22. Economy and moral

Some believe that the Church is only concerned about moral issues relating to sex or to the origin and end of life. They think that the rest does not matter. And, in that rest, is nothing less than the whole of the elapse of the life of the human being. To say this is to ignore the reality, because the church has a complete and very elaborate “social doctrine”, in which she gives answers to moral problems affecting the economy and work.

In the Old Testament, riches are a blessing from God. Abundance is not seen as a problem in itself, but that there is a strong condemnation of the misuse of material goods, fraud, usury, injustice, especially when it is the poor who suffer these abuses.

The other side of the coin, poverty, is seen as a part of the human condition. In this context, the Old Testament invites individuals to recognize their poverty before God. He, in turn, is portrayed as responding to the cries of the poor, who will receive their reward through a new David. “Poverty acquires the status of moral value when it becomes an attitude of humble availability and openness to God, of trust in Him” (No. 324).

In the New Testament, Jesus calls for the conversion of hearts and for us to be attentive to the needs of others. Working for justice and helping the poor is a way to build the Kingdom of God.

In general, the Bible considers economic activity as part of the vocation which invites humanity to manage the gifts received from God. The parable of the talents also teaches that “what has been received be utilized properly, it should be preserved and enhanced.” (No. 326).

Material goods, even when they are legitimately owned by someone, retain their universal destination. “The riches fulfill its role of service to man when they are intended to produce benefits for others and for the society.” (No. 329).

This nexus between morality and economic life is a constant in the doctrine of the Church. “As well as in the area of morality one must take into account the reasons and requirements of the economy, also in the area of the economy one must be open to the demands of morality” (No. 331).

The compendium suggests that morality and economic principles have some points in common. For example, to produce goods efficiently can be seen as a moral duty, in the sense that not doing so would be a waste of resources. But the production of wealth also needs moral guidance, in order to ensure that the economic wealth is distributed in an equitable manner and is guided by principles such as justice and charity.

The economic activity carried out in this way becomes an opportunity to practice solidarity and build a more equitable society and a more humane world. The Church also considers that terms such as development cannot simply be seen in an economic dimension, as the accumulation of goods. An exclusive focus on the material aspect runs the risk of falling into the error of consumerism and is not the way to achieve authentic happiness.

A section of the chapter on economics explains the position of the social doctrine of the Church with regard to the private initiative and economic activity. The freedom of individuals to engage in economic activity is “a fundamental value and an inalienable right that must be promoted and defended” (No. 336).

The initiative in the economy is part of human creative activity and businesses also have an important social role to play through the production of goods and services. Although this role needs to be carried out according to economic criteria, the compendium adds: “We should not be overlook the authentic values that cause the concrete development of the person and society” (No. 338).

In this context, the compendium recalls that the Church has always supported small and medium-sized family businesses, together with cooperative activities that can make a valuable contribution to economic and human activity. In fact, the economic activity provides the opportunity to practice many virtues, such as the diligence, prudence, fidelity and courage.

The text also has positive words for the role of achieving benefits, which are a sign that the productive factors involved in the company are being used well. However, businesses must also serve society in an appropriate manner and this is not done when you violate the obligations of social justice or the rights of workers.

The compendium also notes that in today’s world the individual States may find it difficult to govern business operations and that it puts greater responsibility on the private company to open up to the values of solidarity and authentic human development.

In the field of free market in general, the Compendium explains that “it is an institution of social importance by its capacity to ensure effective results in the production of goods and services” (No. 347). A truly competitive market, continues the text, “it is an effective instrument to achieve important goals of justice”.

However, the compendium adds that, in a free market, there must be taken into account the purposes of the common good and human development, and not only the profit motive. There are important human needs and goods that cannot be bought and sold on the market.

With regard to the role of the State in regulating the market, the compendium invokes the implementation of two principles: solidarity and subsidiarity. Solidarity is to stimulate actions to defend the poor and disadvantaged; subsidiarity is to ensure that state intervention does not become too invasive.

In multiple paragraphs, the compendium insists that the State should not interfere too much in the functioning of the economy, in a way that unduly restricts the freedoms of individuals and businesses. On the other hand, also it defends the legitimate role of taxes and public spending, which plays an important role, especially to protect the weak. Therefore, paying taxes is “part of the duty of solidarity” (No. 355), but the State has an obligation to ensure that taxes are “reasonable and fair,” and public resources are managed with “accuracy and integrity.”

The last part of the chapter considers some of the recent developments related to globalization and international financial markets. “Globalization gives rise to new hopes and at the same time raises troubling questions” (No. 362).

The compendium acknowledges that globalization has opened up many opportunities, but expresses its concern about the inequalities between advanced economies and developing countries. Quoting John Paul II, the text calls for a “globalization of solidarity” to deal with this problem.

A more equitable system of international trade, and a strong defense of human rights are among the reforms requested by the compendium. Respect the cultural and religious differences and to ensure greater solidarity between generations, are points to be treated.

With regard to the financial markets, the text recognizes its positive role in facilitating economic growth and large-scale investments. However, there is a risk that the financial sector loses sight of the service to human development and becomes an end in itself”. And dealing with the serious problems caused by financial instability, it is also necessary to make these markets more stable.

Globalization also requires increased cooperation of States to coordinate the economy, given that individual governments often are not able to exercise effective guidance. The compendium calls for the creation of “appropriate and effective political and legal instruments,” (No. 371) to ensure “the common good of the human family.”

In the concluding paragraphs, the compendium notes that achieving this will also achieve benefits for richer countries, where the abundance of material goods is often accompanied by a sense of alienation and loss of their own humanity” (No. 374). The chapter concludes by calling to educate people so they clearly understand that economic activity must be seen in a broader human context.