World Public Forum

Published on 22 July 2009

Written by Adrian Pabst

Adrian Pabst

An article by Leverhulme Research Fellow at the University of Nottingham Adrian Pabst published in guardian.co.uk.

In his article Adrian Pabst argues that the Pope’s vision of an 'integral human development' is based on a relational anthropology and that his call for a civil economy cannot be charted on our current conceptual map.

Publication of the long-awaited papal encyclical Caritas in Veritateon 29 June has re-ignited the struggle for the soul of Roman Catholicism.

On the one hand, there are the neoliberals like Michael Novak and the theo-cons like George Weigel who denounce «the economic heresies of the left» and dismiss the pope’s injunction against unbridled free-market capitalism. On the other hand, there are the liberation theologians and «social-democrat» Catholics who ignore Benedict’s critique of the centralised bureaucratic state and yearn for statist solutions to get us out of the recession.

In contrast with both these factions, the pope seeks to chart a Catholic «third way» that combines strict limits on state and market with a civil economy centred on mutualist businesses, cooperatives, credit unions and other alternative models. By calling for an economic system re-embedded in civil society, Benedict advocates a political economy that transcends the old secular dichotomies of state vs market and left vs right.

The commonly held belief that the left protects the state against the market while the right privileges the market over the state is economically false and ideologically naive. Just as the left now views the market as the most efficient delivery mechanism for private wealth and public welfare, so the right has always relied on the state to secure the property rights of the affluent and to turn small proprietors into cheap wage labourers by stripping them of their land and traditional networks of support.

This ideological ambivalence masks a more fundamental collusion of state and market. The state enforces a single standardised legal framework that enables the market to extend contractual and monetary relations into virtually all areas of life. In so doing, both state and market reduce nature, human labour and social ties to commodities whose value is priced exclusively by the iron law of demand and supply.

However, the commodification of each person and all things violates a universal ethical principle that has governed most cultures in the past — nature and human life have almost always been recognised as having a sacred dimension. Like other world religions, Catholic Christianity defends the sanctity of life and land against the subordination by the «market-state» of everything and everyone to mere material meaning and quantifiable economic utility — an argument first advanced by Christian socialists like Karl Polanyi and his Anglican friend RH Tawney.

Indeed, the Pope writes in the encyclical that «the exclusively binary model of market-plus-state is corrosive of society, while economic forms based on solidarity, which find their natural home in civil society without being restricted to it, build up society." Instead of defending civil society in its current configuration, Benedict calls for a new kind of settlement whereby the global «market-state» is re-embedded within a wider network of social relations and governed by virtues and universal principles such as justice, solidarity, fraternity and responsibility.

Concretely, the pope encourages the creation of enterprises operating according to mutualist principles like cooperatives or employee-owned businesses, for example the Spanish-based cooperative Mondragon which has over 100,000 employees and annual sales of manufactured goods of over $3bn. Such businesses pursue both private and social ends by reinvesting their profit in the company and in the community instead of simply enriching the top management or institutional shareholders. Benedict also supports professional associations and other intermediary institutions wherein workers and owners can jointly determine just wages and fair prices.

Against the free-market concentration of wealth and state-controlled redistribution of income, the pope proposes a more radical programme: labour receives assets (in the form of stake-holdings) and hires capital (not vice-versa), while capital itself comes in part from worker and community-supported credit unions rather than exclusively from shareholder-driven retail banks.

Like the «market-state», money and science must also be re-embedded within social relations and support rather than destroy mankind’s organic ties with nature. Crucially, the world economy needs to switch from short-term financial speculation to long-term investment in the real economy, social development and environmental sustainability.

Taken together, these and other ideas developed in the encyclical go beyond piecemeal reform and amount to a wholesale transformation of the secular logic underpinning global capitalism. Alongside private contracts and public provisions, Benedict seeks to introduce the logic of gift-giving and gift-exchange into the economic process. Market exchange of goods and services cannot properly work without the free, gratuitous gift of mutual trust and reciprocity so badly undermined by the global credit crunch.

Thus, the papal encyclical resists the misleading categorisation of left-wing statism or right-wing free-market fundamentalism. Benedict’s call for a civil economy is a quest for a way that cannot be charted on our current ideological map. That’s what makes Catholic social teaching such a radical alternative.

An article from guardian.co.uk © Guardian News and Media Limited 2009