St. Ambrose Catholic Church, Annandale, Virginia
February 21, 2024
I have been asked to address how, from a Catholic point of view, one should look at the goodness inherent in a business, rather than the goodness which we might attribute to a business in view of the good effects that it has. Businesses provide goods and services valued by consumers in the market; they create jobs for their employees; and, in pursuing efficiencies, as well as through innovation, they contribute towards the development of the common prosperity of a sector, region, or country – that is, they make their own contribution to that general growth in wealth that economists measure as GDP. These things are all important. But to speak about them is not yet to say, about the operation of a business itself, what makes that good?
Admittedly, it is not consistent with a Catholic mentality to draw an overly sharp distinction between any goodness which is inherent in something, and the good effects of that thing. A Catholic mind views these two goods as almost two sides of the same coin. It is like function and form in biology, or in design; it is like how the beauty of form in athletics correlates with athletic power. An athlete—say, a pro golfer—has a beautiful, graceful, and fluid swing, with lovely tempo and balance. This same athlete hits the ball very far and with tremendous accuracy.
Michelle Wie, swing sequence
The first is form and is inherent to the athlete; the second is function and is extrinsic. The ball’s flying through the air is undoubtedly an effect of the graceful form. And yet the two are very closely connected. One might say that the Catholic mind, in such cases, prefers images taken from farming rather than machinery. A tree may itself prosper and be full of leaves; but, if so, we expect it to be bearing fruit. Plenitude and fullness, which are inherent, imply fruitfulness, which in comparison is extrinsic. Similarly, fruitfulness implies a prior plenitude. A healthy plant is also a productive plant. Blessed is the man who is like a tree planted beside streams of flowing waters, whose leaf never withers and bears fruit in due season—so says Psalm 1. Our Lord cursed the fig tree for having the one but not the other. (So general is the rule in nature, of the connection of plenitude with fruitfulness, that, in order to find a case of the one without the other, Our Lord had to go to a fig tree when it was not the season for figs. He wasn’t irrational for cursing a fig tree out of season. If his intent was to curse a fig tree that was leafy but lacked fruit, to set an example, he was very rational to look for a fig tree when it was not the season for figs—since otherwise in nature such a tree certainly would be bearing fruit.)
A leafy fig tree in Israel.
Similarly, the Catholic mind looks for a business to be successful in the right way, with the right kind and degree of success, when internally things are right. It looks for profitability, which involves matters which are extrinsic, to be tied to a business’s being well run, which is inherent to the business. Proverbs such as ‘cream rises to the top’ or ‘honesty is the best policy’ are saying something similar.
I want to say, as another digression, that if we want to know what the Church teaches about business, we have to look first at what it teaches about work. The reason is that the Church tends to view businesses from the side of the many, not the few, and from the side of the poor, not the wealthy, and therefore it looks at businesses mostly from the side of employees, which means looking at work and the condition of the worker. Not that management and entrepreneurs are not engaged in work, but in a firm of for instance 10,000, only a few hundred will be managers or executives.
As you may know, in the ancient world, work was regarded as an unpleasant necessity. Aristocrats counted themselves lucky that they did not have to work. They would congratulate themselves that they had been fortunate enough to avoid the yoke of work. Happiness, eudaimonia, was associated with being able to enjoy leisure throughout one’s entire life. But Judeo-Christian civilization has always taken a different view of work. As John Paul II and St. Josemaria Escriva like to point out, we find this different attitude expressed in the opening chapters of Genesis. There it says that man was created and placed in the garden so that he might work it. God assigned to man, from the beginning, some work to do.
Now, here we must pause and ask, was it possible for God to create man, and yet not create a being whose vocation was to work? Could God have created man dedicated to a life a leisure? Was this assignment, to do some work, something added on? Is work accidental to the human condition? Pope John Paul II says something interesting in this regard, about human work, in Laborem Exercens. He says: no, this was not possible. God created them male and female. Therefore, he created them with the power to procreate. That is why he instructed them: be fruitful and multiply. We may debate whether plucking low hanging fruit from trees in the garden of Eden as one takes a lovely stroll through the garden would count as work.
Heinrich Jenny (1824-1891), Adam and Eve in Paradise
Be that as may be, the moment the man and woman succeeded in procreating a child, they would become responsible for the child’s nurturance. And they also would become responsible for the child’s education. Both of these tasks would require them to plan their time, expend their energy, make provisions, and improve what is around them. That is, these tasks would require work. Caring for their child would become, so to speak, the first enterprise of the man-woman household.
