Lutheran bishop Peter Rogness recently decried our national loss of awareness that government is self-government, and warned that political discourse “to rally people against their own government...is like an immune system run amuck that eats the very body in which it resides.” Yet since the electoral success of Ronald Reagan in 1980, more and more Republicans have run for office “against government.” This has been at the center of the political stalemate in Washington, and certainly creates resistance to the quite reasonable proposals of the Pontifical Council for Justice and Peace (“Note on Financial Reform,” October 26) for such things as stronger international oversight of financial markets and better funding for development through a very small tax on financial transactions, small enough not to alter investment decisions other than highly speculative arbitrage.
Yet separate from the many strengths of the Note (for example, its economic analysis is first-rate) and the many problems in the way it’s been received in this country, it must also be said that there remains a significant hole in official Catholic social teaching on the economy. In addition to appropriately encouraging virtuous action, the church’s teaching proposes systemic solutions to our problems without a systemic ethical analysis of the moral dynamics of daily economic life. That is, it intends to condemn some current financial practices and leave others with implicit support, without offering a way for Catholics to think about how to draw the line between them. To understand that, consider the character of the financial fraud that we now know was quite common prior to the crash of 2008.
In October, Citigroup paid a $285 million fine to the Securities and Exchange Commission for defrauding its own clients. Goldman Sachs earlier paid a $550 million penalty to the SEC for the same crime. The list of finance firms similarly caught defrauding their customers is a long one, including J.P. Morgan, Wachovia Capital, American Home Mortgage, Countrywide, Charles Schwab, Morgan Keegan, Evergreen, TD Ameritrade, Bank of America, and Brookstreet. In one way or another, these firms deliberately kept from clients their corporate assessment of the risk of the financial instruments they were peddling. So far, the SEC has charged thirty-nine corporate officers and forty-two firms, resulting in suspending or barring individuals from participation in the board of directors, the senior management, or in some cases any sort of employment in the securities industry, and nearly $2 billion in settlement penalties, which will go to the injured clients in partial repayment for their losses.
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There’s plenty here for us and the Wall Street occupiers to be angry about, but we might come to a better understanding of our moral situation by considering the character of the investments involved and how they grew out of helpful but complex financial instruments susceptible to unethical use.
Derivatives are financial instruments created for sale in order to hedge risk, something like insurance. And what’s insurance? You’ve probably taken out fire insurance on your house. With a monthly payment, you provide the security of knowing that should your house burn down, the insurance company will give you the money to rebuild. People in business often have good reason for a similar insurance policy. Consider an inventor who’s just come up with a great new idea in computer technology. He’s quite confident that his idea will work and is willing to borrow the $10 million necessary to get it started, but he has one big worry. If the computer industry tanks while he’s working on this, he’ll lose this investment. So he wants to take out an insurance policy to cover that possible calamity.
The inventor goes to a firm like American International Group (AIG) and works out a deal, typically called a credit default swap. Put simply, he agrees to pay the firm, say, $100,000 per year and in return the firm will pay him $10 million if the computer industry tanks. Of course, they need a clearer definition of what it means to “tank” and they might agree that the trigger for the payment will be the day that a highly respected computer firm—say, Intel—sees it stock price drop to 50 percent of what it is on the day the inventor signs the insurance contract. So in a sense, he is here betting against Intel, but in doing so he is “hedging” his own $10 million bet on his new invention.
One big difference between your fire insurance and the inventor’s credit default swap is that insurance regulation forbids me from also buying fire insurance on your home. The reason our government does this is what economists artfully call “moral hazard.” If I had fire insurance on your home, I might then be tempted to visit your home with a match and some gasoline while you were away on vacation. No such restrictions exist on credit default swaps. Anyone can take out this bet against Intel, or any other firm or business deal, in effect hoping that it will fail. (Of course, the inability of firms like AIG to pay off these insurance policies is what deepened the financial crisis, but that’s another story.)
