What AIG’s Greed Teaches Us

Posted by Tom McFeely

Wednesday, March 18, 2009 8:21 AM

It teaches that the Catholic Church’s balanced view of the merits and flaws of corporate capitalism is the right one.

In contrast to this balanced Catholic view, conservative Protestantism has been mostly mute in the past about problems like corporate greed. So notes Houston Baptist University political scientist Hunter Baker in a commentary posted here at the First Things website.

“Catholic social thought has long resisted socialism while still sharply pointing out abuses in market economies,” Baker writes. “Pope Leo XIII’s Rerum Novarum is an excellent example addressing the ‘Rights and Duties of Capital and Labor.’

“Conservative Protestants, on the other hand, are largely absent when it comes to criticizing unfair labor practices, questionable methods of executive compensation, and other varieties of irresponsible corporate citizenship. My guess is that we tend to stay out of these areas is because we generally accept the idea that the market, left unhindered, will produce good outcomes. (I think the left feels the same way about sex.)

“Experience and prudence have demonstrated that free markets are demonstrably better than other alternatives. But the problem is that we have tuned our antennae in such a way such that they pick up market problems like the promotion of hedonistic vice but do not take adequate notice of other wrongs. Thus, conservative evangelicals are quick to protest against 7-11 carrying Playboy magazine but are slow to call to account the corporation that deals with employees in bad faith.”

Warns Baker, “If our cultural critique is to have integrity, we must simultaneously respect the market and call the corporate sector to righteousness in its business dealings. As uncomfortable as Mike Huckabee’s concerns with executive compensation made many Republicans, his words suggested a healthy willingness critically to examine corporate behavior. If we question corporations when they produce bad products like pornography and gambling operations, then we necessarily accept the notion that the logic of free markets does not insulate them from critique when they commit other types of wrongs.”

Filed under business ethics, financial crisis