Saturday, March 7, 2009

Economics Benedict Style

If you have not read this, you need to read it. We have long anticipated Benedict's new social encyclical, and unfortunately, it has been postponed again. But maybe some of the nuggets have been leaked out in a recent dialogue that took place on February 26. Here it is (along with my interruptions).

Pope Benedict’s response to Fr. Giampero Ialongo during a talk with the priests of the Diocese of Rome in Vatican City, February 26, 2009:
[...] I would distinguish two levels. The first is the macroeconomic, which realizes itself and reaches the last citizen, who feels the effects of a mistaken construction. Naturally, it is the duty of the Church to denounce this. As you know, for a long time we have been preparing an encyclical on these points. And on the long road I see how difficult it is to speak with competence, but if it is not undertaken with competence, a certain [assessment of] economic reality cannot be credible. And on the other hand, it is also necessary to speak with a great ethical awareness, let’s say [one] created and awoken by a conscience formed by the Gospel. So there is a need to denounce these fundamental errors that are now shown in the fall of large American banks, basic errors. In the end, it is human greed as a sin, or, as the Letter to Colossians says, greed as idolatry. We must denounce this idolatry that is against the true God, and the falsification of the image of God as another God, “mammon.” We have to do it with courage but also with concreteness. Because great moralism does not help if it is not based on an understanding of realities, which helps also to understand what can be done concretely to change the situation. And naturally, to be able to do this, the knowledge of this truth and the good will of all are necessary.
The Pope raises a strong challenge to those who would attempt to fix the current economic problem. It will not be easy, and the tools required by the physicians must be more than just economic theory. First, an awareness that maybe there are fundamental flaws in the whole construct. Second, economic competence. Third, great ethical awareness. A truly formed conscience with great ethical sensitivity. Fourth, knowledge of truth and good will. Not an easy set of qualities to find in many people.
Here we are at a crucial point: does original sin really exist? If it doesn’t, we can make an appeal to clear reason, with arguments that are accessible and incontestable to each, and to the good will that exists in everyone. In this simple way we can progress well and reform humanity. But it is not so: reason — even ours — is darkened; we see this everyday. Because egoism, the root of greed, is to want the whole world for myself. It exists in all of us. This is the darkening of reason: it can be very learned, with beautiful scientific arguments, and it can even be darkened by false premises. So it goes with great intelligence and with great steps forward along mistaken roads. We can also say that the will is bent, as the Fathers say: it is not simply ready to do the good but seeks itself above all or the good of its own group. So to actually find the road of reason, of true reason, is not an easy thing; it develops itself in a dialogue. Without the light of faith, which enters in the darkness of original sin, reason cannot progress. But faith meets the resistance of our will, which doesn’t want to see the road that is also a road of renunciation of itself and a correction of the will in favor of the other and not for itself.
This paragraph is the heart of the matter. We cannot, says Benedict, "make an appeal to clear reason, with arguments that are accessible and incontestable to each." What? Is this the Pope of the Regensburg lecture? Yes, but remember, a very balanced and brilliant Pope. When speaking to Islam, Benedict emphasized the importance of reason in the pursuit of truth. Indeed, there is no such thing as faith without reason, since it is reason itself that gives assent to the propositions of faith based upon certain premises (historical, cultural, familial, etc), whether or not Islam will admit to this.

But there is also, according to Benedict, no reason without faith. Every act of reason is a decision made a.) with insufficient knowledge, since we are beings limited by space and time, and b.) by an act of interpretation of the meaning of various pieces of information data, and c.) dependent, in the situation of the human social condition, on the testimony of others. This last one is the most important one. All human reason is based on testimony, which colors every act of reason that we make. And so, reason does not have a firm foundation of its own. Human reason is finite and culturally conditioned. And even worse, it is clouded by Original Sin.

So, just as Benedict spoke to Islam about the need for Reason, he speaks to Economists and proponents of various forms of Globalization; to Neo-Conservatives and to those who still believe that history has come to an end; to all Neo-Hegelian Rationalists: "In this simple way we can progress well and reform humanity. But it is not so." Sadly, it is not so. Or else we have no need for a Savior. "Because egoism, the root of greed, is to want the whole world for myself." Aristotle already told us as much: "the soul is, in a sense, all things." The soul, in an act of knowledge, takes in the universal form of a thing, and thus becomes all things. Does this then mean that God gave us an imperfect spiritual and intellectual structure to work with? No.

