A New Zealand Economist Looks at the the US Catholic Bishops’ Pastoral Letter on Catholic Social Teaching and the US Economy
Paper to the Winter Series “The Soul of New Zealand – Who are We?”, Wadestown Presbyterian Church, July 19, 1989. It was published in “The Catholic Review” Number 1, November 1989.
Keywords: History of Ideas, Methodology & Philosophy;
Given the role of economists in the turmoil of the last few years, this economist is surprised that any of us should be asked to comment upon such an important topic as the Soul of New Zealand. We should be listening to the people; not the telling them.
However perhaps such a task requires some structuring, in which case I might usefully provide a little by responding to some theological commentary on economic policy, before we open the session to general discussion, with an emphasis on the economist listening.
I could have chosen as a theological commentary the Reverend Richard Randerson’s “Christian Ethics and the New Zealand Economy”, particularly for its indigenous content. But if you had wanted to discuss that interesting contribution then it would be better to hear from Richard directly. I urge you to invite him on some suitable occasion.
What I thought would be better was to look at an overseas text. The one I have chosen is “The Pastoral Letter on Catholic Social Teaching and the US Economy”, published by the United States catholic bishops in 1986.
It may seem odd to select a Catholic sourced economic text for discussion in such a protestant environment as this church. One reason is in the spirit of ecumenism. But there were also four practical reasons.
First, unlike most protestant church’s Catholicism predates the industrial revolution, and Catholic theologians more than most others have had to struggle with the relationship between their religion and the modern capitalist economy. I shall have more to say about this.
Second, the United States economy is the greatest industrial economy in the world, where most of the fundamental economic issues which confront us in New Zealand are writ even larger. Because the bishops have had to ponder long upon these issues, we may learn something from them.
Third, because they have pondered long – and in my opinion wisely -their conclusions are likely to have considerable influence upon theological thinking in all parts of the religious world. This is already happening in America. I was recently invited by Crosslink to review a book of essays written by evangelical protestants, mainline protestants, Catholics and Jews on the pastoral letter. It shows a vigorous debate is already underway in the United States; I shall refer to some of it. If the pastoral letter is not so well known in New Zealand, I am sure it will become so. I hope this presentation will stimulate your interest.
And fourth, the bishops say that they have not written
“a blueprint for the economy. It does not embrace any particular theory of how the economy works, nor does it attempt to resolve the disputes between different schools of economic thought.” (p.ix)
That is a sensible theological approach. Theologians have no particular expertise in tackling the technical questions of, for instance, optimal industrial assistance, or what should be the monetary and fiscal stance. That is the economist’s job, and while I would not wish to restrict the task to some secret or select clique, those who wish to join these debates need to acquire a level of technical competence which theologians seldom have. Their competence is, as the bishops go on to say
“Instead, our letter turns to Scripture and the social teachings of the Church. There, we discover what our economic life must serve, what standards it must meet.” (p.ix)
`What economic life must serve, what standards it must meet’. There is a challenge on which economists have no particular competence; an issue where we need to listen rather than to pontificate.
So what are the standards the bishops set? The full letter is over two hundred pages long, with 384 numbered paragraphs. Conveniently there is a summary of principal themes. I begin by listing the italicised sentences in that summary.
(i) “Every economic decision and institution must be judged in the light of whether it protects or undermines the dignity of the person.”
(ii) “Human dignity can be realised and protected only in a community.”
(iii) “All people have a right to participate in the economic life of society.”
(iv) “All members of society have a special obligation to the poor and vulnerable.”
(v) “Human rights are the minimum conditions for life in community.” (They go on “In Catholic teaching, human rights include not only civil and political rights but also economic rights …. all people have a right to life, food, clothing, shelter, rest, medical care, education, and employment’.”)
(vi) “Society as a whole, acting through public and private institutions, has a moral responsibility to enhance human dignity and protect human rights.”
At a personal level I find much comfort that a group of people from a very different intellectual and social background on the other side of the world should articulate a philosophy very similar to my own. But I would be failing in my responsibilities if I did not put them under some scrutiny from the perspective of a New Zealand economist.