Once hedge funds got used to making such bets against firms and business deals they projected to fail, some of them learned it would be helpful to watch the finance houses that were creating those instruments in order to learn about the riskiest deals even before they were sold. The finance firms creating these bundles of mortgages gained their usual percentage commission from the sale and garnered more business with the hedge funds by offering them advance notice. Court records now show that the hedge funds planning to bet against a package were at times even part of the discussion as to how to structure the package itself, to increase the likelihood of failure or sweeten the payoff should failure occur. This is the most serious of the SEC charges against the big finance firms: they deliberately kept their own clients in the dark about the risks those clients were about to take on.
To translate this into our fire-insurance example: not only were people taking out fire insurance on others’ homes, they were also working with the builder to design a home likely to catch fire due to bad wiring. The builder then sold the home without mentioning the fire hazard to the buyers. Of course, we have building codes to prevent such dangers, but there were no such rules for financial derivatives. The investment houses typically say that all their clients are big investors that bear the usual risks of market uncertainty. Gone completely is the trust that clients once presumed they would have in their investment broker.
Beyond the problem of fraud, the systemic threat caused by the very size of the finance industry calls for the kind of oversight recommended in the Vatican’s Note. The Financial Times estimated that, prior to the crisis, there were between $3 trillion and $5 trillion of loans in the world with hard assets behind them (assets like land, buildings, etc., that would be lost if the lender defaulted).* They estimated that the derivatives markets (where there’s nothing behind the instrument besides another firm’s pledge to pay as required) was more than ten times that large. Industry groups have since estimated that figure to be $75 trillion. (Recall the total GDP of the United States was about $14 trillion at the time; the world’s about $55 trillion.) The potential for instability was great and has not been much reduced since. Yet the finance industry continues to resist regulation.
When the pontifical council calls for stronger international oversight of the financial system, it speaks from common sense. Still, while the council can identify fraud as immoral, it hasn’t tried to say anything about where one should draw the line between immoral excess and moral profit-seeking in the finance industry. And it can’t. For it has no analysis of the moral exercise of self-interest in markets. Nor do the social encyclicals from Leo XIII’s Rerum novarum in 1891 to Benedict XVI’s Caritas in veritate in 2009.
The problem is clear: The founder of Christianity preached love of neighbor and told us that the greatest love was to lay down one’s life for another; self-interest wasn’t among the virtues Jesus encouraged. Thomas Aquinas was suspicious of the merchant, whose work so often led to greed (and of course he relied on both Aristotle and Jesus here).
But the moral defense of the market is based on the systemic effect of self-interest, which within the proper institutional and cultural conditions can conduce to the well-being of even the poor. This is the more adequate depiction of Adam Smith’s argument about markets, and a far cry from that preached by the pseudo-Smithians who assert that his “invisible hand” means that just about any form of self-interest in any situation will generate good for all.
A systemic moral defense of markets dates from Bernard Mandeville’s 1705 “Fable of the Bees” and has been proposed in more subtle and theologically more careful ways by neoconservative Catholics since Michael Novak’s 1982 The Spirit of Democratic Capitalism. But Novak does little better than the Vatican in providing an adequate moral account of the exercise of self-interest in markets; his argument is driven by a determination to endorse markets, cherry-picking the Catholic tradition for theological support.
Interestingly, the same problem that keeps the pontifical council from drawing a line at what we might call “the top end” of the market between moral and immoral financial transactions explains why Pope Benedict’s Caritas in veritate endorses “hybrid” firms (that give a sizeable portion of their profits to public purposes) and yet is eerily quiet about the 99.9 percent of firms that don’t. He, too, lacked the ethical resources to draw a line at “the bottom end” of the market between endorsable exercise of self-interest and the morally objectionable sort.
