Understanding

Caritas in Veritate
“Charity in Truth”

December 2010 Jovi C. Dacanay (TCC 2010)

 Introduction
1. Message of Populorum
Progressio
2. Human Development in our
Time
3. Fraternity, Economic
Development and Civil Society
4. Development of People, Rights
and Duties, Environment
5. Cooperation of the Human
Family
6. Development of Peoples and
Technology
Conclusion

Caritas in Veritate
 Main Points of the Encyclical
3

CONTEXT  Provides an understanding of the

nature of integral social development,
in light of intense globalization of the
past generation.
 Social development is the result of
MESSAGE specific decisions & must be guided in
accordance with sound ethics that are
based on a correct understanding of
man’s nature and ends.
GOAL  Integral human development of the
whole man and of all men, in response
to the divine vocation to love.
 Social Encyclicals
4

Shedding the light of the Gospel on the social questions of each time.

Pope Leo XIII - Rerum Novarum “Rights and Duties of Capital and Labor” (15 V 1891)

Pope Pius XI - Quadragesimo Anno “On Reconstruction of the Social Order” (15 V 1931)

Pope John XXIII - Mater et Magistra “Christianity and Social Progress” (15 V 1961)
Pacem in Terris “Peace on Earth” (11 IV 1963)

Paul VI - Populorum Progressio “The Development of Peoples” (26 III 1967)

Octogesima Adveniens “80th Anniversary of Rerum Novarum” (14 V 1971)
Pope John Paul II - Laborem Exercens “On the Dignity of Work” (14 IX 1981)
Sollicitudo Rei Socialis “20th Anniversary of Populorum Progressio”
(30 XII 1987)
Centesimus Annus “100th Anniversary of Rerum Novarum” 15 V 1991)

Pope Benedict XVI - Caritas in Veritate “Charity in Truth” (29 VI 2009. Pope Benedict XVI is
80 years old, date is also the 58th Anniversary of the Priestly Ordination)
 Introduction
5

 The purpose of the Introduction is to recall

that charity is at the heart of the Church’s
social doctrine and that charity is
inseparable from the truth.
 Two key social concepts which drive the
Church’s social teaching: justice and the
common good.
 In an increasingly globalized society, the
common good includes the whole human
family.
 Chapter 1. THE MESSAGE OF
6
POPULORUM PROGRESSIO (PP)
Key Principles of the
Chosen Encyclicals
 The Main Message (PP, 1967)
7

 The whole Church is

engaged in promoting
integral human
development.
 Authentic human

development concerns the

Pope Paul VI whole person in every
single dimension.
 The Main Message (PP, 1967)
8

 Integral human
development involves a
free assumption of
responsibility in solidarity
on the part of everyone.
 Such development requires

Pope Paul VI a transcendent vision of

the person; it needs God.
 Chapter 1. THE MESSAGE OF
9
POPULORUM PROGRESSIO (PP)
also refers to Octogesima
Adveniens (OA)
 The Main Message (OA, 1971)
10

Apostolic Letter, Octogesima

Adveniens (OA)
 Warning against utopian

ideologies, which Benedict

XVI makes use of to
elaborate on twin errors in
Pope Paul VI
present society
 The Main Message (OA, 1971)
11

These twin errors are:

 Idealizing technical progress

 Contemplating the utopia of

returning to humanity’s
original natural state.

Both postures separate the idea

Pope Paul VI of progress from consistent
moral evaluation.
 Populorum Progressio “The Development of Peoples” (March 26, 1967)
Octogesima Adveniens “80th Anniversary of Rerum Novarum” (May 14, 1971)
12

Concretely
 Progress happens with the simultaneous
development of all humanity
 All should be able to give/receive, without one
group making progress at the expense of the other.
 Development of the whole man from “less human”
conditions such as hunger, deprivation, illiteracy,
endemic diseases
 Authentic human development concerns the whole
of the person, or else dehumanization occurs
 Populorum Progressio “The Development of Peoples” (March 26, 1967)
Octogesima Adveniens “80th Anniversary of Rerum Novarum” (May 14, 1971)
13

Concretely
 Without the perspective of eternal life, progress runs the
risk of being reduced to the mere accumulation of
wealth.
 Institutions by themselves are not enough to bring
development
 Charity is the principal force at the service of
development
 Progress is a vocation: Every man is called upon to
develop and fulfill himself, for every life is a vocation.
 Relationship between development and peace
 Chapter 1. THE MESSAGE OF
14
POPULORUM PROGRESSIO (PP)
also refers to Humanae
Vitae and Evangelii
Nuntiandi
 The Main Message (HV, July 25, 1968)
15

 Encyclical Humanae Vitae (HV): Paul

VI emphasized the strong link
between life ethics and social ethics.
 This led John Paul II to affirm that
society crumbles when it asserts
values such as dignity, justice and
peace on the one hand, while acting
radically to the contrary by tolerating
Pope Paul VI devaluation of human life.
 The Main Message (EN, Dec 8, 1975)
16

 Apostolic Exhortation,
Evangelii Nuntiandi (EN):
emphasis on the strong links
between evangelization and
human advancement.

