The True Wealth of Nations

The Ethics and Economics of Prosperity

Appendix B:

Practical Applications

The fundamental hypothesis of the Project on Theology and Economic Processes is that

The economic and cultural criteria identified in the tradition of Catholic social thought provide an effective path to sustainable prosperity for all.

In order to explore, test, and apply this hypothesis, the Project looks to undertake a handful of initiatives in the coming years from the list of possible topics below. The first is likely to be on corruption in Latin America, supporting the efforts of the local Catholic Church there to oppose this major social evil (see Project 1 below.)

A preliminary question is: Why should the Institute and this Project concentrate on any of these topics? Might one not say "It's already been done"? There is available, in every case, at least some relevant academic research and empirical evidence. Yet the research is piecemeal and the evidence widely scattered. What is lacking is the "architecture" necessary for accumulating the research and the evidence, distinguishing points of weakness, commissioning work as needed, and providing the framework for a synthesis that is intellectually coherent and pragmatically grounded. Objective certainty is beyond human reach, but such an architecture, developed within the Institute, can sustain in the larger world a well-founded assurance about the conditions for authentic prosperity that engenders the will to take action.

As each potential topic is considered, prior to a decision to proceed, the Project's Advisory Board and Steering Committee will apply five key criteria to any potential research topic.

1. Is there a specifically Catholic perspective on the issue? The Institute is committed to investigations where the Catholic tradition can help understand and address neuralgic problems in the world.
2. Will the contribution of the Institute on this issue be both novel and significant? Many issues have been investigated multiple times and only the promise of a distinctive contribution will justify taking on an often discussed issue.
3. Will the intellectual contribution to this issue make action more likely? Even if a research project has no action component attached to it, will the resulting synthesis alter perspectives in a way that encourages positive change in the world?
4. Are there appropriate people available to take the lead in and/or participate in the effort? Success requires bringing the most appropriate intellectual and cultural resources to the task.
5. What is the best format for the development and publication of the outcome? Options here include a set of research papers, a book, a conference, a multi-year research project, or some combination of these. There is no doubt that an aggressive and creative use of the best of online technology must be a part of this effort.

One particularly important aspect of this work will be cooperative efforts with foundations and other funders. The process of turning a practically promising idea into a workable project takes time, an extensive network of contacts, and exploratory planning with both principals and knowledgeable others. All this requires preliminary financing, usually about 10% of the ultimate cost of a launched project. We expect to explore mutual interests with particular foundations as appropriate, seeking conceptual and pragmatic input, financing for preliminary costs, and some positive attitude toward the success of the ultimate project. This might result in further financing, although the IACS plans also to seek funding from private individuals and groups interested in the results of the project.

Debates between left and right in economic policy have been characterized by a polarization that leaves partisans at both ends of the spectrum ignoring the concerns and insights of "the other side." Even interpreters of Catholic social thought have too often taken a "culture wars" approach and presented only one-sided readings of papal texts. Receiving less attention are more even-handed economists and theologians who engage the Catholic tradition on economic life with neither a capitalist nor socialist axe to grind. There are challenges in interpreting the meaning of traditional Catholic teachings – such as the just price, the meaning of wealth, the responsibilities of property ownership, the role of business profit – in an era of markets and globalization. Rather than analyses driven by a priori commitments to one economic form or another, the Church today needs hard-headed thinking about the strengths and weaknesses of both the individual exercise of freedom in markets and communal structuring of economic life through government.

The Project on the True Wealth of Nations is currently undertaking preliminary development in the following areas:

