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A blunt Pope Francis targets free market economics

Pope Francis I
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Pope Francis I

Since taking over as head of the Roman Catholic Church in March, Pope Francis has made several stark comments on world economic issues: He's cited the pitfalls of capitalism, decried global income inequality and equated low-wage labor to a form of "slavery."

He's even described the financial corruption in the church he leads as a "spiritual sickness."

Analysts say Pope Francis—leader of some 1.2 billion Catholics—is not necessarily calling for the demise of free market theory. Instead, he's issuing a very strong warning to economic leaders over its future.

"Like many people he thinks capitalism won't survive unless it decreases income disparity," said George Haley, professor of marketing and international business at the University of New Haven.

"I think it's fair to say he's arguing for a more European version of capitalism going forward, especially after the Great Recession, so there's more of a safety net for people when they need it," Haley added.

"I don't think he's attacking capitalism or the wealthy, because if he did, that strategy would fail," said Joseph Pastore, a business professor at Pace University.

"But he is rightly focusing on issues of equality and justice in economics," Pastore said.

(Read more: Pope urges Brazil's youth to fight corruption, apathy)

At least some in the business community have taken notice of the pope's message.

"His comments are of high importance to me," said Rohit Arora, CEO of Biz2Credit, an online site that connects small-business owners with financing.

"The kind of issues he's talking about are too often ignored by religious and business leaders," Arora said.

Surprising as they may be, the pope's comments on global economics are in line with his personal thinking, said Mathew Schmalz, a professor of religious studies at the College of the Holy Cross.

"Being a Jesuit priest and having spent so much time in Argentina as bishop and cardinal had a great effect on him," Schmalz said. "He's seen a lot of poverty close up and raised the issue in Argentina before becoming pope."

a history of Papal comments

Papal statements on social and economic justice are not new. During the past 100 years or so, popes have made their thoughts on the issues known through open letters—what the church calls encyclicals.

In 1891, Pope Leo XIII issued an encyclical that rejected both communism and unrestricted capitalism, while affirming the right to private property. But he also supported the rights of labor to form unions, and the need for some "amelioration of the misery and wretchedness pressing so unjustly on the majority of the working class."

Pope John XXIII issued an encyclical in 1961 backing free market ideas, but said that from a Catholic perspective, "the global economy serves a higher good; if the economy booms, but human dignity suffers, the result is unmistakably evil."

Pope John Paul II, known for his strong anti-communist feelings, issued an encyclical in 1989 warning capitalist nations against letting the collapse of communism "blind them to the need to repair injustices in their own economic system."

More recently, Pope Benedict, whose resignation in February of this year opened the way for Francis to head the chrurch, issued an encyclical in 2009 that called for a world political body to manage the global economy—as well as for more government regulation to pull the world out of the Great Recession.

(Read more: Arrested Vatican prelate acted as private banker, document says)

"Pope Francis speaks in continuity with all the popes that spoke about economic issues," said Mary Catherine Sommers, a professor of philosophy at the University of St. Thomas.

"The church doesn't choose economic systems any more than political systems around the world but it does keep an eye on human systems," said Sommers, who is a member of the American Catholic Philosophical Association, a group that fosters Catholic discussion on issues.

Michael Bellafiore, a Jesuit priest and professor of theology at the University of Scranton, said Francis and the church have a role to play in shaping the business world.

"The church's task is to form consciences," said Bellafiore. "As such, corporations, banks, unions, investors all have to rise above their immediate interests and compromise. Pope Francis can promote leadership in the worst economic crisis since the Great Depression."

Attacked as socialist

For his comments, Francis has been called a socialist or left-leaning by conservative economists. And not all Catholics share the same enthusiasm for his thoughts.

"Personally, I"m much more market friendly, as was John Paul II," said Bill Donohue, president of the Catholic League, an anti-defamation group based in New York.

"I certainly applaud him for recognizing that unrestrained capitalism needs more order," Donahoe said. "If he's emphasizing we can't forget the poor, I'm all for that. But if he's leaning toward a more liberation theology, the more socialist model, which I don't think he is, then I'm against it."

"A lot of Catholics won't like what he says about economics," said Schmalz.

"That includes the bureaucracy in the Vatican, which tends to be conservative on moral and economic issues," Schmalz added.

For his part, Biz2Credit's Arora said he has faith in the pope's good intentions but would like to know more about which economic direction the pontiff's headed.

"Right now, neither capitalism nor socialism offer solutions for the world's income inequality, which is the biggest problem." said Arora. "If the pope is serious about this, I think he needs to come up with specifics and a third way. So far he hasn't."

Francis also has the problem of setting a good example from a church—reportedly worth at least $8 billion—that has had its share of controversies and issues of corruption.

"The Catholic church is very wealthy, and that's why it's important he doesn't take an us-against-them attitude when he talks about the poor," said Pace University's Pastore. "It can look hypocritical."

"He's called for reforms with the Vatican bank and he's rejecting the rich cars and living quarters popes have used in the past," said Schmalz. "But how far he can go with the church remains to be seen."

(Read more: Pope says Vatican bank must be 'honest and transparent')

The University of St. Thomas' Sommers said any pope is always walking a fine line between the spiritual and material world.

"The church has to deal with reality and that means sometimes making compromises," Sommers said. "But the church has many priests who live in poverty voluntarily. There are more of them than other kinds of priests."

Francis likely to keep talking

Whether Francis or any religious figure can influence economic decision-making remains uncertain.

The general public remains skeptical, or at least those on social networks are, according to findings from NetBase. The software firm surveyed online global comments (some 29,000) from March to Aug. 1, finding an overall 54 percent negative to 46 percent positive reaction to his statements on wage labor, capitalism and Income equality.

But Arora argued the pope needs to take advantage of his role as a global leader to help the poor.

"The debate is fine but we need solutions," Arora said. "How do we stop income inequality and low wages? I'd like him to tell us."

One way to turn words into action is to use the full force of the church, said the University of New Haven's Haley.

"If Francis is serious about this, he could use the Vatican's diplomatic corps to lobby various governments to come up with plans to deal with the world's economic woes," Haley said.

And unlike other popes, Francis has an advantage now that others didn't, said Pastore.

"Social media and media in general help him get his message out to a global public and he's being noticed because of that," Pastore said. "But what he needs to do is get folks that are capitalists to join the conversation."

'We need people to have wealth, we need the capacity to have economic activity and all this should be part of the discussion," Pastore added. "The problem is I think most of big business and many in government will ignore him."

Whether Francis is condemned as a socialist, anti-capitalist or a liberal thinker, Schmalz said the pope is likely to keep talking about social and economic issues.

"It would take a lot to pull him back and I don't see him tapering off," Schmalz said. "I think he feels compelled to bring these issues up. The question is, will there be any real concrete changes in economic thinking? We'll have to wait and see."

—By CNBC's Mark Koba. Follow him on Twitter @MarkKobaCNBC.

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