Just before the G-8 meeting in L'Aquila, Pope Benedict XVI warned that there will not be any way out of the crisis without 'measures of ethical value', i.e. jobs and solidarity. In his encyclical 'Caritas in Veritate'*, he condemns the 'grave deviations and failures' of capitalism exposed by the financial crisis and advocates for a return to ethics in the management of the global economy.
The encyclical follows essentially the message of Paul VI's 'Popolorum progressio' (1967) which was largely influenced by the humanistic ideas of Father Lebret, J.Maritain and F.Perroux. Paul VI had an articulated vision of development. It could not be merely reduced to the increase in production of goods and services, but had a more fundamental meaning. The concept of development is broadly understood as the satisfaction of basic needs for people and indicates the goal of rescuing peoples, first and foremost from hunger and deprivation, endemic diseases and illiteracy.
The new encyclical brings the doctrine of 'integral human development' up to date . It calls, for a profound change in the foundations of capitalism, particularly in the relations between market, enterprise and State . It highlights the importance of distributive justice and social justice for the market economy: 'without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function' (§35). It reaffirms the social responsibility of the corporate world: 'Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding human enterprise...Without doubt, one of the greatest risks for business is that they are almost exclusively answerable to their investors, thereby limited in their social value' (§40). It places emphasis on the need for 'just laws' and 'forms of redistribution' of wealth as well as other forms of economic activity based on gratuitousness.
The 127 pages document is quite dense and addresses a range of many other important issues, including migration, terrorism, bioethics and energy.
The main 'political' message is, however, the call for a 'true world political authority' to 'manage the global economy, to revive the economies hit by the crisis, to avoid any deterioration of the present crisis and the greater imbalances that would result'. This idea is not likely to be endorsed by the Group of Eight summit nor to influence decisions on international governance at the next G-20 summit. But his plea for financiers to refocus on ethics will be reflected in the final declaration calling for stronger and more coordinated 'global standards'.
As Keynes put it emphatically, we need to 'invent a wisdom for a new age'. In this regard, the Church's document is an important step forward in the direction of a profoundly reformed system.