Can Catholics Be Capitalists?

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Last week I heard about the Pope's new writing Caritas In Veritate. For those whose Latin is rusty, that translates to "Charity In Truth." Most news I read indicated that the Pope was finally taking a stand regarding the financial crisis, condemning the capitalist swine who created it. That's not exactly true.

First, let me preface what follows by saying that I am Catholic. While knowledgeable about Catholic thought, I do not claim to be a true expert. Additionally, my general view is that religion should stay out of government. But I also think it's impossible to have a government completely devoid of some religious influence.

With that said, I winced when I heard the Pope came out with a new document that addressed economics. I really wish the church would leave economics to the economists. But since they put out this statement, it deserves some attention. I should also add that I have not read the entire document. It's long. Nearly 28,000 words. I have read a great deal of it, however, and most of the specifically relevant sections.

Let me begin with my basis for the view that religion should leave governing to the politicians. It comes from one of my favorite biblical anecdotes, Matthew 22:15-22. Here, Jesus responds to the Pharisees trying to trick him by presenting a question that seemingly has no good answer. They think he'll either have to criticize paying taxes to Rome or say it's okay for Israel/God to be subservient to Rome.

Then the Pharisees went and plotted together how they might trap Him in what He said. And they sent their disciples to Him, along with the Herodians, saying, "Teacher, we know that You are truthful and teach the way of God in truth, and defer to no one; for You are not partial to any. Tell us then, what do You think? Is it lawful to give a poll-tax to Caesar, or not?"


But Jesus perceived their malice, and said, "Why are you testing Me, you hypocrites? Show Me the coin used for the poll-tax." And they brought Him a denarius. And He said to them, "Whose likeness and inscription is this?"


They said to Him, "Caesar's."


Then He said to them, "Then render to Caesar the things that are Caesar's; and to God the things that are God's."


And hearing this, they were amazed, and leaving Him, they went away.

He didn't fall for it. I think a few important lessons should be learned from this story. First, leave religion to priests and government to politicians. Second, pay your taxes, even if you don't like it, because it's only money. Third, religious leaders have more important things to worry about than economics. As a result, I think the Church needs to be very careful in telling governments what to do. And I think it agrees. From the new document:

The Church does not have technical solutions to offer and does not claim "to interfere in any way in the politics of States."

Unfortunately, the document doesn't always live up to that standard. But let's assume it means to.

Next, if Jesus were walking the earth today in the physical form, and forced to pick his favorite economic philosophy, what would it be? You might think it's socialism. After all, wouldn't he want everyone to be equal? Not exactly. Socialism forces equality. I don't think he would want the government forcing morality. Just ask Pope John Paul II who, along with Reagan and Thatcher, fought to end the collectivist societies in Eastern Europe.

In fact, I think Christ would be a libertarian. I think he would want people to make their own choices about morality and religion. Without the freedom to make choices for oneself, two problems occur. First, you never have the opportunity to choose to act in the way Christianity demands, as you are forced to do so. Second, your actions lack religious meaning, because a choice has never been thoughtfully considered. A world in which people are coerced into Christian values is not a truly Christian world. He would surely prefer one where everyone chooses to act in a Christian manner, no matter what the government thought about it. You cannot allow the opportunity to act virtuously without also allowing the opportunity to act sinfully.

The Church agrees. From the document:

(Pope) Paul VI had a keen sense of the importance of economic structures and institutions, but he had an equally clear sense of their nature as instruments of human freedom. Only when it is free can development be integrally human; only in a climate of responsible freedom can it grow in a satisfactory manner.

I actually really love the notion of "Charity in Truth." By that phrase, the Pope means something like, by loving one another (God's charitable truth), we'll all be a lot better off. I think that's right. Individuals, and even corporations, should be charitable. But that's a lot different from saying that government needs to vastly redistribute wealth or crush profit-seeking business.

