Good afternoon from New Economy Brief.
Last Thursday, cardinals elected Pope Leo XIV – the first American pope – following the death of Pope Francis in April. Given that the pope is one of the highest-profile public figures across the globe, the world is now wondering about the implications – political, social and economic as well as religious – of this new papacy.
While the pope is technically a religious rather than political leader, his soft power on the global stage cannot be underestimated. The late Pope Francis in particular gained a reputation for speaking out regularly on economic, social and climate justice. This week, we look at the Vatican’s role in global economic affairs, Pope Francis’ legacy and what to expect from his successor.
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Why the pope’s opinion matters.
With around 1.4 billion Catholics worldwide – more than the population of almost every country – the Pope is the pre-eminent moral authority for communities across the globe, and also, of course, the head of a sovereign state.
A paradigm shift. The pope’s global reach also means that he is in a unique position to represent both the Global North and Global South. In recent years, the balance of Catholic populations has shifted much more towards the latter. Over the last century, the proportion of Catholics living in Europe has fallen from around two thirds to a quarter, with that of Catholics in Africa and Asia increasing from 5% to between 25 and 30%. As Cardinal Sarah of Guinea has previously said: “the Church is no longer Eurocentric.” A pope from the Global South himself, Pope Francis was known for significant institutional reforms to the Catholic Church, appointing new cardinals in countries such as Myanmar, Mongolia and South Sudan. And his actions reflected not just a demographic shift, but a shift in focus towards global economic inequality and tackling poverty.
Rooted in teachings. While some popes have been more outspoken than others about inequalities and economics, many of these principles are deeply rooted in Christian teachings. Catholic teaching is rooted in a “duty to help the poor, the sick, the weak and the suffering”. Every 25 years, the Catholic Church also celebrates a Jubilee or Holy Year, a special time of forgiveness and reconciliation. It stems from the biblical concept of the Jubilee, occurring every 50 years, where debts would be cancelled and land "restored to the landless”. As a result, debt cancellation has formed an important part of Catholic teachings in recent decades, with the Church playing a major role in the Jubilee 2000 debt campaign which led to the cancellation of over $100 billion of debt owed by 35 of the poorest countries.
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“Inequality is the root of social evil”
Pope Francis was particularly vocal on issues such as global debt but also on economic inequality more broadly, famously stating that “inequality is the root of social ills”. Economist Mariana Mazzucato has said his “economic vision fundamentally reshaped global conversations by insisting that inequality is not just a technical failure, but a moral one”. The 2015 publication of his encyclical “Laudato Si’: on care for our common home”, a letter written to bishops with the aim of guiding them in their ministries, played a significant role in shaping conversations on tackling the climate crisis and was instrumental in the Paris Climate Agreement. In it, he said it was “remarkable how weak international political responses have been,” and that “the principle of the maximization of profits, frequently isolated from other considerations, reflects a misunderstanding of the very concept of the economy.” He was also a vocal proponent of fairer taxation of wealth, arguing that “the tax pact is the heart of the social pact.” He also condemned tax evasion and praised the majority who refrain from it, saying that “you can tell of the honesty of many people who do not shirk their duty.” He went as far as to say that tax evasion is sinful.
The global financial system. Recent popes have also been unafraid to criticise the global economic and financial system. Speaking at the height of the Global Financial Crisis in 2008, Francis’s immediate predecessor, Benedict XVI, argued that financial activity can be “completely turned in on itself, lacking any long-term consideration of the common good … finance limited in this way to the short and very short term becomes dangerous for everyone, even for those who benefit when the markets perform well.” In 2015 Francis pulled even fewer punches, calling the “unfettered pursuit of money” at the heart of modern capitalism “the dung of the devil”. He also criticised “the rise of new forms of colonialism”, which “takes on different faces. At times it appears as the anonymous influence of mammon: corporations, loan agencies, certain ‘free-trade’ treaties, and the imposition of measures of ‘austerity’ which always tighten the belt of workers and the poor.”
