March 9, 2016 // Local

Bishop reflects on Pope Francis and Catholic teaching on the economy

Bishop Kevin C. Rhoades presented this talk at the Catholic Business Network event on March 4 in Fort Wayne.

Some of the most controversial teachings of Pope Francis have been his statements on economic issues. There was a scathing critique of Pope Francis’ teachings on the economy by George Will in the National Review last September. Some have even accused the Pope of being a communist or a socialist. Others have welcomed his challenging words as a call to economic reform on the basis of justice and solidarity with the poor.

I think it is helpful to view the words of Pope Francis on the economy within the Tradition of the Church and her social doctrine. There are key principles that the Church has always upheld.

The Universal Destination of Goods

The Church teaches a principle called “the universal destination of goods.” This principle holds that “goods, even when legitimately owned, always have a universal destination; any type of improper accumulation is immoral, because it openly contradicts the universal destination assigned to all goods by the Creator” (Compendium of the Social Doctrine of the Church #328). This means that wealth exists to be shared. “Riches fulfill their function of service to man when they are destined to produce benefits for others and for society” (Compendium #329).

Some people are uncomfortable with this principle of Catholic social doctrine and believe it is a justification for socialism or communism. This is a false belief since the Church has consistently taught that private property is not only legitimate, but as the Second Vatican Council taught, is “wholly necessary for the autonomy of the person and the family” (Gaudium et spes 71). The Church upholds the right to private property, yet insists that this right cannot justify neglect of the universal destination of created goods. In his famous landmark encyclical Rerum novarum, Pope Leo XIII wrote: “When the demands of necessity and propriety have been sufficiently met, it is a duty to give to the poor out of that which remains.”

Following the teaching of Jesus Himself, the Church condemns the sin of greed: the immoderate attachment to riches and the desire to hoard. Successive popes, and now Pope Francis, have emphasized this point. The present Holy Father said in an interview: “The Gospel does not condemn the wealthy, but the idolatry of wealth, the idolatry that makes people indifferent to the call of the poor.”

In his encyclical Laudato Si, Pope Francis wrote the following about the common destination of goods and private property: “The Christian tradition has never recognized the right to private property as absolute or inviolable, and has stressed the social purpose of all forms of private property. Saint John Paul II forcefully reaffirmed this teaching, stating that ‘God gave the earth to the whole human race for the sustenance of all its members, without excluding or favoring anyone’” (#93). Pope Francis then went on to quote words spoken by Pope John Paul II in homilies in Mexico and Brazil when he taught that “the Church does indeed defend the legitimate right to private property, but she also teaches no less clearly that there is always a social mortgage on all private property, in order that goods may serve the general purpose that God gave them… it is not in accord with God’s plan that this gift be used in such a way that its benefits favor only a few.”

The principle of the universal destination flows from the principle of the common good (the good of all people and of the whole person), which should be the aim of politics. It is connected to the most fundamental principle of Catholic social doctrine: the dignity of the human person.

Also connected to these principles is the Church’s “preferential option for the poor.” Pope Francis is renowned for reaffirming this option in all its force, not only in his words, but also in his actions. This special love for the poor is inspired by the Gospel of the Beatitudes and the example and teachings of Jesus Himself. We see this emphasis in this Jubilee Year of Mercy in which the Pope has encouraged us to rediscover the corporal and spiritual works of mercy. The Church has always taught, in line with the New Testament letter of Saint James, that love for the poor is “incompatible with immoderate love of riches or their selfish use” (Catechism 2445). Pope Francis’ strong condemnations of “the idolatry of money,” consumerism, and economic injustices reflect the Church’s perennial concern for the dignity of the human person, the common good, and human solidarity. He is fond of quoting the words of Saint John Chrysostom: “Not to share one’s wealth with the poor is to steal from them and to take away their livelihood. It is not our own good which we hold, but theirs.”


Subsidiarity and Solidarity

Subsidiarity and Solidarity are two other key principles of Catholic social teaching.

On the basis of the principle of subsidiarity, all societies of a superior order have the duty of support, promotion, and development with respect to lower-order societies. An example of subsidiarity is the duty of the state to refrain from unnecessarily restricting the freedom and initiative of smaller cells of society. Private initiatives in economic matters should be promoted, not impeded, by the state.

The principle of subsidiarity stands alongside another key principle of Catholic social teaching: solidarity. Solidarity is a social virtue directed to the common good. There is a clear connection between solidarity and the universal destination of goods. Solidarity requires that we be concerned not only about our own well-being, but the well-being of our neighbor, especially the poor.

