RE-VISIONING THE U.S. ECONOMY:

AFTER THE FINANCIAL AND ECONOMIC CRISIS OF 2007-?

Charles K. Wilber

University of Notre Dame

�� As we look ahead to recovery from the present financial and economic crisis, what then? Do we return to business as usual? Or is this a moment in time when a re-visioning of the economy is possible and necessary? Some would argue that this is what President Obama is doing-- changing the social compact from an emphasis on opportunity to one on fairness. Others look at the economic team he has gathered and say that it is the same old Wall Street professionals that got us into this mess. Still others, myself included, believe that the world will never be the same. The old consumer led growth of the past is simply not viable in a world where every country wants to have the same consumer society. The demand on natural resources and the environmental strain will be too great
�� What can Catholic Social Thought (CST) add to this debate? I don't believe there is only one Catholic response to this question but I do believe CST can provide guidance for my particular Catholic response. Certainly other responses are possible, at least within a spectrum framed by CST.

�� The tradition of CST is rooted in a commitment to certain fundamental values-- the right to human dignity, the need for human freedom and participation, the importance of community, and the nature of the common good. These values are drawn from the belief that each person is called to be a co-creator with God, participating in the redemption of the world and the furthering of the Kingdom.

�� As a result of these fundamental values two principles permeate CST. The first is a special concern for the poor and powerless which leads to a criticism of political and economic structures that oppress them. The second is a concern for certain human rights against the collectivist tendencies of the state and the neglect of the free market.

�� Pope John XXIII, in his encyclical Pacem in Terris, includes a number of economic rights concerning human welfare. First among these are the rights to life, food, clothing, shelter, rest, medical care, and basic education. In order to ensure these rights everyone has the right to earn a living. Everyone also has a right to security in the event of illness, unemployment, or old age. The right to participate in the community requires the right of employment, as well as the right to healthful working conditions, wages, and other benefits sufficient to support families at a level in keeping with human dignity. [PT, 8-27; CA, 8, 15]

�� Furthermore there are a number reasons to be concerned with the emphasis on consumption driven growth. �There are three that are prominent in CST. First, excessive consumption by some individuals and nations while at the same time other individuals and nations suffer from want is morally unacceptable. Typical is Pope Paul VI's statement: "...the superfluous wealth of rich countries should be placed at the service of poor nations...Otherwise their continued greed will certainly call down upon them the judgment of God and the wrath of the poor..." [Populorum Progressio, 49]

�� Second, excessive consumption which threatens the earth's environment is also morally unacceptable. Pope John Paul II stated in Centesimus Annus: "Equally worrying is the ecological question which accompanies the problem of consumerism and which is closely connected to it. In his desire to have and to enjoy rather than to be and to grow, man consumes the resources of the earth and his own life in an excessive and distorted way." [CA, 37]

�� Third, treating consumption as the primary goal of life-- that is, focusing on having instead of being-- is seen as detrimental to human dignity. Pope John Paul II wrote in Sollicitudo Rei Socialis: "All of us experience firsthand the sad effects of this blind submission to pure consumerism: in the first place a crass materialism, and at the same time a radical dissatisfaction because one quickly learns...that the more one possesses the more one wants, while deeper aspirations remain unsatisfied and perhaps even stifled." [SRS, 28]

�� If we stop here we have nice philosophic principles and some general guidelines for policy but re-visioning of the economy remains vague and fuzzy. What is needed are specific policies that flow from the general principles of CST. In the remainder of this article I will outline a few such policies.

�� 1. Reregulation: Since the Reagan Administration the main thrust of public policy has been to free up markets by deregulation, cut taxes, and eliminate or reduce social programs. The result has been constant federal deficits, a dramatic increase in income and wealth inequality, periodic financial scandals, decay of public services and infrastructure, and finally the present collapse of the financial services sector. The role of government needs to be rethought.� CST insists that "government has a moral function: protecting human rights and securing basic justice for all members of the commonwealth." [PT, 60-62] At a minimum this means restructuring and regulating the financial sector, protecting the rights of workers, and finding ways to use intermediate institutions such as churches to deliver social services.

�� 2. Economic decision making at all levels of government: The Bishops' pastoral letter, Economic Justice for All, argues that every perspective on economic life that is human, moral and Christian must be shaped by three questions: What does the economy do for people?� What does it do to people?� And how do people participate in it?[ NCCB, 1986, 1]� In addition, special concern must be given to the economy's impact on the poor and powerless because they are particularly vulnerable and needy.[ NCCB, 1986, 24] These questions need to be asked before any economic policy is enacted or undertaken at each and every level of government. Cost benefit analysis studies need to be restructured so these questions can be answered. Simply weighting costs and benefits with monetary values means the access road will always be put through the poor neighborhood not the well-off one.

