Katherine Jean Lopez of National Review Online interviewed me about the new papal encyclical, Caritas in Veritate, shortly after its release this morning here in Rome:

LOPEZ: Obviously the topic of ethics and the economy resonates with people today. What can a Catholic take away from the new encyclical when it comes to his lost job, the stimulus, or government takeovers?

JAYABALAN: It’s hard to summarize such a long and complex document into a lesson or two, but I’ll try. First is the absolute importance of Truth to our understanding of charity, efficiency, and economics. For Catholics, this means the Church’s fundamental theological and moral teachings, which should be received as gifts rather than burdens, as difficult as they may seem to us. The Church’s theological understanding of charity and justice should make all Catholics feel responsible for each other and think and act accordingly. This is the real meaning of solidarity.

During the interview I was also asked about the importance of the encyclical to non-Catholics and what they can take away from it:

LOPEZ: What can the non-Catholic learn from the encyclical?

JAYABALAN: He doesn’t distinguish between Catholics and non-Catholics in the encyclical but calls all of us to broaden our use of reason beyond the merely technical or scientific. Benedict also recalls the limited nature of the state and its inability to provide the most important thing — love.

As Benedict argues in his previous encyclicals, as well as the current one, the state is no replacement for the family or the church: The state cannot love us  — and it would be a scary thing even if it could.

Even where the state does have some responsibilities, it may obey the principle of subsidiarity — that is, let individuals, families, churches, businesses, and local communities handle their own problems first. This is the setting for the pope’s call for fraternity and a vibrant, diverse civil society.

The entire interview can be read at The Corner.

The official release of Pope Benedict’s social encyclical Caritas in Veritate took place this morning at the Holy See Press Office in Rome.

There were four speakers at the presentation: Cardinal Renato Raffaele Martino, President of the Pontifical Council for Justice and Peace (PCJP), Cardinal Paul Josef Cordes, President of the Pontifical Council Cor Unum, Archbishop Giampaolo Crepaldi, the newly-appointed bishop of Trieste and former Secretary of PCJP, and Professor Stefano Zamagni, Professor of Economics at the University of Bologna and a consultor for PCJP.

All of the formal presentations in Italian can be found here.

It’s well-known but not often publicly revealed that the presenters of an encyclical were usually close collaborators with the pope on the encyclical, so it’s often worth listening to their explanations and more importantly their answers to the journalists’ questions.

I won’t provide a blow-by-blow account, but here is my summary of more interesting issues raised at the press conference:

– Both Cardinal Martino and Archbishop Crepaldi spoke of the ideology or problem of technique as one of the new, main themes of the encyclical.

– Cardinal Cordes denied that the encyclical or the Church proposes a “third way” between capitalism or socialism, as the Church has no technical model to offer. (This leads one to wonder if a moral critique can be made without an adequate technical understanding, as the former Cardinal Ratzinger once wrote.)

– Professor Zamagni noted the distinction between a market economy and capitalism (which was also made in Pope John Paul II’s Centesimus Annus, n. 42), adding that the Franciscans had a form of market economy in Italy long before the term “capitalism”, with its Marxist ideological connotations, ever existed.

– There were several questions about this very important distinction, with one French journalist noting an “anti-liberal, anti-capitalist” slant to the encyclical and another asking about the role of profit in a pre-capitalist, market economy. It was encouraging to hear Professor Zamagni deny the first and Cardinal Martino speak positively about the second.

– Professor Zamagni also addressed the nature of the ethical basis of the encyclical, stating that not all ethical systems are the same. The encyclical is based on “a virtue ethics that comes from Aristotle and Aquinas”.

– The most difficult questions concerned the nature of a “world political authority” mentioned in n. 67 of the encyclical, which refers to Pope John XXIII’s Pacem in Terris. Is this authority the same as the United Nations? Why would the Holy See, which has fought tooth-and-nail to protect the sanctity of life, marriage and the family at the UN, think such an authority would be a good thing? Would giving “real teeth” to the UN be a good idea? And why would Prof. Zamagni call for a Security Council for social and economic affairs, when the actual Security Council is widely regarded to be an ineffective way of dealing with international peace and security?

