El Ignaciano / Junio 2025

“The Economy of Francesco”: a reorientation of the economy inspired by the Church's social teachings

Alfredo Romagosa

This article is about an initiative launched by pope Francis on May of 2019 that has come to be known as the Economy of Francesco (EoF), calling for a more just economy:

I am writing to invite you to take part in an initiative very close to my heart.  An event that will allow me to encounter young men and women studying economics and interested in a different kind of economy: one that brings life not death, one that is inclusive and not exclusive, humane and not dehumanizing, one that cares for the environment and does not despoil it. An event that will help bring us together and allow us to meet one another and eventually enter into a “covenant” to change today’s economy and to give a soul to the economy of tomorrow.¹

This initiative is directed especially at young economists: "I thought especially of inviting you young people, because your desire for a better and happier future makes you even now a prophetic sign, pointing towards an economy attentive to the person and to the environment." Pope Francis clarifies that Francesco in this context does not refer to himself, but to the saint that his papacy is named after, Francesco d’Assisi (1181-1226) or St. Francis, and he cites the saint's vision:  "A vision that can give hope to our future and benefit not only the poorest of the poor, but our entire human family. A vision that is also necessary for the fate of the entire planet, our common home, our sister Mother Earth,” in the words of Saint Francis in his Canticle of the Sun. An excellent article on this initiative parses the pope's message into three key elements: ²

1. A selection of fraternity as the model of social life. We are called to a reciprocal care and a relational link among all.
2. Secondly, we extend this care and relation to the whole of creation. In this sense the relation to nature is changed from ownership to caretakers.
3. Thirdly, we are invited into an option for poverty, a poverty of spirit that does not necessarily denigrate wealth but opts for a social function of resources and their circulation, with a solidarity that pays special attention to those most in need.

This initiative is consistent with the long tradition of Papal Social Encyclicals that began with Rerum novarum² by Pope Leo XIII in 1891 and has continued through the decades to the Laudato si³,  document by Pope Francis, where he emphasizes the human responsibility for environmental problems.

Organization

EoF has an official website⁴ that covers its organization and events. It has a Board of Directors and an international Assembly of Representatives composed of economists and entrepreneurs. Pope Francis has given overall responsibility to the Bishop of Assisi, Monsignor Domenico Sorrentino. Dr. Luigino Bruni, professor of economics at Lumsa University in Rome is the technical director. Yearly events have been organized, consisting mostly of seminars. A set of study groups, designated as “villages”, support concentrated research on such topics as Energy and Poverty, Vocation and Profit and Finance and Humanity.

The goal of EoF is to create a new economic culture. In the next few sections, we will try to convey some of the themes that are developing as part of this culture.

Approaches

The authors of an introductory article on EoF⁵ list several general approaches to economic changes that could be taken in the spirit of this initiative. First is what they call a reformist: "The principles of capitalism are fully accepted and endorsed. However, recognizing that there is a gap between principles and their application in concrete situations, there is an attempt to reduce the gap through progressive implementations." A second approach, is what they characterize as transformative: "The idea is to scrutinize the principles of capitalism, trying to determine what is acceptable and what should instead be replaced…" and there is the revolutionary approach in which "one can refuse the principles of capitalism in bulk, aiming for a new economic system…" Neither Pope Francis, nor the current leaders of the movement have taken a clear stance on this issue, or favored one of these approaches. This provides flexibility but hinders clarity.

Business Models

By the twenty-first century, the failures of socialism have clearly demonstrated that a market economy is the most effective economic base. But it is also clear that this should not be considered an absolute or sacred principle. Back in 1931, Pope Pius XI affirmed: “Free competition, while justified and certainly useful provided it is kept within certain limits, clearly cannot direct economic life."⁶ In practice, what is meant is that free competition cannot fully and exclusively control economic life. The continuing stream of Catholic Social Thought has clearly established the need for social oversight limiting this model.

The primary driver of competitive economies is profitability, since it is a measure of efficiency. In a conceptual essay on EoF, Stefano Zamagni⁷ offers a number of helpful comments on the profit motive. First, he remarks that "pursuit of profit is not a problem, per se. The real problem is the incompleteness of the profit calculation, namely what is left out." Some of the things that are left out are the unrecorded cost of environmental damage, the risk of having companies that are so large that their failure would cause significant damage to several national economies, and the development of financial intermediaries that are not well identified and therefore not fully accountable.

Many modern governments have created the designation of a non-profit organization as "a legal entity organized and operated for a collective, public or social benefit, in contrary with an entity that operates as a business aiming to generate a profit for its owners. A nonprofit is subject to the non-distribution constraint: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties."⁸ In practice, the owners or principals of these companies sometimes benefit from generous salaries or bonuses.

The emergence of companies that may technically seek a profit, but that are to a significant extent motivated by social goals is a welcome recent development. Several governments  have created new legal entities to facilitate this, as for example, the Benefit Corporation in the United States, the Community Interest Company in the United Kingdom, and social cooperatives in Italy.⁹ These companies are generally taxed as traditional corporations, although tax deductions due to charitable contributions may be facilitated.

