The Vatican and Economy: Part 3 of 3

Things have picked up for me a bit, so I am going to just comment on a couple of things more from the document and make room in my time for other posts.

The first two posts are found here (part 1) and here (part 2).

The following is one of my favourite passages of the document

In his social encyclical, Benedict XVI precisely identified the roots of a crisis that is not only economic and financial but above all moral in nature. In fact, as the Pontiff notes, to function correctly the economy needs ethics; and not just of any kind but one that is people-centred. He goes on to denounce the role played by utilitarianism and individualism and the responsibilities of those who have adopted and promoted them as the parameters for the optimal behaviour of all economic and political agents who operate and interact in the social context. But Benedict XVI also identifies and denounces a new ideology, that of “technocracy”.

The issue is, in fact, not an economic one.  The economic judgments of the magisterium are not magisterial, economics does not fall under the realm of faith and morals in so far as it is pure economics.  However, it is impossible to separate economics from culture.  The inseparability of economics and culture points to a certain sacramentality of life: what is made visible points to and is a sign of an invisible, hidden reality.  How is the cultural-economic situation sacramental?  The external manifestations of a culture – of which economics is but one means of that expression – is a sign of the inner life of the culture, of its moral rectitude and framework.  Thus when an economic crisis happens, it points to a cultural crisis, which is ultimately a moral and human crisis.  The situation that is happening in the West with the economic crisis is not the result of bad economic policies – though it is that! – but rather, it is the result of a culture that has lost its roots in what it means to be human: humanity and God are no longer the ends of the cultural and economic life.  Thus utilitarianism and individualism poke their ugly heads.  Utilitarianism, for those who don’t know, is the philosophical idea that anything can be used, including people, in so far as the end being brought about is greater than the pain suffered.  This also leads naturally to individualism, where “I AM” is no longer adored, but simply “I”.

And the reference to Caritas in Veritate is important, because it demonstrates that an economic system must be personalistic: man, others, the neighbour, must be the ends of economic action.  It is not me who is the end, but others.  Capitalism is not contrary to that principle at all, and can be a beautiful expression of charity in the world if individuals, in the concreteness of their economic action, allow “the other”, “the neighbour” to be the goal of their economic activity and not themselves.  Capitalism does allow for greed to become rampant if left unchecked, but that is not the fault of the system itself.  Communism, too, leads to greed, though of a different order (and, besides, communism is not a purely economic system, it an anthropology: a theory of the human person which separates man from God).  And it is here that I think I will end my reflections on the document, though there is much more that could be said.  If we wish to see an economic renewal in our culture, we must first and foremost have a moral renewal.  We must make love the basis of our lives, and others the basis of our actions.  Until we do so, things will continue to fall down the long path of moral, economic, human, and cultural decay.  Benedict’s point about a technocracy is also worthy of comment.  For that, though, I point you to a book by Neil Postman called “Technopoly”, it is well worth the read:

http://www.amazon.ca/Technopoly-Surrender-Technology-Neil-Postman/dp/0679745408/ref=sr_1_1?ie=UTF8&qid=1319749267&sr=8-1

 

I also will point you to a few articles I found helpful.  I must admit that calling the Pontifical Council for Justice and Peace to be a “rather small bureau in the vast Vatican bureaucracy” to be, well, childish and unfair.  Size does not matter.  That being said, the document really holds very little magisterial authority.  Furthermore, it came from that office, and not from the Pope’s office, nor was it attempting to side with Occupy Wall Street in any way whatsoever.  Unfortunately, many news outlets jumped on it rather quickly.

The first link I will post is by John Allen Jr and he offers an interesting observation about how this document is the result of a bishop from the Southern Hemisphere and reflects greatly the suspicion of the south to capitalism.  The document, though, in the end, has some interesting things to say, but we are allowed to object to certain elements of it and still be Catholics in good standing because they are economic judgments, not moral.  I find the document to be quite good when it comes to the oral element, but quite ill-informed when it comes to the economic elements.  The economic crisis is not simply a problem of laissez-faire economics, though that is part of the issue.  The issue is governments borrowing more than they can spend, of people spending more than they have, and banks playing roulette with the money they are paid to hold in trust.

Here are the links:

http://ncronline.org/news/vatican/vatican-note-economy-first-ripple-southern-wave

http://www.catholicvote.org/discuss/index.php?p=21986

http://www.sunnewsnetwork.ca/video/1239383767001#.TqgBUqgsAbs.facebook

in Christ

-Harrison

The Vatican and Economy: Part 2

This is a continuation of my original post found here.

We continue:

But the inequalities within and between various countries have also grown significantly. While some of the more industrialized and developed countries and economic zones – the ones that are most industrialized and developed – have seen their income grow considerably, other countries have in fact been excluded from the overall improvement of the economy and their situation has even worsened.

This is a moral statement, one which has considerable weight to it too.  In essence: people are starving while others grow to have more.  It is not wrong, though, for other countries to prosper.  The moral issue here is that they are not taking a moral and humanitarian interest in the development of those less fortunate than we are.  The document is not stating that the inequality is created by certain economic systems, but leaves to imply the idea that the inequality is the result of a lack of true charity (in the Christian sense of the term) for others who are less fortunate.  We have become morally individualistic and hedonistic: care for neighbour has been lost and many in other countries are suffering as a consequence of that.

