Martinez: New Encyclical Reflects Common Sense
Pope Takes Business Ethics to
By Gabriel Martinez
NAPLES, Florida, 8 JULY 2009 (ZENIT)
As I read the latest encyclical
by Benedict XVI, a thought arose: No one understands an encyclical on
Catholic social teaching.
When prominent people in authority speak on the economy, politics, or
society, we expect to express themselves in the categories of political
parties. When they fail to toe the line, we find ways to discount or
ignore we do not like.
The key insight of the free-marketeer is that voluntary exchange must be
mutually beneficial. The key insight of the left-liberal is that fair
outcomes must be deliberately planned for.
The key double insight of Catholic social teaching, on the other hand,
is that we are created in the image of God and that we are sinners. That
is, we build an economy, politics, or culture that is human, if we
remember that we are creatures who received our being as a gift, called
by God to be like him and with him; and that our economy, our politics,
and our culture are inhuman insofar as we forget it.
This position is often refreshingly commonsensical. Instead of, say,
"idealizing technical progress, or contemplating the utopia of a return
to humanity's original natural state," the Pope naturally mistrusts what
comes from the hand of man, but also relies on the "human capacity to
exercise control over the deviations of development." Capacity implies
responsibility, but it also implies that this responsibility is often
abdicated in the name of a system, an idea, or a vice.
Or take another example. Some thinkers give the benefit of the doubt to
the forces of the market and strive to protect it from the depredations
of religion, custom or the state. Common sense and Catholic social
teaching tell us that it requires a special kind of faith to assume that
what is personally vicious can be socially virtuous.
Other thinkers instinctively trust in the capacity of social
deliberation and rational planning to achieve desirable outcomes, which
are not defined in relation to nature, blind to the obvious point that
even well-intentioned, law-abiding people can make mistakes. Good
intentions are not enough, common sense and Catholic social teaching
tell us: action unmoored from the truth is ultimately wasteful and
In one of its most lucid passages, the encyclical points out that the
exclusive pursuit of shareholder-value maximization is a risk for
businesses. Maximization of shareholder value encourages faceless
management, distance from stakeholders, and a short-term focus. But the
benefits are only temporary.
Over the long haul, business benefits from permanence and from social
ties. Skeptical of outsourcing (and doing honor to his name), Benedict
XVI insists on geographical stability: cultivating stakeholders and
making long-term profits are not substitutes, but complements.
Even more, Benedict XVI insists on the need to create a space for "the
logic of gift" (which I wish he had explained more). This idea is one
example of why encyclicals, like "Populorum Progressio" and "Caritas in
Veritate," often sound appallingly naïve.
We are taught, from first grade to business school, that grown-ups with
their feet on the ground look out for themselves
and that they ought to look out for themselves, either to protect that
fragile beauty called capitalism or because no one else looks after you
anyway. We are taught that we should not care about the other fellow,
unless it yields quantifiable results. We are fanatically brainwashed,
and so we do not understand.
Accepting an "economy of communion" requires a dramatic expansion of the
set of goods that one values, a huge increase in the virtue of patience,
a drastic acceptance of uncertainty and unknowability, and a jarring
openness to faith and hope. The human being so described is radically
different from the human being of the business school, from what one
would be taught in a Corporate Finance class. The "return on investment"
is the fruit of not seeking the return, but of seeking the Kingdom of
Heaven and its justice (and all the rest will be added unto you).
How different this is (and how hard it is to see the difference) from
the nauseating insistence to follow our heart, to do what feels right,
because there's no such thing as truth! We are told that any
non-selfishness not only sounds naïve, but that it should sound naïve
and as unmoored from common sense as possible.
While politicians give us slogans and pretty words, without reference to
the truth of the human person, the Pope sounds the warning note: "On
this subject the Church's social doctrine can make a specific
contribution, since it is based on man's creation 'in the image of God'
(Genesis 1:27), a datum which gives rise to the inviolable dignity of
the human person and the transcendent value of natural moral norms.
"When business ethics prescinds from these two pillars, it inevitably
risks losing its distinctive nature and it falls prey to forms of
exploitation; more specifically, it risks becoming subservient to
existing economic and financial systems rather than correcting their
* * *
Gabriel Martinez is chair of the Economics Department at Ave Maria
University. He earned his Ph.D. from the University of Notre Dame, and
has worked at the Inter-American Development Bank in Washington, D.C.,
and at the Ministry of Government in Ecuador.