[ FINANCIAL CRISIS ] CHARITY IN TRUTH: Pope Benedict XVI Confronts the Actual Global Economic Crisis

Pope Benedict XVI Confronts the Actual Global Economic Crisis
Ando Isamu, s.j. (Jesuit Social Center, Tokyo)
The actual financial crisis has produced many competent analyses and public statements all over the world. It has impelled most countries to look for drastic global policies to avoid catastrophe, because of the need to take immediate and urgent action.
In June this year, Pope Benedict XVI published his first encyclical letter on social issues, Charity in Truth (Caritas in Veritate), to address publicly the global crisis affecting most countries in the world.
The Catholic Church considers an encyclical letter is considered to be one of the most authoritative documents guiding Catholics in living their Christian life.
Given the fact that the Pope's public document is meant to address the serious financial economic global crisis, we would expect to find technical answers suitable for helping people solve it.
Governments immediately poured huge amounts of capital into banking institutions and demanded drastic re-structuring. Big companies in danger of bankruptcy were obliged to make use of public funding in order to survive, to re-organize their management radically and to cut their labor force.
One would expect the public voice of the Catholic Church to offer some alternative set of urgent technical solutions for relieving the global crisis presently affecting the whole world. Moreover, since the encyclical document is also addressed to all people of good will, many non-Christians, as in Japan, could easily lend an ear to its teaching. But the document does not answer these expectations and might thus be disappointing.

Reflections on the First Social Encyclical of Pope Benedict XVI
One of the characteristics of Charity in Truth is its theological vision. It starts with charity and love of God and the search for truth. It continues with justice and the common good.

Human Development and the Public Sector
Integral human development is the key theme in this encyclical letter and was strongly influenced and inspired by Populorum Progressio (The Progress of Peoples), the important social encyclical published in 1967 by Pope Paul VI. Recognizing that this document had a great impact on the development of many developing countries that were becoming independent from colonial powers at that time, Pope Benedict stresses that the main insights of Populorum Progressio are still relevant today. Nevertheless, many changes have occurred since then and, consequently, the Pope wants to review Catholic thinking on development, in order to better address the current crisis.
In Charity in Truth "development" refers not only to the economic and industrial fields but is an integral human development covering these fields. The encyclical identifies a number of problems confronting such a total vision of development today, like the financial global crisis, large scale migrations, poverty gaps, political-economic corruption issues, workers' rights and multinational corporations, exploitation of the earth's resources, international cooperation, etc.
Pope Benedict draws attention to the importance of the public sector to provide needed answers to the current global crisis: "Populorum Progressio assigned a central, albeit not exclusive, role to 'public authorities.'
In our own day, the State finds itself having to address the limitations to its sovereignty imposed by the new context of international trade and finance, which is characterized by increasing mobility both of financial capital and the means of production, material and immaterial. This new context has altered the power of States.
Today, as we take to heart the lessons of the current economic crisis, with the State's public authorities directly involved in correcting errors and malfunctions, it seems more realistic to re-evaluate their role and their powers. These need to be prudently reviewed and remodeled so as to enable authorities, perhaps through new forms of engagement, to address the challenges of today's world." (24)

What Went Wrong in the American Financial System?
I would like to quote here part of the official statement made to the American Congress in October 2008 by Alan Greenspan, chairman of the United States Federal Reserve Board for two decades.
I was wrong, Alan Greenspan said in so many words. Seated before his congressional inquisitors in October 2008, with the worst financial crisis since the Great Depression cascading down Wall Street, Mr. Greenspan confessed that the philosophical principle upon which he had based his highly influential professional judgment is -flawed.
For some two decades as chairman of the Federal Reserve Board, Greenspan had counseled Presidents and Congresses that government deregulation of financial markets and reliance upon self-regulation by self-interest was the way of both freedom and prosperity. The collapse of one insolvent bank after another called such counsel into question.
Here are Greenspan's own words: 'Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief... The whole intellectual edifice [of risk-management in derivative markets]...collapsed last summer.'" (Quoted freely from "The Demise of the Cult of Self-Interest? Greenspan's Folly" by Darrin W. Snyder Belousek, America, March 30-April 6, 2009)
In other words, the thinking behind Greenspan's economic philosophy was that the only moral economic system is 'laissez-faire capitalism,' giving free rein to the selfish pursuit of individual profit. Accordingly, 'government' should be minimal, limited to national defense, property protection and criminal persecution.
Such economic thinking has provoked also in Japan a rush for privatization policies. Nevertheless, one of the main elements lacking here is a healthy concept of the common good. At a time of a global serious crisis we should remember our inter-dependence and the demands for mutual responsibilities.

