Address of Archbishop Diarmuid Martin at the MacGill Summer SchoolJohn Hume Lecture 2009
THE IRISH ECONOMY – WHAT WENT WRONG?
HOW WILL WE FIX IT?
I was struck by the phrase of Franklin D Roosevelt quoted by Joe Mulholland in his introduction to the programme for this year’s MacGill Summer School: “We have always known that heedless self-interest was bad morals; we know now that it is bad economics”.
Joe’s conclusion is that while FDR realised the truth of that phrase in 1936, today we can all say in chorus: “Don’t we just know it!” The problem is that I am not so sure that as yet we have fully understood what the phrase of FDR really means.
I suppose it goes back to my natural suspicion and perhaps to my diplomatic training, that I have a particular disquiet about adjectives. So the first word that I began to look at in FDR’s phase was the word heedless. We would all agree that heedless self-interest was immoral. But what do we mean by heedless or better still what would we consider to be the opposite of heedless self-interest?
There are those who would say that enlightened self-interest is not just acceptable but in the long term is an attitude which is in fact favourable towards, and indeed vital for, economic growth and the generation of wealth. Again we would have to examine what sort of a package of enlightenment would be at the basis of such an affirmation.
Certainly enlightened self-interest is a strong motivating factor which gives human creativity and innovation a particular edge. The fundamental question we should be asking however is: is “self” really the dominant notion on which to base our motivation for action in the economic sphere? The economy has a social function. Catholic social teaching defends the right to private property, but asserts also that all property is subject to a social mortgage. I saw this dynamic play out, for example, in the WTO debates surrounding intellectual property and access to medicines for HIV/AIDS. In all probability we will see it again around the response to the swine-flu virus. Protection of intellectual property rights will encourage research, but that research belongs within the broader responsibility of the protection of health globally. The ownership of knowledge also bears a social mortgage. Self interest alone, no matter how enlightened, cannot be the sole measure for evaluating relations within a society or in a global world.
The fact of mutual interdependence which is the essential starting place of globalization means that no individual, no individual business enterprise, no individual country, no individual sector in society can go it alone. In today’s world the concepts of entitlement and self-interest or indeed group-interest or sectoral–interest, with whatever adjective we may wish to add, have to be twinned with the concept of solidarity, which defines the responsibility side of the equation regarding any economy.
As we look at the current economic situation on the national and global level I believe that we have to generate new parameters for defining and putting into practice that twinning process. Our economy needs to balance its books and to do so in a way which is sustainable. But that sustainability will be determined not just by simply cutting back on spending and getting the sums right, but by optimising all spending in such a way that the overall objectives of an economy at the service of society can best be realised. Cut-backs should never loose sight of the long-term objective to be achieved.
To do this we have to re-define the word heedless and more closely identify the factors - human, economic and social - to which we should be paying heed.
I have stressed on various occasions my conviction that Ireland today urgently needs a poverty strategy. A poverty strategy is not a luxury for times of prosperity, but an essential demand in leaner times. By a poverty strategy I do not mean simply providing essential social security, much less hand-outs. I mean focussed attention on ensuring that, in the lean years, human potential and talent are fostered and that a response to disadvantage in realising such talent be prioritised. A poverty strategy in times of cut backs has to look at investment in education and in fighting disadvantage with lenses which do not just focus on the broad percentages of cut backs. Even in times of tightening-up, there are areas where the wide-focus lens is the only appropriate one.
Let me come back to FDR’s affirmation that heedless self-interest was bad morals. The second word of FDR’s phrase which I felt needed closer examination was morals. The term morals is a word open to many interpretations, more so than ever today when there is on a global level and in our own society no longer a fundamental agreement on where morality is founded and thus where pragmatism or utilitarianism or indeed self-interest can come to dominate our thoughts.
For many, morality in business is about not breaking the norms of fair competition, honesty and transparency, and not being involved in deceit or corruption. This is a job-description written very much in negative terms of “not breaking”, but would that we were even there!
