Economy and morality, or rather, capitalism and its ‘religious-ethical despisers’: two worlds and never the twain shall meet? On the contrary: the economic domain is not and has never been without morals and beliefs. Historically, Catholicism has contributed to the spirit of contemporary capitalism. But modern Catholic social thought has gradually developed a vision that suggests a conversion of the present global system. I will argue that it is necessary to continue the dialogue, not only because economists and faith traditions can critically contribute to each other, but also because this fosters the self-understanding of both faith traditions and economists.

A Lack of Ethics?

We are living in an age in which prophets raise their voices and preach fire and brimstone. The financial sector, the oil industry, pharmaceutics and other sectors in present-day economy certainly invoke to do so. Products are sold that harm the consumer or the environment; accountancy firms are paid to condone the annual accounts; authorities that should supervise these practices put their trust in self-regulation (Boot, 2011). The metaphor of the ‘rotten apples’ that spoil it for the rest is long overdue. It is the bowl that is rotten. The problems in important sectors in contemporary economy are structural. The big banks are too big to fail; oil companies are prone to hinder the development of sustainable sources of energy; Big Pharma flourishes by satisfying shareholders rather than by promoting health.

A lack of ethics. This is the image that arises when one listens to protesting politicians, to the slogans of the Occupy movement and its successors, to critical journalists. All raise their voices against immoral practices in the name of a more or less articulated system of ethics. The Dutch investigative journalist Joris Luyendijk (2015), educated as an anthropologist, interviewed professionals working in the City, the financial center of Europe and portrayed a world without morals. All play their part in a system that will probably ruin our lives, yet moral considerations exceeding legal limits seem absent. Luyendijk focuses on the perspectives that specific categories of actors have, but his underlying message is much in line with a long tradition of critical religious discourse on the way the economy works. “[…] the socioeconomic system is unjust at its root,” so Pope Francis (2013, section 59) declared in his apostolic exhortation Evangelii Gaudium.

Economy and morality, or rather, capitalism and its ‘religious-ethical despisers’: two worlds and never the twain shall meet? In this article I will first take a historical-sociological perspective and argue that the economic domain is not without morals and beliefs. Next, I will explain that Catholicism has historically contributed to the spirit of capitalism, but that modern Catholic social thought has gradually developed a vision that suggests a conversion of the present global system. Since both the present-day economy and modern catholic social thought have developed in close interaction with each other over the centuries, it is clear that a fruitful (self-)critical dialogue is possible. I will argue that it is necessary to continue the dialogue, not only because economists and faith traditions can critically contribute to each other, but also because this fosters the self-understanding of both faith traditions and economists.

The Economy Is a Matter of Faith

In the public debate, they often seem like two worlds: the economic domain, perceived as a universe without scruples, and the moral domain of religion and philosophy, where ideas about a good society are articulated. Better informed authors have however argued that the economic domain, in particular capitalism, has its own faith and its own morals such as that the world benefits from economic progress (Nelson, 2011; cf. Sedlácek, 2011; Skidelsky, 2012). Moreover, faith traditions have brought forward ideas about the way consumers and producers should behave and how the allocation of goods and services should be organized. Weber’s thesis on the relation between the Protestant ethos and the spirit of capitalism is probably the most well-known example.

The economic crisis following the collapse of systemically important banks in 2008, has made it clear that faith is not an external voice to the domain of economy. Our economic system itself is based on faith. Alan Greenspan, chairman of the United States Federal Reserve Board (1987-2006), recognized that he actually believed in the economic models he was working with. At the hearing by the national congress (23 October 2008), Greenspan spoke as a man who had lost his religion of radically free markets. Apparently, markets didn’t regulate themselves.

The central moral philosophy of capitalism still is: it is good to maximize profits. Other tenets of this worldview are: a rise in GNP is good, and, a more implicit belief: in cases of emergency, the state will repair the damage caused by large companies. On a more personal level, late-modern capitalism cherishes successful careers; employers may take pride in what their company produces; consumers may even be proud to own a product of a particular brand, such as the latest type of smartphone. Capitalism produces the idea that our life makes sense (Campbell, 1987).

