5.3.2 But is CST’s vision realistic?

Back to 5.3.1

Unit 5 Contents

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Reflection

Do you find CST’s vision of a ‘solidary market economy’ convincing?

What objections do you think can be made against it?

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Notice again the main difference between CST’s ‘solidary market economy’ and the so-called ‘third way’ position, ‘social capitalism’.  The latter accepts the driving force of maximizing profit as the overriding end in business.  In contrast, CST insists that, while making a profit is a necessary means, business is more importantly for “production of goods and services that are useful for the growth of each person, and… an opportunity for every individual to embody solidarity” (Compendium, #333).

As that sharp contrast might help us to see, a main objection that some would make to CST’s vision is that it is utterly unrealistic.  The argument would be that it is ridiculous to think that in business people will act out of solidarity, that is, for the sake of others or altruistically.  In fact, in markets most people are driven by self-interest, which in practice means profit-making.

There are both right-wing and left-wing versions of this line of critique.

On the right, the defenders of laissez-faire capitalism would say that the strength of capitalism comes from the fact that it makes use of the motivation of self-interest, to the end of efficient production and, thereby, prosperity for large numbers of people. For this reason it is best to accept the raw energy which the capitalist pursuit of profit generates.  Advocates of ‘social capitalism’ (we might think of Tony Blair) would add that this is the only realistic way of seeing economic life, so the need is to harness what this energy produces for society as a whole by ensuring it operates within a strong legal framework, rather than dissipate it by asking business people to do something different.

On the left, by contrast, defenders of use of state power to control economic life would argue that CST’s call for the practice of solidarity will be little more than that, a plea – mere words.  It will make negligible difference because a few well motivated people can’t change something that’s as large-scale and deeply entrenched as the practice of capitalism.  Rather what is needed is for political power to be used to make sure that business really does act for the benefit of society by directing it closely or actually taking over its ownership.

These lines of critique in terms of lack of realism are powerful.  Indeed, they both appear to fit, in different ways, with Christianity’s long-time recognition that people are in general pretty self-interested, because we are all sinful.

In fact many Christians, ever since the early days of Adam Smith’s theory, have accepted capitalism on just such grounds.  Some prominent early defenders even saw the great benefits that the free market mechanism brings as part of God’s providence.  They thought that, even though we are sinners, God providentially allows the effects of our selfish economic transactions to be beneficial overall.  On this view, the “invisible hand” of which Smith spoke was God’s hand.

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Reflection

What responses do you think can be made to this objection, in defence of a ‘solidary market economy’?

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CST has not accepted this view, even though faith in God’s providence for the world is an important part of Catholic teaching (see Catechism of the Catholic Church, ##302-314).

There are at least three lines of argument that can be made in response to the objection of lack of realism.  We shall look at two of them on this screen, and the third on the next, when we give attention for the first time in the module to what CST says about ‘structural sin’.

1. CST cannot ‘baptize’ sinful action for the sake of a good end

One main reason that CST rejects that view will be clear to you, in light of all you have studied so far.  As Pope John Paul II argued in Laborem Exercens, in line with Rerum Novarum, capitalism in its strict sense subjects persons to things, to capital.  This makes capitalism fundamentally inconsistent with human dignity.

Another way of putting what is essentially the same point should be clear from your reading of the Compendium in this unit.  To embrace such capitalism would be to accept that what people do in markets is not itself a matter of morality.  It would amount to saying that it is acceptable to treat people as mere means to making profit, and so deny their dignity, because the overall end justifies this.

But Catholicism has always insisted that a good end can never justify use of immoral means (cf. Catechism of the Catholic Church, ##1753 and 1759).  CST cannot accept what the argument for capitalism asks it to accept, that the goal of maximum return to capital justifies placing a veil over whatever actions are needed to bring it about.

In other words, the Church cannot baptize sinful actions on the basis of claimed good consequences.  The Church has to insist that people repudiate sin and instead do what is right, even in business life.

This is why, in principle, CST has to resist that objection to its vision.

2. In practice, economies always combine virtue and vice

That response was one of moral principle.  The second is more empirical – it looks at what economies are in fact like in practice.  This therefore responds more directly to the objection that CST’s vision is unrealistic.

Although we can distinguish ‘capitalism’ (strictly defined) and a ‘solidary market economy’ in theory, we need to recognize that neither of these versions of economic life will ever correspond fully to the actual reality.  Even though neoliberalism has been the dominant way of thinking among economists and policy-makers in recent decades, the actual economy, even in the most ‘capitalist’ countries (such as the USA and the UK) doesn’t correspond entirely to the neoliberal model.

The main reason for this is straightforward.  Even if many major businesses are driven to a very large extent by the goal of maximum profit, there are many people, even in those businesses, who sustain a real commitment to supplying high quality goods and services as such.  In all sorts of ways, this commitment finds expression in the way companies do business and it thereby qualifies and limits the pursuit of profit.  Sometimes, certainly, such people find they are banging their heads against a brick wall because the pressure to maximize financial return curtails their capacity actually to serve their customers.  But it is more realistic to see businesses as held in check from entirely rapacious pursuit of profits simply by the humanity of their staff – who, after all, have their own human dignity and, for the most part, recognize it in others.

Moreover there are plenty of businesses which really are committed to pursuing goals other than financial return.  We noted some examples earlier in the unit.  At the end of the unit (5.4.2), are links to some more companies that, on the face of it, appear to be in that way non-capitalist.  Of course we have to be wary when reading statements that companies make about their commitments to quality and good service, because what is there to stop purely capitalist businesses making equivalent statements?  Nevertheless this is not a reason for total scepticism.  What about companies run by Christians committed to what CST calls for?

The main point here is that what exists in reality is not pure capitalism, but a market economy which neoliberalism pulls in that direction while other views and commitments, such as Christian commitment to love and service of neighbour, pull in a different, more humanizing direction.

Likewise, there will never be a pure ‘solidary market economy’ because there will always be people who are willing to pursue maximum profits regardless of the effects on human persons and therefore to exploit and rip off others.

In summary, CST presents, strictly speaking, a vision of a non-capitalist market economy, but the economy that actually exists will always be an uneasy combination of capitalist and solidary practices.  But this gives every reason for Christian people to remain committed to the latter.  Doesn’t it?

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End of 5.3.2

Go to 5.3.3 ‘Structures of sin’ in business life

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