The answers to these questions usually referred to previous papal encyclicals, the difference between government (or a supra-state) and governance, which would presumably respect subsidiarity better than other supra-national entities such as the European Union. Others answered that the UN is the only game in town and the Holy See has to work with it.

I know, I know. These aren’t very satisfying answers to me either, and I used to work for the Holy See at the UN! Well, maybe Pope Benedict’s next social encyclical can take up issues of sovereignty and international relations. For now, we should carefully read and digest Caritas in Veritate.

Published in newspapers across Indiana– for example, here and here in the (Jeffersonville/New Albany) News-Tribune

Excerpts from essay #1:

…We also hear assertions that various forms of government involvement in health care are likely to be effective in the U.S. because they work well in other countries. Aside from whether this is true, it should be noted that these other countries have lower populations and, typically, far less diversity in their populations. So these comparisons are somewhere between somewhat helpful and useless. One of the ironies of the health-care debate is that such comparisons should encourage us to consider state-based reforms (instead of a single, grand federal experiment), since the population and diversity of our states is similar to other countries.

A second myth is far more important: We’re often told that our current health-care system is “free-market.” This is akin to blaming the Great Depression on markets — while ignoring the four tax increases of Hoover and FDR, massive trade protectionism, restrictive monetary policy, laws that artificially increased prices and wages and so on. In both cases, the extent to which we should blame the government is an open question. But ignoring its role in either mess is neither legitimate nor useful.

With health care, there is already massive government intervention. The most obvious example is the double debut of Medicare and Medicaid in the 1960s. In addition, there is a wide array of relatively minor but still significant issues: various labor market restrictions (e.g., you and I are not allowed to receive medical services from professionals who provide the same services to our armed forces), mandated insurance benefits (for everything from in-vitro fertilization to hair transplants), the explosion of medical malpractice awards (and thus, malpractice insurance rates) and so on.

But the most important public policy in this realm? The subsidy of health insurance acquired by workers through the firm….

Excerpts from essay #2:

The current mix of government and markets in health care certainly has an amazing amount of inefficiency. But will bureaucracy and red tape be reduced or enhanced with more government?

It’s difficult to imagine much if any gain. Thus, extending health-care availability will probably involve higher costs or reduced access in other contexts (rationing)….

Barack Obama’s proposal is to subsidize public insurance that would “compete” with private insurance. By definition, subsidized insurance would undermine private insurance to some extent — somewhere between attracting people at the margin and entirely destroying the industry. It would depend on the extent of the subsidy….

One last thought: It’s interesting that we’ve become so fixated on a federal approach to this problem. Why not allow the 50 states to try 50 different experiments rather than betting everything on one grand, federal experiment that would be difficult if not impossible to reverse?

Relativists beware. Whether you like it or not, truth matters – even in the economy. That’s the core message of Pope Benedict XVI’s new social encyclical Caritas in Veritate.

For 2000 years, the Catholic Church has hammered home a trio of presently-unpopular ideas into the humus of human civilization: that there is truth; that it is not simply of the scientific variety; that it is knowable through faith and reason; and that it is not whatever you want or “feel” it to be. Throughout his entire life, Benedict XVI has underscored these themes, precisely because much of the world, including many Christians, has lost sight of their importance.

Perhaps Caritas in Veritate’s most important truth-claim about economic life is that the market economy cannot be based on just any value-system. Against all relativists on the left and the right, Benedict maintains that market economies must be underpinned by commitments to particular basic moral goods and a certain vision of the human person if it is to serve rather than undermine humanity’s common good: “The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centred” (CV no.45)

“Without internal forms of solidarity and mutual trust,” the Pope writes, “the market cannot completely fulfill its proper economic function” (CV no. 35). This surely has been amply confirmed by the recent financial crisis. America’s subprime-mortgage market collapse was at least partly attributable to the fact that literally thousands of people lied on their mortgage application forms. Should we be surprised that mass violation of the moral prohibition against lying has devastating economic consequences? “The economic sphere”, the pope reminds us, “is neither ethically neutral, nor inherently inhuman and opposed to society. It is part and parcel of human activity and precisely because it is human, it must be structured and governed in an ethical manner” (CV no.36).

