5.3.4 Before and after the financial crisis

Back to 5.3.3

Unit 5 Contents


Screen 5.3.1 set out in summary CST’s vision of a ‘solidary market economy’.  Everything in Unit 5 had been leading up to that. Maybe you think that not all you were asked to study earlier in the unit was really necessary.  But I would question that!  This is because we cannot understand what is significant in CST, and how it is distinct, unless we have given enough attention to what is at stake in the issues it is addressing, as well as to their historical context.

We then considered, in screens 5.3.2 and 5.3.3 a major objection to CST’s vision, that it is just not realistic, and three arguments in response to this objection.  For the third of these, the concept of ‘structures of sin’ was introduced.

We have now looked at all the main elements of Catholic Social Teaching on business and economics – with one exception.  This is the particular contribution that Pope Benedict XVI made by speaking in his 2009 encyclical, Caritas in Veritate, about the way that ‘gift’ has a proper place in business.  As you will see, this only adds a new ingredient to the mix, rather than marking a shift or a major departure.

As was mentioned in Unit 1 (1.2.3), the publication of Caritas in Veritate was delayed by about two years, in order for the Pope to be able to include a serious analysis of the global financial crisis that began in 2007.  In the remainder of this unit you are asked to do two further readings from the primary texts of CST.  One of these is the last part of the Compendium’s chapter on Economic Life, and the other is about eight pages of Caritas in Veritate.

These two are very interesting to compare, because they both address similar themes, but one was written a few years before the financial crisis and the other after its early stages.  In particular, the Compendium’s final part begins by talking about ‘globalization’ which basically means extension of the West’s largely capitalist economy to form a single global market.  It addresses the place of financial institutions within this and includes some very strong statements of concern – see especially ##368-369 – which can certainly be seen as warnings in the prophetic tradition.  Both #369 and #371 come fairly close to anticipating the crisis that occurred just a few years later.

You are asked to do these two readings, and then to do an exercise relating especially to that from Caritas in Veritate.  This is about what this latest social encyclical adds to CST.  As you do both these readings, keep in mind the question of what is familiar, in the light of study so far, and what is new.


Reading (8pp)

Compendium, ##361-376 (Chap 7, part V)


To understand the next reading, which begins half way through Caritas in Veritate, you need to know what the basic message of this encyclical is.  This is summed up in its title, which means ‘love in truth’ or ‘charity in truth’.  Benedict XVI makes clear, from the very start of the document, that all attempts to practise love of neighbour or charity need to be based on truth, especially on the truth about human persons.  If charitable activity rests on an inadequate understanding of persons and of the world in which we live, it will get things wrong and might just make things worse.  He says:

Love – caritas – is an extraordinary force which leads people to opt for courageous and generous engagement in the field of justice and peace. It is a force that has its origin in God, Eternal Love and Absolute Truth. Each person finds his good by adherence to God’s plan for him…: in this plan, he finds his truth, and through adherence to this truth he becomes free (cf. Jn 8:22). To defend the truth, to articulate it with humility and conviction, and to bear witness to it in life are therefore exacting and indispensable forms of charity. Charity, in fact, “rejoices in the truth” (1 Cor 13:6)…

[But] charity has been and continues to be misconstrued and emptied of meaning, with the consequent risk of being misinterpreted, detached from ethical living and, in any event, undervalued. In the social, juridical, cultural, political and economic fields – the contexts, in other words, that are most exposed to this danger – it is easily dismissed as irrelevant for interpreting and giving direction to moral responsibility. Hence the need to link charity with truth…

(Caritas in Veritate, ##1-2)

This point sets the agenda for whole encyclical.  To illustrate what he means in practice, we could think of Christian agencies involved in responding to poverty, whether in immediate relief or long-term development.  The Encyclical’s teaching is that such work must never be separated from Christian understanding of the truth about the world; it must never be secularized.

The following statement summarizes the point clearly: “The more we strive to secure a common good corresponding to the real needs of our neighbours [i.e. in light of the truth], the more effectively we love them” (#7, italics added).

If you wish to get a fuller sense of the way Benedict XVI sets out this main theme of this encyclical, you could read the ‘Introduction’, ##1-8 (at the link below).

The extract from Caritas in Veritate you’re about to read basically applies this point to business life.  The Christian gospel is about grace and gift – about what God offers us freely, and, according to the Pope, this has relevance to the way we engage with one another even in markets.


Reading (8pp)

Benedict XVI, Caritas in Veritate, ##34-41 (to end of first para), ##45-46, ##65-66

The link is to the start of the document, so scroll down to #34.




After doing this reading, look back over it and spend ten minutes making notes on what you find is distinctive and new in these extracts from Caritas in Veritate.

In particular, what do you understand by the statement quoted below?  How does it relate to CST’s perspective on economic life as you have encountered it in this unit?  Make notes also in response to these questions.

The great challenge before us… is to demonstrate, in thinking and behaviour, not only that traditional principles of social ethics like transparency, honesty and responsibility cannot be ignored or attenuated, but also that in commercial relationships the principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within normal economic activity. (#36, italics in original)





End of 5.3.4


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