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Profits and Morals: A Non-Catholic Assessment of Centesimus Annus

In 1986 America’s Catholic bishops issued a controversial pastoral letter on the subject of the nation’s economy. The cartoonist S. Kelley summed it up best in The San Diego Union. In his cartoon, two bishops were lecturing from upside-down economics textbooks and a blackboard full of obvious nonsense as a parishioner prayed by a pew: “Father, forgive them, for they know not what they’re talking about.”

That 1986 document, calling as it did for massive increases in federal spending, redistribution of the wealth and a hefty dose of socialism, was greeted with dissent from economists, clergy and business leaders favorably disposed to the free market. And given what Pope John Paul II had to say a few weeks ago, it will probably go down in history as the high water mark of left-liberal Catholic thinking.

By the latter half of the 1980’s the breakdown of socialist systems and socialist thinking was becoming too evident to ignore. Radical “liberation theologians,” whose model was the thugocracy of Sandinista Nicaragua, were being rejected by Catholic congregations and the Vatican as well. And of course, when the predominantly Catholic countries of Eastern Europe embarked on the path to freedom in 1989, they rushed headlong toward capitalism, not some refurbished socialism.

Some American religious leaders may never get the message, but at least now they can’t claim papal endorsement for their left-wing doctrine. Early in May, Pope John Paul II issued an historic encyclical, Centesimus Annus, perhaps the most positive treatment of the free market economy to which any pope has ever put his name.

The encyclical endorses a free market tempered by strong moral and ethical principles. Some might think that’s an implicit criticism of capitalism, but I don’t. Capitalism, in fact, rests squarely on the inherent morality of private property, individual rights, the family, and voluntary action.

John Paul dismisses socialism, Marxist and otherwise, because it violates human nature which, he says “is made for freedom,” and because it is “impossible.” With socialism, life becomes “progressively disorganized and goes into decline.” He says furthermore that if “self-interest is violently suppressed, it is replaced by a burdensome system of bureaucratic control which dries up the wellsprings of initiative and creativity.”

The pope even attacks the welfare state, whose “malfunctions and defects” are “the result of an inadequate understanding” of the proper tasks of government. The welfare state, he says, “leads to a loss of human energies and an inordinate increase of public agencies, which are dominated by bureaucratic ways of thinking” and accompanied by “an enormous increase in spending.” Poor countries are kept poor by the lack of free markets and by state-created “barriers of monopolies.”

When it comes to profit, the pope says it indicates that “a business is functioning well. When a firm makes a profit, this means that productive factors have been properly employed and corresponding human needs have been duly satisfied.” (When was the last time you heard that from a pulpit?) The businessman is admonished to refrain from offending the dignity of his employees or from using his profit in anti-social ways, maintaining the high ethical standards which John Paul says “are at least equally important for the life of a business.”

He explicitly approves “initiative and entrepreneurial ability” and “courage in carrying out decisions which are difficult and painful but necessary” for business survival, such as laying off workers during hard times. He warns not against the acquisition of wealth, but the abuse of wealth–two very different things.

The pope’s bottom line is this: “…the free market is the most efficient instrument for utilizing resources and effectively responding to needs.” He emphatically affirms “an economic system which recognizes the fundamental and positive role of business, the market, private property, and the resulting responsibility for the means of production, as well as free human creativity in the economic sector…”

It’s undoubtedly no coincidence that it took a Polish pope to force a significant departure from the sort of thinking reflected in the American bishops’ letter of 1986. Having endured forty-five years of Soviet-imposed socialism in Poland, he saw first-hand the insufferable indignities that state-planned systems create. And he understood that welfare states aren’t much better.

John Paul II was an inspiration for the Polish revolution of 1989. He assisted the people of Nicaragua by providing support for the church when it was under attack by the Sandinistas. He survived a would-be assassin’s bullet to become the most widely-traveled pope in history, preaching his message of salvation, love and freedom to tens of millions. And now he has written a document that will undo a great deal of harm and help make the world a freer and more compassionate place for all humans.

I’m not even Catholic, but I must say that Pope John Paul II is a genuine hero in my book.