Reflections on the Economic Agenda of “Caritas in Veritate”

REFLECTIONS ON THE ECONOMIC AGENDA OF “CARITAS IN VERITATE”, POPE BENEDICT XVI’s NEW ENCYCLICAL LETTER (2009)

Developing nations owe between $ 2 000 billion and $ 3 000 billion. This compares with expenditure in arms in 2008 of $ 1 460 billion. The top 20% of population consume 86.5% of the annual “cake” produced by the world. The next 60% consume 12% and the bottom 20% consume 1.5%. In 1960 the ratio of the richest 20% nations to the poorest 20% was 30 to 1. In 1990 this ratio was 64 to 1. Some 1 billion people are obese, another 1 billion experience regular food insecurity. For some there is too much food, for others too little. It is socio-economic situations like these that prompt the Church to speak out about the modern situation of Lazarus and Dives (Luke 16:19-31) that prevails in our world today.

BACKGROUND
Populorum Progressio
Caritas in Veritate (= CV) studies the world of economics, particularly in relation to development and underdevelopment. It takes as its prime point of reference, an earlier encyclical, Populorum Progressio (= PP, 1967), which concerned itself with these issues. In fact, it takes PP as a milestone document of the Church’s Social Teaching, much the same as the document Rerum Novarum (= RN, 1891, “of new things”) is seen as one of the founding documents of the Church’s social doctrine. In RN, the Church spoke boldly about trade unions and workers’ rights in the context of the Industrial Revolution in Europe. PP, however, is broader in scope, hence its choice by Pope Benedict as the key reference basis for CV.

Sollicitudo Rei Socialis
PP (3) noted conditions of underdevelopment and suffering, writing that the “Church shudders at the cry of anguish and call for each one to give a loving response of charity to this brother’s (sic) cry for help”. Twenty years later, in 1987, Pope John Paul II issued an encyclical letter Sollicitudo Rei Socialis (= SRS, “on the social concern of the Church”). This updated PP, as an ethical essay offering principles for reflection and criteria for judgment (SRS 8), not a detailed blueprint of technical solutions.
SRS (1987:12) observed that the development hoped for twenty years ago, was not realized. In general, the situation had worsened (:13) and the gap between the developing and developed countries had in fact increased (:14). Pope Benedict’s new encyclical (CV), issued in July 2009, was in fact meant to be issued in 2007, on the fortieth anniversary of PP. Because of technical problems, it emerged in 2009. The Pope concluded, as with SRS, that while there had been some increase in the overall standard of living, there were still radical problems of poverty and underdevelopment. The financial crisis, which began in 2008, threatened to aggravate the plight of the developing nations.

A Non-Political, Scriptural Agenda
The key Scripture passage underlying the title of CV, is found in Ephesians 4:15 “If we live by the truth and in love, we shall grow completely into Christ, who is head…”. A USA secular newspaper apparently referred to PP as warmed up Marxism. The latest encyclical does not choose either the left (Marxism, Communism) or the right (Liberal Free Market Capitalism), offering principles for reflection, not a politically biased policy document. Some principles such as the common good and solidarity, would be incorrectly interpreted as favouring a centrally planned economy. The principle of subsidiarity, on the other hand, is not an endorsement of liberal capitalism either. All theology has an underlying political stance, even if only implicitly. Be that as it may, there is no intention in the encyclical letter to choose sides.

The Failure of the Ideologies
The late Jon Paul II, in various writings, noted in fact that the reason many had in the past opted for Communism, was because of the failure of Capitalism to overcome widespread poverty. He was prescient in expressing concern that there could be serious economic problems without ethics in the economic system. Certainly, one of the reasons for the financial collapse in 2008 is the absence of self-regulation, of concern for the effects of economic actions. Most, if not all economic actions have human and therefore moral consequences.

THE HEART OF CARITAS IN VERITATE

The Qualities of God
CV is essentially contextual theology. It studies the socio-economic context of the world we live in, judges it in the light of Scripture and Tradition, and formulates principles, guidelines for action. This is what the Prophets of the Bible did. However, before beginning its analysis of the world economy, it focuses on two essential qualities of God, namely love and truth. Love has its origins in God, who is Eternal Love and Absolute Truth.

