In early 2018, a decade after the trans-Atlantic financial crisis, two Vatican departments, the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, jointly presented the document Oeconomicae et pecuniae quaestiones (“On Economic and Monetary Issues”) to provide ethical guidance concerning the current economic and financial system.

How effective can we expect this document to be?

What follows is an analysis of its strengths, weaknesses, opportunities, and threats. We do this in the belief that the fit between the guideline’s internal elements (strengths, weaknesses) and external environment (opportunities, threats) is crucial to accomplish its strategic goal. At the very least, it could perhaps help to plot a course of action for Catholic Social Thought in the coming years.

Below is an internal critique, the first of two parts.


Finance and the economy are not independent of ethics. They should be placed at the service of integral human development as a universal common good.

There is a level in which a self-regulating market as a resource-distribution mechanism is a myth, and as such, it cannot be trusted to do the best for individuals in society (n. 21). From the very beginning, the document unmasks this false belief and calls for an appropriate regulation of the market as well as an ethical foundation for market-based relationships (n. 1). This entails, on the one hand, scientific or technical knowledge, and on the other, ethical wisdom, in the understanding that no human action  ―including that carried out in the market― falls outside the purview of moral principles. To function properly, markets assume certain conditions they themselves do not produce, such as social coexistence, honesty, trust, safety and security, laws and so forth (n. 13). Moreover, left alone, markets frequently tend toward harmful inequality, asymmetries, environmental damage, social insecurity [disorder and crime], and fraud (n. 13). 

The ultimate end or purpose of human action is none other than integral development. Insofar as no individual in isolation can achieve this, except in union with all the other members of the political community, it is a common good. Business organizations (including schools) as intermediate social bodies play a special role in bringing this common good about (n. 23).

As believers, we know that Jesus Christ came to redeem not just any single individual but all people, with their social relationships. The integral human development we all seek is thus a prefigurement or anticipation of the Kingdom of God which the Church proclaims (n. 2).

Human beings should not be conceived as mere individuals or consumers in search of income, profits, and other forms of material wealth.

Human beings are individual and social or relational in all respects and at all times. That’s what distinctively makes them ‘persons’. Their fulfillment could only be reached jointly with others. Life and flourishing are possible thanks to a network of supportive relationships starting with the family.

It would be a mistake to think that human beings are driven by material goods alone, as consumers seeking to satisfy individual wants and preferences or as producers trying to maximize profits above all. Like other material goods such as income and wealth, profits are necessary for integral human development, but only as means, not ends. “Profit should be pursued but not ‘at any cost’, nor as a totalizing objective for economic action” (n. 11).  

People care deeply about non-material goods as well, including the quality of their relationships in terms of trust, equity [fairness], and cooperation (n. 9). These are even more important for our ultimate purpose. Wellbeing ought not to be measured in terms of GDP or income per capita alone, but should also take into account safety, security, human capital development, the quality of human relationships, and work (n. 11), among others.

Freedom of initiative [free enterprise] is essential to the sustenance of economic activities, and most economic agents have good and upright intentions (n. 14). Market transactions, in their distributive capacity, are morally permissible, so long as they uphold human dignity and promote the common good.

Without freedom, markets would not work. Market exchanges presuppose the freedom of initiative and choice, and at the same time can augment and deepen this freedom. In general, this is what market agents intend when they engage in economic activities. However, for market transactions to be beneficial for everyone involved, they must respect human dignity. This means acknowledging the intrinsic worth or value of every human being endowed by nature with freedom and rationality (as opposed to their ‘market price’ as producers or consumers). Human beings are ‘ends in themselves’ and never ought to be used merely as means or instruments to something ulterior. Things or material objects such as wealth and income should be placed at the service of human beings and not the other way around.

Furthermore, economic activities must always be realized with the common good in view. The contrary is a ‘zero-sum game’ in which one party benefits exclusively at the other’s expense. This doesn’t mean there should never be winners and losers in market exchanges. Instead, it requires that market conditions, as much as possible, provide all participants with reasonably fair chances of winning and improving their lot. Since perfect market conditions do not obtain, solidarity and subsidiarity will always be moral imperatives (n. 12 and 13). Roughly, solidarity could be understood as the help extended among equals, while subsidiarity, the help superior institutions give to inferior ones, including respect for the latter’s own decisions.


The document fails to explain why certain practices and institutions in the economy and finance “constitute instances of proximate immorality” (n. 14) or are “morally questionable” (n. 22).

Chapter 2 speaks of “conditions” and “methods” constituting “instances of proximate immorality” insofar as they readily generate “abuse and deception that can damage less advantaged counterparts” (n. 14). It cites the example of financial instruments which, although “in itself licit”, are sold in conditions of asymmetrical information or contractual weakness in either party. The principle of caveat emptor (“buyer beware”) is nullified by the lack of knowledge (asymmetrical information) or choice (contractual weakness).

