CST 3: ECONOMIC LIFE
BIBLICAL ASPECTS
Man, poverty and riches
"In the Old Testament a twofold attitude towards economic goods and riches is found. On one hand, an attitude of appreciation sees the availability of material goods as necessary for life. Abundance — not wealth or luxury — is sometimes seen as a blessing from God. On the other hand, economic goods and riches are not in themselves condemned so much as their misuse." (CSDC 323)
Wealth exists to be shared
"Goods, even when legitimately owned, always have a universal destination; any type of improper accumulation is immoral, because it openly contradicts the universal destination assigned to all goods by the Creator.” (CSDC 328)
Mercy is more important than social justice. “The Fathers of the Church insist more on the need for the conversion and transformation of the consciences of believers than on the need to change the social and political structures of their day. (CSDC 328)
“They call on those who work in the economic sphere and who possess goods to consider themselves administrators of the goods that God has entrusted to them. " (CSDC 328) "Riches fulfil their function of service to man when they are destined to produce benefits for others and for society.[685]” (CSDC 329)
This next quote expresses that since the universal destination of goods entails the poor having their share, that to then give them their share is not charity, but ‘paying a debt’ you already have to them.
“He who retains riches only for himself is not innocent; giving to those in need means paying a debt.[690]" (CSDC 329)
PRIVATE INITIATIVE AND BUSINESS INITIATIVE
The Catholic Church is pro-entrepreneur.
"The Church's social doctrine considers the freedom of the person in economic matters a fundamental value and an inalienable right to be promoted and defended. “Everyone has the right to economic initiative; everyone should make legitimate use of his talents to contribute to the abundance that will benefit all, and to harvest the just fruits of his labour”.[702] " (CSDC 336)
Business and its goals
"Businesses should be characterized by their capacity to serve the common good of society through the production of useful goods and services. Besides this typically economic function, businesses also perform a social function, creating opportunities for meeting, cooperating and the enhancement of the abilities of the people involved. In a business undertaking, therefore, the economic dimension is the condition for attaining not only economic goals, but also social and moral goals, which are all pursued together. A business' objective must be met in economic terms and according to economic criteria, but the authentic values that bring about the concrete development of the person and society must not be neglected. In this personalistic and community vision, “a business cannot be considered only as a ‘society of capital goods'; it is also a ‘society of persons' in which people participate in different ways and with specific responsibilities, whether they supply the necessary capital for the company's activities or take part in such activities through their labour”.[707]" (CSDC 338)
Profit is the first business indicator of success but must be in harmony with pursing working conditions. "The social doctrine of the Church recognizes the proper role of profit as the first indicator that a business is functioning well. But this does not cloud her awareness of the fact that a business may show a profit while not properly serving society.[710] …It is essential that within a business the legitimate pursuit of profit should be in harmony with the irrenounceable protection of the dignity of the people who work at different levels in the same company." (CSDC 340)
Role of business owners and management
"… These workers constitute “the firm's most valuable asset” [720] and the decisive factor of production.[721] " (CSDC 344) "The Church's social doctrine insists on the need for business owners and management to strive to structure work in such a way so as to promote the family, especially mothers, in the fulfilment of their duties…" (CSDC 345)
ECONOMIC INSTITUTIONS AT THE SERVICE OF MAN
Role of the free market
Free market positives
"The free market is an institution of social importance because of its capacity to guarantee effective results in the production of goods and services. A truly competitive market is an effective instrument for attaining important objectives of justice: moderating the excessive profits of individual businesses, responding to consumers' demands, bringing about a more efficient use and conservation of resources, rewarding entrepreneurship and innovation, making information available so that it is really possible to compare and purchase products in an atmosphere of healthy competition." (CSDC 347)
Social usefulness is more important than profit.
