Module 4

Youtube: Socially sourced: Economic life

● Social teachings: The Universal Destination of Goods & The Principle of Common
Good
● “The blessing of God is in abundance, not in wealth and money”
● Wealth exists to be shared
○ Damaging effects of wealth includes too dependent on wealth and not on God
● The economy exists to serve humans and for the common good
● Excessive accumulation of material goods enslaves people (consumerism = evil)
● Capitalism can abuse human dignity, the workers, and the environment
● Capitalism can also be a healthy form of economic system if it is a properly regulated
market economy
○ Fundamental and positive role of business, market, and private property
○ Responsibility of production
○ Free human creativity
○ Service of human freedom
● A person is free to make decisions with their economic matters
○ Interference of such is an attack to human dignity and common good
● The government and business owners are tasked to uphold and protect this right.
○ Evil comes when the government becomes a business owner (instead of being two separate
entities) that controls and interferes with people’s economic life

Biblical aspects of Economic life

● Two attitudes toward economic goods and riches
○ attitude of appreciation that sees the availability of material goods as necessary for life.
○ economic goods and riches are not in themselves condemned so much as they are used
according to their ultimate purpose. What the church condemns are fraud, usury, exploitation,
and gross injustice.
● The biblical concept of economic activity assumes a grateful response to our call – ‘to
till the land’. With material progress, economic activity fulfills its purpose when it
serves people and society.
● When the poor man seeks, the Lord answers. They will be heirs to the Covenant
between God and His people
○ “Rich man” places trust on possessions, not God.
○ Poverty takes on the moral value of humility by opening up to God. This attitude helps
recognize that economic goods are divine gifts from God for he is the first owner of these gifts
that are meant to be shared by everyone.
● Jesus teaches us that man is called to render justice to the poor, releasing the
oppressed, consoling the afflicted, actively seeking a new social order in which
adequate solutions to material poverty are offered and in which the forces thwarting
the attempts of the weakest to free themselves from conditions of misery and slavery
are more effectively controlled. Through this, the Kingdom of God is present on
Earth.
● Economic activity is to be considered and undertaken as a grateful response to the
vocation which God holds out for each person (Genesis).
● Good administration of the gifts received, and of material goods also, is a work of
justice towards oneself and towards others. What has been received should be used
properly, preserved and increased, as suggested by the parable of the talents
● Economic activity = service to man and society
● Faith in Jesus makes it possible to understand social development.

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 ○ Personal and collective effort to raise up the human condition and to overcome the obstacles
which are continually arising along our way is inspired by Jesus’ image as the firstborn of all
creation and the firstborn from the dead.
● Wealth exists to be shared
○ Improper accumulation of wealth is immoral
○ Ownership of properties have a universal destination
● The Church calls on those who work in the economic sphere and who possess goods
to consider themselves administrators of the goods that God has entrusted to them.
● Riches belong to some people so that they can gain merit by sharing them with
others.
● The rich man — Saint Gregory the Great will later say — is only an administrator of
what he possesses; giving what is required to the needy is a task that is to be
performed with humility because the goods do not belong to the one who distributes
them. He who retains riches only for himself is not innocent; giving to those in need
means paying a debt.

Morality and Economics

● Economic activity and moral behavior are joined together.
○ “... the purpose which God ordained for all economic life… commands us to
seek our supreme and last end in the whole scheme of our [economic]
activities.”
● “In the economic and social realms, too, the dignity and complete vocation of human
welfare and the welfare of the society as a whole are to be respected and promoted.
For man is the source, the center, and the purpose of all economic and social life.”
● The purpose of the economy is not found in the economy itself, but rather in its being
destined to humanity and society; the production, distribution and consumption of
material goods and services (economic efficiency is at play).
● Economic efficiency and the promotion of human development in solidarity are one
indivisible goal; they cannot be separated.
○ The production of goods should be efficient so that they will not be wasted
○ Economic growth should not be at the expense of human dignity
○ Wealth (i.e abundance and availability of goods and services) should inspire man to practice
solidarity
○ “Structure of sin” refers to perpetuating poverty, underdevelopment, and degradation due to
selfishness.
Moral Character. Everyone has the right to participate in economic life and the duty to
contribute, each according to his own capacity, to the progress of his own country and to that
of the entire human family.
○ Duty to one another
○ Duty to commit to economic development as well
○ Growth of each person
● The development of wealth is morally correct if it is directed to man's overall
development in solidarity and to that of the society in which people live and work.
○ The quality of wealth development is equally important as quantity. Excessive wealth could
enslave people of possessions if not considered with quality.
● Capitalism can also be a healthy form of economic system if it is a properly regulated
market economy
○ Fundamental and positive role of business, market, and private property
○ Responsibility of production
○ Free human creativity
○ Service of human freedom