An ongoing legacy. According to CAFOD’s Maria Finnerty, Pope Francis’ influence in turning the dial on economic justice continues to be felt across world institutions, with dozens of economists he appointed to this Jubilee Commission playing a key role in the recent IMF-World Bank Spring Meetings. Finnerty argues that Pope Francis left “a map for leaders who are willing to step out of political comfort zones and embrace real transformation.”
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Rerum Novarum
The good news for economic justice advocates is that Pope Leo XIV is expected to continue this legacy and to focus on economic justice and debt justice in the Jubilee Year 2025. Not only was he a close confidant of Pope Francis, but his choice of name indicates a commitment to social justice and workers’ rights. Pope Leo XIII, the last pontiff to use the name, used his 1891 encyclical Rerum Novarum (“On the Condition of Labor”) to argue for greater workers’ rights amid the upheavals of the Industrial Revolution. It called for fair wages and humane working hours, and for the right to form trade unions. The text is considered foundational in modern Catholic social teachings.
Continuing the climate legacy. Early indications suggest that Pope Leo will also continue the legacy of the “Climate Pope” Francis. Speaking last year at a seminar on the impacts of the climate crisis, he urged leaders to move “from words to action” and offered a reminder that humanity’s “dominion over nature” should not be “tyrannical”, but a “relationship of reciprocity”.
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The first American pope.
Despite Donald Trump’s celebrations of the first American Pope, it has been suggested that he opposes much of the President’s policy regime, particularly on immigration. At a time of such global economic turmoil, much of it recently stemming from US tariffs, it seems likely that the Vatican’s positioning on economic issues will continue to be influential over the coming years. Though there are concerns that Pope Leo may not continue Pope Francis’s progressive approach to important social issues like LGBTQ+ rights, there is well-founded hope that he will continue his predecessor’s legacy of speaking out on economic inequality and the climate crisis.
Labour’s ‘vision’ problem. Commenting on the view that the UK Labour government struggles to articulate a clear vision of its political programme and the ability to ‘sell’ this to the electorate, the Fairness Foundation's Will Snell looks abroad for inspiration from recent elections. For instance, recently re-elected Australian Labor Party’s Anthony Albanese championed a ‘social patriotism’ built around fairness, equality and respect, offering up a policy package to tackle the cost of living for working class communities.
What’s in the UK-US trade deal? Global Justice Now’s Nick Dearden explains that the UK had to concede opening the door to lower and ‘dangerous’ food standards in order to cut US tariffs on UK car exports and steel in return, and argues that “rather than standing up to the bully, we’ve empowered him”. Opportunity Green’s James Meadway commented that the deal was a ‘victory’ for the US, “a godsend for Trump’s administration”, and “dangerous for the world”. Both authors warn that other impending trade deals with the US will sacrifice more UK sovereignty over policy areas like the Digital Services Tax.
The disability benefits bill is rising due to declining health and worsening deprivation. Analysis from the New Economics Foundation (NEF) finds that the disability benefits bill has been rising due to worsening health and deprivation, meaning more people who previously didn’t claim are now looking for additional financial help from the government. NEF’s Max Mosely says their analysis suggests that “PIP [Personal Independence Payment] is going to exactly the sort of people it is intended to support”, contrary to the government’s justification for restricting access to it.
The economics of migration. Commenting before the government released its immigration white paper, IPPR’s Marley Morris highlights the risk that “reductions in migration further dampen the UK’s growth prospects and undermine the public finances”. He outlines four areas the government could focus on, such as directing immigration policy towards improving growth and living standards, and ensuring overall migration levels are commensurate with current levels of infrastructure, housing and public services provision.
Profiteering from underinvestment. Analysis from Common Wealth has found the private companies that own the UK’s energy network have spent nearly half a billion pounds less than they were approved to by Ofgem on essential upgrades to the energy grid each year, pocketing some of the remainder for shareholders.
