Saturday, January 12, 2008

Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems

At the Association of American Law Schools 2008 Annual Meeting, held this year in New York City, the Section on Socio-Economics presented its annual meeting program on Thursday, January 3, 2008 , co-Sponsored by the Sections on Jurisprudence, Minority Groups, Poverty Law, and Women in Legal Education. That program was entitled “Positive and Normative Dimensions of Socio-Economics.” I was fortunate enough to have been invited to participate in one of the panels—Theology and Socio-Economics, with Susan Stabile, formerly of St. Johns Law School and now a member of the faculty of St. Thomas University Law School in Minneapolis. The panel description suggested the parameters of our general discussion:

Socio-economists recognize (1) that faith in a higher power affects economic behavior and (2) an understanding of how faith affects economic behavior will enhance one’s ability to address law-related economic issues. This session continues an inquiry began at last year’ s annual meeting to explore the connection between theology and Socio-economics.

For that panel I presented a paper entitled: Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems. What follows is an extended version of the remarked delivered at that panel. I am grateful to Robert Ashford (Syracuse University Law School) for putting the program together, and to Susan and the participants at the panel for their questions and comments.

Values Economics and Theology: The Contribution of Catholic Social Thought and its Implications for Legal Regulatory Systems.

At its core, classical economics, whether in its free market or Marxist forms, focuses on issues of scarcity and ownership. Wealth maximization is the foundation around which most systems of economics are built. Each posits economic actors who act rationally to maximize wealth, and tends to ignore the possibility of foundationally different characteristics of people as holders of capital or people as contributors of labor. The systems built on this grounding in the material (that is in materialist systems) are concerned with the attainment of the foundational object, and are indifferent to the means to those ends, except to the extent that the means are more or less efficient in the attainment of that objective. Like the great 19th century systems of constitutional law, these systems privilege process and not the normative values that underlie them. They look to Rechtsstaat and not Sozialstaat constructions of value, efficiency, and the right.

But the great global wars of the 20th century changed thinking among elites in the ways in thinking about the character of legitimate approaches to system building and the character of the elements that went into those efforts. Among the most significant change was a movement from a privileging of process and process issues, to a focus on values. Just as in constitutional law value systems provide the critical element in constructing legal systems (Backer 2007), so in the law of economics, normative systems are vital for the construction of those values that necessarily infuse rationality. Economics itself, in the West, has sought to engage in these notions.

Consequently, by the middle of the 20th century, the values lacunae in economics suggested to some at least that, like legal systems, economic systems grounded solely on rational activity without a grounding in normative systems of values, are either incomplete or subject to perversion. Among the more vibrant of the responses, at least within the contemporary legal academic community, are notions of socio-economics, and particularly the binary economics of Louis Kelso. (Kelso and Adler 1958). These seek to find a values hierarchy within economics, in general, and in particular to re-examine the place of labor within the labor capital matrix, in particular.

But the search for a normative structure within which to frame economics has not been limited to those who carefully guard the field boundaries of that social science within the academy. Theology, too, has much to contribute in those areas of economics left open by economic theory. This paper focuses on the values of substantive economics developed recently through application of Catholic theology. It focuses on the Catholic critique of consumerism, its understanding of a necessary labor policy and its sense of a just global economics. It will suggest a number of places where socio-economics and theology share common ground, and even something of a common framework of analysis. That, I will further suggest, adds weight to the notion that some values may be trans-religious, as well as trans-cultural. I will start with a short consideration of the approach of economics in its modern globalized context, and the contribution of socio-economics to that approach. I will then briefly suggest the contours of an economic critique of that modern approach—focusing on the attacks on globalization by Fidel Castro in the name of an alternative global economic model—substantially Marxist in character. I will then turn to the development of Catholic social thought as it touches on the issues raised by global economic activity in three respects: materialism, labor rights and globalization. For that purpose I will look carefully at two encyclicals separated by almost 15 years. The first is Benedict XVI’s encyclical, Deus Caritas Est given December 25, 2005. And the second is John Paul II’s encyclical, Laborem exercens, given September 14, 1981. Both provide a basis for a values based economics, and both suggest a regulatory context significantly different from both classical economic and Marxist models. Socio-economics has taught that values matter, even in economics. Religion reminds us that values and economics also matter in religion. All share in the search for values, and the application of those value systems to the relationship between people, things, the production and distribution of wealth.

Classical economics focuses on the maximization of wealth. Wealth maximization must occur both at the level of the individual (and the firm), and in the aggregate, at the level of the community (and ultimately the globe). Like any system focused on production, its students tend to privilege efficiency as the value par excellence of any system of wealth maximization at both individual and aggregate level. But privileging efficiency suggests less concern with the means instituted to attain wealth maximization. Despite this indifference, there is a sense that systems of open, transparent and flexible markets, where the aggregate actions of individuals and organizations, all equally situated, together tend to produce the greatest production of wealth for the greatest number of people for the longest period of time. This idea is based on the great postulates of the system: that people act rationally in a world of perfect information, that income distribution will reflect marginal productivity under conditions of perfect competition, and that personal preference is exogenous to the appropriate functioning of a system focused on the production of wealth (that is, to each her own). Economics, thus, is a function of objects and process. In the long run all individual profit, but that profit (material things) rather than the human being, serve as the center of system focus. These ideas have significant regulatory consequences. They suggest that governments seeking the greatest wealth for the greatest number of its inhabitants should regulate only in a manner that facilitates the efficiency required for long-term wealth production of the greatest sort. Disclosure, maintaining the integrity of markets, facilitating economic transactions across borders, reducing the transaction costs of economic activity would suggest themselves as the highest forms of state political regulatory activity. The care and augmentation of capital becomes the greatest good of state policy. Success can be measured in the ability of the state to reduce allocation of resources to ameliorate the effects of short-term market dislocations or failures at the personal or institutional level. In a perfect world everyone would have more than enough to meet their needs.

Socio-economics seeks to privilege the human element. Along with classical economics, it accepts materialism as the founding principle of human activity. But it rejects the possibility of attainable conditions of perfect competition, perfect markets and rational behavior. As such, the system of economics must, of necessity, have built into it the unfairness of structurally permanent market failures and faulty income distribution. As a consequence, there can be no hope of optimally allocating resources or maintaining perfectly functioning markets. These failures, a product of human imperfection, are borne, of necessity, by people, and might be augmented by a stubborn insistence on privileging capital over labor. In this imperfect system, human preferences are endogenous, and the state is necessary to provide a necessary correction or at least amelioration to the failures that are an inevitable part of any human based system of interaction. For an economics that privileges individuals, values must matter. But, like classical economics, it is substantially indifferent among value systems. It recognizes the importance of values in charting (ir)rational behavior but refrains from imposing its own set as an aspirational basis for human behavior.

“However, socio-economics does more than suspend these assumptions [of classical economic theory]. Rather, based on principles of natural and moral philosophy relied on by Adam Smith, and drawing upon all relevant disciplines, socio-economics is a positive and normative approach that aspires to present a factually rigorous, holistic understanding of economic behavior that is both paradigm-conscious and value-conscious, yet at the same time, largely, though not entirely, paradigm- and value- neutral.” Robert Ashford, Socio-Economics—An Overview, electronic version available at

These ideas, too, have significant regulatory consequences. They suggest that governments seeking an appropriate role in the amelioration of the dysfunction of economic wealth maximization and allocation systems must regulate in a way that levels the privilege of capital and labor in ways that are consistent with aggregate value systems of the people for whose benefit regulation is maintained.

