Thomas Donohue: Pope Francis is wrong on free enterprise

Now that Pope Francis has arrived, we're likely to hear him raise important questions about how best to expand opportunity and improve the quality of life for all Americans, especially those who have been left behind in the past. As citizens engage in these debates, it is important to remember the positive role that business and free enterprise play in solving society’s greatest challenges.

Putting people to work, bridging the opportunity gap and maintaining a robust social safety net all depend on one simple thing — greater economic growth. It won’t solve all of our problems, but we can’t solve any of them without it.

The free enterprise system is the best system to create that growth. In fact, free enterprise has created more jobs, broadly shared wealth and opportunity than any other system ever devised. The evidence is indisputable. The U.S. economy, built on free enterprise principles, is the envy of the world.

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Every command-and-control economy that has moved toward free markets has seen significant reductions in poverty, rising wages and a growing middle class. For example, the adoption of free market principles fuels massive increases in wealth in China, India, and Eastern Europe. The globalization of free enterprise principles from 1950 to the present has more than tripled annual average income in the world. While socialist and communist governments have left millions impoverished and dispirited, free enterprise has successfully lifted hundreds of millions of people out of poverty and helped spread democracy, the rule of law and respect for human rights globally.

A government-directed economic system that takes from the rich and gives to the poor only makes everyone poorer. You could redistribute all of the wealth from the top 10% and it wouldn’t begin to make a difference for those in need. Only greater economic growth can provide new wealth and opportunities to lift the prospects of the less fortunate.

Free enterprise provides another benefit to society — thriving businesses that create jobs, spur growth, innovate, and generate wealth to address difficult challenges. When businesses do well, they do a lot of good.

Last year, U.S. private- and public-sector employers spent approximately $7.5 trillion on direct wages and salaries and $1.8 trillion on employee benefits, such as health care, retirement, life insurance, paid vacation, and tuition reimbursement.

On a daily basis, businesses large and small utilize their business expertise, human capital and charitable donations to solve the greatest challenges we face as a country. Logistics companies, for instance, donate their system and models after natural disasters to help communities coordinate immediate relief supplies and efforts. Health companies develop and disperse fortified foods to end malnutrition around the world. And some of the country’s largest retail companies use their reach to help entrepreneurs grow their businesses.

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On top of all that, the American business community contributes more than $25 billion to charitable causes every year. These donations create new STEM programs for students, feed disadvantaged families and protect the environment while creating jobs.

The wealth and innovations produced by healthy businesses also dramatically improve the environment. In America, businesses have spent trillions on environmental compliance since 1970. Much of it was money well spent. It helped bring about an enormous reduction in major pollutants, solutions to environmental problems such as acid rain and the most efficient and cleanest industrial base in the world. It’s clear that all over the world, stronger economies have cleaner environments.

We’re the first to acknowledge that free enterprise is not perfect — only the best system we have. We’re not advocating for unfettered capitalism. We believe government has a legitimate and important role to play in instituting reasonable regulations, while providing a strong social safety net for those who truly require it.

The business community believes in a few simple principles — enlarging the economic pie is preferable to divvying up a shrinking economic pie; self-sufficiency and the dignity of work are better than dependency; technology is useful in improving our standard of living and addressing complex challenges like climate change; business plays a positive role in our society; and free enterprise makes it all possible.

What the United States has accomplished under a free enterprise system at home and abroad proves that business is not part of the problem; rather, it is a big part of the solution.

Thomas J. Donohue is the president of the U.S. Chamber of Commerce .

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