Let's think about truth and charity in the practical sense. I actually believe ignoring truth -- in the non-religious sense -- is one of the major reasons we got into this economic mess. Truth was being ignored by the entire spectrum of the market. Lenders were ignoring truth by giving people mortgages that couldn't afford them; borrowers were ignoring truth by taking those mortgages that they couldn't afford; investors were ignoring truth by not acting prudently; banks were ignoring truth by thinking they could hold risky assets without enough capital to back them up.

A denial of truth definitely played a major role in breaking the economy. I think a denial of charity had very little to do with it. Most of the banks or other corporations that failed, or nearly failed, were quite charitable. So were most of the wealthy individuals at the center of the tragedy. Goldman Sachs, a common symbol of greed, has a foundation that gave something like $120 million to charities in 2007. That number doesn't include the countless of millions more their individual bankers gave to charity.

The past five to ten years also saw the growth of the non-profit industry -- an entire branch of the economy entirely dedicated to charity. During this time, we also saw incredible sums of money go towards disaster relief for catastrophes like Hurricane Katrina, Darfur and the Tsunami in Southeast Asia. Charity seemed to be alive and well. Truth? Not so much.

So what does the document say are some of the steps that need to be taken? Here's a popular one:

The message in both is that global capitalism has raced off the moral rails and that Roman Catholic teachings can help set Western economics right by encouraging them to focus more on justice for the weak and closely regulating the market.

The message is not that capitalism is bad. It's that profit-seeking without any concern for the consequences is bad. The Church, rightly, thinks that some regulation needs to be in place to control that.

They don't make entirely clear what type of regulation that is. But I would suggest that the regulation would protect consumers, not corporations. For example, regulation that provides better disclosure for consumer credit products is good. Regulation that stunts competition by assuring that a systemic risk "regulator" will keep afloat firms it deems too big to fail is bad.

The document also talks a lot about greed being bad. I think greed is a loaded word, because it means different things to different people. I think that profit-seeking is not bad. Materialism, however, is bad. That's what leads a nation to over-indulge in credit -- not companies trying to turn as large a profit as responsibly possible for shareholders. Here's what the Pope's document says:

Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it. Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty.


What is needed, therefore, is a market that permits the free operation, in conditions of equal opportunity, of enterprises in pursuit of different institutional ends.


Charity in truth, in this case, requires that shape and structure be given to those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.

I also want to point out that not all charity is good. From the document:

If we love others with charity, then first of all we are just towards them. Not only is justice not extraneous to charity, not only is it not an alternative or parallel path to charity: justice is inseparable from charity, and intrinsic to it.

Charity isn't giving people money. Charity is providing people with an opportunity to succeed. Giving an alcoholic living on the street a bottle of Jack Daniels isn't charity -- that will harm him further. Instead, charity would be helping him to kick the habit and make something of his life. Similarly, charity is not a bank writing a mortgage to a borrower who cannot afford a house and will ultimately be forced to foreclose. Charity would be a bank donating money to a program that helps train people to acquire better employment, which one day might get them that home through legitimate means.

Lastly, in the document, there is a great deal of talk about the "common good":

To desire the common good and strive towards it is a requirement of justice and charity.

That phrase probably makes those who believe in a socialist or welfare state's hearts flutter with joy. But it shouldn't. Those who believe in capitalism also believe that free markets work towards the common good, because it allows for more efficient exchange and better opportunities for everyone involved.

I would just end by saying that, although I am not crazy about some of the assertions made in this document, by-in-large, I think it's pretty good. It really urges individuals and businesses to think more deeply about how the decisions they make affect the world. The Church would like them to think about more than just themselves and more than just the short term. I think that's right. I will close with perhaps my favorite passage from the document, which I think shows the general spirit of what the Pope wants to say, very eloquently:

Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. Instruments that are good in themselves can thereby be transformed into harmful ones. But it is man's darkened reason that produces these consequences, not the instrument per se. Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.
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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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