Love
If the whole Bible were to be summarized in three words, “God is Love” would be the ideal phrase. This is in fact the title of Pope Benedict’s first encyclical letter (Deus Caritas Est, “God is Love”, 2005). This quality reveals God’s fountain-like love, which overflows into creation (the Father), salvation (by the Son), recreation (by the Holy Spirit), and the final consummation (cf Ad Gentes Divinitus, 1965:2). Love is God’s gift to us, and our final goal is to share in the ecstatic communion of love that exists between the Father and the Son, in the Holy Spirit.
All our activities need to be shaped by love, which is the extraordinary force that leads people to generous and courageous engagement in the field of justice and peace. Love is poured into our hearts by through the Holy Spirit (Rm 5:5). We need to mobilise at the level of heart.

Truth
Love needs to be given direction by truth. There is absolute truth in God and therefore the Church maintains that there is objective reality in the world, even if in the postmodern world, truth is seen as purely relative to culture and circumstances. Truth overcomes subjective opinions and cultural and historical limitations (CV 4). Truth defines what true love is, where the concept of love is often distorted.
Truth needs to be searched for and expressed in a loving manner. It is truth that we are one single human family, and that the good of all society is greater than the individual good (CV 7). The common good is a key principle of the Catholic Social Teachings, and to ensure the common good is to love effectively (in truth). It is the duty of the Church to find the truth, to read the “signs of the time” (Gaudium et Spes 1965:4; Luke 12:56).

The Church’s Mission
Only in charity illuminated by truth, the light of reason and faith, is it possible to implement humane and effective goals (CV 9). The Church has mission to truth, not to specific technical solutions. Motivated by love, it searches for the truth, and it sets out fundamental principles for a just ordering of society. Such guidelines include the common good, subsidiarity and solidarity, key principles of Catholic Social Teachings.

A Vocation
Both PP (34) and CV (16) contend that economic and technological progress is in effect a vocation, based on the call from God to develop oneself and the material culture (Gen. 1:28, “fill the earth and subdue it. Be masters of the fish of the sea…”, as well as the parable to use our gifts properly, cf Mt 25:14-30, Lk 19:11-27). This is further ground for the Church’s concern for the question of economic development. Humankind has a pilgrimage through history to make, and the Church has the right to evaluate this vocation, this journey, by shedding the light of the Gospel (to “Judge”) on the social question (to “See”, to perform a social analysis, to read the signs of the times) and to “Act”, to prophesy, to speak out.

THE ESSENTIAL NEED FOR SPIRITUALITY, GOSPEL VALUES

Technology is Not Enough
Technology enables us to exercise dominion over nature in order to improve living conditions. It is in effect a response to God’s command to subdue the earth (Gen. 1:28), to cultivate the land (Gen. 2:15). But the criteria in subduing the material culture must be subject to the Gospel, to moral considerations. Technology and profit are means to an end, not an end in themselves. The world cannot rescue itself with technology alone.
Thus CV (78) maintains that “without God man (sic) neither knows which way to go, nor even understands who he is”. Apart from God, we can do nothing (Jn 15:5). All three encyclicals (PP, SRS, CV) conclude that if wealth has grown for some, there is still “the scandal of glaring inequalities” (CV 22), as well as corruption, inefficiency, illegality and the improper diversion of economic aid.

Need for Gospel Values
The Gospel is essential for building society according to freedom and justice. The conviction that economics should and is free from morality has led to grave abuses. Economics in fact, itself rests on a real platform of underlying values, assumptions, ideologies, even if it claims to be ”scientific”, dealing only with “hard” facts. The market is not a neutral arena. It cannot justify itself, and it must draw its morality from elsewhere.
The Pope acknowledges that there are many non-profit organizations, but he looks with interest at hybrid groups that pursue both profit and social goals. He believes these give rise to a more civilised market. Without God, development becomes dehumanised (CV 10-12). It needs to be backed by “values rooted in the truth of life” (CV 72). It needs ethics, taking into account the dignity of people, of the family, of women, of procreation and of the rights of the unborn. Business needs to work for humanity, not only for shareholders. The cause of under-development is not technological, but spiritual and human, the lack of love in truth.

Unregulated Speculative Activity
CV criticises the unregulated and speculative financial deals of 2008, which not only affected the share markets, but lead to a sharp decline in output in the real economy where goods and services are produced and sold. When the oil price reached a record of $ 147 per barrel in 2008, observers believed that without speculative activity in the futures market for oil, the price would have reached only $80 per barrel. This huge increase lead to higher inflation and there were food riots in various countries as the prices of foodstuffs rose sharply. Do commodity dealers and speculators have the ethical freedom to sway prices to such an extent, in effect causing massive hardships? In 2008 the US Treasury resolved to enact legislation to control trading in the oil market. In the USA and UK, not only did share prices drop sharply, but also, many banks could not guarantee to pay out ordinary depositors.