"The free market cannot be judged apart from the ends that it seeks to accomplish and from the values that it transmits on a societal level. Indeed, the market cannot find in itself the principles for its legitimization; it belongs to the consciences of individuals and to public responsibility to establish a just relationship between means and ends.[728] The individual profit of an economic enterprise, although legitimate, must never become the sole objective. Together with this objective there is another, equally fundamental but of a higher order: social usefulness, which must be brought about not in contrast to but in keeping with the logic of the market. When the free market carries out the important functions mentioned above it becomes a service to the common good and to integral human development.” (CSDC 348)
This next sentence indicates the current world financial dilemma. Since the means (profit) is more important than the ends (social usefulness), the financial markets are inhuman and we are now entering into ‘uncontrollable repercussions’ due to world financial insecurity.
“The inversion of the relationship between means and ends, however, can make it degenerate into an inhuman and alienating institution, with uncontrollable repercussions." (CSDC 348)
The solution to these problems is to bring ethics back to the markets and better control them.
"The Church's social doctrine, while recognizing the market as an irreplaceable instrument for regulating the inner workings of the economic system, points out the need for it to be firmly rooted in its ethical objectives, which ensure and at the same time suitably circumscribe the space within which it can operate autonomously.[729] " (CSDC 349)
Action of the State
"The action of the State and of other public authorities must be consistent with the principle of subsidiarity and create situations favourable to the free exercise of economic activity. It must also be inspired by the principle of solidarity and establish limits for the autonomy of the parties in order to defend those who are weaker.[733] Solidarity without subsidiarity, in fact, can easily degenerate into a “Welfare State”, while subsidiarity without solidarity runs the risk of encouraging forms of self-centred localism. In order to respect both of these fundamental principles, the State's intervention in the economic environment must be neither invasive nor absent, but commensurate with society's real needs. “The State has a duty to sustain business activities by creating conditions which will ensure job opportunities, by stimulating those activities where they are lacking or by supporting them in moments of crisis. The State has the further right to intervene when particular monopolies create delays or obstacles to development. In addition to the tasks of harmonizing and guiding development, in exceptional circumstances the State can also exercise a substitute function”.[734] " (CSDC 351)
"It is necessary for the market and the State to act in concert, one with the other, and to complement each other mutually. " (CSDC 353) "Tax revenues and public spending take on crucial economic importance for every civil and political community. The goal to be sought is public financing that is itself capable of becoming an instrument of development and solidarity. … Public spending is directed to the common good when certain fundamental principles are observed: the payment of taxes [739] as part of the duty of solidarity; a reasonable and fair application of taxes;[740] precision and integrity in administering and distributing public resources.[741] In the redistribution of resources, public spending must observe the principles of solidarity, equality and making use of talents. It must also pay greater attention to families, designating an adequate amount of resources for this purpose.[742]" (CSDC 355)
Private non-profit organisations are encouraged.
"The social-economic system must be marked by the twofold presence of public and private activity, including private non-profit activity. In this way sundry decision-making and activity-planning centres come to take shape. " (CSDC 356) "Private non-profit organizations have their own specific role to play in the economic sphere. These organizations are marked by the fearless attempt to unite efficiency in production with solidarity. " (CSDC 357)
Savings and consumer goods
The following paragraph suggests a new form of charity where rather than giving money to the poor, you should make consumer choices based on the company’s care of workers and the environment. In the past, consumers have been able to shape company policy through product boycotts, such as the Nestle boycott due to their supplanting African women’s breastfeeding with their milk powder products. There is great scope and opportunity to start up grass roots movements to bring changes in these areas.
"Purchasing power must be used in the context of the moral demands of justice and solidarity, and in that of precise social responsibilities. One must never forget “the duty of charity ..., that is, the duty to give from one's ‘abundance', and sometimes even out of one's needs, in order to provide what is essential for the life of a poor person”.[745] This responsibility gives to consumers the possibility, thanks to the wider circulation of information, of directing the behaviour of producers, through preferences — individual and collective — given to the products of certain companies rather than to those of others, taking into account not only the price and quality of what is being purchased but also the presence of correct working conditions in the company as well as the level of protection of the natural environment in which it operates." (CSDC 359)
New lifestyles are needed to respond to the problems of the world. The Catholic Church encourages these lifestyles.
