Catholic social thought and economic transition.

Introduction

The transition of formerly Communist countries to market-oriented economies is certainly one of the most significant developments of our time. Unfortunately, advice from the West has been lacking -- to say the least -- especially the official advice from the State Department, International Monetary Fund (IMF) and what has been called the "Washington consensus." This failure is partly the result of a failed "vision" of what makes for a good and prosperous society. The Washington consensus has emphasized privatizing state property and establishing stock markets, as well as fiscal balance, paying little attention to historical and social factors and, most important, the moral aspects of the problem of transition. These fundamental factors in any prosperous society seem to be outside the theoretical perspective of Western advisors.

The Catholic Social Thought (CST) tradition does not offer an alternative economic theory. What it does offer is an alternative vision of the economy and society, from which an alternative understanding of the economy can be developed. The value of this alternative vision is that it provides the foundations for a realistic and useful understanding of the economy, and the related problems of economic transition. It also offers a "moral compass" to help guide policymakers as they try to fashion a new economic and social reality.

This paper concentrates on presenting such an alternative vision of the economy and society, not wishing to retrace the well-beaten path of what's wrong with neoclassical economic theory. First, we'll take a look at how CST views: values and the common good; human nature; society and efficiency. The second half of this paper will present some of the key concepts developed in CST and their applicability for transitional economies.

Catholic Social Thought's Alternative Vision for Understanding the Economy

CST is openly and explicitly based on a specific vision and set of value judgments. They are not hidden preconceptions but, rather, celebrated pillars upon which all social formations and analyses need to be built. It is a vision grounded in the Old Testament, which comes to life in the Gospels and provides the explicit underpinning for various Encyclicals and other Church documents making up the Catholic Social Thought tradition.

At the heart of this vision is the belief that "God speaks to every reality. Whatever we are looking at, whether it is an issue such as world hunger...or an economic system such as Capitalism, God does have something to say to that reality. Our world either is or is not in accord with God's ideal for it. Consequently it is important for us to come to know what God is saying to whatever reality we are examining. God speaks to these issues or situations in various ways: through the Bible, through the teachings of His Church, through the signs of the times and through the prophets who interpret those signs ... [W]e should listen to God in theological reflection and in prayer" (7).

The Dignity of all Humans. One bedrock value of this tradition is the assertion of the dignity of all humans. "The dignity of the human person, realized in community with others, is the criterion against which all aspects of economic life must be measured" (11). This is an assertion that runs through CST and its significance cannot be understated, for it calls for a view of society that is not mechanistic and individualistic, as is neoclassical economic theory, or completely organic, as is vulgar Marxism. Both the individual and the community are interconnected and neither can be reduced to the other.

This "interconnectedness" is at the core of the idea of the common good. Since human nature is defined as social, the welfare of each individual is connected with that of the community. The common good is, of course, not an equilibrium state of affairs. It is a process.

"The common good is a social reality in which all persons should share through their participation in it. It is not simply the arithmetic aggregate of individual goods suggested by the utilitarian formula 'the greatest good for the greatest number.' In a utilitarian understanding, increased aggregate social good (e.g., gross national product) is compatible with the exclusion of some persons from participation in it. Emphasis on the participation of all in the common good is particularly important" (8).

Pope John XXIII defined the common good as that which "embraces the sum total of those conditions of social living, whereby men are enabled more fully and more readily to achieve their own perfection" (Mater et Magistra, 65). This interdependence was particularly highlighted in the Vatican II document, Gaudium et Spes: "Man's social nature makes it evident that the progress of the human person and the advance of society itself hinge on each other. For the beginning, the subject, and the goal of all social institutions is and must be the human person, which for its part and by its very nature stands completely in need of social life."

Pope John Paul II recently emphasized that concern for the environment, too, is an essential aspect of the common good, for the obvious reason that man needs more than community to flourish.

Promoting the Common Good. In Economic Justice for All, the U.S. Bishops stated that six principles must be followed if economic policy is to promote the common good: "1) every economic decision and institution must be judged in light of whether it protects or undermines the dignity of the human person; 2) human dignity can be realized and protected only in community; 3) all people have a right to participate in the economic life of society; 4) all members of society have a special obligation to the poor and vulnerable; 5) human rights are the minimum condition for life in community; and 6) society as a whole, acting through public and private institutions, has the moral responsibility to enhance human dignity and protect human rights" (11).

Economic theory defines efficiency in terms of market transactions and outcomes, profit and loss, underpinned by the mythical entities of utility and non-utility. CST asserts a different yardstick. Yet it is not anti-growth or hostile to economic life (both common charges). It objects to economic growth as an "end," not economic growth as a "means." CST offers a different vision of economic development and progress (see Popuiorum Progressio) (4). To follow productivity as a goal, without regard for the context of economic activity and its human dimension, is to follow a false god. As the U.S. Bishops have stated:

Productivity is essential if the community is to have the resources to serve the well-being of all. Productivity, however, cannot be measured solely by its output in goods and services. Patterns of production must also be measured in light of their impact on the fulfillment of basic needs, employment levels, patterns of discrimination, environmental quality and sense of community (11).

The key distinction that CST makes is that humans can never be treated as means to an end, for they are the ends. Thus, the treatment of workers as mere commodities to be used to maximize profits is objectionable. We can see a clear statement of this view in Rerum Novarum:

The following duties bind the wealthy owner and the employer: not to look upon their work-people as their bondsmen but to respect in every person his or her dignity and worth. ... They are reminded that...to misuse people as though they were things in the pursuit of gain...is truly shameful and inhuman. ... Furthermore, employers must never tax their work-people beyond their strength, or employ them in work unsuited to their sex and age. Their great and principal duty is to give everyone what is just. ... to gather one's profit out of the need of another is condemned by all laws human and divine. ... Lastly, the rich must religiously refrain from cutting down the workers' earnings, whether by force, fraud or by unjust dealings... (RN 16-17) (4).

And this theme is continued in numerous subsequent documents. Thus for CST, the concept of efficiency must be defined in terms of meeting human needs, regardless of whether these needs are expressed in the market. Furthermore, these needs are not limited to material ones.

Greater Equity. CST also has a very different concept of equity. The basis of equity in CST is the common gift from God of the earth. Thus the minimum equity criteria is that all have a share in this gift so that each will meet their basic minimum needs. "God destined the earth and all that it contains for the use of all people and peoples. Furthermore, the right to have a share of earthly goods sufficient for oneself and one's family belongs to everyone" (Vatican II) (4). This is not a claim for perfect equality, but that all are insured a decent standard of living. This claim is also put forward in the United Nations Universal Declaration of Human Rights.