The 77-year-old leader of the world's 1.2 billion Roman Catholics said some countries had a youth unemployment rate of more than 50 percent, with many millions in Europe seeking work in vain.
"It's madness," the pope said in an interview with the Barcelona-based Vanguardia daily's Vatican correspondent Henrique Cymerman.
"We discard a whole generation to maintain an economic system that no longer endures, a system that to survive has to make war, as the big empires have always done," Francis said.
The pope said there was enough food to feed all the world's hungry.
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"When you see photographs of malnourished children you put your head in your hands, you cannot understand it," Francis said.
"I think we are in a global economic system that is not good," he said.
"But we have placed money in the centre, the god of money. We have fallen into the sin of idolatry, the idolatry of money. The economy moves by the desire to have more and paradoxically it feeds a disposable culture."
The pontiff said the young were discarded when "the birth rate is limited" and the old were discarded when they no longer were considered productive.
"By discarding children and the old, we discard the future of a people because the young will pull us strongly forward and the old will give us wisdom," he said.