"The phenomenon of consumerism maintains a persistent orientation towards “having” rather than “being”. This confuses the “criteria for correctly distinguishing new and higher forms of satisfying human needs from artificial new needs which hinder the formation of a mature personality”.[746] To counteract this phenomenon it is necessary to create “life- styles in which the quest for truth, beauty, goodness and communion with others for the sake of common growth are the factors which determine consumer choices, savings and investments”.[747] It is undeniable that ways of life are significantly influenced by different social contexts, for this reason the cultural challenge that consumerism poses today must be met with greater resolve, above all in consideration of future generations, who risk having to live in a natural environment that has been pillaged by an excessive and disordered consumerism.[748]" (CSDC 360)
THE “NEW THINGS” IN THE ECONOMIC SECTOR
Globalization: opportunities and risks
"The growing economic wealth made possible by [Globalisation] processes is accompanied by an increase in relative poverty." (CSDC 362) The “Magisterium to point out the importance of ethical criteria that should form the basis of international economic relations: the pursuit of the common good and the universal destination of goods; equity in trade relationships; and attention to the rights and needs of the poor in policies concerning trade and international cooperation. Otherwise, “the poor nations remain ever poor while the rich ones become still richer”.[754]" (CSDC 364)
Human rights need to be defended.
"An adequate solidarity in the era of globalization requires that human rights be defended. …Likewise, we are witnessing the emergence of an alarming gap between a series of new ‘rights' being promoted in advanced societies – the result of new prosperity and new technologies – and other more basic human rights still not being met, especially in situations of underdevelopment. I am thinking here for example about the right to food and drinkable water, to housing and security, to self-determination and independence – which are still far from being guaranteed and realized”.[755] " (CSDC 365)
Globalization must not be a new version of colonialism.
“Globalization must not be a new version of colonialism. It must respect the diversity of cultures which, within the universal harmony of peoples, are life's interpretive keys. In particular, it must not deprive the poor of what remains most precious to them, including their religious beliefs and practices, since genuine religious convictions are the clearest manifestation of human freedom”.[757]" (CSDC 366)
You must think of the future generations.
"In the era of globalization solidarity between generations must be forcefully emphasized: … Solidarity between generations requires that global planning take place according to the principle of the universal destination of goods, which makes it morally illicit and economically counterproductive to burden future generations with the costs involved: morally illicit because it would mean avoiding one's own responsibilities; economically counterproductive because correcting failures is more expensive than preventing them." (CSDC 367)
A new regulatory framework is needed for the international financial system.
"A financial economy that is an end unto itself is destined to contradict its goals, since it is no longer in touch with its roots and has lost sight of its constitutive purpose. In other words, it has abandoned its original and essential role of serving the real economy and, ultimately, of contributing to the development of people and the human community. … The sudden acceleration of these processes, such as the enormous increase in the value of the administrative portfolios of financial institutions and the rapid proliferation of new and sophisticated financial instruments, makes it more urgent than ever to find institutional solutions capable of effectively fostering the stability of the system without reducing its potential and efficiency. It is therefore indispensable to introduce a normative and regulatory framework that will protect the stability of the system in all its intricate expressions, foster competition among intermediaries and ensure the greatest transparency to the benefit of investors." (CSDC 369)
Role of the international community in an era of a global economy
"The more the worldwide economic-financial system reaches high levels of organizational and functional complexity, all the more priority must be given to the task of regulating these processes, directing them towards the goal of attaining the common good of the human family." (CSDC 371)
An integral development in solidarity
"One of the fundamental tasks of those actively involved in international economic matters is to achieve for mankind an integral development in solidarity, that is to say, “it has to promote the good of every person and of the whole person”.[764] " (CSDC 373) "A more human development in solidarity will also bring benefit to the richer countries themselves. In these countries “one frequently observes a sort of existential confusion, an inability to live and to experience properly the meaning of life, even though surrounded by an abundance of material possessions." (CSDC 374)
Need for more educational and cultural formation
“Thus a great deal of educational and cultural work is urgently needed, including the education of consumers in the responsible use of their power of choice, the formation of a strong sense of responsibility among producers and among people in the mass media in particular, as well as the necessary intervention by public authorities” (CSDC 376)