Economics: love of God, production and free
market
Christian
judgement on neo-liberalism - Prof.
Rodney Moss, Johannesburg
Neo-classical
or neo-liberal economics upon which much free market business practice is based
differs rather radically from Catholic social thought. Neo-liberal economics
assumes that its economic theory is value-neutral and scientific in its
analysis of concepts such as ‘production’, ‘consumption’, ‘money’, ‘wealth’,
‘capital’ and ‘scarce’ resources. Bannock, Baxter and Davis suggest that
economics may be defined as “The study of production, distribution and
consumption of wealth in human society”.[1]
Here the key ingredients in human economic activity would be individualism,
hedonism, and market competition. The human person is seen to be motivated by
self-interest and wishes to maximise pleasure and avoid pain. There is no
concern with the ‘common good’.
Ideally the
free market should, as Adam Smith suggested, work for the benefit of all
members of society. Thus if each person follows their own self-interest in
spite of not aiming to contribute to others, nevertheless, society as a whole
will benefit. Adam Smith in his Wealth of
Nations [2]
calls this outcome “the invisible hand”. In this neo-liberal model, then, the
common good is best served by the operation of the free-market system involving
minimal government interference. Economic
problems are best solved by promoting economic growth “generated by each
individual’s pursuit of self-interest in a free market regulated by the forces
of market competition.[3] Development
is seen in this model only in economic terms and is “economic centred”, not
“human centered”.[4]
In contrast,
then, what is the view of Catholic social thought on Economics? First, Catholic
Social Thought does not view economics as concerned only with facts or being value-free / neutral as do the neo-classical / neo-liberal
economists. Importantly, economic systems are seen as based on some set of
values whether that system be capitalist, socialist, Marxist or some other
economic variant. The importance of the dignity of the human person is central
to Catholic social thought and to its view of economics and the economy.
Economic choices, production, and consumption involve human beings. Economics
does not exist for its own sake: “The
purpose of economics is the service of men, their material needs and those of
their moral, spiritual and religious life. Economic activity is to be carried
out according to its own method and laws but within the limits of morality.”[5]
Economics and
economic systems and activity cannot then be neutral or value-free,
for they impact on human life and are also a product of human thought,
creativity, choices and decisions. Like any other area of knowledge economics
has its particular laws and methods and a degree of autonomy but human beings
are to have a priority and primary importance. In Catholic social thought
economics is to be seen in the context of its contribution to the service of
the human person as a whole being –
physical, spiritual, intellectual, moral and spiritual. Secondly, in Catholic
social thought, the scientific or qualitative aspects of economics are
secondary to the human element.
Therefore “(e)ven in social and economic life the
dignity of the human person and the integrity of his vocation, along with the
good of society as a whole, are to be recognised and furthered. Man is the
author, the centre and the end of all social and economic life.” [6]
In other
words, economics and economic life is to be at the service of human beings and
not vice versa: “The ultimate and basic purpose of economic
production does not
consist merely in the increase of goods produced, nor in profit nor prestige; it is directed
to the service of man, that is, in his totality, taking into account his
material needs and the requirements of his intellectual, moral, spiritual, and
religious life ...”[7]
Because the
human person is viewed as a whole being – physical, spiritual, intellectual,
moral and spiritual – he/she is not viewed as an ‘economic being’, nor as an
individualistic, purely rational being whose goal is material pleasure. Our
goal is transcendent unity with God. “The highest reason for human dignity is
man’s vocation to communion with God”.[8]
Thirdly,
Catholic social thought is not based
on the belief that individual self-interest
should be pursued and that somehow this will contribute to the good of
society. This was the assumption of Adam Smith. However, Wilber notes that “Scholarly work in
economics over the past fifteen years demonstrates that, under conditions of interdependence
and imperfect information, rational self-interest frequently leads to
socially irrational results.”[9]
We need a
‘moral culture’ to inform economic life. Fourthly, the common good is central
to Catholic social thought and can never be regarded as a mere by-product of individual self-interest. The
common good, that which transcends particular interests and which is a good in
which all can participate, is very different from a ‘mechanistic’ and
individualistic view of society
dominant in classical and neo-liberal
economic theory. Finally, economic problems are not solved by growth alone. In Centesimus Annus (1991), n. 29, we read:
“… development must not be understood solely in
economic terms, but in a way that is fully human. It is not only a question of
raising all
people to the level enjoyed by the richest countries, but rather of building up
a more decent life through united labour, of concretely enhancing every
individual’s dignity and creativity, as well as his capacity to respond to his
personal vocation, and thus to God’s call.”
[1] Bannock,
G., Baxter, R.E., and Davies, E. 2003. The
Penguin Dictionary of Economics. London: Penquin Books, p.114
[2] Originally
published in 1776, this edition, 2003, p. 527
[3] Wilber,C.K.
1991. ‘Incentivies and the Organisation of Work. Moral Hazards and Trust’ in
Coleman, J.B. One Hundred Years of Catholic Social Thought. Celebration and
Challenge. New York: Orbis
Books, p.212
[4] Henriot,
J.P. 1993. ‘ Who cares about Africa?
Development Guidelands for the Church’s Social Teaching’ in Williams, O.F. and
Houck, J.W. (eds) Catholic Social Thought
and the New World Order. Building on One Hundred Years. Notre Dame:
University of Notre Dame Press, p. 212
[5] Gaudium et Spes
n. 64
[6] Ibid. n. 63
[7] Ibid. n.64
[8] Ibid. n.19
[9] Wilber, ibid, p.214