Introduction by Gregory M. A. Gronbacher

The Moral Mandate for Freedom: Reflections on Centesimus Annus

By Rocco Buttiglione

The recent encyclical Centesimus Annus represents what might be called a springtime in Christian social doctrine. We are now seeing a change take place in this social doctrine but certainly not in the sense that something that was once true has now become false. Catholics, and Christians in general, believe that the truth regarding human nature does not change over time, though there may be changes in how we understand the consequences of the truth as its environment changes. The Catholic Church has become aware of our new social and economic environment, and the changes that have taken place in this environment have made it easier for the Church to see freedom-specifically economic freedom-as a moral mandate.

The change that has taken place in Christian social doctrine in response to the changing social and economic environment is especially evident in two areas: the idea of the common good, and the view of the free market. First, there has been a deepening of the idea of the common good, an idea at the center of Christian social doctrine that implies that people act to pursue their own ends, some of which are of both an individual and a social nature. For example, when you ask me who I am, I usually answer giving you my first name, Rocco, and my family name, Buttiglione, which implies that I am a member of a family and that you cannot really understand who I am without also knowing about my family. These relationships are part of my identity, and because my identity is found to a certain extent in my relationships with other people, I cannot say that something is good for me if it is not also good for them.

I explain the idea of the common good to my students by using this example: Let's suppose that a friend calls me on the telephone and invites me to go with him to the mountains. Since I am married, my usual answer is the answer of all good husbands: "It's a good idea, but give me a bit of time to think about it." Of course, "time to think about it" means "Let me ask my wife." If she is willing, then I will go, but if she is not, then I prefer to stay with her even if I would like to go to the mountains, because staying with her is more important. This example shows that there are people who are part of my life, and I cannot know what I want if I do not know what they want; I cannot know what I will, if I do not know what they will. I belong to them, and my personal good can be determined only in relation to them; therefore what is bad for my wife cannot be good for me. This is why the idea of the common good stands at the center of Christian social doctrine; in fact, it is so important that it would be almost impossible to have Christian social doctrine without it.

Because of its centrality, we must understand how the idea of the common good is formulated. According to one traditional and objective formulation, the common good of a community is the aggregate sum of the particular goods of each individual participating in it. It is therefore possible for someone to know what is good for each and every individual and from this knowledge be able to calculate the common good. In other words, the person who knows what is good for everyone determines the common good. In medieval times this person was called the "good prince."

However, there is an objection to this purely objective determination of the common good: Who is this good prince who knows what is good for me? Can someone outside myself know what is good for me better than I can? In a certain sense it is possible; I know what is good for my daughter better than she, but it is not good for her to do what is good simply because I know it. It must be an expression of her interiority. I can pick the best man in the world for her to marry, but if she does not fall in love with him, the marriage will not be a good one. Likewise, the common good cannot be determined by a simple aggregate calculation done by a "good prince" independent of the participation of the people; freedom and interiority must enter into it.

We can explain this by an example from the histories of Herodotus. After the three leaders of the Persian revolt had succeeded in placing an usurper on the throne, they had a discussion among themselves to choose the perfect form of government for the new state. The first was a proponent of monarchy; he believed a king was the only one who could both establish and realize the common good. The second objected and said that not one person, but a few-the best few together-should govern the people since there is more wisdom in many heads than in one. The third objected to both and defended democracy, but his argument was considered the weakest of the three because of the improbability of finding wisdom among the many.

Nevertheless, the third leader had a very good argument that pertains to the idea of the common good. He saw that men are by nature free, that this freedom corresponds to their dignity, and that they should obey a law to which they freely consent. In other words, the third leader understood that the common good of the people cannot be realized without their participation. This endorsement of democracy does not, of course, warrant the belief that people will understand the common good without struggle. It does mean, however, that the common good pertains to human dignity-that people should, in at least some sense, control themselves and obey reason. Additionally, it presupposes that reason can be explained to the people, because democracy is based on the idea that everyone has the potential for understanding if he has an adequate explanation of the issues.

