Thursday, December 05, 2013

Pope Francis' "Evangelium Gaudium" and the Crisis of the Moment

Excerpt From The Apostolic Exhortation "Evangelium Gaudium" (November 2013)

No to an economy of exclusion [53-54]
No to the new idolatry of money [55-56]
No to a financial system which rules rather than serves [57-58]
No to the inequality which spawns violence[59-60]

52. In our time humanity is experiencing a turning-point in its history, as we can see from the advances being made in so many fields. We can only praise the steps being taken to improve people’s welfare in areas such as health care, education and communications. At the same time we have to remember that the majority of our contemporaries are barely living from day to day, with dire consequences. A number of diseases are spreading. The hearts of many people are gripped by fear and desperation, even in the so-called rich countries. The joy of living frequently fades, lack of respect for others and violence are on the rise, and inequality is increasingly evident. It is a struggle to live and, often, to live with precious little dignity. This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occuring in the sciences and in technology, and by their instant application in different areas of nature and of life. We are in an age of knowledge and information, which has led to new and often anonymous kinds of power.
53. Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.
Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.
54. In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably 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. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.
55. One cause of this situation is found in our relationship with money, since we calmly accept its dominion over ourselves and our societies. The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf. Ex32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption.
56. While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions. The thirst for power and possessions knows no limits. 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.
57. Behind this attitude lurks a rejection of ethics and a rejection of God. Ethics has come to be viewed with a certain scornful derision. It is seen as counterproductive, too human, because it makes money and power relative. It is felt to be a threat, since it condemns the manipulation and debasement of the person. In effect, ethics leads to a God who calls for a committed response which is outside of the categories of the marketplace. When these latter are absolutized, God can only be seen as uncontrollable, unmanageable, even dangerous, since he calls human beings to their full realization and to freedom from all forms of enslavement. Ethics – a non-ideological ethics – would make it possible to bring about balance and a more humane social order. With this in mind, I encourage financial experts and political leaders to ponder the words of one of the sages of antiquity: “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 goods which we hold, but theirs”.[55]
58. A financial reform open to such ethical considerations would require a vigorous change of approach on the part of political leaders. I urge them to face this challenge with determination and an eye to the future, while not ignoring, of course, the specifics of each case. Money must serve, not rule! The Pope loves everyone, rich and poor alike, but he is obliged in the name of Christ to remind all that the rich must help, respect and promote the poor. I exhort you to generous solidarity and a return of economics and finance to an ethical approach which favours human beings.
59. Today in many places we hear a call for greater security. But until exclusion and inequality in society and between peoples is reversed, it will be impossible to eliminate violence. The poor and the poorer peoples are accused of violence, yet without equal opportunities the different forms of aggression and conflict will find a fertile terrain for growth and eventually explode. When a society – whether local, national or global – is willing to leave a part of itself on the fringes, no political programmes or resources spent on law enforcement or surveillance systems can indefinitely guarantee tranquility. This is not the case simply because inequality provokes a violent reaction from those excluded from the system, but because the socioeconomic system is unjust at its root. Just as goodness tends to spread, the toleration of evil, which is injustice, tends to expand its baneful influence and quietly to undermine any political and social system, no matter how solid it may appear. If every action has its consequences, an evil embedded in the structures of a society has a constant potential for disintegration and death. It is evil crystallized in unjust social structures, which cannot be the basis of hope for a better future. We are far from the so-called “end of history”, since the conditions for a sustainable and peaceful development have not yet been adequately articulated and realized.
60. Today’s economic mechanisms promote inordinate consumption, yet it is evident that unbridled consumerism combined with inequality proves doubly damaging to the social fabric. Inequality eventually engenders a violence which recourse to arms cannot and never will be able to resolve. This serves only to offer false hopes to those clamouring for heightened security, even though nowadays we know that weapons and violence, rather than providing solutions, create new and more serious conflicts. Some simply content themselves with blaming the poor and the poorer countries themselves for their troubles; indulging in unwarranted generalizations, they claim that the solution is an “education” that would tranquilize them, making them tame and harmless. All this becomes even more exasperating for the marginalized in the light of the widespread and deeply rooted corruption found in many countries – in their governments, businesses and institutions – whatever the political ideology of their leaders
   TConsider the above in the light of the thought of Joseph Ratzinger/Benedict XVI who pronounced the following remarks in 1985:

Market Economy and Ethics

Article presented in 1985 in a symposium in Rome, “Church and Economy in Dialogue.”
 1 by 
Joseph Cardinal Ratzinger
Allow me to give a cordial welcome — also in the name of the two other protectors, Cardinal Höffner and Cardinal Etchegaray — to all the participants here present for the Symposium on Church and Economy. I am very glad that the cooperation between the Pontifical Council for the Laity, the International Federation of Catholic Universities, the Institute of the German Economy and the Konrad-Adenauer-Foundation, has made possible these world-wide conversations on a question of deep concern for all of us.