One famous elaboration of these ideas can be found in Louis Kelso’s binary economics. (Kelso and Adler 1958; Kelso and Adler 2000). The binary in Kelso’s theory referred to the human and non-human elements into which all factors of production can be grouped. “The central tenet of binary economics is that, through the property (or ownership) principle, these two ‘independent variables’ can link marketable outputs from the labor-capital mix directly to incomes distributed according to market quantified values of all ‘labor’ and all capital’ inputs.” (Kurland 2005, 1). Under principles of binary economics, economic justice is privileged as a form in which wealth optimization must occur (that is one in which human values are endogenous) and regulation along lines meant to achieve such economic justice (as wealth maximization) must be based on a more aggressive and pointed system of positive political regulation. According to some, that regulation must be based on four key principles: (1) the democratization of capital and universal access to capital, (2) universal access to and protection of rights to property for exploitation and wealth production, (3) positive regulation to achieve the aims of individual and institutional social justice based wealth maximization, and (4) the promotion of the free and open markets which serve as the start (but are actually the goal) of classical economic theory. (Ashford and Shakespeare). Lastly, economic justice is conceived as participatory, distributive, and harmony inducing. Id.).

Marxism’s dialectical materialism also speaks to social justice and also focuses on the individual—that is the labor component of the production of wealth. But Marxist theory relies on collectivization rather than a regulatory environment for the perfection of individual activity, to achieve its vision of a social justice based system of optimal wealth maximization and allocation. For Marxist economics, individual perfectibility is rejected in favor of the perfectibility of the collective, to which the individual must defer, and to the values of which the individual must assimilate. But like classical economics, Marxist economics also focuses on wealth maximization and the optimal allocation of resources. Capital retains its privileged position within theory. But the individual, and individual power to direct capital, is substantially curtailed in favor of the collective. Marxism is values based to some extent. Collective values are endogenous. Economic justice is a critical component of Marxist economics. And in its post-Soviet phases, this includes anti subordination and pluralist value notions.

But values do not include substantive notions of individual rights. These rights, like the power to direct, are bound up in the collective and its more perfect wisdom. Marxists have theorized this notion in the political as well as the economic sphere as democratic centralism at least since its origins in the construction of Leninist party organization (Lenin 1902, 347-530). And of course, democratic centralism, and the privileging of the collective in its relationship with capital has had significant regulatory effects. Socialism, totalitarianism, and other forms of collective ownership by the instrumentalities (the apparatus) of state organization, under the guidance of the Communist Party (or its equivalent), of the means of production (capital) merges the economic with the political. And all of this is the service of wealth maximization and optimal resource allocation for the benefit of the collective.

But the Church’s approach, based on an application of a now almost century old development of Catholic theology and expressed through an increasingly sophisticated system of Catholic social thought, is grounded on a very different basis than Marxist systems, or the free market systems Marxists criticize. Indeed, the Catholic Church has engaged deeply, on a theoretical basis, not only the basis of Marxist theory but that of free market globalization as well. The foundational difference can be seen in the differences between these systems in their understanding and privileging of capital and labor, and in their understanding of the nature of labor and its social place within legal orders.

The grounding of Catholic social thought, and its relationship to economic theory, can be found in the encyclical, Deus Caritas Est. (2005). That grounding is complex, sophisticated and subtle and requires a bit of exposition. The basic premise is the centrality of love, the core of traditional Jewish faith. “In acknowledging the centrality of love, Christian faith has retained the core of Israel's faith, while at the same time giving it new depth and breadth.” (Deus Caritas Est at ¶ 1).

The commandment of love, in essence a dual whole made up of love for God and for one’s neighbor) is now also a response to the gift of love through the incarnation of the divine. “Jesus united into a single precept this commandment of love for God and the commandment of love for neighbour found in the Book of Leviticus: “You shall love your neighbour as yourself” (19:18; cf. Mk 12:29-31). Since God has first loved us (cf. 1 Jn 4:10), love is now no longer a mere “command”; it is the response to the gift of love with which God draws near to us.” (Deus Caritas Est at ¶ 1). It is in the interplay of a series of dualisms that one can construct a theology of both charity and economic substantive norms. These dualisms have as their core the love of God for humanity, and the love of individuals for their neighbors. From the love of God for humanity will be derived “the ecclesial exercise of the commandment of love of neighbour.” (Deus Caritas Est at ¶ 1).

Benedict starts with a long and complex development of the speculative duality of love. That development first sketches the distinctiveness of divine love in both God and humanity (agape) and an appropriate physical love (eros). (Deus Caritas Est at ¶ 2-7). (Deus Caritas Est at ¶ 1). “This is due first and foremost to the fact that man is a being made up of body and soul. Man is truly himself when his body and soul are intimately united; the challenge of eros can be said to be truly overcome when this unification is achieved.” (Id., at ¶ 5). Both eros and agape, together, are constructed as necessary connecting the physical with the spiritual and humanity with God. “Yet eros and agape—ascending love and descending love—can never be completely separated. The more the two, in their different aspects, find a proper unity in the one reality of love, the more the true nature of love in general is realized.” (Id., at ¶ 7).

At this point comes to “an initial, albeit still somewhat generic response to the two questions raised earlier. Fundamentally, “love” is a single reality, but with different dimensions; at different times, one or other dimension may emerge more clearly. Yet when the two dimensions are totally cut off from one another, the result is a caricature or at least an impoverished form of love.” (Id., at ¶ 8). That, Benedict suggest, is the great Biblical innovation that distinguishes it from its predecessor systems of understanding and faith, built on the unity of the dual systems of human and divine. “This newness of biblical faith is shown chiefly in two elements which deserve to be highlighted: the image of God and the image of man.” (Id., at ¶ 8). This harmonization of the duality of love can be seen in the nature of the love of God for man. “We have seen that God's eros for man is also totally agape. This is not only because it is bestowed in a completely gratuitous manner, without any previous merit, but also because it is love which forgives.” (Id., at ¶ 10). And it can also be seen as a part of the nature of the physical love of humanity through marriage.

“First, eros is somehow rooted in man's very nature; Adam is a seeker, who “abandons his mother and father” in order to find woman; only together do the two represent complete humanity and become “one flesh”. The second aspect is equally important. From the standpoint of creation, eros directs man towards marriage, to a bond which is unique and definitive; thus, and only thus, does it fulfil its deepest purpose. Corresponding to the image of a monotheistic God is monogamous marriage.” (Id., at ¶11).

It is, for Benedict, bound up in the incarnation of God, giving physical reality to the combination of divine and human love—love for God and for one’s neighbor—through the physical presence of God on earth. “The real novelty of the New Testament lies not so much in new ideas as in the figure of Christ himself, who gives flesh and blood to those concepts—an unprecedented realism.” (Id., at ¶ 12).