“Hot” Money
There is a huge volume of money in the world, seeking a home. This money represents the savings of people, insurance funds, pensions funds, unit trusts and share and bond market investments. This volume is over 28 times the annual value of goods and services traded in the world, and over 20 times the annual value of world gross domestic product. This money has no loyalty to any country it finds a home in, and can be rapidly withdrawn, often with serious effects to the country’s currency and interest rates. The annual value of derivative trading on the share markets is around 30 times the total value of the world stock exchanges. The logic of the markets is based on exit, namely mobility, flexibility, liquidity and short-term bias. CV observes that while governments regulate local economies, global companies are able to circumvent local legislation.

All Business Decisions have Ethical Dimensions
It needs to be understood that all business decisions have ethical implications. For example, a global company may decide to move its production to a country with lower costs and more favourable tax regime, irrespective of the harm done to the country where the production facility is closed down. CV (25) repeats the call of RN for the promotion of worker associations to protect their rights. Workers face difficult life situations, being unable to plan their life paths, including marriage, family, education of children, and the provision for retirement. Development should also include cultural and spiritual interests. Given floating exchange rates, instant communication and the mobility of capital, both financial and physical, the globalized world is highly interrelated.

Pharmaceutical Groups
These groups are also challenged. They enforce patent rights on vital medicines, which forbid competitors from making cheaper generic medicines for a certain period. They argue that they have to recoup their research and development costs. Brazil’s government has ignored international patent rights for certain medicines and allowed local companies to produce cheaper generics, in order to address the problem of HIV/AIDS. The principle of solidarity, of looking beyond one’s own immediate interests and borders to those who are suffering, is essential. How many lives must be lost in the name of profit? The free market has proved it cannot enable all people to flourish, many are sentenced to low quality lives reduced to a daily struggle for survival.

Gratuitousness
The Pope (CV 34) proposes a value of gratuitousness, which I read as the notion of freely giving and/or forgoing profit, without any expectation of a monetary reward, in order to serve some social interest. This is a principle that would make many business leaders choke! However, there are companies that do have social programmes for employees and for the community. I draw attention to certain passages in Leviticus (Lev. 19:9-10) and Deuteronomy (Dt. 24:19), that instruct owners of vineyards not to pick the vineyard bare or to pick up the fallen grapes. The surplus is for the poor. Every third year, a tenth of the whole income should be given to the Levite and the poor (including foreigners, widows, orphans, so that “they may eat to their hearts content” (Dt. 26:12).
Every seventh year there should be a rest from sowing and what grows in this year must feed all people. In terms of Jubilee theology (Lev. 25:8-11), every fiftieth year all personal debts should be cancelled and people should be allowed to return to their ancestral property. With due allowance for the fact that the economy in those years was centred on agriculture, and today there is a wide spread of economic activities, there is a clear call for generosity by companies today.

Subsidiarity and Solidarity
Whilst CV (53) sees the human race as a single human family, working together in communion, this community should never absorb the individual and destroy their autonomy, as happens in totalitarianism. The Trinity is the model of absolute unity in diversity, where there is no loss of individual identity (CV 54). The subsidiarity principle asserts that all social (including economic) activity should be carried by those closest to that activity. This is very close to the Free Market principle that everyone should have maximum freedom to pursue their own interests, in this way the whole economy should in theory benefit the most. This is the predominant ideology today. However, Capitalism is today being re-looked at, even if subsidiarity argues against central state control of the economy, as well as an all-encompassing welfare state. Perhaps it can be said that society would rather live with the negative consequences of the Free Market than the negative results of Communism.
However, subsidiarity (truth), without solidarity (charity) results in social privatism and rank individualism. Solidarity (love) without subsidiarity (truth), results in paternalistic assistance and encourages dependence (CV 58). Nevertheless, developed countries should increase their economic aid.

A Christian Anthropology
Anthropology is the study of the human person, in this case, in relation to behaviour, motivation and needs. Christian anthropology adds the spiritual dimension to this study. Since the Church proclaims Christ, the perfect human being, it claims to be an expert in humanity, being able to understand the deepest truth of a person better than most, particularly in relation to needs and to our transcendent finality. Because the person is made in the image of God, they have an inviolable dignity, a dignity that is greater than the law of profit maximization. With our technological and monetary mindset, interior well-being has been reduced to psychology and emotions, without “awareness of the human soul’s ontological depths” (CV 76).

