Caritas in Veritate envisions a new economic order

Posted on July 9, 2009 in Debates, Governance Debates, Social Security Debates – Holy Post/blogs – Caritas in Veritate envisions a new economic order
Posted: July 07, 2009.   Father Raymond J. De Souza

Issuing a new encyclical letter today, Caritas in Veritate (Charity in Truth), Pope Benedict XVI presented a wide-ranging vision of a new economic order. The encyclical — the highest form of papal teaching — takes something of a turn away from the pro-enterprise teaching of Pope John Paul II toward the generally redistributionist vision of Pope Paul VI, who addressed questions of poverty and development in the late 1960s, the 40th anniversary of which Benedict’s document commemorates.

This encyclical has been in the works for several years, and was much delayed in order to permit Benedict to formulate a response to the current economic crisis. While insisting that the Church has no “technical solutions to offer,” Benedict is not reluctant to offer an analysis of the world economic situation that invites a rethinking of how economic life is organized.

Caritas in Veritate makes the argument that both charity and truth are needed to underpin a just and free economic order. Truth is necessary so that “integral human development” is possible in which men and women are treated as their full human dignity demands, not as mere parts in an economic machine. Charity is essential so that our treatment of each other is not limited to mere contractual obligations, but to the real flourishing of others.

“Without the perspective of eternal life, human progress in this world is denied breathing-space. Enclosed within history, it runs the risk of being reduced to the mere accumulation of wealth,” the Pope writes about the ultimate truth of human existence. “[True development] requires a transcendent vision of the person, it needs God.”

The economic crisis, which Benedict blames on investments that were motivated for “speculative” reasons rather than authentic development, highlights that moral behaviour — honest, generous and not selfish — makes for good economics, as well as good ethics.

“Development is impossible without upright men and women, without financiers and politicians whose consciences are finely attuned to the requirements of the common good.”

Forty years after Paul VI wrote on these questions, Benedict acknowledges that billions of people in vast areas have lifted themselves out of poverty — principally through markets which unleash the creativity and productivity of the human person. Benedict’s focus, however, is not on the successes of the past generations, but on those who have not yet participated in the prosperity of recent decades.

He calls for massive redistribution of wealth, protecting social security systems, strengthening labour unions, combating hunger by investments in rural life, enhancing access to employment, avoiding excessive protection of intellectual property especially in health care, granting access to world markets for the agricultural produce of poor nations, more open immigration policies and a significant increase in foreign aid. Indeed, Benedict argues the welfare systems in rich countries should be made more efficient, curbing bureaucratic waste, with the savings redirected to foreign aid.

On the environment, Benedict says affluent countries “must” reduce their energy consumption through greater efficiency and simpler lifestyles, while cheap energy should be made available to poor countries for their development needs.

All this will require substantial state intervention in economy, and even “a true world political authority … with real teeth,” though such a global body would have to respect local liberties of individuals, families and communities.

Globalization has made peoples around the world “neighbours but not brothers,” and Benedict argues for a new ethos, going beyond the market and the state. The market, while an ethically neutral instrument, responds to self-interest. The state operates according to the rules of power. What is needed, the Pope argues, is a wholly different approach, where economic and political actors look beyond their interest to the service of others.

Benedict proposes a “principle of gratuitousness” and the “logic of the gift” — concepts which would transform the potential for development in his view. “Gratuitousness” and “gift” encourage people to think not of their interest but of service. So Benedict argues that labour unions should think not of their own members alone, but of the good of workers — even foreign workers who might compete with union labour. More far-reaching, Benedict endorses the idea that corporations should answer to not only to shareholders but also “stakeholders” — all those who have a stake in a company’s activities.

The last papal encyclical on economic matters was written in 1991 by John Paul II, who made a significant break with his predecessors in emphasizing the positive role of business, free markets and the role of creativity in the economy. He went as far as to say that economic liberty is an essential liberty alongside religious liberty, political liberty and legal liberty.

Benedict has taken a substantial step back from that analysis — the role of the entrepreneur and the potential for wealth creation are secondary. The primary focus is on redistributive solutions to economic disparities. How to reconcile the two approaches remains a task for theologians and economists to work out.

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