For others, morality in business would focus on respect for the protagonists of economic activity, people with their rights and their entitlements. There are others who would stress that morals mean delivering to the shareholders, remembering that the shareholder may well be not just the speculator or the professional investor, but may be people’s life-savings, or investment to guarantee certain social benefits, such as pensions, or even the production of social goods such as medicine and health care. We see here again another dimension of how the economy always has a social function which must always be heeded.
Morals are not primarily about immorality. The moralist is not primarily the one who criticises, who points the finger, who judges others, very often sitting in a comfortable armchair on the sidelines observing and judging those who have to make daily and difficult decisions. In the past, it was ecclesiastics who took with gusto to moralising in that sense. Today they have been joined and indeed superseded by a wide range of secular pundits.
Morals must be rescued from such negativity and move towards a morality of proposing, of setting out indications of the framework in which moral imperatives about the good and the truth in society can be marked out and put into practice.
In this context I would like to pay tribute to John Hume, in whose honour this annual lecture is held, who in the midst of the crisis of society in Northern Ireland of the late 60’s and in the years that followed had the clarity and determination to identify things to be criticised and rejected, but who yet never lost sight of his underlying forward-looking vision of a different Northern Ireland, a different Ireland and a different relationship with Ireland’s nearest neighbour and Ireland’s European roots and hopes. In facing the problems of our economy today the only solution is the long-term solution. Pragmatic decisions have to be taken, but they will never be truly pragmatic without “the vision thing” also, to quote another US President.
What went wrong with the Irish economy? There is an abundance of analysis and abundant attribution of blame, of short-sightedness and of heedlessness and there is ample space for the old fashioned negative moralising about which I have spoken. To answer the second question posed to this summer school – How will we fix it? – we need much more morality of proposing and vision.
What is the contribution to this fixing process not just of the extraordinary pool of technical talent and wisdom that that is gathered here this week, but also of morals? What sort of ethical framework might be needed to ensure that we can truly “fix it”? What are the fundamental moral choices that have to be made, what sort of society do we need to foster and what sort of people must we be in order to achieve this? These are not simply technical questions.
Indeed I would immediately take task with the term “fix it”. I believe that for too long now in Irish politics we have lived in a “fix-it” mode and that perhaps the day has come for one of those occasional quantative and qualitative leaps which have also characterised the history of Irish politics. I believe that the challenge today is not just to fix it, but to change it and to change our ways of carrying out politics and to change ourselves as individuals and as a society. A climate of uprightness can only be generated by people who are upright. I quote the latest Encyclical of Pope Benedict XVI Caritas in Veritate: “Development is impossible without upright men and women, without financiers and politicians whose consciences are finely attuned to the common good” (n71).
Pope Benedict in his first Encyclical Deus Caritas Est surprised some by stating that it is not the task of the Church to create a just society, but the task of politics. “Building a just social and civil order, wherein each person receives what is his or her due, is an essential task which every generation must take up anew. As a political task, this cannot be the Church's immediate responsibility”. (n.28)
“The Church cannot and must not take upon herself the political battle to bring about the most just society possible. She cannot and must not replace the State. Yet at the same time she cannot and must not remain on the sidelines in the fight for justice. She has to play her part through rational argument and she has to reawaken the spiritual energy without which justice, which always demands sacrifice, cannot prevail and prosper… A just society must be the achievement of politics, not of the Church. Yet the promotion of justice through efforts to bring about openness of mind and will to the demands of the common good is something which concerns the Church deeply”. (ibid.) At a moment when there is a certain disillusionment with politics, a moment in which many young people do not even vote, the Pope’s endorsement of the centrality of politics is striking.
When I speak of a qualitative leap in Irish politics I must be the first to say that part of any qualitative change must involve the relationship between Church and State, between Church and politics in a changing Ireland. There are many aspects of the relationship between Church and State in Ireland which are, as I said recently in the debate about schools, part of a hangover of our particular historical past.