1. Corruption. This project will engage the Catholic Church in Latin America in cooperation with institutions of civil society to confront government corruption. The project is formed and structured and in the process of being funded. (See appendix C)
2. Economic Role of Women. Both traditional Catholic social thought and mainstream economic theory have generally restricted their view of women to their reproductive and domestic nurturing functions, the former treating their social and economic roles as subordinate to men while sentimentalizing their capacity for self-sacrificing maternal care; and the latter tending to under-estimate the contribution of women because it often occurs outside the market and is not easily measured. Changes in development theory are re-evaluating the role of women in economic life in traditional economies and in the conservation of natural resources. Meanwhile, the economic role of women in developed economies is prompting re-evaluation of traditional separations between unpaid work in the home, and the workplace formerly regarded as the sphere of paid work for men. Central to these re-evaluations is the question of collective responsibility for the care of children including the question of state-subsidized child care. A three-party dialogue is proposed which will bring these and other feminist concerns to the attention both of specialists in Catholic social thought and in conventional economic theory, for their mutual benefit. The terms of reference and the methodology of this dialogue will only be finalized once the likely participants have been identified.
3. Giving Life to the "Dead Capital" of the Poor. Left and right on the political spectrum can agree that the primary goal for the economic security of the poor of the world must be to assist poor people to sustain themselves economically. Yet one of the most basic differences between the poor of the world and the well-to-do is the lack of access by the poor to financial assets. This occurs not simply because of their poverty – they don’t have much – but also because of a failure of the rule of law. Millions of poor people own their homes and land and animals but have no legal title to them, little ability to legally transfer them, scant incentive to invest in them, and no capacity to employ them as collateral to raise money for starting a small business. In spite of the abuses, the recognition of land ownership was crucial to overall economic development in Eastern Europe and Russia after Communism. One need not be a capitalist to recognize that the financial infrastructure of many poor nations is underdeveloped and biased against the poor. The long and rich history of Catholic social thought on property ownership – emphasizing both its benefits and limitations – can make a significant contribution in this area. There are two separable foci within this initiative. The first is the more classical notion of the "rule of law" within the legal tradition, as it applies to property rights. This involves such basic legal institutions as the specification of property rights, access to the justice system by all regardless of income. The second focus would concentrate on the multitude of structures which are necessary or at least helpful to mobilize the capital of the poor, including systems for title registration and insurance, etc. This project would be likely to entail a preliminary period of investigation, bringing together new or existing resources, and might eventually lead to five or so pilot projects in various developing countries.
4. Catholicity and the Environment. Perhaps the single most serious market failure, recognized by even the strongest of free market economists, is environmental degradation. The individual economic agents in the market not only have no economic incentives to be concerned for the market but experience significant market pressures to ignore these sorts of negative externalities. Progress on local environmental problems, while not easy, has been shown to be quite feasible, as demonstrated by the clearer air in the large cities of Europe and North America than in those of Africa, Latin America, and South Asia. But global environmental problems – from global warming to ozone depletion – have proven considerably more difficult to address. Yet success on issues such as chlorofluorocarbon emissions indicates that global solutions are possible. The still-developing environmental theology with the Catholic tradition has much to gain from deep dialogue with economists and others to develop a truly catholic approach to the environment. The historically global experience of Catholicism has a great deal to contribute to the development of a responsible, universal environmentalism.
5. Mediating Organizations as a Force for Development. The last fifty years has seen the rise in importance of mediating organizations, non-governmental organizations, and vital institutions of civil society. These have become one of the primary means by which the Church has striven to improve the life of the poor and the vitality of the nation. Church agencies (e.g., Catholic Relief Services) once known only for direct relief now often spend significant staff time and money strengthening the capacity of civil society organizations in the long term effort to reduce poverty.
6. Catholic, Jewish, and Islamic Perspectives on Economic Life. Christianity, Judaism and Islam stand out among world religions for the depth of engagement and extent of influence in the economic lives of people in the world today. Islam, like Catholicism and Judaism, provides a detailed view of the proper interaction of faith and economic prosperity. Dialogue between these religious traditions on economic matters holds out the promise not only for greater mutual understanding but for cooperative efforts to move toward the common good in a number of developing nations where people of these faiths live. In many nations, progress on several of the issues identified in the Economics of Prosperity Project – such as corruption, role of financial institutions, rule of law, and mediating organizations – will require close cooperation between Catholics, Muslims and Jews. This can only begin with a careful understanding and wide dissemination of mutually affirmed commonalities and differences.
7. Globalization as a Two-Way Street. Much has been written about the effects of globalization on the peoples of the developing world – with recurring arguments about the costs and benefits that economically more advanced nations bring about in globalization. However, the influence of globalization has moved in both directions. Wealthier nations are experiencing the influence of peoples and ideas from elsewhere in the world through immigration and an increase in the frequency of dialogue across national borders. Nations such as Germany, France, Great Britain, and the United States are all experiencing problems of assimilation of immigrants but are also undergoing a slow transformation of national identity as larger proportions of their citizenry hail from other parts of the world. Globalization consequently produces threats to the jobs of those who find themselves competing with immigrants, and threats to the jobs of both groups as manufacturing facilities are transferred to less developed countries where wages are substantially lower. The relocation of professional jobs from the developed to the developing world is imposing increasing strains on the middle classes who have traditionally relied on them for careers. Calls for protectionist measures against globalization inevitably grow louder, therefore, in contradiction to the demands of international solidarity. In contrast, parishes, dioceses, and national bishops' conferences have established close relations with parallel organizations in other nations, a change that is altering the self-perceptions of all. A Catholic analysis of mutual enculturation holds out the promise of greater understanding of our globalizing world as it unfolds in the coming century.
8. The Parish as Agent in Economic Development. In many of the poorest neighborhoods and villages of the world, the local Catholic parish plays a role in civic community leadership uncommon in wealthier nations. The local pastor and other parish workers have an opportunity to shape local developments so they improve the well-being of ordinary people. There are many examples where donations from abroad have been applied not primarily to provide relief but to build a basic economic infrastructure. Projects can include the drilling of a village well, the purchase of grain milling equipment, and the construction of a dormitory at the local Catholic high school to allow schooling for girls whose daily journey between home and school would otherwise prevent their getting an education. A series of handbooks for priests and other parish leaders, crafted in the light of local needs and customs, would represent an important contribution to the chronically poor and a practical outcome for Catholic social thought.
9. Christian Saints of Social Responsibility. The Catholic tradition has long held up for our edification men and women officially declared as saints in formal Church procedure. Speaking analogically, we can identify "saints" of social responsibility in the world – individuals who out of a heightened sense of personal responsibility and through a lifetime of unflagging commitment stand as exemplars of social responsibility. The project would seek a specifically Catholic theological understanding of their motivation and how they integrated their spirituality with their commitment to social justice. Here we would find a range of commitments, from direct service to the most needy to the transformation of unjust political and economic structures.