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Pope’s view of capitalism troublesome for have-nots


During the 1980s and 1990s, a deterioration in social conditions has occurred that is remarkable for its breadth, its depth and its global character. Inequality grew significantly, both within nations and between nations, to the disadvantage of the South. Poverty increased steadily in quantity and intensity, as did acute pauperization, particularly in the South. Finally, processes calculated to exclude significant elements of the population from the economic system have been consolidated, with resultant unemployment and subemployment that now are structural, massive and expanding.

From the beginning of his pontificate, and in continuity with Paul VI, Pope John Paul II denounced this social outrage, insisting that the issue was one of social and international justice that made it necessary to give priority to the phenomenon of poverty.

In addition, since the mid-1980s, poverty in the South has elicited significant concern among the Bretton Woods institutions that constitute the principal mechanism for the global implantation of the neoliberal paradigm -- the concept that the free-market solves all economic problems. And what is still more remarkable, the World Bank took a leadership role on the issue, proposing since 1990 that the highest priority of international policies and of the bank’s own activities should be precisely the lessening of global poverty.

Concern about poverty is thus spreading among a greater number of international agents and agencies. This highlighting of the issue, at the same time, brings into play very different and even contradictory diagnoses and strategies because of divergent answers to this decisive diagnostic question: What is the role the currently prevailing model of “market-oriented growth” has played (and continues to play) in the global intensification and expansion of inequality, poverty, pauperization and exclusion? In other words, what role does neoliberal capitalism, with its structural adjustments, play as a causal factor?

A central issue consequently is to determine how the problem should be defined and what corrections are called for.

This issue is also a problem for the social teaching of John Paul II, whose pontificate coincides almost exactly with the global establishment of the neoliberal paradigm.

In various statements, some of them at a formal level, John Paul has referred to the “human deficiencies of capitalism.” In Centesimus Annus (1991), for example, his first social encyclical after the disintegration of the Soviet bloc, he asked whether in the light of the communist collapse capitalism might be considered as a “model” for the countries of the South.

A complex answer

While insisting that the answer is complex and depends on what one means by capitalism, John Paul answered affirmatively that capitalism is understood as an economic system that recognizes the fundamental and positive role of business, the market and private enterprise. In addition, and in accordance with the tradition of papal teaching, he also reaffirms the existence of a natural right to private ownership of the means of production (capital as a form of ownership).

The point is decisive. To define this right as natural makes it universal and untouchable, with the consequence that a historic regime becomes naturalized and thus sacralized (since such rights would derive from God). In this way, capitalist property is converted into an a priori, an axiom, none the less ideological because of the appeal to the sacred.

At the same time, and also in conformity with the papal tradition, John Paul defines liberal capitalism as the kind that accords an absolute right to private property. This would give capital an intolerable primacy over labor. Liberal capitalism is consequently rejected as having -- ever since the industrial revolution -- originated the capital/labor conflict, and as being the principal cause of injustice and exploitation.

With this in mind, and in continuity with his predecessors, John Paul predicates a necessary pre-eminence of labor over capital. In Centesimus Annus, nevertheless, he simultaneously and explicitly identifies the capitalist free market as the most efficient instrument for allocation of resources and satisfaction of needs. That, of course, is precisely the nuclear thesis of the neoliberal philosophy and of neoclassic economic theory.

At the same time, papal teaching has from the very beginning rejected economic liberalism and in consequence it condemns uncontrolled competition. That is to say that it insists that the capitalist market has limits, an argument that John Paul revives. In Centesimus Annus itself, he warns against the danger of an “idolatry” of the market, of a “radical” capitalist ideology that “in a fideistic way leaves to the free development of market forces” the solution of the problems of exploitation and marginalization. This is clearly a criticism of neoliberalism.

Yet if the pope at the same time affirms that the free market is the best mechanism for assigning resources and satisfying needs, he is formulating the precise foundational thesis of the neoclassical and neoliberal edifice, as already noted. In addition, a logical corollary is that those limits (of the market) must inevitably be restricted (not substantial). In this respect, it is appropriate to note that since the early 1990s, recognition of such limits began to be widely acknowledged, to the point of becoming a part of the neoliberal agenda, especially among the Bretton Woods institutions. The new hierarchy of poverty thus opened the doors to a relative aggiornamento of the neoliberal program that was publicly announced in the World Bank’s 1990 Report on World Development.

This updating also had an influence on the area of discourse, with the appearance of arguments that tend to depart from neoliberal orthodoxy. For example, it is now claimed that there is no dichotomy between state and market, between government intervention and laissez-faire. What is more, the inadequate nature of the markets is recognized, with the World Bank actually recommending some state intervention, though of course that intervention should be “reluctant,” careful and “market-friendly.”

Neoliberalism has consequently evolved, while always holding to its primary thesis, namely, that though the market may have limits, these do not invalidate its intrinsic superiority. So we are left once more with the concept of limited limits.