This worldview is actually profitable for some, but it is a vulnerable belief. Once people start to question whether this is a sound worldview, the consequences are far from imaginary. ‘When people define situations as real, they are real in their consequences.’ (W.I. Thomas & D.S. Thomas). On the basis of this so-called Thomas theorem (1928), Robert K. Merton (1948) conceptualized his concept of the self-fulfilling prophecy and illustrated it with the way a company can go bankrupt. Predict with authority that shares in an enterprise will lose their value and they will lose their value. Economy is ipse facto a matter of faith (Everett, Friesen, Neu & Rahaman; Nelson, 2011; ter Borg, 2003).

Sometimes, so-called ‘immoral’ consequences of economic activities are discussed: the devastation of the rain forest, oil-related killings in Sudan, slavery in Congo. In these cases, however, different moral philosophies are often seen to be in conflict: for example, an ecological worldview, or a worldview based on human rights, versus the worldview of capitalism. Capitalism is, however, flexible: all these negative external effects could be translated into adjusted business models: companies may end these disapproved activities in order to reduce damage to their image. Moral dilemmas are everywhere. Getting companies to reflect on them explicitly, however, is ‘a hell of a job’, as a political philosopher put it. It all starts with the break-down of the idea that in the market moral issues do not count. Commercial decisions cannot exclude moral deliberations (Claasen, 2008).

The Historical Contribution of Christianity to Capitalism

Max Weber (1864-1920) is known for his essay on the spirit of capitalism as the secularized descendant of the ethos of the Calvinists. His reflections have been conserved in textbooks as the much-debated Weber thesis. This essay was followed by a larger project on the economic ethos of global religions, which shows that all economic systems are embedded in religions and cultures, and that, in turn, religions are marked by particular economic agents. In comparison to the religions of China, India and ancient Israel, Christianity stands out as a religion which tends to perceive God as transcending this world, leaving this disenchanted world to men as a place to labor. Especially in monasteries, this labor is perceived as the human response to God’s calling.

This work ethic, developed by religious virtuosi, has been exported successfully to the world outside the cloisters’ walls. To an ever-growing part of the population, work becomes a meaningful enterprise in itself, an honorable occupation in particular, as opposed to merely a means to make a living, or one’s dire fate – which is another way of attaching meaning to work. Medieval cities were founded as ‘secularized convents’, as the Dutch humanist Desiderius Erasmus of Rotterdam (1466-1536) put it, where guilds and fraternities sustained a ‘community of values’ (Buijs, 2015). In this era, the market is embedded in a moral, Christian, framework that condemned usury and greed. Thomas Aquinas (1225-1274) sustained the market economy, but expressed his reserves against modern trade that was directed merely by profit.

Centuries later, after the birth of industrial capitalism, the Christian work ethic secularized. Weber perceived this as a loss of meaning, referring to the modern condition as an ‘iron cage’. The Catholic economist Michael Novak (1993) disputed this: the capitalist ethos is meaningful in itself (Gregg, 2013). In particular, capitalism has a creative passion for innovation. In general, capitalism still embodies secularized elements of a Christian ethos, next to elements from other origins.

One faith tradition that has been particularly influential and has been articulated quite well, is the Catholic teaching on the economy. Catholicism has a place in the history of capitalism; Revisions of Weber’s thesis have shown that the spirit of capitalism is rooted in Catholicism as well (Stark, 2005). Catholicism not only contributed to the rise of capitalism, Weber’s Catholic contemporaries were also dealing with the spirit of capitalism. In fact, they too developed some kind of sociology, in dialogue with the study of history and culture, and the teachings of the Church (De Groot & Sengers, 2015).

Modern Catholic social teaching however also provides a normative source to criticize capitalism (e.g. Fox 2016). This relatively recent body of ideas is dynamic. It started with a condemnation of socialism while criticizing certain aspects of capitalism. The most recent Encyclical Letter condemns neoliberalism without embracing socialist ideas (McHugh, 2008). There is moreover a variety of Catholic social thoughts: papal teachings have promoted corporatism, but also revised versions of capitalism and, more recently, an ecological global economy. This historical variety suggests that Catholic social thought does not represent an external voice to the economic domain, but rather a collection of voices in an ongoing debate about the economic order (Hellemans, 2000).