Anything that gives rise to abuse and deception or harms the weak is morally blameworthy. Is that the case with all information asymmetries and contractual weaknesses? Probably not. My doctor will always know more medicine than I, and if I am sick or in pain, my bargaining power will be close to zero. To some extent, such asymmetries and weaknesses are inescapable. As we’ve said, perfect market conditions where every agent equally knows exactly what he or she is buying and is absolutely free to contract or not never obtain. Hence, there must only be some degree of asymmetry and weakness past which abuse, deception and harm are produced. But when? Could that be determined beforehand? Would it hold universally? The document gives no indication.

Similarly, the stock exchange is praised as “positive” inasmuch as it provides access to money (n. 15). Yet at the same time, it seems beholden to “bad financial practices” such as “speculative transactions of virtual wealth” and “high frequency trading where the parties accumulate […] excessive quantity of capital and remove the capital from circulation within the real economy” (n. 15). An offshoot is that “capital annuity can trap and supplant the income from work which is often confined to the margins” (n. 15).

Indeed, there are many stories of companies taken over, stripped of assets, then sold at a pittance at the expense mainly of workers who lose their jobs. This would not be possible if shares weren’t publicly traded. But are all mergers and acquisitions immoral? How could we ferret out beforehand the good from the bad? Would a ban on such transactions offset the gains from access to fresh capital for growth and investments? Again, on this the document is silent.

Instead, we are presented with tautological formulas where “speculative transactions of virtual wealth”, “high frequency trading” and the accumulation of “excessive capital” are cast as “bad financial practices” (n. 15). How virtual could assets be? What level of speculation, frequency of trading, and amount of capital accumulation would be permissible and legitimate?

We find this morally charged rhetoric again in reference to “excessively high interest rates” and other “usurious activities” in contrast to the “principled circulation of wealth” associated with cooperative credit, microcredit, and public credit (n. 16). However, on the other hand, there is no dearth of examples of corrupt cooperatives, microfinance institutions and public lending. How, then, should we proceed?

Some portions of chapter 3 are peppered with truisms: “the compelling need of an appropriate regulation that at the same time unites the freedom and protection of every person” (n. 21), “among the major reasons for the most recent economic crisis was the immoral behavior of agents in the financial world” (n. 21), “the current globalization of the financial system requires a stable, clear, and effective coordination among various national regulatory authorities” (n. 21). They also denounce the “excessive movement of the investment portfolio”, the lack of “impartiality in offering instruments of saving”, the “scarcity of an adequate diligence or even a malicious negligence on the part of financial advisers”, and the “concession of financing […] not convenient to the client” (n. 22). But this is just too obvious to be helpful.  

Other passages are maximalist in their demands to the point of becoming unreal. For instance, “that public authorities should provide a certification for every product generated by financial innovation” (n. 19) or the requirement of “complete transparency regarding whatever is traded […] to eliminate every form of injustice and inequality, thus assuring the greatest possible equity in the exchange” (n. 21). Likewise, the condition of “the maximum amount of information possible, so that every agent can protect his or her interests in full, and with complete freedom” for a “healthy financial system” (n. 22).

Often, the document uses too broad a brush-stroke or too blunt an instrument to be effective.

At other points, however, it becomes too categorical without carefully explaining its position. For example, on the institution of “Ethical Committees” to assist “Councils of Administration” [boards of directors] (nn. 24, 28), it seems oblivious even of egregious counterexamples such as Enron. We are aware of the substantial role of the securitization of subprime mortgages in triggering the 2007-2008 crisis. But does that mean the practice is intrinsically evil and that the market ought to be shut down? Ditto for the markets on derivatives and credit-default swaps (nn. 25, 26). We also know about the LIBOR manipulation which had been ongoing among banks for too long. Now then, what would an improved, alternative regulation look like? Any concrete suggestions?

The document also touches on the shadow banking system (n. 29) and offshore financial markets (nn. 30-32). Both are criticized for their lack of control by national regulators ―thereby depriving states of taxes― and their speculative, even predatory character. Well and good. However, would these same objections apply, for instance, to individuals and businesses in Venezuela, or other countries with similar confiscatory regimes?

We do not claim the document’s orientations are off. Only, that they are inadequately explained, failing to establish the moral limits of practices and institutions, none of which, presumably, is intrinsically evil. Instead, we find an abundance of tautological expressions and emotionally charged rhetoric, when cool, rational analysis is in order.

Alejo José G. Sison teaches at the School of Economics and Business at the University of Navarre and investigates issues at the juncture of ethics, economics and politics from the perspective of the virtues and the common good. He is an editor of the recently published “Business Ethics: A Virtue Ethics and Common Good Approach” (Routledge 2018). He blogs at Work, Virtues, and Flourishing from which this article has been republished with permission.

Alejo Jose G. Sison

Alejo José G. Sison teaches ethics at the University of Navarre and Georgetown. His research focuses on issues at the juncture of ethics, economics and politics from the perspective of the virtues and...