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A Paper by Kamran Mofid*

Delivered at The World Public Forum- Dialogue of Civilisations

2009 Rhodes Forum, Greece, October 8-12, 2009

(Panel 5: Tradition and modernization:

variants of combination- Religious response)

Photo:Education for Justice


Caritas in veritate, The Encyclical-Letter by Pope Benedict XVI suggests to advance towards a new conceptualization of the tenuous relationship between economics and ethics, proposing a ‘‘new humanistic synthesis.’’ It offers some powerful ideas that can help diagnose and address the economic ills that have been plaguing the global economies for the past many years. Where social encyclicals have traditionally justified policy proposals by natural law and theological reasoning alone, Caritas in Veritate gives great relevance to economic arguments. The encyclical defines the framework for a new business ethics which appreciates allocative and distributive efficiency, and thus both markets and institutions as improving the human condition, but locates their source and reason outside the economic sphere. It places a clear accent on the ontological connectedness of the economic and ethical dimensions of human action. It is the proper ordering of means towards the end of integral human development that allows mankind to leave a vicious circle of consumerism, materialism and individualism and enter a virtuous circle that applies the creativity fostered by markets. This vision implies a new model of business, economics and financial management that integrates considerations of vocation, purpose, common good values at a theological level. These ideas and vision are a challenge to much of contemporary economic theory, in particular arising from the fact that economics as a field, like most of social science, is deeply ensconced in a liberal worldview, with all that entails, including a rejection of transcendent moral norms and a blindness to its own metaphysical assumptions. In this presentation, which is divided in two parts, I would like to reflect firstly on the relationship between economics and theology and why they should be reunited; and in Part two, I will further reflect on Benedict XVI, Economist: Caritas in Veritate.

“Love – caritas – is an extraordinary force which leads people to opt for courageous and generous engagement in the field of justice and peace.”

“Business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of business: the workers, the clients, the supporters of various elements of production, the community of reference…” 

“The environment is God’s gift to everyone, and in our use of it we have a responsibility towards the poor, towards future generations, and towards humanity as a whole.”

“Economic activity cannot solve all social problems through the simple application of commercial logic. This needs to be directed towards the pursuit of the common good, for which the political community in particular must also take responsibility. Therefore, it must be borne in mind that grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from Political action, conceived as a means for pursuing justice through redistribution” 

“Development is impossible without upright men and women financiers and politicians whose consciences are finely attuned to the requirements of the common good” 

“The common good refers to what belongs to everyone by virtue of their common humanity”

Part I- On Economics and Theology

THERE WAS A TIME when economics was regarded as a branch of theology. Economic factors were intimately linked to what was regarded as just or right and these in their turn were shaped by a Christian understanding of the common good. From the eighteenth century onwards economics became an autonomous discipline and this has clearly enabled a great deal of technical expertise to be developed. Nevertheless in the end economics is about human well-being in society and this cannot be separated from moral, or perhaps in the end, theological considerations. The idea of an economics which is value-free is totally spurious. Nothing in this life is morally neutral. Although of course there will continue to be a range of technical, very often statistical and mathematical factors in economics, in the end the subject cannot be separated from a vision of what it is to be a human being in society.

Today, our world is facing major socio-economics, political, financial and ecological crises. There have also been some major scandals, especially in the financial and business sectors. Many articles and books have already been written on why and what has gone wrong. They all agree on the role of one vital element: dishonesty fuelled by greed. We forget at our own peril that honesty and greed are essentially spiritual and moral issues. They lie within the province of religious faith, which seeks to apply God’s wisdom to the formation of moral and spiritual values. However, no part of human life can operate without these values, not least the sphere of business. Genuine faith, far from being a private affair, relates to the whole of life, from the chief executive to the bottom line.

The greed-motivated neo-liberal world is spinning out of control. Perhaps it is time for us to redefine our values. From a religious perspective the two main problems with market capitalism are greed and delusion. In modern economic theory, and the kind of market it promotes, the moral concept of greed has inevitably been lost; ‘today it seems left to religion to preserve what is problematic about a human trait that is unsavoury at best and unambiguously evil at its worst’. Religious traditions have tended to accept greed as part of the human condition, but they have seen a great need to control it.

This will come as no surprise to those with a traditional orientation to the world. By far the best critiques of greed are provided by the established religions, by Buddhism, Hinduism, Judaism, Christianity and Islam, as well as by others such as Sikhism, Sufism, Ismailism, Zoroastrianism and Baha’ism. All offer a wealth of teachings on how we should ethically and morally lead our lives, on how we can achieve happiness without greed or delusion.
The benefits of neo-liberal globalisation are limited and are based on individualism, greed, self-interest and economism (which regards human societies primarily as economic systems in which financial considerations alone govern choices and decisions). Other fundamental values such as faith, spirituality, justice, love, compassion, sympathy, empathy and co-operation are neglected.