The first problem is that the bishops provide no adequate definition of what they mean by `human dignity’. They do refer to a papal encyclical “Mater et Magistra” which articulates the principle that economic life must be measured against the dignity of the human person realised in community with others. They refer to the `transcendent worth – the sacredness – of human beings’ (p.15). And they go through the scriptures to describe the moral vision of the Christian.
I take it that we are to treat `human dignity’ as some fundamental concept, undefinable in terms of more fundamental concepts, but which can be illustrated by example. In that technical sense it has the same status as the New Right’s objective of freedom, although I imagine that Christians would want to argue that human dignity is a much richer concept.
This follows because the notion of human dignity as described in the letter emphasises man in society, that is socialised man. I am using here the term `man’ to encompass both genders. These terms came from the nineteenth century, when social philosophers were lees careful about giving equal status and involvement to women. I apologise to those of you who are concerned with such gender issues – and I hope that is the whole audience – but we have no adequate alternative term to `socialised man’.
Socialised man emphasises that each of us is not a being which arose independently of the society in which we live, who can function independently of that society. We are not Athenas who sprung fully clothed and fully armed out of the head of Zeus. Rather we have evolved and live in a society which has nurtured us.
Most people may feel this is a trivial point, but I think the bishops are right to emphasise it. The rational economic man of neo-classical economics is not an example of socialised man, and the characterisation of the human condition by the New Right is even less so. The bishops would judge such characterisations as spiritually dead, and rightly so. Social philosophies and policies based upon such foundations would be judged to be against what they describe as the Christian vision of economic life.
I do not want tonight to judge current economic policies by the Christian vision. That is for the audience. But they may be relieved to know that in our past human dignity was a central notion of our social policy. In particular the social security debate of the late nineteenth century used the concept widely, particularly in the notion that the aged should be treated with dignity in their pension entitlement. Not, of course, did we always attain that objective, but the notion of the entitlement to a social security benefit and other publicly provided services being by right, rather than by the liberality of the powerful, has been an integral part of our social policy.
Perhaps that is less true today, although the recent Royal Commission on Social Policy while not using the term `human dignity’, did refer to the `intrinsic moral worth’ of individual humans.
The Royal Commission on Social Security which reported in 1972 referred to the human dignity approach, as you would expect in its review of our social security debate. But the Commission used a more instrumental definition of social objectives, when they described the objectives of the social security system, and by implication of public policy in the wider society, as
“to ensure, within limitations which may be imposed by physical or other disabilities, that everyone is able to enjoy a standard of living much like that of the rest of the community, and thus able to feel a sense of participation and belonging to the community”. (p.65)
Perhaps I should add a verbal quote does not quite capture the fact that the Commission italicised the phrase `a sense of participation and belonging’.
The bishops expressed a similar sentiment when they said that “All people have a right to participate in the economic life of society”, and that “all members of society have a special obligation to the poor and vulnerable”. You might say that the US bishops are real New Zealanders, or that each are expressing some universal phenomena.
It is clear from the letter, that the bishops are very influenced by an American philosopher John Rawls, who published his seminal “Theory of Justice” at about the same time as our Royal Commission on Social Security reported.
It may seem surprising that bishops representing a religion as old as the Catholic Church should be so influenced by a recent philosopher. However Rawls is indebted to the eighteenth century German philosopher Immanuel Kant, whose supreme moral principle was a categorical imperative, which harkens back to Christ’s injunction to “do unto others as you would have them do unto you”. We may take it that the bishop’s philosophical foundations are rock solid.
Essentially, and I simplify, Rawls argued that social policy should be judged by the way it treats the least well off in society. His derivation was as follows. Suppose each of us were able to choose which ever society and economy we preferred. The only limitation is that we would not know what our status would be in it; whether we would be rich or poor, white or brown, male or female, intelligent or dull, heterosexual or homosexual, and so on.
In such circumstances we would be unlikely to select a particular form of society which favoured one set of characteristics over another, since we may well end up in that society with the less favoured characteristics. Rather, given this veil of ignorance about our status, we would prefer a society which maximised the minimum level of wellbeing. So if we were unfortunate enough to end up with the least favourable set of characteristics we would as well as possible.
That would result in a society which, in the words of the bishops, “all members of society have a special obligation to the poor and vulnerable”.
