Tag Archives: Andrew Abela

The moral foundations of economic prosperity

DR. ANDREW ABELA explores Catholic teaching on private property, solidarity, subsidiarity, and consumerism. In each case we’d find empirical evidence that living according to Church teaching leads to greater prosperity. A Chinese scholar tried to explain the reason for the West’s prosperity and found that the Christian faith was the key reason  . . .

Andrew Abela

Andrew Abela

At the new School of Business & Economics at The Catholic University of America, our approach is to integrate morality into all our teaching and research. Why? Because Christian morality is vital for sustained economic prosperity.

Harvard economist Niall Ferguson quotes a scholar from the Chinese Academy of Arts and Sciences who tried to explain the sustained preeminence of the West, our power relative to the rest of the world. The first conclusion was that our preeminence arose from our having better weapons. Finally they concluded that it was our economic system. “But in the past 20 years, we have realized that the heart of your culture is your religion: Christianity,” Fergusson quotes the Chinese scholar. “That is why the West has been so powerful. The Christian moral foundation of social and cultural life was what made possible the emergence of capitalism, and then the successful transition to democratic politics.”

How can we verify his conclusion? Here are three moral principles drawn from Catholic doctrine, along with empirical evidence of the economic consequences when these principles are violated.

Sanctity of human life. The Catechism of the Catholic Church teaches that “human life must be respected and protected absolutely from the moment of conception” (#2270) and that both abortion and contraception are grave evils. While the conventional wisdom is that lower population leads to economic development, there is strong evidence to the contrary.

Dr. Maria Sophia Aguirre, an economist at The Catholic University of America, recently published a study on Guatemala using 50 years of economic data. She found that the fertility rate was positively correlated with economic growth. In other words: the more children, the more prosperity.

John Mueller at the Ethics and Public Policy Center has made an empirical case that if abortion had not been made legal, we wouldn’t be facing a social security crisis. The contributions from the 50 million children aborted since 1973 would have been more than enough to maintain the solvency of our social security system.

Marriage. The principle here is of the indissolubility of marriage and, more broadly, that it’s best for children to be brought up by a mother and father who are and stay married to each other. The empirical research on the positive economic implications of the family is overwhelming. Dr. Pat Fagan at the Family Research Council has collected extensive research that shows families create stronger human capital. Poverty in intact, never-divorced families is around 12%. For single parent families, it’s 58%.

Religion. The principle here is “you shall love the Lord your God with all your heart, with all your soul, and with all your mind” (Mt 22:37). People who are religious tend to be more moral. A 2010 paper in the Journal of Business Ethics concluded that “enough evidence exists to state that individuals who have stronger religious beliefs, whether business practitioners or consumers, tend to have stronger ethical norms and judgments than those with weaker religious beliefs.”

We can therefore expect that religious people cause fewer ethical problems. But it goes deeper than that. Fagan has also gathered extensive research on religion. He found all kinds of good things associated with religious practice, particularly church attendance: The more frequently children attend church, the higher their grades are, the less likely they are to get drunk, do drugs, or run away from home. All these things have important implications for the development of human capital, and therefore for economic outcomes.

The common sense aspect of this is clear: Without a sense of a higher calling, it’s difficult for the average person to rise above human weakness and become a strong contributor to society. It’s not impossible, but it’s difficult. In a 2011 New York Times column, David Brooks makes the point very well: “That’s because people are not gods. No matter how special some individuals may think they are, they don’t have the ability to understand the world on their own, establish rules of good conduct on their own, impose the highest standards of conduct on their own, or avoid the temptations of laziness on their own.”

Space prohibits going on, but we could also look at Catholic teaching about private property, solidarity, subsidiarity, and consumerism. In each case we’d find empirical evidence that living according to this teaching leads to greater prosperity.

DR. ANDREW V. ABELA is the dean of the School of Business & Economics at The Catholic University of America and co-editor of “A Catechism for Business.”

A new catechism for business

Legate Andrew Abela creates a valuable resource for Catholic business leaders . . .

Amid the daily demands of running a company, few Catholic business leaders have time to plumb the depths of the Church’s social teaching when they are facing challenging ethical questions in their work.

