‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018
II. Fundamental Considerations
7. Some basic considerations are evident to all who seek to understand the historical situation in which we are now living. It is beyond the scope of this document to discuss the legitimate disagreements among their diverse theories and schools of thought (apart from the desire to contribute towards dialogue among them). Furthermore this document acknowledges that there do not exist universally valid economic formulas for every moment. Nevertheless, this document intends to offer an interpretation of the situation in which we find ourselves.
8. Every human reality and activity is something positive, if it is lived within the horizon of an adequate ethics that respects human dignity and is directed to the common good. This is valid for all institutions, for it is within them that human social life is born, and thus it is also true for markets at every level, including financial markets.
It must be noted that the systems that give life to the markets—before deploying the anonymous dynamics made possible by ever more sophisticated technologies—are in fact founded on relationships that involve the freedom of individual human beings. It is evident therefore that the economy, like every other sphere of human action, “needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centred.” 
9. It is evident that without an appropriate vision of the human person, it is not possible to create an ethics, nor a practice, worthy of the dignity of the human person and the good that is truly common. In fact, however neutral and detached from every basic concept one may claim to be, every human action, even in the economic sphere, implies some conception of the human person and of the world, which reveals its value through both the effects and the developments it produces.
In this sense, our contemporary age has shown itself to have a limited vision of the human person, as the person is understood individualistically and predominantly as a consumer, whose profit consists above all in the optimization of his or her monetary income. The human person, however, actually possesses a uniquely relational nature and has a sense for the perennial search for gains and well-being that may be more comprehensive, and not reducible either to a logic of consumption or to the economic aspects of life.
The fundamentally relational nature of the human person is characterized essentially by a rationality that resists a reductionist view of one’s basic needs. In this regard, it is impossible to be silent in the face of today’s tendency to reify every exchange of “goods” as if it were no more than a mere exchange of “things.”
In reality, it is evident that in the transmission of goods among persons there is always something more than mere material goods at play, given the fact that the material goods are often vehicles of immaterial goods whose concrete presence or absence decisively determines the quality of these very economic relationships (for example, trust, equity, and cooperation). It is at this level that one can well understand that the logic of giving with nothing in return is not an alternative to, but rather is inseparable from and complementary to the exchange of equivalent goods.
10. It is easy to note the advantages of a vision of the human person understood as constitutively inserted in a network of relationships that are in themselves a positive resource. Every person is born within a familial environment, enjoying a set of pre-existing relationships without which life would be impossible. The human person develops through the stages of life thanks to pre-existing bonds that actualize one’s being in the world as freedom continuously shared. These are the original bonds that define the human person as a relational being who lives in what Christian Revelation calls “communion”.
This original nature of communion, while revealing in every human person a trace of the affinity with God who creates and calls one into a relationship with himself, is also that which naturally orients the person to the life of communion, the fundamental place for one’s fulfillment. One’s own recognition of this character, as an original and constitutive element of our human identity, allows us to look at others not primarily as potential competitors, but rather as possible allies, in the construction of the good that is authentic only if it is concerned about each and every person simultaneously.
Such relational anthropology helps the human person to recognize the validity of economic strategies that aim above all to promote the global quality of life that, before the indiscriminate expansion of profits, leads the way toward the integral well-being of the entire person and of every person. No profit is in fact legitimate when it falls short of the objective of the integral promotion of the human person, the universal destination of goods, and the preferential option for the poor. These are three principles that imply and necessarily point to one another, with a view to the construction of a world that is more equitable and united.
For this reason, progress within an economic system cannot measured only by quantitative and profit-driven standards, but also on the basis of the well-being that extends a good that is not simply material. Every economic system is legitimate if it thrives not merely through the quantitative development of exchange but rather by its capacity to promote the development of the entire person and of every person. Well-being and development both demand and support each other, calling for sustainable policies and perspectives far beyond the short term.
