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 (SWOT). 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 (CST) in the coming years.

Below is a critique focusing on opportunities and threats. (This is the second in a series analysing the document. For the first, click here.)


Besides the CST principles, the virtues, in particular, practical wisdom, are crucial in providing ethical guidance in economic and financial activities.

“[M]arkets are in need of solid and strong bearings, macro-prudential rather than normative, more shared than uniform; there is also need of continuously updated regulations that can respond to market flux” (n. 21).

CST goes beyond the principles of human dignity, the common good, solidarity, and subsidiarity. A full rendering includes, not only the commandments but the beatitudes as well. And what else are the beatitudes, if not an expression of the virtues, distinctively human excellences that constitute, albeit partially, integral human development or flourishing?

Usury aside, most of the economic and financial practices mentioned in the document, along with the institutions that enable them, do not fall under the heading of “prohibited without exception” according to the Decalogue. Therefore, the uprightness of the agent’s intention will have to be examined, whether or not it is consistent with the “final end” or “ultimate aim” of human beings. This may be understood as flourishing, integral human development, moral perfection, or holiness.

The problem is that it’s fiendishly difficult to determine what an agent’s true intention is, so unless we have a clear indication it’s nothing other than “earning money for the sake of earning more money” (greed), we ought to give people a pass. Pace Gordon Gekko, “greed is not good” because it proposes the accumulation of material means as the ultimate aim and final end of human beings.

Which leads us to the third criterion in judging the moral worth of an action, its circumstances. For instance, in the case of usury, we no longer consider the charging of any interest on loans as usurious, but only certain interest rates. Why? Because social circumstances have changed. Whereas in a primitive, subsistence economy there was hardly any “opportunity cost” to financial assets, nowadays, this is no longer the case. Interests, then, can be recast as payments for the lost opportunities owed to creditors to make use of financial resources as determined by market conditions.

Unfortunately, the document fails to offer similar explanations for the various financial products and markets mentioned, such as subprime mortgages, derivatives, credit-default swaps, high-frequency trading, offshore institutions, and so forth. For example, moving drug-trafficking profits to offshore havens for money laundering would indisputably be censurable, whereas it may be permissible for Venezuelan food companies under the Maduro regime to open such accounts for international operations.

Since the financial operations considered are not intrinsically evil and depend on the agent’s intentions as well as the circumstances, they squarely fall under remit of practical wisdom, the virtue of doing the right things for the right reasons and in the right way. Practical wisdom presupposes that at times, we could do the right things, but not for the right reasons or intentions, or in the right way, as circumstances may advise.

On my reading of Aristotelian-Thomistic sources, four features of practical wisdom as a virtue stand out. First, its practical orientation as a moral virtue (Nicomachean Ethics, henceforth NE, 1103a). Virtues are found in multiple “operational tracks” (inclinations, actions, habits, character), producing positive feedback or reinforcement among them. Virtues are “goods” not only because they satisfy the right desires, but also—and above all—because they lead to flourishing, the final end of human beings. As a moral virtue, practical wisdom differs from sophia, which is wisdom, but theoretical, not practical; and techne, which is practical, but concerned with “making”, not “doing”. Practical wisdom (phronesis) is the virtue of doing the right thing the right way. It deals with particular or concrete realities and contingent events (NE 1139a) which involve deliberations and choices (NE 1140a–b). Practical wisdom also entails right action. It establishes habitual alignment among proper rational deliberation, choice and behavior.

A second feature of practical wisdom is normativity, expressing a command or prohibition beyond general rules. Outside “moral absolutes” or exceptionless prohibitions (NE 1110a), ethical rules are always formulated in general terms. They cannot take into account all relevant particulars. Hence, proper rule-following invariably needs “prudential judgment” or practical wisdom. There is no such thing as a self-implementing rule. For instance, on a certain level, derivatives act as a form of insurance, which is good and desirable. Yet how far can we go down this route of “securitizing securities” (n. 26) without crossing the legal and moral line? Typically, this is the sort of issue that practical wisdom has to consider. Regulators may establish guidelines, but these will still have to be interpreted, and that could be done fairly or unfairly. Since human beings are not all-knowing, they cannot establish perfect rules or foresee all circumstances. Hence, there will always be a need for practical wisdom in interpreting and implementing even the best of rules.