The stage is now set for the connection between this more or less esoteric discussion of love and its theology and charity. Benedict starts by drawing a parallel between love of God for humanity and the love between individuals through the symbolism of Communion. “Communion draws me out of myself towards him, and thus also towards unity with all Christians. We become “one body”, completely joined in a single existence. Love of God and love of neighbour are now truly united: God incarnate draws us all to himself.” (Id., at ¶ 14). But Communion is not limited to a love of fellow Christians. “The concept of ‘neighbor’ is now universalized, yet it remains concrete. Despite being extended to all mankind, it is not reduced to a generic, abstract and undemanding expression of love, but calls for its own practical commitment here and now.” (Id., at ¶ 5). Love of neighbor, as a physical manifestation of the love of God, and a necessary part of the whole, can be manifested as charity—the practice of love. “As a community, the Church must practise love. Love thus needs to be organized if it is to be an ordered service to the community.” (Id., at ¶ 20).

“Love of neighbour, grounded in the love of God, is first and foremost a responsibility for each individual member of the faithful, but it is also a responsibility for the entire ecclesial community at every level: from the local community to the particular Church and to the Church universal in its entirety.” (Id., at ¶ 20). The individual and institutional nature of charity (as love of neighbor) adds another aspect to the layers of duality which serves as the foundation of Catholic theology as a sort of values economics. That institutionalization has significant regulatory aspect—evidenced by legal regulation of Church charity from the 4th century, with a focus on the example of Egyptian regulation. (Id., at ¶ 23). Benedict at last draws what he calls two essential facts from the discussion, critical to the development of a theological set of values economics. The first that charity is “not a kind of welfare activity which could equally well be left to others, but is a part of her nature, an indispensable expression of her very being.” (Id., at ¶ 25). The second is that within the family of God on earth caritas agape extends beyond the frontiers of the Church, within which “no one ought to go without the necessities of life.” (Id., at ¶ 25).

This charity has a strong social justice dimension. Responding to a Marxist critique of the Church’s charitable activities, Benedict asserts that caritas, as developed since the 19th century has a strong social justice component. “Historically, the issue of the just ordering of the collectivity had taken a new dimension with the industrialization of society in the nineteenth century. The rise of modern industry caused the old social structures to collapse, while the growth of a class of salaried workers provoked radical changes in the fabric of society.” (Id., at ¶ 26). Since the maturity of the Industrial Revolution, the social justice component of Catholic social thought has been bound up with the relationship between capital and labor. “The relationship between capital and labour now became the decisive issue—an issue which in that form was previously unknown. Capital and the means of production were now the new source of power which, concentrated in the hands of a few, led to the suppression of the rights of the working classes, against which they had to rebel.” (Id., at ¶ 26). The Church’s response, Benedict relates, was slow at first, and then decisive. (Id., at ¶ 27). “Faced with new situations and issues, Catholic social teaching thus gradually developed, and has now found a comprehensive presentation in the Compendium of the Social Doctrine of the Church published in 2004 by the Pontifical Council Iustitia et Pax.” (Id.).

The social justice values derived from the Church’s notions of love of neighbor and its obligation to charity, Benedict offers, can serve as the foundation of a universal set of values for constructing a just society. “In today's complex situation, not least because of the growth of a globalized economy, the Church's social doctrine has become a set of fundamental guidelines offering approaches that are valid even beyond the confines of the Church: in the face of ongoing development these guidelines need to be addressed in the context of dialogue with all those seriously concerned for humanity and for the world in which we live.” (Id., at ¶ 27). That foundation, like the development of a theology of social values in economic theory, arises from the unity of a set of dualities. Benedict posits that the basis of Church notions of social justice as universal arises from an understanding that the just ordering of society is primarily the responsibility of politics. “The just ordering of society and the State is a central responsibility of politics. As Augustine once said, a State which is not governed according to justice would be just a bunch of thieves: “Remota itaque iustitia quid sunt regna nisi magna latrocinia?”.[18] Fundamental to Christianity is the distinction between what belongs to Caesar and what belongs to God (cf. Mt 22:21), in other words, the distinction between Church and State, or, as the Second Vatican Council puts it, the autonomy of the temporal sphere.” (Id., at ¶ 28(a)).

But politics must have as its objective the achievement of justice, that is through the implementation of a social ordering based on ethics. “Justice is both the aim and the intrinsic criterion of all politics. Politics is more than a mere mechanism for defining the rules of public life: its origin and its goal are found in justice, which by its very nature has to do with ethics.” (Id., at ¶ 28(a)). The connection comes in the form of faith—for faith, for Benedict, is the key to justice. “Here politics and faith meet. Faith by its specific nature is an encounter with the living God—an encounter opening up new horizons extending beyond the sphere of reason. But it is also a purifying force for reason itself.” (Id.). Faith acts as the agape to politics’ Eros

The ethics inherent in faith leads to the possibility of universalizing values beyond a particular faith system.

“Faith enables reason to do its work more effectively and to see its proper object more clearly. This is where Catholic social doctrine has its place: it has no intention of giving the Church power over the State. Even less is it an attempt to impose on those who do not share the faith ways of thinking and modes of conduct proper to faith. Its aim is simply to help purify reason and to contribute, here and now, to the acknowledgment and attainment of what is just.” (Id., at ¶ 28(a)).

Faith can thus serve as a proper basis for constructing a just social order among many faiths. “It recognizes that it is not the Church's responsibility to make this teaching prevail in political life. Rather, the Church wishes to help form consciences in political life and to stimulate greater insight into the authentic requirements of justice as well as greater readiness to act accordingly, even when this might involve conflict with situations of personal interest.” (Id.). This is a journey from faith to universal morals and ethics. “As a political task, this cannot be the Church's immediate responsibility. Yet, since it is also a most important human responsibility, the Church is duty-bound to offer, through the purification of reason and through ethical formation, her own specific contribution towards understanding the requirements of justice and achieving them politically.” (Id.). And that ethics is based on the notions of love and the charity (now social justice) obligations that flow from that love.

Thus Benedict has built up a theology of social justice values on a foundation of resolved binaries: Religion-politics, love of God-love of humanity, faith-reason, spiritual-concrete, theology-economic values. And it also suggests an important caveat that separates Church theology from classical or Marxist economic values theory—the Church does not posit the possibility of constructing systems that produce (eventually) a perfection that makes values regulation irrelevant. Instead, Benedict posits that the striving for a just society on the basis of Church values will not lead to human social perfection. (Id., at ¶ 28(b)). Instead, the obligation to charity—now social justice—reflects an eternal obligation to express the love of God for humanity, and of individuals for their neighbors. “In the end, the claim that just social structures would make works of charity superfluous masks a materialist conception of man: the mistaken notion that man can live “by bread alone” (Mt 4:4; cf. Dt 8:3)—a conviction that demeans man and ultimately disregards all that is specifically human.” (Id.).

Deus Caritas Est suggests a fully developed and sophisticated system of valuation for economic analysis. Economic values are essentially grounded in love, rather than in personal or aggregate wealth maximization. But love here is understood as the expression of a complex series of parallelisms. These start with the relationship between God and humanity—as expressed from the Old Testament to the meaning of the Incarnation (agape). That love find expression in the love between man and woman, and then generalized as the love among individuals—both physical (and thus grounded in physical relationships) and perfectible (grounded in the need to mimic the love from God in the love of neighbor). From these foundations—divine love expressed in physical terms in the love among individuals within families and in communities, and among communities, is what is meant to serve as the maximizing value of economic analysis—not goods but the love value generated by interactions. Aggregate maximization of value, then, is not necessarily measured by wealth maximization in the form of the accumulation of lots of objects with a high market value (the conventional sense of classical economics and Marxist theory), but is measured in the production of good measured in terms of charity, and, in its modern understanding—social justice. Economics, then, is grounded in the study of systems for the maximization of social justice among individuals which itself is to be understood as an application of divine love in human relations.

