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Pope Francis and Warren Buffett both blame free market policies for rising inequality.
In his latest encyclical (Fratelli Tutti), Francis points out “The marketplace, by itself, cannot resolve every problem, however much we are asked to believe this dogma of neo-liberal faith.
“Neo-liberalism simply reproduces itself by resorting to the magic theories of ‘spillover’ or ‘trickle’ — without using the name — as the only solution to societal problems.”
The “trickle-down economics” Francis was referencing refers to the idea that as the rich accumulate wealth, money will automatically flow into the pockets of poor people.
The pandemic’s fallout, including massive unemployment spikes around the world, are evidence that “not everything can be resolved by market freedom,” Francis continues in his encyclical.
Unfettered capitalism, he says, doesn’t work.
Francis’s analysis is similar to Buffett’s. The Omaha, Nebraska billionaire investor and CEO of Berkshire Hathaway said in a Yahoo Finance interview earlier this year:
“There’s no question that capitalism, as it gets more advanced, will widen the gap between the people that have market skills, whatever that market demands, and others, unless government does something in between.
“It isn’t some diabolical plot or anything.
“It’s because of the market system.”
Buffett (who is known as the ‘Sage of Omaha’) suggested two ways to tackle the issue.
Firstly, there should be a more generous earned-income tax credit to reduce working people’s tax burden, while ultra-wealthy people should pay steeper taxes.
Buffett plans to give more than 99 percent of his wealth to philanthropy.
He has repeatedly called on politicians to hike taxes on the super-rich. Existing laws allow him to pay a lower rate than his secretary.
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