Speculation, not profit, is dirty word

There is a wide perception that business and ethics do not mix. This perception is not totally amiss as many people mix together business and speculation.

Food is sometimes hoarded just to force up the price- Fr Joe Borg

Business is an important activity that can be legitimate and ethical. Speculation can be legal, but is it ethical? The difference between these two activities is manifested in the difference between business leaders and speculators.

The speculator sees only profits, even at the expense of the human person. The speculator looks at everything as a commodity whose value lies only in its market worth. Speculation rewards the few but brings terrible consequences on millions. Speculation is a killer.

Last July, Pope Benedict spoke about this issue in his address to the participants at the 37th conference of the Rome-based United Nations Food and Agriculture Organisation.

The Pope placed poverty and hunger on the doorstep of the selfishness of speculators. He said poverty, underdevelopment and the resulting hunger are often the outcome of selfish attitudes which, arising from man’s heart, find expression in his social activities, in economic relations and in the conditions of the market. He said all this is then translated into the denial of the primary right of all people to nourishment, and freedom from hunger.

The Church cannot but protest loudly especially when food is sometimes hoarded just to force up the price.

Pope Benedict is very forceful:

“How can we remain silent before the fact that food has become the object of speculation and is tied to the movements of financial markets which, lacking clear rules and moral principles, seem fixated on the single objective of profit? Nourishment is a factor which touches on the fundamental right to life.”

The Church’s position ema­nates from its social teaching, which includes principles such as the centrality of the human person, subsidiarity, solidarity and the pursuit of the common good.

Within these principles, profit is legitimate and important.

However, speculators look at profit outside these principled parameters. Their raison d’être is just the maximisation of profit. This attitude breeds abuses.

In a speech to business leaders, Vatican Secretary of State Cardinal Tarcisio Bertone spelled out the difference between the business leader and the speculator:

“For the speculator, building roads and establishing hospitals or schools is not the goal, but merely a means to the goal of maximum profit. It should be immediately clear that the speculator is not the model of business leader that the Church holds up as an agent and builder of the common good.”

For Mgr Bertone the business leader is first and foremost an innovator who generates and pursues projects which are of worth and are then profitable.

In his encyclical letter Caritas in Veritate, Pope Benedict does not reject the ethical value of profit but praises “those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself”.

In practical terms one can say that we are faced by a question of balancing these different goals.

Mgr Bertone said business leaders who want to take the Church’s social teaching seriously should not be happy with just adopting socially responsible work practices and/or doing acts of philanthropy.

“We need business leaders with a social conscience, leaders whose innovation, creativity and efficiency are driven by more than profit, leaders who see their work as part of a new social contract with the public and with civil society.”

I think these comments are valid for the local situation as much as for other countries.

joseph.borg@um.edu.mt