Here is something I myself struggle with as a statement:

Nonetheless, it should be reiterated that the process of globalisation with its positive aspects is at the root of the world economy’s great development in the twentieth century. It is worth recalling that between 1900 and 2000 the world population increased almost fourfold and the wealth produced worldwide grew much more rapidly, resulting in a significant rise of average per capita income. At the same time, however, the distribution of wealth did not become fairer but in many cases worsened.

The words “distribution of wealth” always give me the willies.  This is because magisterial documents (this is not a magisterial document, by the way) tend to look at economics in a different way.  Centessimus Annus, perhaps one of the greatest social encyclicals to come out of any pontificate, promotes a different sense of wealth.  It argues that there is no “economic pie” in which, let’s say,one percent has the majority of the wealth while the other 99% are suckered and have only a very small share of the pie.  The Church sees economics, rather, in an infinite manner.  She tends to look to wealth creation as something with limitless possibility. The classic example is silicon.  Prior to the digital revolution, it was virtually worthless.  But someone saw that it had value and created things in order for it to have value.  There is no pie, wealth is there always to be created.

Now, I must say that distribution of wealth could have a different sense, in that those who have wealth are not meeting their moral obligation to help those with less with what has been given them.  If that is the sense (though, I must admit, I tend to doubt it), then I would not cringe so much at the statement.  Besides, economic systems do not fall within the purview of magisterial authority, only the moral application of them.

Let’s do one more for this post.  Asking what is at the core of the current economic crisis, the Pontifical Council states the following:

First and foremost, an economic liberalism that spurns rules and controls. Economic liberalism is a theoretical system of thought, a form of “economic apriorism” that purports to derive laws for how markets function from theory, these being laws of capitalistic development, while exaggerating certain aspects of markets. An economic system of thought that sets down a priori the laws of market functioning and economic development, without measuring them against reality, runs the risk of becoming an instrument subordinated to the interests of the countries that effectively enjoy a position of economic and financial advantage.

This statement frustrates me, to be honest, and I am trying to see what I can accept of this.  I have yet to know of any economic liberalism that spurns rules and controls.  If anything, I would say most economies are saturated by rules and controls.  They are important, and unless one leans towards liberatarianism, I have yet to encounter even a classical liberal who spurns rules and controls.  I can agree that the crisis is the result of not analyzing markets and economies against the backdrop of reality.  The issue, though, is that it is thanks to rules, controls, and people on both sides of the political divide being controlled, bought, and manipulated by banks, companies, etc.  They did not look to reality, they gave in, simply, to their greed.  That is not the fault of capitalism, that is the result of moral bankruptcy which looks to the self instead of others when making economic decisions.

More on this later.

in Christ

-Harison

The Document on Economic Reform from the Vatican: What it is and isn’t

There has been much press about what the Pontifical Council’s for Justice and Peace document’s “Reform of the international financial system with a view toward a general public Authority” has to say.  People on the left are touting it as a moral success for their political views: the Vatican, for once, is leftist.  The right is mixed.  Some downplay its authority, some are reservedly approving of it, some dismiss it completely.

What frustrates me is how the Americans have, again, become rather polarized about the document.  Instead of having the intellectual humility to listen to what it says, they simply either immediately approve or disapprove because it does or does not jive with their own political bend.

So I thought it would be important to offer a brief reflection on the document, ending with a small commentary about the media’s response to it and the moral authority it holds for Catholics.  I also encourage people to read the document, which can be found here.

Here is the first bit of text I found helpful:

Since the 1990s, we have seen that money and credit instruments worldwide have grown more rapidly than revenue, even adjusting for current prices.

This is not an economic statement, but a moral one.  It is a statement about the moral bankruptcy of creating more credit than there is money.  It allows for a culture that becomes crazed with debt without having the means to pay it back.  Obviously, credit is important, it is what people need to buy a house, a car, and some other necessities of life.  So it is not a moral statement about credit itself, but rather about the excess of credit.  We have seen the negative effects of this in the recent recession that has been plaguing the West.  We, as a culture, have become morally bankrupt, and our economic bankruptcy is but a sign of a deeper moral issue.  The following comment a bit further down re-iterates what I just stated:

The speculative bubble in real estate and the recent financial crisis have the very same origin in the excessive amount of money and the plethora of financial instruments globally.

The document continues a bit further on:

A liberalist approach, unsympathetic towards public intervention in the markets, chose to allow an important international financial institution to fall into bankruptcy, on the assumption that this would contain the crisis and its effects. Unfortunately, this spawned a widespread lack of confidence and a sudden change in attitudes. Various public interventions of enormous scope (more than 20% of gross national product) were urgently requested in order to stem the negative effects that could have overwhelmed the entire international financial system.

The above is not a moral statement, it is an economic judgment.  I must admit, it is rather vague at that.  First, the document uses the term “liberal” in the classical sense, which is more akin to the North American term “conservative”.  Many commentators have decried statements like this, stating it lacks proper economic principles and is an unfair judgment on a situation that is more complex than simple non-interventionism.  I would agree with these critics.  While summation is important, making sweeping negative judgments is unfair to the situation itself, which is far more complex.  This is a moral statement, to an extent.  But it is based on bad facts.  It decriest the unwillingness to help – read moral statement.  But the basis for the moral statement is an economic situation that did not exist.  Interventionism did happen, and it created worse problems. People are confused by the above statement, myself included.

I have realized that this post is going to be much longer than I expected. I will make this, then, into a series of posts.  Please continue to read and please comment so as to engage and debate this important topic.

in Christ

-Harrison