The market needs objective morality

Sam Gregg writes that Pope Benedict’s new encyclical, Caritas in Veritate, reminds us that we cannot make economic choices or act economically as if the demands of Christian love and truth have nothing to do with such choices and acts. The Pope reminds us that “it is good for people to realize that purchasing is always a moral — and not simply an economic — act” . . .

Dr. Sam Gregg

Amidst the fanfare surrounding the promulgation of Benedict XVI’s third encyclical Caritas in Veritate (Love in Truth) and what can only be described as the simplistic analysis offered by the mainstream media, a number of important insights have been lost — including those especially relevant for people engaged in the daily toil of creating wealth in the worlds of private enterprise, business and commerce.

The first is that this is a profoundly theological text. As with his previous encyclicals, Benedict reminds us that realities such as love, truth and hope are theological realities. The fact that they are theological realities — that is, ultimately known through our knowledge (lógos) of God (theos) — does not make them any less real than the economic world we engage every day of our lives.

All of us are tempted to regard theological imperatives as abstract concepts that have no relevance or place in the “real world.” If, however, we truly believe that the life, death and resurrection of the Person of Jesus Christ is real, then we should have no difficulty in integrating these theological truths into our daily lives.

This in turn means that we cannot make economic choices or act economically as if the demands of Christian love and truth have nothing to do with such choices and acts. The Pope observes, for example, that “it is good for people to realize that purchasing is always a moral — and not simply economic — act” (#66). That does not mean that business leaders, CEOs and entrepreneurs should act less competitively or creatively. As Caritas in Veritate affirms, there is a place for commercial logic and thinking economically. It simply means that Christians should assimilate the commandment of love of neighbor and our responsibility to live in truth into our economic lives.

How does this play out in practical terms? This means that, no matter how intense and stressful the competition, we should never, for example, treat our customers, competitors and employees as mere objects. This is a requirement of justice, but it also reflects the Christian’s recognition that these people are persons made in God’s image.

On a second level, Caritas in Veritate’s attention to love and truth has profound implications for the functioning of the market economy. Significantly Benedict does not call for a “third way” between the market economy and socialism. Nor does he present an alternative economic system to the market. Instead the market economy is more or less assumed to be the only alternative available. What matters is the degree to which the market economy is grounded in the truth — especially the moral truth — revealed to us through faith and reason.

Without internal forms of solidarity and mutual trust,” the Pope writes, “the market cannot completely fulfill its proper economic function” (#35). This surely has been amply confirmed by the recent financial crisis. America’s subprime mortgage collapse was partly attributable to the fact that thousands of people lied on their mortgage application forms. It is not surprising that mass violation of the moral prohibition against lying has devastating economic consequences. “The economic sphere,” the Pope reminds us, “is neither ethically neutral, nor inherently inhuman and opposed to society. It is part and parcel of human activity and precisely because it is human, it must be structured and governed in an ethical manner” (#36). Against all relativists, Benedict maintains that market economies must be underpinned by commitments to particular basic moral goods and a certain vision of the human person if it is to serve rather than undermine humanity’s common good: “The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centered” (#45).

At the heart of the economy are human persons. People whose minds are dominated by hedonistic cultures will make hedonistic economic choices. “Therefore,” Benedict writes, “it is not the instrument that must be called to account, but individuals” (#36). Nor does he regard the market as morally problematic in itself.

“The market is not … the place where the strong subdue the weak. Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations” (#36). What matters, Benedict says, is the moral culture in which market economies function.

In addition to these insights, Caritas in Veritate expresses plenty of prudential judgments with which faithful Catholics may legitimately take issue. I myself wonder if the encyclical fully appreciates the potentially tremendous negative impact of massive state-based redistribution of wealth. Of course Catholics may disagree among themselves (and even with the Pope) about those matters that the Church considers prudential. This includes the overwhelming majority of economic policy issues — though not on the subjects such as abortion and euthanasia as Pope Benedict affirmed in a 2004 letter to the then-archbishop of Washington, D.C.

Lastly, I would suggest one thing: Read the encyclical for yourself. It is dense and at times complex, but it also contains beautiful words of wisdom relevant to us all. We have a great Pope. Deo Gratis.

Dr. Samuel Gregg is research director at the Acton Institute. He is the author of many books, including “On Ordered Liberty” (2003) and his prize-winning “The Commercial Society” (2007).