Speech to the Leaders and Members of the Centesimus Annus Foundation: Analysis and comments 
Eduardo Rafael Carrasco offers an interesting analysis of the Speech to the Leaders and Members of the Centesimus Annus Foundation of Pope John Paul II 

By: Pope John Paul II | Source: Analysis made by Eduardo Rafael Carrasco 

SPEECH OF THE HOLY FATHER TO THE LEADERS AND MEMBERS OF THE FOUNDATION 
"CENTESIMUS ANNUS, PRO PONTIFICE" 
Saturday 11 September 1999 

Venerated brethren in the episcopate and in the priesthood; 
Illustrious Ladies and gentlemen: 

1. I am glad to meet you again, distinguished members of the foundation "Centesimus annus, Pro Pontifice", that you have come here with your relatives. I salute Monsignor Agostino Cacciavillan, president of the Administration of the patrimony of the apostolic headquarters, to whom I thank the kind words he has directed me. I also salute Monsignor Claudio Maria Celli, secretary of the same Administration, Monsignor Daniele Rota and don Massimo Magagnin, national assistants, and the other ecclesiastics present. I give you a cordial welcome to all of you, who did not want to miss this appointment. 

You met for the last time last February, but you have felt the need to do it once more on the eve of the holy Year 2000. In fact, the jubilee constitutes a great ecclesial appointment, in which your foundation is called to collaborate, in the framework of the jubilee of the world of the work, to prepare the sector of the financial agents. While I thank you for your availability, I congratulate you because, precisely with a view to this event, you have decided in a timely manner to deepen for next year the theme: "Ethics and finances". I know your purpose to organize an international congress on this subject on the eve of the junilar day. I welcome this important initiative, and I hope that it will give abundant fruit. 

In addition, today you have wanted to hear Monsignor Miroslav Marusyn, secretary of the Congregation for the Oriental Churches, who has spoken extensively about my recent apostolic journey to Romania and the many spiritual and material needs that affect the life of the eastern catholic communities. 

2. Illustrious ladies and gentlemen, for your daily experience, you have seen that, within the broad phenomenon of globalization, which characterizes the present historical moment, the so-called "financialization" of the economy is an essential and loaded aspect of consequences. In economic relations, financial transactions have already exceeded the real, to the extent that the scope of finance has already acquired self autonomy. 

This phenomenon raises new and arduous issues from an ethical standpoint as well. One of these concerns is the problem of the relationship between wealth produced and work, by the fact that today it is possible to quickly create great wealth without any connection with a definite amount of work done. It is easy to understand that this is a rather delicate situation which calls for a careful consideration on the part of all. 

In the encyclical Centesimus Annus, addressing the question of the "increasing internationalization of the economy", I recalled the need to promote "valid international control and guidance bodies, which orient the economy itself towards the common good" (N. 58), taking into it also says that economic freedom is only one of the elements of human freedom. Financial activity, according to its own characteristics, must be ordered to serve the common good of the human family.
 
However, we must ask ourselves what are the value criteria that should guide the options of the agents, even beyond the demands of the functioning of the markets, in a situation like the current one, in which a appropriate international normative and legal framework is still missing It is also necessary to ask ourselves what the appropriate authorities are to develop and provide such indications, as well as to ensure their implementation. 

A first step corresponds to the same agents, who could devote themselves to developing ethical or behavioural codes, which are binding on this sector. The leaders of the international community are also called upon to adopt appropriate legal instruments to deal with the crucial situations which, if not controlled, could have disastrous consequences not only in the economic sphere, but also in the social and political. 

And certainly the weakest would be the first to pay the consequences, and the ones who would pay the most.

3. The Church, which is a master of unity and its vocation, walks with men, feels called to protect their rights, with constant solicitude especially for the poorest. With its social doctrine it helps to solve these problems that, in various sectors, influence the life of men, aware that "even when the economy and moral discipline, each in its field, have its own principles, despite this is wrong that the economic order and the moral are so estranged and oblivious to each other, that under no regard would that be dependent on it "(Pius XI, Quadragesimo Anno, 42). The challenge is arduous, because of the complexity of the phenomena and the speed with which they arise and develop. 

Christians, who work in the economic sector and, particularly in the financier, are called upon to discover appropriate ways of fulfilling this duty of justice, which for them is evident in their cultural approach, but which can be shared by all who want to put the human person and the common good at the center of any social project. Yes, all your operations in the financial and administrative fields must always be aimed at never violating the dignity of man, building for this purpose structures and systems that favor justice and solidarity for the good of all. 

