Pope Francis has been promoting Jubilee 2025, which began in December, as a year of spiritual renewal for the people of God, but he has also connected this jubilee year with a call for debt forgiveness for nations in the developing world, which are struggling with fiscal burdens that prevent basic national investments in education, health care and human development.
Caritas Internationalis, the church’s network for humanitarian relief and development, describes “an urgent yet silent debt crisis.”
“Over 100 countries are struggling with unjust and unsustainable public debt, 65% of which is held by private lenders, slowing down, if not completely hampering, development and climate action,” according to Caritas. Scores of low-income nations are nearing debt distress, “limiting their ability to invest in people’s futures.”
Caritas reports that as debt repayments in more than 50 low-income nations exceed spending on social services and climate adaptation, “3.3 billion people are being denied vital services, driving poverty and inequality even further.”
In his invitation to mark the Jubilee 2025, “Spes Non Confundit” (“Hope does not disappoint”), Pope Francis wrote: “Hope should be granted to the billions of the poor who often lack the essentials of life,” adding that “the goods of the Earth are not destined for a privileged few but for everyone.” The pope implored affluent states to “acknowledge the gravity of so many of their past decisions and determine to forgive the debts of countries that will never be able to repay them. More than a question of generosity, this is a matter of justice.”
America discussed the pope’s Jubilee 2025 appeal for debt relief with Joseph E. Stiglitz, a Nobel Prize winning economist and a professor at Columbia University. Mr. Stiglitz is a former chief economist of the World Bank and the co-founder of Columbia’s Initiative for Policy Dialogue. He is the author of numerous books, including Globalization and Its Discontents Revisited and, most recently, The Road to Freedom: Economics and the Good Society.
Mr. Stiglitz has served at the Pontifical Academy of Social Sciences since 2003. In February, the P.A.S.S. and the I.P.D. jointly established a commission of experts who will convene during 2025 to address the global sovereign debt and development crises.
This interview has been edited for length and clarity.
You seem to have a unique relationship with Pope Francis. Is that something of a surprise to you or is it natural at this point after you’ve visited with him so often?
I think of it as very natural. I’ve been a member of the Pontifical Academy of Social Sciences for a very long time, something like 20 years. The academy has a compulsory retirement age of 80, but they were nice enough to make me an honorary life member last year.
So I’ve had this long relationship with the academy, which has been one of the few places where social scientists, including economists, get together to discuss the ethical issues associated with economics and the ethical and moral issues involved with globalization, intergenerational equity and so forth.
That’s an interesting term. The pope used the term intergenerational solidarity in “Laudato Si’,” which I guess was his Catholic way to put it.
We actually had a joint meeting of the Pontifical Academy of Sciences and the Pontifical Academy of Social Sciences to talk about the issues that eventually got reflected in “Laudato Si’,” about bringing together social justice and, you might say, environmental justice, but intergenerational equity is a term that economists have used for a very long time. There’s a famous paper in 1928 by Frank Ramsey talking about how to weigh the needs of one generation versus another, arguing that you shouldn’t discount future generations.
But I think the pope’s idea of “intergenerational solidarity” is slightly different. It’s a particular way of considering equity—solidarity meaning that you have empathy. If you have solidarity, you think about equity. If you don’t have solidarity, you don’t think about fairness at all.
Some critics of Pope Francis and Vatican dicasteries complain that when they speak on economic issues, or any issues really, outside of theology or spirituality, the church is stepping out of its lane. They’ll suggest the pope doesn’t know what he’s talking about, doesn’t have the expertise. What do you think?
The Pontifical Academy of Sciences goes way back, 500 years—all the way to Galileo—and the Pontifical Academy of Social Sciences was established in 1994 by Pope John Paul II. The pope is surely well advised about economics. Beyond that, economic decisions have great consequences for different people. Morality has to be brought in when making economic policy.
I mentioned intergenerational equity: How do we think of this generation’s needs versus another’s? That’s about solidarity and justice; it’s about fairness. And the same moral challenges pertain across economic decisions that affect different countries. I would think that participating in those discussions is essential to the mission of the church.
Economists are always talking about trade-offs. And you know, once you recognize that there are trade-offs in judging how you weigh these issues, it’s often the well-being of one versus the well-being of another. And the church is all about giving voice to the poor, giving voice to those who have no voice. I think the role of the church is to make sure that, as we make those temporal, material decisions, we keep them attuned to our deeper moral values.
Pope Francis in particular has been extraordinarily influential in arguing that we have a moral obligation about the care of the earth, about the environment and about our fellow inhabitants of this earth. So I don’t think he’s stepping out of his lane. Quite the contrary—I wish there were more discussions on the moral consequences of economic decisions.
What does the church bring to the table that’s useful in making economic policy?
It’s precisely to bring in the moral element in a very forceful way. We’ve talked about it in a couple of ways, but let me give you one more example that was highlighted in the 2008 economic crisis that grew out of the collapse of the subprime mortgage industry in the United States.
Milton Friedman said the only obligation of a manager of a firm is to maximize value. It’s about making money. Capitalism, often financial capitalism particularly, is often very ruthless.
And while there are good ways to make money by creating new products, inventing new things that help us address problems, like coming up with new and better methods of producing renewable energy, there are ways that people make money simply by exploiting others and by taking advantage of them, their vulnerabilities, their lack of information. The church reminds us that that shouldn’t be acceptable. I think now, many of our younger people say they don’t want to work for a firm that is making its money simply by taking advantage of others.