TO REVERSE THE CRISES affecting the fabric of our world we have to awaken the desire to ask deeper questions about life and its purpose. Modern globalised culture desperately needs a conscience; it needs morality, ethics and spirituality. It needs faith. Then we can make economics, politics, business and the trend towards globalisation more relevant and acceptable.I suggest that it is only by bringing together the common beliefs within our religious traditions and applying them to our economic systems that we can create an all-inclusive world for the good of all. As Hans Kung stresses, ethics should be firmly rooted in religion, otherwise there is no binding force. Only religions can speak with one voice on ethical issues, covering all aspects of respect for life.

Why should we try to combine religion and economics?

Because they have a common end: that all may live happily; it is just that they employ different methods in order to achieve this end. One uses the production and exchange of goods and services, the other selfless service, love and compassion. Religions could – if they will speak with their original source of inspiration– greatly contribute towards restoring the balance between the material and the spiritual elements and thus show the way to live fully human lives in a peaceful, just and sustainable society.

The ethical and spiritual teachings of all religions and their striving for the common good can provide us with a clear and focused model of moral behaviour in what we term ‘the marketplace’. An overall ethical orientation to the challenges of daily economic activity can be related to each of our faith traditions.

In the Jewish tradition we see the effort to balance pragmatic considerations of economic efficiency with ideals of interpersonal equity and social justice. The key themes of Christian and Islamic thought are respectively a concern for human dignity and a concern for communal solidarity. These three themes are not separate: they overlap and interlock; and they are shared by all three traditions. Together they form an inspiring mosaic of Western religious ethics.

The traditions of the East have somewhat different themes from those of the Abrahamic religions; nonetheless, there is much that is similar. The importance of humility and patience characterises the Hindu view of economic life. In Buddhism, the theme that resonates most strongly is compassion; in Confucian thought it is reciprocity. These, also, are not separate themes, but overlapping and interlocked. The mosaic they form is not sharply distinct from that of the Western traditions. Related to the marketplace, it would inspire businessmen to exhibit mutual compassion, while individual achievement would not be at the expense of communal solidarity. Steady economic and moral improvement would be pursued with humility and patience.

These must become the guiding principles, the vision behind the teachings of a new economics: the marketplace is not just an economic sphere, ‘it is a region of the human spirit’. Self-interest undoubtedly drives most decisions made every day in the marketplace, but those decisions also have a moral content because each decision affects not only us but other human beings too, and often also the animal and natural world. To the extent that our economic decisions impact on others, we have a moral responsibility to assess our self-interest in the context of a broader sense of right and wrong.

There must be a serious attempt to connect economics and theology. In modern neo-liberal economics no such connection is made. Religion is tolerated only if it narrows its focus to individual salvation; the wider social concerns which preoccupied Moses, Jesus, Mohammed and other prophets are not considered to be within its realm. For neo-liberal economists anything that interferes with their god, the marketplace, is blasphemous. They have forgotten that their mentor Adam Smith, father of modern economics, was Professor of Moral Philosophy at Glasgow University. Before he wrote The Wealth of Nations he was already famous for The Theory of Moral Sentiments. They also forget his wise words, ‘No society can surely be flourishing and happy of which the greater part are poor and miserable.’

In all, if we could align the most powerful force in capitalism, namely wealth-creation, with ethical objectives by bringing economics and theology together, then the world would be a better, safer place, and globalisation could become a force for good. If only we could link theology and economics we could make the study of these subjects far more effective than if they continue to be analysed in isolation. We should not reject the imperatives of economics, politics and trade per se but should apply them to the common good: everybody must become a stakeholder; everybody must benefit.

In short, instilling the practice of ethical capitalism, creating the virtuous economy and the globalisation for the common good is possible and practical. Global human civilisation has all the moral, ethical and spiritual tools in need to achieve these goals. Ethical principles that emphasise reciprocal rights and responsibilities have long characterised human societies. The Golden Rule is a feature of all the world’s religions and cultural canons-“Do unto others as you would have them do unto you.”The ancient Egyptians and Greeks alike pointed to the moral worth of not doing to your neighbour "what you would take ill from him." The Golden Rule is found in both the Old and the New Testament, with the Great Commandment found in Leviticus: "Love thy neighbour as thyself." For Islam, the Golden Rule was offered in the last sermon of Muhammad: "Hurt no one so that no one may hurt you." Variations and extensions of the principle are also found in Buddhism, Hinduism, Taoism, and Jainism. 

