5.4.1 Critical assessment of CST on business and economics

Back to 5.3.4

Unit 5 Contents

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We have already considered one main critique of CST’s vision of a ‘solidary market economy’, namely that it is just unrealistic.  Screens 5.3.2 and 5.3.3 presented three responses to that objection.

This screen takes that further by outlining the shape of critical discussion of CST on economic life, most contributors to which are Catholics. As Caritas in Veritate has generated a large secondary literature, it will make sense then to focus on this, in particular the innovatory teaching about ‘gift’ we have just studied.

Looking first at the broad picture, I pointed out that the objection of unrealism could come from either the right or the left – i.e. from neoliberalism or from advocates of collective ownership of property.  I noted that it might also be made by those who favour ‘social capitalism’, the ‘third way’ advocated in the 1990s by Blair and Clinton (discussed in 5.1.6 and 5.3.1).  In expounding CST on economic life in this unit, I have sought to enable you to see the way in which it represents a position that is different from all three of those.

I return to this because some secondary literature about CST on economics consists of comment by people, mainly Catholics, who identify with either right or left and who offer critique of CST in light of what is, in effect, prior commitment to a stance different from it.  This is a really important point to appreciate.

Sometimes such contributors might not really grasp the way in which it represents a distinctive position, and might be predisposed to object to it because in certain respects it resembles a position they know they reject.  This problem really arises from the enduring tendency to reduce discussion of economics to binary terms, as though there are only two possible stances, laissez-faire capitalism and state socialism.  I referred to this reductive tendency in twentieth century debate on screen 5.1.4.

For example, someone on the left who identifies with socialism might misinterpret CST’s favouring of markets and business enterprise as showing it to be indistinguishable from capitalism.  Some Catholics broadly on the left, including some who are strongly supportive of Liberation Theology, have tended to read CST along such lines.  This kind of analysis was more widespread before the significant challenge to socialism that the 1989-91 revolutions in eastern and central Europe represented, yet one can find instances of it since then.

To give a flavour, here is one.  Michael Hornsby-Smith has written a substantial and very informative book entitled, An Introduction to Catholic Social Thought.1. He is straightforward in saying that he identifies more with a liberationist approach than with that of the tradition of ‘official’ CST since Rerum Novarum (p. 109).  Yet what the book doesn’t communicate is the way in which the latter represents a position that is deeply different from both liberal capitalism and state socialism (and from social capitalism too), an alternative that doesn’t fit on a spectrum between those two.  Hornsby-Smith tends to characterize the debate in the binary way I have criticized and to regard CST as too close to capitalism. (See pp. 204-205, 281, inter alia.)

However, this phenomenon of selective critique of CST in terms of whether it corresponds to a different position held on other grounds has, during the past 25 years, become increasingly common among voices on the economic right.  In particular, throughout this period there have been a few very prominent writers making the case for, in effect, a Catholic version of neoliberalism, however bizarre this might seem (in light of your reading of the primary texts of CST).  Three such contributors stand out: Michael Novak and George Weigel in the USA, and Philip Booth in the UK, who is based at a neoliberal think-tank, the Institute of Economic Affairs.2. ((In US discussion, the position of Novak and Weigel is usually referred to as ‘neoconservative’ rather than ‘neoliberal’.  However, in so far as their neoconservatism is a matter of a position on economics and business, it is fundamentally the same as what is widely called neoliberalism in the US as well as elsewhere.  As this module does not include study of ‘conservatism’, I don’t discuss this further.))

In a moment you are asked to read an article that discusses Novak.  But we note first a pretty plain example of that way of thinking in a sharply critical review by Weigel of Caritas in Veritate.  The encyclical’s discussion of ‘gift’ and ‘gratuitousness’ represents one respect in which its teaching is clearly inconsistent with neoliberalism, because a basic tenet of this is a purely instrumental view of market transactions.  In part of Weigel’s review focusing on this topic, he says:

The encyclical includes a lengthy discussion of “gift”… which… might be an interesting attempt to apply to economic activity certain facets of John Paul II’s Christian personalism and the teaching of Vatican II…  But the language in these sections… is so clotted and muddled as to suggest the possibility that what may be intended as a new conceptual starting point for Catholic social doctrine is, in fact, a confused sentimentality of precisely the sort the encyclical deplores…

Central in Weigel’s critique is a claim that the text of Caritas in Veritate is a “hybrid” of two distinct sources, one which fits with his own convictions (“the pope’s own insightful thinking”, as it happens!) and one which doesn’t (a “gauchiste” approach characteristic of the Pontifical Council for Justice and Peace, the Vatican body that produced the Compendium). “The net result is… an encyclical that resembles a duck-billed platypus.”

As you can see, his style here is somewhat polemical.  One has to say that he doesn’t like it because Pope Benedict presents a position he disagrees with.  If you have time, read the full review by Weigel.

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Optional reading (3pp)

George Weigel, Caritas in Veritate in Gold and Red’, National Review Online, 7 July 2009

Note

The review extends to two online pages – don’t miss the second.