The Construction of Catholic Social Teaching

 As a rule, the Catholic teachings are presented as some kind of eternal truths. Even social teachings, although embedded in specific historical and social circumstances, are often presented as a continuation of what the Church has always taught and as derived from authoritative sources outside the contemporary context, be it the ‘angelic doctor’ Thomas Aquinas or the Scriptures itself. Catholic social thought as we know it, however, dates from the late-nineteenth century when Catholic responses to processes of modernization were formulated. Then, Thomas Aquinas, the philosopher and theologian who renewed Catholic thought in the thirteenth century, was re-constructed as the designer of a system that defends a status quo that was at that time under siege. On one front, the ideology of liberalism that inspired the French Revolution, gave rise to deep concern. On another, the socialist movement, formed as a reaction to the industrial revolution, was perceived as an even bigger threat. ‘Neo-Thomism’ provided the arguments for an anti-revolutionary position.

Meanwhile, individual Catholic workers, Catholic employers, priests, a bishop like Wilhelm Emmanuel von Ketteler (1911-1977), and societies such as the Society of Saint Vincent de Paul were seeking to alleviate the conditions of the new working class. They witnessed a growing gap between the world view of the official Church and the world of workers in the heavy industry. Their experiences penetrated the first Encyclical Letter on the social issues of that time, Rerum Novarum (1891). The letter foremost addresses the revolutionary spirit of the times and responds to the call for nationalization of enterprises in the Communist Manifesto (1848). It defends the right to private property as if Thomas Aquinas himself had put this forward as a natural law (Salemink, 1995). It doesn’t acknowledge the modern separation between capital and labor, nor Thomas’ view that, ultimately, all goods are destined for all. More fundamentally, it did not accept capitalism as a new social fact, and therefore it could not reflect on it critically. The letter does, however, warn against the excrescences of the ruling economic system, pleas for a just wage, restricts working hours, and allows for Catholic unions to be erected. This relatively progressive voice was received well among proponents of workers’ rights.

Gradually, Catholic social teaching evolved. In Germany, Catholic economists and ethicists such as Heinrich Pesch S.J. (1854-1962) and Oswald von Nell-Breuning S.J. (1890-1991) were conceiving an alternative to liberalism and capitalism. Both in their own ways sketched an economic and political system in which occupational groups, that is, employers and employees in one sector together, cooperate organically for the benefit of all in a society which has a common concern for justice and charity. This view, corporatism, found its way to the following Encyclical Letter on social issues, Quadragesimo Anno (1931). It is here that the principle of subsidiarity is mentioned for the first time in an Encyclical Letter, namely as ‘the great, firm principle of social philosophy’: the state should not take over responsibilities from the various associations.

Backed up by this recognition, the political tradition of Christian democracy developed further into an ideology which promotes a moderate model of social reform. The ideal type of welfare state promoted by this ideology is called social capitalism, which is characterized by

  1. a conditional acceptance of capitalism;
  2. a critical stance on state intervention (subsidiarity);
  3. an organic view on society;
  4. redistributive justice, that is: each class and group receives what it deserves – a principle that allows for the reproduction of status and
  5. private property as social policy, which implies that employees are entitled to a just wage, that is: sufficient to sustain their families.

In post-war Western Europe, this Christian-Democratic type of welfare state, prevalent in Germany, Italy and the Netherlands, could be considered as a recent Christian contribution to the existing social and economic world. Here, the central social unit is not the state, as is the case in social-democracy, not the individual, as in liberalism, but the community. The welfare state has Christian roots (Van Kersbergen, 1995).

At the eve and the aftermath of Vatican II, new developments in Catholic theology, such as personalism (Mater et Magistra 1961) and liberation theology (Populorum Progressio 1967) found their way to Encyclical Letters. Under the papacy of John Paul II, however, this latter trend towards a more radical critique on capitalism was not pursued; rather, a reform of democratic capitalism was sought through a communitarian approach (Williams, 1993). In the same era, Catholic social teaching was further developed in the direction of moral theology, culminating in what was boldly called a Compendium of the Social Doctrine of the Church (2004). In this compilation, a normative system based on philosophical and theological principles (human dignity, common good, subsidiarity and solidarity) is constructed. In contrast with ecclesial teaching before Vatican II, human rights and democracy are cherished. In contrast with Rerum Novarum, the universal destination of goods is proclaimed. In contrast with Quadragesimo Anno, a specific political program such as corporatism is absent, but in line with earlier documents, civil society is highly regarded whereas the welfare state is criticized as blocking private initiative (Pancorbo, 2012).