In this regard, it is particularly desirable that institutions such as universities and business schools both foresee and provide, as a fundamental and not merely supplementary element of their curricula of studies, a formational dimension that educates the students to understand economics and finance in the light of a vision of the totality of the human person and avoids a reductionism that sees only some dimensions of the person. An ethics is needed to design such formation. The social doctrine of the Church would be a considerable help in this connection.
11. Well-being must therefore be measured by criteria far more comprehensive than the Gross Domestic Product of a nation (GDP), and must take into account instead other standards, for example, safety and security, the growth of “human capital”, the quality of human relationships and of work. Profit should to be pursued but not “at any cost”, nor as a totalizing objective for economic action.
The presence of humanistic standards and cultural expressions that value generosity turn out to be both useful and emblematic here. Thus the discovery and implementation of the true and just as good in themselves, become the norms for evaluation. Profit and solidarity are no longer antagonists. In fact, where egoism and vested interests prevail, it is difficult for the human person to grasp the fruitful interchange between profit and gift, as sin tends to tarnish and rupture this relationship. In a fully human perspective, there is actualized an interchange between profit and solidarity that, thanks to the freedom of the human person, unleashes a great potential for the markets.
An enduring call to acknowledge the human quality of generosity comes from the rule formulated by Jesus in the Gospel, called the golden rule, which invites us to do to others what we would like them to do for us (cf. Mt 7, 12; Lk 6, 31).
12. Economic activity cannot be sustained in the long run where freedom of initiative cannot thrive. It is also obvious today that the freedom enjoyed by the economic stakeholders, if it is understood as absolute in itself, and removed from its intrinsic reference to the true and the good, creates centers of power that incline towards forms of oligarchy and in the end undermine the very efficiency of the economic system.
From this point of view, it is easy to see how, with the growing and all-pervasive control of powerful parties and vast economic-financial networks, those deputed to exercise political power are often disoriented and rendered powerless by supranational agents and by the volatility of the capital they manage. Those entrusted with political authority find it difficult to fulfil to their original vocation as servants of the common good, and are even transformed into ancillary instruments of interests extraneous to the good.
These factors make all the more imperative a renewed alliance between economic and political agents in order to promote everything that serves the complete development of every human person as well as the society at large and unites demands for solidarity with those of subsidiarity.
13. In principle, all the endowments and means that the markets employ in order to strengthen their distributive capacity are morally permissible, provided they do not turn against the dignity of the person and are not indifferent to the common good.
At the same time, it is clear that markets, as powerful propellers of the economy, are not capable of governing themselves. In fact, the markets know neither how to make the assumptions that allow their smooth running (social coexistence, honesty, trust, safety and security, laws, and so on) nor how to correct those effects and forces that are harmful to human society (inequality, asymmetries, environmental damage, social insecurity, and fraud).
14. Moreover, besides the fact that most of its operators are singularly animated by good and right intentions, it is impossible to ignore the fact that the financial industry, because of its pervasiveness and its inevitable capacity to condition and, in a certain sense, to dominate the real economy today, is a place where selfishness and the abuse of power have an enormous potential to harm the community.
For this reason, it must be noted that in the economic-financial world there are conditions in which some methods, though not directly unacceptable from an ethical point of view, still constitute instances of proximate immorality, that is, occasions that readily generate the kind of abuse and deception that can damage less advantaged counterparts. For instance, to commercialize certain financial instruments is in itself licit, but in a asymmetrical situation it would be possible to take advantage of a lack of knowledge or of the contractual weakness of either counterpart. In itself this amounts to a violation of due relational propriety, which is already a grave violation from an ethical point of view.
The complexity of numerous financial products currently renders such asymmetry an inherent element of the system itself and puts the buyers in a position inferior to those who commercialize these products—a situation that from several aspects leads to the surmounting of the traditional principle of caveat emptor. This principle, on the basis of which the responsibility to assess the quality of the good acquired should rest above all with the buyer, in fact presupposes a parity in the capacity to safeguard the proper interests of the contractors. This actually does not exist in many cases both from the evident hierarchical relationship that comes to be established in certain types of contracts (for example, between the lender and the borrower) as well as in the complex structuring of numerous financial instruments.