But let us not forget how difficult this line-drawing task is. Ask yourself where, on the spectrum from fire insurance for your home to derivatives designed to fail, you would draw the line of acceptable and unacceptable behavior. And before you answer too quickly, recall that, historically, fire insurance has its own dark side. It replaced local mutuality that led members of a community to pitch in and help rebuild a neighbor’s burned-out home. Fire insurance meant you didn’t have to depend on your neighbors, and was both a cause and an effect of the slow withering of neighborly cooperation (dare we say “love of neighbor”) that has characterized so much of U.S. history.
In 1902, economist Thorsten Veblen presciently warned that, even in his day, the production of goods and services was “carried on for the sake of business, and not conversely.... The pecuniary interests of the business men...may come to them from a given disturbance of the system, whether it makes for heightened facility or for widespread hardship.”
Today, the church has publicly responded to the problem of the dangerous power of finance, and has done a creditable job of policy analysis. Three centuries after Mandeville, it’s high time that the church develop an ethical analysis that will integrate proposals for systemic change for financial markets with an ethical analysis of daily economic life. Conservative Catholic columnist and commentator George Weigel is certainly wrong in calling the pontifical council’s note “rubbish, rubbish, rubbish”—and in his confidence that Pope Benedict disagrees with its contents—but the rift between left and right in Catholic social thought on the economy won’t be closed without Rome’s careful attention to the criteria for a moral assertion of self-interest.
* This sentence has been corrected. The original version erroneously reported that there were $30 to $50 trillion of loans backed by collateral.
Related: Justice & Economics, by the Editors
Via Finn's criticism of derivatives, one could logically argue that basketball pools should be highly regulated since the participants don't own Duke or Villanova, and don't have a real stake in the outcome.
Wiegel is correct, the Note is rubbish. Most of what the Vatican puts out for economic enlightment is written by people steeped in the tradition of 19th century anarcho-syndicalism.
While sympathetic to the project of regulating corporate and financial leviathans, I don't think Mr. Finn's polemical misrepresentation of Weigel's comments does any good for his credibility as a constructive and good-willed commentator. Weigel, in the piece linked to, did not by any means call the Note rubbish, only the runaway enthusiasms of commentators on it. Mr. Finn should look to the beam jutting visibly from his own eye before castigating the partisanship of his chosen enemies.
Mr. Finn (and the Pontifical Institute for Peace and Justice) raise important questions that must be addressed in this present crisis. We are seeing the destabilizing fruit of hedging one's bets through credit default swaps. The analogy of basketball pools mentioned by another comentator is an apt one. Though we don't admit it, the office sports pools are actually illegal in most states. The reason for this is the possibility that someone would seek to rig the outcome of the event for personal financial gain. The "Black Sox" scandal of 1919 is probably the most famous example, but given that members of the Pakistani cricket team were convicted in London last month for match rigging shows that the problem is far from extinct. Likewise, Adam Smith, the father of modern capitalism, recognized and decried the danger of the presence of market participants whose only aim was to enhance their own wealth without considering the protential consequences to others. Unfortunately the equity markets have recently all too often reflected this mindset. There are no easy answers to the question Mr. Finn poses, but its moral relevence is clear.
There seems to be two paths to determining if "self-interest" in economic affairs is moral. The first is purely economical: is the product or service offered by the person or group seeking to make a self-intrested profit economically worthwhile? The market will determine. On the other hand, is the product or service, no matter how desirable the market may find it, intrinsically immoral? For example, no matter how well the market receives prostitution, even if legal, no degree of self-interested success on the part of the provider, or providers, would make it moral. It seems the bishops should concentrate their investigation into the moral status of self-interest, if they so choose, in the latter. Of course, for markets to work and be moral, there is need for honesty and transparency.
Finn is right! ... and Plourde correctly supports him with in-point sports examples.
I haven't read the Weigel piece, but I must confess that I also found the Curia document somewhat 'light' conceptually and with a tendency to slay some pretty obvious paper tigers without getting down to the real battle which needs to be engages with the real tigers (some of which Finn correctly indentifies).