The Church upholds both of these principles as necessary for the common good. Emphasizing one to the exclusion of the other is problematic, yet at times there is a tension between them. Pope Benedict XVI, like popes before him, has called subsidiarity “an expression of inalienable human freedom.” In his social encyclical Charity in truth, Pope Benedict stated that “subsidiarity is the most effective antidote against any form of an all-encompassing welfare state.” He taught that “the principle of subsidiarity is particularly well-suited to managing globalization and directing it towards authentic human development. In order not to produce a dangerous universal power of a tyrannical nature, the governance of globalization must be marked by subsidiarity, articulated into several layers and involving different levels that can work together.” (#57)

While affirming the importance of subsidiarity, Pope Benedict also insisted that “the principle of subsidiarity must remain linked to the principle of solidarity and vice versa, since the former without the latter gives way to social privatism, while the latter without the former gives way to paternalist social assistance that is demeaning to those in need.” (#58)

Some have criticized Pope Francis saying that he promotes the principle of solidarity while ignoring the principle of subsidiarity. I don’t think this criticism is entirely fair. Though I would agree that Pope Francis has spoken out more often about the need for solidarity, he has not ignored the principle of subsidiarity. The pope has affirmed both principles.

In a speech at a conference celebrating the 50th anniversary of Pope Saint John XXIII’s encyclical Pacem in terris, Pope Francis re-affirmed Pope John’s insistence that every person has the right to access to the basic means of sustenance: food, water, housing, medical care, education, and the possibility to form and support a family. Pope Francis said that “these are the goals which must be given absolute priority in national and international action.” Here he is emphasizing solidarity. But immediately after saying this, he adds that “it is also important that space be made for the wide range of associations and intermediary bodies that, in the logic of subsidiarity and in the spirit of solidarity, pursue these objectives.” In others words, solidarity and subsidiarity can work together.

Balancing the principles of subsidiarity and solidarity can be challenging at times and quite complex in actual practice, but neither can be ignored. We must strive to uphold both principles. There are different opinions on how this can work, especially regarding the role of government in promoting the common good. Generally speaking, those favoring a more limited government will appeal to the principle of subsidiarity and those favoring more government intervention and regulation appeal to the principle of solidarity. Without oversimplifying, I think we can discern these different emphases in our own nation’s political parties. We see this debate also at the supranational level, regarding the role of the United Nations in relation to individual nations. What is the role of the higher authority versus the lower authorities, the U.N. in relation to the member nations?

It is clear in the teaching of Pope Francis that he sees the responsibility of higher authorities in issues of global importance, like the environment. But how do we harmonize the rights and responsibilities of the various authorities? Two years ago, Pope Francis gave an address to the European parliament. He emphasized, as he often does, the principle of solidarity, encouraging the European nations to work together for the common good of European society and the world. He again condemned uncontrolled consumerism and a “throw-away culture.” However, he spoke against a uniformity of political, economic and cultural life. He insisted on unity in diversity. He said: “The proper configuration of the European Union must always be respected, based as it is on the principles of solidarity and subsidiarity, so that mutual assistance can prevail and progress can be made on the basis of mutual trust.”

Pope Francis believes that the principle of solidarity can be implemented in harmony with that of subsidiarity. Only when this happens is there true justice. I think this harmony is best achieved when one keeps at the center of everything the centrality of the dignity of the human person. This is also something that Pope Francis emphasized throughout his speech to the European Parliament. He encouraged the Parliament to work together “in building a Europe which revolves not around the economy, but around the sacredness of the human person, around inalienable values.”

Business and the Free Market 

I now turn to the specific issues of business and the market. As a Catholic business network here in Fort Wayne, this is your area of experience and expertise. The Church’s expertise is in morality. The Church has a rich body of social teaching about economic life, including the place of the market and the role of business. In looking at these issues, all the principles I’ve been talking about come into play: the common good, the universal destination of goods, subsidiarity, and solidarity.

One of the most controversial statements made by Pope Francis these past three years was in his apostolic exhortation The Joy of the Gospel. In criticizing what he calls “an economy of exclusion,” the Holy Father stated the following: “some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitable succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting” (#54).

Later, in that same apostolic exhortation, Pope Francis wrote: “We can no longer trust in the unseen forces and the invisible hand of the market. Growth in justice requires more than economic growth, while presupposing such growth: it requires decisions, programs, mechanisms, and processes specifically geared to a better distribution of income, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality” (#204).