What happened was a reversal. The body is taught to absorb all things to itself. This is how it preserves itself in existence. It takes other material things, and it turns them into itself. But Reason in the soul is to turn itself into other things. It is to become all things, not absorb all things into itself. That would be Kantian reason: to create all things into the image and likeness of my mental categories. But the Thomistic model is for the mind to become all things. Because of Original Sin, the proper activity of the mind, to essentially be an inbuilt tool of Solidarity, has instead been usurped by the the lower part of the person (by the material rather than the personal), and turned into an instrument of absorption. And because the Will is also darkened, it can do nothing to direct Reason away from attempting to control all things, absorb all things. "It can be very learned, ... and be darkened by false premises." Left to itself, Reason does not know where to begin. Reason cannot simply know the Truth.

"We can also say that the will is bent, as the Fathers say: it is not simply ready to do the good but seeks itself above all or the good of its own group. So to actually find the road of reason, of true reason, is not an easy thing; it develops itself in a dialogue. Without the light of faith, which enters in the darkness of original sin, reason cannot progress." The Will seeks the good of its own group. Evolution requires it to be so. And so the soul, created directly by God, gets usurped into the evolutionary model when Original Sin comes along. To find the role of Reason, then, paradoxically requires dialogue and Faith. Reason cannot begin reflection by sitting in front of a fire (unfortunately), Cartesian style. Philosophy is not a solipsistic enterprise. Kant never traveled more than 60 miles from his home his whole life. And it is reflected in his philosophy. The fact that Descartes developed his philosophy while sitting alone is also reflected in his thought. Without dialogue, truth cannot be found. Reason is too limited. Faith, paradoxically in our world, opens Reason up to become all things by alerting it to its universal pretensions, not to absorb all, but to become all. The act of understanding is an act of service, not an act of domination. True Reason must be cruciform, stretching out its arms to enfold the whole world. A true act of Reason is, as Paul says, to become "all things to all men." Faith also meets the resistance of the Will, and helps it to see the Good which it seeks as outside of its own group and its own selfish desires and as residing in the good of the other, and the Other, as a whole.
So I would say that we need the reasonable and reasoned denunciation of errors, not with great moralism, but with concrete reasons that are understandable in the world of today’s economy. The denunciation of these errors is important; it has always been a mandate for the Church. We know that in the new situation created by the industrial world, Catholic social doctrine, beginning with Leo XIII, seeks to make these denunciations — and not only denunciations, which are not sufficient — but also to show the difficult roads where, step by step, the assent of reason, the assent of the will, together with the correction of my conscience, the will to renounce in a certain sense myself in order to collaborate with the true meaning of human life and humanity, are required.
Economists must take up their crosses as well.
Having said this, the Church always has the duty to be vigilant, to search with all its might to discover what is the reason of the economic world, to enter into this reasoning and illuminate it with faith which liberates us from the egoism of original sin. It is the duty of the Church to enter into this discernment, into this reasoning, to make itself heard — also at different national and international levels — in order to help and correct. And this is not easy work, because many personal and national group interests oppose a radical correction. Maybe it is pessimism but it seems realistic to me: so long as there is original sin we will never arrive at a radical and total correction. Still we must do everything toward at least provisional corrections, enough to let humanity live and to block the domination of egoism, which presents itself under the pretenses of science and the national and international economy.
