The Catholic Church, as the largest and longest-lived “corporation” on earth, possesses a great fund of wisdom concerning justice and success in human labour and the economy. Other Christian and religious bodies and communities have comparable traditions of wisdom. Recently we have all experienced the effects of a crisis in the global economy, in which the scale of unwise speculation in credit derivatives reached that of the world’s total GDP, trust in the banking system evaporated, and growth turned to recession. We need to understand what has gone wrong with our economy, and how to heal it. As Pope Benedict XVI has said on several occasions, especially in his third encyclical Caritas in Veritate (Charity in Truth), the economic crisis requires us to develop a new relationship between labour and capital and between the common good and the market.

This is one area where dialogue across and between religious traditions can be especially fruitful. For her part, while the Church is careful not to offer any "model economic system" for all, she asks her members, especially those most engaged in economic society, to develop models appropriate to their own concrete historical and personal circumstances. In the early twentieth century, Christian thinkers such as G.K. Chesterton and Hilaire Belloc developed the idea of distributive capitalism or “Distributism”, which advocated the wider distribution of productive property. Distributists sought to offer an alternative both to state socialism and monopolistic capitalism, and helped inspire co-operative, “alternative” economic and green movements after the Second World War.

Today, under the stimulus of the present crisis, and encouraged by the 2009 encyclical, a new wave of radical economic thinking draws on some of the same ideas as Distributism. “Neo-distributists” speak of localism, decentralization, guilds, and microfinance. They support the development of civil society, small businesses and cooperative partnerships. Philip Blond writes: “Today there is more concentration of wealth in fewer hands than at any time in history. At the same time, real wages have declined and most people are worse off in real terms than 30 years ago. People have been offered credit instead of wages… For me the greatest challenge is how we solve the conflict between capital and labour so that everybody has a chance – through wider share ownership, decentralisation, mutual funds, guilds, co-operatives, for example – to own a little of something.”

If it is not merely to degenerate into another ideology, Neo-Distributism needs to be brought into dialogue with other strands of Catholic and traditional social thought. We need to examine more carefully our notions of freedom, wealth, growth, and quality of life. For example, there has been a long-standing attempt to claim that, because it rejects the idea of a centrally-controlled economy in the name of subsidiarity, Catholic teaching must automatically endorse economic deregulation. In the encyclical Centesimus Annus (1991), Pope John Paul II praised the market economy. Nevertheless, he also wrote there about the “limits of the market” and the need for economic and political freedom to be circumscribed by a “strong juridical framework” (nn. 34, 40, 42, 39). Pope Benedict XVI took this critique of the liberal market even deeper in Caritas in Veritate. A market in which goods are exchanged is only “free” within certain limits: those limits are constituted juridically, and such limits reflect the moral-anthropological assumptions of the law-makers. It is however not simply a matter of adding some ethical controls – restrictions on pornography, arms sales or the accumulation of wealth, for example. The market itself is already a juridical framework. Every economy is a kind of game, constituted by the rules which define what it means to play the game (what counts as property, as fair exchange, competitiveness, and so on).

In 1985, before the fall of Communism, and long before the present global recession, Cardinal Ratzinger spoke of Christian business managers who “regard their Christianity as a private concern, while as members of the business community they abide by the laws of the economy.”

These realms have come to appear mutually exclusive in the modern context of the separation of the subjective and objective realms. But the whole point is precisely that they should meet, preserving their own integrity and yet inseparable. It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse. An economic policy that is ordered not only to the good of the group — indeed, not only to the common good of a determinate state — but to the common good of the family of man demands a maximum of ethical discipline and thus a maximum of religious strength.

Human institutions, such as the market, are social and cultural artefacts, justifiable mainly in terms of the human well-being they promote. An “economy” does not exist at all except as a set of patterns and customs of behaviour: i.e. as the material aspect of a moral-cultural system. As Pope Benedict explains, economic activity, like political activity, is a subset of cultural activity. It has a moral structure of its own, as well as requiring certain standards of human behaviour in order to function harmoniously. Every economy is a cultural economy, and fundamentally an ethical economy; i.e. the expression of an ethos, and a vision of what we are as human beings: our goal and calling. Christianity claims that our nature fulfils itself only in self-giving love. If this is true, it affects the goals and methods of economics. Exactly how it affects them is what we aim to discover through the research, debate, publications and conferences linked to this site.

Stratford Caldecott