A Catholic Economy for Europe

The last week of January witnessed the gathering of the World Economic Forum held annually in Davos, Switzerland. The freezing temperatures and falling snow were more than a weather report. It forecast the economic mood among the corporate giants, the powerfully political, and all vestiges of the so-called 1%.

There were professors, purveyors, and pundits who ventured to speak in positive terms of a turnaround recovery. But their seemingly collective naiveté vanished. The likes of Ben Bernanke, chairman of the Federal Reserve, Robert Zoellick, president of the World Bank, and Christine Lagarde, managing director of the International Monetary Fund, all reaffirmed their commonly shared pessimistic view that the economic recovery from the 2008 crisis will take far longer that initially thought, and further into the future, perhaps into 2015, and even beyond. For now, as Lagarde lamented, the economic reality for the eurozone and for the world is “uncertain and dangerous”.

In Davos, as well as in Brussels the following week as the 27 European Union heads of state gathered in continued discussion, the underlying question—bigger than any elephant in any room—remained: “What is the future of capitalism?”

Human dignity

It was in Los Angeles, a few weeks ago, that Octavia Spencer received the Golden Globe Award for Best Supporting Actress for her performance as a housekeeper in civil rights era Mississippi, in the social justice film, “The Help”. In her acceptance speech, she honored domestic workers both past and present, as she quoted Martin Luther King Jr., saying: “All labor that uplifts humanity has dignity and importance”.

In Rome, a few days prior, Pope Benedict reflected on the meaning of such justice. “Justice”, he said, “is not a mere human convention. When, in the name of supposed justice, the criteria of utility, profit, and material possession come to dominate, the value and dignity of human beings can be trampled underfoot”.

Social market economy

The economy and labor have been the overarching concerns of people at all levels of the socio-economic spectrum, from the 1% to the 99%.

Not choosing to remain silent in the face of society’s growing economic crisis, the Catholic bishops of the European nations entered the fray on January 12th, publishing a twenty-five page position paper on the concept of what they term a “social market economy”.

The bishops of the Commission of the Bishops’ Conferences of the European Community (COMECE), based here in Brussels, considered at length how most effectively to respond to the current economic and financial crisis affecting Europe, and by extension the rest of the world. They recommend and urge the European Union to become “a viable ‘Community of Solidarity and Responsibility’”.

Solidarity

The foundations for the phrase “social market economy” are historically based in Europe’s philosophical, religious, and specifically Christian tradition. While it is more commonly utilized in the German-speaking nations, it is also used in other countries including those on other continents. In Vietnam, for example, the phrase used is a “socially-oriented market economy”.

In a contemporary perspective, a social market economy usually is understood to mean that the free and competitive market is positioned in the context of the principle of solidarity for the purpose of advancing greater social equality, achieved through the role of the state.

The COMECE document is presented in five chapters: 1. The Cultural Foundations of the Social Market Economy; 2. Community and Voluntary Welfare Initiative in the Social Market Economy; 3. Market Economy and Competition; 4. Social Policy; and 5. Sustainable Development of the Social Market Economy.

Key to understanding the cultural underpinnings of the social market economy is “the recognition that life is an inalienable gift”. The predominant idea is that Christian theology has decisively modified the earlier philosophical notion of justice by a “belief in the fundamental equal worth of all people and the commandment to love of neighbor”.

From this the bishops argue that the concept of social justice to which this gives rise “is first and foremost geared towards the dignity which is equal for all people”.

Gift, then, refers to the free activity exercised as a function of solidarity. Such free action, together with the role of the state, is essential. The bishops explain: “Assistance rendered to others as a free form of active love and solidarity—not motivated by obligation, with no expectation of receiving anything in return immediately or directly, and which often has its origin in religious faith—must not be stifled, either through bureaucratic forms of state solidarity or through market solutions motivated by short-term considerations”.

Social and ecological dimensions

The bishops do affirm that organized in the right ethical way, a market economy “can be a place for interactions that create relationships”. Similarly, from a practical point of view, they note that markets need to be economically efficient so that governments can receive the revenue necessary to provide for social welfare needs.

Following in the line of modern Catholic social teaching, the bishops straightforwardly criticize any economic model that focuses solely on the accumulation of capital. They emphasize that such a profit oriented economic model “threatens to overshadow the social and ecological dimensions of quality of life, which often cannot be directly expressed in monetary terms, and ignores the impact of economic activity on others, especially the generations to come”.

In addressing the issue of economic and financial reform, the bishops speak positively, at least in the long term, of developing what they and others have called “a true world political authority with supranational structures and institutions…[that] should show due regard for the principles of justice and ecological responsibility”.

In short, the bishops are calling for an economic reform that embodies institutional and professional ethics, authentic morality, and genuine virtue.

No laissez-faire

The Catholic bishops of Europe are well within the prophetic vision of Catholic social teaching. They are also European, that is, they have an historic economic development recognizably distinct from that of Great Britain and North America.

