The Tablet - 13/03/2010

Catholic ethics in public life

Benedict's third way

By Daniel Finn
Published on The Tablet 13 march 2010

the_tabletWhen the bishops of England and Wales issued their pre-election statement, 'Choosing the Common Good', last week, they cited the Pope's encyclical Caritas in Veritate as highly relevant to efforts to rethink economic life after the recent financial crisis. But what lies behind it?

Pope Benedict XVI's encyclical, Caritas in Veritate received kudos from nearly all quarters when it appeared last summer. However, little has been said about the economics in the document, and in particular about what strains or schools of economic thought the Pope was relying upon. This issue becomes more important when we recognise that Benedict's view of economic life marks a significant evolution in papal thought.

We know that earlier popes learned from economists: Leo XI11 from the German Jesuit Heinrich Pesch, and Pius XI from another German Jesuit, Oswald von Nell-Breuning. And, of course, Pope John Paul II  initiated a far more public consultation when he invited the advice (and the attendance at lunch in his personal quarters) of a score of internationally famous economists – many not Catholic – prior to writing Centesimus Annus. Thus we might wonder about any possible influence on Pope Benedict’s thinking by the lay Stefano Zamagni, who stood alongside two cardinals and a bishop at the conference formally releasing Caritas in Veritate  to the world.

The history of the drafting of an encyclical typically remains a closely held secret until after the death of the Pope, but there is sufficient textual evidence within  Caritas in Veritate   to argue that Pope Benedict has been persuaded by what we might call the Bologna School of economics, whose leading figure is Zamagni. One need only look to an important  but underappreciated book by him and Luigino Bruni, Civil Economy: efficiency, equity, public happiness (Peter Lang Publishing, 2007)

Bruni and  Zamagni aim to reintroduce  a moral perspective into the market and into economic analysis of it, resisting both those who would rely on “free” markets to solve nearly all social problems and those who view nearly all market relationships as threatening communal life.

While endorsing markets, they see capitalist market s as the problem. Instead, they recommend “civil markets” and propose re-establishing (suitably updated) characteristics of the “civil economy” that flourished in fifteenth-and sixteenth century Italian civic humanism, which itself arose out of earlier Benedictine and Franciscan traditions.
For his part, Benedict in Caritas in Veritate  notes that "the market does not exist in the pure state. It is  shaped  by the cultural configuration that define it and give it direction”. He goes on to argue that “economic life undoubtedly requires contracts” but it also needs “forms of redistribution” and fraternal reciprocity”.
The parallels in Civil Economy are clear. The book’s starting point is that every economic system requires three “regulating principles”, even though today most economists attend to only the first two. The first is the exchange of equivalents, for which the contract is the paradigm: I agree to transfer this to you and you agree to transfer that  to me. The second principle is redistribution, a process that aims at fairness in society, particularly for the poor, without which political support for the economic system would vanish. The third principle is reciprocity. Reciprocity is similar to exchange, in that when I help you out, you feel an obligation  to help me in return. But at the same time, it is similar to the pure gift relationship, in that you don’t have to return the flavour. Or you may reciprocate by helping someone else.
Common examples include holding the door open for a stranger whose arms are full or contributing to a good friend’s favourite charitable cause. Such an action may simply be the right thing to do; but we experience an informal social obligation as well, once we  our selves have benefited from such actions by others. A similar thing occurs in economic life when an employee or employer does something for the other not required by contract, and the other  feels some obligation to reciprocate.

to be continued ...

Benedict's third way

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