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 Otherwise, it is immoral

Private initiative and business initiative

● Everyone has the right to economic initiative
○ Immorality comes from weakening and denying this right to economic
initiative (creative subjectivity of the citizen)
● Everyone should make legitimate use of his talents to contribute to the abundance
that will benefit all.
● Free and responsible initiative in the economic sphere can also be defined as an act
that reveals the humanity of men and women as creative and relational subjects
(capable of planning and innovation = source of wealth in society).
○ “Man’s intelligence enables him to discover the earth's productive potential and the many
different ways in which human needs can be satisfied”.

Business Goals. Characterized by their capacity to serve the common good of society
through the production of useful goods and services.
○ businesses create wealth for all of society, not just for the owners but also for the other
subjects involved in their activity.
○ businesses also perform a social function, creating opportunities for meeting, cooperating and
the enhancement of the abilities of the people involved
● Society of persons. There are shared responsibilities in business; 1) to supply the
necessary resources, 2) to participate through labor.
● The pursuit of profit should also protect the dignity of the people on the different
levels of the company.
○ Profit ensures the future of the company, and protection of the worker’s rights could foster
increased productivity and efficiency. Business enterprises should be a community of solidarity.

Role of Business Owners. The roles of business owners and management have a central
importance from the viewpoint of society, because they are at the heart of that network of
technical, commercial, financial and cultural bonds that characterizes the modern business
reality (their initiative in decision making is significant to society).
● “Cumpetere” means seeking together the most appropriate solutions for responding
in the best way to needs as they emerge.
● Economic initiative is an expression of human intelligence and of the necessity of
responding to human needs in a creative and cooperative fashion.
● Economic initiative includes social virtues such as:
○ diligence,
○ industriousness,
○ prudence in undertaking reasonable risks,
○ reliability and fidelity in interpersonal relationships,
○ courage in carrying out decisions which are difficult and painful but necessary.
● Promote family, development, quality goods and services, quality of life and
environment, and an opportunity to make use of one’s own labor.

Economic Institutions and the service of man

● The higher priority issue in economics is the utilization of resources. Resources are
scarce in quantity, hence individuals in the economic sphere should come up with a
most rational plan to utilize such resources efficiently.
● The efficiency of this economic system involves the responsibility and capacity of
various agents; such as the market, the State, and the intermediate social bodies.

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Role of the free market. The free market guarantees an effective production of goods and
services. It can initiate and sustain economic development over long periods.
○ The most efficient instrument for utilizing resources and effectively responding
to needs through its mechanisms.
● Competitive market is an effective instrument for attaining the important objectives of
justice:
○ Moderating excessive profit of businesses
○ Responding to consumer’s demands
○ Efficient use and conservation of resources
○ Rewarding innovations and entrepreneurship
○ Accessible information and products via healthy competition
● The free market is judged with its means to an end. Individual profit should not be the
sole objective of the free market, instead it should be social usefulness.
● In avoiding the “idolatry of market” the Church’s social doctrine underlines the ethical
objective of the market. That is to avoid simply aiming for seeing goods as mere
commodities, buy-and-sell, or exchange of equivalents (with no regard to who
produced them).
● Market operators must be effectively free to compare, evaluate and choose from
among various options. Freedom in the economic sector, however, must be regulated
by appropriate legal norms in service to human freedom.
○ “Economic freedom is only one element of human freedom. When it becomes autonomous,
when man is seen more as a producer or consumer of goods than as a subject who produces
and consumes in order to live, then economic freedom loses its necessary relationship to the
human person and ends up alienating and oppressing him”.