Sure, I don't think the Pope is going to come out and say: "Listen, an economic model that is no longer wedded to self-interest and the profit motive is one that I advocate." Most Catholic economists would become atheists. As would most Catholic businessmen. However, to likewise claim that the Pope has no problem with an economics of enlightened self-interest, but only with greed, is naive and a misreading. This is a common claim of the Theo-Conservatives. But Benedict makes it clear here that he is looking for a "radical correction" of a "mistaken construction" as he says in the first line of the response, provisional as this correction may always have to be. This correction must "block the domination of egoism," which is stimulated, as he has already said, by Reason under Original Sin. Let us get this straight. Under Original Sin: Reason = Ego = Greed = Domination = Pretense (at the service of manipulation by the most powerful). I don't see how we can avoid this reading of Benedict here. Therefore, "enlightened self-interest" (read: "rational" self-interest) is masked egoism under Original Sin. Authentic solidarity will have no place in this model; only absorption to the ego. And since relationships are never devoid of power dynamics, self-interest is all about manipulation of the other. Such is the Gift-Structure of humans under Sin. It becomes an Absorption-Structure. Pseudo-Dionysusian self-difussion loses out. The formula must instead be: faithful self-interest (with the interest of the truly rational self being the interest of the whole, since this is the ultimate goal of reason). Only a cruciform economics will acknowledge that power distorts the equality of the self-interested market and will never allow it to be truly Free.
This is the first level. The other is to be realists. And to see that these great objectives of marcoscience are not realized in microscience — marcoeconomics in microeconomics — without the conversion of hearts. If there are no just people, there is no justice. We must accept this. So education in justice is a priority, we can also say the priority. Because St. Paul says that justification is the effect of the work of Christ, it is not an abstract concept, regarding sins that do not interest us today, but it refers to justice as a whole. Only God can give us it, but He gives it with our cooperation at different levels, at all possible levels.
So the Jesuits have the right idea at least. We need a faith that does justice, and teaches others to do so. But there is only one person that did justice, and that person was Christ.
Justice cannot be created in the world solely with good economic models, which are necessary. Justice is realized only if there are just people. And there are no just people if there is no humble, daily work that changes hearts and that creates justice in hearts. Only like this is corrective justice spread. Therefore the work of the parish priest is so fundamental, not only for the parish, but also for humanity. Because if there are no just people, as I said, justice remains abstract. And good structures will not be realized if justice is opposed by the egoism of competent people.
Our humble, daily work is fundamental to achieve the great objectives of humanity. And we must work together at all levels. The universal Church must denounce, but also announce what can be done and how it can be done. Episcopal conferences and bishops must act. But all of us must educate in justice. It seems to me that the dialogue of Abraham and God (Genesis 18:22-33) is still true and realistic today, when the former says: Would you really destroy the city? Maybe there are 50 just people, maybe ten just people. And ten people are enough to save the city. Now, if there are not ten, even with all the economic doctrines, society will not survive. So we must do what is necessary to educate and guarantee at least ten just people, but if possible many more. With our call we can make it so that there are ten just people and that justice is truly present in the world.
"Now if there are not ten [just people], even with all the economic doctrines, society will not survive." Wow, I can't say I've read a one-liner that hit me like that in a while. Who but Benedict can take the story of Abraham's dialogue with God and apply it to contemporary global economics? That is good biblical scholarship. And, he returns us to that word again: Dialogue. Reason is non-existent without dialogue. But so is Faith. Faith requires dialogue with God and others, but especially continual dialogue with God in a conversation that constantly threatens our presumptions about his will. We usually call this prayer.
In effect, the two levels are inseparable. If, on one hand, we do not call for macro-justice, the micro does not grow. But, on the other, if we do not perform the very humble work of micro-justice, the macro also does not grow. And always, as I said in my first encyclical, with all systems that can grow in the world, beyond the justice that we seek, charity remains necessary. To open hearts to justice and charity is to educate in the faith, it is to lead to God.