The resonance with the values laden focus of socio-economics in particular, and Kelso’s binary economics, is obvious. Though the two sets of systems are based on different notions of the source of value, both suggest values exogenous to the production of objects themselves as a basis for maximization analysis in economic terms. The regulatory consequences are apparent as well—at least at a macro level—markets in things are not a central focus of a Catholic values economics. Neither hostile nor solicitous of markets—or of centralization in planning (either by public or private forces)—the thrust of Deus Caritas Est looks to the use of things for the betterment of the individual, and the aggregate of individuals in the family, communities and political and social organizations. Income transfer, social benefits, the requisites of human diognity become the focus of an efficient economic system. But it is by no means one in which the individual is passive. Love, in the sense of Deus Caritas Est is an active not a passive thing. Looking to the incarnation itself as an active principle of involvement, Benedict suggests the role of individuals as instruments of love in the sense of charity and social justice.

For all that, the social justice concerns that form an integral part of the social project of the Church, and a necessary project mandated by Church theology, still remains somewhat esoteric. But the Church has been able to translate this theology of social justice into more concrete terms in three specific areas of economic regulation: consumerism (materialism), labor rights, and globalization. It is to each of these that this essay turns to next.

Consumerism: The phenomenon of consumerism is characterized as the expression of a godless materialism that demeans humanity and leads it away from an ethical life. John Paul II fleshed these values out in his encyclical Centesimus annus (1991):

A given culture reveals its overall understanding of life through the choices it makes in production and consumption. It is here that the phenomenon of consumerism arises. In singling out new needs and new means to meet them, one must be guided by a comprehensive picture of man which respects all the dimensions of his being and which subordinates his material and instinctive dimensions to his interior and spiritual ones. If, on the contrary, a direct appeal is made to his instincts — while ignoring in various ways the reality of the person as intelligent and free — then consumer attitudes and life-styles can be created which are objectively improper and often damaging to his physical and spiritual health. Of itself, an economic system does not possess criteria for correctly distinguishing new and higher forms of satisfying human needs from artificial new needs which hinder the formation of a mature personality. Thus a great deal of educational and cultural work is urgently needed, including the education of consumers in the responsible use of their power of choice, the formation of a strong sense of responsibility among producers and among people in the mass media in particular, as well as the necessary intervention by public authorities. (Centesimus annus at ¶ 36).

Among the consumption patterns that are permitted through the materialism of a consumer culture are cultures of drug use. (Id.). “It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed towards "having" rather than "being", and which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself.” (Id.). The sense is that the promotion of consumption for consumption’s sake bespeaks a hedonism that privileges the physical over the spiritual, and thus reduces the wealth maximization—and value—of production, for the individuals. This is evidenced by a sense of alienation. “This happens in consumerism, when people are ensnared in a web of false and superficial gratifications rather than being helped to experience their personhood in an authentic and concrete way.” (Id., at ¶ 41).

Labor: The development of the Church’s labor values is perhaps its most specific elaboration of its understanding of social justice as a component of its mission to caritas, the lynchpin of which is the relationship between labor and capital. (Deus Caritas Est, supra at ¶ 26). The great elaboration of these policies within the context of Church social justice norms was in John Paul II’s encyclical, Laborem exercens (1981). The basis of a theology of labor, like that of the function of economic activity, was based on the relationship between God and humanity. The encyclical explains that “man "is the primary and fundamental way for the Church"4,precisely because of the inscrutable mystery of Redemption in Christ; and so it is necessary to return constantly to this way and to follow it ever anew in the various aspects in which it shows us all the wealth and at the same time all the toil of human existence on earth.” (Laborem exercens, at ¶ 1).

John Paul II starts by situating work in the context of faith and reason. First, there is an acknowledgement of the utility of reason for reasoning through the values issue for labor policy. “She is confirmed in this conviction by considering the whole heritage of the many sciences devoted to man: anthropology, palaeontology, history, sociology, psychology and so on; they all seem to bear witness to this reality in an irrefutable way. But the source of the Church's conviction is above all the revealed word of God, and therefore what is a conviction of the intellect is also a conviction of faith.” Id., at ¶ 4.

From this John Paul draws an important conclusion. “The Church is convinced that work is a fundamental dimension of man's existence on earth.” (Id., at ¶ 4). Humanity is the subject of work both because of the Biblical commandment to assert dominion over the earth and because persons were created in the image of God, an image incarnated in the form of the divine presence on earth for a short time. “Man has to subdue the earth and dominate it, because as the "image of God" he is a person, that is to say, a subjective being capable of acting in a planned and rational way, capable of deciding about himself, and with a tendency to self-realization. As a person, man is therefore the subject of work.” (Id., ¶ 6). Dominion conditions the nature of work, and gives rise to its ethical dimension. “This dominion, in a certain sense, refers to the subjective dimension even more than to the objective one: this dimension conditions the very ethical nature of work. In fact there is no doubt that human work has an ethical value of its own, which clearly and directly remain linked to the fact that the one who carries it out is a person, a conscious and free subject, that is to say a subject that decides about himself.” (Id., at ¶ 6). Thus, fundamental to the relationship between humanity and work is the relationship between humanity and God, that is for God’s work for humanity on Earth.

If the work of humanity must reflect the work of God, then the dualistist parallelism that marked the ethics of charity and social justice in Deus Caritas est is also at the foundation of the ethics of work in Laborem Excercens. That ethics is grounded in the attainment of human dignity through work. “Work is a good thing for man-a good thing for his humanity-because through work man not only transforms nature, adapting it to his own needs, but he also achieves fulfillment as a human being and indeed, in a sense, becomes "more a human being".” (Id., at ¶ 9). The ethics is also tied to basic human social and politica organization—the family and the state. Work must be the basis for the strengthening of the family and the nation. “Work constitutes a foundation for the formation of family life, which is a natural right and something that man is called to. These two spheres of values-one linked to work and the other consequent on the family nature of human life-must be properly united and must properly permeate each other.” (Id., at 10). Those relationship are made explicit in Laborem exercens: “In fact, the family is simultaneously a community made possible by work and the first school of work, within the home, for every person.” (Id.).

The centrality of the human in the context of work is decisive for the elaboration of an ethics of work in the context of the conflict between labor and capital. (Laborem exercens, at ¶¶11-15). It is in this sphere that the Church took some pains to suggest both the similarities of its applied theology to modern notions of classical and Marxist economics and, more importantly, the differences between the three approaches to understanding the foundations of economic analysis (and thus the foundations for political regulation). The conflict between labor and capital had it modern origins, for the Church, in the shift from self employment to employment of one person by another, which without an ethical dimension, gives rise to exploitation and the lose of human dignity. “The conflict originated in the fact that the workers put their powers at the disposal of the entrepreneurs, and these, following the principle of maximum profit, tried to establish the lowest possible wages for the work done by the employees. In addition there were other elements of exploitation, connected with the lack of safety at work and of safeguards regarding the health and living conditions of the workers and their families.” (Id., at ¶ 11).

