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When I’m looking for common sense analysis of the economic turmoil, I like to read articles on Ludwig von Mises Institute’s website.  They are dedicated to advancing liberty by teaching the principles of Austrian Economics.

Yesterday, they published an article written by Gabriel E. Vidal that caught my attention. It’s a critical analysis of the Pope Benedict’s encyclical “Love in Truth,” published July 7th.

Vidal’s critique is very well written. He challenges Benedicts economic analysis and policy recommendations, especially when the pope urgently calls for “a true world political authority” and calls for wealth redistribution.

Vidal lays out 5 faulty arguments that Benedict makes, then he addresses each false premise one by one applying reason and logic.  Highlights from Vidal’s critique:

Benedict “misunderstands the function of the entrepreneur in creating wealth and ameliorating poverty.” -Vidal

Vidal explains further:

It is an individual’s entrepreneurial action in the pursuit of the goals he values most, using scarce factors of production, taking into consideration his costs, and guided by expected future prices in an unhampered market economy that creates wealth and diminishes poverty for society. Motivated by profit, the entrepreneur plans and then acts to satisfy the needs of other individuals. The common good is the unintended, but logically necessary byproduct of the entrepreneurial process. There exists no other rational mechanism to achieve the common good.

I highly recommend this article! Well worth a read!

Read the full critique >>

Reference:

• Ludwig von Mises Institute