The four principles

The current financial crisis is the result of market turmoil, of mindless economic globalization, of a so-called virtual economy that lost sight of real economy, neglecting concrete enterprise turnover data. Mostly, it’s the result of human rashness, which overlooks the significance of the human person. We don’t know how the crisis will be overcome, and if policymakers will learn the lesson. However, we are already witnessing the relinquishment of liberal dogmas supported by the reintroduction of government bailouts to counter the disaster also in the United States and in England. Perhaps the moment has come to recover the principles of social market economy, a human economy adopted by the Christian Democratic Parties for many years after the Second War. The economic doctrine of these European Parties, that draws inspiration from the social doctrine of the Church, is based on four principles:1) economy organization must ensure the fundamental natural right to own an asset while securing dignified-life support;2) economy is not an end in itself. Rather, it should be placed to the service of man;3) a social and economic order that gives priority to the concept of responsibility must be sought, that includes the responsibility for the Creation, employee-employer relations, and solidarity;4) Government bailout envisaged to amend competitive distortions in case of market failures. In 1990, a delegate of the European Popular Party recalled that on the basis of these four principles, “market force ratio doesn’t merely follow its own rules.Rather, it encompasses a significant social rule envisaging the achievement of social consensus, social cooperation and social justice”. The Christian-Democratic social principle was put into practice in Germany, immediately after the War. Ludwig Erhard, Minister for the Economy of Federal Germany in the years 1949-1963, later appointed Chancellor from 1963 to 1966, thus implemented market social economy. This principle consists in linking the free market to social equality. Accordingly, free market (the State is not the producer) must correspond to its protection (fair competition meant as the keystone of antitrust policies) while at the same time ensuring social accordance (respectable working conditions and workers’ participation to enterprise management). Erhard was quoted as saying: “Christian economic policy is marked by the help it gives to each individual”. He believed that “economic performance isn’t regulated by technical rules. The economy doesn’t have an inborn essence, representing an unanimated automatism, since it depends on the individuals”. This policy of social interventionism, linked to truly liberal measures such as decontrol of prices, delivered positive results. The improved standards of living of the German and European population from 1950 to 1970, in a pacified Europe where Christian Democrats acted as the pivot point, conferred a special historical bearing to social market economy. Today, the question is not sticking to the past and recovering policies that were the result of a specific historical event. Moreover, it should be acknowledged that this policy shows that it is possible to link economic freedom with the respect for the human person and with economic performance. On a condition: never overlooking the human person as the heart of all decisions. This, also in Europe, is the only way to prevent a fall into the virtual realm where the human person doesn’t exist and where the only purpose of the economic system is the exclusive quest for mere profit that excludes man. This is the crucial message conveyed by the social doctrine of the Church to our contemporary societies, which Pope Benedict XVI has powerfully reaffirmed.