CONTROVERSIES: 3. Homo Economicus

What is all this about "gratuitousness" in the market? The Pope's Caritas in Veritate has planted several little bombs under conventional economic thinking. One of the most important is an attack on homo economicus. In section 34 the Pope writes that “Gratuitousness is present in our lives in many different forms, which often go unrecognized because of a purely consumerist and utilitarian view of life. The human being is made for gift, which expresses and makes present his transcendent dimension.” Thus “economic, social and political development, if it is to be authentically human, needs to make room for the principle of gratuitousness as an expression of fraternity.” Over and over again the Pope insists that “in commercial relationships the principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within normal economic activity” (36). This is why he calls for new types of economic entity and wealth-creation that do not seek profit as an end in itself (38).

The idea that we are made for self-gift is more familiar to Catholics in the context of papal teaching about marriage and the family. Its most famous reference point is in the documents of the Second Vatican Council, especially section 24 of Gaudium et Spes, which states that man “cannot fully find himself except through a sincere gift of himself”. This was unfolded by John Paul II into a theology of the body. Pope Benedict applies it to economics, rejecting the idea of “economic man” – the individual acting always in his own interest, a model favoured in business schools the world over – in favour of homo socialis, whose “self-interest” is actually the interest of others and of the group. We are made in such a way (he argues) that our true self-interest is served by giving of ourselves to others. He deepens this point by a “metaphysical interpretation of the ‘humanum’ in which relationality is an essential element” (55) in chapter 5.

This changes everything – but we may not immediately see how. One place to look for clarification is a brilliant 2003 essay by Dr Adrian Walker (an editor of Communio and translator of the Pope's book Jesus of Nazareth) called “The Poverty of Liberal Economics”, now published online for the first time on the Second Spring site. It can be found in Doug Bandow and David L. Schindler (eds), Wealth, Poverty and Human Destiny, which brought together writers from different points of view to discuss the triumph of capitalism. Walker argues precisely for the point made by the Pope – that the market is not morally neutral, and that (in his words) “the best, most central paradigm for understanding free economic exchange is not contract among self-interested strangers, but gift-giving among neighbours” (p. 23). In fact, only a “communion of giving and receiving… can unlock for the individual the wealth of his being as a person” (p. 33). By contrast, the market of pure exchange, far from generating genuine wealth, engenders the “ontological poverty” expressed in boredom, stress, alienation, misery.

Walker also shows how liberal economics is based on an inadequate sense of economic freedom, profit, justice and value. Liberal economics guarantees neither real freedom nor real prosperity. He calls for us to address the “necessary task of developing an economics of gift” (p. 42), to reconsider the well-being of local economies, and to decentralize economic power according to the principle of subsidiarity. Like Pope Benedict, he offers a humanistic critique of technical “efficiency”, and claims that “conventional economics, deeply shaped by the liberal tradition, gets economics itself wrong by separating it from theological considerations” (p. 46). For the “neutral” economy that takes no stand with regard to God or the nature of man is a pure illusion.

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For further study: Lewis Hyde, The Gift: How the Creative Spirit Transforms the World (Random House, 1979); Kenneth L. Schmitz, The Gift: Creation (Marquette University press, 1982), and The Recovery of Wonder: The New Freedom and the Asceticism of Power (McGill-Queen's University Press, 2005); and especially Joseph Ratzinger, Chapter 5, Introduction to Christianity (Ignatius Press, 2004), where he talks about Trinity, person, and relation. See also my article "The Theology of Gift".

More notes on controversies sparked by the encyclical to follow. For an overview of the document itself see below.