CHAPTER TWO
HUMAN DEVELOPMENT IN OUR TIME

21. Paul VI had an articulated vision of development. He understood the term to indicate the goal of rescuing peoples, first and foremost, from hunger, deprivation, endemic diseases and illiteracy. From the economic point of view, this meant their active participation, on equal terms, in the international economic process; from the social point of view, it meant their evolution into educated societies marked by solidarity; from the political point of view, it meant the consolidation of democratic regimes capable of ensuring freedom and peace. After so many years, as we observe with concern the developments and perspectives of the succession of crises that afflict the world today, we ask to what extent Paul VI's expectations have been fulfilled by the model of development adopted in recent decades. We recognize, therefore, that the Church had good reason to be concerned about the capacity of a purely technological society to set realistic goals and to make good use of the instruments at its disposal. Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it. Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty. The economic development that Paul VI hoped to see was meant to produce real growth, of benefit to everyone and genuinely sustainable. It is true that growth has taken place, and it continues to be a positive factor that has lifted billions of people out of misery — recently it has given many countries the possibility of becoming effective players in international politics. Yet it must be acknowledged that this same economic growth has been and continues to be weighed down by malfunctions and dramatic problems, highlighted even further by the current crisis. This presents us with choices that cannot be postponed concerning nothing less than the destiny of man, who, moreover, cannot prescind from his nature. The technical forces in play, the global interrelations, the damaging effects on the real economy of badly managed and largely speculative financial dealing, large-scale migration of peoples, often provoked by some particular circumstance and then given insufficient attention, the unregulated exploitation of the earth's resources: all this leads us today to reflect on the measures that would be necessary to provide a solution to problems that are not only new in comparison to those addressed by Pope Paul VI, but also, and above all, of decisive impact upon the present and future good of humanity. The different aspects of the crisis, its solutions, and any new development that the future may bring, are increasingly interconnected, they imply one another, they require new efforts of holistic understanding and a new humanistic synthesis. The complexity and gravity of the present economic situation rightly cause us concern, but we must adopt a realistic attitude as we take up with confidence and hope the new responsibilities to which we are called by the prospect of a world in need of profound cultural renewal, a world that needs to rediscover fundamental values on which to build a better future. The current crisis obliges us to re-plan our journey, to set ourselves new rules and to discover new forms of commitment, to build on positive experiences and to reject negative ones. The crisis thus becomes an opportunity for discernment, in which to shape a new vision for the future. In this spirit, with confidence rather than resignation, it is appropriate to address the difficulties of the present time.

22. Today the picture of development has many overlapping layers. The actors and the causes in both underdevelopment and development are manifold, the faults and the merits are differentiated. This fact should prompt us to liberate ourselves from ideologies, which often oversimplify reality in artificial ways, and it should lead us to examine objectively the full human dimension of the problems. As John Paul II has already observed, the demarcation line between rich and poor countries is no longer as clear as it was at the time of Populorum Progressio[55] . The world's wealth is growing in absolute terms, but inequalities are on the increase. In rich countries, new sectors of society are succumbing to poverty and new forms of poverty are emerging. In poorer areas some groups enjoy a sort of “superdevelopment” of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation. “The scandal of glaring inequalities”[56] continues. Corruption and illegality are unfortunately evident in the conduct of the economic and political class in rich countries, both old and new, as well as in poor ones. Among those who sometimes fail to respect the human rights of workers are large multinational companies as well as local producers. International aid has often been diverted from its proper ends, through irresponsible actions both within the chain of donors and within that of the beneficiaries. Similarly, in the context of immaterial or cultural causes of development and underdevelopment, we find these same patterns of responsibility reproduced. On the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property, especially in the field of health care. At the same time, in some poor countries, cultural models and social norms of behaviour persist which hinder the process of development.

23. Many areas of the globe today have evolved considerably, albeit in problematical and disparate ways, thereby taking their place among the great powers destined to play important roles in the future. Yet it should be stressed that progress of a merely economic and technological kind is insufficient. Development needs above all to be true and integral. The mere fact of emerging from economic backwardness, though positive in itself, does not resolve the complex issues of human advancement, neither for the countries that are spearheading such progress, nor for those that are already economically developed, nor even for those that are still poor, which can suffer not just through old forms of exploitation, but also from the negative consequences of a growth that is marked by irregularities and imbalances.

After the collapse of the economic and political systems of the Communist countries of Eastern Europe and the end of the so-called opposing blocs, a complete re-examination of development was needed. Pope John Paul II called for it, when in 1987 he pointed to the existence of these blocs as one of the principal causes of underdevelopment[57] , inasmuch as politics withdrew resources from the economy and from the culture, and ideology inhibited freedom. Moreover, in 1991, after the events of 1989, he asked that, in view of the ending of the blocs, there should be a comprehensive new plan for development, not only in those countries, but also in the West and in those parts of the world that were in the process of evolving[58] . This has been achieved only in part, and it is still a real duty that needs to be discharged, perhaps by means of the choices that are necessary to overcome current economic problems.

