The Pope's delusion
People become affluent by creating a product that the market demands in excessive quantities. And with the increased prevalence of the Internet it is now easier to create wealth and engage in business transactions.
According to Mckinsey Global Institute, the Internet accounted for 21 per cent of GDP growth in mature economies during 2006-2011, and it is no surprise that the architects of brands like Facebook are young people.
Technology has provided even the destitute with an opportunity to accumulate vast riches in a modern capitalist economy and, prior to the evolution of technology, success stories were not elusive either. For example, billionaire Lakshmi Mittal was born in a poor Indian village, but this did not prevent him from becoming a global business leader.
Therefore, the Pope's description of capitalism as a "form of tyranny" is baseless. The Pope and many of his ilk fail to understand that it is the free market and pro-growth policies that reduce income inequality and uplift the poor. Taxes and excessive government regulations are disincentives to growth and restrict entrepreneurship and job creation, thus keeping the poor destitute.
In 1970, Sweden was the fourth richest country in the world. But with an increase in taxes and statist policies, economic growth decreased; and by 1993, Sweden had become the 14th richest country in the world. However with the creation of conservative economic policies, like the abolition of wealth and property taxes and the reduction of the corporate tax to 22 per cent, Sweden is becoming more conducive to investments and wealthy citizens who migrated years ago to flee burdensome taxes, like Ingvar Kamprad are now making Sweden their home again.
Capitalism's record in eliminating poverty is enviable. According to the Cato Institute, India would have had 175 million fewer people living in poverty by 2008 had it embarked upon reforms in 1971, instead of 1991. Income inequality maybe a concern to many, but stifling capitalism will only make the problem worse.
Being a religious leader, the Pope's primary objective is to save souls, bashing capitalism is not one of his duties. Furthermore, we must not begrudge the rich for being successful because we have benefitted tremendously from their products that have enriched our lives. Only capitalism can solve income inequality, and instead of complaining about the wealth of rich people, the Pope and his fans could encourage the poor to take advantage of the opportunities that the Internet has created.
We must be realistic, not everyone will be rich, and since some individuals are more talented than others, we will never be equal. Progressive policies rarely work, but intellectuals like the Pope continue to suffer from delusions of grandeur.