Therefore, it was not possible for God to create man as male and female, as procreative beings, and not to create a being whose vocation by nature was to work.
A very deep truth emerges out of this reflection, namely, that the command, “Be fruitful and multiply, and subdue the earth,” and man’s vocation to work, and therefore to engage in business, are one and the same thing. Business, we might say, is procreative. It is an expression of the procreative impulse. In the intention of God, in creation, business is included within the God’s intention for us, as expressed in his commands to be fruitful and multiply, and to subdue the earth.
This is why one sees two fundamentally different attitudes towards the economy. One is generous and optimistic. It sees nature as superabundant. It sees prospects for mutual prosperity in business relationships. It thinks of gains from trade in terms of persons’ sharing their surplus production with one another. It sees a human person as the greatest good. It regards children as contributors and producers. The other, in contrast, is stingy and pessimistic. It sees the market place as a place of struggle and survival of the fittest. It thinks of resources as scarce. It views an economy or nation as always at risk of collapse from having too many people. It sees children as consumers. The one attitude thinks that prices of raw materials will go down and technology will improve, so as to feed greater numbers of human beings; the other believes that we will exhaust resources and perish from our sheer numbers. The one attitude we might call “Smithian,” after Adam Smith, the author of The Wealth of Nations. The other we should call “Malthusian, after Thomas Malthus, the Protestant pastor and early economist, who believed that wars and famines played the necessary role of periodically decreasing “the surplus population.” Or we might even call the one attitude, tongue-in-cheek, that of Bob Cratchit, and the other. that of Ebenezer Scrooge:
Albert Finney as Ebeneezer Scrooge and David Collings as Bob Crachit
My point is that attitudes towards business, and towards procreation, mirror each other. Now, is the love between a husband and wife inherent and intrinsic, while their children are effects and extrinsic? Do children provide a utilitarian justification of a marriage? Hardly, rather, a wife is like a fruitful vine and the children are like “olive shoots” from an olive tree, as the Psalm says (Ps 128). The Church prefers organic language for goods which are organically connected.
Now, although in nature and in God’s intention, inherent goodness and fruitfulness are connected, and we ought to think of the two as related organically, nonetheless, because of original sin, and the influence of bad philosophy, we can find it easy to think of the means of production merely instrumentally, and workers as merely instrumental factors in such production. Perhaps we take a mathematical formula, or a model, or a system of cost accounting, to represent the full reality, which is to say that we become practically speaking materialists. In cost accounting, for instance, the manufacture of a product is conceived of as a function of inputs which include the cost of raw materials, the cost of overhead, and the cost of labor. In such a model, labor looks like ‘stuff’ on a par with raw materials. We think of the raw materials as in the service of the final product, and only in the service of that product. Accordingly, we come to think of labor as in the service of that product, and only in its service. It is not a mistake, of course, to look at a process of production as having a material dimension. But it is a mistake, to take that dimension to be the whole of the reality. This is the transition from being prudentially material in our thought, to being materialistic.
A typical scheme of cost accounting.
Catholic social thought at this point says: Materialism here is not acceptable, whether it be the materialism of the Marxist, or the materialism of an atheistic laissez-faire economist. The dignity of the human person must ever be respected. As Pope John Paul II says in his encyclical letter, Laborem Exercens, the “subjectivity of the worker must always be kept in mind. Labor cannot be treated merely as a factor in production.
But how should a business keep in mind the “subjectivity of the worker”? In various ways. The most important way is by operating in such a way that the business exemplifies the principle of “the priority of labor over capital,” which is an instance of the more general principle that things are for persons, not persons for things. We can formulate the principle of the priority of labor over capital in various ways. We might say, for instance, that management should observe the golden rule and always treat employees the way that they themselves would wish to be treated. Or, as John Paul II says, that management should recognize that work within a business must always be construable by each employee as for the good of each employee taken individually, as much as for the good of the business, or for the good of the product or service that the business provides to customers. Work should build up the individual worker. Also, that employees should follow the golden rule too in their relations with fellow employees, and, if they do, the employees will develop “solidarity” with one another. Furthermore, if it is possible for employees to purchase a stake in the ownership of a business, say, today, through an Employee Stock Option Plan (ESOP), then this too, or something like it, should be pursued. Modern management methods, which encourage some degree of employee participation in management decisions, should be also implemented. Management generally should consult with employees who have hands-on experience, for a better understanding of the business from employees’ point of view. They should even be on friendly terms with their employees and get to know them personally. They should know about their families and their interests outside of work.