24. The world that Paul VI had before him — even though society had already evolved to such an extent that he could speak of social issues in global terms — was still far less integrated than today's world. Economic activity and the political process were both largely conducted within the same geographical area, and could therefore feed off one another. Production took place predominantly within national boundaries, and financial investments had somewhat limited circulation outside the country, so that the politics of many States could still determine the priorities of the economy and to some degree govern its performance using the instruments at their disposal. HencePopulorum Progressio assigned a central, albeit not exclusive, role to “public authorities”[59] .

In our own day, the State finds itself having to address the limitations to its sovereignty imposed by the new context of international trade and finance, which is characterized by increasing mobility both of financial capital and means of production, material and immaterial. This new context has altered the political power of States.

Today, as we take to heart the lessons of the current economic crisis, which sees the State's public authorities directly involved in correcting errors and malfunctions, it seems more realistic to re-evaluate their role and their powers, which need to be prudently reviewed and remodelled so as to enable them, perhaps through new forms of engagement, to address the challenges of today's world. Once the role of public authorities has been more clearly defined, one could foresee an increase in the new forms of political participation, nationally and internationally, that have come about through the activity of organizations operating in civil society; in this way it is to be hoped that the citizens' interest and participation in the res publica will become more deeply rooted.

25. From the social point of view, systems of protection and welfare, already present in many countries in Paul VI's day, are finding it hard and could find it even harder in the future to pursue their goals of true social justice in today's profoundly changed environment. The global market has stimulated first and foremost, on the part of rich countries, a search for areas in which to outsource production at low cost with a view to reducing the prices of many goods, increasing purchasing power and thus accelerating the rate of development in terms of greater availability of consumer goods for the domestic market. Consequently, the market has prompted new forms of competition between States as they seek to attract foreign businesses to set up production centres, by means of a variety of instruments, including favourable fiscal regimes and deregulation of the labour market. These processes have led to a downsizing of social security systems as the price to be paid for seeking greater competitive advantage in the global market, with consequent grave danger for the rights of workers, for fundamental human rights and for the solidarity associated with the traditional forms of the social State. Systems of social security can lose the capacity to carry out their task, both in emerging countries and in those that were among the earliest to develop, as well as in poor countries. Here budgetary policies, with cuts in social spending often made under pressure from international financial institutions, can leave citizens powerless in the face of old and new risks; such powerlessness is increased by the lack of effective protection on the part of workers' associations. Through the combination of social and economic change, trade union organizations experience greater difficulty in carrying out their task of representing the interests of workers, partly because Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labour unions. Hence traditional networks of solidarity have more and more obstacles to overcome. The repeated calls issued within the Church's social doctrine, beginning withRerum Novarum[60] , for the promotion of workers' associations that can defend their rights must therefore be honoured today even more than in the past, as a prompt and far-sighted response to the urgent need for new forms of cooperation at the international level, as well as the local level.

The mobility of labour, associated with a climate of deregulation, is an important phenomenon with certain positive aspects, because it can stimulate wealth production and cultural exchange. Nevertheless, uncertainty over working conditions caused by mobility and deregulation, when it becomes endemic, tends to create new forms of psychological instability, giving rise to difficulty in forging coherent life-plans, including that of marriage. This leads to situations of human decline, to say nothing of the waste of social resources. In comparison with the casualties of industrial society in the past, unemployment today provokes new forms of economic marginalization, and the current crisis can only make this situation worse. Being out of work or dependent on public or private assistance for a prolonged period undermines the freedom and creativity of the person and his family and social relationships, causing great psychological and spiritual suffering. I would like to remind everyone, especially governments engaged in boosting the world's economic and social assets, that the primary capital to be safeguarded and valued is man, the human person in his or her integrity: “Man is the source, the focus and the aim of all economic and social life”[61] .

26. On the cultural plane, compared with Paul VI's day, the difference is even more marked. At that time cultures were relatively well defined and had greater opportunity to defend themselves against attempts to merge them into one. Today the possibilities of interaction between cultures have increased significantly, giving rise to new openings for intercultural dialogue: a dialogue that, if it is to be effective, has to set out from a deep-seated knowledge of the specific identity of the various dialogue partners. Let it not be forgotten that the increased commercialization of cultural exchange today leads to a twofold danger. First, one may observe a cultural eclecticism that is often assumed uncritically: cultures are simply placed alongside one another and viewed as substantially equivalent and interchangeable. This easily yields to a relativism that does not serve true intercultural dialogue; on the social plane, cultural relativism has the effect that cultural groups coexist side by side, but remain separate, with no authentic dialogue and therefore with no true integration. Secondly, the opposite danger exists, that of cultural levelling and indiscriminate acceptance of types of conduct and life-styles. In this way one loses sight of the profound significance of the culture of different nations, of the traditions of the various peoples, by which the individual defines himself in relation to life's fundamental questions[62] . What eclecticism and cultural levelling have in common is the separation of culture from human nature. Thus, cultures can no longer define themselves within a nature that transcends them[63] , and man ends up being reduced to a mere cultural statistic. When this happens, humanity runs new risks of enslavement and manipulation.