Pope Paul VI
 The Main Message (EN, 1975)
17

 Benedict XVI asserts that

integral human development
is a vocation from God that
demands responsible
freedom, respect for truth,
and charity that will give
Pope Paul VI rise to authentic fraternity in
the social order.
 Caritas in Veritate (CV)
“Charity in Truth ” (June 29, 2009)
Background:
• Global Economic Crisis: increasing mobility of
financial capital and means of production.
Mismanaged financial markets
• Profit seeking motive separated from the social
responsibility of the market
• Unregulated exploitation of the earth’s resources
• A world in need of profound cultural renewal, a
Pope Benedict XVI rediscovery of fundamental values, a new vision for
the future

18
 Charity Culture
Truth Globalization
Charity in Truth Subsidiarity
Respect for Life Economy
Hunger Political Authority
Fraternity Technology
Religious Freedom Communications
Family Environment
Work

Caritas in Veritate
 Charity
20

- Love is an Extraordinary
Force that has its Origin in
God
- Love is God’s Greatest
Gift to Humanity
- Charity is Love received
and given. It is “grace”
that comes down to us
from God.
- We are Instruments of
Grace for others.
- Our Goal/Mission is to
build a “Civilization of
Love”
 Truth
 Truth is a Gift.
 Truth is Greater than
we are.
 Truth about ourselves
is given to us
 Truth is not something
that we produce.
 Truth is either received
or found
 To Defend the Truth is
also a Form of Charity
21
 Truth
 Fidelity to the Truth
Guarantees Freedom
 The Mission of Truth,
is something that the
Church can never
renounce

Faith and Reason work

hand in hand to discover
the Truth and to show us
what is Good.
22
 Charity in Truth
 Without Truth,
Charity can be
distorted, emptied of
meaning, and
undervalued.
 Without Truth,
Charity degenerates
to sentimentality and
emotionalism.
 Truth preserves the
Power of Charity to
Liberate
23
 Charity in Truth
 Search for Love and
Truth is the vocation
planted by God in the
mind and heart of
every human person
 Charity in Truth is a
Force that Builds
Communities

Charity in Truth is at
the heart of the
Church’s Social
24 Doctrine
 Chapter 2:
Human Development in our Time
25

 Problems & current situation

(CV 21-23)
 Five critical areas to address for an
effective plan for integral human
development:
a. re-evaluation of the role of
public authorities (CV 24-26)
b. hunger (CV 27)
c. respect for life (CV 28)
d. religious freedom (CV 29)
e. multidisciplinary collaboration
(CV 30-33)
 Globalization

The greatest change

since Paul VI’s time
is the explosion of
worldwide
interdependence:
Globalization

26
 Globalization
“Without the guiding force of
charity in truth, this global force
could cause unprecedented damage
and create new divisions within the
human family. Hence, charity in
truth confront us with an altogether
new and creative challenge… It is
about broadening the scope of
reason and making it capable of
knowing and directing these
powerful new forces, animating
them within the perspective of that
‘civilization of love’ whose seed
God has planted in every people, in
27 every culture.” (33)
 Challenge
Creative reason via Charity
in Truth: Engagement in
issues of justice and
peace (CV 1)

Gratuitous Freedom and

Integral Human
Development (CV 8)

Consciousness and
Experience that God is
28 Truth (Christ Logos) (CV 4)
 The current social
situation
(CV 21-23)
Malfunctions continue to
take place as problems in
the sixties continue to
exist in spite of the
consolidation of
democracies and greater
political participation
Wealth growth but
inequalities also increase
Loss of state sovereignty
with increasing
29
international trade
 Principles of
Social Doctrine
Reiterated
 Dignity of the
Human Person
 Right to Human
action with
Individual
Responsibility
 Principle of Solidarity
 Principle of
30 Participation
 Public Authorities
(CV 24-26)
Correct malfunctions and
errors: new forms of
engagement to address the
world’s challenges
Rules of the market economy
prevail but at the cost of
downsizing the social
security system
Honor trade union
organizations as a way for
workers to participate in
decision-making
31
Mobility of labor encouraged
 Hunger
(CV 27)
Improve actual living
conditions
Elimination of hunger is a
requirement for
safeguarding peace.
Problem of food insecurity
needs to be addressed.
Institutional problem
Networks of agencies
needed to cooperate, long-
term solution
Right to food and access to
32
water is a universal right
The Phenomenon of hunger
is related to poverty.