Andrew Abela, a member of Legatus’ Northern Virginia Chapter and dean of the School of Business and Economics at the Catholic University of America, knows that well.

A former brand manager at Procter & Gamble, he spent seven years researching what the Church has to say about the challenges faced by people in business. His findings and those of co-editor Joseph Capizzi are consolidated in a new book, A Catechism for Business: Tough Ethical Questions and Insights from Catholic Teaching.

From concept to reality

Joseph Capizzi (left) and Andrew Abela pose with their new book

Joseph Capizzi (left) and Andrew Abela pose with their new book

Abela and Capizzi developed responses to such questions as: Do people have the right to strike? Is it moral to extend benefits to an employee’s same-sex partner? The duo came to their conclusions through an extensive search of Church documents that, while available online, are not necessarily easy to find.

For example, a question on the moral acceptability of using sexual imagery or innuendo in advertising cites two papal encyclicals, two papal messages from World Communications Day, plus the Catechism of the Catholic Church. Other sources quoted in A Catechism for Business include documents from the Second Vatican Council and various Vatican organizations.

Abela had already begun his research when Philadelphia Legate Jim Longon suggested he put it into a book. After listening to a presentation of Abela’s case studies, Longon told him, “What you’re doing is creating a catechism for business.”

Abela proposed the concept to Catholic University of America Press and engaged Capizzi, director of moral theology in the university’s School of Theology and Religious Studies, to work with him on the project.

After the book was completed, Longon, who has followed and supported the project from its inception, said the book “is something that belongs on every CEO’s credenza and night stand.”

Positive response

Since its March 26 launch at the Catholic Information Center in Washington, the book has garnered positive reviews, and attention in radio interviews and from the National Review Online and The Washington Post. Both venues mentioned the book in the context of Hobby Lobby’s challenge to the HHS mandate, soon to be decided by the U.S. Supreme Court.

Capizzi said the response has been overwhelming and that he has been surprised at the level of need the book has tapped into. Lay people in particular — and not just those in business — have warmed to it, he said, adding that even some non-Catholics have expressed an interest.

“They had no idea the Church does this kind of stuff,” he said.

Among the 114 questions the book addresses are whether the Church recommends a specific economic model, whether it’s morally acceptable to offer employees health care benefits that cover abortion or birth control, and whether it’s moral to contribute to the consumer culture.

Questions are grouped into general concerns and those applying specifically to finance and investing, management, marketing and sales, manufacturing, international business and morally sensitive industries.

Abela and Capizzi present their answers using quotations from magisterial teaching with minimal editorial comment.

“With a lot of books on social doctrine, you get the feeling the author is twisting the teaching to present whatever the view is,” Abela explained. “We wanted to be very clear we were not doing that. We wanted to present all that the Church teaches and only what the Church teaches on each of the questions in the book.”

Among the questions that most intrigued Capizzi were those dealing with wages. “The just wage is one that American readers love sinking their teeth into,” he said. “It’s obviously provocative, and it engages the kind of concerns people have from across the political spectrum about the nature of justice itself.”

In the introduction to A Catechism for Business, Abela and Capizzi recommend that readers use the book by finding the question closest to the moral dilemma they’re facing, and then to read, pray and meditate on the quotations provided. If necessary, they suggest reading further in the documents cited and then applying them.

Valuable resource

John Hunt, Legatus’ executive director, said the book encourages business executives to make decisions in the context of their Catholic faith rather than on feelings or the general tone of the culture.

“It gives the interested and inquiring business person answers to questions, but it also provides a reassurance, a kind of support mechanism, for knowing that what I’m doing and trying to do is right, ethical and moral,” he said.

Hunt said he considers the book valuable for all executives, aspiring executives and business students — whether they are Catholics, faithful Christians or people of good will trying to be just in the marketplace.

Abela said he and Capizzi also hope to see the book used in study groups, possibly with the help of a study guide that may be developed in the future. Although it’s not written as an academic text, the co-editors would also like the book to be employed in educational settings, including Catholic University’s business and economics school.

Catholic University’s approach to teaching business seems to be resonating with students, faculty and supporters.