27. Life in many poor countries is still extremely insecure as a consequence of food shortages, and the situation could become worse: hunger still reaps enormous numbers of victims among those who, like Lazarus, are not permitted to take their place at the rich man's table, contrary to the hopes expressed by Paul VI[64] . Feed the hungry (cf. Mt 25: 35, 37, 42) is an ethical imperative for the universal Church, as she responds to the teachings of her Founder, the Lord Jesus, concerning solidarity and the sharing of goods. Moreover, the elimination of world hunger has also, in the global era, become a requirement for safeguarding the peace and stability of the planet. Hunger is not so much dependent on lack of material things as on shortage of social resources, the most important of which are institutional. What is missing, in other words, is a network of economic institutions capable of guaranteeing regular access to sufficient food and water for nutritional needs, and also capable of addressing the primary needs and necessities ensuing from genuine food crises, whether due to natural causes or political irresponsibility, nationally and internationally. The problem of food insecurity needs to be addressed within a long-term perspective, eliminating the structural causes that give rise to it and promoting the agricultural development of poorer countries. This can be done by investing in rural infrastructures, irrigation systems, transport, organization of markets, and in the development and dissemination of agricultural technology that can make the best use of the human, natural and socio-economic resources that are more readily available at the local level, while guaranteeing their sustainability over the long term as well. All this needs to be accomplished with the involvement of local communities in choices and decisions that affect the use of agricultural land. In this perspective, it could be useful to consider the new possibilities that are opening up through proper use of traditional as well as innovative farming techniques, always assuming that these have been judged, after sufficient testing, to be appropriate, respectful of the environment and attentive to the needs of the most deprived peoples. At the same time, the question of equitable agrarian reform in developing countries should not be ignored. The right to food, like the right to water, has an important place within the pursuit of other rights, beginning with the fundamental right to life. It is therefore necessary to cultivate a public conscience that considers food and access to water as universal rights of all human beings, without distinction or discrimination[65] . It is important, moreover, to emphasize that solidarity with poor countries in the process of development can point towards a solution of the current global crisis, as politicians and directors of international institutions have begun to sense in recent times. Through support for economically poor countries by means of financial plans inspired by solidarity — so that these countries can take steps to satisfy their own citizens' demand for consumer goods and for development — not only can true economic growth be generated, but a contribution can be made towards sustaining the productive capacities of rich countries that risk being compromised by the crisis.

28. One of the most striking aspects of development in the present day is the important question of respect for life, which cannot in any way be detached from questions concerning the development of peoples. It is an aspect which has acquired increasing prominence in recent times, obliging us to broaden our concept of poverty[66] and underdevelopment to include questions connected with the acceptance of life, especially in cases where it is impeded in a variety of ways.
Not only does the situation of poverty still provoke high rates of infant mortality in many regions, but some parts of the world still experience practices of demographic control, on the part of governments that often promote contraception and even go so far as to impose abortion. In economically developed countries, legislation contrary to life is very widespread, and it has already shaped moral attitudes and praxis, contributing to the spread of an anti-birth mentality; frequent attempts are made to export this mentality to other States as if it were a form of cultural progress.

Some non-governmental Organizations work actively to spread abortion, at times promoting the practice of sterilization in poor countries, in some cases not even informing the women concerned. Moreover, there is reason to suspect that development aid is sometimes linked to specific health-care policies which de facto involve the imposition of strong birth control measures. Further grounds for concern are laws permitting euthanasia as well as pressure from lobby groups, nationally and internationally, in favour of its juridical recognition.

Openness to life is at the centre of true development. When a society moves towards the denial or suppression of life, it ends up no longer finding the necessary motivation and energy to strive for man's true good. If personal and social sensitivity towards the acceptance of a new life is lost, then other forms of acceptance that are valuable for society also wither away[67] . The acceptance of life strengthens moral fibre and makes people capable of mutual help. By cultivating openness to life, wealthy peoples can better understand the needs of poor ones, they can avoid employing huge economic and intellectual resources to satisfy the selfish desires of their own citizens, and instead, they can promote virtuous action within the perspective of production that is morally sound and marked by solidarity, respecting the fundamental right to life of every people and every individual.

29. There is another aspect of modern life that is very closely connected to development: the denial of the right to religious freedom. I am not referring simply to the struggles and conflicts that continue to be fought in the world for religious motives, even if at times the religious motive is merely a cover for other reasons, such as the desire for domination and wealth. Today, in fact, people frequently kill in the holy name of God, as both my predecessor John Paul II and I myself have often publicly acknowledged and lamented[68] . Violence puts the brakes on authentic development and impedes the evolution of peoples towards greater socio-economic and spiritual well-being. This applies especially to terrorism motivated by fundamentalism[69] , which generates grief, destruction and death, obstructs dialogue between nations and diverts extensive resources from their peaceful and civil uses.