The situation cannot be addressed by

macroeconomic policies alone. Why?
Individuals affected by hunger can
no longer be targeted by the existing
policies. Why? Resources are limited
and existing government revenues
will not be enough to address the
needs of these individuals. Why?
Addressing their needs to make them
get out of poverty are just too
specific to their objective
circumstances. This is why we call
them marginalized. Lacson Underpass, Quiapo

33
Current Observations
 Policy Interventions by Multi-
lateral agencies (ADB, WB)

Specify their needs in terms of their

locale. Questions asked: Given the
place where they are, what makes
them inaccessible to the market
economy. Why couldn’t they transact?
What is it in their society which does
not allow them to participate in
community-specific decisions. Note
that these questions just address the
objective factors which explain their
poverty. We are not yet asking the
question whether or not they are
happy. Lacson Underpass, Lacson
Quiapo Underpass, Quiapo

34
Current Observations
 Policy Interventions 35

The financial resources of the multi-

lateral agencies are geared towards
alleviating the urban poor from their
current socio-economic status. The
urban poor comprise half of the
world’s population. Why them? The
urban poor live in areas where
commerce thrives. The provision of
the socio-economic and physical
infrastructure (institutional: financial,
judicial, transportation services and
roads, migration and travel) depend
on three key areas. These areas are
density, distance and division. Lacson Underpass, Quiapo

35
Current Observations
 Policy Interventions
Density refers to the number of
inhabitants per geographic area or
space. Distance refers to access
(nearness or farness) of a
community to the centers of
business and commerce. Division
refers to barriers to trade, travel,
business negotiations of an area to
another. Key relationship: The
greater the density, the lesser the
distance, the fewer the barriers or
divisions, the greater is the
potential for development. Lacson Underpass, Quiapo

36
Current Observations
 Challenge to Address Hunger
Creative reason:
Charity in Truth

True Freedom &

Integral Human
Development

Consciousness and
Experience that God
37
is Truth
 Respect for Life
(CV 28)
Broader concept of poverty
Issues on
underdevelopment to
include issues in connection
with the acceptance of life
The acceptance of life
strengthens the moral fiber
and makes people capable
of mutual help
Anti-birth mentality as a
form of cultural progress,
embedded in many
38
intellectual circles
 Religious Freedom
(CV 29)
Not referring simply to the
struggles and conflicts,
even use the religious
motive for domination and
wealth
Denial of this right
People frequently kill
using the holy name of
God
Refers to terrorism
motivated by
fundamentalism
39
God is the guarantor of man’s
true development
 Multidisciplinary
Collaboration
(CV 30-33)
 Fosters the interaction in the
levels of human knowledge
 Socio-economic measures have
to be made but implementation
is joint action. And, joint action
involves a doctrine.
 Charity does not exclude
knowledge, but rather requires,
promotes and animates it from
within
 Moral evaluation and scientific
research have to go hand-in-
hand
 Wisdom and reflection provide
40
a clear vision of all aspects
 Multidisciplinary
Collaboration
(CV 30-33)
 With this new view of
development, new solutions
come to light
 Example: law, economics,
business and sociology can
work together to achieve a
solution to achieve access to
steady employment.
 A network of a relationship of
trust, rules, civil coexistence:
Social Capital
 Broadening the scope of
reason: labor usually is left to
adjust to varying policy
41
mechanisms. Human costs.
 Policy Interventions
There are so much funds available
for grants and aid from the World
Bank, ADB, and even private
banks (ie. Spain, Belgium, Canada,
Australia, etc.). RP lacks the
capacity to “absorb” these funds. Boix House, Quiapo

“Absorbing” the funds means

having viable and sustainable
projects geared towards their
poverty intervention options.
These options do not compromise
life issues. Thailand, Indonesia,
Kenya, have a better track record. Estero near the Ocampo Pagoda, Quiapo

42
Current Observations
 Specific Interventions
for the Philippines
The Philippines needs more
business entrepreneurs, and,
social entrepreneurs. The
business entrepreneurs create Boix House, Quiapo
wealth by mobilizing financial
capital and resources. The
social entrepreneurs create
wealth by building trust:
mobilize social capital by
networking communities with
public and private institutions. Estero near the Ocampo Pagoda, Quiapo

43
Current Observations
 Chapter 3: Fraternity, Economic Development and
44
Civil Society
 Chapter 3: Fraternity, Economic Development
and Civil Society
45

“Charity in truth places man

before the astonishing
experience of gift.
Gratuitousness is present in our
lives in many different forms,
which often go unrecognized
because of a purely
consumerist and utilitarian
view of life. The human being
is made for gift, which
expresses and makes present
his transcendent dimension.”
 Chapter 3: Fraternity, Economic Development
and Civil Society
46

