Effective Development Needs to Enter Existential Sphere

The discourse and practices around sustainable development cannot be limited to the boundaries of neo-classical economics or the promises of technological transfer. To make individual and communal development effective and complete, we need to enter the sphere of existential meaning and belief systems.

If the work in development were to be stripped of any reference or space for existential reflection on one's belonging to a communal experience, history, culture, tradition and ultimately beliefs and ethics, it would deny the transcendental and ethical dimension of human experience and, consequently, loose its grounding.

Debates around the need to refound the economic and financial foundations of society have mushroomed lately, sparked, perhaps, by the devastating flaws of the current systems and principles.

I am reporting below on a debate that caught my attention. It was first published by the Italian scholar and journalist Sandro Magister on June 6, 2009 (http://chiesa.espresso.repubblica.it).

The scholar Ernst-Wolfgang Böckenförde, in a pivotal 1967 essay, presented what was later called the Böckenförde paradox: the thesis according to which "the secularized liberal state lives by presuppositions that it cannot guarantee."

On January 19, 2004, then-cardinal Raztinger and philosopher Jürgen Habermas used this thesis as the starting point for a debate in Munich on the theme "Ethics, religion, and the liberal state."

So, in an article for Süddeutsche Zeitung, also published in Italy in May 2009 by the journal Il Regno, Böckenförde applied his paradox to capitalism as well, but in much more devastating terms.

In his judgment, the principles on which the capitalist economic system is founded can no longer stand. Its current collapse is definitive, and has revealed the inhuman foundations of this system. The economy must therefore be rebuilt from the ground up, not on principles of egoism, but of solidarity. It is up to the states, and European countries in the first place, to take control of the economy. And it is up to the Church, with its social doctrine, to accept the testimony of Marxism, who saw correctly.

Böckenförde's anticapitalist "manifesto" brought reaction, in Italy, from some prominent economists such as Luigi Campiglio, vice president of the Catholic University of Milan; Dario Antiseri, a philosopher and follower of the liberal economic school of Vienna; Flavio Felice, a professor at the Pontifical Lateran University and president of the Tocqueville-Acton study center; Ettore Gotti Tedeschi, a banker and economic commentator for L'Osservatore Romano.

In particular, Antiseri objects that "restoring Marx today is like continuing to be Ptolemaic after Copernicus and Newton"; that "individualism is the opposite of collectivism, not of solidarism, and this is possible only if there is the creation of wealth to be shared, as takes place in capitalist societies"; and finally that Benedict XVI cannot be expected to distance himself from "Centesimus Annus" by John Paul II and from "Rerum Novarum" by Leo XII, with its "lucid and impassioned defense of private property."

Flavio Felice contests Böckenförde's unrealistic vision of an "angelic economy" as an alternative to a capitalism that is identified with pure lust for gain. And regarding the salvific control of the state over the economy, he points out that the encyclical "Centesimus Annus" by John Paul II, in paragraph 25, warns against precisely this danger: "When people think they possess the secret of a perfect social organization which makes evil impossible, they also think that they can use any means, including violence and deceit, in order to bring that organization into being. Politics then becomes a 'secular religion' which operates under the illusion of creating paradise in this world."

Ettore Gotti Tedeschi observes that Böckenförde lashes out against a capitalism of Protestant origin, dominated by man's egoism and inability to do good. But he does not realize that there is a capitalism in keeping with Catholic doctrine, which the popes from Leo XIII to John Paul II have denounced for its errors while appreciating its basic validity, linked to private property and freedom of investment and commerce.

In an article in Il Sole 24 Ore – Europe's most widely circulated financial newspaper – Gotti Tedeschi maintained that the current global turbulence does not arise from excessive greed or the lack of rules. These have aggravated the crisis, but did not cause it. The real cause was the reduction of the birth rate, and therefore of the human capital that alone was capable of ensuring the necessary growth in production.

The frontal attack that Böckenförde brings against capitalism must in any case come to terms with the answer that "Centesimus Annus," in paragraph 42, gives to the question of whether capitalism is a system that corresponds to "true economic and civil progress."

The answer of the encyclical is the following:

"If by 'capitalism' is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a business economy, market economy or simply free economy."

In his article, the German scholar asks the social doctrine of the Church to awaken from its "Sleeping Beauty slumber" and apply itself to a "radical refutation" of capitalism, made obligatory by its current "evident collapse."

From the Financial Times: Governments struggle to assess aid effectively

Sir, After the heated rhetoric on FT.com   from such eminent experts as Jeffrey Sachs and William Easterley about Dambiso Moyo’s book, Dead Aid, Mo Ibrahim is to be congratulated for restoring sober thought and analysis to the debate about the value of aid (“Good governance will bolster African aid”, May 28.)

His points that Ms Moyo’s proposed solutions may not be realistic and that aid alone cannot be either the solution to or the cause of Africa’s problems are well-taken.

However, like Ms Moyo and Messrs Sachs and Easterley, he seems to treat aid as fundamentally different from the other sources of development finance that African countries utilise. It is not. Like these other sources – for example international capital markets, foreign direct investors, remittances etc – it entails both costs and benefits.

This means that, like them, there will be some occasions when aid, despite its costs, will be the best source of finance for the particular purpose, and some situations in which it will be an inappropriate source. Identifying the most desirable times for utilising aid requires governments to dispassionately assess both the explicit and implicit costs and benefits associated with the offers of aid that they have received, and of the alternatives to those offers. It also requires negotiating the best possible deal with the chosen source of funds.

Unfortunately, some governments do not do this, either because of governance problems, as Mr Ibrahim suggests, or because they lack the resources required to make the necessary assessment and to negotiate effectively with their counterparts. This failure can be remedied if the relevant government officials are provided with the technical knowledge and resources needed to undertake this analysis and negotiation exercise, and are reminded that it is possible, and sometimes desirable, to decline offers of aid – just as they might decline offers from the private sector or from non-governmental organisations.

It would be a fortunate result of the debate on aid, which Ms Moyo’s book has stimulated and your newspaper has promoted, if Mr Ibrahim and all the experts who have participated in this debate were to contribute to assisting African governments to become more discriminating in their assessment of aid proposals, and more effective in their negotiations with their aid donors.

By Daniel D. Bradlow, University of Pretoria, South Africa