Yet it should be added that, as well as religious fanaticism that in some contexts impedes the exercise of the right to religious freedom, so too the deliberate promotion of religious indifference or practical atheism on the part of many countries obstructs the requirements for the development of peoples, depriving them of spiritual and human resources. God is the guarantor of man's true development, inasmuch as, having created him in his image, he also establishes the transcendent dignity of men and women and feeds their innate yearning to “be more”. Man is not a lost atom in a random universe[70] : he is God's creature, whom God chose to endow with an immortal soul and whom he has always loved. If man were merely the fruit of either chance or necessity, or if he had to lower his aspirations to the limited horizon of the world in which he lives, if all reality were merely history and culture, and man did not possess a nature destined to transcend itself in a supernatural life, then one could speak of growth, or evolution, but not development. When the State promotes, teaches, or actually imposes forms of practical atheism, it deprives its citizens of the moral and spiritual strength that is indispensable for attaining integral human development and it impedes them from moving forward with renewed dynamism as they strive to offer a more generous human response to divine love[71] . In the context of cultural, commercial or political relations, it also sometimes happens that economically developed or emerging countries export this reductive vision of the person and his destiny to poor countries. This is the damage that “superdevelopment”[72] causes to authentic development when it is accompanied by “moral underdevelopment”[73] .

30. In this context, the theme of integral human development takes on an even broader range of meanings: the correlation between its multiple elements requires a commitment to foster the interaction of the different levels of human knowledge in order to promote the authentic development of peoples. Often it is thought that development, or the socio-economic measures that go with it, merely require to be implemented through joint action. This joint action, however, needs to be given direction, because “all social action involves a doctrine”[74] . In view of the complexity of the issues, it is obvious that the various disciplines have to work together through an orderly interdisciplinary exchange. Charity does not exclude knowledge, but rather requires, promotes, and animates it from within. Knowledge is never purely the work of the intellect. It can certainly be reduced to calculation and experiment, but if it aspires to be wisdom capable of directing man in the light of his first beginnings and his final ends, it must be “seasoned” with the “salt” of charity. Deeds without knowledge are blind, and knowledge without love is sterile. Indeed, “the individual who is animated by true charity labours skilfully to discover the causes of misery, to find the means to combat it, to overcome it resolutely”[75] . Faced with the phenomena that lie before us, charity in truth requires first of all that we know and understand, acknowledging and respecting the specific competence of every level of knowledge. Charity is not an added extra, like an appendix to work already concluded in each of the various disciplines: it engages them in dialogue from the very beginning. The demands of love do not contradict those of reason. Human knowledge is insufficient and the conclusions of science cannot indicate by themselves the path towards integral human development. There is always a need to push further ahead: this is what is required by charity in truth[76] . Going beyond, however, never means prescinding from the conclusions of reason, nor contradicting its results. Intelligence and love are not in separate compartments: love is rich in intelligence and intelligence is full of love.

31. This means that moral evaluation and scientific research must go hand in hand, and that charity must animate them in a harmonious interdisciplinary whole, marked by unity and distinction. The Church's social doctrine, which has “an important interdisciplinary dimension”[77] , can exercise, in this perspective, a function of extraordinary effectiveness. It allows faith, theology, metaphysics and science to come together in a collaborative effort in the service of humanity. It is here above all that the Church's social doctrine displays its dimension of wisdom. Paul VI had seen clearly that among the causes of underdevelopment there is a lack of wisdom and reflection, a lack of thinking capable of formulating a guiding synthesis[78] , for which “a clear vision of all economic, social, cultural and spiritual aspects”[79] is required. The excessive segmentation of knowledge[80] , the rejection of metaphysics by the human sciences[81] , the difficulties encountered by dialogue between science and theology are damaging not only to the development of knowledge, but also to the development of peoples, because these things make it harder to see the integral good of man in its various dimensions. The “broadening [of] our concept of reason and its application”[82] is indispensable if we are to succeed in adequately weighing all the elements involved in the question of development and in the solution of socio-economic problems.

32. The significant new elements in the picture of the development of peoples today in many cases demand new solutions. These need to be found together, respecting the laws proper to each element and in the light of an integral vision of man, reflecting the different aspects of the human person, contemplated through a lens purified by charity. Remarkable convergences and possible solutions will then come to light, without any fundamental component of human life being obscured.

The dignity of the individual and the demands of justice require, particularly today, that economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner[83] , and that we continue to prioritize the goal of access to steady employment for everyone. All things considered, this is also required by “economic logic”. Through the systemic increase of social inequality, both within a single country and between the populations of different countries (i.e. the massive increase in relative poverty), not only does social cohesion suffer, thereby placing democracy at risk, but so too does the economy, through the progressive erosion of “social capital”: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence.