“Sometimes modern man is

wrongly convinced that he
is the sole author of himself,
his life and society. This is a
presumption that follows
from being selfishly closed
in upon himself, and it is a
consequence –to express it
in faith terms-
of original sin.” (CV 34)
 Principles of
Social Doctrine
Reiterated
 Universal Access to
Goods and the Principle
of Subsidiarity are
implicit
 Focus is the Principle of
Gratuitousness:
Reciprocity achieved
through trust in
ventures which uplift
the human spirit (CV 34-
47
35, 38)
 Fraternity
The false conviction of self-
sufficiency causes people to
confuse happiness and
salvation with material
prosperity, and leads them
to choose economic
strategies which, by
removing God and gift from
the equation, end up
impoverishing the weak
and diminishing personal
and social freedom and
48
responsibility. (CV 34)
 Market
Economy
Benedict XVI asserts that
the market itself must
incorporate this same
gratuitous spirit which
God displays in His
dealings with man. (CV 34)
 In a climate of mutual
trust, the market is the
economic institution that
permits encounter
between persons, so
that needs and desires
49 are satisfied. (CV 35)
 Market
Economy
 The market must not
limit itself to the
commutative justice
Ils de Tuls, Quiapo
represented by the
contract, but must also
incorporate in its very
foundations certain
elements of distributive
and social justice which
rings all parties
together in an ever-
stronger fraternal
50
Hidalgo St., Quiapo
community. (CV 35)
 Principle of
Gratuitousness
 Charity in truth is a gift,
received by everyone. It is
force that builds community,
it brings all people together
Estero de Quiapo Clean-up
without imposing barriers or
limits. To make development
authentically human, it
needs to make room for
gratitude for the gift of
charity in truth, as an
expression of fraternity
(CV 34)
 Manifested in a climate of
51 mutual trust (CV 35)
 Business
How can the Principle of
Gratuitousness be applied
to business?
 Large risks faced by
businessmen. (CV 40)
 It is insufficient for
businesses to be
exclusively answerable
to their investors, often
with no stable director
who feels responsible for
the long-term impact on
all the stakeholders
(workers, suppliers,
consumers, natural
environment, broader
52 society) (CV 40)
 Business
All these stakeholders
have a claim on business,
a claim that is far easier to
understand and provide
for if the principle of
gratuitousness is kept in
mind, for it is this principle
of the gift that enables us
to transcend ourselves and
truly operate in solidarity
with others. (CV 40)
Every economic decision has a moral
consequence. Investment always has
53
moral as well as economic
significance. (CA 36)
 Political Authority
 The pope calls for a greater
articulation of political authority,
i.e., a collaborative effort, based
on subsidiarity, of various
organizations and levels of
government combining to guide
the process of economic
globalization. Weak
constitutional systems can easily
be accompanied by the
development of other political
players of a cultural, social,
territorial, religious nature,
alongside the state. (CV 41)
54 Person-based, Community-Oriented, World-
wide Integration, Open to Transcendence
 Globalization
 He affirms that it is false and
counter-productive to view
globalization as a pre-
determined process over
which man has no control.
Because it is a human reality,
it is a product of cultural
tendencies which must be
subjected to a process of
discernment. (CV 42)
 ”A sustained commitment is
needed to promote a person-
based and community
oriented cultural process of
world-wide integration that is
55
open to transcendence.”
(CV 42)
 Tokyo’s
The Asian Development “trainpackers”
crush
Bank, UNESCO, World Bank commuters into
metrorail
recognize the need to carriages.
Richest
manage the urban sprawl countries in
affecting most of Asia’s Asia are
economically
cities. Alongside this is dense

also the need to restore the

inner cities: old cities, high
historic value, but with
several dilapidating built
heritage sites. This is an
attempt to preserve culture
along with growth.

56 Some Observations
 (Persons paid to push people
Key Cities likely to A typical day in Mumbai

Trainpackers needed
Develop fast due to

into the train)

Globalization, are in Asia
Higher Densities
 No country has grown to
high income without
urbanizing
Shorter Distances
 Growth seldom comes
without the need to
move closer to density
Fewer Divisions
 Growth seldom comes to
a place that is isolated
from others People die every day on Mumbai’s trains

57 Some Observations
 Challenge to Address Urban Sprawl
Creative reason:
Charity in Truth

True Freedom &

Integral Human
Development

Consciousness and
Experience that God
58
is Truth
59 Observations on the US Financial Crisis
Factors which led to the crisis and Pope Benedict’s
advice
 U.S. Financial Crisis –
Major Factors
60