Contrary to the pre-encyclical hype of certain American commentators and the ever-unreliable British press, predictions of papal anathemas against “global capitalism” have – as usual – been found wanting. In economic terms, the pope describes as “erroneous” the tired notion that the developed countries’ wealth is predicated on poor nations’ poverty (CV no.35) that one hears customarily from the likes of Hugo Chavez and whatever’s left of the dwindling band of aging liberation theologians. That’s a pontifical body-blow to a central working assumption of many professional social justice “activists”.

Nor will they be happy with the pope’s concerns about the ways in which foreign aid can produce situations of dependency (CV no.58), not to mention Benedict’s strictures against protectionism (CV no.42) as well as his stress that no amount of structural change can possibly compensate for people freely choosing the good: “Integral human development presupposes the responsible freedom of the individual and of peoples: no structure can guarantee this development over and above human responsibility” (CV no.17).

Nor does Benedict regard the market as morally problematic in itself. “In and of itself,” the Pope states, “the market is not . . . the place where the strong subdue the weak. 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” (CV no.36). What matters, Benedict claims, is the moral culture in which markets exists.

At the heart of the economy are human persons. People whose minds are dominated by crassly hedonistic cultures will make crassly hedonistic economic choices. “Therefore”, Benedict comments, “it is not the instrument that must be called to account, but individuals” (CV no.36).

The implications of truth for economic life do not, however, stop here. For Benedict, it is a lens through which to assess ideas such as “business ethics”, “ethical investing” and “corporate social responsibility.” The notion that investment and business choices have a moral dimension is hardly new. What matters for Benedict is the understanding of morality underlying these schemes. Merely labeling an investment scheme as “ethical”, Benedict notes, hardly tells us whether it is moral (CV no.45).

A second major truth underscored by Benedict is the indispensability of a strong civil society for both undergirding and limiting the market and the state. By this, he does not mean a plethora of government-funded NGOs, many of whom Benedict identifies as intent upon imposing some of the very worst aspects of Western lifestyle-libertarianism upon developing nations (CV no.28). Certainly, Benedict believes, there is a need to re-evaluate (CV no.24) how the state regulates different parts of the economy. Ultimately, however, Benedict stresses that the virtue of solidarity, he argues, is about people concretely loving their neighbour; it “cannot therefore be merely delegated to the State” (CV no.38). This is reminiscent of Alexis de Tocqueville’s attention to the manner in which the habit of free association both limits the size of government while also discouraging people from retreating into their own little bubbles.

The economist John Maynard Keynes is famous for many things, including the saying that “in the long run, we’re all dead.” The horizon of Benedict XVI’s perspective on economic life is rather different. The pope asks people to live their economic lives in the short, medium, and long-term as if living in the truth is eternally important, not to mention eternally relevant to their soul’s salvation.

That’s change we can all believe in.

Speaking to the Grass Roots

Speaking to the Grass Roots

This weekend, I had the pleasure of joining dozens of Michiganders in Grandville to protest big government and big spending. The Hudsonville TEA (Taxed Enough Already!) Party, a grassroots group of Americans concerned for the sake of liberty, put on the event immediately following the Grandville 4th of July Parade.

Commemorating America’s independence, the people at the rally were treated to a recitation of the Declaration of Independence, a lesson in the history of American liberty, and the reading of a letter from an auto dealer shut down as part of the government’s bailout of the big three carmakers. I spoke on behalf of the Acton Institute about the balance between virtue and limited government.