Populorum Progressio and Globalization
Pope Benedict recognizes that the basic theme of Populorum Progressio, namely progress, remains an open question, made all the more acute and urgent by the current economic and financial crisis.
Now, 40 years since its publication, the principal new feature has been the explosion of worldwide inter-dependence, commonly known as globalization. Paul VI had partially foreseen it, but the ferocious pace at which it has evolved could not have been anticipated. Originating within economically developed countries, this process by its nature has spread to include all economies. (33)

Unity of the Human Race
Chapter 3 of the encyclical deals with "fraternity, economic development and civil society." The Pope stresses "the unity of the human race, a fraternal community transcending every barrier, which is called into being by the word of God-who-is Love... Economic, social and political development, if it is to be authentically human, needs to make room for the principle of gratuitousness as an expression of fraternity." (34) In this global era, economic activity cannot prescind from gratuitousness, which fosters and disseminates solidarity and responsibility for justice and the common good among the various economic players. "Justice must be applied to every phase of economic activity, because this is always concerned with humanity and its needs. Locating resources, financing, production, consumption and all the other phases of the economic cycle inevitably have moral implications. Thus every economic decision has a moral consequence." (37)
The Market and the Common Good
Again, mentioning the importance of the market in all economic activity, the Pope warns: "In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot fulfill its proper economic function. And today it is this trust which has ceased to exist, and the loss of trust is a grave loss..." (35)
"Economic activity cannot solve all social problems through the simple application of commercial logic. It needs to be directed towards the pursuit of the common good, for which the political community in particular must also take responsibility..." (36)
"The economic sphere is neither ethically neutral, nor inherently inhuman and opposed to society. It is part and parcel of human activity and precisely because it is human, it must be structured and governed in an ethical manner." In commercial relationships also "the principle of gratuitousness and the logic of gift, as an expression of fraternity, can and must find their place within normal economic activity. This is a human demand at the present time, but it is also demanded by economic logic. It is a demand both of charity and of truth." (36)

The Need for New Ways of Doing Business
Next, the Pope proposes new models of enterprises. "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.
Alongside of profit-oriented private enterprise and the various types of public enterprise, there must be room for commercial entities based on mutuality principles and pursuing social ends to take root and express them. It is from their reciprocal encounter in the marketplace that one may expect hybrid forms of commercial behavior to emerge, and hence an attentiveness to ways to civilizing the economy." (38)
"Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise... Today's international capital market offers great freedom of action. Yet there is also increasing awareness of the need for greater social responsibility on the part of business." (40)
On the other hand, "political authority also involves a wide range of values, which must not be overlooked in the process of constructing a new order of economic productivity, socially responsible and human in scale... The integrated economy of the present day does not make the role of States redundant, but rather it commits governments to greater collaboration with one another." (41)
Pope Benedict recalls that the Church's social teaching is quite clear on the subject of the economy needing ethics in order to function correctly - not any ethics whatsoever, but an ethics which is people-centered. The economy in all its branches constitutes a sector of human activity. (45)

Globalization: a Human Realit
Speaking about "globalization," which "is sometimes viewed in fatalistic terms, as if the dynamics involved were the product of anonymous impersonal forces or structures independent of the human will," the Pope considers it useful to remember that the socio-economic process is not globalization's only dimension. As a human reality, globalization is the product of diverse cultural tendencies which need to be subjected to a process of discernment.
"Despite some of its structural elements, which should neither be denied nor exaggerated, 'globalization, a priori, is neither good nor bad. It will be what people make of it.' We should not be its victims, but rather its protagonists, acting in the light of reason, guided by charity and truth." (42)
The Human Person: a Pillar in Catholic Social Thought
A main pillar in the whole Catholic social teaching is that the human person is the subject and actor of all economic activity. Thus, "in development programs, the principle of the centrality of the human person - as the subject primarily responsible for development must be preserved," says Pope Benedict. (47) On the other hand, if development programs are to be adapted to individual situations, they need to be flexible; and the people who benefit from them ought to be directly involved in planning and implementing them.