 Asset bubble in housing market fueled by lax lending

standards in primary market.
 Excessive leverage of major financial institutions and
holders of complex financial instruments combined
with lax regulation.
 Excess risk-taking promoted by compensation system
that emphasized high immediate returns.
 Emergence of a solvency crisis.
 Uncertain condition of counterparties led to freezing
of credit flows and liquidity problems.
 United States Saving-Investment,
1980-2007
61

35

30
percent of GNI

25
Investment

20

15
Saving
10
1980 1985 1990 1995 2000 2005

The US is a net-spender, as investments (18% of Gross

National Income (GNI) are more than saving (13% of GNI)
 Industrial Countries, Excl. U.S.
Saving-Investment, 1980-2007
62

35
Rich countries are hardly saving,
since saving and investment
30 are almost equal as of 2005
Saving
percent of GNI

25

20
Investment
15

10
1980 1985 1990 1995 2000 2005
 Emerging Asia, Excl. China
Saving-Investment,1980-2007
63

45

40 Asians are net savers

Saving
percent of GNI

35

30

Investment
25

20
1980 1985 1990 1995 2000 2005

As of 2005, Emerging Asia’s (Southeast Asia, Central Asia) Saving is 43% of

Gross National Income (GNI), and investment is only 37% of GNI
 China
Saving-Investment, 1980-2007
64

60

55
The Chinese are net savers
Saving
50
percent of GNI

45

40

35
Investment
30

25

20
1980 1985 1990 1995 2000 2005
As of 2005, China’s Saving is 55% of Gross National Income (GNI), and
investment is only 43% of GNI
 Causes of the Crisis
65

The reasons for this crisis are:

1) Boom and bust cycle in the housing market
2) Excessive speculative investments by homeowners
3) Aggressive lending practices by mortgage lenders
4) Poor securitization practices and oversight
5) Inaccurate credit ratings
6) Mortgage fraud
7) Flawed oversight by mortgage brokers
8) Excessive underwriting of high-risk mortgages
In short: GREED by homeowners, speculators, banks, investment
houses, financial service providers, and portfolio managers
 Subprime Securitization:
The Virtuous Cycle
66 13 Collect P + I
1 HOMEOWNER
This set-up
Loan
is okay if the
BANK ORIGINATOR
(Consumer Loan) @ Fee assets have
4 3 2 Sells (with representation and warranties) high net worth
Borrows/pays ARRANGER
now and in the
Warehouse Lender @ Fee
INVESTMENT HOUSE future,
@ Fee Repackage into CDO, SIVs, etc. and, debt
Rating 5 MBS payments are
6 Credit Rating Agency
Underlying Cash Flow made. This is a
@ Fee basic law in
7 Payments
Insure
8 Bond Insurance Fund
P+I finance. Basic
Transfer CDO
idea in
@ Fee 9 Trustee @ Fee derivatives
trading.
Selects Collection
10 ASSET MANAGER 12
@ Fee Service Entity
These three levels have
Sold
increased leverage of 14
Pays P + I net of
11 fees and taxes
assets INVESTOR
 The Virtuous Subprime
Securitization Cycle
67

1 Bank lends to homeowner

2 Bank sells the loan to arranger (consolidator) and collects a fee
3 Arranger/consolidator borrows from a Warehouse Lender
4 Warehouse Lender pays originating bank
5 Arranger repackages and consolidates the individual mortgages into
an MBS (mortgage-backed securities)
6 Arranger gets a credit rating agency (e.g., S & P, Moody’s) to issue a
credit rating for the MBS. At this point, the arranger can break up the
MBS into “Good” (AAA s.o.), “Not so Good” (B) and “Ugly” (No
Rating) and have ratings issued separately. Different categories of
MBS are tailored to various investors as “Structured Investment
Vehicle (SIV). SIVs have leveraged structures, i.e., investors belong to
classes that differ as to rights over income and risk of default.
 How securitization is
supposed to work
68

7 MBS consists of principal and interest to be collected from

homeowners and with the home as collateral
8 The < P & I > (decreasing principal but increasing interest payments,
not the value of the collateral) are insured by a Bond Insurance Fund
9 A Trustee receives the MBS and takes custody
10 The Asset Manager is selected
11 MBS are sold to Investors
12 A permanent Collection Service Provider entity is appointed
13 Periodic < P & I > are collected by the Service Provider
14 Investors receive periodic < P & I > according to terms of the MBS and
all the participants receive their fees (that are charged to the borrower
by grossing up his interest).
 Subprime Securitization:
The Vicious Cycle
69 2 Fails to Collect <P + I>
1 HOMEOWNER
Borrower Walks

BANK ORIGINATOR
(Consumer Loan)