4. On the other hand, it should be added that the processes of globalization of markets and communications do not themselves have an ethically negative connotation, and therefore cannot be taken in front of them an attitude of summary condemnation and a priori. However, those that appear in principle as factors of progress can produce, and indeed already do, ambivalent or decidedly negative consequences, especially to the detriment of the poorest. 

It is therefore a matter of finding change and making it contribute to the common good. Globalization will have very positive effects if it relies on a strong sense of the absolute value of the dignity of all human persons and of the principle according to which the goods of the earth are destined for all. There is space, in this direction, to work in a loyal and constructive way, also within a sector very exposed to speculation. For this purpose, it is not enough to respect local laws or national regulations; there is a need for a global sense of justice, which corresponds to the responsibilities at stake, noting the structural interdependence of relations between men beyond national borders. 

In the meantime, it is very opportune to support and promote the projects of "ethical finance", of micro-credit and of "equitable and solidary trade", which are available to all and also have a positive pedagogical value, oriented towards global stewardship. 

5. We are in the twilight of a century that has experienced, also in this field, rapid and fundamental changes. The imminent celebration of the great jubilee of the year 2000 represents a privileged occasion for a wide-ranging reflection on this problem. Therefore, I thank your foundation "Centesimus Annus", who wanted to orient their work in the light of the great jubilee event, taking into account the perspective I indicated in the apostolic letter Tertio millennio adveniente. Indeed, I wrote that "the commitment to justice and peace in a world like ours, marked by so many conflicts and intolerable social and economic inequalities, is an outstanding aspect of the preparation and celebration of the jubilee" (N. 51). 

Dear brethren, you have understood that the jubilee year invites you to give your specific and qualified contribution so that the word of Christ, who came to evangelize the poor (cf. Lc 4, 18), will find welcome. I support you cordially in this initiative, with the wish that, thanks to the jubilee, it will ripen "a new culture of international solidarity and cooperation, in which everyone, especially the rich countries and the private sector, will assume their responsibility in a model of economy at the service of each person "(Incarnationis mysterium, 12). 

With these feelings, while I wholeheartedly wish the foundation to grow, to provide an ever more effective collaboration to the Holy See and the Church in the work of the new evangelization and the establishment of the civilization of love, I commend all your projects and initiatives to Mary, Mother of hope. 

Accompany you and also hold my blessing, which I am pleased to impart to you and to all your loved ones.

 

Case Analysis: 
The financial expansion of the economy 
Summary of its exhibition 

1.-In a discourse on the financialization of the economy, John Paul II emphasizes that financial transactions have several questions because they exceed the real transactions. It is striking that from an ethical point of view (without entering into technical reasons) the question arises as to how it is possible to create disconnected wealth from the work carried out, and which make up a rather delicate scenario. 

2.-Alert also to the absence of controls, adequate regulatory frameworks and appropriate authorities to act, and recalls that in 1991-on the occasion of publishing its encyclical Centesimus Annus-claimed the need to promote international bodies of valid control and guidance, which orient the economy itself towards the common good "(N. 58). 

3.-It prevents possible crucial situations that, if not controlled, could have disastrous consequences not only in the economic sphere but also in the social and political. And certainly, the weakest would be the first to pay the consequences and the ones who would pay the most. 

4.-Warns that although the markets do not themselves have an ethically negative connotation, they are seen as a sector very exposed to speculation. 

5.-Finally it exposes fundamentals, criteria, and some guiding guides and application practices to confront the problem, and to orient the economy and the finances to the service of the man. –-John Paul II places the phenomenon of the so-called "financialization" of the economy, within the context of globalization. In fact this subject was already reflecting since the year 1991, on the occasion of the promulgation of the encyclical Centesimus Annus, and where it expressly pointed out the modern phenomenon of the planetary economy in which the internationalization of the activities was growing economic, and the consequent opportunities that opened for humanity in pursuit of greater well-being. 

But also there, it warned of the lack of correspondence between that growth, and the appropriate international control and guidance bodies valid to guide the economy towards common welfare. These organs would be all the more necessary because a State alone could not undertake that task, even if it were the most powerful on earth. 

Faithful to its proposals to generate a great agreement between the larger countries and the international organizations, it also proposed to have the presence and participation of all the components of the great human family, to promote solidarity actions in attention to those in need and with greater difficulty. 