Economic science tells us that structural insecurity generates anti-productive attitudes wasteful of human resources, inasmuch as workers tend to adapt passively to automatic mechanisms, rather than to release creativity. On this point too, there is a convergence between economic science and moral evaluation. Human costs always include economic costs, and economic dysfunctions always involve human costs.

It should be remembered that the reduction of cultures to the technological dimension, even if it favours short-term profits, in the long term impedes reciprocal enrichment and the dynamics of cooperation. It is important to distinguish between short- and long-term economic or sociological considerations. Lowering the level of protection accorded to the rights of workers, or abandoning mechanisms of wealth redistribution in order to increase the country's international competitiveness, hinder the achievement of lasting development. Moreover, the human consequences of current tendencies towards a short-term economy — sometimes very short-term — need to be carefully evaluated. This requires further and deeper reflection on the meaning of the economy and its goals[84] , as well as a profound and far-sighted revision of the current model of development, so as to correct its dysfunctions and deviations. This is demanded, in any case, by the earth's state of ecological health; above all it is required by the cultural and moral crisis of man, the symptoms of which have been evident for some time all over the world.

33. More than forty years after Populorum Progressio, its basic theme, namely progress, remains an open question, made all the more acute and urgent by the current economic and financial crisis. If some areas of the globe, with a history of poverty, have experienced remarkable changes in terms of their economic growth and their share in world production, other zones are still living in a situation of deprivation comparable to that which existed at the time of Paul VI, and in some cases one can even speak of a deterioration. It is significant that some of the causes of this situation were identified inPopulorum Progressio, such as the high tariffs imposed by economically developed countries, which still make it difficult for the products of poor countries to gain a foothold in the markets of rich countries. Other causes, however, mentioned only in passing in the Encyclical, have since emerged with greater clarity. A case in point would be the evaluation of the process of decolonization, then at its height. Paul VI hoped to see the journey towards autonomy unfold freely and in peace. More than forty years later, we must acknowledge how difficult this journey has been, both because of new forms of colonialism and continued dependence on old and new foreign powers, and because of grave irresponsibility within the very countries that have achieved independence.

The principal new feature has been the explosion of worldwide interdependence, commonly known as globalization. Paul VI had partially foreseen it, but the ferocious pace at which it has evolved could not have been anticipated. Originating within economically developed countries, this process by its nature has spread to include all economies. It has been the principal driving force behind the emergence from underdevelopment of whole regions, and in itself it represents a great opportunity. Nevertheless, without the guidance of charity in truth, this global force could cause unprecedented damage and create new divisions within the human family. Hence charity and truth confront us with an altogether new and creative challenge, one that is certainly vast and complex. It is about broadening the scope of reason and making it capable of knowing and directing these powerful new forces, animating them within the perspective of that “civilization of love” whose seed God has planted in every people, in every culture.


CHAPTER THREE
FRATERNITY, ECONOMIC DEVELOPMENT AND CIVIL SOCIETY

34. Charity in truth places man before the astonishing experience of gift. 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. Sometimes modern man is wrongly convinced that he is the sole author of himself, his life and society. This is a presumption that follows from being selfishly closed in upon himself, and it is a consequence — to express it in faith terms — of original sin. The Church's wisdom has always pointed to the presence of original sin in social conditions and in the structure of society: “Ignorance of the fact that man has a wounded nature inclined to evil gives rise to serious errors in the areas of education, politics, social action and morals”[85] . In the list of areas where the pernicious effects of sin are evident, the economy has been included for some time now. We have a clear proof of this at the present time. The conviction that man is self-sufficient and can successfully eliminate the evil present in history by his own action alone has led him to confuse happiness and salvation with immanent forms of material prosperity and social action. Then, 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. In the long term, these convictions have led to economic, social and political systems that trample upon personal and social freedom, and are therefore unable to deliver the justice that they promise. As I said in my Encyclical LetterSpe Salvi, history is thereby deprived of Christian hope[86] , deprived of a powerful social resource at the service of integral human development, sought in freedom and in justice. Hope encourages reason and gives it the strength to direct the will[87] . It is already present in faith, indeed it is called forth by faith. Charity in truth feeds on hope and, at the same time, manifests it. As the absolutely gratuitous gift of God, hope bursts into our lives as something not due to us, something that transcends every law of justice. Gift by its nature goes beyond merit, its rule is that of superabundance. It takes first place in our souls as a sign of God's presence in us, a sign of what he expects from us. Truth — which is itself gift, in the same way as charity — is greater than we are, as Saint Augustine teaches[88] . Likewise the truth of ourselves, of our personal conscience, is first of all given to us. In every cognitive process, truth is not something that we produce, it is always found, or better, received. Truth, like love, “is neither planned nor willed, but somehow imposes itself upon human beings”[89] .
Because it is a gift received by everyone, charity in truth is a force that builds community, it brings all people together without imposing barriers or limits. The human community that we build by ourselves can never, purely by its own strength, be a fully fraternal community, nor can it overcome every division and become a truly universal community. The unity of the human race, a fraternal communion transcending every barrier, is called into being by the word of God-who-is-Love. In addressing this key question, we must make it clear, on the one hand, that the logic of gift does not exclude justice, nor does it merely sit alongside it as a second element added from without; on the other hand, 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.