3 Bank repurchases loan

Warehouse Lender ARRANGER 2

INVESTMENT HOUSE

3 5 M t M = Loss
Credit Rating Agency MBS

Payments
4
P+I
Bond Insurance Fund

Trustee
Insurer defaults

Collection
ASSET MANAGER Service Entity

2
No collection
INVESTOR

5 M t M = Loss
 The Vicious Cycle
70

1) Two risk events happened

 Property prices came down, borrower walked out of the loan
 End of “teaser” and “easy payment plan” period. Borrower defaults
on the first few payments after adjustment to a much higher mortgage
payment schedule.
2) Trustee sees that cash is not coming into the SPV. It calls the
Bank/Originator and Investment House (IH, Arranger) to buy
back the loans that did not perform as warranted by them.
3) Bank or IH repurchases the loan portfolio (what if not?)
4) Bank or IH claims the bond insurance for loans that defaulted
but bond insurer defaults.
5) Bank or IH recognizes loss on securitized defaulted mortgage
loans using the new Mark-to-Market (MtM) rules.
 What does CV 40 say?
71

There is no reason to deny that a certain amount of capital

can do good, if invested abroad rather than at home. Yet
the requirements of justice must be safeguarded, with due
consideration for the way in which the capital was
generated and the harm to individuals that will result if it is
not used where it was produced (PP 24). What should be
avoided is a speculative use of financial resources that yields
to the temptation of seeking only short-term profit, without
regard for the long-term sustainability of the enterprise, its
benefit to the real economy and attention to the
advancement, in suitable and appropriate ways, of further
economic initiatives in countries in need of development.
 Challenge to Globalization
Creative reason: Globalization is a
Charity in Truth multifaceted and complex
phenomenon which must
be grasped in the diversity
True Freedom & and unity of all its different
dimensions, including the
Integral Human theological dimension. In
Development this way, it will be possible
to experience and to steer
the globalization of humanity
Consciousness and in relational terms, in terms of
Experience that communion and the sharing of
goods. (CV 43)
72
God is Truth
Chapter 4: The Development of People, Rights
and Duties, the Environment
73

Benedict XVI addresses

several problems in the
contemporary world which
make it difficult to guide
human development in an
integral manner:
 Rights & the natural law
(CV 43)
 Population growth (CV 44)
 Ethics & economy (CV 45-47)
Guangzhou railway station
during Chinese New Year,  Solidarity and stewardship
over nature (CV 48-51)
2008
 Principles of Social Doctrine Reiterated

 Principle of Subsidiarity to
strengthen businesses,
reforms aimed towards the
achievement of human
dignity (CV 47)
 Principle of Solidarity for the
conservation of energy
(CV 49)
 Principle of Responsible
Stewardship over nature:
harmony of the human being
74 with the environment (CV 50)
 Key Contemporary
Problems to
Address
1. The contemporary tendency
to create arbitrary new
rights with no basis in the
natural law, while at the
same time ignoring the most
basic of human rights. (CV 43)
2. Regarding population
growth and openness to life:
“the primary competence of
the family in the area of
sexuality must be upheld
75
against the State.” (CV 44)
 Key Contemporary
Problems to
Address
3. The economy needs
Ethics in order to function
correctly. The proper
ethics must be person-
centered. (CV 47)
4. Peaceful agreement about
the use of resources can
protect nature and, at the
same time, the well-being
of the societies
76 concerned. (CV 51)
 International
Organizations
Reform of international
organizations: complete
transparency.
“At times it happens that
those who receive aid
become subordinate to the
aid-givers, and the poor serve
to perpetuate expensive
bureaucracies which consume
an excessively high
percentage of funds intended
77 for development.” (CV 47)
 Environment
Two common and equally
false attitudes on nature and
human ecology (CV 48-50):

1. Nature cannot be viewed

as something more
important than the human
person.
2. Neither should there be
total technical dominion
over nature because the
natural environment is
more than raw material to
be manipulated at our
78
pleasure.
 Challenge to Sustain a Clean Environment

Creative reason:
Charity in Truth

True Freedom &

Integral Human
Development

Consciousness and
Experience that
79
God is Truth
 Re-Focusing
Policy
The pope concludes the
chapter by pointing
out that economic
incentives and
deterrents to effect
change are
insufficient.
“The decisive issue is
the overall moral tenor
of society.” (CV 51)
80
 Re-Focusing
Policy
Going back to the law of
gift he says:
“That which is prior to us
and constitutes us –
subsistent Love and
Truth– shows us what
goodness is, and in
what our true happiness
consists. It shows us the
road to true
81 development.” (CV 52)
82 Observations: Microfinance and Development
Microenterprises need the help of the financial sector in order to
grow and contribute to wealth creation. The high risks involved in
their business, with small prospects for profit, does not make
lending them attractive to investors.
 These are the usual risks faced
by firms

Several financial intermediaries

earn via lending, spreading risk

Many firms are established, business

grows, many get employed. Wealth
is created in this manner.