The economic inequality between the northern and southern hemispheres of the globe is becoming more and more an inner threat to the cohesion of the human family. The danger for our future from such a threat may be no less real than that proceeding from the weapons arsenals with which the East and the West oppose one another. New exertions must be made to overcome this tension, since all methods employed hitherto have proven themselves inadequate. In fact, the misery in the world has increased in shocking measure during the last thirty years. In order to find solutions that will truly lead us forward, new economic ideas will be necessary. But such measures do not seem conceivable or, above all, practicable without new moral impulses. It is at this point that a dialogue between Church and economy becomes both possible and necessary.
Let me clarify somewhat the exact point in question. At first glance, precisely in terms of classical economic theory, it is not obvious what the Church and the economy should actually have to do with one another, aside from the fact that the Church owns businesses and so is a factor in the market. The Church should not enter into dialogue here as a mere component in the economy, but rather in its own right as Church.

Here, however, we must face the objection raised especially after the Second Vatican Council, that the autonomy of specialized realms is to be respected above all. Such an objection holds that the economy ought to play by its own rules and not according to moral considerations imposed on it from without. Following the tradition inaugurated by Adam Smith , this position holds that the market is incompatible with ethics because voluntary “moral” actions contradict market rules and drive the moralizing entrepreneur out of the game. 3 For a long time, then, business ethics rang like hollow metal because the economy was held to work on efficiency and not on morality. 4 The market's inner logic should free us precisely from the necessity of having to depend on the morality of its participants. The true play of market laws best guarantees progress and even distributive justice.
The great successes of this theory concealed its limitations for a long time. But now in a changed situation, its tacit philosophical presuppositions and thus its problems become clearer. Although this position admits the freedom of individual businessmen, and to that extent can be called liberal, it is in fact deterministic in its core. It presupposes that the free play of market forces can operate in one direction only, given the constitution of man and the world, namely, toward the self-regulation of supply and demand, and toward economic efficiency and progress.
This determinism, in which man is completely controlled by the binding laws of the market while believing he acts in freedom from them, includes yet another and perhaps even more astounding presupposition, namely, that the natural laws of the market are in essence good (if I may be permitted so to speak) and necessarily work for the good, whatever may be true of the morality of individuals. These two presuppositions are not entirely false, as the successes of the market economy illustrate. But neither are they universally applicable and correct, as is evident in the problems of today's world economy. Without developing the problem in its details here — which is not my task — let me merely underscore a sentence of Peter Koslowski's that illustrates the point in question: “The economy is governed not only by economic laws, but is also determined by men...”. 5 Even if the market economy does rest on the ordering of the individual within a determinate network of rules, it cannot make man superfluous or exclude his moral freedom from the world of economics. It is becoming ever so clear that the development of the world economy has also to do with the development of the world community and with the universal family of man, and that the development of the spiritual powers of mankind is essential in the development of the world community. These spiritual powers are themselves a factor in the economy: the market rules function only when a moral consensus exists and sustains them.
If I have attempted so far to point to the tension between a purely liberal model of the economy and ethical considerations, and thereby to circumscribe a first set of questions, I must now point out the opposite tension. The question about market and ethics has long ceased to be merely a theoretical problem. Since the inherent inequality of various individual economic zones endangers the free play of the market, attempts at restoring the balance have been made since the 1950s by means of development projects. It can no longer be overlooked that these attempts have failed and have even intensified the existing inequality. The result is that broad sectors of the Third World, which at first looked forward to development aid with great hopes, now identify the ground of their misery in the market economy, which they see as a system of exploitations, as institutionalised sin and injustice. For them, the centralized economy appears to be the moral alternative, toward which one turns with a directly religious fervor, and which virtually becomes the content of religion. For while the market economy rests on the beneficial effect of egoism and its automatic limitation through competing egoisms, the thought of just control seems to predominate in a centralized economy, where the goal is equal rights for all and proportionate distribution of goods to all. The examples adduced thus far are certainly not encouraging, but the hope that one could, nonetheless, bring this moral project to fruition is also not thereby refuted. It seems that if the whole were to be attempted on a stronger moral foundation, it should be possible to reconcile morality and efficiency in a society not oriented toward maximum profit, but rather to self-restraint and common service. Thus in this area, the argument between economics and ethics is becoming ever more an attack on the market economy and its spiritual foundations, in favor of a centrally controlled economy, which is believed now to receive its moral grounding.
