Big Moral Challenges and the Workings of the Economy

Joseph F.X Zahra's article on Newsbook

An audience made up of economists, bankers,  sociologists, professionals and business people attended a seminar at the Seminary in Tal- Virtu’ on the 22nd April organised by the Malta Group of the Fondazione Centesimus Annus Pro Pontifice. Three speakers made their views heard on the challenges of the socio-economic world today, taking their cue from the Pope Francis’ apostolic exhortation, Evangelii Gaudium. I introduced the economic aspects of the exhortation which come down hard on the market economy, consumerism and financial markets. They do “prima facie” contrast with the hope and optimism of Saint John Paul II encyclical “Centesimus Annus” and Pope Benedict XVI ‘s “Caritas in Veritate” that addressed unambiguously the value of the market economy as having no effective and efficient alternative models as it naturally respects human creativity and decision making. The speakers at the seminar were asked to expand on three warnings given by Francis – no to an economy of exclusion, no to the idolatry of money, no to a financial system which rules rather than serves, and no to the inequality which spawns violence.

Fr Paul Pace S.J. and Dr Sue Vella put their finger on a prevalent economic model that does not address inequality, which has been growing during these last two to three decades. This widening gap between the “have all” and the “have not” has a dehumanising effect on people where for many it is a struggle to make ends meet at the end of the week. It reflects indifference between the two categories, and it is also self-defeating. Inequality has a negative impact on growth, and undermines equal opportunities, it weakens the social fabric and creates social problems. There is a positive correlation between inequality and violence. Fr Pace says that the warnings should shake us. There is nothing that we can acquire from indifference and exclusion. Sue Vella refers to the three suggestions being made in Evangelii Gaudium – good growth through the improvement in income distribution, the creation of jobs and solidarity with the poor; good governance to achieve the common good through subsidiarity and solidarity, and Generosity, whether when working for structural changes and reforms, as well as in individual decision-making.

Michael Bonello, former Central Bank of Malta governor and the third speaker, quoted from Alan Greenspan (definitely not a faint hearted economist when it comes to the benefits of the market economy) and William H Gross (Managing director of PIMCO, the largest global investment management companies) in saying that inequality is defeating the whole concept of the market economy. In a recent survey conducted by Pricewaterhousecoopers (PWC), 75% of CEOs of companies stated that they believe that their firm has a wider role to play in society and in mitigating against the perils of inequality. The flight from labour to capital has to be managed in a manner that re-establishes balance in growth within the economy itself. Michael Bonello views a role not only for the state but also for the Church in achieving this fairer income distribution. He indicates the Scandinavian social welfare systems as “best in class”. In my view, much can be said about this, but I will tackle this in a separate blog. With regard the Church, Michael Bonello, says that it has two channels for this purpose – the pulpit and the parish community. This translates into better and effective sermons (even Francis invokes this in Evangelii Gaudium) and voluntary work in the parish community aimed at building self confidence in the poor and emarginated and giving them the intellectual and emotional tools to bounce back into mainstream society.

A number of interventions were made by the audience. Archbishop Paul Cremona concluded this event by stating that a lot will be lost if we do not place the human person and human dignity in the centre of economic activity. 

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