35. In a climate of mutual trust, the market is the economic institution that permits encounter between persons, inasmuch as they are economic subjects who make use of contracts to regulate their relations as they exchange goods and services of equivalent value between them, in order to satisfy their needs and desires. The market is subject to the principles of so-called commutative justice, which regulates the relations of giving and receiving between parties to a transaction. But the social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function. And today it is this trust which has ceased to exist, and the loss of trust is a grave loss. It was timely when Paul VI inPopulorum Progressio insisted that the economic system itself would benefit from the wide-ranging practice of justice, inasmuch as the first to gain from the development of poor countries would be rich ones[90] . According to the Pope, it was not just a matter of correcting dysfunctions through assistance. The poor are not to be considered a “burden”[91] , but a resource, even from the purely economic point of view. It is nevertheless erroneous to hold that the market economy has an inbuilt need for a quota of poverty and underdevelopment in order to function at its best. It is in the interests of the market to promote emancipation, but in order to do so effectively, it cannot rely only on itself, because it is not able to produce by itself something that lies outside its competence. It must draw its moral energies from other subjects that are capable of generating them.

36. Economic activity cannot solve all social problems through the simple application of commercial logic. This needs to be directed towards the pursuit of the common good, for which the political community in particular must also take responsibility. Therefore, it must be borne in mind that grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution.

The Church has always held that economic action is not to be regarded as something opposed to society. In and of itself, the market is not, and must not become, the place where the strong subdue the weak. Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations. Admittedly, the market can be a negative force, not because it is so by nature, but because a certain ideology can make it so. It must be remembered that the market does not exist in the pure state. It is shaped by the cultural configurations which define it and give it direction. Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. Instruments that are good in themselves can thereby be transformed into harmful ones. But it is man's darkened reason that produces these consequences, not the instrument per se. Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.
The Church's social doctrine holds that authentically human social relationships of friendship, solidarity and reciprocity can also be conducted within economic activity, and not only outside it or “after” it. The economic sphere is neither ethically neutral, nor inherently inhuman and opposed to society. It is part and parcel of human activity and precisely because it is human, it must be structured and governed in an ethical manner.

The great challenge before us, accentuated by the problems of development in this global era and made even more urgent by the economic and financial crisis, is to demonstrate, in thinking and behaviour, not only that traditional principles of social ethics like transparency, honesty and responsibility cannot be ignored or attenuated, but also 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. This is a human demand at the present time, but it is also demanded by economic logic. It is a demand both of charity and of truth.

37. The Church's social doctrine has always maintained that justice must be applied to every phase of economic activity, because this is always concerned with man and his needs. Locating resources, financing, production, consumption and all the other phases in the economic cycle inevitably have moral implications. Thus every economic decision has a moral consequence. The social sciences and the direction taken by the contemporary economy point to the same conclusion. Perhaps at one time it was conceivable that first the creation of wealth could be entrusted to the economy, and then the task of distributing it could be assigned to politics. Today that would be more difficult, given that economic activity is no longer circumscribed within territorial limits, while the authority of governments continues to be principally local. Hence the canons of justice must be respected from the outset, as the economic process unfolds, and not just afterwards or incidentally. Space also needs to be created within the market for economic activity carried out by subjects who freely choose to act according to principles other than those of pure profit, without sacrificing the production of economic value in the process. The many economic entities that draw their origin from religious and lay initiatives demonstrate that this is concretely possible.

In the global era, the economy is influenced by competitive models tied to cultures that differ greatly among themselves. The different forms of economic enterprise to which they give rise find their main point of encounter in commutative justice. Economic life undoubtedly requires contracts, in order to regulate relations of exchange between goods of equivalent value. But it also needs just laws and forms of redistribution governed by politics, and what is more, it needs works redolent of the spirit of gift. The economy in the global era seems to privilege the former logic, that of contractual exchange, but directly or indirectly it also demonstrates its need for the other two: political logic, and the logic of the unconditional gift.