Shiffman and Walton are wrong, deeply wrong. Finn has put his finger on a sensitive and so far rather ignored lacuna - a well developed Christian ethic to 'socialize' the so-called "science" of much of today's economic group-think.
Thank You, Mr. Finn, for pointing out this lacuna.
Sheridan posits, "There seems to be two paths to determining if "self-interest" in economic affairs is moral. The first is purely economical: is the product or service offered by the person or group seeking to make a self-intrested profit economically worthwhile? The market will determine. On the other hand, is the product or service, no matter how desirable the market may find it, intrinsically immoral?"
The second standard is a red herring, having nothing to do with morality in economic affairs but with the material subject to the economic transaction. Finn's questions do not deal with such things.
To restate, given that the product or service is not intrinsically immoral and is economically worthwhile by market standards, what MORAL standards govern the production, marketing, sale, and warrantying of the product? At any point does the individual pursuit of self-interest do moral injury to other individuals or to society and become morally evil?
This is the question avoided by appeals to the market.
First, the generally positive view of capitalism works on an unchallenged assumption that increased economic efficiency is for the greater good.
Second, the defenders of capitalism do not differentiate between increased economic activity and improved quality of life. They assume that a growing economy is a social good without proof.
Finn's questions, from his text,
(1) What are the criteria for a moral assertion of self-interest?
(or, Where is the moral dividing line is between legitimately pursuing one's self-interests and harming the interests of the community?)
(2) Where one should draw the line between immoral excess and moral profit-seeking?
are ways of challenging these sorts of assumptions. They can be addressed in terms of society experiencing environmental and social costs for the sake of individual profit. They can be addressed in terms of what is just compensation compared to what the market will bear. They can be addressed in terms of what is a just price for necessities or in terms of a just wage, a living wage, a family wage.
These are complicated questions completely avoided if one assumes that economics are independent of morality, that economics are completely and positively described by the assumptions of capitalism.
The moral question relates to the just purposes of any economic activity. Capitalists and most other economists would claim that economic exchange is a natural institution.
Christianity holds, to the contrary, that humans exist to love God, to love each other as themselves. The moral question is whether everyone working in their own economic self-interest supports those objectives or whether self-interest needs to be moderated in some way, just as eating needs to be moderated to avoid gluttony.
Eating is good, and to a certain extent more eating is better. Excessive eating is gluttony. Where does eating become gluttony? When eating produces obesity. Can one eat too much without obesity? Yes, one who eats beyond sufficiency in the presence of starving others is one who has eaten too much even though it is circumstantial and not absolute.
The same questions apply to all permitted but not required things and activities.
In economics, a particular question is whether it is permitted to produce things for the sake of personal gain when food, clothing, shelter, education, medical care are not sufficiently provided for all our neighbors?
Finn's questions, from his text,
(1) What are the criteria for a moral assertion of self-interest?
(2) Where one should draw the line between immoral excess and moral profit-seeking?
ask how the individual makes a moral claim to generating and keeping as much income as possible.
I draw the line at ruthlessness. If one's decisions are conditioned by requiring the economic partner to be wary, caveat emptor, then one has abjured moral responsibility. This is true for all economic relations, with providers, customers, employees.
Caveat emptor, is good advice for buyers, but when employed as an expectation by sellers, it is an abdication of moral responsibility to provide a morally good product or service of full value to the buyer. If there is a disproprtion of economic power, then the person with the greater power is responsible to use that power most fairly, not most avantageously, not ruthlessly.
Charging what the market will bear is a reasonable way to value luxury goods, but not for necessities. If a day's wage is not a lot more than the cost of a day's meal, then either meals for a day are overpriced or the workers are underpaid . This is especially true if the cost of the meal is inflated by layers of profit to those already able to buy luxuries who are ruthless in taking only the highest possible price instead of a reasonable profit.
The reverse is also true. Profits for those able to buy luxuries are unjust if they come without paying a family wage to all who, directly or indirectly, work for them. There is also a moral disproportion when some employees are paid enough both to live in luxury and accrue capital without having invented anything or taken the personal risks of entrepeneurship.