When I speak of the changing role of the Church, I would not want to give the impression that it is all about being more compliant and more tolerant towards today’s open-mindedness. I am not giving, as some would claim, a sort of blessing to a more secular vision of Ireland and nowhere more than in Ireland does secularism paradoxically like being blessed. Nor am I favouring the more radical response of those who would tell me: thanks for coming, now you can go off back to Drumcondra or to your sacristies or to your historical past and keep your historical hangovers out of our lives!
The Church in Ireland has to move away from any temptation to maintain an attitude of dominance. But no one wants a Church which just gives a moral veneer to the ways of society. The Church has its mission, to preach the Gospel of Jesus Christ, and that Gospel is not the Gospel of a comfort zone.
But many sectors of secular Ireland also have to find new ways of addressing their own historical hangovers about faith and learn to relate in an adult way with the place of religious belief in society. A vital democracy must find ways in which the values, including the religious values, of all are welcomed and cherished.
You may think that I have drifted away from the theme of this summer school on the Irish economy. I believe that the idea of moving from the hangovers of our historical past regarding the role of the Church opens up some areas of reflection on a new vision of politics and the economy in Ireland.
Certainly a situation in which a Church took over day to day responsibility for the running of most of the school system and of our hospitals was – and still is - an anomaly. But the answer, I believe, is not simply handing everything over to complex State bureaucracies whose efficiency has certainly yet to be proven. Pope Benedict’s Encyclical speaks about “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”. Market mechanisms can be used to deliver social goods, while a non-profit model can provide certain services in a more efficient way than business or the State.
Underlying many of the key insights of Pope Benedict’s Encyclical is the application of the principle of subsidiarity to a modern economy and the creation of a model of government and economy with a much wider participation of intermediary subjects. A State which simply delegated a wide part of its social responsibilities to a Church had gotten it wrong; a State which takes over the entire package is on equally dodgy ground. Monopolies of ideas can be as dangerous as monopolies in the business sector and the result could easily be a society which is passive and in that sense impoverished and less a free society. To use the 1972 words of an anti-conformist Italian song writer, Giorgio Gaber, who were he still alive might be surprised to be quoted by a Churchman: “la libertà è partecipazione”: freedom is participation.
Ireland needs today not just a revival of social partnership, but an even wider model of social participation. Civil society is not a totally separate third force, distinct from State and market. Civil society is not a cheap alternative or a fire brigade for social emergencies. Civil society and the values which are characteristic of it should also be seen as a protagonist of the economy, both in terms of the goods and services it can provide, but also as regards its basic inspiration and value system which has a different view of profit. There are various types of business enterprise which do not simply fit into the traditional clear distinction between “private” and “public”.
There are economic actors of various types which, again to quote Pope Benedict, “without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself” (Caritas in Veritate, n.38)
The profound concept of gratuitousness is an essential antidote to consumerism and a narrow market-focussed mentality. As a person I can and must offer my neighbour not just goods and services, but also something of myself. It is a concept which if embraced will inevitably lead to a new way of understanding business since “investment always has a moral as well as an economic significance” (n.40). Economic growth and solidarity are not two parallel tracks. For Pope Benedict “solidarity and reciprocity can also be conducted within economic activity and not only outside or after it”.
Joe’s conclusion is that while FDR realised the truth of that phrase in 1936, today we can all say in chorus: “Don’t we just know it!” The problem is that I am not so sure that as yet we have fully understood what the phrase of FDR really means.
I suppose it goes back to my natural suspicion and perhaps to my diplomatic training, that I have a particular disquiet about adjectives. So the first word that I began to look at in FDR’s phase was the word heedless. We would all agree that heedless self-interest was immoral. But what do we mean by heedless or better still what would we consider to be the opposite of heedless self-interest?
There are those who would say that enlightened self-interest is not just acceptable but in the long term is an attitude which is in fact favourable towards, and indeed vital for, economic growth and the generation of wealth. Again we would have to examine what sort of a package of enlightenment would be at the basis of such an affirmation.