38. My predecessor John Paul II drew attention to this question inCentesimus Annus, when he spoke of the need for a system with three subjects: the market, the State and civil society[92] . He saw civil society as the most natural setting for an economy of gratuitousness and fraternity, but did not mean to deny it a place in the other two settings. Today we can say that economic life must be understood as a multi-layered phenomenon: in every one of these layers, to varying degrees and in ways specifically suited to each, the aspect of fraternal reciprocity must be present. In the global era, economic activity cannot prescind from gratuitousness, which fosters and disseminates solidarity and responsibility for justice and the common good among the different economic players. It is clearly a specific and profound form of economic democracy. Solidarity is first and foremost a sense of responsibility on the part of everyone with regard to everyone[93] , and it cannot therefore be merely delegated to the State. While in the past it was possible to argue that justice had to come first and gratuitousness could follow afterwards, as a complement, today it is clear that without gratuitousness, there can be no justice in the first place. What is needed, therefore, is a market that permits the free operation, in conditions of equal opportunity, of enterprises in pursuit of different institutional ends. Alongside profit-oriented private enterprise and the various types of public enterprise, there must be room for commercial entities based on mutualist principles and pursuing social ends to take root and express themselves. It is from their reciprocal encounter in the marketplace that one may expect hybrid forms of commercial behaviour to emerge, and hence an attentiveness to ways of civilizing the economy. Charity in truth, in this case, requires that shape and structure be given to those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.

39. Paul VI in Populorum Progressio called for the creation of a model of market economy capable of including within its range all peoples and not just the better off. He called for efforts to build a more human world for all, a world in which “all will be able to give and receive, without one group making progress at the expense of the other”[94] . In this way he was applying on a global scale the insights and aspirations contained in Rerum Novarum, written when, as a result of the Industrial Revolution, the idea was first proposed — somewhat ahead of its time — that the civil order, for its self-regulation, also needed intervention from the State for purposes of redistribution. Not only is this vision threatened today by the way in which markets and societies are opening up, but it is evidently insufficient to satisfy the demands of a fully humane economy. What the Church's social doctrine has always sustained, on the basis of its vision of man and society, is corroborated today by the dynamics of globalization.

When both the logic of the market and the logic of the State come to an agreement that each will continue to exercise a monopoly over its respective area of influence, in the long term much is lost: solidarity in relations between citizens, participation and adherence, actions of gratuitousness, all of which stand in contrast with giving in order to acquire (the logic of exchange) and giving through duty (the logic of public obligation, imposed by State law). In order to defeat underdevelopment, action is required not only on improving exchange-based transactions and implanting public welfare structures, but above all on gradually increasing openness, in a world context, to forms of economic activity marked by quotas of gratuitousness and communion. The exclusively binary model of market-plus-State is corrosive of society, while economic forms based on solidarity, which find their natural home in civil society without being restricted to it, build up society. The market of gratuitousness does not exist, and attitudes of gratuitousness cannot be established by law. Yet both the market and politics need individuals who are open to reciprocal gift.

40. Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise. Old models are disappearing, but promising new ones are taking shape on the horizon. Without doubt, one of the greatest risks for businesses is that they are almost exclusively answerable to their investors, thereby limiting their social value. Owing to their growth in scale and the need for more and more capital, it is becoming increasingly rare for business enterprises to be in the hands of a stable director who feels responsible in the long term, not just the short term, for the life and the results of his company, and it is becoming increasingly rare for businesses to depend on a single territory. Moreover, the so-called outsourcing of production can weaken the company's sense of responsibility towards the stakeholders — namely the workers, the suppliers, the consumers, the natural environment and broader society — in favour of the shareholders, who are not tied to a specific geographical area and who therefore enjoy extraordinary mobility. Today's international capital market offers great freedom of action. Yet there is also increasing awareness of the need for greater social responsibility on the part of business. Even if the ethical considerations that currently inform debate on the social responsibility of the corporate world are not all acceptable from the perspective of the Church's social doctrine, there is nevertheless a growing conviction that business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference. In recent years a new cosmopolitan class of managers has emerged, who are often answerable only to the shareholders generally consisting of anonymous funds which de facto determine their remuneration. By contrast, though, many far-sighted managers today are becoming increasingly aware of the profound links between their enterprise and the territory or territories in which it operates. Paul VI invited people to give serious attention to the damage that can be caused to one's home country by the transfer abroad of capital purely for personal advantage[95] . John Paul II taught that investment always has moral, as well as economic significance[96] . All this — it should be stressed — is still valid today, despite the fact that the capital market has been significantly liberalized, and modern technological thinking can suggest that investment is merely a technical act, not a human and ethical one. There is no reason to deny that a certain amount of capital can do good, if invested abroad rather than at home. Yet the requirements of justice must be safeguarded, with due consideration for the way in which the capital was generated and the harm to individuals that will result if it is not used where it was produced[97] . What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise, its benefit to the real economy and attention to the advancement, in suitable and appropriate ways, of further economic initiatives in countries in need of development. It is true that the export of investments and skills can benefit the populations of the receiving country. Labour and technical knowledge are a universal good. Yet it is not right to export these things merely for the sake of obtaining advantageous conditions, or worse, for purposes of exploitation, without making a real contribution to local society by helping to bring about a robust productive and social system, an essential factor for stable development.