Review of Our Life-Style and the Environment
The encyclical also touches on international cooperation and the relationship of economic development programs and the care of the natural environment. "Projects for integral human development cannot ignore coming generations, but need to be marked by solidarity and inter-generational justice, while taking into account a variety of contexts: ecological, juridical, economic, political and cultural." (48)
"The way humanity treats the environment influences the way it treats itself, and vice versa. This invites contemporary society to a serious review of its life-style, which, in many parts of the world, is prone to hedonism and consumerism, regardless of their harmful consequences. What is needed is an effective shift in mentality which can lead to the adoption of new life styles in which the quest for truth, beauty, goodness and communion with others for the sake of common growth are the factors that determine consumer choices, savings and investments."
Economic incentives or deterrents are not enough to protect nature; not even apposite education is sufficient. "The decisive issue is the overall moral tenor of society. If there is a lack for respect for life and for a natural death, society ends up losing the concept of human ecology and, along with it, the concept of environmental ecology. It is contradictory to insist that future generations should respect the natural environment when our educational systems and laws do not help them to respect themselves." (51)

Human Relationships and Cooperation
Chapter 5 of the encyclical refers to cooperation within the human family. It stresses that the development of peoples depends, above all, on recognition that the human race is a single family working together in true communion.
"As spiritual beings, human creatures are defined through interpersonal relations. The more authentically they live these relations, the more their own personal identity matures. It is not by isolation that people establish their worth, but by placing themselves in relation with others and with God." (53)
The Pope develops this perspective from the theological point of view of the relationship between the Persons of the Trinity which is central to the Christian faith. (54) He affirms that "the Christian religion and other religions can offer their contribution to development only if God has a place in the public realm, specifically in regard to its cultural, social, economic, and particularly its political dimensions... The exclusion of religion from the public square - and, at the other extreme, religious fundamentalism - hinders an encounter between persons and their collaboration for the progress of humanity." (56)
Finally, Pope Benedict offers basic principles of Catholic social doctrine to manage and direct globalization towards authentic human development, like the principles of subsidiarity, and solidarity. (57-61) He reminds us of the universal phenomenon of migration and the direct link existing between poverty and unemployment (62-63), and makes a strong appeal for the reform of the United Nations on the line of an urgent need for a true world political authority.
Development and Technology
The last chapter of the encyclical deals with the role of technology. The challenge of development today is closely linked to technological progress especially in the field of biology. Technology reveals people's aspirations towards development and expresses the inner tension that impels them gradually to overcome material limitations.
Then the Pope concludes: "The greatest service to development is a Christian humanism that enkindles charity and takes its lead from truth, accepting both as a lasting gift from God. Openness to God makes us open towards our brothers and sisters and towards an understanding of life as a joyful task to be accomplished in a spirit of solidarity. On the other hand, ideological rejection of God and atheism of indifference, oblivious to the Creator and at risk of becoming equally oblivious to human values, constitute some of the chief obstacles to development today." (78)

How to make it Work in Japan
The content of the encyclical touches deeply the Japanese situation, immersed as it is in the international financial turmoil and globalization issues. Nevertheless, the Pope's encyclical is completely unknown in Japan and has no impact, in spite of being a document addressed also to "all people of good will.
" The encyclical's analysis of the realities of today's world and its human and ethical approach are, of course, valid.
But the issue is: how to make it work in Japan? The Pope is addressing all of us Christians and offers us new opportunities and ethically oriented principles to continue, maybe in different ways, the task of evangelization by taking to heart issues and problems affecting not only the lives of people, but also the overall orientation of the country.
Now, how can we create and implement those moral values expressed in the encyclical? The current Japanese situation is very egoistic and individualistic. Education aims at profit and success. Christian education, at all levels, has been given a rich content here to reflect on. The role of the Church is to look for ways to renew our Christian social commitments. Some examples could be our training in Catholic social thought, and in an attitude of being 'persons for others,' as well as emphasizing the importance of volunteers.
Christians today should be interested in the realities concerning people suffering from underdevelopment and poverty in Asian countries and around the world. The encyclical presents and analyzes many other current issues, like migrants, the unemployed, care for nature, etc. We should take action to make society more human.
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