Part II- Benedict XVI, Economist: Caritas in Veritate

Reading the encyclical what I noticed most was that, the core message of the pope is: truth matters, even in the economy.

Perhaps Caritas in Veritate’s most important truth-claim about economic life is that the market economy cannot be based on just any value-system. Pope Benedict maintains that market economies must be underpinned by commitments to particular basic moral goods and a certain vision of the human person if it is to serve rather than undermine humanity’s common good: “The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centred”. 

“Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty”. “Without internal forms of solidarity and mutual trust,” the Pope writes, “the market cannot completely fulfil its proper economic function”. 
For the Pope, a proper understanding of the challenges to our moral development “requires further and deeper reflection on the economy and its goals” but this is only a first step towards bringing about a “profound cultural renewal” that could not legitimately be captured by the technical language or categories of academic economics.

More specifically, Caritas is devoted to the virtue of charity understood in light of the “commitment to the common good” which has “greater worth than a merely secular or political stand would have.” 

The Pope believes that the current economic crisis can become an opportunity for discernment, in which to share a new vision for the future, a process in which the world needs to “rediscover fundamental values”. Focusing on human and social capital as the deep source of tangible wealth creation, the Pope notes that “the primary capital to be safeguarded and valued is man, the human person in his or her integrity.” 
In an important part of his argument, the Pope continues:

“In a climate of mutual trust, the market is the economic institution that permits encounter between persons, inasmuch as they are economic subjects who make use of contracts to regulate their relations as they exchange goods and services of equivalent value between them, in order to satisfy their needs and desires. The market is subject to the principles of so-called commutative justice, which regulates the relations of giving and receiving between parties to a transaction. But the social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function. And today it is this trust which has ceased to exist, and the loss of trust is a grave loss.”

The Pope recognizes that the market is not an intentional moral instrument; it only reflects the values brought to it by those who seek to buy and sell:

“Admittedly, the market can be a negative force, not because it is so by nature, but because a certain ideology can make it so. It must be remembered that the market does not exist in the pure state. It is shaped by the cultural configurations which define it and give it direction. Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. Instruments that are good in themselves can thereby be transformed into harmful ones. But it is man's darkened reason that produces these consequences, not the instrument per se. Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” 

Economic development, believes the Pope, is impossible without upright men and women, without financiers and politicians whose consciences are finely attuned to the requirements of the common good. 

The Pope acknowledges in his Encyclical that “Much in fact depends on the underlying system of morality.” Ethics, the Pope writes, must apply to the system, to the core of business operations and financial intermediation. The Pope argues that “Efforts are needed –and it is essential to say this – not only to create “ethical” sectors or segments of the economy or the world of finance, but to ensure that the whole economy – the whole of finance – is ethical, not merely by virtue of an external label, but by its respect for requirements intrinsic to its very nature.” 

He adds later in his Encyclical the observation that “Finance, therefore — through the renewed structures and operating methods that have to be designed after its misuse, which wreaked such havoc on the real economy — now needs to go back to being an instrument directed towards improved wealth creation and development. Insofar as they are instruments, the entire economy and finance, not just certain sectors, must be used in an ethical way so as to create suitable conditions for human development and for the development of peoples. It is certainly useful, and in some circumstances imperative, to launch financial initiatives in which the humanitarian dimension predominates. However, this must not obscure the fact that the entire financial system has to be aimed at sustaining true development. 

Above all, the intention to do good must not be considered incompatible with the effective capacity to produce goods. Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers. Right intention, transparency, and the search for positive results are mutually compatible and must never be detached from one another. If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in a significant way by much of the experience of credit unions.” 

The Pope also requires of financial capitalism that: “What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise, its benefit to the real economy and attention to the advancement, in suitable and appropriate ways, of further economic initiatives in countries in need of development.” 

In this very vein of analysis the Pope asserts:

“Locating resources, financing, production, consumption, and all the other phases in the economic cycle inevitable have moral implications. Thus every economic decision has a moral consequence.”  Thus the Pope concludes that:

“Yet there is also increasing awareness of the need for greater social responsibility on the part of business. Even if the ethical considerations that currently inform debate on the social responsibility of the corporate world are not all acceptable from the perspective of the Church's social doctrine, there is nevertheless a growing conviction that business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference.” 