The Church's understanding of the importance of democracy for the determination of the common good is growing, but this does not imply that the Church accepts the democratic ideology formulated in the nineteenth century. To take a familiar example, Joseph de Maistre's strong criticism of democracy is completely valid: Popular government is not intrinsically good government. However, since the common good of the community cannot be determined without democracy, one cannot renounce it and accept a nondemocratic form of government. The Church has understood this and has viewed democracy as the worst form of government, except when compared with all others.

Indeed, democracy is not perfect; the democratic solution to a problem is not always the best solution because the people sometimes will things that are wrong in and of themselves. So should we impose upon them an authoritarian rule? To help answer this question, we should recall the story of King Philip of Damascus, who one day when he was drunk had to make a ruling on a civil issue. One of his friends had offended a common citizen and the common citizen wanted justice. The king said to the citizen, "I will not give you what you want, because my friend is a good chap, so please leave me alone." Being unsatisfied with the judgment, the common citizen asked for an appeal. "An appeal! To whom? I am the king!" roared King Philip. "An appeal to Philip-sober," said the citizen. Likewise, to endorse democracy is not to say that the people are always right; it is the endorsement of a system that allows one to make an appeal from ignorant, misinformed people who are convinced of false ideas to enlightened people that have all the correct information.

For democracy to work, however, it cannot be based on moral relativism. If there is no moral truth transcending time and place, then truth becomes whatever people want it to be, and there is no potential for enlightenment. The Church has been moving toward democracy with the recognition of its importance in the establishment of the common good, a move refiected in Centesimus Annus, which endorses democracy as no other papal document has before, while at the same time giving a very sharp criticism of the defects and shortcomings of a democracy in alliance with moral relativism.

In addition to rejecting relativism in the democratic process, a society must have confidence in those who try to see and to tell people the truth. This was the great discovery of the Romans, not the Greeks. Plato did not like democracy because he thought that the philosopher would never succeed in moving the people because they would always act according to their passions, in the face of which the philosopher is impotent. Cicero, however, proposed that the orator-a philosopher capable of talking to the people, a good man who knows and loves the people-could help them make good decisions.

The Church recognizes the truth in Plato's strong criticism of democracy in the eighth and ninth book of the Republic, where he argues that because democracy lacks adequate authority, it therefore leads to corruption. The institutions of the city eventually become so despised by the people that the tyrant comes and makes use of the incapacity of the democratic leaders to defend the common good and becomes the master of the city. But this destiny, says Centesimus Annus, is not the destiny of every democracy, but only those democracies that are alive to moral relativism, that do not see the value of elites who tell the people the truth, that pretend there is no truth, or that believe that what the majority wants is the truth. For this reason the democracy endorsed by Centesimus Annus is the kind of democracy developed in the Anglo-Saxon tradition-the kind of democracy found in the Federalist Papers-rather than the continental democracy of the French revolution.

If you look at Alexander Hamilton and James Madison, or at Alexis de Tocqueville, the great teacher of the theory of American democracy, you will see that they all could have been readers of de Maistre. De Tocqueville did read de Maistre, but Hamilton did not, for he died before de Maistre's works reached America. De Maistre did read Hamilton and the Federalist Papers, however. All these thinkers tried to take into account the criticisms of democracy and used them to help find a way to create a state of ordered liberty, a state where the conditions to help the people make good sound choices can be constructed on a democratic basis.

As a result, the Founders of the American political order thought that a chamber of representatives elected for two years was necessary in order to know what the people think and want at the moment but without their passions being able to take the lead immediately; the Founders therefore established a senate elected for six years in which one-third of the members are reelected each two years, thereby ensuring that important changes can take place only if the same opinion dominates the people for three elections over a period of six years. The Founders also wanted an independent judiciary so that even if the senate and the chamber of representatives are willing to do something wrong, there is still an authority to check them. As we know, the judiciary is nominated by the president but is not dependent upon him or the electors and is therefore an independent authority, but in order to create stability in this authority, it is changed only when the people holding that authority become too old for office or die.

This form of democracy and the institutions of ordered liberty can help popular government work with as little virtue as possible and still make wise decisions. This is necessary because virtue is a merchandise not found easily; as a rule, there is not much virtue in any particular group of people. This is why a political constitution must work well with a minimum of virtue, but if the people do not have even this minimum amount of virtue, they are lost. If the people keep willing something wrong over a long period of time, no law or form of government can save a country. Democracy cannot work without virtue; this is the idea of true or ordered liberty.

