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Faith Looks at Wall St.

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The Pope and St. Joseph on Wall Street

BY Angelo Matera
May 11-17, 2003 National Catholic Register

Does a “free” economy in itself fulfill the requirements of Catholic justice?

Pope John Paul II, drawing on 2,000 years of Catholic tradition, has consistently answered No to that question. In the last week of April, at two separate events, the Holy Father reinforced his teaching with a twofold warning about the dangers of economic freedom pursued without regard for Gospel truths.

That happened to be the same day a $1.4 billion settlement against Wall Street’s leading investment firms was announced. The firms were accused of luring millions of investors into buying billions of dollars worth of shares in hyped-up companies with biased research reports during the recent stock-market boom.

And on May 1 would come the Feast of St. Joseph the Worker, the day proclaimed by Pope Pius XII in 1955 to counter communist “May Day” celebrations on May 1, the traditional holiday of the working class.

Was the Pope’s timing a coincidence? Hardly. Since the fall of communism, he has refused to give capitalism a free pass.

The Golden Bull

In a meeting with representatives of the Czech Republic on April 8, the Holy Father took aim at the demand side of modern capitalism — consumers. He cited the perils of a “culture of consumption” and the “idolatry of the market.”

What do these phrases mean in everyday language? They describe societies where people see themselves mostly as consumers of goods and services, living lives built around the enticements of the marketplace.

According to John Paul, a society where “having” becomes more important than “being” can never be a “civilization of love,” even if its members fulfill the obligations of personal piety and morality. The people themselves might be saved, but they will have failed in the important task of building up the Kingdom of God, creating communities where people live in communion through strong ties of citizenship, justice and service.

These social obligations are defined in Catholic social teachings every pope since the late 19th century has considered essential to the Church’s proclamation of the Gospel.

These teachings are highly critical of the unrestrained “free market,” which tends to reduce life to financial and contractual relationships, and ends up reducing people themselves to objects. Eventually, families and communities are undermined, and the weak are marginalized.

“This,” the Pope warned, “seriously detracts from the dignity of the human person and makes promotion of human solidarity difficult at best.”

Two days earlier, on April 26 before 800 executives from an Argentine bank, the Holy Father zeroed in on the supply side — investors, entrepreneurs and corporate managers — those who fund, start and operate businesses.

“Profit,” the Holy Father insisted, “should not be the sole or principal motive for business or commercial activity.”

John Paul knows businesses must generate enough profit to survive and thrive. He has also praised the creativity and initiative involved in starting a business. But, he reminded his audience of executives, “such activity must keep in mind the human factors and is subordinated to the moral exigencies proper to all human action.”

Could the Pope have had in mind the large-scale business corruption cited in the Wall Street cases as well as Enron, WorldCom and the scandal that crippled the accounting firm Arthur Andersen?

An economy motivated mostly by the lust for money will, paradoxically, end up less wealthy.

The massive corruption that fed the stock-market boom and the bust that followed left millions of small investors — many of them seniors living on fixed incomes — significantly poorer, caused the layoff of thousands of employees and sent the economy into a recession that has lasted much longer than expected.

Why have the Pope’s leading Catholic defenders been mostly silent about all of this, despite the statements of the Holy Father and the U.S. bishops and 2,000 years of Catholic teaching concerning the evils of economic injustice?

After all, the faith implications are clear. The Catechism states: “Every practice that reduces persons to nothing more than a means to profit enslaves man, leads to idolizing money and contributes to the spread of atheism” (2424).

Looking at the government policies of the past 25 years, faithful Catholics need to ask: Has the radical deregulation of business and financial markets — and the relaxing of professional standards — made our economy less just and, ultimately, less Catholic?

It’s true, as the Vatican’s doctrinal point man Cardinal Joseph Ratzinger has said, that “structures of sin” are built upon personal sin, and that without personal morality, social reform cannot succeed. But structures of sin, in themselves, can push moral standards lower, creating a vicious cycle of moral decline.

In a recent Wall Street Journal article titled “A Decade of Greed Undid a Once-Proud Profession,” reporter Ianthe Jeanne Dugan chronicled the disastrous decline of the centuries-old accounting profession. (A Franciscan Friar, Luca Pacioli, fathered the profession in 1494 when he became the first person to describe double-entry bookkeeping).

Dugan quoted 72-year-old retired General Motors auditor Eugene Flegm, who blamed the collapse on “the 1960s anything-goes attitude” combined with “all the greed.” Together, he said, “you have a recipe for disaster.”

That’s some recipe: Take ruthless, global competition; add pressure to generate ever-increasing levels of growth and profit; combine materialistic values; drain off moral restraint. The result? Greed and social irresponsibility. Apply it to the upper strata of American business — Wall Street and the Fortune 500 — and corruption is inevitable.

St. Joseph the Consumer?

What can orthodox Catholics do? They can protest against these economic “structures of sin” that harm families and communities, and victimize the poor and the vulnerable. Just as we protest against laws and conditions that threaten the sanctity of life and family values, we must advocate for reasonable regulation of the marketplace to ensure a just economy (as the Catechism says in No. 2425).

Historically, the Church has always taken a middle path between collectivism (socialism) and individualism (capitalism). It favors private property and the common good, strong government and economic freedom. As Catholics, our criterion for judging economic policy should be: “Will this make life in our nation more human ... more Christian?”

This might not go over well on conservative talk radio. But we are called to proclaim the Gospel, not a party platform. We must go beyond liberal and conservative.

Reducing our economy’s obsession with cutthroat competition, unrealistic growth, short-term profit and higher stock prices, by whatever reasonable means, will help create more breathing space for charitable and spiritual pursuits, and strengthen families and communities. Most management experts agree such measures would probably improve long-term business performance as well.

And that’s the rub.

An economy motivated mostly by the lust for money will, paradoxically, end up less wealthy. Even more damaging than business sins of commissionare sins of omission —the creative acts of investment and service that don’t happen when a business or economy is motivated solely by greed and selfishness rather than the sort of self-giving commitment to customers, employees, neighbors and investors that comes from the Gospel.

Such commitment, far from being pie in the sky, has always been the source of real business achievement.

In his message for the Feast of St. Joseph the Worker, the Pope entrusted the world of work to the spouse of Mary, whose example is a support to “those who in their activity attend to the needs of the family and of all the human community.” That’s as good a working definition of the purpose of business as any.

When that purpose is lost, economic freedom becomes a destructive force. Economic freedom, like other God-given freedoms — political, scientific, artistic, sexual — is good, but only when ordered to the truth of the human person. As Catholics, we’re well aware of the harm done by bad politics, bad science, bad art and certainly bad sex.

But are we blind to the effects of bad economics? The Pope is calling us to examine our consciences.

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About Guest Blogger/Tom Hoopes

Tom  Hoopes
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Tom Hoopes is Vice President of College Relations and writer in residence at Benedictine College in Atchison, Kansas. He has written for the Register for more than 20 years and was its executive editor for 10. His writing has appeared in First Things’ First Thoughts, National Review Online, Crisis, Our Sunday Visitor, Inside Catholic and Columbia. He has served as press secretary for the Chairman of the U.S. House Ways & Means Committee. He and his wife, April, were editorial co-directors of Faith & Family magazine for 5 years. They have nine children.