The pope has been actively promoting 2025 as a year of Jubilee for poor nations overwhelmed by debt. I can recall the Jubilee 2000 debt forgiveness movement and other debt crises going back decades. It seems like we throw water on the fire and then 10 or 15 years later, we seem to be in the same situation. How is it that the world of global finance still hasn’t fixed this problem?
That is precisely the message of this Jubilee, actually. The church was very influential about debt forgiveness in 2000. It made a very big difference and we should not underestimate the value of freeing so many people from the shackles of debt at that time; it meant that those nations had the resources they needed then to invest in health care and education. It made the lives of their people better, but it didn’t address the underlying sources of indebtedness, and that’s why 25 years later, in time for the next Jubilee, we’re at another moment of debt crisis.
This particular crisis has been exacerbated by events beyond our control, primarily the Covid-19 pandemic. Many countries had to take on too much debt to pay for their response to that crisis. But as we started to reflect on what has happened over the last 25 years, we came to appreciate that there were some fundamental flaws in the way our capitalist system, our financial system, works—money flows away from poor countries when economic conditions deteriorate. In other words, rather than helping the poor in bad times, the rich take their money back.
Yes, it did seem in the past that the debt problem only surfaced as a crisis, not when people were hungry in the developing world because of debt burdens, but when anxiety over cascading bank failure reached Manhattan because debt wasn’t being properly serviced.
One of the things we’re emphasizing today in this Jubilee is that it’s not just a debt crisis—it’s a development crisis. Indebted nations spend so much of their money servicing their debt, sending checks to Wall Street, that they don’t have enough money for the social services they need or to invest in health, education, for raising themselves up out of poverty or for addressing the problems of climate change.
We’re trying to broaden the discussion. Debt shouldn’t be a concern just because it might trigger a global financial crisis engendered by default. We have to look at it through a broader lens.
How can we ensure that indebted nations have the resources they need to pay for health, education, enabling people to live up to their potential? We hope in Jubilee 2025 to address the issue of the immediate debt at the same time we address some of the issues of the underlying, structural problems.
So much of the debt is written in New York and London. And New York, for instance, has a provision that while negotiation on restructuring debt is going on, some poor countries have to pay 9 percent interest. That’s usury by any name, and it incentivizes these predators to delay debt restructuring because they’re getting 9 percent interest while the negotiations go on. It’s strangling poor countries.
You also have vulture funds buying debt at pennies on the dollar and then going to the courts demanding to get paid full dollar value. They’re buying debt just to begin litigation.
How do the emerging policies and priorities of the Trump administration factor in Jubilee 2025? It can’t help nations contending with debt problems that, at the same time, the White House has shut down the U.S. Agency for International Development.
That’s why it is all the more important that the moral voice of the church be heard. I believe what the Trump administration has done is morally unconscionable, that you would overnight cut off health care for the poorest people in the world, cut off H.I.V. treatment for people in Africa, resulting in young people and children dying. I think you have to be somebody without any moral compass to allow that to happen.
I’ve talked to both Republicans and Democrats who are shocked at what the Trump administration has done. This is not normal. We may have political disagreements in our country and around the world, but this is simply beyond the realm of what’s conceivable.
The United States used to have moral leadership in the world in many ways; we’ve lost that, unfortunately, right now. A lot of people believe there is a moral vacuum now. In that context, Pope Francis’s leadership, the church’s leadership, is all the more important in these very troubled times.
But is it possible to reform the policies at the World Bank and the International Monetary Fund and alter the instruments that have added to suffering in the developing world without Washington? Isn’t it essential to have the White House behind this?
It would definitely be so much better if the White House were behind it, of course. And there are many people behind Mr. Trump who do have a moral compass, people who might be able to exert pressure that could enable the administration to begin a self-correction. But I think the multilateral system has to go forward with or without the Trump administration, and I think it can.
In one way, ironically, Mr. Trump has helped. You know, you can live day to day, and you don’t think about your priorities and what you care about, and then suddenly Mr. Trump comes along. He has created a shock, and now you have to ask, “What are the things that are most important?” Maybe you would have been better off without that shock, but a virtue of the shock is that it has led many people to reconsider their priorities.
Europe has said those priorities include the rule of law and defending Ukraine. They are also saying, “We’re going to change our rules about budget deficits. Those were okay in ordinary times. We’re not in ordinary times.” What’s more important: Saving freedom or reducing budget deficits? I give them kudos for getting their act together.
I have to point out that the United Kingdom and some other European states have decided that they can live with higher deficits, but they’re also going to cut back on foreign assistance in order to mitigate the impact of higher defense spending.
And that’s when the voice of the church has to be heard.
What’s your ask for the people in the pews, for American voters, about this issue of developing world debt forgiveness and debt justice?
Our “ask” is compassion and solidarity. Jubilee is an essential part of the teaching of any religion; there has to be compassion for others.
And Jubilee is an interesting way of addressing it—every 25 years, we think about where we are and what we need to do. Every 25 years is a chance for a fresh start.
But this time, the pope has made a big step forward, beyond Jubilee. He’s not only asking the question about how to give people a fresh start; he’s also saying, let’s try to make sure that they don’t wind up in the same situation in another 25 years with indebtedness that it is undermining health and education and the possibility of raising yourself out of poverty.
