Andrew Abela, Ph.D., asks how much of our own personal profits should we be willing to sacrifice in order to avoid or reduce layoffs during an economic downturn? That question requires conscientious discernment by those involved. While it’s perfectly legitimate to make a profit, the Church teaches that it’s not acceptable to do so illegitimately . . .
Dr. Andrew Abela
In today’s culture, successful business leaders are often the object of scorn. Some elected officials want to play Robin Hood and spread their wealth around. That said, it’s worth exploring whether it’s all right to make a profit.
The Church has made it abundantly clear that making a profit is morally acceptable. In his 1991 encyclical Centesimus Annus, Pope John Paul II wrote that “the Church acknowledges the legitimate role of profit as an indication that a business is functioning well” (#35).
Further, the Catechism of the Catholic Church teaches that “profits are necessary. … They make possible the investments that ensure the future of a business, and they guarantee employment” (#2432).
However, John Paul says profit should not be seen as a business’ only goal. “The purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society” (Centesimus Annus, #35).
Still less should it be seen as the highest goal of a business, where everything else is subordinated to profitability. “A theory that makes profit the exclusive norm and ultimate end of economic activity is morally unacceptable” (CCC, #2424).
“Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it,” Pope Benedict XVI wrote in Caritas in Veritate. “Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty” (#21).
John Paul II agreed with that sentiment. “Christians charged with responsibility in the business world are challenged to combine the legitimate pursuit of profit with a deeper concern for the spread of solidarity,” he said in a message to participants of The Business Executive: Social Responsibility and Globalization conference in 2004.
But do we have a moral obligation to protect the capital that is entrusted to us as investment in our business? Clearly, the answer is yes. No one is served if the bottom line is ignored, leading to the business going bankrupt.
“Man, to whom in Genesis God entrusted the earth, has the duty to make all the earth’s goods fruitful, committing himself to use them to satisfy the multiple needs of each member of the human family,” Pope Benedict told members of the Centesimus Annus Pro Pontifice Foundation in 2008. “One of the recurring metaphors of the Gospel is, in effect, exactly that of the steward. With the heart of a faithful administrator man must, therefore, administer the resources entrusted to him by God, putting them at the disposition of all.”
It’s important to avoid a situation where “directors of business companies, forgetful of their trust, betray the rights of those whose savings they have undertaken to administer,” Pope Pius XI wrote in his 1931 encyclical Quadragesimo Anno, #132.
What should we do if we face a choice between immoral activity and allowing a significant loss to the capital that was entrusted to us? While managers have a moral responsibility to put forward their best efforts, they are never justified in doing evil in order to keep the company solvent. A central moral principle from the Catechism is that “one may never do evil so that good may result from it” (#1789).
How much of our own personal profits should we be willing to sacrifice in order to avoid or reduce layoffs during an economic downturn? That question requires conscientious discernment by those involved. In such situations, the Church counsels us to consider carefully what we truly need (with the virtue of temperance in mind), understand honestly what is due in justice to the employees at risk, and determine what course of action would be most consistent with the principle of solidarity.
“No one, certainly, is obliged to assist others out of what is required for his own necessary use or for that of his family, or even to give to others what he himself needs to maintain his station in life becomingly and decently,” Pope Leo XIII wrote in his 1891 encyclical Rerum Novarum. “But when the demands of necessity and propriety have been sufficiently met, it is a duty to give to the poor out of that which remains” (#36).
The Catechism confirms this sentiment in paragraph 2407: “In economic matters, respect for human dignity requires the practice of the virtue of temperance, to moderate our attachment to the goods of this world; of the virtue of justice, to preserve our neighbor’s rights and to render what is his or her due; and of solidarity, following the Golden Rule and in keeping with the generosity of the Lord, who ‘though he was rich, yet for your sake … became poor, so that by his poverty you might become rich’ (2 Cor. 8:9).”
A charter member of Legatus’ Northern Virginia Chapter, Andrew V. Abela, Ph.D., is chair of the Business and Economics department at the Catholic University of America and an associate professor of marketing.