In my previous post, I examined the introduction to Oeconomicae et pecuniariae quaestiones, the new Vatican document on “economic and financial issues.” Now I will examine part one, entitled “Fundamental Considerations.” It is a complete rejection of libertarianism (laissez-faire economics) in favor of what I would call “person-centered” economics. This document does not contain any detailed policy proposals (7). Figuring those out is our job, not the Vatican’s. Instead, the document expounds key principles that should form the basis of actions. I identify six principles: human dignity, relational anthropology (“communion”), the common good, the universal destination of goods, solidarity & subsidiarity, and proximate immorality.
1) Human dignity
This is the most basic concept. Over and over again, the document insists that the dignity of every human person be respected by all financial actors and institutions. If the dignity of persons is violated, that is morally wrong, no matter how much money the violation earns. No attempt is made to list possible violations (I would offer as examples unsafe and inhumane working conditions, underpaying workers, various forms of humiliation, union-busting). Instead, the basic principle is stated that human beings are not just “consumers.” The fundamental evil of capitalism as it is actually practiced today is stated:
Our contemporary age has shown itself to have a limited vision of the human person, as the person is understood individualistically and predominantly as a consumer, whose profit consists above all in the optimization of his or her monetary income. (9)
It is intrinsically evil to instrumentalize another person: we are subjects, not objects. The only moral attitude to have toward another human being is to love them, never to use them. The document points out that the economy today has perversely inverted the means and the end:
Precisely in this inversion of the order between means and ends, where work as a good becomes an “instrument,” and money an “end”, the reckless and amoral “culture of waste” finds a fertile ground. (15)
Money is supposed to be a means to the end of human flourishing. Instead, the “great masses” of human beings have become a means to the end of the luxury and power of a few.
2) Relational anthropology (“communion”)
Liberalism is based on the recognition of the value of the human person and will therefore have no trouble in accepting the first principle. But the Catholic Church binds to this principle a second one, equally indispensable and inseparable: human beings are inherently relational. That is, we do not and cannot live as isolated individuals, but always in communion with others. The document calls this principle “relational anthropology,” and explains it as follows:
Every person is born within a familial environment, enjoying a set of pre-existing relationships without which life would be impossible. The human person develops through the stages of life thanks to pre-existing bonds that actualize one’s being in the world as freedom continuously shared. These are the original bonds that define the human person as a relational being who lives in what Christian Revelation calls “communion.” (10)
The whole concept of libertarianism, namely that everyone is an autonomous individual whose freedom from coercion should be maximized, is antithetical to Christianity, which is centered on the concept of “communion” (see, e.g., Acts 2:42-47; Gal 2:7-10; Heb 13:16; 1 John 1:3). As the English poet John Donne famously wrote, “No man is an island entire of itself; every man is a piece of the continent, a part of the main” (Meditation 17).
Here some will object that, while Christianity may be based on communion, that is an element peculiar to that religion and thus should be excluded from politico-economic considerations on the basis of the separation of church and state. But no, that is wrong. As the document notes, actual human existence clearly attests to our inherently communal nature. This human phenomenon is named “communion” (κοινωνία) by the New Testament (“Christian Revelation”). If a person cannot recognize this obvious fact, I know of no argument that will persuade them. Their mind must be trapped in the clouds of darkness, which only a ray of intellectual light can scatter.
3) The common good
It follows from human relationality that economic actors and institutions that harm the common good are ipso facto immoral. It is not enough simply to respect the intrinsic worth of individual persons; one must also contribute to the common good. The two principles go hand-in-hand, and constitute the fundamental “bottom-line” of morality in the economic sphere.
Every economic system is legitimate if it thrives not merely through the quantitative development of exchange but rather by its capacity to promote the development of the entire person and of every person. (10)
This principle of the common good comes into play in a wide variety of areas in which the global economy fails miserably. The document says:
Well-being must therefore be measured by criteria far more comprehensive than the Gross Domestic Product of a nation (GDP), and must take into account instead other standards, for example, safety and security, the growth of “human capital”, the quality of human relationships and of work. Profit should to be pursued but not “at any cost”, nor as a totalizing objective for economic action. (11)
Again, the Vatican does not try to list all the different ways that economic actors may harm the common good. I think of corporations that pollute or damage the environment, form monopolies in order to extort prices, outsource labor to workers in other countries (whom they underpay, thus also violating their dignity), or traffic in harmful goods, such as drugs, pornography, weapons, or propaganda.