Abela said the school, which was upgraded from a department last year, is growing dramatically and currently has 560 students and 32 faculty and staff. Applications are up by 40% for the fall term, when four new faculty members will be added. And the school has raised more than $3 million in its first year.

According to CUA’s website, the school seeks to teach ethics by integrating morality, virtue and service into every aspect of its classes and research. This is in step with A Catechism for Business, which says: “Being a good Catholic business person means being a good person and being good at business. The two are not opposed.”

JUDY ROBERTS is Legatus magazine’s staff writer.

Excerpt from A Catechism for Business

Saint John Paul II

Saint John Paul II

Is it morally acceptable to be involved in the production or marketing of toys, video games or movies that have violent or sexual content?

Popes Benedict XVI and John Paul II both condemn exaltation of violence and trivialization of sexuality in any form:

“Any trend to produce programs and products — including animated films and video games — which in the name of entertainment exalt violence and portray anti-social behavior or the trivialization of human sexuality is a perversion, all the more repulsive when these programs are directed at children and adolescents. How could one explain this ‘entertainment’ to the countless innocent young people who actually suffer violence, exploitation and abuse?” (Benedict XVI, Message for World Communications Day 2007, #3).

“Do not corrupt society, and in particular youth, by the approving and insistent depiction of evil, of violence, of moral abjection, carrying out a work of ideological manipulation, sowing discord!” (John Paul II, Message for World Communications Day 1984, #4).

“Nor can we fail, in the name of the respect due to the human person, to condemn the widespread hedonistic and commercial culture which encourages the systematic exploitation of sexuality” (Letter of Pope John Paul II to Women, #5).

##

 

A Catechism for Business

The long awaited Catholic business resource from Catholic University of America . . .

AbelaA Catechism for Business
Andrew Abela and Joseph Capizzi
CUA Press, 2014
152 pages, $24.95 paperback

There are many resources for Catholic business leaders, but perhaps none as valuable as this new book from Capizzi and Abela, dean of the Catholic University of America’s School of Business & Economics and member of Legatus’ N. Virginia Chapter.

Subtitled Tough Ethical Questions and Insights from Catholic Teaching, the book presents Church teachings as they relate to 100+ specific and challenging moral questions asked by business leaders. Questions and answers are grouped under topics such as marketing, investment and finance. It’s a quick reference for tough questions and serves as a basis for deeper study.

Order: Amazon

Liberty and solidarity

DR. ANDREW ABELA writes that poverty can only be conquered through businesses leaders working to provide opportunities for the impoverished. Not only is this a Catholic position, but it’s the only way that will work.  We are called to practice solidarity — the love of others — in everything we do, and particularly in running our companies . . .

Andrew Abela

Andrew Abela

The market economy is falling out of favor. Politicians who favor statist solutions to all social problems appear to be only too happy to seize upon the dissatisfaction of the poor and the middle class and promote class conflict.

We can make theoretical arguments about how the market economy lifts societies out of poverty, and we can cite the ample historical evidence that this has happened time and again, but if large numbers of citizens hold the perception that here and now their incomes continue to stagnate while owners prosper, then the market economy is truly in jeopardy.

The Church’s social teaching holds the solution. We are called to practice solidarity — the love of others — in everything we do, and particularly in running our companies. Solidarity is “first and foremost a sense of responsibility on the part of everyone with regard to everyone, and it cannot therefore be merely delegated to the State” (Benedict XVI, Caritas in Veritate, 38). This is something we must do ourselves.

Benedict warned that “when both the logic of the market and the logic of the State come to an agreement that each will continue to exercise a monopoly over its respective area of influence, in the long term much is lost: solidarity in relations between citizens, participation and adherence…” (Caritas in Veritate, 39).

Benedict is denouncing the conventional view that it’s the job of business to make money and the job of government to tax that money and redistribute it. He says this view weakens solidarity, responsibility and charity. What he’s saying, in effect, is that we should not rely on the government to solve the problem of poverty. If government is perceived to be the solution to poverty, the poor are going to want more government! Instead, we as business leaders should be leading the charge to solve the problem of poverty — and we should do this by drawing more people into the “circle of exchange” (Centesimus Annus, 34), the market economy.