�� 3. Full employment: In our society the way most participate is through jobs and it is also the major source of income for most people. In a market economy, employment-- or access to wealth-- is necessary to one's identity as a human being. We don't ask someone, "Who are you?" but rather "What do you do?" I am a professor or a carpenter. I work for General Motors or the University of Notre Dame

�� Whether through a public employment program or job tax credits to the private sector, a top policy priority must be to guarantee a job to everyone willing and able to work. We should also provide adjustment assistance to those who lose their jobs because of changes in competitive position, and should make every effort to keep open plants that can be operated efficiently. A host of other policies are possible: targeted jobs programs, education and training programs to equip workers with the skills needed for the future, day care centers for employed parents, and so on.

�� 4. Universal health care: How we do it is less important than that we do it. Human dignity demands that basic health care be available to all. My personal preference is to detach health care insurance from jobs. This is a burden that individual businesses should not have to bear. The best way to organize a universal system is debatable but the Kaiser Permanente system, which has almost nine million patients, might provide important lessons. Their high performance as an HMO has been attributed to three practices: First, they place a strong emphasis on preventative care which reduces costs later on. Second, their doctors are salaried instead of fee for service, which removes the incentive to perform unnecessary procedures. Finally, they strive to minimize the time patients spend in high-cost hospitals by advance planning and by providing for care in clinics. This results in cost savings and greater physician attention to patients. And any restructuring of medicine needs to shift the focus from high tech medicine for the few to basic medicine for all.

�� 5. Energy conservation: The most dangerous conflict and the most difficult to resolve is that between traditional patterns of economic growth and environmental systems. As stewards of the earth, any program for future economic improvement must be based on a wiser use of natural resources and more attention to the impact on environmental systems. At this point particular attention must be paid to reducing fossil fuel burning and to safer disposal of toxic waste. Increased taxation of gasoline and carbon generally is necessary to force conservation. At the same time this could facilitate dealing with the federal budget deficit. It could also aid subsidies to public transport to make it cheaper than private transport, thereby aiding energy savings.

�� 6.� Globalization: It must be realized that these changes will take place within the context of a globalized world. �CST calls us to recognize that all the peoples of the world are our brothers and sisters. As a result we cannot pursue "beggar thy neighbor" policies in international trade and aid while constructing domestic economic solutions. In addition, Pope John Paul II argues that there must be social intervention on the international level "to promote development, an effort which also involves sacrificing the positions of income and power enjoyed by the more developed countries." [CA, 52] To carry out this effort, "it is not enough to draw on the surplus goods which in fact our world abundantly produces: it requires above all a change of life-styles, of models of production and consumption, and of the established structures of power which today govern societies." [CA, 58] This strikes at the heart of a consumption oriented market system.

�� 7. The Church and Subsidiarity: The different levels of society are inter-connected. �For example a principal objective of publicly proclaimed laws and regulations is to stigmatize certain types of behavior and to reward others, thereby influencing individual values and behavior codes. Aristotle understood this: �Lawgivers make the citizen good by inculcating habits in them, and this is the aim of every lawgiver; if he does not succeed in doing that, his legislation is a failure. It is in this that a good constitution differs from a bad one.�� While families, peer groups, churches and schools play the most important role in shaping behavior and inculcating values, public laws have a role to play. For example, while law cannot make people stop holding racist beliefs, it can make them stop engaging in certain types of racist behavior. With time that behavior, say refusing service in a restaurant, becomes de-legitimized in public opinion.

�� I have focused on government policies so far but it is time to take up the concept of subsidiarity contained in CST. At the political level we need to rethink liberal theory which vests sovereignty in the state limited only by individual rights. A more communitarian view would require that sovereignty to be shared with intermediate groups.

�� Much work must be done at the lower levels. First, the Church as an institution must begin to "walk the walk" as well as "talk the talk." It needs to honor employees rights to organize and to participate in operations. It needs to educate its people in CST and their obligations as persons and as citizens to feed the hungry, house the homeless, etc. The promotion of soup kitchens, Catholic Worker Houses, lobbying for social service needs, and like projects are responsibilities that the laity should be urged to take on. Much is already being done but more is needed.

�� All well and good some would say, but how are you going to get these policies enacted and the church to change its ways? I don't know. It will require us as a people to rethink the type of society we want for ourselves, our children and grandchildren. Clearly the old way of consumer driven growth is no longer viable because of resource shortages and environmental limits. Globalization is resulting in a multi-polar world where we can no longer control the world economically or militarily. If this leads to the United States being able to reduce its policing function around the world; lowered defense spending can help pay for the needed health care reforms and other public investments such as infrastructure.

�� Finally, we must remember that we are but short-term sojourners in this world. It is a temporary dwelling place, where Christians reside not as citizens with full rights but as aliens or pilgrims whose true home is in a city to come. The Church's tendency to provide religious legitimation to the debilitating and sometimes lethal workings of the market and/or the state must be resisted. What is needed is for the church-- the members of Christ's body-- to mount a critique of the iniquities of both the market and the state. And to carry out their obligation to love and serve God and their neighbor.