If we want to see this conception of a business put into practice, we can turn to the example Enrique Shaw, the Argentine businessman whose cause for beatification is currently going forward.
Stained glass window of Enrique Shaw in St. Michael’s Chapel, fBusch School of Business, The Catholic University of America
After a career in the navy, Shaw worked his way up from a job on the shop floor to President of a glassworks company in Buenos Aires. (His father was a prominent banker. He was from a wealthy family. The point is that he did not rely on his connections to get a job immediately as an executive at the company. He wanted to work his way up, and he did so, so that he would know its employees and its manufacturing processes from bottom to top.) Shaw was famous for walking the shop floor with his notebook, consulting with workers and taking notes. He knew them personally. He would even invite union representatives to his home—which shocked everyone--to remove any traces of conflict or resentment. When he did so, he would refer to an image he drew from his navy experience: “Those who are in the same boat must row together.”
Shaw’s company was a subsidiary of a U.S. interest. Once, during a downturn, instructions came from the United States that 1200 workers should be laid off to cut costs. Shaw said that he would tender his own resignation before he would fire a single worker. Instead, he called a council among the management and employees. They agreed upon a voluntary plan to cut costs and accept pay cuts for a determinate period, to meet certain targets, until market conditions improved. The U.S. parent accepted the plan, which proved to be successful. Not long thereafter, Shaw came down with aggressive melanoma when he was about 40 years old and died as a young man, age 41. During his treatments for cancer, he needed blood transfusions. Hundreds of employees from the glassworks lined up to donate blood, so that, on his death bed, the very blood of the people he loved so much was coursing through his veins.
Shaw as an executive believed in the importance of the virtue of “study.” He spent a year at the Corning glass works in New York, learning about best practices, to implement them as best as could be done in Argentina, given the relative paucity of resources there. Something John Paul II emphasizes in Laborem Exercens is the desirability of all of the employees in a company gaining a thorough understanding of what the company is up to. Why? Because it is through our intellect and will, that human beings transcend the rest of the visible creation. John Paul II said that it was dehumanizing, and it reduced man to the status of a mere thing, if in his work he regarded himself as merely a cog in a vast unintelligible machine. Such a plight is common outcome in socialist societies, with their tangles of bureaucracy. But the same thing can happen in a large firm. The remedy is the virtue of study. Pascal in one of his Pensées says that, although the universe may crush a man like a straw, still, the man is greater than the universe, because he can understand the universe.
iPhone City, a mega factory, in Zhengzhou, China
Perhaps you remember the pin factory that Adam Smith describes at the beginning of Wealth of Nations to illustrate efficiencies gained from the division of labor. From the very beginning of modern commercial societies, in the early 1700s, with the application of methods of division of labor and mass production, it was felt that someone’s carrying out just one function on an assembly line, say, screwing in just one screw in a smart phone, 8-10 hours a day, 5 or 6 days a week – as in an Apple “mega factory” in China--was dehumanizing. We can admit that such work is necessary. Also, that it is comparatively attractive for millions of people in China, because it is preferable for them to every alternative. Also, that consumers benefit from the efficiencies created by smart phones. Yet to say all these things is not enough, because we are ignoring the “subjectivity of the worker.”
One way in which even a worker in a mega-factory could realize some degree of subjectivity would be to be trained in how the plant works, and the steps in a smart phone’s manufacture – and even, if he is willing and able, to receive some training in the architecture and design of a smart phone. Here is how John Paul II puts it in Laborem Exercens:
This gigantic and powerful instrument-the whole collection of means of production that in a sense are considered synonymous with "capital"- is the result of work and bears the signs of human labor. At the present stage of technological advance, when man, who is the subject of work, wishes to make use of this collection of modern instruments, the means of production, he must first assimilate cognitively the result of the work of the people who invented those instruments, who planned them, built them and perfected them, and who continue to do so. Capacity for work--that is to say, for sharing efficiently in the modern production process--demands greater and greater preparation and, before all else, proper training.
Such training is necessary so that each worker grasps that “even if he is only doing the kind of work for which no special training or qualifications are required, he is the real efficient subject in this production process, while the whole collection of instruments, no matter how perfect they may be in themselves, are only a mere instrument subordinate to human labor.”
“We want God!” chanted by the people during John Paul II’s Papal Mass, Warsaw, Poland, June 2, 1979
We can summarize what I have been saying as follows. A condition of an enterprise’s being itself good, is that it is operated on the principle of the priority of labor to capital. When it is run in this way, then it realizes the ideal of a communio personarum, a communion of persons, which is itself good because it is a realization, in its way, of the virtue of charity, and because it expresses, in the way that it can, the communio among the three persons of the Trinity.