Free markets and Christian love — liberty and solidarity — can and should work together within commercial activity. An individualistic perspective denies this. It sees them as opposing one another. Solidarity, to the extent that it obliges me to “lose myself” in the service of others, seems to put a limit on my economic freedom. By contrast, the Church teaches that the more we serve others, the more free we become.

Pope Benedict affirmed this: “Without internal forms of solidarity and mutual trust, the market cannot completely fulfill its proper economic function. The principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within normal economic activity” (Caritas in Veritate, 35-36). We need solidarity for the market to work well.

Look, we already know this. We know that when business runs well, it runs on trust — even on generosity. Whenever we give a break to an unproven new hire, whenever we extend extra credit to a struggling customer because we believe they will make it, we are practicing solidarity. Don’t believe those who argue that what we’re doing is just “enlightened self-interest.” Yes, doing the right thing will most often lead to good results for the firm, but that’s not only why we do it. We do it because that’s how we love God and our neighbor in our daily work.

This is the only way forward. Pope Francis, in his first encyclical, wrote: “Modernity sought to build a universal brotherhood based on equality, yet we gradually came to realize that this brotherhood, lacking a reference to a common Father as its ultimate foundation, cannot endure. We need to return to the true basis of brotherhood” (Lumen Fidei, 54). Pope Francis affirms it: Christian brotherhood can only succeed under the Father — not under Big Brother.

This will only work if we’re determined to fight poverty through our businesses. How do we do this? Could we find ways to employ people who are considered unemployable? For example, could our employees, on a volunteer basis, run seminars on how to interview for a job? Could we come up with creative ways to serve customers in underserved areas? Could we extend opportunities to employees, customers, and community members to invest in our businesses, so that they can experience for themselves the rewards of being “capitalists”? The more we do this, the less demand there will be for government aid to poverty. And less demand for government, period.

Interested in hearing more? Attend the conference on Liberty and Solidarity at the Catholic University of America, Sept. 24-26, 2014.

ANDREW V. ABELA, PH.D. is the dean of the newly created School of Business & Economics at The Catholic University of America, and a charter member of Legatus’ Northern Virginia Chapter.

Business leaders are going John Galt

ANDREW ABELA writes that in today’s difficult and over-regulated economy, many business leaders are dropping out of the marketplace–to the detriment of the entire economy. He suggests that business leaders engage rather than retreat by helping young and upcoming entrepreneurs learn to navigate today’s challenging business climate . . .

Andrew Abela

Andrew Abela

There’s a growing, disturbing phenomenon among business leaders and entrepreneurs. Perhaps you’ve noticed it among some of your acquaintances; perhaps you’ve even been tempted by it yourself.

The phenomenon is called “going John Galt,” named after a leading character in Ayn Rand’s novel Atlas Shrugged. Fed up with the socialistic world he’s living in, Galt decides to leave and encourages numerous other entrepreneurs to follow him. As a result, the economy more or less grinds to a halt.

At Legatus chapter meetings across the country where I’ve been speaking — and with individual and groups of Catholic entrepreneurs and business leaders who visit us at the Catholic University of America — I’m meeting more and more people who are basically just walking away. Whether because they have had enough of fighting the EPA over every aspect of their business or they are concerned about going to jail because they didn’t comply with the umpteenth new regulation this week, they believe that the fun and sense of accomplishment in building a business is being sucked away by big government.

Blogger David McElroy posted a real life example of this from a hearing on environmental issues in Birmingham, Ala. At one point, a man stepped up to the microphone:

“My name’s Ronnie Bryant, and I’m a mine operator. I’ve been issued a [state] permit in the recent past for [waste water] discharge, and after standing in this room today listening to the comments being made by the people…. [pause] Nearly every day without fail — I have a different perspective — men stream to these [mining] operations looking for work in Walker County. They can’t pay their mortgage. They can’t pay their car note. They can’t feed their families.

“And as I stand here today, I just … you know … what’s the use? I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home…. If there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.”