41. In the context of this discussion, it is helpful to observe that business enterprise involves a wide range of values, becoming wider all the time. The continuing hegemony of the binary model of market-plus-State has accustomed us to think only in terms of the private business leader of a capitalistic bent on the one hand, and the State director on the other. In reality, business has to be understood in an articulated way. There are a number of reasons, of a meta-economic kind, for saying this. Business activity has a human significance, prior to its professional one[98] . It is present in all work, understood as a personal action, an “actus personae”[99] , which is why every worker should have the chance to make his contribution knowing that in some way “he is working ‘for himself'”[100] . With good reason, Paul VI taught that “everyone who works is a creator”[101] . It is in response to the needs and the dignity of the worker, as well as the needs of society, that there exist various types of business enterprise, over and above the simple distinction between “private” and “public”. Each of them requires and expresses a specific business capacity. In order to construct an economy that will soon be in a position to serve the national and global common good, it is appropriate to take account of this broader significance of business activity. It favours cross-fertilization between different types of business activity, with shifting of competences from the “non-profit” world to the “profit” world and vice versa, from the public world to that of civil society, from advanced economies to developing countries.

Political authority also involves a wide range of values, which must not be overlooked in the process of constructing a new order of economic productivity, socially responsible and human in scale. As well as cultivating differentiated forms of business activity on the global plane, we must also promote a dispersed political authority, effective on different levels. The integrated economy of the present day does not make the role of States redundant, but rather it commits governments to greater collaboration with one another. Both wisdom and prudence suggest not being too precipitous in declaring the demise of the State. In terms of the resolution of the current crisis, the State's role seems destined to grow, as it regains many of its competences. In some nations, moreover, the construction or reconstruction of the State remains a key factor in their development. The focus of international aid, within a solidarity-based plan to resolve today's economic problems, should rather be on consolidating constitutional, juridical and administrative systems in countries that do not yet fully enjoy these goods. Alongside economic aid, there needs to be aid directed towards reinforcing the guarantees proper to the State of law: a system of public order and effective imprisonment that respects human rights, truly democratic institutions. The State does not need to have identical characteristics everywhere: the support aimed at strengthening weak constitutional systems can easily be accompanied by the development of other political players, of a cultural, social, territorial or religious nature, alongside the State. The articulation of political authority at the local, national and international levels is one of the best ways of giving direction to the process of economic globalization. It is also the way to ensure that it does not actually undermine the foundations of democracy.

42. Sometimes globalization is viewed in fatalistic terms, as if the dynamics involved were the product of anonymous impersonal forces or structures independent of the human will[102] . In this regard it is useful to remember that while globalization should certainly be understood as a socio-economic process, this is not its only dimension. Underneath the more visible process, humanity itself is becoming increasingly interconnected; it is made up of individuals and peoples to whom this process should offer benefits and development[103] , as they assume their respective responsibilities, singly and collectively. The breaking-down of borders is not simply a material fact: it is also a cultural event both in its causes and its effects. If globalization is viewed from a deterministic standpoint, the criteria with which to evaluate and direct it are lost. As a human reality, it is the product of diverse cultural tendencies, which need to be subjected to a process of discernment. The truth of globalization as a process and its fundamental ethical criterion are given by the unity of the human family and its development towards what is good. Hence a sustained commitment is needed so as to promote a person-based and community-oriented cultural process of world-wide integration that is open to transcendence.

Despite some of its structural elements, which should neither be denied nor exaggerated, “globalization, a priori, is neither good nor bad. It will be what people make of it”[104] . We should not be its victims, but rather its protagonists, acting in the light of reason, guided by charity and truth. Blind opposition would be a mistaken and prejudiced attitude, incapable of recognizing the positive aspects of the process, with the consequent risk of missing the chance to take advantage of its many opportunities for development. The processes of globalization, suitably understood and directed, open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale; if badly directed, however, they can lead to an increase in poverty and inequality, and could even trigger a global crisis. It is necessary to correct the malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty: a real danger if the present situation were to be badly managed. For a long time it was thought that poor peoples should remain at a fixed stage of development, and should be content to receive assistance from the philanthropy of developed peoples. Paul VI strongly opposed this mentality in Populorum Progressio. Today the material resources available for rescuing these peoples from poverty are potentially greater than before, but they have ended up largely in the hands of people from developed countries, who have benefited more from the liberalization that has occurred in the mobility of capital and labour. The world-wide diffusion of forms of prosperity should not therefore be held up by projects that are self-centred, protectionist or at the service of private interests. Indeed the involvement of emerging or developing countries allows us to manage the crisis better today. The transition inherent in the process of globalization presents great difficulties and dangers that can only be overcome if we are able to appropriate the underlying anthropological and ethical spirit that drives globalization towards the humanizing goal of solidarity. Unfortunately this spirit is often overwhelmed or suppressed by ethical and cultural considerations of an individualistic and utilitarian nature. Globalization is a multifaceted and complex phenomenon which must be grasped in the diversity and unity of all its different dimensions, including the theological dimension. In this way it will be possible to experience and to steer the globalization of humanity in relational terms, in terms of communion and the sharing of goods.

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