4) The universal destination of goods
The universal destination of goods is a long-standing element in CST. It is explained in Vatican II’s pastoral constitution Gaudium et Spes as follows:
God intended the earth with everything contained in it for the use of all human beings and peoples. Thus, under the leadership of justice and in the company of charity, created goods should be in abundance for all in like manner. Whatever the forms of property may be, as adapted to the legitimate institutions of peoples, according to diverse and changeable circumstances, attention must always be paid to this universal destination of earthly goods. In using them, therefore, people should regard the external things that they legitimately possess not only as their own but also as common in the sense that they should be able to benefit not only them but also others. On the other hand, the right of having a share of earthly goods sufficient for oneself and one’s family belongs to everyone. The Fathers and Doctors of the Church held this opinion, teaching that people are obliged to come to the relief of the poor and to do so not merely out of their superfluous goods. If one is in extreme necessity, they have the right to procure for themselves what they need out of the riches of others. Since there are so many people prostrate with hunger in the world, this sacred council urges all, both individuals and governments, to remember the aphorism of the Fathers, “Feed the person dying of hunger, because if you have not fed them, you have killed them.” (69)
The libertarian valuation of “private property” is directly antithetical to this Catholic doctrine. If anyone wants to learn more about this concept, I recommend you purchase the collection of sermons by St. Basil the Great called “On Social Justice.” He is a Father and Doctor of the Church, and this paragraph cites one of his sermons translated in this volume.
Unquestionably, the modern economy has as its end-result the accumulation of vast wealth by a tiny number of shareholders. This is the economy that Pope Francis says kills. In contrast, the moral economy that he wants to see has as its goal
to create and spread wealth, and to eliminate the inequality so pronounced today. (5)
This principle is re-stated in the third part of the document (“the functionality of the system that produces and spreads wealth,” 20). In other words, the redistribution of wealth is the goal. Presently, the top 1% own about half of all money. This is the inequality we must work to end, by spreading that wealth justly. Again, the Vatican does not offer any specific policies, such as tax rates. It is up to legislators and other powerful actors to take these moral principles and apply them justly and wisely to the concrete situation in each country.
5) The integral role of governments (solidarity and subsidiarity)
According to libertarianism, the government’s job is to secure the life, freedom, and private property of individuals. This means that governments serve only the wealthy, since the poor have neither property nor the economic means to be free. The Catholic Church, in contrast, sees the common good as the collaborative goal of every sector of society. That includes individuals, businesses, NGO’s, religious communities, and all levels of government. Thus the Compendium of the Social Doctrine of the Church, published by the authority of St. John Paul II, teaches:
The responsibility for attaining the common good, besides falling to individual persons, belongs also to the State, since the common good is the reason that the political authority exists. The State, in fact, must guarantee the coherency, unity and organization of the civil society of which it is an expression, in order that the common good may be attained with the contribution of every citizen. The individual person, the family or intermediate groups are not able to achieve their full development by themselves for living a truly human life. (168)
Of all the principles I have outlined so far, this may be the one most widely and routinely denied by many Americans, including Catholics who either do not know better or reject CST. (Just yesterday I saw a Tweet decrying “outsourcing” charity to the government.) Over and over again, one hears someone saying that helping the poor is the job of individuals and churches, not the government. This is true according to libertarian doctrine, but it is false according to Catholic doctrine.
The necessity of government intervention in creating a just economy is stated forcefully in this document:
The freedom enjoyed by the economic stakeholders, if it is understood as absolute in itself, and removed from its intrinsic reference to the true and the good, creates centers of power that incline towards forms of oligarchy… Those deputed to exercise political power are often disoriented and rendered powerless by supranational agents and by the volatility of the capital they manage. Those entrusted with political authority find it difficult to fulfil to their original vocation as servants of the common good, and are even transformed into ancillary instruments of interests extraneous to the good. These factors make all the more imperative a renewed alliance between economic and political agents in order to promote everything that serves the complete development of every human person as well as the society at large[,] and [to] unite demands for solidarity with those of subsidiarity. (12, typo corrected)
Today, a few corporations are becoming so wealthy (and therefore powerful) that they threaten to overpower governments. This is oligarchy, as the document says. Rather than advocating that governments wage war against large corporations or take them over (as communism would have), the document suggests that governments use their “political authority” to create an “alliance.”
Of course, right now it seems there is a kind of “alliance,” but one where the state is the handmaid of corporations: passing laws, offering tax incentives, and removing regulations to help them make more money! What the pope envisions is the opposite of this slave relationship: an alliance between all sectors of society where people, not profits, are the goal.
Two extremes are avoided here: libertarianism, which denies the principle of “solidarity” (the common good) and communism, which denies the principle of “subsidiarity” (all levels working together instead of a top-down, big government solution). This is the essence of CST, and why it is sometimes called a “third way” between libertarianism (or individualism) and communism (or “collectivism”).