Virtue makes limited government possible. There is evil in the world and there is good that needs to be done. We have governments to make it possible for us to live together, and we do need the law to protect us from chaos, but we are able to live free of tyranny because virtue tells us to live up to our responsibilities.

Aristotle once said, “I have gained this by philosophy: to do without being commanded that which others do only from fear of the law.” Philosophia means the love of wisdom. When put into practice, this is virtue. Virtue lets us care for our families and neighbors, respect the wellbeing of other people, and live within our means without being forced to do so by the law.

Virtue is a potent force. The more that we are virtuous, the more we can be free. Limiting government from an institutional angle might be difficult for the time being due to politics. We can take actions now, though, that limit the need for government by doing good, avoiding evil, and encouraging others to do the same.

If we can do that, then America can see another 234 years of being known as the land of the free and the home of the brave, the just, the virtuous.

My commentary on the forthcoming social encyclical was published on National Review Online. Here’s the complete text:

On Tuesday, Pope Benedict XVI will release his first social encyclical, Caritas in Veritate. The pre-release buzz from the Catholic Left on each of his two previous encyclicals has so far proven wrong each time, so the rule should be to wait and see what the pope will actually say.

Each time, with previous encyclicals, we have been told that the pope is preparing to lambaste capitalism and call for state measures to heavily regulate it with an eye to redistributing wealth, cleaning up the environment, controlling consumption, etc. Each time, the final text has demonstrated that the pope’s conversion to progressivist causes has been greatly exaggerated. Invariably, his arguments have been highly sophisticated and have defied easy political categorization.

In advance of Caritas in Veritate, Catholic “progressives” are working themselves into a frenzy of predictions, recommendations, and anathemas — and not one of them, to my knowledge, has seen even an early draft of the encyclical which has been two years in the making.

Will the document draw attention to the weaknesses of Western-style capitalist systems? One hopes so. We might expect the pope to call on market forces to be regulated by moral concerns, within a strong juridical framework, and an exogenous apparatus of standards to curb excesses.

But here is the operative question: In what sense would such a call be a blow against the idea of free economic institutions? The short answer is that it will not be.

There are few advocates of market economics who advocate a complete lack of regulation rightly understood. Every transaction in the marketplace is in fact regulated by contract law, reputation, industry standards, competition, certification and monitoring, and profit and loss systems that reward prudence and punish excess over the long term.

Do these need strengthening? Certainly, and it should be noted that a main force for weakening them is not the market as such, but partisan interventions in the market. (more…)

Blog author: jcouretas
Friday, July 3, 2009
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The Heartland Institute and Consumers for Health Care Choices are sponsoring Health Care Roundtables across the country. Earlier this week, Acton development associate Charles Roelofs attended a roundtable and offers this report:

The event was co-sponsored by the Mackinac Center for Public Policy and Americans for Prosperity – Michigan. According to event organizers, over 100 people registered for the event. Participants included, local and national health care experts, medical and insurance representatives, current and former elected officials, and concerned citizens.

Common themes in many of the presentations included the need for reform of the current third-party payer system, the potential for consumer driven health care to reduce costs, and how much of recently proposed legislation to reform our health care system is ineffective. However, the discussions were varied and ranged from practical advice for saving money on prescription drugs to tips on communicating with elected officials regarding health care.

These policy discussions often lend themselves to moral questions regarding reform. Which types of reform most respect the dignity of the human person? Which types provide the most effective, highest quality health care for those least able to afford it? The Acton Institute has many resources available to answer such questions. The Health Care Resource web page has lectures, commentary, articles, and other media on the subject. Recently, Acton also published a new monograph by Dr. Donald P. Condit, A Prescription for Health Care Reform, which is available through our bookshoppe.

