Cardinal Pell on the market economy

In my essay Catholic Social Thought and the Corporation (available at SSRN: http://ssrn.com/abstract=461100), I wrote:

In Toward a Theology of the Corporation, for example, Novak asserted that Christian theologians tend to be poorly trained in economics and inexperienced with the business world: They “are likely to inherit either a pre-capitalist or a frankly socialist set of ideals about political economy.”[1] Consequently, theologians “are more likely to err in this territory than in most others.”[2]

A persistent error “in this territory” is the tendency towards what Milton Friedman called “the collectivist moral strain” in Catholic social thought.[3] Indeed, it is fair to assert that some documents in the social teaching more closely resemble “the platforms of European social democratic parties” than Biblical exegesis.[4]

So it was refreshing to read Cardinal Pell's keynote address to the Global Foundation roundtable on the global economy:

He began by observing that:

... it remains true that market economics have brought unprecedented prosperity and represent, despite their many faults and deficiencies, an extraordinary human achievement.

Dr Johnson famously remarked that when a dog walks on its hind legs, it walks badly. But, he continued, “you are surprised to find it done at all”. So too with the market economy.

Granted, that's not the most spirited defense of capitalism a Catholic ever penned. (That would be Michael Novak's The Spirit of Democratic Capitalism.) Indeed, it calls to mind Churchill's defense of democracy. And he goes on to detail some of market capitalism's admitted foibles.

But then we get to some good stuff:

I like to quote Maggie Thatcher who pointed out that if the Good Samaritan had been without capital he could not have paid for the care of the man who was beaten and robbed on the road to Jericho. It was also useful that the innkeeper trusted him sufficiently to accept his promise to cover any extra costs when he returned (Lk 10:25-37).

Even more usefully the parable of the talents shows that Jesus understood that money should be used profitably to produce income. The man with one talent who was condemned had not wasted his money or thrown it away. He was condemned for burying it and not generating a proper return.

(Watch this space for more on the parable of the talents.)

He also went on to recall Pope Francis' comments on business as a vocation:

“Business is a noble vocation, directed to producing wealth and improving the world. It can be a fruitful source of prosperity for the area in which it operates, especially if it sees the creation of jobs as an essential part of its service to the common good”. (Laudato Si', 129)

(On the vocational aspects of business, see Novak's book Business as a Calling.) Pell went out of his way to praise the entrepreneurial spirit:

We should work to encourage among our young men and women the emergence of effective entrepreneurs who will contribute to sustainable growth, especially through job creation.

[1] Michael Novak, Toward a Theology of the Corporation 59 (rev. ed.1990).

[2] Id. at 12.

[3] Milton Friedman, Good Ends, Bad Means, in The Catholic Challenge to the American Economy 99 (Thomas M. Gannon ed. 1987).

[4] Robert Benne, The Bishops’ Letter—A Protestant Reading, in The Catholic Challenge to the American Economy 76, 79 (Thomas M. Gannon ed. 1987).