The richer class have many ways of shielding themselves, and stand less in need of help from the State; whereas the mass of the poor have no resources of their own to fall back upon, and must chiefly depend upon the assistance of the State.
—Leo XIII, Rerum Novarum
Our second contribution on the issues raised by Evangelii Gaudium—and on the forgetfulness that sometimes seems to exist in the Catholic world regarding some relevant and surprising pages of the social doctrine of the church—is a dialogue with Professor Stefano Zamagni. Born in 1943 in Rimini, Italy, Zamagni is professor of political economy at the University of Bologna’s faculty of economics and adjunct professor of international political economy at Johns Hopkins University. He graduated in 1966 in economics from the Catholic University of the Sacro Cuore in Milan, and, from 1969 to 1973, he specialized at the University of Oxford, at Linacre College. Before Bologna, he taught at the University of Parma and, until 2007, at the Bocconi University in Milan as a professor of the history of economic analysis. From 2007 to 2012, Zamagni was president of the Italian Commission for the Non-Profit Sector. In 2010, he was awarded the Georgio La Pira prize for peace. In 2013, he was awarded the first Economy and Society international award of the foundation Centesimus Annus. Also in 2013, the Foundation of Subiaco awarded him the Saint Benedict European Prize. He is a member of the scientific committee of several national and international economic journals and of the Pontifical Academy of Social Sciences. He is the author of numerous scientific publications and other contributions to cultural and scientific debate. His most recent books are Famiglia e lavoro (Family and Work) and Impresa responsabile e mercato civile (Responsible Business Enterprise and the Civil Market).1
Do you share the alarm raised by Pope Francis in the apostolic exhortation Evangelii Gaudium on the economy that kills?
What Pope Francis launched in Evangelii Gaudium is not a warning, but a heartfelt invitation to reconsider the foundations of the model of market economy now in vogue. It is therefore an invitation to leave behind the “night of thought” in which this crisis forces us to dwell. Markets are not all equal, because they are the “precipitate” of cultural and political projects. There is a market that reduces inequality and one that increases it. The first is called civil, because it broadens the civitas as it aims to include virtually all; the second is the uncivilized market, because it tends to exclude and restore the “existential suburbs.” In the current phase of financial capitalism, the second type of market has become dominant, and the results are before our eyes: an increase of social inequalities to a level never seen in previous centuries and a decline of fundamental, and not symbolic, freedoms for too many people. It is to this situation, and not to a hypothetical reality, that the pope draws the attention of all, believers and nonbelievers. The fact is that the pope’s words have a solid theoretical foundation much more than what a certain official media version wants people to believe. His approach is that of historical realism: reconnect knowledge and experience of reality and turn thought into life practice. Therefore, for Pope Francis, Christianity cannot be reduced to one orthodoxy, the risk of rationalistic intellectualism, nor to one orthopraxis—that is, a kind of spiritual pathos. What this means in concrete terms is that in addition to the factum—that is, what humanity does—there is the faciendum—that is, what it can do for a new historical project. Francis has criticized the“trickle-down” economic theories and for this he was attacked and called a Marxist. Do you agree with these allegations against the pope? Is the pope right or not?
The theory known in economic literature as “trickle-down economics,” effectively rendered the aphorism—first used, it seems, by the American economist Alan Blinder—that “a rising tide lifts all boats.” For a long time, advocates of neoliberalism believed in it; there was no need to be concerned about the distribution of income and wealth because eventually everyone will see improvements. The important relevant thing was to increase the size of the pie (the GDP) without worrying about the size of the individual portions. It is on this that the well-known conservative adage is founded: “We do not need to care for the poor because each new rich is one less poor.” Well, the pope tells us that in the current historical conditions (market globalization and financialization of the economy) the “trickle-down” effect can no longer happen, as any economist not blinded by preconceived notions well knows: the famous “Kuznets curve” is no longer valid today. Thus, the pope is right from a scientific perspective; so much so that the criticisms that have been made are only ideological (the pope has become a Marxist!). The truth is that Francis proves that he understands what too many observers and scholars pretend not to see—namely, that poverty, absolute poverty, and inequality are substantially different phenomena. Therefore, they also require different control strategies: if the fight against absolute poverty requires interventions on redistributive mechanisms, progress on the second front requires action at the very moment in which wealth is produced. And this bothers many!
Is the most recent form of capitalism, the one we are living today, a somewhat irreversible system?
Capitalism is one, but the varieties of capitalism are many. And the varieties change in relation to both cultural matrices prevalent in the societies in which they are applied and the characteristics of the historical period taken into consideration. There is nothing irreversible in capitalism, as well as in other socioeconomic systems. Another important point to keep in mind is the distinction between market economy and capitalist economy. The first anticipates at least a couple of centuries the advent of the second. This explains why markets are not all equal. For example, the civil economy market—a term first coined by Antonio Genovesi in 1753—does not accept what Joseph Schumpeter in 1912 called the engine of capitalism—namely, what he called “creative destruction.” The capitalist market must “destroy”—that is, expel businesses and people who are unproductive or even just less productive—in order to create what is new and thus expand indefinitely. This version of social Darwinism ends up reducing economic relations between people to relationships between things and these to goods. According to the pope, this model of capitalism, typical of the current historical phase, is no longer sustainable.
Why does a part of the American neoconservative world struggle to understand Pope Francis?