The first important change we find in Centesimus Annus is the strong endorsement of a democracy with the characteristics of ordered liberty. This comes very close to what the Church has traditionally called mixed government. Even in the nineteenth century when the Church opposed democracy, it did not endorse absolutism. The idea the Church supported was rather a mixed government-joining the advantages of kingship, the common people, and the aristocracy-in which the best could contribute with their wisdom to the determination of the course of action taken by the state. If you consider the American constitution in the reading of the Federalist Papers, you see that Hamilton tries to ground all creative forms of government on the mixed democratic principle. The Supreme Court is a kind of aristocracy, the president a kind of king (only for four or eight years, but nevertheless with more powers than a usual French king), and the representatives are, at the moment of participation, part of the political body.

Up to this point, we have looked at the change in the idea of the common good and the fact that this idea implies the freedom of individuals to govern themselves by democratic processes, but if individuals have such a right to choose, we must reevaluate not only political democracy but also the free market. This is the second relative shift in Centesimus Annus and Christian social doctrine. The free market is not justified merely by the fact that it is the most efficient system for allocating scarce resources to satisfy human needs; there is something more that makes it a desirable economic system.

The smallest element of the free market is a contract, the encounter of the free will of two human beings. They must both be free, for if they are not there can be no contract, and thus no free market. In this way the law of contracts that stands at the very basis of a free-market economy is a law that presupposes human freedom and therefore has ethical value in itself. A free-market economy, an economy where the rule of private law is sustained, is an economy of free persons. Conversely, whenever the extent of the private law is limited, there is danger for human freedom. Thus, the Church's positive judgment on the free market is primarily an ethical one. The person is by nature free; God has created each person to freely choose the truth, and a free economic order is a part of the order of human freedom. This is the first important statement of Centesimus Annus in regard to economic order. We want an order of economic democracy because it implies the law of contracts and the free market, and these presuppose both human freedom and human dignity.

The second important statement of Centesimus Annus in regard to economic order concerns its penetrating understanding of the situation of modern economy. Political economy, as a rule, starts with the determination of the causes of the wealth of nations-the classical formulation of Adam Smith. One traditional explanation, common until the eighteenth century, for the origin of the wealth of nations is land; from land comes gold, silver, and other precious minerals, and land is fruitful and produces all a person needs for existence. There is some truth in this explanation because an economy cannot exist without land, the first plausible explanation for any economic activity, but when I say "land" I mean more than just real estate-I also include in this broad definition material things like the human body. In any human activity there is always first something given by God that functions as its presupposition; the human body is the first presupposition of economics because it is not produced by the economic system itself. Man is not the Creator.

It is evident, however, that the person is a co-creator in that things in nature acquire value only when seen by the person; if economic resources are not seen, then they do not exist. For example, we know from their reports that European tourists crossing the Great Plains in the late eighteenth and early nineteenth centuries encountered oil, but since they did not know what to do with it, it was a nuisance rather than a resource. Oil only became a resource when somebody saw that it could be used in a productive way. In this way the eye of the person participates with the gifts of God to create economic resources.

Now lest I be misunderstood, let me stress that a person needs quite a lot of human virtues to be able to see resources. First of all, one needs a certain passion for theoretical thought; that is, contemplation. Consider this example from the story of Ulysses and the giant cyclops Polyphemus in Homer's Odyssey: Ulysses and his companions are imprisoned in a hole by the cyclops and are overwhelmed by fear, becoming so passive that Polyphemus is able to take and eat a few of them. Ulysses speaks to his heart-believed to be the organ that controlled passions-and asks it to help. Ulysses then becomes calm as he is freed from the debilitating fear over his personal safety, and when he regains mastery over himself, he is able to see that a nearby pole, when sharpened, may become a weapon against the giant and that the sheep can be used as instruments to get out of the hole. Ulysses can now struggle against the giant-a symbol of nature-because he sees clearly and is no longer blinded by his passions. He can see because he was able to recover his contemplative attitude.

