Pope Offers Guidelines

By Father John Flynn, L.C.

ROME, JUNE 25, 2007 (Zenit) - Confrontations over globalization no longer make headlines, but many concerns remain over the future of the world economy. In past months the question of growing economic inequality has come under increasing attention.

Globalization has delivered many benefits, argued a front-page article published May 24 by the Wall Street Journal. The article did concede, however: "As trade, foreign investment and technology have spread, the gap between economic haves and have-nots has frequently widened, not only in wealthy countries like the United States, but in poorer ones like Mexico, Argentina, India and China as well."

The experience of the last few years is showing that those with education and skills benefit from globalization. Others, without these advantages, are not so fortunate. While not forgetting the benefits of globalization for many millions of people, the Wall Street Journal also expressed concern that the growing inequalities could provoke a backlash that would damage trade and investment.

Earlier this year, U.S. Federal Reserve Chairman Ben Bernanke also warned of problems stemming from economic inequality. In a speech given Feb. 6 to the Greater Omaha Chamber of Commerce in Nebraska, Bernanke defended the idea that the free market does not guarantee an equality of economic outcomes, allowing as it does the possibility for unequal rewards due to differences in effort and skill.

Slipping down the ladder

"That said, we also believe that no one should be allowed to slip too far down the economic ladder, especially for reasons beyond his or her control," he added in the text posted on the Federal Reserve Board site.

Outlining evidence from a variety of sources, the Federal Reserve chairman pointed out that over the last few decades economic well-being in the United States has increased considerably. At the same time, he observed that "the degree of inequality in economic outcomes has increased as well."

Bernanke admitted the difficulty of resolving the question of how to maintain a balance between a market system that uses economic incentives and stimulates growth, and the need to protect individuals against adverse economic outcomes.

Proposing solutions to this problem involves value judgments beyond the realm of economic theory, Bernanke concluded. He did, however, suggest a range of possible measures, ranging from education and job training, to helping individuals and families bear the cost of economic change, as ways to affront the problem of inequality.

A similar position was expressed in an opinion article by Danny Leipziger and Michael Spence, published in the Financial Times on May 15. The authors, respectively a vice president at the World Bank and a 2001 Nobel laureate in economics, argued that in the globalization debate the most important issue is "who benefits and who loses."

"Globalization is a positive sum game in the aggregate but one that produces both winners and losers," they also observed.

Leipziger and Spence supported improvements in education to help workers affront the current situation. In addition, they called for better safety nets, more investment in infrastructure and assured access to services such as health care.

Dignity of the person

Amid the ongoing debate over issues of economics and ethics, Benedict XVI has addressed these issues on several occasions in recent months. On May 26 he spoke to a group of young people from Confindustria, the General Confederation of Italian Industry.

Every business, the Pope noted, should be considered first and foremost as a group of people, whose rights and dignity should be respected. Human life and its values, the Pontiff continued, should always be the guiding principle and end of the economy.

In this context, Benedict XVI acknowledged that for business, making a profit is a value that they can rightly put as an objective of their activity. At the same time the social teaching of the Church insists that businesses must also safeguard the dignity of the human person, and that even in moments of economic difficulties, business decisions must not be guided exclusively by considerations of profit.

The Pope also dealt briefly with the theme of globalization. This is a phenomenon, he commented, that gives hope of a wider participation in economic development and riches. It is a process not without its risks, however, leading in some cases to worsening economic inequality. Echoing the words of Pope John Paul II, Benedict XVI called for a globalization characterized by solidarity and without marginalization of people.

Other principles that need to guide the economy are justice and charity, Benedict XVI explained in a message, dated April 28, to the president of ...