If I’m understanding correctly, one of the Acton Institute’s first responses to Pope Francis’s encyclical is a sadly common form of wishful thinking:
I am…curious as to what the Holy Father would want us to do in this much-criticized global economy? …[S]imply consuming less often ends up hurting the poor who would like to do business with us… Would saving and investing, rather than consuming, be a better way to help the poor?
(As an aside, no need to wonder “what the Holy Father would want us to do.” The encyclical includes a long list of practical suggestions, compiled by the Catholic News Service.)
If I am understanding correctly, this passage is claiming that reducing consumption by the well off would hurt the poor. (Here’s an example of a similar argument.) Is it true that reducing my spending will hurt the poor because that would mean buying less of the stuff they make? No, that’s actually ridiculous. The primary alternative here is not “saving and investing,” it is giving. If I spend $100 less on my energy bill by using less air conditioning (to take one of Pope Francis’s specific examples), I can literally give that money to a poor villager in Uganda (ok, 85% of it). Then they can choose how to spend it.
There would be no reduction in total consumption, in this example, but I would reduce my overconsumption and help alleviate underconsumption. There would be no reduction in employment caused by this transfer either, though it will shift the jobs available, tending to reduce air conditioning repair jobs and increase employment in providing what the Ugandan villager wants.
An economics ph.d. should not be necessary to recognize the nonsense in the claim that it will hurt the poor if I don’t spend as much money as possible on myself. But this is the pope’s point about market fundamentalism – it can blind us.