Summary: We must manifest our conversion by managing our financial systems so as to protect the most vulnerable and strive for the general good.
Monday of Second Week in Easter
April 12, 2010
The call to be born from above is a call to a repentance and revolution internal to the person. Once we accept the invitation to be one with the Father and the Son, the Holy Spirit begins to transform us. Maybe this church won’t experience an earthquake, but our souls, individually and collectively, should shake with joy and anticipation. This transformation must extend to our societies and economies, as well.
In his encyclical, the Pope turns to finance. He tells us, “through the renewed structures and operating methods that have to be designed after its misuse, which wreaked such havoc on the real economy — now needs to go back to being an instrument directed towards improved wealth creation and development. Insofar as they are instruments, the entire economy and finance, not just certain sectors, must be used in an ethical way so as to create suitable conditions for human development and for the development of peoples.” I was reading the other day about how Private Equity companies during the last decade found profitable public companies and bought them out. They would then make those companies borrow a huge amount of money, to be repaid from cash flow, and then pay the Private Equity firm a huge dividend, instead of using the loan to finance improvements in the company. In other words, they plundered both the banks and the companies, many of which had to go out of business. Seeing through this, the Pope adds: “the entire financial system has to be aimed at sustaining true development. Above all, the intention to do good must not be considered incompatible with the effective capacity to produce goods. Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers. Right intention, transparency, and the search for positive results are mutually compatible and must never be detached from one another. If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in a significant way by much of the experience of credit unions.”
The most vulnerable in society must be protected, even as history tells us they are the most exploited: “the
experience of micro-finance, which has its roots in the thinking and
activity of the civil humanists — I am thinking especially of the birth of
pawnbroking — should be strengthened and fine-tuned. This is all the more
necessary in these days when financial difficulties can become severe for
many of the more vulnerable sectors of the population, who should be
protected from the risk of usury and from despair. The weakest members of
society should be helped to defend themselves against usury, just as poor
peoples should be helped to derive real benefit from micro-credit, in
order to discourage the exploitation that is possible in these two areas.
Since rich countries are also experiencing new forms of poverty,
micro-finance can give practical assistance by launching new initiatives
and opening up new sectors for the benefit of the weaker elements in
society, even at a time of general economic downturn.”
You can see how revolutionary these ideas are, but how needed they are today. I am not surprised that secular society has ignored this encyclical, because it is a real call to repentance for the entire economic system. But if we ignore it, we do so at our peril.