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A British writer, Edward Hadas, has taken both Weigel and Philip Booth to task for their one-sided readings of CST on economics.  Hadas is a columnist on the Financial Times and won the British ‘Business Journalist of the Year’ award in 2009.  Although his critiques of such writers are also expressed polemically, they have force partly because he is in no sense a traditional left-winger.  The next reading is Hadas’s short review of Caritas in Veritate in which he critiques Weigel’s response.

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Reading (3pp)

Edward Hadas, ‘Caritas in Veritate’, at Hadas’s website

First published in Faith, March-April 2010, with the title, ‘Church Social Teaching: An Inconvenient Truth’.

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You might wish to read also a short review by Hadas of a book edited by Philip Booth, Catholic Social Teaching and the Market Economy, published by the Institute of Economic Affairs.

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Optional reading (2pp)

E. Hadas, Review of P. Booth, ed., Catholic Social Teaching and the Market Economy, at Hadas’s website

First published in Faith, June 2008.

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This screen has begun to convey what we find in critical discussion among Catholic writers of CST on business and the economy.  Moving from the big picture to a particular focus, we turn to an excellent article by a prominent Catholic theologian, Nicholas Healy. This fits with what we’ve been looking at because it discusses Caritas in Veritate on ‘gift’, and considers various objections to this, including one made by Novak.  Healy sees the issue of ‘gift’ as central in what makes CST distinct from the discipline of economics in its conventional form, as inspired by Adam Smith and embraced by neoliberals.

But this article has a further real benefit as we come towards the end of the unit.  It introduces two very significant contemporary writers who, unlike Hornsby-Smith on one side and Novak, Weigel and Booth on the other, avoid the trap of failing to appreciate CST’s distinctiveness and trying, as it were, to drag it towards a different position.

They are two Italian economists, Luigino Bruni and Stefano Zamagni.  Both have been advisors to John Paul II and Benedict XVI on economic issues.  Indeed it is widely recognized that what Caritas in Veritate says about the proper place of ‘gift’ in economic life draws on their work.  Bruni and Zamagni insist that there can be a form of market economy that serves the common good and which, for this reason, is best not called ‘capitalist’.  Indeed Zamagni refers to “the intellectual confusion engendered by the mistaken identification of market economy solely with capitalism”.3

I proposed (5.3.1) that a good label for what CST favours is ‘solidary market economy’.  Bruni and Zamagni use ‘civil market economy’.  These are simply alternative labels for the same thing.  They use ‘civil’ because this word, which is derived from the Latin for ‘city’, civitas, is inherently to do with the common good.  Historically, the archetypical political community was the city (not the nation), so ‘the common good’ meant the good of the city.  They see a ‘civil market economy’ (or a ‘civil economy’ for short) as one in which business activity serves the end of the common good, not maximum financial return to capital.

You can be a good Christian by being a good merchant… What ensures the absence of conflict between faith and economic agency is the orientation of economic action to the common good.4

You might like to look at the following YouTube video.  It is a short report of the publication of Caritas in Veritate in 2009 and includes a couple of brief clips of Zamagni commenting on this.

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Optional video (2½ mins)

YouTube, Rome Reports, ‘Pope publishes third encyclical, “Caritas in veritate”’

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Healy’s article is from an academic journal, so is more demanding than the review by Hadas you read just now.  But it is not long and is written with exemplary clarity.

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Reading (12pp)

Nicholas J. Healy, Caritas in Veritate and Economic Theory’, Communio 37 (Winter 2010), pp. 580-591; the link accesses a pdf.

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Reflection

Healy quotes Bruni and Zamagni as advocating,

the concept of free-gift and communion inside the market and thus… a ‘multi-dimensional’ market: not only a place of efficiency, but also a place in which to practice the culture of reciprocity, the culture of love, and fraternity (p. 583).

In light, not only of this article, but of study of this unit as whole, do you think you have a good sense of what this means for business life?

On the next screen, the final one before reviewing what you have studied in this unit, you are asked to look at some websites of companies and other initiatives that should enable you to see more clearly what that means in practice.

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End of 5.4.1

Go to 5.4.2 Action: making the ‘universal destination’ particular

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  1. Michael Hornsby-Smith, An Introduction to Catholic Social Thought (Cambridge University Press, 2006). Some of the text is accessible at Google Books. 

  2. In Apr. 2014 Booth was Editorial and Programme Director at the Institute of Economic Affairs and also Professor of Insurance and Risk Management at Cass Business School; see http://www.iea.org.uk/biographies/philip-booth, accessed 9 Apr. 2014 

  3. S. Zamagni, ‘Catholic Social Thought, Civil Economy, and the Spirit of Capitalism’, in The True Wealth of Nations: Catholic Social Thought and Economic Life, ed. D. Finn (Oxford University Press, 2010), 79.  This article gives an outline of the perspective presented fully in L. Bruni and S. Zamagni, Civil Economy: Efficiency, Equity, Public Happiness (Peter Lang, 2007). In extensive historical work, they argue that a ‘civil market economy’ actually existed in the late medieval period, prior to the rise of capitalism. 

  4. Zamagni, ‘Catholic Social Thought’, 73 

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