Towards good business

In his 2009 encyclical Caritas in Veritate (Charity in Truth), Pope Benedict said that businesses cannot be ethically neutral: either they serve the common good in all they do, or they don’t. These ethics, the pope said, must be “people-centred”, serving not only the stockholders, but all the stakeholders—including workers, community and consumers.

The pope demanded “a profoundly new way of understanding business enterprise”, one that is rooted in the ethics of honesty and solidarity, and one which replaces the primacy of profit for the primacy of the person.

At a Church-hosted conference on business ethics, held in Rome in mid-June, Vatican secretary of state Cardinal Tarcisio Bertone stated the Church’s position bluntly: “We need business leaders with a social conscience, leaders who see their work as part of a new social contract with the public and civil society.”

Cardinal Bertone touches on a key issue: the social contract. All of our civilisation is predicated on the social contract—the mutual understanding that we abide by certain written and unwritten rules, and that its violation must produce consequences. The social contract is what stands between us and anarchy.

So when the Church leadership calls for a “new social contract”, it is saying that in the free market system, the relationship between business, labour, consumer and society in general is broken.

When the pope places the foundations for that “new way of understanding business enterprise” within the Gospel, he is giving enterprises a blueprint that also makes temporal sense in the pursuit of the common good.

Corporations may well protest that through their philanthropic activities and social responsibility programmes they are contributing to the common good. While these may be commendable, if they are carried out for reasons other than publicity and satisfying quotas, they are not enough.

At the Rome conference, Professor Daniel K Finn, who teaches economics and theology in Collegeville, Minnesota, listed four fundamentals for genuinely ethical commercial activity, which require innovative engagement by business, government and civil society.

Firstly the moral behaviour of individuals and organisations must be modified, diminishing selfish impulses of greed and rampant consumerism. Secondly, the market requires some regulation and legal structure to “prevent the worst abuses”. Thirdly, jobs must be created, not slashed, and those in need must be directly assisted by means that include vocational training programmes. Lastly, civil society must organise itself to help advance the different needs of society and push towards institutional reform.

Individuals may regard themselves powerless, but they can contribute to a more ethical commercial environment. It requires that they be well informed about where business is acting against the common good—whether it be environmental destruction by corporations or dishonest conduct by local producers—and about what they can do about it.

Pope Benedict in Caritas in Veritate counsels that consumers have an obligation towards business ethics themselves: “It is good for people to realise that purchasing is always a moral—and not simply economic—act. Hence the consumer has a specific social responsibility, which goes hand-in-hand with the social responsibility of the enterprise.”

This means that consumers ought to be informed about the provenance of the goods they buy (for example, whether they were produced by a corporation that exploits its workers, or by a company that engages in price-fixing), and make their purchasing decisions accordingly.

More than that, consumers should be vocal about transgression by businesses. That starts by protesting when producers employ furtive tricks to exploit consumers and standing in solidarity with workers when their labour disputes have merit. Sometimes that might mean making personal sacrifices—a very Christian attribute. Few things are as persuasive to business as consumers withholding their patronage.

The Church in particular can play a role on the parish level by raising awareness about the way we interact with business, and in mobilising against unethical behaviours in commerce.

In Caritas in Veritate, Pope Benedict pointed out that every economic decision has a moral consequence. This applies to the CEO of a multinational corporation and it applies to the consumer in the shop.