Back to 8.2.3
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Centesimus Annus exemplifies, I suggest, the reading of “the signs of the times” which the Second Vatican Council had said the Church’s social teaching always needs to do. The Council’s document on ‘The Church in the Modern World’, Gaudium et Spes, put it like this:
The Church has always had the duty of scrutinizing the signs of the times and of interpreting them in the light of the Gospel. Thus, in language intelligible to each generation, she can respond to the perennial questions which men ask about this present life and the life to come, and about the relationship of the one to the other. We must therefore recognize and understand the world in which we live, its explanations, its longings, and its often dramatic characteristics. (#4)
I refer to this here because of the way in which Centesimus Annus changes gear, as it were, at the start of chapter 4. It moves from one kind of task involved in reading the signs of the times to a different, equally necessary one. Up to this point, it has looked back at the previous century, and looked around at the world following the events of 1989. Now it begins to address what should be done. We could say it moves from reflective review to constructive teaching.
Which subject does it turn to first? It addresses economics and business – and, in the task of reading the signs of the times, this makes excellent sense.
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Reflection
Why is the topic of human use of material goods, and therefore economics and business, a vital one for Pope John Paul to address in this encyclical?
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The great ideological conflict of the twentieth century between capitalism and state socialism was basically over – and to many people, especially at that heady moment, there seemed to be one clear winner and, therefore, only one option for the future: capitalism. Moreover, as we saw in Unit 5, there had been a great revival of support for economic liberalism across much of the Western world during the previous decade or so, backed by Reagan and Thatcher among others. It was in the early 1990s, when CA was issued, that this view was coming to be called simply ‘neoliberalism’.
It was obvious that the Pope had to address that situation. What does CST have to say about neoliberal capitalism?
John Paul addresses this question directly just before the end of chapter 4. But the whole chapter, the longest in the encyclical, can be seen as leading up to the point where he does that (#42). If you have studied Unit 5, you will already be very familiar with his answer, because it is examined there in detail. The position for which he argues is of truly vast significance – at least this is how it seems to me. After the reading, we’ll briefly recap some of what is in Unit 5, and give further examples of companies that are making real the anti-neoliberal vision of economic life for which John Paul argues.
Given all that you have studied so far, I recommend that you read CA chapter 4 quickly also – much should be basically familiar to you. You might wish to make notes on what is familiar and what is new.
Here is a brief outline of what this chapter covers:
##30-31 The right to private property, as affirmed by RN, is located in the context of the principle of the universal destination of goods.
#32 In contrast to earlier main forms of wealth, namely land and capital, there is now a new kind of wealth in developed economies: knowledge. Here John Paul is discussing what has since come to be called ‘the knowledge economy’ – one in which a highly important basis for wealth is knowledge.
#33 John Paul contrasts the highly developed, affluent economies with the reality of terrible poverty in which vast numbers of people live, and which he addressed at length in Solicitudo Rei Socialis (1987).
##34-35 Against that background, John Paul identifies the benefits and the inadequacies of free markets. He gives a marvellous definition of what a business should be: “the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavouring to satisfy their basic needs, and who form a particular group at the service of the whole of society” (#35).
#36 This is the half-way point in the chapter. Up to now it has addressed global concerns. But now John Paul makes clear that he is turning “to the specific problems and concerns emerging within the more advanced economies”. He starts with ‘consumerism’, which turns life into “having” rather than “being”.
#37 Consumerism leads to the ecological problem: “people consume the resources of the earth… in an excessive disordered way”.
#38-39 Against consumerism, we need also to safeguard the conditions of a “human ecology” and a “social ecology”. For this, family life is crucial. Here John Paul introduces a dramatic contrast which he developed in later teaching – between a ‘culture of death’ and a ‘culture of life’. The last para of #39 summarises ##36-39: “economic freedom is only one element of human freedom. When it becomes autonomous… [it] ends up by alienating and oppressing [the person].”
#40 It is the task of the State to safeguard the natural and human ecologies which ##37-39 have discussed. ‘Market forces’ are not sufficient to do so.