These are standards for forming one's own conscience. The ruthless either do not have or do not apply their consciences to their moral deallings.
Then the problem becomes exactly what capitalists fear. If they are not allowed to behave ruthlessly, there must be regulation to insure fair dealings and fair distribution or redistribution of economic resources. That requires defining numbers well inside the moral limits in order to keep the ruthless within bounds, while those with consciences might find other moral means to the same ends with greater profit to themselves.
Defenders of capitalism, however, tend to reject all regulation in order to avoid extreme regulation. They tend to assert ownership by right of anything which comes into their possession by any means. This is ruthless, having no conscience or regrets, showing a total love of self with no care for neighbor.
It is not capitalism which is immoral, but capitalism depends on competition as if it were a virtue, even though competition is not praised in scripture. It is ruthlessness which is immoral and which competion encourages rather than controls. It is immoral to win at all costs or to profit at all costs.
Jesus teaches us to treat our neighbors as ourselves. Whenever economic activity puts one in the position of taking advantage of another, then one has violated this fundamental Christian teaching and is behaving immorally.
Tom restates Finn's questions.
In reply to Tom. Finn's two questions are interesting, but irrelevant regarding economic transactions in a free society. One can provide a worthwhile product or service, provided one has the resources to do so, to society purely for the benefit of society, with no monetary self-interest, other than to keep the "enterprise" afloat so that it may continue to provide to society. Many non-profit organizations do so, including religious. In most economic activity the providing of a good or service to society deemed by society as worthwhile acquiring/"purchasing" such (commonly known as the "market" for such product or service) entails a monetary self-interest on the part of the providers. If there is honesty and transparency in these transcations, does it matter for the well-being of society how great a self-interest may be involved on the part of the providers? That would be a very difficult stance to make. The implication of the questions and Tom's stance is that their should be a lid on self-interest in such transactions, that is, a limit to profits. Why? If the product or service is good for society and it is openly and honestly delivered (provided the product or service is moral in itself), why should there be a moral lid on the profit? What effect those profits ("riches") have on the moral life of those profiting, including how they use those riches, is a moral problem, for the individuals. If it is deemed that the accumulation of riches in too few hands is a problem for society (which I think it is), then society can take action by taxing in some way those riches to make them less of a problem.
Sheridan seems to compartmentalize life. Economics is put into a category separate from morality. For the Christian, this is not possible. Not only can everything in life be viewed in terms of good and evil, everything must be compared to what Jesus taught about love of God and neighbor.
Sheridan view of economics as independent of any judgment except its own rules reminds me of two football analogies. One is the claim that if one does not cheat occasionally then one is not trying hard enough. This is a remarkable outlook which puts winning over both the rules of the game and personal moral principles. It is ruthless, conscienceless. Winning, the equivalent of economic profits, is put beyond honor and the rules of the game. This is an end justifying the means argument. No moral judgment of how one plays/deals is considered so long as one achieves victory/profit. Morality is put into a closed compartment for the sake of winning.
Even more relevant is comparison to the coach, ahead by 42 points at the half, who continues to play the first team and run up the score until the end of the game. The reason most fans find such behavior disgusting, even though entirely within the rules of the game, is that it shows a complete lack of moral regard for the opponent.
I am one of the fans of capitalism compared to other economic systems, but I am booing the ruthless running up the score by executives, merely employees and not inventors or entrepreneurs, who have managed to change their relative compensation from 40 times that of their line workers in the 1950s [the most prosperous decade of American economic growth] to 400 times in the 2010s. We should all be booing this running up the score. The CEOs have taken care of their self-interests, but they have betrayed their duty to maximize the profits of the stockholders and they have reduced the buying power of their employees, which harms the overall economy.
Sheridan continues to avoid answering the basic questions, which amount to, "When is enough, enough?" or, to use his own terms, "When does the general interest of society outweigh the self-interest of the individual?"
