Pope Benedict on capitalism

VATICAN CITY — This week’s CNS Vatican Letter focuses on some of Pope Benedict’s recent comments regarding the Gospel and social justice. As the world waits for the pope’s first social encyclical, it might be instructive to read what he wrote in a 1985 presentation to a Rome symposium, later published in Communio magazine. It’s been posted on the Web site of the Acton Institute.

In his 1985 text, “Market Economy and Ethics,” then-Cardinal Joseph Ratzinger takes a dim view of the argument that the free market produces distributive justice best when it’s allowed to operate solely according to the laws of the market, without interference from morality.

He frames the question this way:

Here, however, we must face the objection raised especially after the Second Vatican Council, that the autonomy of specialized realms is to be respected above all. Such an objection holds that the economy ought to play by its own rules and not according to moral considerations imposed on it from without. Following the tradition inaugurated by Adam Smith , this position holds that the market is incompatible with ethics because voluntary ‘moral’ actions contradict market rules and drive the moralizing entrepreneur out of the game. For a long time, then, business ethics rang like hollow metal because the economy was held to work on efficiency and not on morality. The market’s inner logic should free us precisely from the necessity of having to depend on the morality of its participants. The true play of market laws best guarantees progress and even distributive justice.

But the pope sees this as a form of determinism — that “man is completely controlled by the binding laws of the market while believing he acts in freedom from them” — and also rejects the supposition that the natural laws of the market are in essence good. The problems of the global economy demonstrate otherwise, he says.

He concludes that ethics must have a place in any economy:

It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse.

Interesting reading, and remember, this was 1985.

3 Responses

  1. Amen. This is almost an exact mirror to a functioning democracy. Without moral and ethical people as it’s foundation, it all goes to hell. Instead of looking at the lenders as the cause, one must look at the hearts, minds, and souls of the people behind the lenders.

  2. and at the millions of borrowers themselves who, like so many in present day society, acted irresponsibly in taking out loans they knew at the outset could only be
    repaid if everything went ‘just right’ and without a hitch.

  3. I wonder what Pope Benedict would say about a $7 Trillion bailout?

    I can’t see how this will stimulate the economy.

    John Michael

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