Reno Hayek Symposium

The Pope’s encyclical Caritas in Veritate in not the leftist manifesto for which some liberals hoped. As Tyler Cowen in his Vaticanomics Wall Street Journal article points out, “the underlying assumption of the document is the continued reign of the status quo–a globalized , wealth-creating economy–with some ethical adjustments.” It’s a fundamentally a conservative piece of work. After the Madoff scandal, it’s hard to argue that the system doesn’t need ethical adjustments.

Robert Sirico fills in a few more details on those ethical adjustments in his WSJ op-ed, The Pope on ‘Love in Truth’. “He constantly returns to two practical applications of the principle of truth in charity. First, this principle takes us beyond earthly demands of justice, defined by rights and duties, and introduces essential moral priorities of generosity, mercy and communion — priorities which provide salvific and theological value. Second, truth in charity is always focused on the common good, defined as an extension of the good of individuals who live in society and have broad social responsibilities.”

The Pope is not an economist; nor is he a international political scientist. He is though a European and his suggestions for a world financial regulatory framework should only reflect other such calls from European heads of state. Like the Basal II Accord, these suggestions will not work. His worries on wealth aggregation reflect concerns of economists like Alan Greenspan, our former Fed Chairman. A broader treatment of the encyclical can be found in George Weigel’s Charity in Truth in National Review Online.

So where are we with the morality of capitalism as a system? This is an economic system that has raised the living standards of the masses from its beginnings. Adam Smith’s Wealth of Nations took steroids as it grew and, pejoratively speaking, “trickle down” economics benefited all. But something is indeed missing if the greed of the “invisible hand” is the only obligation of the head which governs that hand.

The medieval concept of noblesse oblige, I believe, gives secular society an answer. This is the moral obligation of those of high birth, powerful social position, etc. to act with honor, kindness, and generosity. In other words, take care of those less fortunate. And a scale is implied in the concept, the more you have, the greater your obligation. In Judaism, Christianity and Islam the religious context further requires almsgiving of all, regardless of status. The story of the widow’s might is all too familiar. In short, there is an obligation of charity.

So if we add a specific concept of charity to an economic system which benefits all, we have what the Pope is promoting. This indeed all religious leaders should promote.

I personally go further and believe that governments should provide the freedom to allow individuals, social institutions, and business enterprises to give alms and perform charitable works. Unfortunately the statist governments in Europe and the Obama government in the US are not so inclined. In Europe individual charity is lacking and people rely on the state to take up the individual obligation; witness the tsunami relief of recent years. And Obama has proposed to limit charitable deductions in favor of government controlled largess.

When we depend on the state for more and more of our needs, we are enticed to cede our moral obligations as well, in the end we lose our individuality and we are nothing but slaves of the state. The Road to Serfdom is an easy path indeed!

Tom Motherway, tom@renohayek.com