Thus, the critical issue is not the nature of work, but the nature and purpose of ownership. Applying its theology of work, Laborem exercens derives a principal of the priority of labor over capital (Id., at ¶ 12), elaborates a connection between labor and capital on the basis of this principal of labor priority (Id., at ¶ 12), suggests a critique of both classical and Marxist economics (Id., at ¶ 13), and provides an ethical grounding for the use and exploitation of property (capital) in the context of the primacy of work. (Id., at ¶ 14). From this ethics of labor, Laborem exercens develops a systems of workers rights situated within the context of human rights and grounded in notions of human dignity (Id., at ¶ 16), and the obligations of employers and the state ((Id., at ¶ 17). In addition, Laborem exercens elaborates from its first principles a right to work and subsistence (elaborated more completely in Deus Caritas Est). (Id., at ¶ 18). “The obligation to provide unemployment benefits, that is to say, the duty to make suitable grants indispensable for the subsistence of unemployed workers and their families, is a duty springing from the fundamental principle of the moral order in this sphere, namely the principle of the common use of goods or, to put it in another and still simpler way, the right to life and subsistence.” (Id.). Additionally elaborated is an ethics of just wages. (Id., at ¶ 19). “The key problem of social ethics in this case is that of just remuneration for work done.. . . . Hence, in every case, a just wage is the concrete means of verifying the justice of the whole socioeconomic system and, in any case, of checking that it is functioning justly. It is not the only means of checking, but it is a particularly important one and, in a sense, the key means.” (Id.). The rights of women in the workplace are also a product of this elaboration of an ethics of economic values. (Id., at ¶ 19). “The true advancement of women requires that labour should be structured in such a way that women do not have to pay for their advancement by abandoning what is specific to them and at the expense of the family, in which women as mothers have an irreplaceable role.” (Id.). Also flowing from the primacy of labour in an ethics based economics of values is a right to unionization. (Id., at ¶ 20). “They are indeed a mouthpiece for the struggle for social justice, for the just rights of working people in accordance with their individual professions. However, this struggle should be seen as a normal endeavour "for" the just good: in the present case, for the good which corresponds to the needs and merits of working people associated by profession; but it is not a struggle "against" others.” (Id.). But unionization is valued only when appropriately asserted. (Id.). For similar reasons the importance of agricultural work and work by the disabled is confirmed. (Id., at ¶ 21-22). Lastly, and importantly, Catholic values labor economics also elaborates a basis for the ethical regulation of global labor migration. (Id., at ¶ 23). “The most important thing is that the person working away from his native land, whether as a permanent emigrant or as a seasonal worker, should not be placed at a disadvantage in comparison with the other workers in that society in the matter of working rights. Emigration in search of work must in no way become an opportunity for financial or social exploitation. As regards the work relationship, the same criteria should be applied to immigrant workers as to all other workers in the society concerned.” (Id.).

The principle of the priority of labor inverts the classical relationship between labor and capital. This is derived from the theology of human dominion over the Earth. Things are taken over “by making them his workbench. He takes them over through work and for work.” (Id., at ¶ 12). Capital, in effect, in “every phase of the development of his work man comes up against the leading role of the gift made by "nature", that is to say, in the final analysis, by the Creator. At the beginning of man's work is the mystery of creation.” (Id.). As a consequence, capital is something gifted to persons by God for their use, and must necessarily be treated as an instrument of work rather than as its object. “Obviously, it remains clear that every human being sharing in the production process, even if he or she is only doing the kind of work for which no special training or qualifications are required, is the real efficient subject in this production process, while the whole collection of instruments, no matter how perfect they may be in themselves, are only a mere instrument subordinate to human labour.” (Id., at ¶ 12). “All that we can say of everything in the production process which constitutes a whole collection of "things", the instruments, the capital, is that it conditions man's work; we cannot assert that it constitutes as it were an impersonal "subject" putting man and man's work into a position of dependence.” (Id., at ¶ 13).

More importantly it suggests two things. First, labor priority suggests that the character of property ownership is ethically charged and values laden. “From the beginning there is also linked with work the question of ownership, for the only means that man has for causing the resources hidden in nature to serve himself and others is his work. And to be able through his work to make these resources bear fruit, man takes over ownership of small parts of the various riches of nature: those beneath the ground, those in the sea, on land, or in space. He takes all these things over by making them his workbench. He takes them over through work and for work.” (Id., at ¶ 12).

And second, the relationship between labor and capital is not one of conflict but of hierarchy. (Id., at ¶¶ 12-13). Christian morals and ethics posits that property ownership is morally charged. As a gift from God, its possession is not absolute and unlimited. Instead, there are a number of ethical parameters limiting the rights of private exploitation of property. “Christian tradition has never upheld this right as absolute and untouchable. On the contrary, it has always understood this right within the broader context of the right common to all to use the goods of the whole of creation: the right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone.” (Id., at ¶ 14). These obligations are not solved by changing the owner of the property (collective rather than private ownership), but are inherent in the nature of ownership itself. (Id.). Ownership ethics “diverges radically from the programme of collectivism as proclaimed by Marxism and put into pratice in various countries in the decades following the time of Leo XIII's Encyclical. At the same time it differs from the programme of capitalism practised by liberalism and by the political systems inspired by it.” (Id.). Essentially, the ethics of ownership suggests that every worker ought to feel herself a part owner of the gift of property made by God to all of his human creatures.

“We can speak of socializing only when the subject character of society is ensured, that is to say, when on the basis of his work each person is fully entitled to consider himself a part-owner of the great workbench at which he is working with every one else. A way towards that goal could be found by associating labour with the ownership of capital, as far as possible, and by producing a wide range of intermediate bodies with economic, social and cultural purposes; they would be bodies enjoying real autonomy with regard to the public powers, pursuing their specific aims in honest collaboration with each other and in subordination to the demands of the common good, and they would be living communities both in form and in substance, in the sense that the members of each body would be looked upon and treated as persons and encouraged to take an active part in the life of the body.” (Id., at ¶ 14).

Thus, the problem of ownership is not the right to own or exploit but the nature or character of that ownership.

From this, Laborem exercens derives a critique of classical and Marxist economics. That critique suggested that the tendency of both systems to posit an irreconcilable antimony between labor and capital inverted the relationship between labor and capital and leads inevitably to amoral systems of economic regulation in which human dignity and economic justice might not be attained. The focus of the critique is that both classical and Marxist economics wrongly focus on the means of production—the possibilities of the production of material wealth—and ignore the ends of production—the human being and her material and spiritual fulfillment. The error “originated in the whole of the economic and social practice of that time, the time of the birth and rapid development of industrialization, in which what was mainly seen was the possibility of vastly increasing material wealth, means, while the end, that is to say, man, who should be served by the means, was ignored. It was this practical error that struck a blow first and foremost against human labour, against the working man, and caused the ethically just social reaction already spoken of above.” (Id., at ¶ 13).

In the absence of appropriate values, economics leads to perversion of sorts by elevating the thing over the person. And that elevation of the material over the personal provides the core of the Catholic critique of a non-values based economics. Classical economic theory is critiqued for its materialism—its frenetic search for more and greater things as the beginning and end of “the good.” In this context, the human is reduced to a subordinate position and spiritual well being is marginalized. Human dignity is threatened.

