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Re-thinking Catholic social doctrine

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Over the last few years I have been both strong supporter and sometime critic of the Church's contribution to debate on major economic and social issues. The Church has an extremely important role to play in public debate in these areas not least because of its role as custodian of permanent values. So while

tonight I intend to canvass some guestions about some of the Church's pronouncements in areas such as welfare, I preface my remarks with a strong expression of support for the continued involvement of the Church in public debate as well as the delivery of services.

To avoid misunderstanding I also place on record again my clear belief that Christian doctrine places a clear obligation on every individual to care for his or her neighbour with "neighbour" receiving a generous definition. There is no clearer Christian imperative in the temporal sphere.

I speak to you neither as a professional theologian nor as a professional economist. The matters I raise, however, have concerned me because of the influence of my Catholic upbringing and my practical experience in administering government departments which impact on the lives of the poor and deprived.

Since you are trained theologians I feel some diffidence but I hope that you will use your trained minds to consider the issues I wish to raise with you tonight, and that you will in time contribute to public discussion on issues which I believe have an important long-term impact on what sort of country we are.

My criticisms in the past have been directed in particular towards the Catholic Commission for Justice and Peace and its work on issues such as poverty, peace, and industrial relations. I consider that the Commission's publications were unbalanced to

the left and failed to acknowledge some fundamental elements of Christianity. Most notably, the Commission's prescriptions for social ills generally ignored the rights, freedoms and more particularly the responsibilities of the individual.

Before elaborating on my concerns I note that the Commission is now defunct, and the Catholic bishops have established a new body, the Secretariat for Justice and Peace. I sincerely hope that the revised methodology the Bishops have adopted will be a


The broader and more open approach being adopted then is particularly welcome not least because few Catholics are in a position to assess rigorously the Church's pronouncements on economic and social policy.

I make no comment on theological questions.




I adopt the words of Padraic McGuinness in a recent Financial Review article on the Papal Encyclical "On Social Concerns":

"When the Pope speaks on matters of Catholic faith, ethics and moral standards generally, he deserves to be treated with the utmost respect."

I note with more circumspection his further words:

"But as a political and economic analyst he is not a runner. This is a pity, since his views will influence not just the moral behaviour of many people, as they should, but also their political and economic analysis, which they should

not. "

Mr McGuinness's concerns and the questions I raise are not just academic. The Catholic Church influences the thinking of millions. The issues in question, such as poverty, economic development and welfare, affect the lives of millions. My

concern is that if the Church does get things wrong, the impact in human terms can be enormous.

I have already mentioned the work of the now defunct Catholic Commission for Justice and Peace and my criticisms of what I regard as its incomplete analysis of major social and economic issues. I must concede however that the Commission's views appear to be fairly deeply rooted in the body of mainstream Church thinking.

The Vatican's official contribution on social matters in 1891 - Pope Leo Kill's encyclical "Rerum Novarum" (Concerning New Things) on the condition of the working classes - is an important starting point. In that letter Pope Leo urged distributive

justice for the proletariat, the poor and the weak while at the same time affirming the right to private ownership of property and free sale of labour.

Another major development in the Church's approach to social equity occurred under Pope Paul VI in his Encyclical letter of 1967 "Populorum Progressio" (The Progress of Peoples). This document was principally concerned with social and economic development, in particular development of the third world. While the desire for better living standards worldwide is uncontentious, the analysis of the problem in the Pope's letter

is not. The underlying assumptions are that economic inequality amounts to injustice, and that income re-distribution on a massive and collective scale is required. The problem with all this, despite its superficial appeal, is that as Peter Bauer

succinctly puts it, "The modern clerical consensus endorsed by the Pope [then] confers spurious moral legitimacy and specious intellectual validity on envy and resentment".

The wealth creators are despised but not so much as would preclude taking as much as possible of the wealth they create.

The problem with the argument for compulsory income re-distribution as the key answer to social injustice is that it too often ignores the processes of wealth creation and, just as


importantly, the rights and responsibilities of individuals. It also places undeserved faith in the benevolence of governments and ignores the very real practical problems in ensuring that re-distribution hits its target.

Late last year, twenty years after Pope Paul's famous encyclical, Pope John Paul II developed and brought up to date the themes in the original letter. It is apparent that the same suspicion of wealth creation remains, alongside uncritical support for its

organised re-distribution.

While I agree entirely with the Pope's view that "development" should encompass spiritual and moral values, the denigration of material comforts is difficult to comprehend given the almost overwhelming importance placed on re-distribution of wealth and

the equation of injustice and inequality with income inequality.

Just as interesting is the inference that the ideologies of "capitalism" and "Marxism" are on a par, one no better or worse than the other. This is strange stuff given the unacceptable totalitarian and indeed atheist nature of most Marxist states.

There is, I believe, a fundamental and easy way to discern the difference between the moral quality of the democratic . capitalist states and the totalitarian Marxist states. In the former, whilst injustices and wrong-doing might be common they will generally be regarded as wrong-doing, or breakdowns in the

system. In the latter, the wrong-doing is often a matter of state policy. By way of example, there is both a moral and a practical difference between individual cases of medical malfeasance and the state's use of psychiatry as an instrument of

oppression and torture.

There is also a world of difference between the near universal religious tolerance of the democracies and the suppression of religion in Marxist states.

The Encyclical covers several other important international issues, for instance, third world debt, international trade, and environmental pollution. I question whether the discussion of each is based on a real understanding of how the world, and particularly things economic, works. Have, for example, loans to developing nations been counter-productive and would cancellation of third world debt be in the long-term interests of debtor nations? The latter would scarcely attract the additional funds which they desperately need for capital investment. Surely a

demonstration of the ability to repay or service outstanding loans would provide a better cause for celebration because it would mean that the money had been put to some permanent productive use.