Action of the State. The principle of solidarity and subsidiarity should inspire the actions of
the state in creating solutions that favors the free exercise of economic activity.
○ Solidarity without subsidiary = degenerate into welfare state
○ Subsidiary without solidarity = encourages self-centered localism
● The State’s actions should commensurate with the needs of society (e.g guiding
development, job opportunities).
● The State should regulate the economic affairs of different parties; avoiding one party
to dominate the other; while maintaining individual freedom and private property. This
is achievable through determination of a juridical framework.
○ Avoid authoritarianism
○ Direct economic and social policies to prevent any abuse in the various market activities
● The State and the market should mutually complement each other.
● The market could benefit society (i.e principle of redistribution of goods and services,
efficiency, equitable distribution) if the State is directed towards economic
development, fair and transparent rules, and direct interventions.
● The common good is promoted with the help of the participation of citizens in
production– driven by economic policies mandated by the State (a.k.a subsidiary).
● Public intervention must be carried out with equity, rationality and effectiveness, and
without replacing the action of individuals, which would be contrary to their right to
the free exercise of economic initiative.
● Public spending is directed to the common good when the fundamental principles are
observed (solidarity; paying taxes, fair use of taxes, integral distribution of resources)
○ Effective and efficient public financing encourages economic growth

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 ● In the redistribution of resources, public spending must observe the principles of
solidarity, equality and making use of talents. It must also pay greater attention to
families, designating an adequate amount of resources for this purpose.

Role of intermediate bodies.

● The socio-economic system involves public and private activities– including
non-profit organizations.
● The State and market collaborates with the intermediate bodies in the attainment of
common good. It thus encourages the development of a fitting economic democracy.
● The State is called to respect non-profit organizations because they fearlessly
attempt to unite efficiency in production with solidarity (volunteerism amongst its
members. Subsidiary is also practiced when the State works in collaboration with
non-profit organizations– by making proper use of its features while respecting the
dignity and autonomous responsibility of the “subsidiary” subject.

Savings and consumers goods

● The choices made within the economic sector are influenced by the decision of
consumers regarding where to put their money; whether it be consumer goods or
savings.
● Purchasing power must be used in the context of the moral demands of justice and
solidarity, and in that of precise social responsibilities.
● The duty of charity means having the duty to give from one’s abundance to provide
for the poor.
● Purchasing power influences the behavior of producers, through individual or
collective preferences, by taking into account the price AND the “ presence of correct
working conditions in the company as well as the level of protection of the natural
environment in which it operates.” (e.g boycott Shein)
● To avoid consumerism, choose lifestyles in which “the quest for truth, beauty,
goodness and communion with others for the sake of common growth are the factors
which determine consumer choices, savings and investments”.

The new things in the economic sector

Globalization: opportunities and risks
● Economic and financial globalization progressively integrates national economies at
a global level of exchanging goods and services.
● Economic sectors are prompt to adopt a more global perspective concerning future
growth and profit.
● Globalization is able to produce potentially beneficial effects for the whole of
humanity.
● Making use of new opportunities for the redistribution of wealth across the world,
which benefits the underprivileged, is a means to the principle of common good.
● “Globalization in solidarity, globalization without minority”
● There’s also an increasing trend of inequalities between countries. The growing
economic wealth is also accompanied by an increase in relative poverty.
● Given the nature of the current dynamics, the free circulation of capital is not by itself
sufficient to close the gap between developing countries and the more advanced
countries.

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● International trade — if properly oriented — promotes development and can create
new employment possibilities and provide useful resources.
● Ethical criteria must be considered in the basis of international relations (e.g
discriminates against products coming from poorer countries and hinders the growth
of industrial activity and the transfer of technology to these countries).
● An adequate solidarity in the era of globalization requires that human rights be
defended. “Effective international public authority at the service of human rights,
freedom and peace”
● Globalization must not be a new version of colonialism. It must respect the diversity
of cultures which, within the universal harmony of peoples, are life's interpretive keys.
In particular, it must not deprive the poor of what remains most precious to them,
including their religious beliefs and practices.
● In the era of globalization solidarity between generations must be forcefully
emphasized: “Formerly, in many places, solidarity between generations was a natural
family attitude; it also became a duty of the community”.
○ E.g inflation should not have happened since it endangers the financial stability of future
generations.
● The more the worldwide economic-financial system reaches high levels of
organizational and functional complexity, all the more priority must be given to the
task of regulating these processes, directing them towards the goal of attaining the
common good of the human family.