Pope Francis and a Closer Look at Argentinian Capitalism

Those who dismiss Pope Francis’ concerns about unfettered capitalism on the grounds that being from Argentina makes him naive need to brush up on their history. Paul Ryan has dismissed them on the grounds that “this guy is from Argentina, they haven’t had real capitalism in Argentina…they have crony capitalism in Argentina. They don’t have a true free enterprise system.” Larry Kudlow, economist and commentator, dismisses the Pope by saying, “I hope sincerely that the pope does not believe that his native Argentina was an example of capitalism. That was state-run fascism, and that was cronyism and stealing.”

Rather than being backwaters disconnected from the global economic system, the relatively advanced economies of the Southern Cone—Argentina, Chile, and Uruguay—were some of the first testing grounds of the extremist libertarian ideology that Kudlow, Ryan, and many others now promote. Living through Argentina’s transition to this form of individualistic capitalism and several subsequent economic crises puts him in an ideal position to understand the harm of idolizing this type of capitalism and warn against it.

Here’s a bit of background: Argentina’s neighbor Chile was one of the first to embrace this economic ideology. Starting from 1956, the US government provided 150 scholarships for young Chileans to study at the University of Chicago with Milton Friedman, the intellectual architect of neoliberal capitalism and a man deified by many rightwing libertarians. Students from other Latin American countries also came to study this economic model.

After carrying out a coup against democratically-elected Salvador Allende on September 11, 1973, General Pinochet gave free reign to the “Chicago Boys” to implement their economic program, free from any civil society dissent. These policies were soon implemented by the dictatorships in Argentina and Uruguay in the 1970s and 1980s, with their own neoliberal technocrats. Judged on the basis of friendliness to foreign investment, market stability, and integration into the global economic system, they were pronounced a success. The perceived economic success of South America was a significant factor leading to the promotion of a particular set of neoliberal economic policies that prioritized profitability for foreign investors.

Far from being seen as examples of “crony capitalism,” worldwide economic institutions including the IMF and World Bank saw in the “success” of the Southern Cone a model to be replicated throughout the world. (To be clear, this ideology is not the same as the generally pro-business capitalism of moderate Republicans of decades past. Those Republicans often believed that strong investment in public works and social capital, moderate regulations, a solid tax base, and a social safety net were compatible with, and indeed necessary for, a strong market-based economy. The neoliberal model was something quite new.)

Further, the success of this economic “shock treatment” (as Milton Friedman called it) can’t be separated from how it was implemented with supreme contempt for human dignity. These same countries were also innovators in the use of forced disappearance and torture—frequently by electric shock—as political weapons. The comparatively strong social safety nets in these countries were systematically weakened, and to speak out against extreme poverty became a crime. To work with the poor was often a death sentence for priests, nuns, catechists, union members, teachers, and students.

It is not realistic to pretend that the events in Argentina have nothing to do with the rest of the capitalist world. In particular, it is an undisputed fact that the United States government and big business were connected to this history—both the economic changes and the bloody repression. The exact extent to which the US turned a blind eye, was complicit in, or was the chief protagonist in the military and economic affairs of these countries is a matter of heated debate. But it is clear is that Buenos Aires, Montevideo, and Santiago shared a common project in cooperation with Washington. These countries were far from backward third world regimes stuck in their ways—they were key protagonists in the creation of our current global economic system.

Pope Francis’ lived experience of this extremist economic ideology and what he experienced as a human being makes it impossible to dismiss him as simply naive. As a young lab technician, he met and became friends with Esther Careaga, an atheist feminist Marxist. They developed a deep friendship. In 1977, she was disappeared because of her Marxist ideals and her involvement in the Madres de la Plaza del Mayo, a group of mothers who protested for the return of their disappeared children:

Careaga was one of thousands of people who “disappeared” between 1976 and 1983, a bloody spree that stopped only after Argentina entered into a losing war with Britain in 1982 over the Falkland Islands. Victims were taken to secret camps, tortured and thrown from military planes – drugged but still alive – into the South Atlantic Ocean…Careaga had been taken to the ESMA Navy School of Mechanics – which doubled as a detention centre – where she was brutally tortured, and then flown to her watery death, along with two other Mothers of Plaza de Mayo and two French nuns who helped them…Bergoglio, ordained Archbishop of Buenos Aires in 1998, was in shock. “I was badly pained, I tried to communicate with some relatives but I couldn’t, they were in hiding,” Bergoglio testified at the ESMA trial in 2010.

Rather than dismissing the Pope because of his experience in Argentina, United States Catholics smitten with free market ideology need to learn from him, and from the Latin American experience. They need to look at this interconnected global system as it actually exists, not as a reflection of the abstract ideal that exists only in their own minds. Pretending that Argentina isn’t relevant to the discussion is obscene.

But, more importantly, they need to understand that absolutizing any materialist system—whether neoliberalism or socialism—is dangerous idolatry. Uruguayan Jesuit theologian Juan Luis Segundo, writing in exile at the height of the dictatorships, suggested a new way of thinking about faith and ideologies that may be helpful. He said that faith is what we put out ultimate trust in, what we center the meaning of our lives around. And ideologies are the tools and techniques we use to actualize this faith. For example, a person may have faith that Christ is present in “the least of these” and so work to ensure that all people have access to food, water, clothing, health care, and human companionship, even in prison (Matthew 25). In many cases, free market tools may be the best to bring this about, while in others, state intervention will be necessary. In Segundo’s meaning, all ideology needs to be judged by its fidelity to one’s ultimate faith and used when conducive to that end, and reevaluated or discarded when it is not. In that sense, ideologies can be positive or negative. However, it gets dangerous when ideologies displace faith—when the specific means for accomplishing something are absolutized over the ultimate criterion. The prophets of unfettered capitalism have done just that—rather than recognizing that the proper role of the market is to serve humanity, they have idolized certain economic tools at the expense of human dignity.

Francis is not a Marxist because he refuses to absolutize anything except God and the building of the Kingdom of God. For the same reason, he is not a Capitalist. Instead, he looks at human reality. The Pope is not rejecting all the specific tools of market economies—he recognizes many can be quite useful—but he refuses to let anything displace the ultimate criterion that “as you have done to the least of these, you have done to me.” Pope Francis wants us to unflinchingly and honestly look at the reality of the current economic situation. He wants us to judge whether this corresponds to our dignity as human beings. Finally, he is calling us to take action, similarly grounded in the real world, to change the situation. It is a challenge because we are called to lay aside our entrenched idolatries and prejudices, but it is a prerequisite for building a humane and humanizing economy that enables the sons and daughters of God to flourish.