“The fragility of the present economic system”

Here are excerpts from the address Benedict XVI gave today to participants in the 16th plenary session of the Pontifical Academy of Social Sciences, on April 30, 2010:

The worldwide financial breakdown has, as we know, demonstrated the fragility of the present economic system and the institutions linked to it. It has also shown the error of the assumption that the market is capable of regulating itself, apart from public intervention and the support of internalized moral standards. This assumption is based on an impoverished notion of economic life as a sort of self-calibrating mechanism driven by self-interest and profit-seeking. As such, it overlooks the essentially ethical nature of economics as an activity of and for human beings. Rather than a spiral of production and consumption in view of narrowly-defined human needs, economic life should properly be seen as an exercise of human responsibility, intrinsically oriented towards the promotion of the dignity of the person, the pursuit of the common good and the integral development – political, cultural and spiritual – of individuals, families and societies.

In my Encyclical Caritas in Veritate, I observed that “the current crisis obliges us to re-plan our journey, to set ourselves new rules and to discover new forms of commitment” (No. 21). Re-planning the journey, of course, also means looking to comprehensive and objective standards against which to judge the structures, institutions and concrete decisions which guide and direct economic life. The Church, based on her faith in God the Creator, affirms the existence of a universal natural law which is the ultimate source of these criteria (cf. ibid., 59). Yet she is likewise convinced that the principles of this ethical order, inscribed in creation itself, are accessible to human reason and, as such, must be adopted as the basis for practical choices. As part of the great heritage of human wisdom, the natural moral law, which the Church has appropriated, purified and developed in the light of Christian revelation, serves as a beacon guiding the efforts of individuals and communities to pursue good and to avoid evil, while directing their commitment to building an authentically just and humane society.

Among the indispensable principles shaping such an integral ethical approach to economic life must be the promotion of the common good, grounded in respect for the dignity of the human person and acknowledged as the primary goal of production and trade systems, political institutions and social welfare. In our day, concern for the common good has taken on a more markedly global dimension. It has also become increasingly evident that the common good embraces responsibility towards future generations; intergenerational solidarity must henceforth be recognized as a basic ethical criterion for judging any social system.

Benedict XVI