The Process of Wealth Creation Through Finance: Financial

Institutions directly affect the process of growth and
83
development by spreading risk.
 Microfinance institutions are excluded from the financial sector

Commercial
Microfinance Banking
System

84
Microfinance institutions serve micro-enterprises. They also contribute to growth
 Lesson to Learn from the Crisis
85

 Observations: Financial institutions in the US chose to

leverage on non-productive assets. These funds could have
been invested and leveraged towards development-oriented
projects
 But the banking institution in the US was not transparent
enough to manifest that the accounts were non-performing
 The Pope’s message: The very plurality of institutional forms
of business gives rise to a market which is not only more
civilized but also more competitive (CV 46). Both macro and
micro-projects are needed to actively mobilize civil society (CV
47).
 This is where social entrepreneurs are needed: entrepreneurs
which network civil society with institutions on the basis of
 Chapter 5: The Cooperation of the
Human Family
86

The chapter begins

with a deep reflection
on the idea of
“relation” in human
solidarity.
Rather than being
diminished personally
by entering into a
relation, each person
finds that his identity is
enriched & matures
through his reciprocity
with the other.
 Principles of Social Doctrine Reiterated

 Religious Freedom (CV

55)
 Principle of Subsidiarity
closely linked with the
Principle of Solidarity.
The former without the
latter gives way to social
privatism, the latter
without the former gives
way to paternalist social
assistance (CV 58)
 Dignity of human work
87 (CV 63)
 Human Race as a
Single Family
“One of the deepest forms of
poverty a person can
experience is isolation. (…)
Poverty is often produced by a
rejection of God’s love, by
man’s basic and tragic tendency
to close in on himself, thinking
himself to be self-sufficient… It
is not by isolation that man
establishes his worth, but by
placing himself in relation with
88 others and with God.” (CV 53)
 Human Race as a
Single Family
The theme of development can
be identified with the inclusion-
in-relation of all individuals and
peoples within the one
community of the human family,
built in solidarity on the basis of
the fundamental values of
justice and peace. This
perspective is illuminated in a
striking way by the relationship
between the Persons of the
Trinity within the one divine
89
Substance. (CV 54)
 God in the Public Realm
 The Christian religion and other
religions can offer their
contribution to development only if
God has a place in the public realm:
cultural, social, economic, and
particularly its political
dimensions. Purify reason with
faith, purify religion with reason.
(CV 56)
 Fruitful dialogue between faith
and reason render works of
charity more effective under an
appropriate framework for
promoting fraternal collaboration
between believers and non-
90
believers. (CV 57)
 Principles of Solidarity
and Subsidiarity
 The principle of subsidiarity must
remain closely linked to the
principle of solidarity and vice
versa (CV 58) to achieve
cooperation in development (CV
59)
 How?
 In the search for solutions to
the current economic crisis,
development aid for poor
countries must be considered a
valid means of creating wealth
for all. Coordinated social
91
solidarity (CV 60)
 Principles of Solidarity and
Subsidiarity. How?
 Greater solidarity at the
international level is seen especially
in the ongoing promotion — even in
the midst of economic crisis — of
greater access to education, which is
at the same time an essential
precondition for effective
international cooperation. The term
“education” refers not only to
classroom teaching and vocational
training — both of which are
important factors in development —
but to the complete formation of the
92 person. (CV 61)
 Principles of Solidarity and
Subsidiarity. How?
 Migration to be handled effectively: A
social phenomenon of epoch-making
proportions, requires bold, forward-
looking policies of international
cooperation. (CV 62)
 How? Close collaboration between
the migrants' countries of origin and
their countries of destination; with
adequate international norms able to
coordinate different legislative
systems with a view to safeguarding
the needs and rights of individual
migrants and their families, and at
the same time, those of the host
93 countries. (CV 62)
 Principles of Solidarity and
Subsidiarity. How?

Finance: through the renewed

structures and operating methods
that have to be designed after its
misuse, now needs to go back to
being an instrument directed towards
improved wealth creation and
development. Financiers must
rediscover the genuinely ethical
foundation of their activity, so as
not to abuse the sophisticated
instruments which can serve to
betray the interests of savers. (CV
94 65).
 Principles of Solidarity and
Subsidiarity. How?