Certainly enlightened self-interest is a strong motivating factor which gives human creativity and innovation a particular edge. The fundamental question we should be asking however is: is “self” really the dominant notion on which to base our motivation for action in the economic sphere? The economy has a social function. Catholic social teaching defends the right to private property, but asserts also that all property is subject to a social mortgage. I saw this dynamic play out, for example, in the WTO debates surrounding intellectual property and access to medicines for HIV/AIDS. In all probability we will see it again around the response to the swine-flu virus. Protection of intellectual property rights will encourage research, but that research belongs within the broader responsibility of the protection of health globally. The ownership of knowledge also bears a social mortgage. Self interest alone, no matter how enlightened, cannot be the sole measure for evaluating relations within a society or in a global world.
The fact of mutual interdependence which is the essential starting place of globalization means that no individual, no individual business enterprise, no individual country, no individual sector in society can go it alone. In today’s world the concepts of entitlement and self-interest or indeed group-interest or sectoral–interest, with whatever adjective we may wish to add, have to be twinned with the concept of solidarity, which defines the responsibility side of the equation regarding any economy.
As we look at the current economic situation on the national and global level I believe that we have to generate new parameters for defining and putting into practice that twinning process. Our economy needs to balance its books and to do so in a way which is sustainable. But that sustainability will be determined not just by simply cutting back on spending and getting the sums right, but by optimising all spending in such a way that the overall objectives of an economy at the service of society can best be realised. Cut-backs should never loose sight of the long-term objective to be achieved.
To do this we have to re-define the word heedless and more closely identify the factors - human, economic and social - to which we should be paying heed.
I have stressed on various occasions my conviction that Ireland today urgently needs a poverty strategy. A poverty strategy is not a luxury for times of prosperity, but an essential demand in leaner times. By a poverty strategy I do not mean simply providing essential social security, much less hand-outs. I mean focussed attention on ensuring that, in the lean years, human potential and talent are fostered and that a response to disadvantage in realising such talent be prioritised. A poverty strategy in times of cut backs has to look at investment in education and in fighting disadvantage with lenses which do not just focus on the broad percentages of cut backs. Even in times of tightening-up, there are areas where the wide-focus lens is the only appropriate one.
Let me come back to FDR’s affirmation that heedless self-interest was bad morals. The second word of FDR’s phrase which I felt needed closer examination was morals. The term morals is a word open to many interpretations, more so than ever today when there is on a global level and in our own society no longer a fundamental agreement on where morality is founded and thus where pragmatism or utilitarianism or indeed self-interest can come to dominate our thoughts.
For many, morality in business is about not breaking the norms of fair competition, honesty and transparency, and not being involved in deceit or corruption. This is a job-description written very much in negative terms of “not breaking”, but would that we were even there!
For others, morality in business would focus on respect for the protagonists of economic activity, people with their rights and their entitlements. There are others who would stress that morals mean delivering to the shareholders, remembering that the shareholder may well be not just the speculator or the professional investor, but may be people’s life-savings, or investment to guarantee certain social benefits, such as pensions, or even the production of social goods such as medicine and health care. We see here again another dimension of how the economy always has a social function which must always be heeded.
Morals are not primarily about immorality. The moralist is not primarily the one who criticises, who points the finger, who judges others, very often sitting in a comfortable armchair on the sidelines observing and judging those who have to make daily and difficult decisions. In the past, it was ecclesiastics who took with gusto to moralising in that sense. Today they have been joined and indeed superseded by a wide range of secular pundits.
Morals must be rescued from such negativity and move towards a morality of proposing, of setting out indications of the framework in which moral imperatives about the good and the truth in society can be marked out and put into practice.
In this context I would like to pay tribute to John Hume, in whose honour this annual lecture is held, who in the midst of the crisis of society in Northern Ireland of the late 60’s and in the years that followed had the clarity and determination to identify things to be criticised and rejected, but who yet never lost sight of his underlying forward-looking vision of a different Northern Ireland, a different Ireland and a different relationship with Ireland’s nearest neighbour and Ireland’s European roots and hopes. In facing the problems of our economy today the only solution is the long-term solution. Pragmatic decisions have to be taken, but they will never be truly pragmatic without “the vision thing” also, to quote another US President.
