Oeconomicae et Pecuniariae Questiones has its limitations, but it rightly insists on the moral basis of the market
In the 1987 film Wall Street, Gordon Gekko delivers the famous speech in which he proclaims that “Greed… is good.” The iconic market speculator, asset-stripper and insider-trader insists that greed “clarifies, cuts through, and captures the essence of the evolutionary spirit.” He concludes that “greed, in all its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind.”
On Thursday, two Vatican departments – the CDF and the Dicastery for Promoting Integral Human Development – released a joint document, Oeconomicae et Pecuniariae Quaestiones. It could easily be read as a direct response to Gordon Gekko.
It is always refreshing to see the Church engage with economic and political realities in a direct and unapologetic way. The Church has every right, indeed the obligation to insist on moral imperatives in finance and politics.
This document is the fruit of both Pope Francis’s particular care for the globally marginalized and the intellectual tradition of his predecessors. Its unabashed claim to speak to the basic structures of our economy and society echoes somewhat the recent rediscovery of an intellectual “integralism”: the term used by some Catholic thinkers who question the inherent moral limitations of a secular worldview.
While Quaestiones makes clear that there is no perfect economic model or methodology, it focuses on the importance of economic means and ends, and their proper priorities. The basis of the market, however abstract and globalized it may become, is fundamentally human and relational. Citing Benedict XVI’s encyclical Caritas in Veritate, the document states that the ethical foundation of the market must be people-centered.
In contrast to the economic and social Darwinism of Gordon Gekko, Quaestiones insists that the market must serve to build communion among individuals, strata of society, and nations.
Its argument, which builds upon the writings of Leo XIII and St John Paul II, is that the generation of so much of the world’s wealth from capital annuity and investment has marginalized actual human labour. This means “work itself, together with its dignity, is increasingly at risk of losing its value as a ‘good’ for the human person and becoming merely a means of exchange within asymmetrical social relations.” Those outside of the investor or asset-holding class no longer even qualify as the “underside” of the market system, but are left outside it entirely. The fundamental asymmetry of many markets, be it an asymmetry of access, knowledge, or assets, creates the conditions for usury.
“No profit is in fact legitimate,” the document says, “when it falls short of the objective of the integral promotion of the human person, the universal destination of goods, and the preferential option for the poor.” But the pursuit of profit leads inevitably to perverse incentives: for instance, the credit default swap market has created situations where the financial ruin of many can become the means of speculative profit.
Faced with what it calls the “proximate immorality” of some parts of the market, Quaestiones calls for practical solutions – for instance, ethical oversight bodies in companies and institutions. It also appears specifically to call for the re-segregation of commercial from investment banking.
The most eye-catching parts of Quaestiones, certainly the parts which will draw the strongest reactions, are those which stress governmental and international regulation. The document sees political power as a natural counterbalance to the market, one which needs to reassert itself against global market actors. Indeed a significant part of Quaestiones treats the iniquities of offshore financial arrangements. The document also restates the human cost of the oppressive debt burdens on some developing nations, and calls – as the Vatican has often done – for their relief.
Quaestiones makes some strong observations about how global markets have created a class which is excluded from the means of wealth generation. But the document’s engagement with specifics has its limitations. It specifically critiques the credit default swaps market by linking it to the subprime mortgage crisis in America, and the subsequent global financial crisis. But it doesn’t mention the political impetus which fuelled those mortgages and that market in the first place.
Quaestiones relies on political institutions to intervene in favour of the human person and the common good. But government and international bodies often advance policies towards the end of economic equity but by means – often starkly utilitarian ones – which have little to do with Catholic teaching. There should indeed be international political action to help economically burdened countries and peoples. But too often this action comes with anti-life conditions and agendas. Sometimes national and international authorities offer to trade economic justice for cultural colonisation: the caution and discernment of the Church must be applied to separating one from the other.
If this joint document marks the beginning of a more active, thoughtful and direct engagement of the Church in the great questions of global politics and economics, one which balances the potential effectiveness of governments and international bodies against the risks of their often secularist agendas, it is all the more welcome for that.