The Encyclical Letter Caritas in Veritate, promulgated by Benedict XVI in 2009, contains several concrete positions on globalization and an economy of communion. Yet, this is not the main thrust of its message. Especially, it uses the commemoration of Populorum Progressio (1967) to link its message with the Vatican teaching on bioethics (Spieker, 2011) and to prevent a reception in horizontal terms by elaborating on the presumed philosophical-theological foundation of its message of solidarity, justice and equality in international relations.

Six years later however, Pope Francis (2015), resumed the approach of Populorum Progressio and delivered the Encyclical Letter Laudato Si’, a song of praise which presents a fundamental, encompassing vision on ecology from the perspective of a spiritual and practical interconnectedness of the whole creation: the care for our common home. It answers almost all signaled weaknesses of previous social teaching (McHugh, 2008) and excels in concrete positions: against a tendency to privatize such a resource as water (Francis, 2015, section 20), against the preferential treatment of multinationals (section 51), against the ideology of neoliberalism (section 109), and arguing that politics should limit the power of economic sectors for the sake of the common good (section 196). In comparison with the anti-revolutionary approach of Rerum Novarum, it is remarkable that a plea is made for a “bold cultural revolution” (section 114): a change in the way that science and technology are dealt with. Now, the pope himself expresses a desire for new things. He defends his position as follows:

“We need to develop a new synthesis capable of overcoming the false arguments of recent centuries. Christianity, in fidelity to its own identity and the rich deposit of truth which it has received from Jesus Christ, continues to reflect on these issues in fruitful dialogue with changing historical situations. In doing so, it reveals its eternal newness.” (Francis, 2015, section 121).

Thus, the ‘eternal’ quality is conceived not in opposition, but in accordance with the pretension to develop new insights. As this letter unpacks Catholic social thought for contemporaries it is particularly well-suited for a dialogue with economics and politics. As such it has been recognized by several authors (Latour, 2017). Perhaps, it has one deficiency: it does not contain an understanding reflection of the neo-capitalist, or neo-liberal, ethos. A critical dialogue could benefit from an invitation to its adherents to expose it. As such, a familiar deficiency of Catholic social teaching is continued. Before condemning ‘neoliberalism’, like the pope’s predecessors condemned socialism, it is necessary to understand what it stands for (Spickard, 2013; Venugopal, 2015).


The world of economy cannot ignore the issue of faith. Not only is the economic domain itself built on faith, but Christian faith, more specifically the Christian work ethic, has contributed to the development of the capitalist mentality. In later years, Catholic social thought as it was developed in the engagement with the conditions of the working class influenced a moderate type of capitalism. Whereas the Encyclical Letter Rerum Novarum largely defended capitalism, the subsequent Catholic social movement introduced social reforms of capitalism that found their way into Quadragesimo Anno. Since 1961, Catholic social teaching has criticized capitalism more severely, culminating in the Encyclical Letter Laudato Si’. The latter gives an authoritative voice to the dissatisfaction with dominant views on global ecology and economy and to the longing for alternatives.

Catholic social thought should not be identified with a particular representation of it. It is re-constructed time and again. Having started in its modern form primarily as an alternative for communism, now it has become more critical of capitalism. The primarily philosophical and theological discourse of Catholic social teaching is, however, characterized by a tendency to memorize a past which contains lessons for today and to see the implications for our times of the Christian belief in the Kingdom coming. It relates stories on good and evil to the domain of economy, thereby countering the insulation of the economic domain (Sedlácek, 2011).

As Western economy and Christianity share a common history, and the economic world is in need of change, Catholic social thought should be present in the economic and political debate. Its input will be considered more relevant in as much as it is sociologically, economically and philosophically informed. The dialogue itself might contribute to the advancement of Catholic social thought, for a dialogue will flourish when partners are willing to reflect on the shortcomings within their own traditions.

It is not that capitalism lacks ethics. Capitalism already has an ethic, which consists of dis-embedded elements of a Christian ethic, combined with the calculating utilitarian mind. A ressourcement is needed, which includes going back to the Catholic roots of capitalism. The current Covid-19 pandemic has further weakened the prevailing faith in capitalism. Governments and civil society step forward to serve the common good, also by putting severe restrictions on enterprises while at the same time providing support. Once, Christianity promoted the birth of capitalism. In the present situation, can it inspire the transition of capitalism to an ecocentric economy? If so, contemporary Catholic social teaching is an indispensable partner in the conversation.