Catholic Social Thought and Economic Transition

By Clark, Charles M. A. | Review of Business, Fall 2001 | Go to article overview

Catholic Social Thought and Economic Transition


Clark, Charles M. A., Review of Business


Introduction

The transition of formerly Communist countries to market-oriented economies is certainly one of the most significant developments of our time. Unfortunately, advice from the West has been lacking -- to say the least -- especially the official advice from the State Department, International Monetary Fund (IMF) and what has been called the "Washington consensus." This failure is partly the result of a failed "vision" of what makes for a good and prosperous society. The Washington consensus has emphasized privatizing state property and establishing stock markets, as well as fiscal balance, paying little attention to historical and social factors and, most important, the moral aspects of the problem of transition. These fundamental factors in any prosperous society seem to be outside the theoretical perspective of Western advisors.

The Catholic Social Thought (CST) tradition does not offer an alternative economic theory. What it does offer is an alternative vision of the economy and society, from which an alternative understanding of the economy can be developed. The value of this alternative vision is that it provides the foundations for a realistic and useful understanding of the economy, and the related problems of economic transition. It also offers a "moral compass" to help guide policymakers as they try to fashion a new economic and social reality.

This paper concentrates on presenting such an alternative vision of the economy and society, not wishing to retrace the well-beaten path of what's wrong with neoclassical economic theory. First, we'll take a look at how CST views: values and the common good; human nature; society and efficiency. The second half of this paper will present some of the key concepts developed in CST and their applicability for transitional economies.

Catholic Social Thought's Alternative Vision for Understanding the Economy

CST is openly and explicitly based on a specific vision and set of value judgments. They are not hidden preconceptions but, rather, celebrated pillars upon which all social formations and analyses need to be built. It is a vision grounded in the Old Testament, which comes to life in the Gospels and provides the explicit underpinning for various Encyclicals and other Church documents making up the Catholic Social Thought tradition.

At the heart of this vision is the belief that "God speaks to every reality. Whatever we are looking at, whether it is an issue such as world hunger...or an economic system such as Capitalism, God does have something to say to that reality. Our world either is or is not in accord with God's ideal for it. Consequently it is important for us to come to know what God is saying to whatever reality we are examining. God speaks to these issues or situations in various ways: through the Bible, through the teachings of His Church, through the signs of the times and through the prophets who interpret those signs ... [W]e should listen to God in theological reflection and in prayer" (7).

The Dignity of all Humans. One bedrock value of this tradition is the assertion of the dignity of all humans. "The dignity of the human person, realized in community with others, is the criterion against which all aspects of economic life must be measured" (11). This is an assertion that runs through CST and its significance cannot be understated, for it calls for a view of society that is not mechanistic and individualistic, as is neoclassical economic theory, or completely organic, as is vulgar Marxism. Both the individual and the community are interconnected and neither can be reduced to the other.

This "interconnectedness" is at the core of the idea of the common good. Since human nature is defined as social, the welfare of each individual is connected with that of the community. The common good is, of course, not an equilibrium state of affairs. It is a process.

"The common good is a social reality in which all persons should share through their participation in it. …

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