The full extent of this question becomes even more apparent when we include the third element of economic and theoretical considerations characteristic of today's situation: the Marxist world. In terms of the structure of its economic theory and praxis, the Marxist system as a centrally administered economy is a radical antithesis to the market economy. 6 Salvation is expected because there is no private control of the means of production, because supply and demand are not brought into harmony through market competition, because there is no place for private profit seeking, and because all regulations proceed from a central economic administration. Yet, in spite of this radical opposition in the concrete economic mechanisms, there are also points in common in the deeper philosophical presuppositions. The first of these consists in the fact that Marxism, too, is deterministic in nature and that it too promises a perfect liberation as the fruit of this determinism. For this reason, it is a fundamental error to suppose that a centralized economic system is a moral system in contrast to the mechanistic system of the market economy. This becomes clearly visible, for example, in Lenin's acceptance of Sombart's thesis that there is in Marxism no grain of ethics, but only economic laws. 7 Indeed, determinism is here far more radical and fundamental than in liberalism: for at least the latter recognizes the realm of the subjective and considers it as the place of the ethical. The former, on the other hand, totally reduces becoming and history to economy, and the delimitation of one's own subjective realm appears as resistance to the laws of history, which alone are valid, and as a reaction against progress, which cannot be tolerated. Ethics is reduced to the philosophy of history, and the philosophy of history degenerates into party strategy.
But let us return once again to the common points in the philosophical foundations of Marxism and capitalism taken strictly. The second point in common — as will already have been clear in passing — consists in the fact that determinism includes the renunciation of ethics as an independent entity relevant to the economy \. This shows itself in an especially dramatic way in Marxism. Religion is traced back to economics as the reflection of a particular economic system and thus, at the same time, as an obstacle to correct knowledge, to correct action — as an obstacle to progress, at which the natural laws of history aim. It is also presupposed that history, which takes its course from the dialectic of negative and positive, must, of its inner essence and with no further reasons being given, finally end in total positivity. That the Church can contribute nothing positive to the world economy on such a view is clear; its only significance for economics is that it must be overcome. That it can be used temporarily as a means for its own self-destruction and thus as an instrument for the “positive forces of history” is an ‘insight’ that has only recently surfaced. Obviously, it changes nothing in the fundamental thesis.
For the rest, the entire system lives in fact from the apotheosis of the central administration in which the world spirit itself would have to be at work, if this thesis were correct. That this is a myth in the worst sense of the word is simply an empirical statement that is being continually verified. And thus precisely the radical renunciation of a concrete dialogue between Church and economy which is presupposed by this thought becomes a confirmation of its necessity.
In the attempt to describe the constellation of a dialogue between Church and economy , I have discovered yet a fourth aspect. It may be seen in the well-known remark made by Theodore Roosevelt in 1912: “I believe that the assimilation of the Latin-American countries to the United States will be long and difficult as long as these countries remain Catholic.” Along the same lines, in a lecture in Rome in 1969, Rockefeller recommended replacing the Catholics there with other Christians 8 — an undertaking which, as is well known, is in full swing. In both these remarks, religion — here a Christian denomination — is presupposed as a socio-political, and hence as an economic-political factor, which is fundamental for the development of political structures and economic possibilities. This reminds one of Max Weber's thesis about the inner connection between capitalism and Calvinism , between the formation of the economic order and the determining religious idea. Marx's notion seems to be almost inverted: it is not the economy that produces religious notions, but the fundamental religious orientation that decides which economic system can develop. The notion that only Protestantism can bring forth a free economy — whereas Catholicism includes no corresponding education to freedom and to the self-discipline necessary to it, favoring authoritarian systems instead — is doubtless even today still very widespread, and much in recent history seems to speak for it. On the other hand, we can no longer regard so naively the liberal-capitalistic system (even with all the corrections it has since received) as the salvation of the world. We are no longer in the Kennedy-era, with its Peace Corps optimism; the Third World's questions about the system may be partial, but they are not groundless. A self-criticism of the Christian confessions with respect to political and economic ethics is the first requirement.
But this cannot proceed purely as a dialogue within the Church. It will be fruitful only if it is conducted with those Christians who manage the economy \. A long tradition has led them to regard their Christianity as a private concern, while as members of the business community they abide by the laws of the economy.
These realms have come to appear mutually exclusive in the modern context of the separation of the subjective and objective realms. But the whole point is precisely that they should meet, preserving their own integrity and yet inseparable. It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. 9 Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse. An economic policy that is ordered not only to the good of the group — indeed, not only to the common good of a determinate state — but to the common good of the family of man demands a maximum of ethical discipline and thus a maximum of religious strength. The political formation of a will that employs the inherent economic laws towards this goal appears, in spite of all humanitarian protestations, almost impossible today. It can only be realized if new ethical powers are completely set free. A morality that believes itself able to dispense with the technical knowledge of economic laws is not morality but moralism. As such it is the antithesis of morality. A scientific approach that believes itself capable of managing without an ethos misunderstands the reality of man. Therefore it is not scientific. Today we need a maximum of specialized economic understanding, but also a maximum of ethos so that specialized economic understanding may enter the service of the right goals. Only in this way will its knowledge be both politically practicable and socially tolerable.

