- Pope Francis has followed in the footsteps of Warren Buffett, arguing that free markets cannot cope with growing inequality.
- Pontiff said a letter to the bishops of the Catholic Church the weekend that “magic theories” such as economics will not solve all the problems of society.
- Buffett argued earlier this year that markets reward some skills but not others, exacerbating inequalities in the absence of government intervention.
- “It’s not a devilish plot or anything,” said the billionaire investor he told Yahoo Finance, adding, “This is due to the purchasing system.”
- Visit the Business Insider homepage for more stories.
Pope Francis reiterates Warren Buffett accusing uncontrollable capitalism of growing inequality a letter to the bishops of the Catholic Church entitled “Fratelli Tutti” at the weekend.
“The market alone cannot solve every problem, no matter how much we are asked to believe this doctrine of neoliberal faith,” the pope said.
“Neoliberalism simply reproduces itself by using the magic theories of ‘spillover’ or ‘trickle’ – without the use of the name – as the only solution to social problems,” he said, referring to the “economic low” or the rich accumulate wealth, money will automatically flow into the pockets of the poor.
The pope cited the effects of the pandemic, including massive unemployment around the world, as proof that “not everything can be solved with freedom of the market”.
Buffett, a billionaire investor and CEO of Berkshire Hathaway, expressed a similar view. interview on Yahoo Finance earlier this year.
“There is no doubt that capitalism, as it becomes more advanced, will widen the gap between people who have market skills, what the market demands and others, unless the government does something in between,” he said.
“It’s not a devilish plot or anything,” Buffett continued, adding, “This is due to the market system.”
The so-called Sage of Omaha suggested two ways to deal with the issue: a more generous income tax credit to reduce the tax burden on employees and abrupt taxes on the super-healthy.
Buffett, who plans to donate more than 99% of his fortune to charity, has repeatedly called on politicians to raise taxes on the superhuman. Existing laws allow it pays a lower percentage than his secretary.
The Pope and the wise man
Buffett mentioned the pope several times over the years.
The Berkshire boss was mourning the 2006 letter to the shareholders that the critique of effective market theory or the idea that stock prices reflect all available information was tantamount to blasphemy.
“A finance instructor who had the courage to challenge the EMT was about as likely to be promoted as Galileo to be called Pope,” he said.
Buffett also referred to the Pope the 1986 letter, in a legend that underscores the obsessive focus of Berkshire executives.
“Our prototype for professional intensity is the Catholic tailor who used his small savings of many years to fund a pilgrimage to the Vatican,” he said.
“When he returned, his parish held a special meeting to get his first account for the Pope,” Buffett continued. “Tell us,” said the impatient believer, “what kind of guy is he?”
“Our hero did not waste words: ‘He is 44, average.'”