Finance: Right intention,

transparency, and the search for
positive results are mutually
compatible and must never be
detached from one another. If love
is wise, it can find ways of
working in accordance with
provident and just expediency, as
is illustrated in a significant way
by much of the experience of
credit unions.
Social Responsibility for Investors
and consumers (CV 65-66)
95
Observation Microfinance institutions can be included in the financial sector

Commercial
Microfinance Banking
System

96
Microfinance institutions serve micro-enterprises. They also contribute to growth
 Principles of Solidarity and
Subsidiarity. How?
 Finance: Reform of International
organizations (i.e UN, economic
institutions and international finance)
 to give poor nations an effective
voice in decision-making,
cooperation and solidarity needed
to resolve problems in finance,
global migration, food security,
protection and imbalances (CV 67)
 there is urgent need of a true world
political authority (John XXIII, Pacem
in Terris, 293), which has to be
regulated by law, observe
principles of solidarity and
subsidiarity, to seek to establish the
97
common good (CV 67)
 Chapter 6: The Development of Peoples
& Technology
98

Pope Benedict XVI

focuses on the need to
overcome the
prejudices of
technocracy with a
truly human
understanding of
integral development.
A person's development is
compromised, if he claims
to be solely responsible
for producing what he
becomes. (CV 68)
 Development of Peoples
and Technology

Technology enables us to exercise

dominion over matter, to reduce
risks, to save labour, to improve our
conditions of life. It touches the
heart of the vocation of human
labour: in technology, seen as the
product of his genius, man
recognizes himself and forges his
own humanity. Technology is the
objective side of human action (JPII,
Laborem Exercens, 5) whose origin
and raison d'etre is found in the
subjective element: the worker
himself. For this reason, technology
99 is never merely technology. (CV 69)
 Development of Peoples
and Technology

Technology is a profoundly
human reality, revealing man
and his aspirations towards
development, including the
‘inner tension that impels
him to overcome material
limitations’. Therefore it
should never become so
preoccupied with the ‘how’
questions that it fails to ask
and answer the ‘why’
questions which underlie
100 human activity. (CV 69-70)
 Development of Peoples
and Technology
 “When the sole criterion of
truth is efficiency and utility,
development is automatically
denied. Human freedom is
authentic only when it
responds to the fascination of
technology with decisions that
are the fruit of moral
responsibility.” (70).
 Ethically responsible use of
technology. Reappropriate the
true meaning of freedom: a
response to the call of being,
beginning with our own
101
personal being. (CV 70)
 Development of Peoples
and Technology

 The Pope gives 3 examples

(peace among nations, social
communications and
bioethics) to show how
preoccupation with
technological solutions can
distract us from the deeper
human values and moral
judgments which are required
for true development.
 Bioethics: Use of reason to
manifest the transcendence of
man or becoming immersed in
102 his immanence? (CV 74)
 Development of Peoples
and Technology
“Entranced by an
exclusive reliance on
technology, reason
without faith is
doomed to flounder in
an illusion of its own
omnipotence. Faith
without reason risks
being cut off from
everyday life.”
103 ( CV 74)
 Summary of Chapter 6
The Pope ends with a renewed
focus on the central argument
that runs through the entire
encyclical (CV 75-77):
1. The social question has
become a radically
anthropological question.
2. The cultural refusal to
attend to these deep
anthropological questions
results in a materialistic and
mechanistic understanding
of human life which has a
universally negative effect
on integral human
104
development
 Summary of Chapter 6
The Pope ends with a renewed
focus on the central argument
that runs through the entire
encyclical (CV 75-77):

3. Therefore, integral human

development can never occur
without the moral values
which arise from an
understanding of the
importance of the soul of
man to his overall well-
being.

105
 Conclusion
 The Holy Father
emphasizes that
“without God man
neither knows which
way to go, nor even
understands who he is.”
(CV 78)
 Therefore, we can
develop the vision and
energy for integral
human development
only by recognizing our
calling to be part of the
family of God. (CV 79)
106
… Charity in Truth
 Conclusion
“Only if we are aware of
our calling as individuals
and as a community, to be
part of God’s family as his
sons and daughters, will we
be able to generate a new
vision and muster new
energy in the service of a
truly integral humanism. The
greatest service to
development, then, is a
Christian humanism that
enkindles charity and takes
its lead from truth, accepting
both as a lasting gift from
107 God.” (CV 78) … Charity in Truth
 Recap
1. Main points of the
encyclical were tackled
2. Examples centered on
current trends and
practical applications of
an economic nature
3. Documentary shown on a
current view of
development that is akin
to the Pope’s directives on
respect for culture (World
Bank, World Development
108 Report 2009, Video)
 Recap
4. Documentary that shows
how the Pope’s directives
apply to real life through a
deeper understanding of the
role of business &
entrepreneurship: “The Call
of the Entrepreneur” based
on Rev. Robert Sirico (2000)
“The Entrepreneurial
Vocation.” Journal of Markets
& Morality 3, no. 1 (Spring
2000), 1-21
109