Christian humanism
Humanism needs to be open to the Absolute to be genuine (CV 16, PP 42). To see a person in a purely materialistic and mechanistic fashion, amounts to love without truth and will have negative consequences. Integral development is the answer, which includes the whole person in all their dimensions, including cultural and spiritual. A consistent error is to confuse happiness and salvation with material prosperity. Development is not merely about the acquisition of more goods. If there is not a transcendent view of a person development ends up being a dehumanising factor. The goal is to build up all humankind and the whole person as well, including full provision for all human rights. Human rights are objective and inviolable.

Need Openness to the Transcendent
The human person is open to the transcendent and to the natural law inscribed in their heart, therefore truth and charity are fundamental anthropological realities, as they are transcendent gifts to humanity. But an understanding of a person must include the admission that we are wounded people inclined to evil and serious error, and that we are not the sole authors of ourselves and of our lives (CV 34). We cannot by ourselves, build a truly just community, we need God (Psalm 121:7 – “If Yahweh does not build a home in vain do its builders toil”). By ourselves, we cannot establish an authentic humanism, it will always retain something inhuman. This wounded nature gives rise to serious errors in the economy, politics, in education and other areas of society. Only God is the guarantor of true development (CV 30).
Development must take into account the centrality of the human person (CV 47). All things should be ordered towards the person as its centre and summit (CV 57). Profit should be the means to achieving a more humane society and market, and to improve living conditions.
In the world of modernity humankind is viewing itself according to its own ideas, and searching largely for technical solutions, when the true answer lies in the spiritual aspect of the person. Technology is seen as absolute, instead of human dignity. Unbounded hope in technology characterised the Enlightenment and modern periods. In the postmodern world, the limitations of science, as well as its dangers, are now being recognised. The belief that technology can solve all problems has now being seriously challenged and in fact development has caused serious ecological damage. Science and technology need to embrace charity, faith, theology and metaphysics. Research into cloning, for example, is one of the many symptoms that show that science believes it can master any mystery (CV 75).

Development Programmes
People who are affected by development should have representation in the formulation of a development plan. This involvement needs to be made as equal as possible. This is relevant to developing countries that may lack planning resources (statistics, specialists in economics, etc). There should also be greater access to education ((CV 61). This should be integral education, without a relativistic understanding of the person, as if there are no universal principles, especially in relation to moral education. Wisdom is love in truth, and education should include wisdom, not just “neutral” facts (CV 30).

A Message of Life
The encyclical notes the anti-life culture of population control, abortion, euthanasia, contraception, and to which can be added experimentation on foetuses produced in vitro. This is the culture of death, the term used by John Paul II in his letter, Evangelium Vitae (The Gospel of Life). When society entertains denial and suppression of life, it erodes the motivation to strive for humankind’s true goals, including development. Hunger and food security are also against life, as are high infant mortality rates and disease in poorer countries.
The Pope argues that population growth is not the cause of underdevelopment and criticises the anti-birth mentality, as well as making population control a condition for receiving economic aid. Life includes protecting the world’s ecology. Nature must be respected, but it is subordinate to the human person, and nature should not be divinised, attributed some mysterious spirit of its own (CV 48).

Other Recommendations
There are many other recommendations. Receivers of aid should not become subordinate to donors. They should also not waste aid on expensive bureaucracies. Ecology must be respected. The Pope also criticises those who hoard non-renewable energy sources (oil).
Advanced countries need to lower their use of energy resources by reviewing their life style. The Letter deals with some length on our duty to maintain a healthy ecology, and to pass on to future generations an earth that is in a good condition (CV 48, 50, 51). Both nations and individuals should moderate their life-styles to assist in maintaining a healthy ecological balance.
Buying needs to be seen as not only an economic act, but as an action that has ethical consequences, thus consumers have a social responsibility. It is interesting to note the existence of “fair trade” products. For example, some coffee is sold at perhaps 15% more than the usual market price, but the purchaser has the assurance that the workers involved in production were paid fair wages.
Finance needs ethical principles to safeguard society and to discourage “scandalous speculation” (CV 65). There is the call for quality work, a just wage as opposed to a market wage and labour unions are endorsed. The letter is also critical of international tourism that promotes only consumerism, hedonism, and even sex tourism, sometimes supported by governments, with the complicity of tour operators and the silence of the local people. Micro-financing is seen as having its roots in the thinking of civil humanists (but beware of usury).

Conclusion
God, with his Truth and Love, belong in the arena of business and economics. In a sense, CV is a missionary document, calling us to cross the intellectual boundaries of economics, and to enter the world of business, and to bring the Gospel to all the participants in this vital arena of humankind.