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Conservative critiques Pope's views on profit motive, common good

Catholic World News - August 23, 2011

Conservative scholar Richard Epstein, in an essay defending free-market principles and low tax rates, classifies Pope Benedict XVI alongside Warren Buffett as prominent figures who are “working overtime to push social policy in the exact opposite direction.”

Epstein bases his criticism of Pope Benedict on the Pontiff’s statement—made to reporters during his flight to Madrid for World Youth Day last week—that an economic system should be measured not only by profits, but also by how it serves human needs. In Epstein’s view, those “words mirror the refrains of countless Spanish socialists.”

“Structure a system that puts people before profits, and both capital and labor will dry up,” Epstein argues. He explains that profits are necessary in order to provide for the efficient allocation of investment capital, which drives economic growth. But the Pope’s statement does not suggest that profits are undesirable. On the contrary, the Pope recognizes the importance of the profit motive, but adds that there must be other, ethical guidance systems to ensure the proper working of the economic system. Epstein appears to deny the possibility that any free-market transactions could be guided by anything other than the maximization of profits.

The real source of Epstein’s disagreement with the Pontiff becomes evident when he writes:

The "common good" speaks of some aggregate benefit to a community that is not securely tethered to the successes and failures of the particular individuals within the collectivity.

Epstein’s analysis is based on the utilitarian assumption that the welfare of society can be measured only as the total sum of individual goods. Catholic social teaching, as explained by Pope Benedict, argues that the overall welfare of society can be served (or harmed) by the actions of individuals–and that contributions to the common good will ultimately redound to the benefit of all individuals in that society.

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