Tuesday, June 28, 2011

Examining CV, Part 6

In Chapter 3 of CV, Pope Benedict XVI delves into fraternity, economic development, and civil society.

He first affirms that we, as humans, are made for gift and that we are often wrongly convinced that we are the sole authors of ourselves, our lives, and all of society. He reminds us that we have a wounded nature born out of original sin and that the economy has felt the pernicious effects of this sin.

Happiness is not material prosperity and economics is not autonomous from morality:

The conviction that man is self-sufficient and can successfully eliminate the evil present in history by his own action alone has led him to confuse happiness and salvation with immanent forms of material prosperity and social action. Then, the conviction that the economy must be autonomous, that it must be shielded from “influences” of a moral character, has led man to abuse the economic process in a thoroughly destructive way. In the long term, these convictions have led to economic, social and political systems that trample upon personal and social freedom, and are therefore unable to deliver the justice that they promise.

Charity, hope, truth...these things are greater than we are. Charity in truth builds an authentic human community that we alone cannot build by ourselves. Gratuitousness must be evident in society if economic, social and political development is to be authentically human.

The Pope then goes on to make very key statements regarding markets and justice that "free marketers" often ignore or reject:

In a climate of mutual trust, the market is the economic institution that permits encounter between persons, inasmuch as they are economic subjects who make use of contracts to regulate their relations as they exchange goods and services of equivalent value between them, in order to satisfy their needs and desires. The market is subject to the principles of so-called commutative justice, which regulates the relations of giving and receiving between parties to a transaction. But the social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well.

Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function. And today it is this trust which has ceased to exist, and the loss of trust is a grave loss.

According to the Pope, it was not just a matter of correcting dysfunctions through assistance. The poor are not to be considered a “burden”, but a resource, even from the purely economic point of view. It is nevertheless erroneous to hold that the market economy has an inbuilt need for a quota of poverty and underdevelopment in order to function at its best.

It is in the interests of the market to promote emancipation, but in order to do so effectively, it cannot rely only on itself, because it is not able to produce by itself something that lies outside its competence.
It must draw its moral energies from other subjects that are capable of generating them.

These statements are very strong because they rightly point out that markets alone do NOT bring about a just distribution of goods as many economists would have you believe. The solution lies not just in redistribution, but far more importantly in moral actors within markets. We must all act together toward the common good and not rely on selfish actions within a market to produce the result for us. Pope Benedict XVI continues:

In and of itself, the market is not, and must not become, the place where the strong subdue the weak. Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations. Admittedly, the market can be a negative force, not because it is so by nature, but because a certain ideology can make it so. It must be remembered that the market does not exist in the pure state. It is shaped by the cultural configurations which define it and give it direction. Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. Instruments that are good in themselves can thereby be transformed into harmful ones. But it is man's darkened reason that produces these consequences, not the instrument per se. Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.

WE, as economic actors, make up markets and it is WE who are responsible for their goodness or their badness. In other words, Pope Benedict is criticizing the market harshly, not because it isn't efficient or that it is evil, but because our actions within the market aren't directed toward the common good. Those who hold that selfish actions within a market bring about the common good as is often claimed (starting with Adam Smith's "invisible hand") by economists and politicians are wrong! It is clear that this does not bring about the common good, instead we must act always for each other, within and outside the market, so as to bring about a community of charity and fraternity that provides for the welfare of all.
The economic sphere is neither ethically neutral, nor inherently inhuman and opposed to society. It is part and parcel of human activity and precisely because it is human, it must be structured and governed in an ethical manner.

What is needed?:
The great challenge before us, accentuated by the problems of development in this global era and made even more urgent by the economic and financial crisis, is to demonstrate, in thinking and behaviour, not only that traditional principles of social ethics like transparency, honesty and responsibility cannot be ignored or attenuated, but also that in commercial relationships the principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within normal economic activity.

Because: "every economic decision has a moral consequence. Justice must be applied to every phase of economic activity, because this is always concerned with man and his needs."

Pope Benedict XVI writes that economic life needs contracts to regulate exchange, just laws and redistribution governed by poltiics, and most importantly works redolent of the spirit of gift. He calls especially for today's market economies to make room for institutions with motives other than profit-oriented enterprises, for civil society to push for greater solidarity and not simply rely on the State to do so, and for the State to redistribute when necessary to take care of the peoples who are not included within the benefits of the market economy.

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