The Purpose of Business
The purpose of the business firm is not simply to make a profit but is to be found in its very existence as a community of persons who, in various ways, are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society.
John Paul II, Centesimus Annus, 35
Business organisations were one of the most dynamic institutions of the twentieth century. Today most people, including Catholics, are unaware of the official Catholic social teaching. Many Christians too often fail to connect faith and business, except in either prophetic critiques or spiritual platitudes.
What is missing in the engagement is a serious conversation between the intellectual depth of the Catholic social tradition and the complexities of a business organisation.
The problem of recognising a corporate and common purpose to the business enterprise was present from the first days of the modern social teachings of the Catholic Church.
Those first days are indeed the time when the enterprise develops without the name enterprise. People view the corporation as an "anonymous society," as a society of things (capital, shares) rather than of persons.
While there are shareholders, their personal commitment is mitigated by "limited liability." The worker is not considered as a member, that is, as a person, of that society. Rather, he/she relates to it only from the outside through the labour contract, as one more input or service hired by the "anonymous society".
However, Catholic workers and employers agree that the right to joint management of all workers in social, personal and economic matters of common concern is a natural right according to the order laid down by God, and corresponding to the collective responsibility of all.
While Pope Pius XII never wrote a social encyclical, he would give talks to associations, from bee keepers to bankers, about how the social tradition of the Church could be understood within their particular field of work. In a talk to the International Congress of Catholic Association of Small and Medium Sized Businesses, he explained that their vocation called employers and entrepreneurs to create in the enterprise, conditions which allowed employees to develop.
What is of particular interest is that Pius XII articulated for the employer what the principle of subsidiarity means for the business organisation. While the authority of the owner ought to be protected, no room could exist in such a conception of a business for practices that denied the profound worth of the employees of the enterprise. Also, of particular interest here is who Pius XII was talking to: owners of small and medium sized businesses.
He believed that large industries fostered, sometimes unavoidably, an impersonal anonymity between owners and labour. While he insisted that economic responsibility must be legally located with the owners of capital, he perceived the separation of ownership from control as an obstacle to creating a business organisation that fostered human development.
All development in moral teaching requires a period of solidification. In terms of the firm, this period came about with Pope John XXIII, who succeeded Pius XII in 1958. In his encyclical Mater et magistra (1961), John XXIII wrote in a very serene atmosphere of the enterprise as a community and of the obligation to enable all its members to participate more fully in its activities. This participation can not be undertaken in an indiscriminate manner and must, of course, take into account the particular input and contribution of each member. Yet, the workplace must represent a "true community" where workers are treated as human persons, and have a chance to take an active role in the operation of the particular organisation.
This development on the nature and purpose of the enterprise was formulated at the Second Vatican Council in the document Gaudium et spes (1965), in the following terms:
'In economic enterprises, it is real persons who are joined together, that is, free and independent human beings created to the image of God.'
Business, as the major form of economic organisation is consequently, the major mechanism to achieve dominion. Yet, to properly understand dominion, a business must conceive itself to be responsible for the use of an inheritance or gift.
For John Paul II, people who make up a business enter into a two-fold inheritance: 1) what is given by the Creator in terms of natural resources, and 2) what is given by others in terms of what has been already developed on the basis of those natural resources.
Each human generation is indebted, both to the Creator and to its predecessors, for the means and the opportunity to share in the goods of creation. Moreover, since the Creator's gift is given for the use of all in pursuit of their development, this two-fold inheritance, "the gift of creation and the productive instruments already forged from it has, in the formula of Gaudium et Spes, "a universal destination." The destination is "universal" in that participation and in that human inheritance. As such, it should benefit all present humanity and be developed and transmitted to future generations.
John Paul stated that: "Profit is a regulator of the life of a business, but it is not the only one." Profits, like any instrumental good, must be at the service of not just individual agents, such as shareholders or employees, but at the service of the common good; otherwise, profits corrupt the agent who pursues them.
The unfortunate side of things, however, is that not enough businesses reach their full potential of developing people, and instead of developing people, they alienate them. John Paul described this alienation in business as ensuring "maximum returns and profits with no concern whether the worker, through his own labour, grows or diminishes as a person." For example, managers treat employees well not because they are created in the image of God, but because it will maximize shareholder wealth.
This pervasive logic of instrumentalisation within corporations today fails to develop the habit of mind and heart to authentically give themselves to God and others.
Jean-Yves Calvez and Michael J. Naughton
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