There may be many reasons for the flat rejection of the pope’s message within a certain neoconservative world. A first reason could be the fear that the pope intends to spend himself in favor of pauperism and condemn wealth in itself, which is unfounded. In his 2014 Lenten message, the pope clarified the difference between poverty as evangelical virtue and extreme poverty. Extreme poverty is the lack of what is essential to life, with no hope or solution in sight. Evangelical poverty is the detachment from goods and possessions in view of a greater freedom. What Francis is trying to emphasize are the ways in which wealth is generated and the criteria by which it is distributed among the members of the human family; not being purely of a technical order, a Christian cannot but submit to moral judgment these ways and criteria. A second reason is that a certain conservatism is concerned about the lack of support on the part of the social doctrine of the church for a particular model of market economy. But Christianity, as a universalist and nonethnic religion, can never be incorporated in a particular system of social order, a system that relies on a particular and historically determined cultural matrix. These concerns, as understandable as they may be, are not however justifiable within a Christian theological perspective.
Why do Pius XI’s strong and prophetic words in his encyclical Quadragesimo Anno, against the international imperialism of money, sound so radical and extreme that not even the most leftist politician would ever dream of using them today?
Pius XI’s words in Quadragesimo Anno should be read against the background of what was happening then. The crisis of 1929 was the first major crisis of capitalism and it also, like the present one, originated in the financial sector. Consider the current situation. As Marco Vitale informs us, in 1980 the global financial assets were equal to the world GDP ($27 trillion). In 2007, on the eve of the outbreak of the crisis, it had increased to $240 trillion against the $60 trillion of the world’s GDP—four times more. And at present that gap has become even larger. Over that same period of time, in most countries the wage share relative to the GDP fell by more than nine points, resulting in an increase of the financial income share. When facing such phenomena, I don’t think that expressions such as “international imperialism of money” sound too exaggerated!”
Why are these themes, which belong to the teaching and doctrine of the church, so overlooked despite the fact that they photographed very clearly a situation similar to the one we find ourselves in today, eighty years after Pius XI’s encyclical?
The answer to this question requires a clarification that, to my knowledge, is never provided. In October 1829, the famous professor of economics at the University of Oxford, Richard Whately, was the first to formulate the principle of NOMA (Non-Overlapping Magisteria)—that is, if the economy is to become a science, it must be separated from ethics and politics. Why? The answer is simple: politics is the realm of the ends that society pursues; ethics is the realm of the values that should guide human behavior; and the economy is the realm of the most effective means to achieve those ends with regard to those values. Thus the economy does not need to “go haywire” with the other two spheres. All the subsequent economic thought—with few exceptions—has accepted the principle of NOMA and with good reason, as can be easily understood. Since the advent of globalization in the late 1970s, we have gradually witnessed a radical reversal of roles: the economy becomes the realm of ends, and politics that of means. This is the reason why, as all observers have not failed to notice, democracy today is at the service of the market. The influential and powerful president of the Bundesbank, Hans Tietmeyer, understood it ahead of his time, when in 1996 he stated: “At times, I have the impression that most politicians still do not understand that they are already under the control of financial markets, and are even dominated by them.” Need I say more? Today, even Alan Greenspan, chairman of the Federal Reserve for so many years, expressed the same idea in his book The Map and the Territory.2 Well, the social doctrine of the church cannot accept such a “division of roles.” Politics must return to be the realm of ends, and between these three spheres there must be a systematic, and not improvised, cooperative relationship. There must be autonomy, of course, but not separation between them. And we must bear in mind that Catholic ethics is based on the Aristotelian-Thomist principle of the primacy of good over justice. Justice makes sense if it aims at accomplishing what is good; otherwise, it becomes judicialism. Postmodernity does not accept, as we know well, this vision. In its view, the rule, the norm, originates only from the consent of the parties involved, which should not refer to some “good” conception of life. Economic action is therefore based on the principle that consensus facit iustum (the mutual consent makes what is just), just as the system of libertarian individualism, predominant today, requires.
Are the paragraphs of Populorum Progressio, stating that private property is not an absolute right but is subject to the common good, and the claims of the Catechism of Saint Pius X, according to which the sins that cry to heaven for vengeance are the oppression of the poor and defrauding workers of their just wages, still valid today?
That private property cannot be considered an absolute right is so obvious that even the great John Locke recognized this fact in the second half of the seventeenth century. Rather, what needs to be clarified is the distinction between “common good” and “total good”—terms that are too often taken as equivalent. If the “common good” is a product, in which the mulipliers are the good of the individuals, the “total good” is more like a sum, in which the addends represent the good of the individual persons. The sense of this metaphor then is clear: according to the logic of the “common good,” we cannot sacrifice the welfare of someone to better, no matter of how much, that of others; the product would be zero. In a sum this is not the case. Further, the “common good” is the good of all people—even of those who underperform—and of the whole person in its three dimensions: the material, the socio-relational, and the spiritual. The concept of “total good” is a typical expression of utilitarianism; the “common good” instead of one of the four pillars of the social doctrine of the church.
In today’s globalized society, what are the possible applications and implications of teachings that are not only social but are at the very heart of the Christian faith?
In the current historical climate, the practical implications of the teaching of the social doctrine of the church involve the recovery of important pieces of that tradition of thought, asserted during the eighteenth century in Naples and Milan, which is civil economy. On the one hand, we need to redesign the rules of the game—that is, the institutions, especially the economic ones, which are still largely of the “mining” type (to use the felicitous expression coined by Daron Acemoğlu and James Robinson)—that exclude citizens, instead of including them. On the other hand, we must insert the principle of gift as gratuitousness—and not as donation—within the economic discourse and practice, giving life to all those economic initiatives that have reciprocity as their regulative principle. I’m thinking here of social enterprises, productive associations, ethical finance, “voting with the wallet,” institutional structures of corporate governance that include positive rights of participation of workers, and so on. It is a great encouragement to note that the model of civil economy is gaining momentum, perhaps more abroad than in Italy, where it actually originated. But already at the beginning of the nineteenth century our great poet Giacomo Leopardi, with his famous essay on the customs of the Italians, had already prepared us to this “peculiarity” of ours.