In discussing his concern for environmental protections, the Pope in his Encyclical refers to “a responsible stewardship over nature”.  Part of the needed response to excessive technological expertise in our thinking, suggests Pope Benedict XVI in this Encyclical, should be “a deeper critical evaluation of the category of relation.” Isolated individualism gives rise to a profound poverty of both spirit and understanding. It is a limiting constraint on our use of human reason to properly balance our production and consumption with the needs of both the human and the natural ecologies in which we must survive. 

The Pope reminds us that: “As a spiritual being, the human creature is defined through interpersonal relations. The more authentically he or she lives these relations, the more his or her own personal identity matures. It is not by isolation that man establishes his worth, but by placing himself in relation with others and with God.” Reciprocity, holds the Pope, must be considered as the heart of what it is to be a human being. 

Therefore, the task of preparing us for wise action the Pope argues “cannot be undertaken by the social sciences alone, insofar as the contribution of disciplines such as metaphysics and theology is needed if man’s transcendent dignity is to be properly understood.” 

Thus, the Pope is concerned that modern technological thinking can only suggest that business investment is merely a technical act, not a human and ethical one, which in truth it is as well. He advises us that “Technologically advanced societies must not confuse their own technological development with a presumed cultural superiority, but must rather rediscover within themselves the oft forgotten virtues which made it possible for them to flourish throughout their history.” 

Technology, Pope remarks, is a profoundly human reality, linked to the autonomy and freedom of man; technology expresses and confirms the hegemony of spirit over matter, and so must remember that it is never merely technology. Technology has its proper ends in expressing God’s trust to humanity to keep and till the earth, an undertaking that should mirror God’s creative love. In short, technology is an expression of Caritas, a moral dimension that guides the use of numbers, algorithms, and practical theorems.

The Pope then observes in his encyclical that:

“Evolving societies must remain faithful to all that is truly human in their traditions, avoiding temptation to overlay them automatically with the mechanisms of a globalized technological civilization. In all cultures there are examples of ethical convergence, some isolated, some interrelated, as an expression of the one human nature, willed by the Creator: the tradition of ethical wisdom knows this as natural law. This universal moral law provides a sound basis for all cultural, religious, and political dialogue, and it ensures that the multi-faceted pluralism of cultural diversity does not detach itself from the common quest for truth, goodness and God.” 
At Globalisation for the Common Good Initiative we are proud that our initiative, project, work and research has been at the forefront of the ideas and values that the Pope has shared with us in this Encyclical, validating our approach to reform of global business, economics, ecology and globalisation practices. This is a real encouragement for all of us and it shows our collective dynamism at the service of an Economy serving Man and the Common Good.


Caritas In Veritate: A Short Summary**

“The encyclical begins with a short introduction (paragraphs 1-9) wherein the Pope reiterates that charity is the central road of the Church social doctrine but it has to be understood under the light of truth. The encyclical places itself in the tradition of Populorum Progressio (The Development of People) of Paul VI (1967), which is defined as the Rerum Novarum (1891) of our times. The introduction also makes clear that even though the Church has no technical solutions to the current economic crisis, it remains her duty to emphasize that genuine progress is never mere technical progress, but something joined to charity which aims at defeating evil with goodness. Six chapters follow and then a conclusion. Let us briefly enumerate them. 

Chapter 1 is titled “The Message of Populorum Progressio” and consists of ten enumerated paragraphs (10-20). It emphasizes the fact that in his encyclical of 1967 Paul VI had already spoken of development as a human vocation springing from a transcendental call, and based on individual and the collective freedom of whole people and nations. Underdevelopment springs from a lack of real brotherhood. Globalization may bring us closer but not necessarily render us brothers to each other. An insight this worth pondering considering the failures of so many movements based on an empty “brotherhood” devoid of Fatherhood. 

Chapter 2 (21-33) is titled “Human Development in our Times” follows up on the first chapter reminding us that Paul VI was not speaking in general terms but had a well articulated vision of what development of people really means. By development he meant the defeat of poverty, illiteracy, hunger, endemic diseases. So many years later we witness the same problems that far from being resolved have been exacerbated by globalization understood as financial activity badly used and based on mere speculation and profits, the badly regulated exploitation of the earth’s resources, and the consequent migratory waves of millions of destitute peoples. While the world’s wealth increases in absolute terms, economic disparities are still increasing. International aid often has bad motives and goals. There is a reluctance to share generously, a too rigid concept of intellectual property especially in the field of medicine and health. The results are vast pockets of poverty and disrespect toward human rights.

Chapter 3 (34-42) is titled “Brotherhood, economic development and civil society.” It basically underlies the fact that a true social doctrine is always underpinned by distributive justice and social justice as regulating criteria of a market economy. What is needed are fair laws, redistribution laws which are guided by political wisdom carrying the spirit of gifting. To invest and produce has a moral dimension but today we see a managerial class that fixes for itself its own compensations and pays attention only to stock owners and market forces, the so called “bottom line.” The Pope then invites those managers to change the economic system to one that is culturally more personalistic, humane and communitarian, and aiming at the common good.