Sheridan also avoids dealing with his own assumptions, such as whether "the product or service is good for society". The ability to convince someone else to pay for something does not make that thing itself good for society, and certainly does not justify whatever damage its production may have caused the environment or the workers who produced it. Yet, by the standards of self-interest in making a profit, the product is economically justified. One has run up the score for one's own benefit while harming everyone else. Such deals even harm the immediate customer who may have participated in a financially transparent deal but not been informed or taken any notice of the harm caused to all, including themselves.
Economic self-interest has led to built-in obsolescence which insures future sales and larger land fills. The general interest of society should outweigh self-interest. Economic self-interest has led to the production of shoddy or dangerous products. Economic self-interest has led to all sorts of financial schemes which have later been outlawed as harmful to society. These are examples of immoral excesses of self-interest.
Even Sheridan inserts one economic moral criterion, "If the product or service is good for society". Beyond this oft-violated standard, Sheridan needs to deal with other forms of ruthless behavior.
The ability to compartmentalize is one of the most wide-spread moral failures in America. "Don't take it personally, it's just politics/business/winning the game," expresses the removal of the moral element from decision making. The personal injury is ignored in light of other objectives, making those objectives more important than living a moral life.
Jesus did not teach us to love our neighbors except when in politics, business, or sports. Jesus taught us to love our neighbors as ourselves, which means that our self-interest has to be moderated by our interest in our neighbors. The reminder that the poor are always with us includes the meaning that our poor neighbors need always to be considered in our economic decision making. There is a moral limit to economic self-interest, and that limit requires asking when acquiring a sufficiency and a reserve has become the acquisition of excess, asking when self-interest has degenerated into exploiting others.
We have evolved from defining the vice of usury from taking any interest to the taking of excess interest. Similarly, the taking of profit becomes immoral when the profit is excessive.
There is no moral right to unlimited acquisition and ownership. One's right to property is moderated by one's membership in the society in which the property is acquired. It is not right for the Sheriff of Nottingham to take from the poor when the rich can afford, however reluctantly, to pay the king's ransom. Who is the more moral person, the technical outlaw who robs from the rich to help the poor or the rich who legally take from the poor in order to avoid spending their own money?
What is the moral basis for claiming that there should be no limit on profits? What is the moral basis for claiming that one has an unlimited right to one's money, regardless of the needs of society, of one's neighbors? These supposed rights are not base on morality but on placing one's own mere desires above the needs of others.
Sheridan want's to avoid entirely Finn's questions,
(1) What are the criteria for a moral assertion of self-interest?
(2) Where one should draw the line between immoral excess and moral profit-seeking?
by denying that there are any moral criteria in economics and claiming that there is no such thing as immoral excess in profit-seeking. This is entirely contrary to Christian thinking which holds that every human action involves a moral choice, that we are always responsible to God and our neighbors.
I contend that there are criteria which are clear if one has taken care to form a moral conscience.
One's conscience should contend any claim that others' should look out for themselves, because Jesus told us to love our neighbors as ourselves. One's conscience should object to ruthless behavior in self or others. One's conscience should object when one rationalizes that playing within the rules of the game, the economy, the law means that one need not consider the moral consequences, the possibility that others are harmed, directly or indirectly. One should have a tender conscience, not a hard shell. If one has a tender conscience, there is no need to draw hard lines in advance. When considered as personal moral questions, there is nothing threatening to others.
The problem is how does a church speak fairly for both the conscientious and the conscience-less? What criteria does a church teach for those who do not alredy have good moral sensitivity?
What Finn presents as questions of conscience become problems when applied to the public sphere instead of addressed to individuals. How does society decide where to draw such lines without harming reasonable self-interest and moral profit seeking? I suspect that it is this question which actually concerns Sheridan, who may correct me if I am wrong.
Defining the difference between reasonable and excess wealth is both a moral and a political problem. The moral answer is necessarily subjective, which leaves few criteria for a political answer.
