Pope Benedict XVI: Capitalism without Ethics

Pope Benedict XVI: Capitalism without Ethics.

As the world was preparing for the 2009 G8 summit that was held in L’Aquila, Italy, Pope Benedict XVI came out with his encyclical letter entitled Charity in Truth. In this third encyclical of his pontificate the pope dealt with a number of issues including the environment, energy, migration, etc.

What grasped my total interest and attention was his just attack on unrestrained capitalism without any ethics. He wrote, “Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty. “ As someone who has been concerned with anarcho-capitalism (an economic system that destroys government regulation of the economy, and creates anarchy within the global economic system) I think the Pope’s comments on capitalism is timely.

The conscious deregulation of the economy that started during the Reagan administration in the U.S. reached its climax during President George W. Bush’s tenure and has brought the global economic chaos the world is in at the moment. Their bankrupt economic theory of the  market policing itself, has proven to be as hollow as their dreams of making trillions of dollars without manufacturing anything.

“Today, as we take to heart the lessons of the current economic crisis, which sees the State’s public authorities directly involved in correcting errors and malfunctions, it seems more realistic to re-evaluate their role and their powers, which need to be prudently reviewed and remodeled so as to enable them, perhaps through new forms of engagement, to address the challenges of today’s world.”

In other words, government’s role in the economy is not only indispensable for the smooth running of the economy, but also, for protecting the rights of the workers that actually produce profit.

Another crucial point the pope raises is the issue of economic disparity in society.

“The dignity of the individual and the demands of justice require, particularly today, that economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner, … Through the systemic increase of social inequality, both within a single country and between the populations of different countries (i.e. the massive increase in relative poverty), not only does social cohesion suffer, thereby placing democracy at risk, but so too does the economy, through the progressive erosion of “social capital”: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence.”

This is quiet an apt warning for countries like the U.S. which has carried out the biggest transfer of wealth to its wealthiest citizens in the history of humankind. Something without a doubt is wrong in the picture of wealth distribution in the U.S. where the wealthiest one percent of the population own half of the nation’s wealth, while the rest ninety nine percent of the population fights for the remaining fifty percent. This truly is a “trickle down economy” the super majority fighting for the crumbs, the leftovers.

“Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations. Admittedly, the market can be a negative force, not because it is so by nature, but because a certain ideology can make it so. It must be remembered that the market does not exist in the pure state. It is shaped by the cultural configurations which define it and give it direction. Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends.”

Let’s hope, that our elected leaders will rise up to protect the interests of the majority of their citizens.

Professor Mekonen Haddis