Religion, Ethics and the Market

Moral Responsibility Is Key to Economic Recovery

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By Carl Anderson

NEW HAVEN, Connecticut, JUNE 15, 2009 ( Shortly after the fall of European communism two decades ago, then Czech President Vaclav Havel addressed his nation on the importance of individual responsibility within an economic system.

Speaking of the failure of communism, he said: «We live in a morally contaminated environment. We fell morally ill because we became used to saying something different from what we thought. We learned not to believe in anything, to ignore each other, to care only about ourselves. […] We have to understand this legacy as a sin we committed against ourselves. […] If we realize this, hope will return to our hearts.»

Today, with the world economy in the midst of a deep recession, and with pundits and politicians debating a variety of proposed legal or technical corrections, we would do well to keep Havel’s words of individual moral responsibility in mind as a necessary part of any real solution.

When he spoke in 1990, the world had just watched transfixed as the Iron Curtain fell in Europe. Indeed, one of the two financial and political systems that had defined most of the 20th century almost instantaneously disappeared from the European continent.

The idea of atheistic communism as a viable economic force had been debunked, leading at least one commentator to proclaim that «the end of history» was at hand.

But as Benedict XVI has pointed out in many contexts, triumphalism is dangerous.

Lessons learned

Now, as we face an economic crisis of enormous proportions, we cannot simply celebrate the two-decade anniversary of the demise of the Eastern Bloc, we must also look at what went wrong in our economy, and how we can repair it.

The importance of each individual’s moral decision-making will be critical if we are to succeed.

There were a few, in the days before — and immediately after — the collapse of Soviet Communism, who were prescient enough to have predicted trouble ahead for Western economies, if they ignored morality. Their words are all the more relevant today.

Two men in particular stand out for their foresight: Karol Wojtyla and Joseph Ratzinger.

While decrying the «determinism» of Marxism, and its atheistic outlook in a 1985 paper «Market, Economy and Ethics,» Benedict XVI, then Cardinal Joseph Ratzinger, warned that an economic crisis in the West was possible. His concern was a decline of ethics in economic matters.

In fact, he warned that a decline of ethics «born and sustained only by strong religious convictions» could actually «cause the laws of the market to collapse.»

Shortly after the walls began coming down in 1991, Pope John Paul II, widely recognized for the role he played in the collapse of communism, also warned against a market economy that excluded spiritual values.

He made clear that a system that sought to replace Marxism with consumerism — and thus reduced «man to the sphere of economics and the satisfaction of material needs» — in the end both made the same error as a central tenet of Marxism and was not an adequate solution («Centesimus Annus,» 19).

Both Benedict XVI and John Paul II have made clear that any economic system that pushes God and morality aside rests not on bedrock, but on sand.

As Cardinal Ratzinger wrote in his 1985 paper: «Even if the market economy does rest on the ordering of the individual within a determinate network of rules, it cannot make man superfluous or exclude his moral freedom from the world of economics. […] These spiritual powers are themselves a factor in the economy: The market rules function only when a moral consensus exists and sustains them.»

Greed and ambition

Earlier this year, a Knights of Columbus-Marist Survey found that at least 90% of Americans — and 90% of executives — believe that business leaders see career advancement and personal financial gain as primary motivations for business decisions. Only 31% of Americans and 32% of executives believed that «the public good» was a strong motivating factor.

The same poll also showed that three-quarters of Americans and more than nine out of 10 executives believe a business can be both ethically run, and successful.

Little wonder that a subsequent poll showed that Americans — and American Catholics especially — value Benedict XVI’s opinion on both economic and spiritual issues. By overwhelming margins they are interested in what he has to say about the shortsightedness of greed and selfishness, and the building of a society where spiritual values play an important role.

Much pain could have been avoided if the individual members of our economy had heeded our Pope’s words in 1985, or his predecessor’s in 1991, and if capitalism with a conscience had been the norm.

Let us pray that people pay more attention when Benedict XVI’s new social encyclical is released, and that the solutions our politicians and pundits consider will not only transcend the technical and legal, but also include the ethical.

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Carl Anderson is the supreme knight of the Knights of Columbus and a New York Times bestselling author.

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