On international trade matters, Pope John Paul urges elimination of international trade barriers which I strongly endorse but he then suggests that economic development often brings with it exploitation of the poor. Specifically, cheap labour in developing countries will be "exploited" to make goods for the wealthy. Wages in developing countries may well be extremely low

by our standards and working conditions similarly quite


unacceptable. But by the country's own standards, usually wages in the newly industrialised sectors of the economy are comparatively high. Indeed this is the underlying cause of the rapid urbanisation of many developing nations to which the Pope also refers. The point is that although by our standards, and even in absolute terms, conditions in new factories are bad, they offer the chance of a better standard of living to many who now

live on the land in abject poverty. If we were to try and close down these factories for "humane" reasons by, for example, refusing to buy the goods they produce, it could be virtually the same as condemning those workers to starvation.

Pope John Paul II shares with many others a scepticism about the compatibility of a relatively free market economy and achievement of other very desirable human goals such as individual liberty and social justice. I would argue that a market-based economy preserving private ownership is entirely compatible with

individual freedom and that indeed the two reinforce each other. The concept of social justice is of course subjective, but if one interprets it as ensuring at least an acceptable minimum standard of living for the poor, sick or unemployed, then again I would argue that a free market economy will have a much greater chance of allowing this to happen through government and/or individual action.

If you look at figures over the past twenty years or so for various developing countries, it is striking to see which countries have performed well economically and in terms of improving the lot of the majority of their people.

Hong Kong is an excellent example. Growth rates in national output over recent years have averaged in excess of 9 per cent and by 1986 income per head was around US$4300. At the same time the literacy rate was quite high at 90% and life expectancy was a respectable 71 years. Health services per head of population have also improved markedly with, for instance, the ratio of doctors to population doubling since 1965. The daily calorie

supply per capita exceeds the daily requirement by 22% and in fact exceeds the supply in Australia.

Taiwan provides another example. Real growth in national output has outstripped even that in Hong Kong and the latest available figures show that per capita national income is US$3630. The literacy rate is 90 per cent or more and life expectancy is 72 years.

Obviously these two countries still have a long way to go in terms of national income and other measures of economic and social well-being. But they have made great leaps forward with relatively free economies and little direct outside help. There are still many poor people living in unacceptable conditions in these countries, but the capacity to provide work or assistance

to these people has increased as national income has increased.

The ASEAN nations and South Asia suggest a similar pattern. There has been substantial improvement of living standards. Where the conditions of the masses have not been improved that is usually the result of political breakdown or misappropriation

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rather than market failure. How compatible are these real results with the theories of the encyclical?

I would suggest that we have to be far more precise and careful in defining when compulsory re-distribution is required. Re-distribution must be targeted so that it helps those who need help and not those with the strongest political clout. While a tiny minority argue against any collective income re-distribution because they perceive taxation as theft most Australians accept a re-distribution which actually helps the poor. But they rebel at

confiscation of their earnings to help those able but unprepared to help themselves. Is that rebellion really against the spirit of Christianity? The effects of large-scale compulsory re-distribution on personal responsibility and charity can be quite perverse, creating a backlash on the part of taxpayers who

see their hard earned money sometimes being wasted and on other occasions removing any sense of self-responsibility on the part of recipients.

Any proper analysis of poverty and welfare issues in Australia therefore should, I believe, look at the success of wealth transfers in the past before recommending more of the same. Is it possible for example that the recent Government restrictions on youth unemployment benefits have contributed to the reduction of the youth unemployment rate?

Shouldn't we ask what is the moral basis of the removal of the distinction between the deserving and the undeserving poor in our public welfare systems?

I think it is clear that on a number of these issues we all have the same starting point. Poverty is unacceptable, involuntary unemployment an outrage, and exploitation objectionable.

It is difficult however to find the right, that is the effective, responses. Is it possible that often the superficially appealing options such as compulsory transfers from rich nations to poor nations, from rich individuals to poor individuals, can actually worsen the lot of everybody concerned and create antipathy rather

than a sense of responsibility and caring.

As one who has seen a free society, free in both an economic and a social sense, as the best option for mankind I ask for consideration of whether the moral choices are in fact those so often put forward by the Church. The profit-motive, or a desire to obtain an adequate or fair return for our own efforts, is a

fairly rational and natural element of the make-up of individuals. Capitalism does not hold the monopoly on greed. I would argue that a market capitalist economy recognises this motivation and uses it to the advantage of individuals and

societies as a whole. The motivation of individuals in socialist regimes is no different - they are concerned with improving their lot and seeking personal fulfilment - but the opportunities for improvement are not the same. For instance, advancement is obtained through Party activities and by obtaining the favour of those in power. I prefer a system where initiative and productive hard work are rewarded to one where favours are bestowed by the powerful.



As far as the comparative economic performances of each system are concerned, the results are there to see. Not only do individuals in socialist regimes have to put up with unacceptable limitations on their personal freedom including in many cases

freedom of worship, they also endure much lower material standards of living. Is this really the sort of social justice we want?

I acknowledge the goodwill of the Bishops in their current examination of these important matters. I hope their endeavours will produce useful guides for the whole community.

Personally I think a free economy based on private ownership coupled with strong personal responsibility is an extremely potent combination leading to the sort of society all of us want. My upbringing and personal experience suggest to me that

combination is totally compatible with Christian doctrine. Those graduates who think me wrong in that can rejoice that they have training I have not. I hope, however, that like the Bishops in 1988 you will encourage, foster and take part in a debate which will help to shape our temporal society.