[1] This article, translated by Stephen Wentworth Arndt, is provided courtesy of Dr. Johannes Stemmler, secretary emeritus of the BKU (Federation of Catholic Entrepreneurs) and secretary of Ordo socialis in Köln, Germany. This article appeared previously in English under the title “Church and economy: Responsibility for the future of the world economy,” Communio 13, no. 3 (Fall 1986): 199-204 [PDF].
[2] Joseph Cardinal Ratzinger is Prefect of the Congregation for the Doctrine of the Faith.
[3] Cf. Peter Koslowski, “Über Notwendigkeit und Möglichkeit einer Wirtschaftsethik,” Scheidewege. Jahresschrift für skeptisches Denken 15 (1985/86): 301, 204–305. This fundamental study has given me essential suggestions for my own paper.

[Ed. note: This paper, “On the Necessity and Possibility of an Ethics of the Economy,” is further elaborated and available in English in the book by P. Koslowski, Ethics of Capitalism; and, Critique of Sociobiology: Two Essays with a Comment by James M. Buchanan, vol. 10, Studies in Economic Ethics and Philosophy (New York: Springer-Verlag, 1996), with the 6th German edition 1998, along with Spanish, Korean, Russian, Chinese, and Japanese translations.]
[4] Koslowski, “Über Notwendigkeit und Möglichkeit einer Wirtschaftsethik,” 294.
[5] Koslowski, “Über Notwendigkeit und Möglichkeit einer Wirtschaftsethik,” 304; cf. 301.
[6] Cf. Card. J. Höffner, Wirtschaftsordnung und Wirtschaftsethik. Richtlinien der katholischen Soziallehre, ed. Sekretariat der Deutschen Bischofskonferenz (Bonn, 1985), 34–44. The English translation of this paper was published by Ordo socialis: Economic Systems and Economic Ethics–Guidelines in Catholic Social Teaching (Association for the Advancement of Christian Social Sciences, 1986).
[7] Koslowski, “Über Notwendigkeit und Möglichkeit einer Wirtschaftsethik,” 296, with reference to Lenin, Werke (Berlin, 1971), I 436.
[8] I found these two considerations in the contribution of A. Metalli, “La grande epopea degli evangelici,” Trenta giorni 3, no. 8 (1984): 9, 8–20.
[9] For detailed information see P. Koslowski, “Religion, Okonomie, Ethik. Eine sozialtheoretische und ontologische Analyse ihres Zusammenhangs,“ in Die religiöse Dimension der Gesellschaft, Religion und ihre Theorien, ed. P. Koslowski (Tübingen, 1985), 76–96.