There is also an independent international organization called B Lab which analyzes and certifies that an applying company is a B corporation that is "making commitments to be net zero on climate, to reduce inequality, and to build racial equity.”¹⁰ This organization has an extensive marketing program to bolster the prestige of its designation. One clear objective of obtaining this designation or one of the legal designations mentioned above is to foster the public image of the company, and responsible Christian consumers should favor such companies. An EoF project entitled Into the LABel’ tries to foster this consciousness.¹¹

Returning to the approaches mentioned above, what is emerging is a mostly reformist direction through the action of individual entrepreneurs and cooperating groups, facilitated by the legal distinctions mentioned in the last few paragraphs. There is also a growing sensitivity to public image, shown by the use of terms such as sustainable and ecological and B corporation in company advertising. This sensitivity is growing in general, not just in the context of the initiative.

Entrepreneurship and Community

A great deal can be accomplished through individual business entrepreneurs with a social conscience. In an address to an EoF delegation of young economists, pope Francis emphasizes individual action: “The key to transforming the economy is not through the corridors of power, but through the simple act of witness… If you want other young people to approach the economy with your ideals... it will be your life witness that attracts them.”¹² In the EoF website, Juan Manuel Gil¹³ asserts that successful entrepreneurs "recognize the richness of working with others. They recognize the importance of creating new connections, sharing their ideas and being open to developing them with others." The Christian view of an economic enterprise is a community. It is common today to identify the enterprise stakeholders as a community which includes not only the management and employees, but also customers and suppliers. Entrepreneurs should view themselves as leaders that try to inspire their communities and to help them recognize their role in the larger context of society. This is another way of expressing “an economy of fraternity”.

Relationships and Localism

As large commercial chains and online shopping have hurt many small businesses, there has been a renewed interest in the advantage of proximity. The value of nearby business units is beginning to be more recognized, even if there is some price penalty. People often do not include transportation expenses and resulting environmental effects in their purchasing equations. Larger companies may have some advantages due to scale, but patronizing a local business tends to even out some of these trade-offs, in addition to providing more customized or tailored products and services. Author Patricia Netzley emphasizes that ethical and ecologically sound businesses are easier to maintain when one knows the protagonists personally.¹⁴

The term localism is often used in the sense of attempting to put into practice some of the positive elements of village or small community living in today's more complex world. The bottom line of this localism is the development of a consciousness in being part of a community, and perhaps one may get to know the owner or the employees of the local business and become aware of the emphasis in quality and honesty of this establishment. In an address to delegations from several Italian banks, Pope Francis addresses the problem presented by the loss of localism:

In the first place, there are multinationals that move their functions to where it is easier to exploit labor, creating difficulties for families and communities, and annulling labor skills that have been developed through decades. This type of finance takes away resources from a place to other destinations, with the only purpose of maximizing profits.  This conveys a risk of alienating territories, and people feel abandoned and used. When finances abuse persons, encourage inequalities, and distance themselves from the life of regions, they betray their purpose. They become uncivilized economies.¹⁵

As Pope Benedict XVI stated in his encyclical,¹⁶ globalism is not inherently wrong, although it can present some problems as discussed above. On the positive side, globalism has fostered a sense of international solidarity resulting from better communications. Returning to the notion of a community of stakeholders, through global communication facilities, even an international company can form a community with its customers and providers, although they may be located far away. Any effort to develop a sense of community is worthwhile, but the personal physical contact is still preferable, as Pope Francis emphasizes in his comments on the limitations of digital communications: “They lack the physical gestures, facial expressions, moments of silence, body language and even the smells, the trembling of hands, the blushes and perspiration that speak to us and are a part of human communication.”¹⁷

Examples of an Economy of Fraternity

Inspired by EoF, the Archdiocese of Santiago de Cuba is supporting the development of small business in spite the constraints of the country’s socialist economy: “A program grows day by day around the San Luis Obispo Church, in the town with 15,000 people. The program supports the most vulnerable families so they can start their own businesses from the few resources available. Some make handicrafts from recycled materials, others repair and resell household appliances, and still others make natural juices.¹⁸

Another example of a beneficial business is the Moda re- project, a non-profit cooperative dedicated to managing the entire cycle of used clothing, The project is promoted by Cáritas Española, a ministry of the Catholic Church in Spain. Donated clothing is collected from special containers at key points in participating cities and sent to treatment plants, where it is rigorously sorted.  Garments in good condition are sanitized and offered for sale at the organization's secondhand stores. Non-reusable garments are processed for recycling and transformation into new textile products. Qualified low-income families can acquire the products for free from the stores using a card provided by Cáritas.  Over 1600 employees are involved in the process.¹⁹

Aboca is an Italian healthcare company that uses 100% natural products. It takes a vertical approach in its business, from growing its ingredients using organic farming to producing its own medical products. It also pursues a cultural approach in educating consumers about healthy living. Aboca has been certified as a B corporation, and it is involved in the cultural, social and economic development of the communities in which it operates.²⁰