Third, practical wisdom is like a charioteer that guides and a mother that begets all the other virtues (NE 1145a); without it, no genuine virtue exists (the “unity of the virtues”). Because every virtue is connected to a system, to judge any action morally is to compare its worth to others. For instance, the question “should I invest in stocks or in T-bills?” brings mutually exclusive and freighted consequences. Practical wisdom allows us to choose correctly among alternatives by providing a common fount or source for the different virtues. Practical wisdom harmonizes the different moral virtues.

In fourth place, practical wisdom requires a “qualified agent account”, according to which an action will be virtuous if and only if it is what a virtuous agent would characteristically do. Aristotelian practical wisdom rejects the “neutral, third-party observer” standpoint in mathematics, crafts, the natural sciences and positive social sciences. Practical wisdom involves the right perceptions, desires, feelings, motivations, judgments, and actions according to a moral, not physical, standard.

The “objective standard” in decision-making and action is the “subjective judgment” of the practically wise agent. The individual’s subjective moral disposition to act —not any mechanical skill or theoretical knowledge— is the determining factor for practical wisdom.

That’s why not only collateral-free “character loans” but all loan grants should take the applicant’s character into account in determining credit-worthiness (n. 24). Practical wisdom is not a function of sex, ethnicity, profession, or civil status, but of character. Further, observable conduct alone, without knowledge of underlying feelings and motivations, is not enough for practical wisdom. The truly practically wise agent acts with internal dispositions in harmony with external behaviors (NE 1152a).

The opportunity to insist on the need and role of practical wisdom in economics and finance should not be wasted.


The document’s rhetoric is unhelpful for the audience it addresses. Some issues are matters of translation, others of tone.

The document seeks to influence and shape future actions in the realm of economics and finance. This entails addressing the minds and hearts of finance professionals such that their deeds be in keeping with the right values, contained by CST principles and the beatitudes. Rhetoric achieves this objective by presenting the right arguments (logoi), bearing in mind where one’s audience stands (pathos) and, above all, by leveraging the credibility (ethos) of the author or messenger.

Previously we referred to the document’s “weaknesses”, such as its failure to provide a reasoned account of why certain financial practices were unethical. We shall now deal with inadequacies in the appeal to finance professionals’ dispositions and the overall credibility of the authors.

To convince or persuade someone means winning him or her over, usually by finding common ground or interests. Being a scold, or worse, moralizing or giving the appearance thereof is not half as effective as being empathic: “What is morally unacceptable is not simply to profit, but rather to avail oneself of an inequality for one’s own advantage, in order to create enormous profits that are damaging to others; or to exploit one’s dominant position in order to profit by unjustly disadvantaging others, to make oneself rich through harming and disrupting the collective common good” (n. 17). The garbled syntax aside, the text leaves little margin for honorable business and profits. Further, the document advocates a scenario nothing short of utopian: “the renewal of humanity in order to reopen the horizons towards that abundance of values which alone permits the human person to discover himself or herself, and to construct a society that hospitable and inclusive dwelling place with room for the weakest and where wealth is used for the benefit of all —places where it is beautiful for human beings to live and easy for them to have hope” (n. 17).

None of these encourages finance professionals to lend an ear.

And finally, at least in the English version, the language and style could use some polishing. “Councils of Administration” (n. 24) for “corporate boards” or “boards of directors” seems a clumsy attempt to translate a term of art from the original French or Spanish. Similarly, the call for a more equitable compensation requires serious editing: “This is often incentivized by substantial remuneration in proportion to immediate results of management, but not likewise counterbalanced by equivalent penalization, in the case of failure of the objectives, through assuring greater profits to managers and shareholders in a short period, and thus ending up with forcing excessive risk, leaving the companies weak and impoverished of those economic energies that would have assured them adequate expectations for the future” (n. 23).

What is not understandable cannot be believable and, much less, persuasive.

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 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...