God and Capitalism

Reflections of a Catholic Banker

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ROME, FEB. 5, 2005 (Zenit.org).- How to order the modern economy according to moral principles was the subject of a book published in November in Italy. «Denaro e Paradiso: L’Economia Globale e il Mondo Cattolico» (Money and Paradise: The Global Economy and the Catholic World) is a book-length interview with Ettore Gotti Tedeschi, president of the Italian operations of one of Europe’s largest banks, Banco Santander Central Hispano.

Gotti Tedeschi starts off by explaining to author and journalist Rino Cammilleri how the market system, even with its imperfections, is the most efficient way of organizing an economy to satisfy individual needs. As well, the market plays an important role in individual initiative and creativity that permit resources to be used efficiently.

The Italian banker declares his opposition to an overly intrusive governmental role in the economy, arguing that in many cases a welfare state inevitably leads to waste and higher taxes.

At the same time, he recognizes that abuses and problems such as unequal distribution of wealth exist in free markets. Individualism and egoism, the source of many of these problems, form part of the human condition. What is needed, the banker argues, are laws that prevent abuses, but without eliminating the liberty that permits the operation of the market.

Gotti Tedeschi points out that an advanced, freewheeling economy is often needed precisely in order to help the poor. When goods are produced in high volume, their price often decreases, making them more affordable to the poor.

Individual responsibility

Asked if a market economy is guilty of creating artificial needs, Gotti Tedeschi observed that in a complex world the division between essential or superfluous needs can vary widely. It also depends on a culture, the prevailing morality, and the level of technological progress.

The banker acknowledges that people in rich countries are surrounded by opportunities to buy products. He puts the onus on consumers, however, rather than on the market. The economy puts these goods within our reach, but it is up to potential customers to distinguish between what is necessary or not.

To the charge that the market creates wealth at the cost of those who are weaker or less fortunate, Gotti Tedeschi points out that if it were not for an efficient system to create wealth, there would no money to enable people to help others. Someone who becomes rich has the possibility to help more poor people, and this sense of responsibility is something that should be developed, he recommends. The sense of poverty found in the Gospels is not one of a total lack of material goods, but rather a detachment from them.

Lasting values

Although Gotti Tedeschi is a strong defender of the free market, he recognizes the importance of other values. Absolute faith in scientific and technological progress, he notes, is a sort of new idolatry. We would be much better off, he speculates, if mankind had made as much spiritual progress as it has achieved with science and technology.

In the area of economics the Italian banker insists that it is no more than an instrument, neutral in itself. The danger is that decision-makers may allow themselves to be blinded by temptations stemming from a desire for power or profit, forgetting that economics is meant to be used for the good of mankind.

It is, therefore, vital to always keep in mind the supernatural dimension of human nature and the conviction that our lives have some ultimate meaning, not dependent on material factors. If this can be achieved, we can resolve the problems of abuses such as exploitation or coercion, which are the result of a myopic individualism that opts for what is useful over what is good with respect to the human person.

Gotti Tedeschi also explains that Catholicism has an important teaching in this regard, namely that we must make our choices according to a correct hierarchy of values, giving meaning to each one of our decisions. True riches are those that are everlasting, that is, salvation, while earthly wealth is only a means, not an end. If we remember this lesson, it becomes possible to possess material wealth, without losing our true humanity.

Early Silicon Valleys?

It is also possible to understand other elements of capitalism from a Catholic viewpoint. Technological progress, for example, is worthwhile because it frees us from the fatigue of work. In trying to reconcile economic activity with morality, Gotti Tedeschi recommends that we should apply the same principles, whether at home, in church, or in the workplace.

The banker also argues that it is wrong to give all the credit to Protestantism for the origins of capitalism. He argues that many monasteries — «Silicon Valleys» on a reduced scale, in his words — made a vital contribution to capitalism in the late medieval period. Monasteries made many of the technological discoveries that were vital to the start of the industrial era. He also traces the origins of capitalism to developments in 13th-century Italy, well before the rise of Protestantism.

Catholicism also has much to contribute to today’s economic world. For example, it sees the person as an end in himself, and not just as an instrument through whom consumption can be increased. Catholicism also reminds us that the economy should not limit itself merely to multiplying material production, but should instead take into account all aspects, including the spiritual, of human nature, says Gotti Tedeschi. To achieve this capitalism needs to be influenced by norms and moral decisions that can orient us in deciding what is good for us, as creatures made up of both body and spirit.

In this sense the version of capitalism that sees it ordered according to the «law of the jungle,» where egoism and exploitation dominate, is alien to the Catholic vision of how the economic order should be organized.

Free to choose

Gotti Tedeschi also explains how we should understand the concept of freedom of action, or liberty, which is an important part of capitalism. The human person was created in God’s image and given the task of continuing the Creator’s action in the world. With Christ’s incarnation we see how human work acquires a redemptive dimension. Exercising this human creativity, however, requires freedom of action, but it is not an aimless freedom, or a freedom exercised without responsibility.

A Catholic capitalism, he continues, enables us to be children of God and creators using the means we have available and our human genius. This is the true capital in capitalism, which then directs the activity of the material and financial means used to produce wealth. What would be immoral would be not to produce all the wealth possible, or to invert the correct order of means and ends.

What Gotti Tedeschi recommends is an economy inspired by Christian values, which exalts human nature and man’s lasting vocation — and which is directed by people who believe that their lives have a lasting meaning.

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