The implications of business leaders “going John Galt” are obvious and dire: declining competitiveness, decaying economic dynamism, and lack of employment growth. Pope John Paul II, in Sollicitudo Rei Socialis, wrote that “experience shows us that the denial of this right [of economic initiative], or its limitation in the name of an alleged ‘equality’ of everyone in society, diminishes, or in practice absolutely destroys the spirit of initiative” (#15).

Pope Benedict XVI affirmed in Deus Caritas Est that “the State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person — every person — needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces” (#28).

Earlier this year, CUA created its own School of Business and Economics. One of the major motivators in creating the School is the urgent need to re-propose to society that business is a moral endeavor, that business leaders serve society by their very actions of creating products and services, wealth and employment.

How can you help? By doing whatever you can to educate others on the value and values of ownership. Do you have a successful business model? If so, have you considered franchising as a way to grow your business without additional capital investment on your part — and as a way to help others become business owners? Do you have an Employee Stock Ownership Program (ESOP) so that your employees can become owners too? Have you considered “spinning out” parts of your business by selling ownership stakes to the management teams that run them?

The greater the proportion of citizens who are owners and investors, the less ability others have to vilify the business economy. The more people who understand how a culture of ownership brings political and economic stability, the less temptation there will be to attack business, and hopefully the less of a tendency to “go John Galt.”

ANDREW V. ABELA, Ph.D. is the dean of the newly created School of Business & Economics at The Catholic University of America, and a charter member of Legatus’ Northern Virginia Chapter.

Reinventing business education

Catholic University of America launches new School of Business and Economics . . .

Whenever financial scandals make the news, business schools typically respond by adding more ethics courses to the curriculum.

But a new School of Business and Economics at the Catholic University of America is taking a different approach to instilling ethics into future business leaders by seeking to integrate morality, virtue and service into every aspect of its teaching and research.

Rethinking ethics

Dr. Andrew Abela

Dr. Andrew Abela

“It’s more than adding courses or chapters in textbooks,” said Andrew Abela, who was named dean of the school on Jan. 18, “but making sure that when you learn finance, you learn how to do finance well. That means being both effective and ethical.”

A member of Legatus’ Northern Virginia Chapter, Abela said the challenge in creating such a program is that business disciplines traditionally have been designed to be ethically neutral. Added Catholic University President John Garvey: “It’s a popular and common way of thinking about business problems that we can separate our deliberations about business issues from our moral deliberations, that business education will give you the tools to be successful at finance, marketing, accounting, whatever, and you employ that in service to whatever your ideals happen to be.”

Nonetheless, he continued, business is inextricably intertwined with moral questions. For example, he said, the current debt crisis is tied to our duties to the aged and future generations, and the last financial crisis dealt with disclosure, honesty and self-restraint.

“To think back to old-fashioned terms,” Garvey explained, “if you list the capital sins we were taught to recite as children in our catechism  class, the majority deal with these kinds of problems: covetousness, envy, gluttony, lust for goods as well as people. The virtues we want to teach people in the marketplace are a welcome antidote for that.”

Since the university announced on Jan. 8 that it was turning its existing business and economics department into a school, Garvey  said he has been struck by how new and surprising people find the idea of incorporating ethics and morality into a business program.

John Garvey

John Garvey

“I wish that there were more examples of this kind of full integration of ethical and moral thought in business and professional schools, but it’s relatively unusual,” Garvey said.

Neil Watson, a student in the school’s Master of Science in Business Analysis program, said he was drawn to Catholic University precisely because of the way the business school integrates faith, virtues, morals and ethics into every course.

“It wasn’t going to be a one-time course where I signed a paper saying, ‘I promise to be an ethical business person.’” Instead, he said, in every class, he is learning not just finance and accounting, for example, but how to do them for the purpose of doing good.

“It’s one thing to be a good business person and another to be a good business person doing good,” he explained.

Business and economics

Watson said the new business school’s approach is especially important for his generation, which has seen business portrayed as separate from a person’s spiritual life.

“We’ve seen the results and harm that are done to society if you try to practice business that way,” he explained. “We grew up with Enron and the financial crisis with AIG because it became all about money. My generation in particular is hungering for that integration.”