This theoretical attitude is essential for seeing resources. Animals do not see things as we do because they lack this theoretical attitude and therefore cannot make use of general knowledge in order to satisfy their needs or desires. But we can. What we call "work" is a complex activity that presupposes the domination of our instincts; we must have a contemplative attitude toward the world and some theoretical knowledge before we can go to the practical task of transforming nature. This is why animals do not work and we do. The existence of this particularity in the human relation to reality implies that there must be different functions in what we call "work." The theoretical side requires us to see things without the preoccupation of making use of them, and then we can go back with a practical attitude to discern what part of the object can be useful to us. So in the very nature of all human work we detect the seed of what we may call "entrepreneurship." Ulysses in the hole is a theoretician but, at the same time, an entrepreneur because he sees a human need-that is, he wants to get out-he sees the resources that can be used to satisfy this need, and he then takes the responsibility of the risk implied in combining them.

So, if we look at the whole structure and origin of wealth, we see that although land is wealth's presupposition, it is not by itself enough to create wealth; human intellect, effort, and work are also needed. The relation between these productive factors-between land and human intelligence, between land and human labor-changes over time. In the eighteenth century the most important factor was land. In the nineteenth it was capital specifically as Marx understood it: capital-machines. In our time we have seen still another change; now the main factor is the quantity of information objectified in the good produced. A very good example is the computer diskette, where one thousandth of its value is the raw material and ninety-nine and nine-tenths percent of its value is the program written on it. It is the value of the human intelligence invested into an object that makes the object valuable.

Once we understand this concept, we can understand the reason for the Church's changing attitude toward political economy in general. Traditionally, the Church has been mainly interested in wealth's distribution rather that its creation. This is understandable because if you understand wealth creation as a task of God and nature, then the good landowner is the one who freely distributes the riches of the earth that are freely given to him. But in the twentieth century, the entrepreneur's wealth depends upon his investments; he must always buy better machines and create reserves for bad years. The entrepreneur is richer than the old landlord, but his wealth is always at risk. Each year he could lose everything; each production cycle he could become poor. He has a different attitude and must work in a different way than the old landowner because he lives in a world where the central economic resource is now human intelligence and virtue, the synthesis of which might be called "laborosity."

The Church now recognizes the centrality of the entrepreneur's social function and sees that if there are no entrepreneurs, there are no riches for anyone. What is the first source of the wealth of nations in this last decade of the twentieth century? Entrepreneurial activity, because it combines human intelligence with other productive factors. This activity is positive in itself and belongs to and is an essential element of a free economy, but it also implies many virtues such as firmness, prudence, laborosity, intelligence, human wisdom, the knowledge of human nature, and the ability to give everyone his due-i.e., justice-without which people are not willing to work for the entrepreneur. So for the first time, in Centesimus Annus, the Church offers an adequate appraisal of the virtues of work, the virtues of the entrepreneur, the social function of entrepreneurship, and the moral mandate for freedom.

This insight of Centesimus Annus is very important for one specific topic that has been considered with growing attention in recent decades by Christian social thought: the problem of development. We have different theories of why economies are underdeveloped. One argues that people are poor because they have no natural resources. This is false because many underdeveloped countries have an enormous abundance of natural resources; in fact, the problem is that the only thing these countries have is natural resources. A second theory argues that these countries do not have enough capital. There is some truth in this because the lack of capital is a very powerful deterrent to growth, but this is not the primary problem. If people have entrepreneurial capabilities, they will have capital, for banks will give them money without trepidation because they would be sure it would be put to good use and within five to ten years be paid back with interest.

The solution to economic underdevelopment is cultural development, helping people acquire the theoretical and practical skills that will endow their young people with the ability to give a greater informative content to the capital used to produce their land. In other words, we need to help them create an entrepreneurial class. The great problem in Latin America, for instance, is that there are only a few authentic entrepreneurs, and not enough to sustain the economy of that region. There are very few people who see resources and opportunities, who join them together, or who take the responsibility for productive progress. Many people expect the government to do this; others do not know how to do this because there is no entrepreneurial tradition. Entrepreneurship needs to be taught in schools, but it must also be a part of family tradition because entrepreneurial capability is not easy to develop.