Governor Capriless house being attacked by a mob

Venezuelan President Hugo Chavez says that “the world needs a new moral architecture.” He also has a clear idea of what that morality ought to look like. Speaking at a conference on socialism in May of this year, he said that “every factory must… produce not only briquettes, steel, and aluminum, but also, above all, the new man and woman, the new society, the socialist society.” If Chavez manages to convince enough people that socialists are a new breed of humanity, a breed that has evolved beyond the old ideas of liberal democracy and individualism, then there is no compelling reason to acknowledge the rights of anyone else. Rights in the “new society” are not based on humanity, because the socialists are part of a new humanity. Rights are based on conformity.

Henrique Capriles is not a conformer.

Capriles is the Governor of Miranda, a state in northern Venezuela. He won election on the ticket of the only party to field a presidential candidate against Chavez in 2006. He knows firsthand what happens when democracy falls to socialist ideals: he served jail time in 2004 on trumped up charges of conspiring to overthrow Chavez, and his parents arrived in Venezuela as Jewish refugees seeking to get out from the threat of Nazi tyranny.

Unfortunately, socialism did not die with Nazi Germany. Owing to their allegiance with Iran, President Chavez and his supporters, the chavistas, have made no secret of their intense hatred for Israel. In early 2009, Chavez supporter and political columnist Emilio Silva posted a piece on Aporrea, a pro-government website, calling on his comrades to “publicly challenge every Jew that you find in the street, shopping center or park, shouting slogans in favor of Palestine and against that abortion: Israel.” To the chavistas, Venezuelan Jews are targets because Venezuelan Jews do not conform to the new society’s ideas about Israel. The men and women who dissent in the new society do not enjoy old human rights.

Governor Capriles learned that the hard way last month when mobs of angry Chavez supporters attacked his house in an orchestrated political demonstration by the Mayor of Miranda’s capital city, Alirio Mendoza. The mobs sprayed swastikas and climbed the walls of the home, terrorizing Capriles and his family (pictured above). Speaking that day, Mendoza justified his actions: “We are showing Capriles that… people are opposed to his continuous attacks against the initiatives and socialist projects of president Chávez.”

By the Venezuelan state’s morality, Capriles is outdated. He does not conform to socialism. He refuses to embrace Iran. He opposes political tyranny. In short, he is not a new man.

The moment that rights and even humanity itself are granted only on the basis of conformity is the moment that real morality ends. Chavez’s “new moral architecture” for the world, if adopted, will only end with a socialist swastika for whoever stands in his way.

(Thanks to Tim Mak at New Majority for the article that inspired this one.)

In a blow to international relief work, the Spring Lake-based International Aid has announced that it is ceasing operation, effective immediately.

CEO Dr. Gordon Loux cited a “perfect storm” of fiscal hardship: “We have tried to turn it around and we’ve sent out a number of appeals,” he said. “But because of the West Michigan economy and because of donor fatigue of most organizations trying to raise funds, we’ve got the perfect storm.”

In May, longtime CEO and president Myles Fish resigned, citing a restructuring plan focused on handling decreased levels of giving. According to Charity Navigator, International Aid was a model of efficiency in 2007, with 95% of funds being directed to program expenses and garnering a four star rating for both organizational efficiency and organizational capacity.

Founded in 1980, International Aid, “a Christian-based organization known for helping millions around the world, particularly in developing countries hit hard by natural disasters,” received about 40% of its revenue from individual contributions, with foundation support accounting for just over a quarter of support.

Background: “Global Giving and Local Needs”

A recent NBER working paper, “Internationalization of U.S. Doctorate Education,” takes a look at trends in doctoral degrees awarded by American institutions in the physical sciences, engineering, and economics.

From the abstract, “The representation of a large number of students born outside the United States among the ranks of doctorate recipients from U.S. universities is one of the most significant transformations in U.S. graduate education and the international market for highly-trained workers in science and engineering in the last quarter century.”

That transformation wouldn’t be possible without travel and visa allowances, as well as an educational and cultural atmosphere that welcomes immigrants. The trend also speaks to the level of prestige and respect accorded to U.S. institutions and degrees, and the portability and value of those degrees abroad.