A communio personarum respects the dignity of the human person, that is, the subjectivity of the worker. It fosters solidarity, as we said. In its quest to foster widespread participation in management decisions, it also will realize subsidiarity, which is the principle that decisions should be made at the lowest point in a hierarchy of accountability, where such decisions can be made effectively and responsibly. But also, when a firm realizes a communio personarum, it also best realizes inherently a common good, in the sense that its members simply enjoy being together, and they positively want to cooperate with one another for a common purpose.
We can speak of four different common goods of a business. Each such common good is also some kind of inherent good.
The first and most obvious is the good or service which the business provides to customers. It is the way in which it achieves profitability. Everyone in the business aims at this good or service, and pulls for it, and therefore obviously it is a common goal and common good.
The New York Stock Exchange.
The profitability of a business, too, is a common good—the fact that the business is a “going concern.” This is the second common good of a business. Profitability is best understood as a necessary condition which ensures the continued existence of the business. But a business exists so that it can provide a good or service to customers. Profitability is like being alive. You and I need to remain alive, of course, and it is good to be alive, but we want to remain alive in order to do something good other than being alive. Merely to remain alive is clearly not the reason why we are alive. Similarly, it is a mistake to say that a business exists in order to maximize returns for its investors. Return on investment, rather, is a side effect of its business activity. The business exists in order to provide a good or service at an excellent standard. It remunerates the risk undertaken by investors and their opportunity costs in providing capital, as a side effect.
The third common good of a business is, as we described, the bond of charity which it can foster among its members when the principle of the priority of labor over capital is observed.
The fourth common good is a corporation’s contribution to the broader communities in which it is situated: the places where it is headquartered and where its plants are located, the global community in which it does business, and also our “common home,” which is the natural environment. What I have in mind here is very different from what is called a business’s supposed responsibility to “stakeholders.” It is not a matter of a business’s responsiveness to various interested claimants, on analogy with its fiduciary responsibility to shareholders. Rather, it is a matter of a business, like any other personal reality, recognizing that it is embedded within various larger associations, and therefore playing a responsible role accordingly. Thus, for example, patriotism and an instinctive desire to serve one’s country is a highly important attitude for a business incorporated in the United States. But it would be absurd to say that one’s country was a “stakeholder” in one’s business. Businesses should serve their country, as should every other association within that country. But my country is no more a stakeholder in my business than it is a stakeholder in my family, or in me.
Generally, a business will attain this fourth common good in a manner which one might call “compositional.” By “compositional” I mean that it contributes to the common good of the whole, by making a part of the whole good. In a living body, for example, a cell makes mainly a compositional contribution to the health of the body. By its being in good condition, it contributes to the good of the tissue in which it is located. Similarly, the family as “the basic cell of society” contributes to society compositionally, by making that part of society good. Suppose a business of 10,000 employees distributed across a couple dozen plants in a state. If that business fosters the patriotism of its workers, then it contributes compositionally to the patriotism of 10,000 citizens, a not insignificant part of the whole. If that business recycles the waste of its products, it contributes compositionally to the good stewardship of the environment of the broader society, as a not insignificant part of the whole.
As I said, the Church in her social thought has preferred to approach the question of the goodness of a business, through the question of the condition of the workers in that business.
But the Church also has something to say about the “first movers” of a business—that is to say, the innovators, entrepreneurs, founders, and risk takers. What it says in this regard applies to small businesses too, and sole proprietors. I will discuss these matters briefly under three themes: “imago Dei;” “the virtues;” and “the cross.”
William Blake, illustration, in Europe, A Prophecy
By the concept of “imago Dei” I mean that man, as an image of God, realizes his goodness through imitating God. But God does work, when he creates. Therefore, man too when he creates, and specifically, when he creates value in the market, imitates God and realizes his own good. In this respect the vocation to entrepreneurship is the vocation to be god-like in a limited microcosm.
We take it for granted that God works. We refer to creation as consisting of the “works” of God. “Bless the Lord, all his works” says Psalm 103. “All you works of the Lord, bless the Lord,” says the canticle from the book of Daniel. The book of Genesis tells us that God worked for six days, and then on the seventh day he rested from his work. In imitation of God, the Jewish people, likewise, rested from their own work on the seventh day. Christians abolished the Jewish Sabbath and replaced it with the Lord’s Day, on the first not the last day of the week. But we did so on the premise that the Resurrection was a new “work,” the work of a new creation.
