Putting ethics and morality in economics

IN his address to the plenary session of the Pontifical Academy of Social Sciences, Pope Benedict called for a re-planning of economics worldwide. He said it is clear that the market cannot regulate itself apart from public intervention and the support of internalized moral standards.

We cannot deny the fact that we are still reeling from the disastrous effects of the global financial breakdown. The latest victim is Greece, which has just been given a life-saving bailout, the biggest to be given to a country, in the amount of 110 billion Euros from the European Union and the International Monetary Fund (IMF).

Now the festering disease that has brought the once-proud Greece to its knees is exposed for the world to see and to learn from. It’s a terrible case of a country long spoiled by the lavish but parasitic lifestyle and culture of its people, sorry to say that.

To get an idea of what was wrong with the Greek economy, Washington Post columnist David Ignatius has this to say:

“Greece’s problem, (Greek Prime Minister) Papandreou says, was that it developed a financial culture in which pervasive corruption and tax evasion were tolerated, its leaders made promises they couldn’t keep; they expanded public-sector employment so much that nobody even knew, for sure, the number of government employees.”

It seems that Greece has been cultivating a kind of welfare state that killed the productive potentials of its people and other resources. It’s, of course, important that the government helps and intervenes in the lives of people, but it should not take away the people’s initiatives and productivity.

The government plays only a subsidiary role in the over-all development of nations. It’s actually a very crucial role that should not be misunderstood as being only secondary. Its role can be and should be both primary and subsidiary. These two qualifications need not be in conflict with each other.

And to get an idea of the bitter pill that the Greeks have to swallow for this mess, here are some words from a press report:

“Papandreou unveiled austerity measures and tax rises worth 30 billion Euros, including: an increase in the retirement age from an average age of 53 to 67; government workers to lose annual bonuses worth an extra two months’ pay; ten per cent tax rise on alcohol, cigarettes and petrol; three-year freeze in the public sector; early retirement will be limited or abolished altogether; and VAT increase from 21 to 23 per cent.”

News reports also have it that these austerity measures were met with severe opposition from the Greek people many of whom went on a rampage to express their disapproval.

And that’s not all. Other developments in the world today indicate trends of financial and economic activities that are ultimately driven by greed, and not by ethics and morality, not by the social principles of the common good, subsidiarity and solidarity.

Some learned sectors claim that the recent oil leak off the coast of Louisiana in the US that many fear is a mega-catastrophe in the making is caused by greed. Greed blinded the ones involved to the requirements of prudence and safety. They just went about pumping more and more oil from the ocean floor.

We have to return to common sense, to the basic sense of restraint in any endeavor we make. We need to recover the necessary awareness of the need for ethics and morality in our economics and other temporal affairs. We need to develop a finer sensitivity to the demands of the common good and justice and fairness.

Our problem often is that when these human affairs start to assume big proportions, the requirements of ethics and morality tend to be ignored, then forgotten if not openly attacked as irrelevant.

We have to be quick to react to the desensitizing effects of our worldly concerns. The ideal is that the spiritual and supernatural tone of our thoughts and desires, even when they involve our earthly activities, should be kept vibrant and so deeply felt as to effectively guide us in our daily routine.

It would seem that the world of finance and economics find it hard to accommodate the directives of ethics and morality. Greed, pride, arrogance and vanity, which actually are human weaknesses, are converted into the very fuel and resource engine to further our economic activities.

The Pope’s call to re-plan our economic activities according to more internalized moral standards is most relevant these days. We need to correspond to that call.