#41 Oddly at this point (it seems to me), Pope John Paul responds to Marxist analysis of ‘alienation’ and ‘exploitation’. Maybe this fits here because, while he rejects such Marxist analysis, he clearly accepts that those two terms can be used accurately in a Christian analysis of what capitalism can lead to.
#42 Finally, he assesses ‘capitalism’ directly, distinguishing two meanings. The Church can accept a ‘free economy’ that is within a strong juridical framework (which in Unit 5 I labelled a ‘solidary market economy’). But the Church certainly rejects laissez faire capitalism.
#43 This section sums up the chapter and much of what CST says about working life and business.
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Reading (c.12pp)
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Pope John Paul, Centesimus Annus,
Chapter 4: ‘Private Property and the Universal Destination of Material Goods’
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Reflection
In the light of your study of earlier units, especially Unit 5, what is there in CA chap. 4 that you find surprising – if anything?
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I said above that the position for which John Paul argues in this chapter seems to me to be of vast significance. Why? He is challenging the then new dominance of neoliberal capitalism, and is doing so constructively – not merely criticising, but saying what the alternative must be. He does this in a way that is careful and nuanced, yet also powerful and uncompromising.
Neoliberalism legitimizes a form of business in which people submit everything to maximizing profit, as though to an idol. This is the main model of business life that globalization has taken round the world over the past two decades. Pope John Paul says that this gets means and ends the wrong way round and thereby leads to alienation of people from their own humanity (#41). In contrast, he presents a profoundly different stance from that of neoliberal capitalism – but it is also wholly pro-business, seeing business enterprises as capable of achieving great good, both for workers and customers.
This is significant because, as is surely even clearer after the financial and economic crises since 2007, this is exactly what the world needs – a vision of business life that does not legitimize the subjection of real people, workers at all levels, to mere things, the maximization of monetary return.
In Unit 5, we looked at some examples of companies which have attempted to operate in non-capitalist ways. Even though they remain the exception, there are many of them. Below are websites for two more to look at briefly.
The first is a large Indian company that is very much part of ‘the knowledge economy’ which has emerged since 1991. Although John Paul wrote about knowledge as a new source of wealth, as you have just seen, perhaps it would have been almost unthinkable then that India would so rapidly become a driving force in global IT business. Yet most private sector growth in India has been very much on the basis of the neoliberal-capitalist model. One reflection of this is massive income disparities – India now has more billionaires and also more people in poverty than any other country.1
In this context, Infosys Ltd, founded in 1981 and now a huge company, has sought to do business to very high standards. As it appears to me, it comes close to exemplifying what CST calls for. Although no doubt it has critics, it has won many awards, including India’s ‘Most Admired Company’ in the Wall Street Journal Asia for almost every year since 2000. Of course it has had difficulties over the years. The longstanding Chairman of Infosys, N.R. Narayana Murthy, in whose living room the company was founded in 1981, retired in 2011 – but he was brought back as Executive Chairman in 2013 after the company had run into some financial difficulties. As the generation of its founders is replaced, sustaining its good practices could be a major challenge.
Spend a few minutes looking around its website.
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Reading (= 3pp)
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The second example is a small but rapidly growing company in London that recycles cooking oil in order to fuel diesel cars and heat office buildings. As you’ll see from the website, in 2011 it featured in a BBC TV series called Andrew Marr’s Megacities.
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Reading (= 3pp)
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Like all papal encyclicals, CA can seem an abstract and inaccessible document. I have given these practical examples here in order to put some flesh on the bones of the kind of thing it is calling for.
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Reflection
Do you agree that those two companies fit the vision of business which CA presents?
There is no evidence from the websites of either that there are Christians involved in them (although this doesn’t mean there are not!). Assuming there are not, do you think this makes a difference in relation to whether they can be said to exemplify what CST calls for?
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End of 8.2.4
Go to 8.2.5 Chapter 5: ‘State and Culture’
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See e.g. Mary Albino, ‘India: Economic power house or poor house?’, Toronto Star, 1 Oct 2010, at: http://www.thestar.com/News/Insight/article/869143. ↩