The Pope as economist

I have long felt that the answer to achieving a humane and sustainable economy lay in neither extreme of a state-owned economy or a purely capitalist market economy, nor in a state plus capitalist economy, but rather in an economy that entertained both state and capitalist participation while emphasizing co-operative entrepreneurship. I am pleased to see that the Pope agrees.

In his recent encyclical letter "Caritas in Veritate," Pope Benedict XVI comments as follows in Chapter Three, Sections 38 and 39:

Today we can say that economic life must be understood as a multi-layered phenomenon: in every one of these layers, to varying degrees and in ways specifically suited to each, the aspect of fraternal reciprocity must be present. ... What is needed, therefore, is a market that permits the free operation, in conditions of equal opportunity, of enterprises in pursuit of different institutional ends. Alongside profit-oriented private enterprise and the various types of public enterprise, there must be room for commercial entities based on mutualist principles and pursuing social ends to take root and express themselves. It is from their reciprocal encounter in the marketplace that one may expect hybrid forms of commercial behaviour to emerge, and hence an attentiveness to ways of civilizing the economy. Charity in truth, in this case, requires that shape and structure be given to those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.

The exclusively binary model of market-plus-State is corrosive of society, while economic forms based on solidarity, which find their natural home in civil society without being restricted to it, build up society.

Amen to all that.

We have seen in very recent years the failure of both extremes, of a state-owned model -- Soviet-style Communism -- and of the unbridled capitalist market model of neo-liberalism. We have been reminded, in a particularly dramatic way, of the need for balance. What we need to see now is a greater emphasis on what the Pope refers to as "commercial entities based on mutualist principles and pursuing social ends," i.e. co-operatives. A globalization where "we must compete in the global marketplace" is replaced by "we must co-operate in the global society" is one I could believe in.