[Ed. note: This paper, “Religion, Economics, Ethics: An Analysis of Their Relationship from the Perspective of Social Thought and Ontology,” in The Religious Dimension of Society: Religion and its Theories, is further elaborated and available in English in the book by P. Koslowski, Principles of Ethical Economy, vol. 17, Issues in Business Ethics (Boston: Kluwer Academic Publishers, 2001), with a 2nd German edition in 1994 along with French, Russian, Chinese, and Spanish translations.]

* * * * * * * * * 
  Now, Consider the following article from the WSJ 

(Monday December 2. 2013,  Op-Ed, A 17):

"The Pope, the State and Venezuela"

Nicolás Maduro needs cover for an economy in free fall. He gets it from an unlikely source.


Nicolás Maduro needs cover for an economy in free fall. He gets it from an unlikely source.

   "Venezuela's Nicolás Maduro once claimed to be a disciple of a famous Hindu guru. But like his predecessor Hugo Chávez, who died in March, President Maduro is not averse to posing as a follower of Catholic teaching when it suits him.
In October he appeared in public wearing a rosary around his neck that was reportedly given to him by Pope Francis in Rome. It was a political gesture to suggest his government had the favor of the Holy Father. Some Venezuelans might believe it. The pope, like Mr. Maduro, has emerged as a severe critic of free-market economics.
Last week Pope Francis provided Mr. Maduro cover for his claim that state tyranny is morally justified when the pontiff blasted economic freedom in his first apostolic exhortation. Venezuelans are sinking further into poverty under Mr. Maduro's anti-market policies. The pope wants the larger role for the state and an emphasis on equality of outcomes that those policies reflect.
Mr. Maduro needs a miracle. Venezuela will hold municipal elections on Sunday and the vote is seen as a referendum on his leadership. The government has multiple ways of cheating, but even so the opposition believes it will do well in the largest cities.
If that happens, it could signal change. Members of the armed service who were close to Chávez in the military and resent Mr. Maduro's civilian status are said to be restless.
To save himself, Mr. Maduro has been lashing out at Venezuelan importers, retailers and landlords in recent weeks, charging that annualized price inflation, which reached 54% in October, is a symptom of their greed. He says the private sector is at war with the nation. It is his job to defend the working class.
After a new round of price controls last month, shoppers stripped electronics and appliance stores of their goods. Retailers cannot replace inventories at prices that avoid losses because a dollar costs around 70 bolivares in the black market. The official rate of 6.3 cannot be had.
Mr. Maduro needs to pin it all on the market. Pope Francis seems eager to help. In the document released last week he admonished those who defend "trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world." There is no empirical evidence for this, he wrote. It is instead "a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system."
Millions of the world's poor and excluded who landed in the U.S. in the 19th and 20th centuries have been witnesses to the polar-opposite conclusion. Immigrants to the pope's homeland, Argentina, during the same period have not done as well—precisely because they've had to plod along in an economy not unlike the one he advocates.
Heavy state intervention was supposed to produce justice for the poor in the breadbasket of South America. We all know how that turned out.
No Christian can doubt the love expressed in the pope's message, which aims to shepherd the flock away from materialism. But the charge that grinding poverty in the world is the outgrowth of "the absolute autonomy of the marketplace" ignores reality. To be sure, even prosperous economies regulate markets. But those that have a lighter touch do better. Human history clearly demonstrates that when men and women, employing their free will and God-given talents, are able to innovate, produce, accumulate capital and trade even the weakest and most vulnerable are better off.
Instead the pope trusts the state, "charged with vigilance for the common good." Why is it then that the world's most desperate poor are concentrated in places where the state has gained an outsize role in the economy specifically on just such grounds?
Exhibit A is Venezuela. It is an instruction manual on how to increase human misery. Without competition, the Venezuelan oil monopoly is a nest of corruption and a source of untold environmental damage. An unchecked chavista spending binge produced a fiscal deficit of 15% of gross domestic product last year, and the impulse to print money in order to pay for it. Among the unintended consequences of price controls are shortages, which drive hoarding for barter. An accumulated supply of toilet paper, for example, can be traded for cooking oil when none can be found.
Border states suffer shortages even more acutely since price-controlled items disappear rapidly into Colombia. The national chaos cultivates envy, hatred and violence.
Venezuelans need a moral authority that defends their rights to run a business, make a living, own property and preserve the purchasing power of what they earn. In short, they need a champion for a rule of law that will limit the power of the state over their person. Mother Church ought to be that voice. In siding with Mr. Maduro, however inadvertently, she harms her cause in the region."