Chapter 4 (43-52) is titled “Peoples’ Development: rights and obligations, the environment.” It points out that one cannot divorce individual rights from a collective view of rights and duties. To do so is to ensure that the claiming of rights becomes the privilege of the few and the powerful. For example, in the demographic field the Church continues to hold that it is not the growth in population that is the primary cause of a country’s underdevelopment and that in fact openness to life is a social good. Then the Pope speaks of ethical financing, of respect and stewardship of the environment, or responsible use of energy resources, of respect for the right to natural life and natural death. What ought to be promoted, in his view, is the concept of a “human ecology.”

Chapter 5 (53-67) is titled “Collaboration within the human family.” It reiterates that the development of peoples is based on the idea that we are one family. Religious freedom, of the dialogue between believers and non believers, based on international cooperation for development. The development of people is a human enterprise and calls everybody. There is even a reflection on international tourism as a mode of growth, conceived however not in a hedonistic mode, of workers’ unions which must embrace and promote the rights of all workers, of guarantees in international finance, of a needed reform in the United Nations which aims at the development of all people and a genuine globalization.

Chapter 6 (68-77) is titled “Peoples’ Development and Technology.” It points out that technology can take over any other human consideration when mere efficiency and utility become the only criteria for truth. On the contrary, human freedom expresses itself by opposing the fruits of moral responsibility to mere technology. The development of peoples is not dependent on mere technical solutions but on the existence of just men who live in their conscience the appeal to the common good. And here the Pope speaks of the anthropological issues of life’s manipulation, eugenic planning of births, euthanasia, abortion, all practices which to his mind only increase a merely material and mechanistic  view of human life.

Finally in its conclusion (78-79) the Pope reiterates that being open to God means also being open to one’s brothers. The kind of humanism that excludes God, as is in vogue nowadays, ends up dehumanizing man. He also says that a true development needs believers who with their arms lifted toward God as in prayer are aware of the fact that authentic development always proceeds from love based on truth, and that such an awareness is not self-generated but is ultimately a gift.”

**Reprinted from: "Caritas in Veritate" and the Economic Crisis: Message and Messenger




Pope Benedict XVI (2009), Caritas In Veritate- Charity In Truth, Stoke on Trent (UK): alive Publishing-Publisher to the Holy See

Emanuel L. Paparella "Caritas in Veritate" and the Economic Crisis: Message and Messenger


Mofid, Kamran (2002) Globalisation for the Common Good, London: Shepheard-Walwyn

Mofid, Kamran (2003) Business Ethics, Corporate Social Responsibility and Globalisation for the Common Good, London: Shepheard-Walwyn

Mofid, Kamran and Marcus Braybrooke (2005) Promoting the Common Good-Bringing Economics and Theology Together Again, London: Shepheard-Walwyn

*Prof. Kamran Mofid is Founder of the Globalisation for the Common Good Initiative (founded at an international conference in Oxford in 2002) and Co- founder/Editor, Journal of Globalisation for the Common Good, hosted at Purdue University, USA, member of the International Coordinating Committee (ICC) of the World Public Forum, Dialogue of Civilisations, and Founding Member, World Dignity University, and Global Advisory Board, Human Dignity and Humiliation Studies.  Mofid received his BA and MA in economics from the University of Windsor, Canada in 1980 and 1982 respectively. In 1986 he was awarded his doctorate in economics from the University of Birmingham, UK. In 2001 he received a Certificate in Education in Pastoral Studies at Plater College, Oxford. From 1980 to 2000 he was Economic Teaching Assistant, Tutor, Lecturer and Senior Lecturer at Universities of Windsor (Canada), Birmingham, Bristol, Wolverhampton, and Coventry (UK). Mofid's work is highly interdisciplinary, drawing on Economics, Business, Politics, International Relations, Theology, Culture, Ecology, Ethics and Spirituality. Mofid's writings have appeared in leading scholarly journals, popular magazines and newspapers. His books include Development Planning in Iran: From Monarchy to Islamic Republic , The Economic Consequences of the Gulf war, Globalisation for the Common Good, Business Ethics, Corporate Social Responsibility and Globalisation for the Common Good , Promoting the Common Good (with Rev. Dr. Marcus Braybrooke, 2005), and A non-Violent Path to Conflict Resolution and Peace Building (Co-authored, 2008).www.gcgi.info