Q. Pope Francis encouraged Argentinians not to spend money to come to his inauguration Mass, but to give the money instead to the poor. This request seems to have powerful symbolic value. But as an economist and ethicist, what do you think of this? Does this really help the poor? Or does it impede overall economic flourishing and the creation of wealth for those who work in the travel industry and in tourism in Rome?
A. Pope Francis encouraged Argentinians not to spend money to come to his inauguration Mass, but to give the money instead to the poor. Leaving aside the important ethical issues here, what would be the economic effects of this suggestion?
Let’s assume that 100 people take his advice and stay home instead of spending $2000 for the round trip flight and, say, another $1000 for a few days of food and lodging in Rome. That’s $300,000 that would go to the poor in Argentina. This would represent a lot of meals for the homeless, probably the sort of assistance the Pope has in mind. It would not, of course, alter the number of persons in poverty in the nation, although if magically every one of the hundred gave to the same organization to cover a comprehensive program, a few families might over several years get the broad set of services necessary to emerge from poverty.
The loss of 100 (or even 1000) passengers would not show up in the annual statistics of the airlines, so there would likely be no change in the number of jobs in the travel industry – or in the tourism industry in Rome – but there would be a very slight drop in profits for all the firms involved.
And what would be the impact of 100 or 1000 Argentinians going to Rome? It might look like a bump up for airlines and the tourism industry, but most of those travelers would probably cut back on some other trip they would otherwise have made this year (something economists call “the substitution effect”).
So two effects of the Pope’s suggestion stand out. First, those who do as he suggests would likely be reducing their annual travel budget and raising their charitable contributions in a way that concretely helps people in need (though there would be some substitution effect here also, as someone who gives $3000 to charity because of the Pope’s suggestion might cut back on other planned charitable gifts). The second is the deeply personal transformation entailed when we alter our plans because of a call to re-order our priorities in life. This is a change that can alter who we are.
Dr. Daniel Finn is Professor of Economics & the Liberal Arts at the College of Saint Benedict/Saint John’s University and The School of Theology•Seminary in Collegeville, Minnesota. He is past president of the Society of Christian Ethics (2010) and past president of Catholic Theological Society of America (2006-2007).