* * * * * * * * * * * 

Now, Consider the vital practicality of the social doctrine of the Church that must be inserted  to complement the teaching of Popes Francis and Benedict XVI/ Joseph Ratzinger:

   The WSJ piece by Mary O'Grady works within the objectified epistemology of the empirically concrete and the abstractions we make of it. Hence, man is an individual who produces and consumes. As producer and consumer, his freedom will consist in the calculus of the quantity of the produced and the consumed. The economy is understood as the quantitative balance of supply and demand. Liberal economy has come to mean that that balance is self-adjusting as a kind of mechanical subsidiarity and any intervention by the state disrupts it and damages the dynamic of self-interest that drives the whole of it. The culture view we have of this (capitalism) is that "it works." Until ---  from higher view which does not consider man an individual (an "in-itself") but a person (a being constitutively in relation [from and for] another) ---- it doesn't. But since the "individual" (for self: "self-interest") and "person" (who is constitutively for others [as image and likeness of the Trinitarian Persons]) are ontologically distinct, they diverge as the history of freedom unfolds chronologically.

   The missing piece that most be inserted here for the confrontation of what the two popes are saying is the social doctrine of the Church. And that social doctrine offers the practical directives of the working person rather than the mechanism of Capitalism that ignores the person and fixes on the mathematical calculus of supply and demand. As such, we could say that capitalism is an abstract ideology whereas the social doctrine is a Christian anthropology.

   I offer some of the parts of the social doctrine as found in the "Instruction on Christian Freedom and Liberation" (Sacred Congregation for the Doctrine of the Church, March 22, 1986) signed by Joseph Cardinal Ratzinger, Prefect. 

73 (…). Persons are the active and responsible subjects of social life.(GS #25) Intimately linked to the foundation, which is man's dignity, are the principle of solidarity and the principle of subsidiarity. By virtue of the first, man with his brothers is obliged to contribute to the common good of society at all its levels.(110) Hence the Church's doctrine is opposed to all the forms of social or political individualism. By virtue of the second, neither the State nor any society must ever substitute itself for the initiative and responsibility of individuals and of intermediate communities at the level on which they can function, nor must they take away the room necessary for their freedom.(111) Hence the Church's social doctrine is opposed to all forms of collectivism

[Note that the Church opposes both individualism and collectivism. Why? Because they are both ideologies that are working with a materialist reductive understanding of man that contradicts who he is as person made in the image and likeness of God.

Therefore, the caveat: if you work with a wrong perception of man and his work [which is a manifestation of his very self: male and female], then you will inevitably come up with a false economy that ultimately damages the person: 

Hence, the document:

Criteria for judgment 

74. These principles are the basis of criteria for making judgments on social situations, structures and systems. Thus the Church does not hesitate to condemn situations of life which are injurious to man's dignity and freedom. These criteria also make it possible to judge the value of structures. These are the sets of institutions and practices which people find already existing or which they create, on the national and international level, and which orientate or organize economic, social and political life. Being necessary in themselves, they often tend to become fixed and fossilized as mechanisms relatively independent of the human will, thereby paralysing or distorting social development and causing injustice. However, they always depend on the responsibility of man, who can alter them, and not upon an alleged determinism of history. Institutions and laws, when they are in conformity with the natural law and ordered to the common good, are the guarantees of people's freedom and of the promotion of that freedom. One cannot condemn all the constraining aspects of law, nor the stability of a lawful State worthy of the name. One can therefore speak of structures marked by sin, but one cannot condemn structures as such. The criteria for judgment also concern economic, social and political systems. The social doctrine of the Church does not propose any particular system; but, in the light of other fundamental principles, she makes it possible at once to see to what extent existing systems conform or do not conform to the demands of human dignity. 