The current situation at the end of the twentieth century led him to observe the outstanding expansion of financial markets and to warn first of all that financial transactions had already exceeded the real ones, to the extent that the scope of the finances has then acquired self-autonomy. 

His analysis focuses on an ethical approach, which arises naturally from the observation of reality: if finances have acquired self-autonomy, then: what relationship do they keep with the riches produced? 

He had said especially since the Encyclical Laborem Exercens, that the true foundation of wealth lies in human labor.
 
He then exposes a crucial question, which poses as an ethical question: what is the relationship between the wealth produced and the work done, given the fact that it is possible to quickly create great wealth without any connection to a certain amount of work. Ultimately his purpose was to alert on a phenomenon that habitually goes unnoticed for the common man: the value of money. 

If finances do not relate to the wealth produced, and the wealth produced is unrelated to work, then finances are not related to work. The subsequent conclusion to this reasoning is that finances have acquired self-autonomy. 

Now, does it make sense to say that money is worth by itself? Does a paper say it is worth $100, irrespective of whether it has "created" an equivalent real wealth? And if the product is equivalent to the income, can there be $100 that has not been generated by anyone? And who has appropriated them? 

However, we will be faced with a problem if – as it happens today – it is possible to quickly create great wealth without any connection with a defined amount of work done. He has invited to discover an absurd and illogical situation, but which, with simple criteria, has put it mildly: it is easy to understand that this is a rather delicate situation, which requires careful consideration on the part of all.

Case analysis 
It must be judged in the relevant context. 
The financial activity cannot be disconnected from the rest of the economic activities. And again he wields an implicit syllogism: if human activities are free, and economic activity is only one of the elements of that human freedom, which must be oriented towards the common good; the financial activity-which is part of the economic activity must, therefore, be ordered at the same end, the common good. 

Moreover, this orientation towards that common good requires the presence of valid control and guidance bodies that channel the economy. It then notes that they are absent, as there is a lack of an adequate international normative and legal framework. 

Implicitly it has already ruled out that it is the market itself that can regulate in this case. In its encyclical Centesimus Annus had clarified the criteria for evaluating a market economy: a system in which freedom, in the economic sphere, is not framed in a solid legal context that puts it at the service of integral human freedom and considers it as a particular dimension of it, whose center is ethical and religious cannot deserve a positive qualification. 

Precisely the absence of an international normative and legal framework, and without determining who would be the appropriate authorities to elaborate and provide these indications, as well as to ensure their application, leads him to ask about the criteria of value that should guide the options of the agents, even beyond the demands of the functioning of the markets. 

His humanist view of the operation of economic activity and in this particular case the financial activity-although he recognizes the demands that the activity of the markets implies-leads him to emphasize the importance of the human actions in him. 

Proposals 
That is why his proposal traces as policy criteria that a first step corresponds to the same agents (financiers), who could devote themselves, to the elaboration of ethical or behavioral codes, which are binding on this sector. 

Then the leaders of the international community are also called upon to adopt appropriate legal instruments to deal with the crucial situations. 

The Pope does not share the mechanistic vision of the functioning of the economy but recognizes that behind it are hidden people and interests, which trigger in favor of some and to the detriment of others. It also appreciates the difficulties for a sector very exposed to speculation. 

This situation deserves particular care, in the process of globalization of the markets, because those that appear at the beginning as factors of progress can produce... ambivalent or decidedly negative consequences to the detriment of the poorest.
 
Again, the observation of the interdependence of people, societies, and activities, being an opportunity for progress, also requires rules of behavior and global justice, which correspond to the responsibilities at stake. The control of the activities cannot then be left to the opinion of mechanisms that escape from human control. 

His reasons 
Underlie the papal intervention in the economic-financial issues, reasons have a general-purpose: the guardianship of the men, and particularly for the poorest. 

From their perspective it is perceived that these activities are not a "zero-sum game", but that they generate benefits and harms, or as has been said on another occasion, excessive hoarding amasses wealth-generating poverty. 

In a second place, since it is impossible to separate the economic from the human, the economy carries a moral assessment. This is why he referred directly to the expressions of Leo XIII when he stated that "even when the economy and moral discipline, each in their field, have their principles, in spite of it it is erroneous that the economic order and the moral are so estranged and oblivious among themselves, that under any aspect depended on that one of this one "(Pius XI, Quadragesimo Anno, 42), and therefore also added that all operations in the financial and administrative field should always have the objective of never violating the dignity of man, building with this end structures and systems that favor justice and solidarity for the good of all. 