CECOSESOLA (Central Cooperativa de Servicios Sociales de Lara), is a cooperative network of fifty grassroots community-based organizations, located mainly in the central-western region of Venezuela and managed by some 1,300 associated workers. ^²¹

With almost 50 years of existence, Oikocredit (www.oikocredit.es/es/) is the largest impact investment cooperative focused on the Global South whose objective is to generate socially responsible investments to empower, through the granting of credit, people without resources. ^²²

For more information about these experiences and other examples see the related website.²³

Other Economic Initiatives

There are many other economic initiatives that share some of the EoF’s goals. One example is the Economy of Communion (EOC)²⁴ of the Focolare organization, a Catholic lay movement, which encourages businesses to commit to such ideals as:

They willingly share profits to help those in material need, provide opportunities for meaningful work, offer products and services that meet real human and social needs, and seek to manage their companies with moral integrity. At the same time, they seek to promote these ideals by their actions and involvement in their local communities, and by serving in a mentoring and support role to each other.

Another example is the United Nations’ Social and Solidarity Economy²⁵ (SSE), which “refers to forms of economic activities and relations that prioritize social and often environmental objectives over profit motives. It involves citizens acting collectively and in solidarity for democratization of economy and society, including producers, workers, and consumers.” There is a valuable Article that compares the EoF and the SSE.²⁶ The main conclusion of the author is that “SSE provides a concrete organizational structure that can materialize the ideals of the EoF, promoting an economy that addresses social and environmental needs.” This can be taken as a fair criticism of the EoF.  After five years of existence, it still remains fairly abstract. The author of the comparison article nevertheless praises the EoF for its “opening to transcendence”:

Its vision maintains that the economic system should not be limited to the production of goods and services or the accumulation of material wealth. It suggests that the economy should be open to values beyond purely material, such as justice, solidarity, the respect of human dignity and the protection of the environment, that persons and societies have spiritual and moral dimensions that cannot be reduced to simple economic calculations. This implies that economic decisions should be guided by a sense of responsibility for the common good, and not only by individual or corporate interests.

Conclusion

This initiative unites two of Francis’ main themes, his concern for the environment and his concern for the poor. Partly due to his advocacy, the world is gradually taking ownership of the environmental problem, in spite of some blind or self-interested politicians. But there has not been comparable progress in incorporating the poor and the marginalized, calling for increased awareness and creativity in this direction. In the words of Francis’ recent encouraging address to a group of young economists: “Be witnesses, do not be afraid, and hope tirelessly… your life will flourish, and you will have wonderful stories to tell your children and grandchildren. I am with you, I accompany you, and I bless you.”²⁷

¹ Letter of Pope Francis.
² Rerum novarum.
³ Laudato si'.
⁴ Economy of Francesco.
⁵ Plinio Limata and Paolo Santori, "Policies and public happiness: the Economy of Francesco seen through the lens of the civil economy" in Rivista internazionale di scienze sociali, 2021, n. 4, pp. 381-396, at 385-386.
⁶ Quadragesimo anno #110.
⁷ Stefano Zamagni "Scattered remarks on 'the economy of francesco' research program" in Rivista internazionale di scienze sociali, 2021, n. 4, pp. 507-516, at 510
⁸ Wikipedia: Nonprofit organization.
⁹ Bob Doherty et al, "Social Enterprises as Hybrid Organizations: A Review and Research Agenda" in International Journal of Management Reviews, Vol. 16, 417–436 (2014), at 425.
¹⁰ B Corporation.
¹¹ Cecilia Seppia ‘Into the LABel’ and the challenge of responsible consumption, Vatican News, Jan 23, 2024.
¹² Francesca Merlo, “Pope to Economy of Francesco”, Vatican News, Sept 25, 2024.
¹³ Jaun Manuel Gil, "Four tips for creating more sustainable ventures".
¹⁴ Patirica Netzley in Wikipedia: A Blueprint for Survival.
¹⁵ Francisco le saca los colores a la "economía incivilizada”, Religión Digital, 12/16/24.
¹⁶ Caritas in veritate, #42.
¹⁷ Fratelli tutti, #43.
¹⁸ EoF - In Cuba, the micro-business revolution.
¹⁹ Moda re-.
²⁰ Aboca Website.
²¹ Economics for Good.
²² Economy of Communion.
²³ United Nations' Social and Solidarity Economy.
²⁴ United Nations' Social and Solidarity Economy.
²⁵ United Nations' Social and Solidarity Economy.
²⁶ Miguel Ángel Alarcón Conde, “Sobre el valor integral de la economía social y solidaria y la economía de Francisco” in Revista de Estudios Cooperativos, 12/23/2024.
²⁷  “Pope to Economy of Francesco”, Vatican News, Sept 25, 2024.

Alfredo Romagosa
Director of Instituto Jesuita Pedro Arrupe, he has degrees in Religious Studies and Engineering and has taught at the Southeastern Pastoral Institute (SEPI) and at Florida International University.