What went wrong with the Irish economy? There is an abundance of analysis and abundant attribution of blame, of short-sightedness and of heedlessness and there is ample space for the old fashioned negative moralising about which I have spoken. To answer the second question posed to this summer school – How will we fix it? – we need much more morality of proposing and vision.
What is the contribution to this fixing process not just of the extraordinary pool of technical talent and wisdom that that is gathered here this week, but also of morals? What sort of ethical framework might be needed to ensure that we can truly “fix it”? What are the fundamental moral choices that have to be made, what sort of society do we need to foster and what sort of people must we be in order to achieve this? These are not simply technical questions.
Indeed I would immediately take task with the term “fix it”. I believe that for too long now in Irish politics we have lived in a “fix-it” mode and that perhaps the day has come for one of those occasional quantative and qualitative leaps which have also characterised the history of Irish politics. I believe that the challenge today is not just to fix it, but to change it and to change our ways of carrying out politics and to change ourselves as individuals and as a society. A climate of uprightness can only be generated by people who are upright. I quote the latest Encyclical of Pope Benedict XVI Caritas in Veritate: “Development is impossible without upright men and women, without financiers and politicians whose consciences are finely attuned to the common good” (n71).
Pope Benedict in his first Encyclical Deus Caritas Est surprised some by stating that it is not the task of the Church to create a just society, but the task of politics. “Building a just social and civil order, wherein each person receives what is his or her due, is an essential task which every generation must take up anew. As a political task, this cannot be the Church's immediate responsibility”. (n.28)
“The Church cannot and must not take upon herself the political battle to bring about the most just society possible. She cannot and must not replace the State. Yet at the same time she cannot and must not remain on the sidelines in the fight for justice. She has to play her part through rational argument and she has to reawaken the spiritual energy without which justice, which always demands sacrifice, cannot prevail and prosper… A just society must be the achievement of politics, not of the Church. Yet the promotion of justice through efforts to bring about openness of mind and will to the demands of the common good is something which concerns the Church deeply”. (ibid.) At a moment when there is a certain disillusionment with politics, a moment in which many young people do not even vote, the Pope’s endorsement of the centrality of politics is striking.
When I speak of a qualitative leap in Irish politics I must be the first to say that part of any qualitative change must involve the relationship between Church and State, between Church and politics in a changing Ireland. There are many aspects of the relationship between Church and State in Ireland which are, as I said recently in the debate about schools, part of a hangover of our particular historical past.
When I speak of the changing role of the Church, I would not want to give the impression that it is all about being more compliant and more tolerant towards today’s open-mindedness. I am not giving, as some would claim, a sort of blessing to a more secular vision of Ireland and nowhere more than in Ireland does secularism paradoxically like being blessed. Nor am I favouring the more radical response of those who would tell me: thanks for coming, now you can go off back to Drumcondra or to your sacristies or to your historical past and keep your historical hangovers out of our lives!
The Church in Ireland has to move away from any temptation to maintain an attitude of dominance. But no one wants a Church which just gives a moral veneer to the ways of society. The Church has its mission, to preach the Gospel of Jesus Christ, and that Gospel is not the Gospel of a comfort zone.
But many sectors of secular Ireland also have to find new ways of addressing their own historical hangovers about faith and learn to relate in an adult way with the place of religious belief in society. A vital democracy must find ways in which the values, including the religious values, of all are welcomed and cherished.
You may think that I have drifted away from the theme of this summer school on the Irish economy. I believe that the idea of moving from the hangovers of our historical past regarding the role of the Church opens up some areas of reflection on a new vision of politics and the economy in Ireland.
