Thomas Hodgskin, Benjamin Tucker, Franz Oppenheimer — have drawn the same conclusion more recently. The capitalist system we live under today is the lineal heir to the state-enforced class systems of thousands of years ago.

“Free markets,” far from structurally defining capitalism, are permitted to operate on its margins only to the extent that they’re compatible with the propertied interests controlling the state. Even in the supposedly “laissez-faire” nineteenth century, “free enterprise” was a superstructure erected on a foundation of centuries of massive robbery — the enclosure of land and dispossession of the peasantry, first in the industrializing West and then the colonial world, massive restrictions on the free movement and association of working people in industrial Britain, slave labor and the seizure of global mineral wealth. Today many of the fruits of that robbery, like absentee titles to vacant land and corporate ownership of Third World natural resources, and a monopoly on the supply of credit and the medium of exchange by the owners of stolen wealth, are still legally enforced.

Corporate capitalism today depends on even more statism — “intellectual property,” regulatory cartels and other entry barriers, and massive direct subsidies in such forms as the Military-Industrial Complex and the civil aviation and Interstate Highway systems.

It’s true, as Farrell says, that standards of living have increased in absolute terms despite the rise in inequality — true as far as it goes. But the advantages of technological progress are governed by the same targeted pricing that governs all monopolies: Giant corporations use patent monopolies to enclose technological progress and let just enough of the benefits of increased productivity trickle down to the working classes to make it worthwhile for them to keep buying, while appropriating the rest as monopoly rents for themselves.

Farrell’s statement that “capitalism has brought freedom and abundance” to South Korea bears similar looking into. South Korean capitalism was built on the foundation of US military occupation and a military regime installed by the occupation authority, which subsequently liquidated the quasi-anarchist society of self-governing village communes and self-managed factories that had emerged after the Japanese pullout in 1945. This regime put anarchists and leftists of all kinds in mass graves, and during its decades in power wasn’t exactly friendly to the “economic freedom” of — say — Korean workers who wanted to unionize.

Interestingly, Farrell shares one erroneous assumption with Pope Francis: That reducing inequality requires government “redistribution of wealth.” They’re both wrong. What we have now amounts to an upward redistribution of wealth, with “taxes” on the producing classes in the form of the state-enforced monopoly rents we pay to landlords and capitalists. We don’t need state intervention to redistribute wealth downward. We need revolution to stop the state from redistributing wealth upward.

It’s time for free marketers to stop acting as hired prize-fighters for the present system of power, and start using free market ideas to defend actual economic justice.