15. Money in itself is a good instrument, as are many other things at the disposal of the human person, and is a means to order one’s freedom and to expand one’s possibilities. Nevertheless, the means can easily turn against the person. Likewise, the financial dimension of the business world, focusing business on the access of money through the gateway of the world of stock exchange, is as such something positive. Such a phenomenon, however, today risks accentuating bad financial practices concentrated primarily on speculative transactions of virtual wealth, as well as negotiations of high frequency trading, where the parties accumulate for themselves an excessive quantity of capital and remove the capital from circulation within the real economy.
What was sadly predicted a century ago has now come true today. Capital annuity can trap and supplant the income from work, which is often confined to the margins of the principal interests of the economic system. Consequently, work itself, together with its dignity, is increasingly at risk of losing its value as a “good” for the human person and becoming merely a means of exchange within asymmetrical social relations.
Precisely in this inversion of the order between means and ends, where work as a good becomes an “instrument,” and money an “end”, the reckless and amoral “culture of waste” finds a fertile ground. It has marginalized great masses of the world’s population, deprived them of decent labor, and left them “without possibilities, without any means of escape”: “It is no longer simply the phenomenon of exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside, or those on the fringes or its disenfranchised, but rather they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.
16. In this regard, we cannot but think of the irreplaceable social function of credit whose performance looms large to qualified and reliable financial intermediaries. In this sphere, it is clear that applying excessively high interest rates, really beyond the range of the borrowers of funds, represents a transaction not only ethically illegitimate, but also harmful to the health of the economic system. As always, such practices, along with usurious activities, have been recognized by human conscience as iniquitous and by the economic system as contrary to its good functioning.
Here financial activity exhibits its primary vocation of service to the real economy: it is called to create value with morally licit means, and to favour a dispersion of capital for the purpose of producing a principled circulation of wealth. For instance, very positive in this regard, and to be encouraged, are arrangements of cooperative credit, microcredit, as well as the public credit, in the service of families, businesses, the local economies, as well as credit to assist developing countries.
Especially in this context—where the positive potential of money can be best actualized–is it clear that it is morally illegitimate to expose to an undue risk the credit deriving from civil society by deploying it predominantly for speculative purposes.
17. What is morally unacceptable is not simply to profit, but rather to avail oneself of an inequality for one’s own advantage, in order to create enormous profits that are damaging to others; or to exploit one’s dominant position in order to profit by unjustly disadvantaging others, or to make oneself rich through harming and disrupting the collective common good.
Such a practice is particularly deplorable from the moral point of view when the intention of profit by a few through the risk of speculation even in important funds of investment, provokes artificial reduction of the prices of public debt securities, without regard to the negative impact or to the worsening of the economic situation of entire nations. This practice endangers not only the public efforts for rebalancing, but also the very economic stability of millions of families, and at the same time compels government authorities to intervene with substantial amounts of public money, even to the extent of artificially interfering in the proper functioning of political systems.
The speculative intention, often in today’s economic-financial environment, risks supplanting all other principal intentions that ground human freedom. This factor is devouring the immense patrimony of values that renders our civil society a place of peaceful coexistence, encounter, solidarity, renewed reciprocity and of responsibility for the common good. In this context, words such as “efficiency”, “competition”, “leadership”, and “merit” tend to occupy the entire space of our civil culture and assume a meaning that ends up in impoverishing the quality of exchanges, reducing them to mere numerical coefficients.
What is demanded is an initiative, above all, for the renewal of humanity in order to reopen the horizons towards that abundance of values which alone permits the human person to discover himself or herself, and to construct a society that is a hospitable and inclusive dwelling place with room for the weakest, and where wealth is used for the benefit of all—places where it is beautiful for human beings to live and easy for them to have hope.