Primacy of persons over structures 

75. The Church is of course aware of the complexity of the problems confronting society and of the difficulties in finding adequate solutions to them. Nevertheless she considers that the first thing to be done is to appeal to the spiritual and moral capacities of the individual and to the permanent need for inner conversion, if one is to achieve the economic and social changes that will truly be at the service of man. The priority given to structures and technical organization over the person and the requirements of his dignity is the expression of a materialistic anthropology and is contrary to the construction of a just social order.(112 Evangelii nuntiandi 18) On the other hand, the recognized priority of freedom and of conversion of heart in no way eliminates the need for unjust structures to be changed. It is therefore perfectly legitimate that those who suffer oppression on the part of the wealthy or the politically powerful should take action, through morally licit means, in order to secure structures and institutions in which their rights will be truly respected. It remains true however that structures established for people's good are of themselves incapable of securing and guaranteeing that good. The corruption which in certain countries affects the leaders and the State bureaucracy, and which destroys all honest social life, is a proof of this. Moral integrity is a necessary condition for the health of society. It is therefore necessary to work simultaneously for the conversion of hearts and for the improvement of structures. For the sin which is at the root of unjust situations is, in a true and immediate sense, a voluntary act which has its source in the freedom of individuals. Only in a derived and secondary sense is it applicable to structures, and only in this sense can one speak of "social sin",(113) Moreover, in the process of liberation, one cannot abstract from the historical situation of the nation or attack the cultural identity of the people. Consequently, one cannot passively accept, still less actively support, groups which by force or by the manipulation of public opinion take over the State apparatus and unjustly impose on the collectivity an imported ideology contrary to the culture of the people.(114) In this respect, mention should be made of the serious moral and political responsibility of intellectuals.

The role of the laity

80. It is not for the pastors of the Church to intervene directly in the political construction and organization of social life. This task forms part of the vocation of the laity acting on their own initiative with their fellow-citizens.(120) They must fulfil this task conscious of the fact that the purpose of the Church is to spread the Kingdom of Christ so that all men may be saved and that through them the world may be effectively ordered to Christ.(121) The work of salvation is thus seen to be indissolubly linked to the task of improving and raising the conditions of human life in this world. The distinction between the supernatural order of salvation and the temporal order of human life must be seer in the context of God's singular plan to recapitulate all things in Christ. Hence in each of these spheres the layperson, who is at one and the same time a member of the Church and a citizen of his country, must allow himself to be constantly guided by his Christian conscience.(122) Social action, which can involve a number of concrete means, will always be exercised for the common good and in conformity with the Gospel message and the teaching of the Church. It must be ensured that the variety of options does not harm a sense of collaboration, or lead to a paralysis of efforts or produce confusion among the Christian people. The orientation received from the social doctrine of the Church should stimulate an acquisition of the essential technical and scientific skills. The social doctrine of the Church will also stimulate the seeking of moral formation of character and a deepening of the spiritual life. While it offers principles and wise counsels, this doctrine does not dispense from education in the political prudence needed for guiding and running human affairs. 

II. Evangelical requirements for an indepth transformation 

Need for a cultural transformation [in Trinitarianpersonalist/relational terms].
81. Christians working to bring about that "civilization of love" which will include the entire ethical and social heritage of the Gospel are today faced with an unprecedented challenge. This task calls for renewed reflection on what constitutes the relationship between the supreme commandment of love and the social order considered in all its complexity. The immediate aim of this indepth reflection is to work out and set in motion ambitious programmes aimed at the socio-economic liberation of millions of men and women caught in an intolerable situation of economic, social and political oppression. This action must begin with an immense effort at education: education for the civilization of work, education for solidarity, access to culture for all.

The Gospel of work 
82. The life of Jesus of Nazareth, a real "Gospel of work", offers us the living example and principle of the radical cultural transformation which is essential for solving the grave problems which must be faced by the age in which we live. He, who, though he was God, became like us in all things, devoted the greater part of his earthly life to manual labour.(123) The culture which our age awaits will be marked by the full recognition of the dignity of human work, which appears in all its nobility and fruitfulness in the light of the mysteries of Creation and Redemption.(124) Recognized as a form of the person, work becomes a source of creative meaning and effort. 
A true civilization of work 

83. Thus the solution of most of the serious problems related to poverty is to be found in the promotion of a true civilization of work. In a sense, work is the key to the whole social question.(125) It is therefore in the domain of work that priority must be given to the action of liberation in freedom. Because the relationship between the human person and work is radical and vital, the forms and models according to which this relationship is regulated will exercise a positive influence for the solution of a whole series of social and political problems facing each people. Just work relationships will be a necessary precondition for a system of political community capable of favouring the integral development of every individual. If the system of labour relations put into effect by those directly involved, the workers and employers, with the essential support of the public powers succeeds in bringing into existence a civilization of work, then there will take place a profound and peaceful revolution in people's outlooks and in institutional and political structures.

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