Another insight from Christian social thought is that on the one hand the social function of entrepreneurs needs to be recognized, but on the other hand entrepreneurs should be conscious of the fact that they have responsibilities to their whole communities that they should embrace. In Latin America, the technical education is certainly missing, but the moral education is often missing even more. So, what is the task of the Church in such situations? The Church must continue to advocate the cause of the poor of this world and to never stop asking people to help the poor, while at the same time teaching people the virtues they need to get out of their situation of misery. One cannot simply blame an unjust international situation; social injustice predominates at the international level because the necessary social virtues are often missing at the local level. If poor countries had a vibrant entrepreneurial class and a responsible political class, these countries would be better able to defend their interests in the international scene. If they are abused, the first cause is their own weakness, and their weakness is, at least in part, the consequence of weak cultural and moral development. The awareness of the need for cultural and moral development must stand at the center of any action we take to help developing countries. Yet we also must help now those who are starving in Somalia, for instance, because we cannot wait twenty years until a new morally responsible entrepreneurial class has been developed; they need something to eat right now, so we must send food along with soldiers to protect from the robbers what we send. But we must also think about the long-term consequences of our present actions and must not be negligent in helping these countries develop functioning free economies.

The moral mandate for freedom is also needed in the United States and Europe because the West has had a pedagogical revolution inspired by socialism. In Germany, for example, social democracy could not realize a socialist revolution in the economy or society, but it has made a revolution in schools. Young people are reared with the idea of a new society that will be different from today's society-a society without competition in which the old virtues of laborosity are not needed, and which is a consumer society, not a worker society. This society will never come, but young people are prepared for this society and not the one we have. Our real society is one with sharpening competition in which one must be willing to work harder and in which one must study especially harder in school. People must learn to learn but not learn just technical knowledge, because this changes easily; a technological revolution may throw a person out of the market and devalue all the knowledge he has. People must be willing and able to change and adapt and do something new, so they need not just specific technical knowledge but also general knowledge of culture.

Instead of telling students that they must study harder and work more in order to find the satisfaction in life they desire, we are preparing people for a world that does not exist. This devastating pedagogical revolution is linked to many of the other failures of our society; for example, the crisis of the family. Senator Patrick Moynihan of New York-with whom I do not often agree-gave a brilliant speech at Fordham University in which he said that the main problem in America is not the unemployed but the unemployable. Many people have not received from their families and schools the fundamental knowledge and virtues needed to find a job and keep it. Work must become a central virtue of our society again if we do not want to perish. We take for granted the prosperity that was constructed through the hard work of past generations, and we forget that prosperity can be lost. This is the challenge of Western societies. The market is not a zero-sum game; it is not necessary that when one enters the market another becomes poorer. The market can be enlarged, but only through hard work, the same hard work that constructed the market in the first place. If we are not capable of doing this hard work, we will become poorer.

There is still a strong connection between doing well and doing good, even though sometimes doing well may be opposed to doing good; it is possible to imagine situations in which if you want to do what is good, then you must pay for it with a failure, maybe even a political failure as in the example of Saint Thomas More. More was a shrewd politician and wanted to do well in politics. He tried as much as possible to be on the winning side, but in the end he had to choose between doing well and doing good and chose not to do well as a politician in order to do good as person. Yet this is not the normal condition of the life of an entrepreneur; as a rule, we try to join doing well and doing good. We can do it in politics and we can do it in our economic activity. There is no opposition in principle but, on the contrary, in order to do well we must be able to do good, at least to some extent. We need virtues because morality and economic prosperity are linked with one another, even if on occasion they may clash.

In my view, Centesimus Annus wants to introduce a new dialogue between the Church and humanity, between morality and responsible free economic activity. In this dialogue, there may be disagreements, and this should not surprise us, for there will always be clashes between people of strong principle. However, what we have in common is more important than what may divide us; what divides us is often on the surface, but what is common to us is freedom. We believe that the person is free in front of God, that the person should be free in political and economic society. We also understand that a free economic and political society requires a certain amount of virtue not produced by these societies and so must be produced by some other agency. The Church proposes herself as the agency responsible for the teaching of these virtues in the coming millennium. We would do well to heed her invitation.

Rocco Buttiglione is pro-rector of the International Academy of Philsosphy in Liechenstein where he is also professor of political philosophy. He is a member of the Pontifical Academy of Social Science and sits on the board of advisors of the Center for Economic Personalism at the Acton Institute for the Study of Religion and Liberty.