6) Proximate immorality
The final principle is a direct counter to the standard apologetic response that wealthy capitalists use to justify their exploitation of their workers, the poor, and the planet. The profiteers claim they are doing nothing wrong because the acts in which they engage (e.g., lending money at interest, paying someone for their labor, merging two corporations), considered individually as if in a vacuum are not “intrinsically evil.” If each individual action is per se legitimate (at least in theory), then the entire financial system built on the repetition of those acts trillions of times must also be morally right. Right? Wrong.
The Vatican counters this apologetic by conceding the first premise that individual economic actions, considered separately in themselves, may be morally legitimate. This, however, does not automatically guarantee the morality of the whole. Even if (and this is a huge if, given the many abuses) “all the endowments and means that the markets employ in order to strengthen their distributive capacity are morally permissible,” it remains true that “markets, as powerful propellers of the economy, are not capable of governing themselves” (13). An outside actor (namely, the government) must regulate the whole.
Why? This is one of the only places where the Vatican gets specific about why government regulation is necessary:
In fact, the markets know neither how to make the assumptions that allow their smooth running (social coexistence, honesty, trust, safety and security, laws, and so on) nor how to correct those effects and forces that are harmful to human society (inequality, asymmetries, environmental damage, social insecurity, and fraud). (13)
There are bigger considerations that the market does not calculate, such as environmental damage. For example, manufacturing a plastic bottle and buying/selling it is not intrinsically evil, but doing so at a scale of trillions is very harmful.
The Vatican has a second response to the “We did nothing wrong” apologetic, for which it uses a nifty philosophical label: proximate immorality (14). Even in cases where individual acts are not automatically evil, the context of the present economic situation introduces the very-near (“proximate”) potential for massive harm. Once again, a specific example is given:
For this reason, it must be noted that in the economic-financial world there are conditions in which some methods, though not directly unacceptable from an ethical point of view, still constitute instances of proximate immorality, that is, occasions that readily generate the kind of abuse and deception that can damage less advantaged counterparts. For instance, to commercialize certain financial instruments is in itself licit, but in a asymmetrical situation it would be possible to take advantage of a lack of knowledge or of the contractual weakness of either counterpart. (14)
I won’t pretend to understand what exactly “commercializ[ing] certain financial instruments” is, but the sense is that it’s something that is not automatically evil in itself (per se), but nevertheless something that tends to contribute to inequality because we are dealing with an “asymmetrical” relationship rather than one of equal partners. In other words, when “financial instruments” are “commercializ[ed],” it’s the little guys, which is to say the “great masses” of humanity, that get screwed. This is why government regulation is needed, to protect individuals and the common good.
A further point emerges: the principle of caveat emptor (“buyer beware”) simply does not apply to many modern situations (14). This principle was always just a way for sellers to screw people, as everyone knows, but it nevertheless had a common-sense wisdom to it: don’t be an idiot who believes in the exaggerated claims of advertisements. Nowadays, the economic situation in certain situations is so complex and unfair that buyers have no choice. We are aware that we are being screwed, but there is nothing we can do about it! The Vatican once again gives a specific example of a case where this might apply, namely when borrowing money (14). A person has no choice but to agree to unfair terms, which may also be masked by an incomprehensible weave of economic and legal mumbo-jumbo.
I can think of comparable cases: a price-gouger during an emergency can’t say “Well, that’s the going price right now!”, nor can an employer who underpays their employees say “But you agreed to it!” This type of “reasoning” is just a dressed-up “might makes right”: one person has all the power and forces another to accept it, and then claims it’s “fair” because they agreed to it. Something can be “fair” and still unjust. Fair is not fair.
The principles outlined in this document are bedrocks of CST, which rejects libertarianism. As I stated in my previous post, I expect some libertarian Catholics to try to discredit this document by claiming that Pope Francis is a heretic or whatever. Others will simply ignore it, just as they ignored Benedict XVI and John Paul II when they said the exact same things. Lastly, a few will engage in complex apologetics (which could earn them a gold medal in mental gymnastics) that try to spin the document into saying something other than what it actually says. This is mostly accomplished by the sleight of hand they call “prudential judgment,” where they affirm the principles with their lips and then propose standard free-market, anti-government, anti-poor policies that undermine those principles.
It’s a shame that the document is written in complex Vaticanese (with several typos to boot). I had to carefully re-read quite a few sentences, and I have a Ph.D. in theology! We need more Catholic clergy and teachers, especially here in America, to explain these principles in ways ordinary Catholics can understand. That’s what I’ve tried to do here. Many libertarian bromides circulate in Catholic parishes with nary a word of contradiction. At times, they are even presented as though they were Catholic teachings (for example, that it’s the church’s, not the government’s, job to help the poor)! This situation must change, and Pope Francis can’t do it single-handed.