16 ottobre 2009
Conference of the Italian Chamber of Commerce & Industry in the U.K.
Speech by Cardinal Giovanni Lajolo
President of the Governorship of Vatican City State
London, October 16, 2009
1. The subject chosen for this conference, A New Approach for Global Economic and Social Growth cannot be blamed for being too limited.
So, everyone can freely propose what might be the most successful "new approach". As for me, I think it would be interesting for the participants of this conference to hear something about the New Approach suggested by Pope Benedict XVI in His encyclical "Caritas in veritate". The encyclical has had an ample and positive echo in the international press; and I dare to think that for those here today, it could be interesting to learn something more besides what you may have gained from the headlines and newspaper articles.
2. The formal occasion of the encyclical was the 40th anniversary of the encyclical by Paul VI (the sixth), entitled "Populorum progressio", that in 1969 was welcomed with great appreciation. But what has made more timely the arrival of this document has been the financial débâcle of 2008, with the ensuing world economical recession. After many years of vertiginous growth, the collapse of prestigious worldwide economic players, which themselves were symbols of success and well-being, had something of the surreal about it. This collapse damaged not only the economical agents, but feelings of disconcertion and anguish grew in all developed countries. It was a blow to financial magnates and the very rich, but - what was worse – it hit millions of modest people in poorer conditions. For this reason, a word of orientation for the future by the Holy Father was awaited. It came with the encyclical "Caritas in veritate" dated June 29th of this year.
3. First of all, I want to underline that the encyclical didn't want to give technical directives such as the rules to create transparency around the real financial situation of the banks and firms, which accounting criteria to establish for an impartial evaluation of assets and in what measures they should be kept in mind for making loans, how to optimize international accounting standards; and finally, up to what point is it convenient for the State to control, intervene and correct in such matters. These and other technical and political questions are surely determinant to avoid artificial distortions with disastrous financial, economical and social consequences. But the goal of the encyclical could not be of this nature.
This encyclical is all about the attitudes of the acting subject, whether he be individual or collective, private or institutional. These attitudes are most certainly determinant and, when positive, not only bring a particular wellbeing, but promote the common good. The Pope summarizes such an attitude in this phrase: "Love in Truth". "Caritas in veritate", where caritas is love understood not as eros (which is drawn by self-satisfaction), but as agape (inspired by generosity and creativity). In a world of progressive and pervasive globalization there is the risk – he writes – that "the interdependence of people and nations is not matched by ethical interaction of consciences and minds that would give rise to truly human development. Only in charity, illumined by the light of reason and faith, is it possible to pursue development goals that possess a more humane and humanizing value. (n.9)
Love in truth – the Pope continues– is the great challenge that the Church perceives first, for herself, and then that she must present to today's world. After having elucidated the basic approach of the encyclical, I would like to outline how this encyclical develops some specific themes, which I believe to be of more immediate interest to our gathering.
4. First theme: globalization, that is to say, world interdependence.
This is a theme that, we can say, penetrates every other social issue of our times. The term returns over and over in the encyclical, and as such is a sort of "leitmotiv".
The encyclical observes in a very realistic way that the social-economical process is not its only or even its most important dimension. Underneath the more visible process, humanity itself is becoming increasingly inter-connected…The truth of globalization as a process and its fundamental ethical criterion are given by the unity of the human family and its development towards what is good. (n. 42)
This point is fundamental to avoid considering globalization in a deterministic manner. Pope Benedict XVI stresses what was already said by his predecessor Pope John Paul II: globalization in itself is neither good, nor bad; it rather depends on how it will be used.
More concretely, the encyclical asserts that the expansion of the borders of wellbeing to a worldwide extension should not be slowed by protectionist measures. The encyclical adds that, the involvement of the emerging or developing countries will allow to better handle the crisis. "The processes of globalization, suitably understood and directed, - writes Benedict XVI – open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale….. It is necessary to correct the malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty….great difficulties and dangers that can only be overcome if we are able to appropriate the underlying anthropological and ethical spirit that drives globalization towards the humanizing goal of solidarity." (n. 42)
5. Leaving behind this comprehensive theme, I would like to move onto another point that we could well call crucial. All, in recent times, both rich and poor, have been touched by it. It is the theme of finance and its relationship with business. The great freedom of action that characterizes the international exchange market, which is an aspect proper of globalization as we experience it, can produce contrasting results.
"The so-called outsourcing of production" - the Encyclical states - "can weaken the company's sense of responsibility towards the stakeholders – namely the workers, the suppliers, the consumers, the natural environment and broader society – in favour of the shareholders, who are not tied to a specific geographical area and who therefore enjoy extraordinary mobility." (n. 40). There can thus be a temptation to seek short term profit alone, and not the long term, sustainable growth of the company, and its important service to the real economy.
Outsourcing, on the other hand, can be a good for the host country in that it produces jobs and increases technical know how. However, "……it is not right, writes Benedict XVI, to export these things merely for the sake of obtaining advantageous condition, or worse, for purposes of exploitation, without making a real contribution to local society by helping to bring about a robust productive and social system, an essential factor for stable development." (n. 40)
As far as the managers themselves, the operative subjects in this context of outsourcing, the encyclical notes that in recent years, there is a growing cosmopolitan class of managers attentive "only to the shareholders"; however, the encyclical also highlights that at the same time "many far-sighted managers today are becoming increasingly aware of the profound links between their enterprise and the territory or territories in which it operates. (n. 40)
The encyclical recalls that John Paul II has already warned that investment always has a moral aspect along side the economical.
6. On the theme of the market and commerce, the encyclical has words that seem to be very "courageous". "In order to defeat underdevelopment," – it warns – "action is required not only on improving exchange-based transaction and implanting public welfare structures, but above all on gradually increasing openness, in a world context, to forms of economic activity marked by quotas of gratuitousness and communion….The market of gratuitousness does not exist, and attitudes of gratuitousness cannot be established by law. Yet both the market and politics need individuals who are open to reciprocal gift." (n. 39)
And there, where the encyclical touches on the relationship between business and ethics, it highlights the emerging in recent years of a broad intermediate area between two types of businesses, "profit" and "non-profit". This area – points out Benedict XVI - "is made up of traditional companies which nonetheless subscribe to social aid agreements in support of underdeveloped countries, charitable foundations associated with individual companies, groups of companies oriented towards social welfare, and the diversified world of the so-called "civil economy" and the "economy of communion". This is not merely a matter of a "third sector", but of a broad new composite reality embracing the private and public sphere, one which does not exclude profit. Then profit is considered a "means of achieving the goal of a more humane market and society." And in that way "the very plurality of institutional forms of business gives rise to a market which is not only more civilized but also more competitive". (n. 46)