However, in other civilizations, God does not work. In some belief systems, the universe always existed. It is no one’s “work.” Or it grows organically and is like a living being rather than an inanimate object. Or it is regarded as itself divine and not something different from the deity.
12
Reconstruction of Solomon’s temple. God makes a world for us; we make a home for him.
If the concept of work is to pervade one’s conception of reality, and an entire civilization, it is necessary that a people affirm, as a first act of belief, that “all things are possible to God.” Therefore, he can create something out of nothing. Therefore, what previously did not exist can began to exist. Creativity becomes a real but implicit possibility throughout reality.
What I am saying is not a small thing. This concept of an entrepreneur as in the “imago Dei” is tremendously satisfying to the Christian business person. As we said, the impetus to business is like the impetus to procreate. The proper pride which a Christian may take in a business is not unlike the proper pride which parents take in their children. Children too have come out of nothing; they are most obviously free creations. The parents are only “pro-creators.” By the way, economic freedom finds its best foundation in this conception. That is to say, economic freedom is the principle that the human person, in his dignity, should enjoy a freedom to imitate the Creator, within his small domain, in the way that seems best to him, given the conditions that confront him.
So much for “imago Dei.” But business activity can foster the virtues. By a virtue I mean a stable trait of character which makes someone such as reliably to carry out a task, function, or job well. A virtue so defined is a power which opens up doors to us. It is not a restrictive limitation which keeps us from doing what others do. A courageous person can do many more things than a coward, for example, he can climb a cliff wall, or learn to ski down a thrilling double black diamond trail. A generous person can many more friends than others. An honest person enjoys the ample assistance of others, because they easily trust in him.
We should not romanticize the virtues. Many of them we learn by necessity. A whole generation of Americans learned the virtue of financial sobriety by living through the Great Depression. Mothers learn self-control by getting up, nevertheless, in the middle of the night, when they are already exhausted, to tend to a crying baby suffering from colic. Teenagers learn self-discipline by getting up each day to an early alarm, to get to that donut shop job or lawn service
job on time. To sacrifice doing what one you would like to do, and to spend one’s day, instead, thinking about how to meet a someone else’s wants--this is very good for the soul.
“Lunch atop a Skyscraper,” 1932, construction of the RCA Building
An upshot of a worker’s growth in virtue is the purification of his motives. We have not given attention to the common criticism that the world of business is permeated by greed. You may have sensed that I have little sympathy for this criticism. But insofar we are susceptible to greed, as we all are—and susceptible to pride, vainglory, lust, and the other capital vices—hard work can be a means of purging ourselves from these. It won’t be purgative necessarily, but it can be if we approach it in that way. But obviously too certain virtues are elicited by entrepreneurship, such as courage and magnanimity.
Last of all, there is the concept of “work as redemptive.” We have not talked yet about how, because of the fall, human work has the character of “by the sweat of our brow,” –which is undoubtedly why the ancients believed that work was something better to avoid. In Christianity, we recognize in the setbacks, failures, contradictions, and small mortifications of work – such as boredom—we recognize the cross. Let’s not forget the crosses imposed on us by others, through their faults and thoughtlessness, and through apparent persecutions—how others can seem deliberately to hinder us, undermine or criticize us unfairly – how regulators and government officials can seem mainly determined to harass us. Think of any of the sufferings of Christ, and an analogue may be found in ordinary, daily work. If we embrace cheerfully these crosses, and in our hearts intend, by embracing them, to share in the sufferings of Christ, and therefore to become co-redeemers—we can do penance for our own sins, pray efficaciously for the needs of others, and win lots of graces which will benefit many, unknown others. But it needs to be said that because an entrepreneur takes risks, and bears the burden of success or failure of an enterprise, he is potentially the most Christ-like in the field of business.
In conclusion, I don’t think we need to search around for quotations from saints or popes saying that business is a good thing. Of course, it is a good thing. God created us to work, and when we engage in work, especially doing so corporately with others, we are doing business. Business is good because it is a kind of fruitfulness. Potentially, it is an expression of charity. Business activity also enables those engaged in it to image God in their own domain, to contribute to various common goods, and to grow in the virtues. At the same time, it provides many rich occasions to mortify ourselves and imitate Christ, by showing the heroism and self-sacrifice of Christ, and by embracing cheerfully the crosses which doing business sends us each day.
Dony MacManus, “St. Joseph,” CIC, Washington, D.C. A small business operator: carpentry services and jack of all trades