Although Abela believes there is a demand for business programs like Catholic University’s, he said most students searching for a business school might not be looking specifically for a virtues-based approach. However, when they learn about it, they say that is what they want.

Catholic University’s school also differs from other business programs around the country in that it combines business and economics, two disciplines Abela said are closely related. “We realize that the project of reinventing the theory of business so that it can have morality integrated into it also needs a reinvention of economics.”

As plans to expand the former department into a school became known over the last few years, CUA’s School of Business and Economics has attracted new students and faculty members.

Undergraduate enrollment has gone from 300 three years ago to 421 — in addition to 36 graduate students. Although no enrollment target has been set, Abela said applications for the next academic year are already up significantly.

Over the last five years, the full-time faculty has doubled in size to 14, with another 50 teaching part-time. The school plans to hire three more faculty members for the next academic year.

Andreas Widmer

Andreas Widmer

Among recent additions to the faculty are Andreas Widmer, a CEO and former member of the Vatican Swiss Guard who is serving as director of entrepreneurship programs; Dr. Frederic Sautet, a noted French economist who will be a visiting professor of entrepreneurship; and Dr. Ava Cas, a development economist who is assistant professor of economics.

Besides undergraduate degrees in accounting, economics, finance, international business, international economics and finance, management, and marketing, the new school offers graduate degrees in accounting, business analysis, and integral economic development management.

The one-year business analysis program is designed mainly for liberal arts students without a business background and employs an advisory board whose members provide one-on-one mentorships  to students. The integral economic development program is for students who want to work in a nongovernmental organization and is based on the understanding that economic development cannot occur unless the core institutions of society are strong.

Legatus connections

Abela said an MBA program is a possibility for the future, but with the current glut of MBAs in the U.S., there is a declining demand. “We will eventually do one,” he said, “but when we do, it will be something distinctive.”

In its quest to instill Catholic values in the business leaders of the future, the school has also employed Legates as speakers and mentors. The advisory board of the master’s program in business analysis is made up of many Legates from the Northern Virginia and Seattle chapters. Other members have visited the school as guest speakers.

“We always welcome more,” Abela said. “Our students love meeting successful Catholic business people. We want to show them examples of good, upstanding moral leaders who are also successful.”

Asked whether ethical business people are more likely to succeed, Abela was unequivocal.

“In the long term — and most Legates know this — if you treat people with respect, you will have a more sustainable and successful business over the long term. There’s no guarantee that by being moral, you will be successful. There are all sorts of temptations, but if you are trustworthy, chances are you will be more successful.”

JUDY ROBERTS is Legatus magazine’s staff writer.

Capitalism, socialism … or something else?

Dr. Andrew Abela writes that the Catholic Church’s teaching on economics is clear on the validity of the market economy. Find out what the Church has to say about capitalism, socialism and other economic systems. Abela draws from the forthcoming Catechism for Business to explore what the Holy Fathers have written about both socialism and capitalism over the past decades.

Dr. Andrew Abela

The current lingering economic malaise has led some to question the validity of the market economy. I will draw again from the forthcoming Catechism for Business to explore what the Church has to say about capitalism and socialism.

Let’s begin in the middle: Does Catholic teaching on economics represent some sort of middle or third way between capitalism and socialism? The answer is No. “The Church’s social doctrine is not a ‘third way’ between liberal capitalism and Marxist collectivism … it constitutes a category of its own … [as] the accurate formulation of the results of a careful reflection on the complex realities of human existence … in the light of faith and of the Church’s tradition” (Blessed John Paul II, Sollicitudo Rei Socialis, #41).

Nor does the Church recommend a particular economic model as the Catholic way for economic life. “The Church has no models to present; models that are real and truly effective can only arise within the framework of different historical situations through the efforts of all those who responsibly confront concrete problems in all their social, economic, political and cultural aspects as these interact with one another” (John Paul II, Centesimus Annus, #43).