It does not follow from the Rawlsian approach that we should have exact income equality, even were that a meaningful notion given that people with different personal characteristics are likely to have different income needs.
A Rawlsian would argue that inequality was acceptable providing the poor benefitted from it. For instance, a state bureaucracy determined to iron out all inequality could well be so expensive to run, and generate so many disincentives against producing that the poor had their standard of living lowered, in comparison to a society with a moderate level of inequality. On a more positive note, the possibility of a degree of inequality may encourage people to take initiatives which generate jobs, opportunities, and commodities for those on a lower standard of living.
The bishops therefore do not abjure economic inequality, but they do say
“We find the disparities of income and wealth in the United States to be unacceptable. Justice requires that all members of our society work for economic, political, and social reforms that will decrease these inequalities.”(p.92)
As it happens, the evidence points to New Zealand having lower economic disparities than the United States, so we cannot be sure what the bishops would say about New Zealand. However I suspect they would be concerned about our poorest, particularly those who fall through the social security net perhaps because they have inadequate housing or health. Nor would the bishops likely to be happy with the differences in the economic statuses between men and women. And quite frankly, I would be much too embarrassed to even show them the evidence of the substantial disparities between Pakeha and Maori.
It is very easy at this stage to come back with the standard New Right response that the poor are poor through their own faults. I think it would be foolish to argue there are no poor who have defects which have lead them into poverty – one would have virtually abandon the notion of free will to rule out such possibilities.
But even acknowledging the possibility of there being some who are poor through their own faults, the evidence points to the majority of the poor, here and overseas, trapped in that state for `structural’ reasons. It is the way society is organised that keeps them there, not their own shortcomings.
In arguing this, it is unnecessary to equate poverty with material deprivation. The Royal Commission on Social Security’s notion of “inability to be able to participate and belong to society” is the encompassing notion.
The bishop’s go a step further when they argue that
“Social justice implies that persons have an obligation to be active and productive participants in the life of society and that society has a duty to enable them to participate in this way.” (p.36)
Providing, as I am sure is the bishop’s intention, that the notion of positive participation in the life of society is interpreted widely, I do not have many difficulties with their notion of `contributive justice’. What is unclear is what happens to those who do not fulfil the obligation. What are society’s duties towards them?
This question may be a bit theoretical when the main issue we, and the United States, face is that there so many people willing to fulfil their obligation to contribute to society, but unable to do so because society is failing in its duty by not offering them the opportunity. That group includes the structurally poor, and the unemployed.
The bishops are very strong on the need for full employment.
“Full employment is the foundation of the just society.” (p.69)
Thus they echo the New Zealand perception that full employment is the foundation of the welfare state. Given a current level of unemployment in New Zealand of between 7 percent and 12 percent, depending upon how it was measured, the bishops were particulary pertinent when they said
“We believe that 6 to 7 percent unemployment is neither inevitable nor acceptable.” (p.77)
`Neither inevitable nor acceptable’. That sounds like a severe critique of current economic policies does it not? Moreover the bishop’s account, while caring, is not uninformed in economic terms. It goes on
“While a zero unemployment rate is clearly impossible in an economy where people are constantly entering the job market and others are changing jobs, appropriate policies and concerted private and public action can improve the situation considerably, if we have the will to do so. No economy can be considered truly healthy when so many ….. people are denied jobs by forces outside their control. The acceptance of present unemployment rates would have been unthinkable twenty years ago. It should be regard as intolerable today.” (p.77)
Are the economic pundits and politicians listening? That is for the audience to decide.
Such were the sentiments of the bishops’ letters that some critics described it as `socialist’. That terminology seems curious to New Zealanders particularly as the bishops write
“The Catholic tradition has long defended the right to private ownership of productive property.” (p.57)
However in contrast to the approach of New Right to private property they go on
“Support of private ownership does not mean that anyone has the right to unlimited accumulation of wealth. Private property does not constitute for anyone an absolute and unconditional right. no one is justified in keeping for his exclusive use of what he does not need, when others lack necessities.” (p.58)
This is the biblical notion of stewardship of property. One has it only in so far as the property is used for the pursuit of the common good. A little earlier the bishops had said
“The common good may sometimes demand that the right to own be limited by public involvement in the planning or ownership of certain sectors of the economy.” (p.58)
`Planning’, `public ownership’. This is not the language of Rogernomics, nor the policies of the fourth Labour government. Those who thought their social democratic principles were fossils from an earlier era, may be surprised to learn that the US bishops are with them.