“This fundamental error of thought can and must be called an error of materialism, in that economism directly or indirectly includes a conviction of the primacy and superiority of the material, and directly or indirectly places the spiritual and the personal (man's activity, moral values and such matters) in a position of subordination to material reality. This is still not theoretical materialism in the full sense of the term, but it is certainly practical materialism, a materialism judged capable of satisfying man's needs, not so much on the grounds of premises derived from materialist theory, as on the grounds of a particular way of evaluating things, and so on the grounds of a certain hierarchy of goods based on the greater immediate attractiveness of what is material.” (Id., at ¶ 13).

That dehamization is expressed in its notions of property ownership. (Id., at ¶ 14). The right to personal exploitation without ethical limit serves to invert the social order, putting things over people in an unacceptable way, ethically speaking.

“From this point of view the position of "rigid" capitalism continues to remain unacceptable, namely the position that defends the exclusive right to private ownership of the means of production as an untouchable "dogma" of economic life. The principle of respect for work demands that this right should undergo a constructive revision, both in theory and in practice. If it is true that capital, as the whole of the means of production, is at the same time the product of the work of generations, it is equally true that capital is being unceasingly created through the work done with the help of all these means of production, and these means can be seen as a great workbench at which the present generation of workers is working day after day. Obviously we are dealing here with different kinds of work, not only so-called manual labour but also the many forms of intellectual work, including white-collar work and management.” (Id., at ¶ 14).

Dialectical materialism, though more sympathetic form an ethical perspective, also fails to avoid the materialist trap. “In dialectical materialism too man is not first and foremost the subject of work and the efficient cause of the production process, but continues to be understood and treated, in dependence on what is material, as a kind of "resultant" of the economic or production relations prevailing at a given period.” (Id., at ¶ 13). And in the case of Marxist economics there is a further trap—the ease with which the collective spirit can suppress individual human dignity. The bureaucratic centralism of collective organization in the absence of ethical limitations, serves merely as an efficient vehicle for the dehumanization of the social order.

“While we accept that for certain well founded reasons exceptions can be made to the principle of private ownership-in our own time we even see that the system of "socialized ownership" has been introduced-nevertheless the personalist argument still holds good both on the level of principles and on the practical level. If it is to be rational and fruitful, any socialization of the means of production must take this argument into consideration. Every effort must be made to ensure that in this kind of system also the human person can preserve his awareness of working "for himself". If this is not done, incalculable damage is inevitably done throughout the economic process, not only economic damage but first and foremost damage to man.” (Id., at ¶ 15).

Collective ownership, then, like unlimited personal ownership, dehumanizes.

“For it must be noted that merely taking these means of production (capital) out of the hands of their private owners is not enough to ensure their satisfactory socialization. They cease to be the property of a certain social group, namely the private owners, and become the property of organized society, coming under the administration and direct control of another group of people, namely those who, though not owning them, from the fact of exercising power in society manage them on the level of the whole national or the local economy.” (Id., at ¶ 14).

Stripping the individual of the right to own and exploit the means of production puts people in a position of denying others the gift of resources that God freely gave all people and thus reduces their individual dignity.

Globalization and Development: The Church’s moral economic stance has been most visible recently in its interactions with globalization and global finance. It is in the Church’s confrontation with globalization in its current economic forms that values based understanding of consumerism (as the valueless pursuit of things) and labor policy (as the error of placing capital over labor) is most fully developed. In that development, especially with respect to objectives, there is a similarity between Catholic social thought and traditional Marxist frameworks. But the sources of each are quite distinct and the methods used to get to the objectives distinctly different.

A great contemporary voice of traditionalist Marxist approaches to globalized economic activity is Fidel Castro. Castro effectively makes the case that loans profiting the lender but not the borrower (in a public-debt context) must by nature constitute a class of debt that is odious, as that notion is classically understood. (Backer 2007a). Four principal characteristics of this systemic hypercycle produce an unavoidable need for developing states to borrow, and their perpetual inability to repay those loans outlined by Castro was described in earlier studies. (Backer 2006). Labor specialization, overproduction, capital migration, and consumerism produce a global system that compels poor states to borrow for the benefit of developed states. (Id.). “Overproduction misallocates resources for the benefit of consumers in the wealthiest states by depressing the price of these goods, making them more affordable in the developed world but beyond the reach of people elsewhere. Free movement of capital makes it harder for developing states to tax consumption or income of the entities producing goods for the global market. Consumerism as an ideology keeps the wheels of overproduction going and fuels a constant if false aspirational hope among those in developing states.” (Castro 1999).

“States, without wealth to tax and with critical needs to meet, must borrow. Developing states borrow directly, in the debt markets, and indirectly, through the IMF, from developing states.” (Id.). The modern system of private orderings, of global capital in the service of undefined global markets, it is argued, serves to benefit creditor states to the ruin of borrower states. (Id.). “In effect, developing states acquire as a debt obligation a portion of the wealth that represents the required subsidy of global production at the heart of the neo-liberal system. Thus the spiral deepens.” (Id.). In this way, the system of sovereign lending manages to reinforce the old international-law system that sought to legitimize colonialism and the unequal treatment of states without invoking the old imperialist norm system directly. Fidel Castro nicely distilled this insight in the 1980s: “we have analyzed all of the variations suggested to resolve the problem of state debt . . . the result of all of these analyses is that sovereign debt, like an enormous and monstrous cancer, . . . tends to reproduce itself and grow without limit.” (Castro 1987). Unable to tax sufficiently to repay prior loans, “States must borrow additional sums of money to pay the portion of prior loans which are unpaid while meeting continuing need, or sell their wealth (in the form of natural resources or other wealth) in an effort to pay their loans.” (Backer 2006).

Castro’s vision finds an equally important echo in the Catholic social thought of the late 20th century. It has also been elaborated in the writings of American academics who have embraced this perspective. (Quigley 2004). Since its rejection of so-called liberation theology in the 1980s (Ratzinger 1986), Catholic social thought has stressed many of the objectives identified by Castro, and has criticized aspects of market based globalization, and the resulting system of unsustainable state debt, attacked by Castro. At the same time it embraced the form of the critique, the Roman Catholic Church has been careful to reject what it calls the secularism inherent in any form of Marxist-Leninist program of opposition to market globalization. (Ratzinger 1986). The Roman Catholic Church has thus developed, under the leadership of John Paul II, an extensive catalogue of criticism of the modern global market system that stressed development and charity, within a Catholic context, that paralleled Castro’s opposition to neo-liberal globalization, within a Marxist-Leninist context. (described in Deus Caritas Est). Both understand sovereign debt as a piece of the larger problem of the nature of the organization, and the character of the normative structure, of the emerging global governance system.

But the foundations of those objectives are quite different. John Paul II suggested that “Christians will have to raise their voice on behalf of all the poor of the world, proposing the Jubilee as an appropriate time to give thought, among other things, to reducing substantially, if not canceling outright, the international debt which seriously threatens the future of many nations.” (Ecclesia in America). He explains “[o]nce more I express the hope, . . . that . . . “through study and dialogue with representatives of the First World and with the leaders of the World Bank and the International Monetary Fund, will seek ways of resolving the problem of the foreign debt and produce guidelines that would prevent similar situations from recurring on the occasion of future loans”. (218)” (Id.).