To sum up in the light of what has been said: To the extent that imperfections of the market are recognized (even if these are limited), we are faced with the need for corrective regulations and indeed a significant role for the state. In this context, John Paul introduced an express criticism of the welfare state (Centesimus Annus ), thereby repeating another key thesis of the neoliberal agenda, for which such criticism was always basic.

Papal ambivalence

The result is that the social teaching of John Paul involves an ambiguous diagnosis. On the one hand, and in agreement with the body of papal teaching, he identifies the unregulated capitalist market as the primary and determinant carrier of injustice and exploitation. At the same time, under neoliberal influences, he supports theses favoring free competition, namely, that the market is intrinsically superior and the welfare state is defective.

The result is that we do not have an unequivocal identification of neoliberal capitalism as the causal factor, and this leads to ambiguous proposals. Thus, in agreement with his predecessors, John Paul judges that liberal capitalism can accept corrections that will solve the social problem. Along this line, he calls for public regulation of the market. Nevertheless, he simultaneously plays down the key element in that control, namely, the state, while strengthening the role of the market. The result is an equation typical of the neoliberal agenda. His social teaching is consequently imprisoned within the narrow limits of a corrective strategy that does not object essentially to the dominant system and economic paradigm.

As social conditions in all parts of the world continue to deteriorate, more calls are being heard for a new vision of development, a substantial reorientation that would go beyond the limits of a strategy designed merely to correct neoliberal capitalism.

Underlying these calls is a different diagnostic hypothesis, namely, that the global social deterioration is in large part the fruit of the neoliberal program; that we are faced with long-term negative consequences inherent in this program; and that the capitalist market -- today elevated to the status of a universal criterion -- is not a self-regulating mechanism producing ideal social conditions. On the contrary, it constitutes a political relationship, ensuring that those who hold more power are the winners, and it leads inevitably to economic concentration.

This means that the production of inequality is intrinsic to the functioning of the capitalist market. Because of this, and taking into account the seriousness of the situation, neoliberalism and its effects merit a clear, energetic and unambiguous condemnation, a condemnation that is still weak in the papal teaching.

We are here faced with a first challenge for the papacy of tomorrow.

Creating a new vision of development constitutes a major theoretical and political task, one in which Christian social thinking should obviously participate. As of now, we have more questions than answers. Some contributions do, however, exist; and although general and preliminary, they have significant elements in common. Concretely, they agree on the thesis that human (and natural) life be located at the center of development.

This means that human well-being must be hierarchized as the ultimate and exclusive objective of development. It must be the principal and constitutive element, not a complementary piece subordinated to higher purposes, such as economic growth or the search for profits and competitiveness in the market. It must be the final end of the activity, never a means toward another end, an instrument of production, a merchandise at the service of accumulation and private gain. These, of course, are points already stressed by Paul VI and reaffirmed by John Paul II.

When, however, we place human (and natural) life at the center of development, a criterion -- alternative to that of the market and also universal -- inescapably follows. This criterion has to be alternative, because life hierarchized as the center of development is incompatible with the neoclassical and neoliberal utopia of the capitalist market as the best mechanism for the assignment of resources and the satisfaction of needs. To attempt to achieve these two objectives simultaneously is a contradiction in terms, one that -- as already noted -- is present in John Paul’s social teaching and creates another challenge for the future of papal social teaching.

If, moreover, human (and natural) life is located at the very center of development, and if in addition survival is at risk, it follows, in our opinion, that the reproduction of life defines this alternative criterion. This reproduction, nevertheless, is not limited to survival, even though survival constitutes the acute and insistent challenge for vast numbers of human beings.

Neither is it limited to the needs identified as “basic,” even though these are increasingly left unsatisfied for growing segments of the world’s peoples. Nor is it limited to the material world. In consequence, there is emerging the notion of expanded reproduction of life, that is to say the concept that all life on earth is in danger and not just human life. This is an idea that fits in with the principle of the universal destiny of goods (which is focused rather on distribution and inequality).

Now, if the expanded reproduction of life (or similar concepts) is really hierarchized as the end, then no means can be rejected a priori. In consequence, neither can we crystallize absolutes as regards ownership of the means of production.

This is even truer of capitalist appropriation, the basis of a mercantile economic form that yields inequality. And it is still less logical to appeal to the natural and the sacred as justifying that system. Here we have yet another contradiction and a new challenge affecting a typical thesis of papal social teaching.

In the last analysis, only if this reproduction is truly consecrated as an end -- without ambiguities or restrictions imposed by the means -- can it function as a universal and alternative criterion of judgment on any historic form of ownership, and as a criterion of economic organization.

Ana Maria Ezcurra, who lives in Buenos Aires, Argentina, is a psychologist and a specialist in Latin America studies. She coordinates research on education and on society and religion at the Institute of Studies and Social Action in Buenos Aires. Her many books include several studies of Vatican politics. This is the eighth of 11 articles, edited by Gary MacEoin, to be expanded and published as a book, The Papacy and the People of God (Orbis Books).

National Catholic Reporter, December 5, 1997