Actually we have been given a very peculiar account of modern political and economic thinking, because of the accident that the policies of the New Right have been most propounded by English speaking Reaganomics and Thatchernomics. There has been little realisation here as to just how isolated Mrs Thatcher is in European thinking.
For instance in the just elected European Parliament, there are more Greens than their are Tories, who are isolated from the main political grouping which opposes the socialist (slight) majority. The centre of that grouping are the Christian Democrats and their allies from a number of European countries. The expectation is that they, with the democratic socialists, will promote legislation to improve conditions for workers, to extend the social wage, and to provide regional and industry assistance.
Such a political thrust from the Christian Democrats is only surprising if one is surprised that Pope John Paul said
“One cannot exclude the socialisation, in suitable conditions, of certain means of production.”
As the bishops say
“The Church’s teaching opposes collectivist and statist economic approaches. But it also rejects the notion that a free market automatically produces justice.” (p.58)
We can guess what the bishops’ view on proposals to `deregulate the labour market’ are
“The Church fully supports the right of workers to form unions …. to secure their rights to fair wages and working conditions. …. Unions may also legitimately resort to strikes where this is the only available means to justice owed to workers. …. No one may deny the right to organise without attacking human dignity itself.” (p.53)
By New Zealand standards the bishop’s section on `Working People and Labour Unions’ is radical; enough to make a Patrick Kelly leave the Labour Party for the Catholic Church.
By now it should be evident that the bishops’ pastoral letter on the US economy is rich and relevant. It is time to turn to some of the criticisms.
First there are the technical issues. I have little time for those who support Rogernomics with the claim that economic reform was necessary and there was no other way. Economists who saw the need for major economic reform argued for quite different strategies than the one adopted here, strategies adopted overseas.
If some one insists there was no alternative ask what was so inevitable to require cutting the marginal income tax rate on the rich from 66 percent to 33 percent, making it one of the lowest -if not the lowest – in the western world?
Where I have greater problems is the time dimension. One argument for Rogernomics has been that goals such as the bishops propound are the ultimate objective of economic policy. However the government has had to do some savage things to the poor and unemployed in the short run to attain the objective.
I must say in fairness that the government has chosen not to attack verbally the poor in the traditional right wing rhetoric of their being benefit bludgers and scroungers. The necessary review and tightening of the administration of social security to reduce fraud has been done with some tact. In this respect the Labour government deserves recognition for the promotion of human dignity.
But how are we to approach their argument that in the long run the poor will benefit from the policies which are being implemented, even if they suffer in the short run? Sounds a bit calvinist does it not?
A good parallel is the findings of the Cartwright Commission on the activities at National Women’s Hospital. I take it that the doctors involved were sincere and believed they were acting in the best interests of their patients. I do not have the competence to judge whether the doctors were acting so, nor is it necessary to come to some assessment of this here. What I am clear about is that the patients were not adequately consulted.
The same issue applies to recent economic policy developments. The government may be taken as sincere and believe it is acting in the best interests of the poor and those on the margins of society, we need not judge here whether its treatment is the best available. However we can ask to what extent the underprivileged were consulted on the treatment that they have been given, to what extent they had it explained it to them, and to what extent they gave informed consent.
As the bishops say
“The obligation to provide justice for all means that the poor have single most urgent claim on the conscience of the nation.” (p.44)
In which case there is an obligation to consult them to find out what their claim is.
Let me free wheel for a paragraph. In principle, our democracy has a system of one person one vote, although there is bias in it towards the rich who have the economic means to accrue unequal political power to themselves. But even ignoring this bias, is the logic of the bishops’ position that the poor should have a greater weight in the voting system compared to the rest us? Or is this a democratic heresy?
So much for the technical problems involved in the bishops’ approach. Let me turn to the deeper ones of social philosophy. Recall my earlier remark that the Catholic Church is older than the modern industrial capitalist economy, in the way that most protestant churches are not. It is no accident that tonight I am reviewing a text described as a `pastoral’ letter.
