- Pope Francis followed Warren Buffett in saying that free markets cannot address the growing inequality in A. Message to the bishops of the Catholic Church On Sunday.
- The pontiff said that “magic theories” such as an intermittent economy would not solve all of society’s problems.
- Buffett argued earlier this year that markets reward some skills but not others, exacerbating inequality in the absence of government intervention.
- The billionaire investor said: “It’s not a satanic plot, or anything else.” Yahoo Finance. “It’s because of the market system.”
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Pope Francis echoed what Warren Buffett had said in blaming unrestrained capitalism for rising inequality in a Message to the bishops of the Catholic Church Titled “Fratelli Totti” on Sunday.
The Pope wrote: “The market alone cannot solve every problem, no matter how much we are required to believe in this doctrine of neoliberal faith.”
“Neoliberalism reproduces itself simply by resorting to magical theories of“ sprawl ”or“ volatility ”- without using the name – as the only solution to society’s problems,” he continued, referring to the “downward-flowing economy,” or the idea that while the rich accumulate wealth, Money automatically flows into the pockets of the poor.
The Pope pointed to the repercussions of the epidemic, including the massive rise in unemployment rates around the world, as evidence that “not everything can be solved through a free market.”
Buffett, a billionaire investor and CEO of Berkshire Hathaway, expressed a similar view in A. Yahoo Finance Interview Earlier this year.
He said, “There is no doubt that capitalism, as it advances, will widen the gap between people who have skills in the market, whatever market demands, and others, unless the government does something in between.”
Buffett continued, “It’s not a satanic plot, or anything else.” “It’s because of the market system.”
The so-called “Omaha sage” suggested two ways to address this problem: a more generous income tax credit to reduce the tax burden on workers, and steeper taxes on the super-rich.
Buffett, who plans to give more than 99% of his fortune to charity, has repeatedly called on politicians to raise taxes on the super-rich. Current laws allow him to do so He paid a lower rate than his secretary.
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Buffett has mentioned the Pope several times over the years.
The Berkshire president bemoans that criticism of Effective Market Theory (EMT), or the idea that stock prices reflect all available information, amounts to blasphemy in his book. 2006 Letter to Contributors.
“A financial coach who had the audacity to question EMT had a chance for a major promotion like Galileo to be called Pope,” he quipped.
Buffett also referenced the Pope in an anecdote that emphasized the obsessive focus of Berkshire managers in his book The 1986 Message.
“Our archetype for professional zeal is the Catholic tailor who used his small savings for many years to fund his pilgrimage to the Vatican,” he said.
Buffett continued, “When he returned, his parish held a special meeting to obtain his direct report on the Pope.” The eager believer said, “Tell us, what kind of companion is he?”
“Our hero has not wasted any words: He is average 44.”