U.S. Catholic CEO responds to Benedict’s economic encyclical
Pope Benedict’s encyclical “Charity in Truth” proposed a sweeping reform of the world economic system from one based on the profit motive to one based on solidarity and concern for the common good. Like other such documents in the Roman Catholic Church’s social teaching tradition, the encyclical delivers a strong critique of unbridled capitalism. This can be uncomfortable for Catholics who champion free enterprise and some conservative Catholic writers reacted quickly and critically. One of them, George Weigel, wrote the encyclical “resembles a duck-billed platypus.”
(Image: Charity in Truth/Ignatius Press)
We wanted to hear the views of a Catholic executive, one who’s involved in business rather than reacting from the sidelines. So I called Frank Keating, president and chief executive officer of the American Council of Life Insurers (ACLI). The former Republican governor of Oklahoma (1995-2003) is a former chairman of the National Catholic Review Board, which he said “sought to identify and correct the horror of sexual abuse on the part of the clergy.” He is a Knight of Malta and a Knight of the Holy Sepulchre.
DB: What’s your overall reaction to the encyclical?
FK:“I haven’t read the 30,000 words but I think what the pope is proposing is not inconsistent with other papal messages. The common denominator to all of them is the worth of the individual, the dignity of every human person. So Benedict XVI focuses on the right to life, he speaks against euthanasia, he speaks against the evil of abortion, he speaks against cloning. But at the same time he talks about duties and responsibilities to the vulnerable because the vulnerable are dignified human beings as well as those who are rich and powerful.
(Photo: Frank Keating, 11 Feb 2002/Adrees Latif)
“So to exploit someone in a capitalist society is, according to Benedict, inapropriate and contrary to Catholic moral teaching. But for me as a free market capitalist, I see in this statement also the right for me to determine my destiny. In other words, if I wish to work for the state I should be able to do so. If I wish to found a small business, I should be able to do so. A dignified, independent mortal soul, a caring individual should be able to determine their own destiny.
“There is a little bit for the left, support for unions, support for protection of the globe against waste, but there is also something I think for the free market advocates in the Church, because if you are an independent creature with a unique personality based upon, obviously, the immortality of your soul, you should be able to work or not work as your decision. I think there is a little bit for everyone.”
DB: What do you think about Benedict’s call for a “world political authority” to manage the global economy?
FK: “I think it is impractical to suggest that sovereign nations will surrender on the one hand a free market economy or on the other hand a socialist economy or completely managed or disintigrating economy as you would have for example in a place like Zimbabwe, or places like that which are utterly dysfunctional. I don’t think he would suggest that those economies that work surrender what works to those that don’t work and be managed by some supernational group that would impoverish everybody. I think what he’s talking about.
“As a result of the impoverishment of reckless lending, the impoverishment of a number of individuals throughout the globe, you are going to have far more coordination, and that is good. There is a difference between coordination and mandate. Look at Solvency II or (the Bank for International Settlements in) Basel. All that stuff, coordinating banks, coordinating insurance companies and the practices, lending standards and the like. I think you’ll see more coordination and, to the extent that that can be done, it will be healthy for everyone. A reckless loan in the United States can and did impoverish people in Latvia. So obviously coordination is important as long as it is not mandated.
(Photo: Bank for International Settlements, 8 July 1997/stringer)
“I see ‘world political authority’ … (and) ‘manage the global economy’ (in the Reuters report). If it said to coordinate decision making in the global economy, I think there would be less concern. But again it was probably written in Latin.
“Here’s a quote: ‘The conviction that the economy must be autonomous, that it must be shielded from ‘influences’ of a moral character, has led man to abuse the economic process in a thoroughly destructive way.” Well, some men certainly have done that. I don’t think there is any question about that. I think his comments are not inappropriate.
“I think this is also for any of us, whether we are Catholics or not, to have the pope say ‘Once profit becomes the exclusive goal, if it is produced by improper means and without the risks destroying wealth and creating poverty.’ Well, I don’t disagree with that. I think to raise this crisis to an international debate and emphasise the moral issues involved, and the ethical issues involved, is totally appropriate.”
DB: Will this encyclical change the way you run the ACLI?
FK: “Our products are protection products against calamity. Whether your house burns down and you have inadequate resources to rebuild it, property/casualty insurance saves you. Or your business partner dies or your spouse dies, life insurance provides the money to get back on your feet. I would argue there is a moral purpose there in pooling risk to help other people.
“But in the pope’s case, to talk about moral responsibility, duties to others, I think Bernard Madoff is the poster boy for that. Because here is a man, as you know, who betrayed and destroyed his own faith community, those within his own faith community. So I think for men and women in business and finance and government for that matter, I think the Pope’s message is one to listen to and to listen to carefully.”