Pope Francis has called on world leaders to end the "cult of money" and to do more for the poor.
In his first major speech on the financial crisis, the pontiff told diplomats in the Vatican that free market economics had created a tyranny, in which people were valued only by their ability to consume.
"Money has to serve, not to rule," he said, urging ethical financial reforms.
The BBC reports Pope Francis said life had become worse for people in both rich and poor countries.
In a biblical reference during an address to newly accredited ambassadors to the Holy See, the pontiff said the "worship of the golden calf" of old had found a new and heartless image in the current cult of money.
He added that reforms were urgently needed as poverty was becoming more and more evident.
People struggled to live, and frequently in an undignified way, under the dictatorship of an economy which lacked any real human goal, Pope Francis said.
The new pontiff, who took over from Benedict XVI in March, has previously said that the Church has a special duty to defend the poor.
"I would like a Church that is poor and is for the poor," he said following his election.
The pontiff said he had chosen the name Francis in a direct reference to St Francis of Assisi, the founder of the Franciscan Order who was devoted to the poor.