John Paul II, like Castro, suggests a “critical analysis of the world economic order, in its positive and negative aspects, so as to correct the present order, and that they would propose a system and mechanisms capable of ensuring an integral and concerted development of individuals and peoples.” (Id.). Like Castro, John Paul II would have sought a recasting of the current global economic system away from markets and toward development and ‘social justice.’ He writes: “The cry of millions upon millions of poor and marginalized people in our Latin American and Caribbean societies due to this unjust economic system with its "face of suffering" (S.D. 179), must be heard by the Church in the Americas, and must be cased with evangelical courage, and a desire to promote, for everyone’s benefit, this "new international socio-economic order" based on solidarity and justice.” (Synodus Episcoporum 1997).
These views are echoed by American prelates as well.

“Another reason we care is that the most vulnerable people in society were not responsible for contracting the debt, yet they pay the price for it. Some countries used borrowed funds to finance their militaries or projects benefiting the elites rather than for projects that would have benefited the poor. Poor people suffer the most by the diversion of scarce resources to debt repayments from human development.” (United States Bishops 2000).

Like Castro, John Paul II was no friend of the consumerism that formed an integral part of the global economic system contributing, in some measure, to the need to borrow by states least able to afford the debt.

“In the entire American continent, there are indications of the difference mentioned by Pope John Paul II in his Encyclical Letter Redemptoris missio: "the North has constructed (a development model) which is now spreading to the South, where a sense of religion as well as human values are in danger of being overwhelmed by a wave of consumerism." Various answers point to the urgent need to find a solution to the problem of the foreign debt in the context of the celebration of the Great Jubilee of the Year 2000, as proposed by the Holy Father in his Apostolic Letter Tertio millenio adveniente.” (Synod of Bishops 1997).

In Laborem exercens, John Paul II suggested that globalization provided a venue for the indirect exploitation of labor through the elaboration of a transnational classical or Marxist (collective) system of economic exploitation of the individual through the exploitation of capital. He starts by reaffirming the central role of the state. “The concept of indirect employer is applicable to every society, and in the first place to the State. For it is the State that must conduct a just labour policy.” (Laborem exercens, ¶ 17). But the state, John Paul II reminds, does not have a monopoly of power within the community of states. “However, it is common knowledge that in the present system of economic relations in the world there are numerous links between individual States, links that find expression, for instance, in the import and export process, that is to say, in the mutual exchange of economic goods, whether raw materials, semimanufactured goods, or finished industrial products.” (Id.). That has consequences in an interlinked world. “These links also create mutual dependence, and as a result it would be difficult to speak, in the case of any State, even the economically most powerful, of complete self-sufficiency or autarky.” (Laborem exercens, supra at ¶ 17).

The attainment of the worker's rights cannot however be doomed to be merely a result of economic systems which on a larger or smaller scale are guided chiefly by the criterion of maximum profit. On the contrary, it is respect for the objective rights of the worker-every kind of worker: manual or intellectual, industrial or agricultural, etc.-that must constitute the adequate and fundamental criterion for shaping the whole economy, both on the level of the individual society and State and within the whole of the world economic policy and of the systems of international relationships that derive from it. (Id.).

But The Catholic Church views the adoption of this vision as an aspect of conversion to Christian, that is, Catholic, universalism. Thus, the issue of sovereign debt has been conceived as forming a part of a total conversion.

Certain economic systems and policies exist which control the commercial market and affect the financial matter of loans and interests, generating in some cases an enormous debt for nations and impeding the development of peoples. There are also certain types of economic aid dependent on the ideologies of small political groups, various people in power and nations which are not always governed by the criteria of equity and solidarity, but rather by selfish interests. Such conditions call for conversion, especially as they relate to the economic inequality between the northern and southern areas of the continent. The situation calls out to faith and to conscience--both human and Christian--for a response. (Synod of Bishops 1996).

And so, like Castro, within his system, the Roman Catholic Church must continue to witness it faith in it economic and social justice manifestations. “In the next two years, we plan to do a lot of work on the debt issue. We will continue to press the World Bank, IMF, and US government for more substantial relief for the countries that qualify under the new initiative. We will work with CRS' partners in Africa and Latin America who want to do their own work on debt. We will also support more exchanges of bishops and clergy from countries that are deeply indebted.” (United States Bishops 2000).

Like Castro, elements of the Catholic hierarchy have suggested a greater lender responsibility for sovereign debt, especially to less developed states in which the ruling institutions might not be totally free of corruption or entirely legitimate. Thus for example, the Pontifical Council for Justice and Peace Trade, Development and the Fight Against Poverty suggested that:

Among the causes which have helped to create massive external debt are not only high interest rates, caused by speculative financial policies, but also the irresponsibility of people in government who, in incurring debt, have given too little thought to the real possibility of repaying it. This has been aggravated by the fact that huge sums obtained through international loans sometimes go to enrich individuals instead of being used to pay for the changes needed for the country's development. At the same time, it would be unjust to impose the burden resulting from these irresponsible decisions upon those who did not make them. (Martin 1999).

And the Catholic Church has indicated a willingness to embrace a form of Castro’s subsidy argument about neo liberal global trade and its effects on developing states as borrowers. (Id.). Thus, for example, it has suggested that “the international trade system today frequently discriminates against the products of the young industries of the developing countries and discourages the producers of raw materials." (Sollicitudo rei socialis 1987 , ¶ 43). Further, “The trends in primary commodity trade, access to world markets and diversification of production have a decisive impact on developing countries, affecting the balance of payments, foreign debt, domestic budget and the success of savings and investment policies.” (Id.). At a speech given during the Pontifical Council for Justice and Peace, with the support of the Adenauer Foundation, organized a seminar, in Rome on June 9 and 10, which gathered the leaders of international financial institutions (World Bank, International Monetary Fund, Inter-American Bank for Development), the presidency of the Latin American Bishops' Conference and representatives of the US and German Bishops' Conferences, a senior Roman Catholic Church official stated, for example, that “Another reason we care is that the most vulnerable people in society were not responsible for contracting the debt, yet they pay the price for it. Some countries used borrowed funds to finance their militaries or projects benefiting the elites rather than for projects that would have benefited the poor. Poor people suffer the most by the diversion of scarce resources to debt repayments from human development.” (Etchegaray 2000).

At the same time, the Catholic hierarchy has been very careful to curb political expression of its moral stances. The Catholic Church firmly restrained the ‘liberation theology” popular with Latin American religious during the 1970s and 1980s. (Gutierrez 1973). The current Pontiff, Benedict XVI, as Cardinal Ratzinger, was crucial in that effort. He made a distinction between Marxist elements of liberation theology – which he considered an error within the traditions of the Roman Catholic faith, though an alluring one. (Ratzinger 1984).

In trying to arrive at an overall evaluation it must be said that, if one accepts the fundamental assumptions which underlie liberation theology, it cannot be denied that the whole edifice has an almost irresistible logic. By adopting the position of biblical criticism and of a hermeneutics that grows through experience, on the one hand, and of the marxist analysis of history, on the other, liberation theologians have succeeded in creating a total picture of the Christian reality, and this total view seems to respond fully both to the claims of science and to the moral challenges of our time, urging people to make Christianity an instrument of concrete world transformation; it seems to have united Christianity, in this way, with all the "progressive forces" of our era. (Id.).