The secondary moral question is to ask what is the responsibility of individuals in a society where a few have possibly excess wealth, most have sufficient income for current needs but nothing to spare, many do not have enough for food, clothing, shelter, education, or regular medical care, and some are impoverished by accidents, natural disasters, illnesses, or loss of a wage earner? In a geographically large and highly mobile nation of urban anonymity, how do we take care of these people?
Complicating the problem is that people worry about what they have, what makes them financially a little more comfortable or secure, even if not immediately necessary. They fear that this will be taken away arbitrarily rather than justly. Addressing both this fear and the needs of the least among us has been avoided by most politicians. The "right" encourages the fear, while the left looks only at the needs. If we answer Finn's question, we are on the path to dealing with both the fear and the needs because we will be defining the limits which concern the fearful while not denying the needs.
First, I’d like to thank Daniel Finn for his insightful and provocative article. In addition to spurring my own reflections on the morality of economic transactions, it prompted me to read the whole Note from the Pontifical Institute for Peace and Justice, rather than just excerpts, and to read George Weigel’s piece on the reaction to the Note in Catholic circles. The dialog with “Tom” has been helpful to me in clarifying my ideas as well. So, thank you, Tom, also.
I do not believe that economic transactions are outside of the moral realm. Here the basic principle and command, “Do unto others as you would have them do unto you,” applies, as it does in all human endeavors. This is true “enlightened self-interest,” as the command comes from the highest authority.
Is there more guidance needed from the Church, as Finn suggests, as to what is moral self-interest in economic transactions, other than the “Do unto others” command? I have been arguing the negative. I’ve been arguing that provided there is honesty and transparency in an economic transaction, and that the product or service involved is not immoral in itself, the Market, that is the choice of individuals, will decide, at least, the usefulness, or benefit, of that transaction. I stand by this argument, whether the transaction is between individuals, corporations, or nations.
I will now try to address other objections Tom has raised to this approach.
I too am concerned about CEO’s making 400 times the average wage in their corporations on average versus 40 times some years ago. My concern is less about the CEO’s earnings, than it is about the employee’s. What is holding down those wages? And what can be done about it? If we simply limit the amount that a CEO can earn, will that necessarily help the average worker? Of course not.
One answer is better education and training for all workers. I do not know Tom’s position on education reform, so forgive me if this does not apply; but, people who argue for limiting the wages of CEO’s are often the same people who argue against educational reforms, such as charter schools, vouchers, financial aid for teaching non-religious subjects in religious schools, etc., all of which would increase the educational level of the average worker, and his or her earnings power.
I see Tom’s other objections to the “free market” approach more as observations of the dangers, most of which I agree with. I am not in favor of a totally unregulated, free market, capitalist economic system. There is need for reasonable regulation. Markets cannot be free if consumers are ignorant; so there is need for a better educated consumer. (How about, at least in this country, the Bishop’s insisting on a good economic education for every graduate of a Catholic school, beginning in the earliest grades?) Monopolies must be combatted, including monopolies of capital in too few hands. (I don’t see limits on salaries or profits as effective ways to do this. They would actually be detrimental. However, I am in favor of reasonable wealth taxes, to avoid the danger of plutocracy.)
As for the environment: yes, it must be protected. The Church has weighed in on this issue and should continue to do so.
As Tom has stated, repeatedly, Finn’s two questions he seems to be asking the Church to address are:
I believe the Church has addressed the first in all its teachings, and am not certain, at least as the question is phrased here, what more the Church can do.
The second question at least approaches specificity, which might be addressed. But it is a bit of a “loaded question,” making the assumption that there is a level of profit that is immoral in itself. If the question were phrased, “what actions are moral and what immoral in the pursuit of profits?” that seems to be a reasonable for the Church to address. Although, I assert, that in its teachings, the Church has already done so.
However, if most Catholics believe there is need for more specificity in answering (the rephrased question, that is, above), the Church might be able to provide useful guidance.