Does socialism, then, conform with Gospel teaching? Again, the answer is No. “The illusion that a policy of mere redistribution of existing wealth can definitively resolve the problem must be set aside. In a modern economy, the value of assets is utterly dependent on the capacity to generate revenue in the present and the future. Wealth creation therefore becomes an inescapable duty, which must be kept in mind if the fight against material poverty is to be effective in the long term,” Pope Benedict XVI said in his Jan. 1, 2009, message for the World Day of Peace.

This, in part, is because “solidarity is first and foremost a sense of responsibility on the part of everyone with regard to everyone, and it cannot therefore be merely delegated to the state” (Benedict XVI, Caritas in Veritate, #38). Also, by “intervening directly and depriving society of its responsibility, the social assistance state leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending” (Centesimus Annus, #48).

And thus, “religious socialism [and] Christian socialism are contradictory terms; no one can be at the same time a good Catholic and a true socialist” (Pope Pius XI, Quadragesimo Anno, #120).

What about capitalism, then? Does it conform to Gospel teaching? The answer here, given by John Paul II in 1991 in the wake of the collapse of the Soviet Union, is carefully and beautifully nuanced. He wrote:

“If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy,’ ‘market economy’ or simply ‘free economy.’

“But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative (Centesimus Annus, 42).

Thus a market economy conforms to Gospel values if it is set within a system of laws that ensure that it serves all of human freedom, not just economic freedom. This is because “economic freedom is only one element of human freedom. When it becomes autonomous, when man is seen more as a producer or consumer of goods than as a subject who produces and consumes in order to live, then economic freedom loses its necessary relationship to the human person and ends up by alienating and oppressing him” (Centesimus Annus, #39).

In a previous column I mentioned the new Master of Science in Business Analysis (MSBA) program at the Catholic University of America, a one-year graduate program designed to teach liberal arts students the language and tools of business (msba.cua.edu). As part of that program, I teach a course called The Spirit of Enterprise in which we read the major papal documents cited above in their entirety to give students a sound moral perspective on the economy. And employers seem to agree. I’m happy to report that all graduates who were in the job market coming out of our first year are gainfully employed — and at an average salary more than 50% higher than what they would have made a year before, prior to the program!

A charter member of Legatus’ Northern Virginia Chapter, Andrew V. Abela, Ph.D., is chairman of the Business and Economics department at the Catholic University of America.

Does it make sense to teach business ethics?

Dr. Andrew Abela argues that there’s no such thing as an amoral, ethically neutral finance theory or management theory. Good business leaders know that a true theory of business is in fact ethical at the core. A successful, long-lasting business is one that cares about its people — its customers, employees and the communities it operates in . . .

Dr. Andrew Abela

I’ve had a nagging suspicion for some time now that teaching business ethics in a university is not delivering on what’s expected of it. The big question is this: Does teaching business ethics make business more ethical?

At the Catholic University of America (CUA), just like at every other university with a business program, we teach the obligatory business ethics course; the accrediting agencies insist on it, after all. But I think there’s a problem with this approach. Some time ago, two of my students were in their business strategy class with one of my colleagues, a professor of management. During this class, they delivered a presentation about Wal-Mart’s strategic challenges.

At the end of the presentation, my colleague challenged them with the following: “I happen to know that you’ve been discussing ethical issues about Wal-Mart in Dr. Abela’s class. Why didn’t you bring up those issues in your presentation today?”

Without missing a beat, the students’ response was: “Well, that was an ethics class; this is a strategy class.”

There you have it. A separate business ethics course teaches students that ethics is separable from the rest of business — that you can “do” ethics separately from doing finance, marketing or HR. It teaches them what my former professor — Ed Freeman of the University of Virginia’s Darden Business School — calls the “separation thesis,” the (false) idea that business issues and ethics issues can be clearly separated.

This thesis is false because there’s no such thing as an amoral, ethically neutral finance theory or management theory. They can masquerade as such, but every theory of business contains within it some fundamental assumptions about what the theory is for, what counts as a good outcome, and what role human beings play in that theory. And depending on the content of those assumptions, the theory will be moral or immoral, but never amoral — never free of morality. So it’s false to think that we can teach business as a purely technical subject and then add ethics to make it moral. The “ethicality” of business is already determined from the core assumptions of the business theory we teach.