These are a few examples of statements of Pope Francis on the economy that have provoked a firestorm of criticism, accusations that he is a Marxist, that he is condemning the free market and capitalism. I disagree. Like his predecessors, Pope Saint John Paul II and Pope Benedict XVI and popes before them, Pope Francis was criticizing “unbridled or extreme capitalism.” Keep in mind that the Church also criticizes total economic control by the state, “extreme socialism.” The Catholic principle of solidarity is a rejection of unbridled capitalism. The Catholic principle of subsidiarity is a rejection of socialism.

It is helpful to remember the rich teaching of Saint John Paul II on these issues. In his great encyclical Centesimus Annus, John Paul pointed out the anthropological error of socialism in viewing the individual person as “an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socio-economic mechanism” (#13). Socialism violates human freedom and personal initiative. Against socialism, Pope John Paul strongly defended the principle of subsidiarity.

Pope Saint John Paul II affirmed the value of the free market, yet it is a “relative” value that must consider the need to provide for the needy: “the free market appears as the most efficient instrument for utilizing resources and effectively responding to needs. But there are many human needs which find no place on the market. It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied, and not to allow those burdened by such needs to perish. It is also necessary to help these needy people to acquire expertise, to enter the circle of exchange, and to develop their skills in order to make the best use of their capacities and resources” (#35). Against unbridled capitalism, Pope John Paul II emphasized the duty of solidarity. He and other popes, including Pope Francis, have called for just wages, more employment opportunities, and insurance for those in old age and with disabilities and for the unemployed. They are not against the free market, but they demand that the market be appropriately controlled by the forces of society and by the state for the sake of the common good.

When it comes to business, the Church acknowledges the legitimate role of profit, but not profit at the expense of other human and moral goods, like the needs of workers and their families, the needs of the poor, and the care of the environment. Business owners and managers have a responsibility for the common good, beginning with the welfare of their employees and their families. Pope John Paul II stated that “a business cannot be considered only as a society of capital goods, it is also a society of persons in which people participate in different ways and with specific responsibilities.”

While defending economic freedom, the Church does not defend an unfettered economic freedom, one that ignores human dignity, the welfare of families, or the earth as our common home. It isn’t just Pope Francis who speaks of the idolatry of money. Pope John Paul II spoke of the “idolatry of the market,” when the market ignores the existence of these other human goods.

In his encyclical Charity in truth, Pope Benedict XVI highlighted the importance of distributive justice and social justice for the market economy. He wrote that “without internal forms of solidarity and mutual trust, the market cannot completely fulfill its proper economic function” (#35). He then stated: “Economic activity cannot solve all social problems through the simple application of commercial logic. This needs to be directed toward 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.” Pope Benedict was very strong in asserting that “the market must not become the place where the strong subdue the weak” (#36).

Though not something negative in itself, the market can become a negative force, according to Pope Benedict, when those at the helm of business and finance are motivated by purely selfish ends, by greed, for example. This is where all the popes, including Pope Francis, call for ethics in the marketplace, for justice and solidarity. That’s why Pope Francis says that trickle-down economics does not necessarily work for the benefit of the poor. It doesn’t happen automatically. If those making wealth are not generous, are indifferent to the poor, do not expand jobs, and hoard their wealth, they are neglecting the duty of solidarity and ignoring the common good. In other words, the moral value of capitalism is not automatic. It can result in good or bad. Pope Francis writes that a new tyranny is born as the result of “ideologies which defend the absolute autonomy of the marketplace and financial speculation.” He writes: “in this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.” (EG #56).

I encourage you, as Catholic business owners, to study the social teachings of the Church and to be open to the wisdom of our popes, including Pope Francis. Think about how you handle your profits, remembering, as the Church teaches, that wealth exists to be shared. When your businesses create wealth, which is a good thing, it must not be just for yourselves, but also for your employees and hopefully for employing others who need employment. The Catechism teaches: “Business owners and management must not limit themselves to taking into account only the economic objectives of the company, the criteria for economic efficiency and the proper care of ‘capital’ as the sum of the means of production. It is also their precise duty to respect concretely the human dignity of those who work within the company” (#2432). Remember also your duty to structure work in such a way that family life is respected and promoted. I encourage you to act according to the principles of the Gospel, not principles of pure profit. As Jesus taught, “avoid greed in all its forms.”

Though Catholics may respectfully disagree with certain specific proposals or policies recommended by Pope Francis, the principles of Catholic social doctrine are obligatory for us: the dignity of the human person, the common good, the universal destination of goods, subsidiarity, and solidarity. Unfortunately, some critics of our Holy Father are not only disagreeing with him, I fear they are disagreeing sometimes with these principles and ultimately with the teachings of the Gospel. May the Lord open our minds and our hearts to reject the idolatry of money and to embrace the truth of the Gospel!

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