Pope Benedict XVI’s much anticipated economics encyclical, Caritas in Veritate, is scheduled to be released early next week, according reports. For a good sense of this pope’s thinking on economics, we offer an article the then-Joseph Cardinal Ratzinger presented in 1985 at a symposium in Rome. The Acton Institute published it under the title “Market Economy and Ethics.” As indicated by the following quote, the pope believed in integrating morals into economics in order to have sound and successful economic policy:
This determinism, in which man is completely controlled by the binding laws of the market while believing he acts in freedom from them, includes yet another and perhaps even more astounding presupposition, namely, that the natural laws of the market are in essence good (if I may be permitted so to speak) and necessarily work for the good, whatever may be true of the morality of individuals. These two presuppositions are not entirely false, as the successes of the market economy illustrate. But neither are they universally applicable and correct, as is evident in the problems of today’s world economy.
Without developing the problem in its details here — which is not my task — let me merely underscore a sentence of Peter Koslowski’s that illustrates the point in question: “The economy is governed not only by economic laws, but is also determined by men…” Even if the market economy does rest on the ordering of the individual within a determinate network of rules, it cannot make man superfluous or exclude his moral freedom from the world of economics. It is becoming ever so clear that the development of the world economy has also to do with the development of the world community and with the universal family of man, and that the development of the spiritual powers of mankind is essential in the development of the world community. These spiritual powers are themselves a factor in the economy: the market rules function only when a moral consensus exists and sustains them.