In a world of vast wealth inequalities, dishonest financial practices, and an emphasis profit over the authentic good, an ethical discernment is needed if the world is not to “slide towards social collapse with devastating consequences.”
These were the words of warning today from Archbishop Luis Ladaria, prefect of the Congregation for the Doctrine of the Faith, at the publication of Oeconomicae et pecuniariae quaestiones —Considerations for an Ethical Discernment Regarding Some Aspects of the Present Economic-Financial System, a document written by the Congregation and the Dicastery for Promoting Integral Human Development.
Archbishop Ladaria said in view of current ethical challenges in the financial world, the considerations aim to take an “honest look” at certain areas of finance, and to “offer an ethical discernment on certain aspects of those areas.”
The document, signed on the Feast of the Epiphany and running to just over 11,000 words, begins by noting that, although global economic wellbeing has grown at a “magnitude and speed” never seen before, it is important to note “inequalities” that have grown within and among different countries and, moreover, that the number of people who live in “extreme conditions of poverty continues to be enormous.”
It speaks of a time to “initiate the recovery of what is authentically human” in an age which has “shown itself to have a limited vision of the human person” who is generally understood to be a “consumer whose profit consists above all in the optimization of his or her monetary income.”
The document stresses that, on the contrary, the human person has a “relational nature” whose wellbeing is “reducible neither to a logic of consumption nor to the economic aspects of life.”
It highlights a number of points of concern, some of which are as follows:
- “No profit is in fact legitimate when it falls short of the objective of the integral promotion of the human person, the universal destination of goods, and the preferential option for the poor.”
- Wellbeing must be “measured by criteria much more comprehensive than the Gross Domestic Product of a nation (GDP).”
- Markets are “not capable of governing themselves” as they know neither how to achieve elements that allow them to run smoothly nor correct what makes them harmful to human society.
- The financial industry today is a place “where selfishness and the abuse of power have the potential to harm the community beyond match.”
- Work is “not only becoming a reality more and more at risk, but it is also losing its value as a ‘good’ for the human person” turning itself into a “mere means of exchange.”
- Investment funds based on the risk of financial speculation jeopardize “the very economic stability of millions of families,” forcing governments to intervene and “artificially determining the proper functioning of political systems.”
- “Where massive deregulation is practiced,” embezzlement, speculative bubbles, “sudden and destructive collapses, and systematic crisis” is the result.
- Placing profit at the “summit” of a financial enterprise “easily creates a perverse and selective logic that often favors the advancement of business leaders who are capable, but greedy and unscrupulous, and whose relationship with others is prevalently driven by a selfish and personal gain.”
- The document criticizes certain financial instruments such as “derivatives” which it says have “encouraged the rising of speculative bubbles” and are a “ticking time bomb ready to sooner or later explode, poisoning the health of the markets.”
- Similarly, it criticizes “credit default swaps” for encouraging the “gambling on the failure of others,” becoming a kind a “economic cannibalism,” and causing “enormous damage for entire nations and millions of families.”
- Tax avoidance and evasion using offshore tax havens contributes to impoverishment of nations, especially when carried out by large companies, leading to “unjust removal of resources from the actual economy.”
- The document also criticizes governments for public debt caused by “incautious, if not fraudulent, management of the public administrative system,” leading to major obstacles to “good functioning and growth of the various national economies.”
The Considerations also point to possible remedies:
- By habitually living “in solidarity,” goods a person possesses “are used not only for one’s own needs, but they multiply themselves, producing unexpected fruits also for others.”
- Constantly updated regulation is necessary due to the fact that, among the “principal reasons” for the recent economic crisis, was “the immoral behavior of the experts in the financial world.”
- Rules must favor “complete transparency to eliminate every form of inequality,” such as banks being open with customers if they are using their capital for speculative ends.
- The market “needs anthropological and ethical prerequisites that it is neither capable of giving for itself, nor producing on its own.”
- The document advocates “ethical committees” within banks.
- It also proposes equal taxes to bring about an “equalization and redistribution” of wealth.
In conclusion, the document urges readers not to be tempted into cynicism and a sense of powerlessness but to remember “every one of us can do so much, especially if one does not remain alone.”
It highlights “numerous associations” that are emerging to promote social responsibility, and that it is important to shape actions “for the common good,” based on “the sound principles of solidarity and subsidiarity.”
Moreover, it stresses that all such actions depend on the Lord and good will, leading to a “web that unites heaven and earth, which is a true instrument of the humanization of each person, and the world as a whole.”