Thus we often face the problem that in our business ethics course, we teach students to respect human dignity, but then in marketing they’re taught to sell as much stuff as possible regardless of the good of the consumer; in finance, to maximize profits above all else; in economics, that human beings are nothing more than utility maximizers who find their happiness by consuming more and more stuff. Not explicitly, perhaps. But implicitly, that’s the message they get from these courses.

If, after you graduate, real life presents any tension between the lessons you learned in your business ethics course and the lessons from your finance (or marketing or management) course, guess which is more likely to win? “I’ve got to do my job,” graduates think, “and my job is finance, therefore I do what my finance class taught me.”

The difficulty here is that when business runs this way, according to supposedly amoral theory, we invariably end up with the greed-induced global malaise we’re facing now. Why? Because “amoral” business leads to immoral business: Without a strong notion of the good built into our concept of business, without a strong ethical foundation within the theory, business theory cannot provide sufficient protection from temptation.

The irony is that good business leaders know what many professors don’t: that a true theory of business is in fact ethical at the core. Most Legates I’ve spoken with know that a successful, long-lasting business is one that cares about its people — its customers, employees and the communities it operates in.

So how do we educate future business leaders? Instead of teaching business ethics as a separate course, let’s build it into each and every business course, and show that it belongs right inside business theory itself. (That, by the way, is the purpose of the upcoming Catechism for Business — not to serve as a business ethics textbook).

This is what we are trying to do at CUA with our new Master of Science in Business Analysis (MSBA) program, launching this fall. It’s a one-year business program designed for liberal arts students who want to pursue a business career. It takes the critical thinking and communication skills they’ve developed and adds the language and tools of business.

The program is guided by an advisory board of Catholic business leaders (including several Legates) who will also serve as mentors to students. Each course — be it in marketing, finance or management — is solidly founded on the Catholic social teaching principles of solidarity, subsidiarity and human dignity. And there is no course in business ethics. It does have a unique course called The Spirit of Enterprise, which gives a historical view of the contributions of business to society through the ages, but the topic of ethics itself is infused into each course.

We’ve started to accept applications to this program, so if you know any liberal arts college seniors with an interest in business, send them our way because it’s time to start educating the next generation of Legatus members!

A member of Legatus’ Northern Virginia Chapter, Dr. Andrew V. Abela is chair of the Business and Economics department at the Catholic University of America and an associate professor of marketing. He blogs at CatholicBusinessEthics.org

Legatus member receives Acton prize

Andrew Abela wins Novak Award, calls for greater moral engagement in market place . . .

Dr. Andrew Abela

Dr. Andrew Abela

WASHINGTON, D.C. — Professor Andrew V. Abela of Catholic University of America gave the 9th annual Calihan Lecture on Oct. 8 at CUA’s Pryzbyla Student Center. Abela spoke on “Consumerism, Subsidiarity and the Market.” The Calihan Lecture is delivered by the recipient of the Novak Award, a $10,000 prize.

Andrew Abela, a charter member of Legatus’ Arlington Chapter and Legatus Magazine contributor, is an associate professor of marketing and chair of the Department of Business and Economics at the Catholic University of America in Washington. His main areas of interest include consumerism, marketing ethics, Catholic social teaching and internal marketing communication.

A frequent guest on television and radio programs, Abela has recently addressed such issues as the moral underpinnings of capitalism, the current financial crisis and ethics in advertising.  Abela is also widely published in academic and professional journals including The Journal of Marketing, The Journal of the Academy of Marketing Science and The Journal of Markets & Morality.

The Novak Award is named after the theologian and social philosopher, Michael Novak.  The award acknowledges and rewards those who, relatively early in their academic careers, have made significant contributions to the study of the relationship between religion and economic liberty, and who are deemed likely to make further important contributions. Recipients of the Novak Award make a formal presentation on such issues at an annual public forum known as the Calihan Lecture. The Novak award forms part of a range of scholarships and awards available from the Acton Institute.

The Acton Institute is a nonprofit, ecumenical think tank located in Grand Rapids, Mich. The Institute works internationally to “promote a free and virtuous society characterized by individual liberty and sustained by religious principles.”

Source: Acton Institute news release.

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