Certainly a situation in which a Church took over day to day responsibility for the running of most of the school system and of our hospitals was – and still is - an anomaly. But the answer, I believe, is not simply handing everything over to complex State bureaucracies whose efficiency has certainly yet to be proven. Pope Benedict’s Encyclical speaks about “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”. Market mechanisms can be used to deliver social goods, while a non-profit model can provide certain services in a more efficient way than business or the State.
Underlying many of the key insights of Pope Benedict’s Encyclical is the application of the principle of subsidiarity to a modern economy and the creation of a model of government and economy with a much wider participation of intermediary subjects. A State which simply delegated a wide part of its social responsibilities to a Church had gotten it wrong; a State which takes over the entire package is on equally dodgy ground. Monopolies of ideas can be as dangerous as monopolies in the business sector and the result could easily be a society which is passive and in that sense impoverished and less a free society. To use the 1972 words of an anti-conformist Italian song writer, Giorgio Gaber, who were he still alive might be surprised to be quoted by a Churchman: “la libertà è partecipazione”: freedom is participation.
Ireland needs today not just a revival of social partnership, but an even wider model of social participation. Civil society is not a totally separate third force, distinct from State and market. Civil society is not a cheap alternative or a fire brigade for social emergencies. Civil society and the values which are characteristic of it should also be seen as a protagonist of the economy, both in terms of the goods and services it can provide, but also as regards its basic inspiration and value system which has a different view of profit. There are various types of business enterprise which do not simply fit into the traditional clear distinction between “private” and “public”.
There are economic actors of various types which, again to quote Pope Benedict, “without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself” (Caritas in Veritate, n.38)
The profound concept of gratuitousness is an essential antidote to consumerism and a narrow market-focussed mentality. As a person I can and must offer my neighbour not just goods and services, but also something of myself. It is a concept which if embraced will inevitably lead to a new way of understanding business since “investment always has a moral as well as an economic significance” (n.40). Economic growth and solidarity are not two parallel tracks. For Pope Benedict “solidarity and reciprocity can also be conducted within economic activity and not only outside or after it”.
For this vision to work, we need more than ever today real political leadership at local, national and international levels. This is needed especially in the light of the process of globalization. Without clear political leadership, the current economic crisis and the challenges of globalization might actually undermine some of the foundations of democracy.
The current economic crisis poses a real challenge to government institutions. After years of calling for “small government”, many of the more strident proponents of small government are looking for government to bail them out, much to the annoyance of ordinary citizens. But government must also take its share of responsibility. Many organs of government and financial regulation, national and international, watched by heedlessly as the evident signs of “heedless self-interest” flourished and grew. And indeed, the organs of civil society and intermediate groups – including many aspects of the media - joined the heedless euphoria of the years of wealth.
Solidarity is not a luxury addition to the way society works. In poorer times in Ireland it was the basic network of community solidarity which kept society together and enabled people to hope. Whatever happens on the political level that sense of true community solidarity will remain necessary - indeed even more necessary - in the years to come.
We need a strong civil society. There is in the long-term no real answer to the challenge of violence in Ireland other than a vibrant community spirit which takes a stand. We need a new culture of participation. Political institutions and political parties have to the forefront of fostering a true sense of community participation and ownership of social policy. The media have a special responsibility to bring abuses of power and trust to light, but the media must also be on the side of an ethics of proposing, of constructive support for those who are out there day after day facing the front-line risks of attempting to change society.
I say that not as one who believes that the media and civil society are essential to the future of Irish politics and the economy. We need more people who heed, and who heed not just their own interest, but that of society and who are prepared to stand up and get involved. We should not fall into the unrealistic dream that we can somehow “fix it” from the outside. There is no way to address the future of the Irish economy or of Irish society which does not involve a real politics of participation.
My role as a Bishop is not to propose how to address the economic challenge of cutbacks but to witness to the message of a God who reveals his love in Jesus Christ, a God whose inner life is sharing and who reaches out in love and encourages his followers to do likewise. +++++++++++++++++++++++++++++++++++++++++++++
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