The Encyclical and a "Fraternal" Market

Interview with Stefano Zamagni

The Encyclical and a "Fraternal" Market

by Paolo Lòriga
Published in Città Nuova n.15/2009

Stefano Zamagni, professor of political economy at the University of Bologna, Italy, is a consultant of the Pontifical Council for Justice and Peace, the consulting body that follows the themes addressed by "Caritas in veritate".

Which do you consider as "Caritas in veritate´s" most innovative point?

"A first point is the invitation to overcome the separation between the economic and social spheres. In the last three centuries, modernity has left us a model of society which is based on the economic sphere, on one hand, and the social sphere on the other. The economic sphere has an iron-like logic which does not answer to other opinions, to the point that we say "business is business" – compensations occur in the social sphere. That is to say, the social sphere has to provide everything that the market economy typical of capitalism isn’t capable of producing on the plane of justice and equity. Let’s not forget that the welfare state, the social state, is son of this logic of separation. Eighth century thought, and especially 9th century thought - whether on the liberal or statist side of politics - does not alter that model.  Well, Benedict XVI´s encyclical tells us that this is an old way of thinking, because we´ve entered in the post-industrial society and therefore the social element must enter inside the economic one, not at its margin or following it. It’s a notable innovation that can allow the market to go back to being an instrument of civilization, of relationships, and of generative structures."

The encyclical assumes the principle of fraternity in the economic sphere. What are the reasons? 

"Benedict XVI gives centrality to the principle of fraternity. Here is another innovative point and one that is among the most intriguing for the effects that it can generate. The socioeconomic literature has long since put in evidence that people today yearn for happiness, but a society that can guarantee this objective must be fraternal. Solidarity – the condition that tends to render different people equals – is not enough. Fraternity, instead, allows equal people to be different. A fraternal society is also sympathetic, but the opposite is not true. Therefore, it´s a step ahead. It is important that the principle of fraternity explicitly appears in this encyclical because even the most advanced literature on economy and social questions has underestimated (beside very rare exceptions) the need for a fraternal society. And fraternity is nothing other that the translation, in economic-practical terms, of the principle of reciprocity. That´s why the encyclical continues to go back to reciprocity.

"It should be said that fraternity, as a category of thought, isn’t an absolute novelty. It´s merit of the Franciscan school of thought, already beginning in the 8th century and continuing until the French revolution, whose flag stated “liberty, equality, fraternity”. But after the French revolution, the word fraternity was cancelled and banished. Now with this encyclical, one can talk about fraternity again and consider it as a category of thought."

Is the insertion of the principle of fraternity in the encyclical due to the explosion of the financial crisis?

"No. Caritas in veritate puts in evidence the intrinsic limit of capitalism: that of identifying a goal - the maximization of profit - and making it become the goal of the entire society. That isn’t to say that profit should be condemned, but that it should be condemned when it becomes (society’s) only motive. The encyclical reaffirms that the market is a way for organizing economic activity, while it proposes to go beyond capitalism. Regarding the principle of fraternity, the encyclical cites examples of novelties: it talks about non-capitalistic businesses, like cooperatives, social businesses, the businesses of the Economy of Communion. They are true and proper businesses because they produce for the market, but their goal is not maximizing profit. Don’t we want to consider these as businesses? The logic of separation recalled earlier would tend to say that these belong to the social sphere. And instead, the encyclical says no, that they belong to the economic sphere. They are that prophetic minority that shows that it is possible to remain in the market, respecting the rules, pursuing ends for collective and social use."

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