In some ways the fundamental break is between the organisation of society around the social solidarity of preindustrial society, and the individualism of industrial society. As one writer said
“the traditional Catholic communitarian vision [is] of a human family ordered in organically related social structures”. ((Strain, p.190)
That is why the bishops are able to talk about the `common good’ with so little introspection, and it is clear that they do not merely mean the sum of individual preferences, which economists often interpret as the common good.
The procedure John Rawls proposes attempts to get around this conflict between the common good and individualism, but it does so at some cost.
I illustrate by drawing attention to the fact that my gender is obviously male. This is one of a number of personal characteristics which are a very integral part of me as a human individual.
As a result I find it most difficult to carry out the Rawlsian thought experiment from the position of a genderless human individual. It would not be me who is making that decision about my preferred choice of society.
(Of course I try to be empathetic to those of another gender. and that I have a mother, sister, wife, daughter, and women friends and colleagues helps me, I hope, to do this reasonably sensitively. But that is not the same as what the Rawlsian experiment requires.)
This is not an entirely theoretical issue. Suppose we said to everyone `what is the minimum income you would need to participate in and belong to society’, perhaps with the idea using the answers for designing distributional policy. For instance, if they were all to choose the same minimum income, and if this were practically deliverable, then it would be a candidate for the poverty line below which no one should fall.
However, everyone does not choose the same minimum income level for living comfortably, and as a general rule the higher one’s income the higher one’s required minimum standard of living. This may not be surprising, but its social implications are. First it says that the Rawlsian veil of ignorance is not going to be much help in trying to quantify an acceptable distribution policy.
Second it says if the rich knew how really poor were the poor, and they accepted the bishops’ social philosophy they would be appalled. Fortunately ignorance protects them from such a fate.
There is another strange thing about the Rawlsian thought experiment. I am expected to act selfishly behind my veil of ignorance. But perhaps I am not totally selfish. That reinforces the conclusion to the existence of some common good above the sum of our selfish decries.
I guess what I am bridling at is the Treasury type line which starts by noting that people make selfish decisions on occasions, and then goes on to argue that we should design public policy on the assumption that people always make selfish decisions.
A further problem with the Rawlsian approach is that it is not sufficiently comprehensive to lead to a complete economic policy, even if we can agree on how economies work, we could not generate a complete economic policy from mere Rawlsian principles.
This is getting a bit abstract, so I offer the easy illustration. Where would the Treaty of Waitangi fit into the bishops’ account, if they had been writing about the New Zealand economy rather than the US one? I do not think the Treaty, and treaty issues, are just an add on, but I do not see how easily to extend the pastoral letter to cover it. In other words there may well be important social issues not covered by the pastoral letter.
The majority of my criticisms are in the spirit of the pastoral letter; ones the bishops are likely to respond positively to. But I have tried to touch upon the criticisms of the New Right, particularly their concerns about the tensions between individualism and social solidarity. Those tensions loom large in any protestant assessment of the issues too.
The bishops were not unaware of them; after all the letter was written during the height of Reaganomics, and in many ways is designed as a response to that political philosophy, albeit a positive response rather than a carping one.
I think that is the way we have to approach Rogernomics and the economic policies of the fourth Labour government. That applies as much to its supporters as to its critics. We lack a sound, comprehensive and cogent philosophical account of what Rogernomics stands for, and as yet the criticisms are fragmentary rather than as profound as, say, the pastoral letter.
Ultimately those accounts are about articulating the soul of New Zealand. What then is the role of the religious person in articulating this soul of a secular society? The spirit of the bishops’ pastoral letter provides a guide when they say
“Sustaining a common culture and a common commitment to moral values is not easy in our world …. One of our chief hopes in writing this letter is to encourage and contribute to the development of the common ground.” (p. 11)
New Zealanders today feel the loss of the articulation of the nation’s soul more than at any time in my life. By debating such overseas contributions as the pastoral letter, and by doing so evolving their own indigenous account – including incorporating other sources such as the Maori perspectives – the religious can make a distinctive contribution to that common good. I would have thought such a purpose would be high among their priorities. Let us begin.