Nathan O'Halloran, SJ


Joe said...

There is much of what you write which merits thought and thoughtful comment. More on that when I have had an even shot at digesting it.

I do, however, want to quibble with something:

Therefore, "enlightened self-interest" (read: "rational" self-interest) is masked egoism under Original Sin.

I am not so sure "enlightened" in this case is to be read as "rational." The original context for the word enlightened comes from Adam Smith, a professor of moral theology, who had come to understand economics based on the work of several Jesuits from Venice.

By HIS understanding -- and I must disclose I agree with him -- "enlightened" meant, not "rational," but "properly and morally formed." That is, a person operating within the sphere of commercial activity out of a sense of enlightened self-interest does so not merely for the self-interest part, but

a) so that he may be able to distribute his blessings to those in need, AND
b) by engaging in activities which benefit others commercially (building houses, discovering new medicines, growing vegetables) or are in no way morally objectionable.

It is the "enlightened" part of the equation which has been lost and is in dire need of rediscovery. For too long, and for too many people, that term has been bent and shaped to provide a convenient fig leaf over otherwise naked greed and avarice.

Just one man's opinion.



Martin said...

Father O' Halloran,

As soon as it is understood that economics has mutated into a religion, the easier it will be for Catholicism to oppose it.

Getting people to understand that it's a religion is extremely difficult.

Economics is not just anti-Christian - it is anti-Christianity. It denies the existence of grace and providence, declaring instead that all actions are based on rational decisions intended to promote efficiency. Accordingly, it validates actions which cause harm and loss to others, ranging from the employment of Third World child labour to the despoliation of the environment, on the basis that they're 'rational'. It strays into the area of moral philosophy by declaring support for 'inefficient' businesses to be a 'moral hazard'. In recent years, it has even strayed into mysticism, producing studies into 'The Economics of Happiness'. Lord Layard, one of the principal 'happiness' mystics, has even gone as far to suggest that the UK introduce civil 'birthing ceremonies'; a sacrilegous secular baptism if ever there was one.

All of this can be traced to Adam Smith.

Smith's fame is based on three observations, all of which are claimed to be scientific. They are not. The benefits of division of labour are scientific, because they are empirically observable. The benefits of freedom of trade are entirely theoretical; French history in the 17th and 18th Centuries, Russian history under the reign of Peter the Great, German history in the late 19th Century and much of American history show that freedom of trade is not the sole path to national prosperity. The idea that men are motivated solely by their own self-interest is theological, implicitly based as it is on an 18th Century provincial Scotsman's prejudice that God had no role to play in his life. This has led later and very influential economists such as Friedrich von Hayek to deny the operation of altruism in economic life, and James M. Buchanan Jr. to describe public servants who operate out of a spirit of public service and not for pay as 'zealots'.

Smith's hatred of the Catholic Church was almost insane, writing "(i)n the Church of Rome, the industry and zeal of the inferior clergy are kept more alive by the powerful motive of self-interest than perhaps in any established Protestant church. The parochial clergy derive, many of them, a very considerable part of their subsistence from the voluntary oblations of the people; a source of revenue which confession gives them many opportunities of improving. The mendicant orders derive their whole subsistence from such oblations. It is with them as with the hussars and light infantry of some armies; no plunder, no pay."

Almost everything bad and wrong about the recent history of the Man can be traced back to Smith in one way or another. If there had been no Smith, there would have been no Marx. If there had been no Marx, the rise of Hitler would have been less likely. Marx's great canard was that religion was the opium of the people; that statement should be turned round on him and his fellow economists, when it is declared that economics is the opium of the elites, nothing but the flimsiest justification for their own greed that poor and incomplete science and a false religion can provide.

My apologies for the rant, Father - this subject is very close to my heart. I look forward to reading the published dialogue in full.

Nathan O'Halloran, SJ / Mason Slidell said...

Your comment, Martin, is a thing of beauty. Thank you.

Mason Slidell

Anonymous said...

Dear Pater O'Halloran,
please where did you find this translantion?
Thank you.

Nathan O'Halloran, SJ / Mason Slidell said...

First, I simply must clarify that I am not a Father, just a Scholastic, first year Regent, in my 6th year as a Jesuit. Sorry if some feel I misrepresented myself.

I found the translation that I used at Catholic Exchange.

I somewhat agree with the quibble Joe. "Enlightened" there should not necessarily imply "rational." However, the whole rant that traces Smith back to Aquinas is bogus. While Smith's "Theory of Moral Sentiments" might strike us as nice and Christian, his underlying metaphysic gives him away. When morality is based upon sentiments, or feelings of compassion, their grounding is highly subjective. This of course fits the mould of the Scottish Enlightenment, with its rejection of natural forms and with its weak epistemology. Without an economics that takes into consideration the proper ends of the human person, sentiments get mixed up in power and preferences. "Englightenment" becomes about weighing my preferences against yours, and creating our own Good, since there is no Good to be know through the natural law.

Nathan O'Halloran, SJ

Joe said...

That's all I'm sayin'.

Longer response to ensue.


P.S. Gotta admit, "Fr. O'Halloran" has a nice ring to it. You can practically see a "Fr. O'Halloran" in some 1930s movie.