Operational morality and practical scope 
One of his concrete contributions in the economic aspects comes and is based on his conception of ethics, which is not understood as a set of norms to be fulfilled, nor a sequence of mandates and prohibitions.

In JPII ethics has an active dimension. It is not simply "to avoid evil", but also to "do well". Distinguishing between technical aspects in the productive activities of goods and services does not repair exclusively in the technical. It emphasizes, even more, the human work, honest and virtuous, concerning the evil to act. 

Moreover, the work influences decisively on technical doing. 

Hence, when he mentions that the Church has no technical proposals to offer, he immediately points out that he does have the mission of illuminating the actions of men, orienting them in the sense of their activities and their aims, and giving them the impetus to their tasks. 

In many of his exhibitions before businessmen, he will refer to the virtues necessary for the proper business of his businesses, and on the contrary, he warns about the dangers that lurk them, especially in his intemperate cravings of wealth and profit motives. 

This approach to ethics, allows you to advance on financial activities with a firm step, and without being deceived by the games of the markets and the mirages of promising extraordinary gains. 

Anticipating the financial crisis 
From this perspective, the recent global financial crisis that occurs precisely in writing this research can be interpreted. 

As stated above, already since 1991 was alerted on the need for adequate controls in the sector. And in May 1998 I anticipated that: it is necessary to work for a culture of the rules, which not only takes into account the commercial aspects but also takes care of the defense of human rights around the world. Indeed, for the globalization of the economy not to have the dire consequences of the savage explosion of private and group selfishness, the progressive globalization of the economy must increasingly correspond to the “global” culture of solidarity, attentive to the needs of the weakest. 

Therefore, from an ethical point of view, he demonstrates the importance of this approach even in operational key because: 

• Alert on the countersense of financial expansion concerning productive activities. 

• It also alerts on the lack of relationship between these riches and the work. 

• Alert on the absence of international control bodies to order the activity. 

• Warning of the absence of an appropriate international normative and legal framework. 

• Warning of the harm that the weakest would have, for they would be the first to pay the consequences of an eventual crisis. 

• Also alerts on a sector like the financial one very exposed to the speculation. 

• Alerts on the need for a global justice system that applies the rules agreed by all actors. 

At this point, it is true to say that an ethical approach cannot specify when a crisis can be precipitated. 

But it is also true that even the prestigious international institutes and agencies technically competent for it were unable to specify the severity of the circumstances. And that happens precisely not so much because of a difficulty in the mechanisms of control, but rather in the concrete men who handle these mechanisms, and for the causes that the pontiff himself warned. 

In this regard, the concordance, when the crisis erupted, is remarkable, from various parts of the world voices were raised criticizing the greed and lack of responsibility and foresight of the institutions and people involved. 

A derivative aspect and also of the importance of this approach of JPII is that it allows us to propose ways of solution orientation and simultaneously, to evaluate the technical proposals referred to the problem. 

Thus, being the foundation of the ethical perspective the dignity of the human person and his subsequent duties and rights, it appears clear that the solutions can not pass exclusively by a rescue of the financial institutions involved, and ignorance in solidarity with the consequential damage on savers, debtors, and later on the productive sector of the economy. 

Secondly, having been criticized after the crisis, the excessive search for wealth, it is clarified to understand that the current systems of rewards and bonuses tied to profitability end up hindering the transparency of markets, and inducing to risky activities that lead to financial and economic crises.

Other proposals
This same perspective based on the dignity of the human person allows JPII to suggest some proposals. 

He indicates then as very opportune to support and to promote the projects of ethical finance, of microcredit and equitable and solidarity trade, that is accessible to all and also have a positive pedagogical value,  to be oriented to the global co-responsibility. 

All these proposals, seemingly of lesser relevance to the dimension of today's financial markets, contain implicit teaching: that of prioritizing – according to the principle of subsidiarity – the activities of micro, small and médium sized enterprises and give them opportunities to open up to larger markets through cooperation. 

On the other hand, given the preponderance of the economy in the context of globalized markets, and always bearing in mind the interdependence of men and institutions, promotes an impulse to the purposes of international cooperation with the participation and special attention of weaker sectors and countries. An opposed approach to the one that has been preached until the present.