Instead, the focus ought to turn from political action and the marshalling of the material, to the traditional, and doctrinally appropriate concern for the poor. (Lynch 1994). Professor Lynch notes “Opponents of liberation theology have incorporated their struggle against this particular philosophy into a more general attack on secularism, societal disunity and a culture confined to addressing economic conflict. The approach has been quite successful.” (Id.).

Again, the regulatory consequences can be significant. A Catholic values based economics would tend to reject the free market globalization that is dominant today. The basis is consistent with its views on consumerism and labor policy. Modern globalization is built on a hierarchy of false values—things over people and the value of aggregations of things over the use of those things for the fulfillment of the divine command to love (God and neighbor). As a result, developed states might be deemed t have obligations ot aid the development of their less well developed neighbors, and all states have an obligation to provide for their people. The position is not in direct opposition to free markets, or even a socialist based transnational trade system. Rather it measures those systems using a different values yardstick. It is not the amount of accumulation, but the way in which those accumulations are used that matter under those systems of values. And economic analysis must serve those values to be legitimate.


John Paul II perhaps described the theological intervention in economics best when he noted:
The Church's social doctrine is not a "third way" between liberal capitalism and Marxist collectivism, nor even a possible alternative to other solutions less radically opposed to one another: rather, it constitutes a category of its own. Nor is it an ideology, but rather the accurate formulation of the results of a careful reflection on the complex realities of human existence, in society and in the international order, in the light of faith and of the Church's tradition. Its main aim is to interpret these realities, determining their conformity with or divergence from the lines of the Gospel teaching on man and his vocation, a vocation which is at once earthly and transcendent; its aim is thus to guide Christian behavior. It therefore belongs to the field, not of ideology, but of theology and particularly of moral theology.
(Sollicitudo rei socialis 1987 ¶ 41). The Curch has developed a values bases systemn for grounding economics//and most importantly social and political policy arising from the application of economic theory, now properly understood. To a great extent, this development is central to the theology of the Church itself and its mission to spread the word. "In these new forms, it is often possible to establish a fruitful link between evangelization and works of charity. " (Deus Caritas Est ¶ 30(b)). The centrality of charity to Catholic theology was a central element of Deus Caritas Est. But at the same time, the values have also been conceived as transcending any one theology. Since the Church speaks of the union of faith with reason, it is possible to constitute the application of reason (in the form of the vaue system of economics) as reason universal. This is critical to the possibility of applying Catholic social theory beyond the confines of the Catholic community--that is, to produce an ethics of economics that is above a parochial religion. Thus, Benedict suggests that "since we all have the same fundamental motivation and look towards the same goal: a true humanism, which acknowledges that man is made in the image of God and wants to help him to live in a way consonant with that dignity. " (Deus Caritas Est ¶ 30(b); Sollicitudo rei socialis 1987 ¶ 32). In these forms, Catholic values economics can participate in secular policy and legal discourse on economics and its regulatory implications, without lessening its breadth as "mere" religion.

In the end, all of these systems seek the good. All of them are based, in large measure on faith. But the faith of each of these systems—those premises from which the vast and complex structures of each of these rational systems of knowledge and order are constructed, are vastly different. Yet all share the same foundational understanding that the rational can only be perfected as a function of something else—of something outside of the systems that are created on their basis. It is from that faith, from those premises, that all else—from law to economics, to culture, to the structure of human organization, arises and is supported. The contest for the soul of a community, then, as the pontiffs so rightly suggest, strike at the core of the ordering of human organization for the coming century. Which faith will triumph, of course, is another matter. Still, whichever triumphs, all assert a substantial effect on both policy and the law that results from application of that policy. Acceptance of one or another basis of economic “truth” is essential for the legitimacy of government action, and for elaborating the basis on which political as well as economic judgments can be made and leaders held accountable. Accountability here is not limited to political actors—but extends as well to economic actors who themselves must be accountable to their own stakeholders. Theology and socio-economics, thus, both have become significant actors in law and politics.


Robert Ashford, Socio-Economics—An Overview, electronic version available at

Robert Ashford and Rodney Shakespeare, Binary Economics: The New Paradigm.

Larry Catá Backer, God(s) Over Constitutions: International and Religious Transnational Constitutionalism in the 21st Century, 26 MISSISSIPPI COLLEGE LAW REVIEW – (forthcoming 2007).

----------. Odious Debt Wears Two Faces: Systemic Illegitimacy, Problems and Opportunities in Traditional Odious Debt Conceptions in Globalized Economic Regimes, 70 DUKE JOURNAL OF LAW & CONTEMPORARY PROBLEMS –(forthcoming 2007a).

----------. Ideologies of Globalization and Sovereign Debt: Cuba and the IMF, 24 PENN STATE INTERNATIONAL LAW REVIEW 497 (2006).

Benedict XVI, Deus Caritas Est 2005,

Fidel Castro Ruz, Commander in Chief, First Secretary of the Central Committee of the Cuban Communist Party, President of the Council of State and Ministers, Discourse Delivered at the Eighth Summit Conference of Non-Aligned States (Sept. 2, 1986), (last visited Sept. 9, 2007) (author’s translation).

John Paul II, Sollicitudo rei socialis 1987,

---------- Centesimus annis 1991.

---------- Laborem exercens 1981,.

---------- Ecclesia In America, (Apostolic Exhortation: To the Bishops, Deacons, and Priests)(available at

Cardinal Etchegaray, Speech: Pontifical Council for Justice and Peace, (June 9-10 2000)(Speech available at


Louis O. Kelso and Mortimer J. Adler, The Capitalist Manifesto (New York: Random House, 1958).

----------, The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings (San Francisco: The Kelso Institute, 2000).

Norman G. Kurland, Binary Economics in a Nutshell (2005) available at

V.I. Lenin, What is to be Done (1902) in Lenin Collected Works, Foreign Languages Publishing House, 1961, Moscow, Volume 5, pages 347-530. available at

Edward A. Lynch, The Retreat of Liberation Theology, HOMILETIC & PASTORAL REVIEW 12-21 (Feb. 1994) available at

Bishop Diarmud Martin, Pontifical Council for Justice and Peace Trade, Development and the Fight against Poverty, Report (18 November 1999)(available at ).

William P. Quigley, Prison Work, Wages, and Catholic Social Thought: Justice Demands Decent Work for Decent Wages, Even for Prisoners, 44 SANTA CLARA L. REV. 1159, 1174 (2004).

Joseph Cardinal Ratzinger, Sacred Congregation for the Doctrine of the Faith. Instruction on Christian Freedom and Liberation (1986).

---------- Liberation Theology, Preliminary Notes, (1984) available at (reproduced from THE RATZINGER REPORT — an interview with Cardinal Ratzinger and Vittorio Messori (Ignatius Press 1984)).

Synod of Bishops, Special Assembly for America, Instrumentum Laboris, Encounter With the Living Jesus Christ: The Way to Conversion, Communion and Solidarity in America (1997) available at

---------- Special Assembly for America, Encounter With the Living Jesus Christ: The Way to Conversion, Community and Solidarity in America: Lineamenta, 1996, available at at ¶ 25.

Synodus Episcoporum Bulletin Of The Commission For Information Of The Special Assembly For America Of The Synod Of Bishops 16 November-12 December 1997.

United States Bishops, Jubilee, That’s Why We Care About International Debt, (June 2000) (available at

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