It is important to recall, at least in general terms, that a free market or neo-liberal capitalism dates back to the Protestant Reformation. The rise individualism sustained through the centuries has permeated both economic activity and religious practice. Church became defined as a collection of individual persons functioning their salvation apart from other individuals. As one commentator noted: “Adam Smith, in the spirit of the Presbyterian skepticism of the Scottish Enlightenment, stated that when some individual engaged in business purely to make a profit for himself, he would, by the action of ‘an invisible hand’ [the hand of God], provide a benefit to society”.

In rebuilding Europe following World War II, politicians and economic leaders on the Continent moved away from such self-centered individualism and looked for insight and inspiration from the developing Catholic social teaching’s communitarian principle of the common good as articulated by Pope Leo XIII and Pope Pius XI.

As a result, the European Union’s foundational ideals reject the goals and objectives of the kind of laissez-faire capitalism practiced in the United Kingdom and the United States. Instead, they opted for the economic model of the social market economy.

What makes people poor

It is precisely within this exact context that the beloved Blessed Pope John Paul II spoke so aggressively against capitalism. He reflected on the Gospel of Matthew, Chapter 25, as well as the seminal encyclical of Pope Paul VI, Populorum Progressio. He recognized everything that made people poor: a lack of food, a lack of all the basic necessities of life, as well as a lack of freedom and all other human rights. He then proclaimed that it is the poor who will judge the rich. The poor, he said, “will judge those people who take these goods away from them, amassing to themselves the imperialistic monopoly of economic and political supremacy at the expense of others”.

The social market economy is one imbued with the virtues and values of Catholic tradition. It is created to be of service to the common good of all, in equality and freedom. It is achieved by a communal effort. Its goal is the common good. The goal is not exclusively profit, relying on some “invisible hand” to construct a social safety net.

Greed and neglect

Increasingly, the Occupy Wall Street movement has given voice in over 800 cities and towns worldwide to the rank and file condemnation of the 1%’s breakdown of the global banking system in 2008. Neo-liberal capitalism is also blamed for the tragic array of sovereign debt crises that has forced European nations to seek bailouts sustained by dramatic and swift austerity measures impacting the socio-economic life of their respective citizenry.

The judgment of economists and ordinary citizens, especially the poor and nearly poor, is that the whole economic crisis is the result of blatant personal and corporate greed as well as the fault of the very system itself, that is, the neo-liberal economic model still dominant in the English-speaking world.

Austerity economics with such devastating cuts in public spending cannot generate the needed economic growth, as Paul Krugman and other noted economists have repeatedly argued. Instead, it creates more debt as the good citizens of Great Britain and elsewhere are now coming to realize.

The formidable foe remains the fortified wall of resistance by Wall Street and the City of London, in a non-negotiable defense of the free-market neo-liberal system that has so negatively impacted national economies and the common good for all peoples. As one astute commentator succinctly stated: “The flow of history is on the European side; neo-liberalism cannot deliver, and the self-interested individualism that it depends upon and encourages is fast becoming a destructive social disease”.

Human life is the measure

It is not only the Catholic bishops of Europe who have included within their call for economic reform the idea of “a true world political authority with supranational structures and institutions”. In Rome, the Pontifical Council for Justice and Peace has likewise recently called for just such a global public authority.

As one of the latest positive contributions of Catholic input in laying the foundation for creating a new economic model based on the heritage of Catholic social teaching, the Pontifical Council issued a thirteen-page document titled Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority. The document received worldwide media attention and generated numerous and various responses. Of particular note was the Council’s call for the establishment of a global public authority.

That call echoes the original proposal of Pope John XXIII in his 1963 prophetic encyclical, Pacem in Terris. There he expressed the hope that someday “a true world political authority” would be created to serve the common good of all people.

Recognizing the complexity and political sensitivity of establishing such a supranational authority, the Pontifical Council recommends that a realistic structure should be created gradually. It should be inspired by the values of charity and truth, and “should be the outcome of a free and shared agreement and a reflection of the permanent and historic needs of the world common good”.

As we responsibly progress forward into a future of our making, Catholics and others in the United States might do well to once again review, reflect, and respond to the 1986 pastoral letter of the U.S. Catholic bishops, Economic Justice for All.

At the very start of that increasingly relevant and important teaching document, the bishops state: “Our faith calls us to measure this economy, not only by what it produces, but also by how it touches human life and whether it protects or undermines the dignity of the human person”. They continue with the following challenge as a call to conversion and action: “Every perspective on economic life that is human, moral, and Christian must be shaped by three questions: What does the economy do for people? What does it do to people? And, how do people participate in it?”

The Catholic time is now, to build a Catholic economy founded on equality, justice, and the common good of all.

Fr. Kenneth Weare, Ph.D. is pastor of St. Rita Church in Fairfax. He writes from Brussels during his academic sabbatical at the Catholic University of Louvain, in Leuven, Belgium where he is engaged in research, writing, and lecturing on the moral issues concerning the economy, the right to food, and climate change.