Cardinal Marx rethinks economics

Author: Henry Tugendhat

The Catholic Church’s new leadership has come out strongly against neoclassical thought, its lack of engagement with moral philosophy, and its impact of poverty. Their message is a welcome contribution to the post-crash debate on how we might refocus economic policy around moral principles.

“The collateral damage of capitalism is not acceptable” stated Cardinal Marx at a lecture hosted by St. Benet’s College, Oxford (Feb 11th 2014). Neoclassical thought “is a utilitarian view of economics that tells us some may suffer and we may get increasing income inequalities, but in the long run we’ll all be better off… this [utilitarian approach] is exactly what the communists did before!”

Cardinal Marx’s latest book, ‘Das Kapital: A plea for man’, elaborates these criticisms against the almost religious application of singular economic schools of thought such as Marxism and Neo-Classical economic theory at present. That said, he still draws lessons from both of these schools among others to focus his economic thinking around Catholic teaching. Ultimately, as he told the Oxford audience, “the church’s social doctrine is not against markets, but against utilitarian economics":

With views like this, one might think he represents a minority in the group of the Catholic Church, however his responsibilities have increased enormously under the new Papacy. He is the archbishop of Munich, the head of the European Union Bishops’ Conference Association, and one of the new Pope’s most trusted inner circle of 8 Cardinals responsible for Church reforms.

It is surely no accident that Pope Francis should have chosen him to be one of the front-line leaders in his assault on poverty. The new Pope’s own choice of name, Francis, speaks volumes about his commitment to the poor, and he has grabbed headlines with his relatively austere lifestyle in comparison with papal predecessors. But what is most significant, is that he has chosen to re-engage with poverty at the level of the political economic debate.

For decades, Rome stepped out of economic discussions. It had already condemned the atheism of many Communist movements in the 1930s, so when the Cold War settled in, this among other reasons led to the leaders of the Church to side with the West. As Western nations increasingly associated themselves with neoclassical economics, church leaders saw no reason to intervene.

That said, there were still movements within the Church that critically engaged with the moral philosophy surrounding economics such as the liberation theologists in Latin America, key Catholic politicians who favoured socialist policies such as Julius Nyerere, and even some links between the Communist Party and Catholic Church in France. 

Pope Francis (or Jorge Bergoglio as he was known then) never associated himself with liberation theology despite its popularity with many Argentinians. Instead, he has been accused by some in Argentina as complicit with the Videla dictatorship of the 1970s. In any case, there is no doubt that there are traces of his current views amid the melting pot of economic ideas in Latin America since the 1960s.

With the arrival of Pope Francis to the Holy See, the question of a moral economy has been brought squarely back into the debate. On May 1st last year, Francis came out to condemn the “slave labour” under which the Bangladeshi textile workers died: “today many social, political and economic systems have chosen to exploit the human person [in the workplace] by not paying a just (wage), not offering work, focusing solely on the balance sheets… only looking at how much I can profit. This goes against God!” In November last year he published the Apostolic Exhortation ‘Evangelii Gaudium’ that called on his faithful to see the very real moral consequences of our current economic frameworks.

This, along with Cardinal Marx’s own exhortations against “utilitarian economics”, makes a very useful contribution to the post-crash crash debate, as well a case for pluralism. Pluralist economics might best be described as drawing from a selection of economic schools of thought, as befits the situation at hand, and therefore serve humanity better. It can do this with a focus on human well-being, a green economy, or as we see here, the ethical imperatives. So although the Church does not apply the scientific rigour as put forth by some, it is still taking the crucial first step of cleaving open the debate on why we should break out of mono-paradigmatic views of the world.

As the first Pope to be elected since the financial crisis, this is a significant time for Francis and his inner circle to be shaping the economic debate within the Catholic community. His criticisms of the policies and culture surrounding the modern financial sector certainly go back to the 2001-02 Argentinian banking crisis which he blamed on the “crudest form of liberalism”. Keen to lead by example, the Pope has actuated reforms on the Vatican’s bank (rather mysteriously named the Institute for the Works of Religion) to open it up to external auditing and scrutiny.

Ultimately, the Church is making an ethical contribution to the post-crash debate in that it argues for some form of moral philosophy to be brought back into our economic thinking. Certainly they are still mired in a number of other controversial debates with important social impacts, such as transparency over child abuse cases. This article is also by no means a clarion call for the church to get back into statecraft. However, we should welcome the fact that the spiritual leaders of 1.2 billion people around the world are now boldly and publically rethinking economics.