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The True Wealth of Nations

Catholic Social Thought and Economic Life

Edited by Daniel K. Finn

Oxford University Press, $35, 380 pp.

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The Oxford Handbook of the Welfare State

Edited by Francis G. Castles, Stephan Leibfried, Jane Lewis, Herbert Obinger, and Christopher Pierson

Oxford University Press, $150, 876 pp.

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Two new volumes of scholarly essays make impressive contributions to our understanding of how moral values relate to modern economic life. Although neither deals directly with the events of 1989 and the fall of Communism, both would be inconceivable had the Berlin Wall not been pulled down. Both social theory and Catholic social thought are still coming to terms with these epochal events. While capitalism and democracy emerged triumphant at the close of the Cold War, just what kind of capitalism and what manner of democratic institutions will best serve people in an increasingly globalized economic order remain open questions and a work in progress. In an age of financial crisis and skepticism about the role of government, we need as much insight as we can find.

The True Wealth of Nations comes with a mandate and a motto. As the inaugural project of the Institute for Advanced Catholic Studies, an independent lay-led institute at the University of Southern California, this book represents a wager that the interdisciplinary collaboration of theologians, social scientists, policy analysts, ethicists, and activists can shed needed light on the contemporary economic realities the church and the world face. Indeed, the names of many of the volume’s thirteen contributors will be familiar to Commonweal readers: John Coleman, SJ, Daniel K. Finn, and John Carr among them. The volume features a particularly informative essay by Stefano Zamagni on the civil economy in which markets are embedded. An economist at the University of Bologna, Zamagni is rumored to have shaped the central arguments of Pope Benedict XVI’s 2009 social encyclical Caritas in veritate. His equally accomplished spouse, Vera Negri Zamagni, offers a tour de force in the volume dealing with her own specialty, recent European economic history.

The idea lending focus to the volume and the project is that Catholic social thought can help map a sustainable path toward global economic prosperity. More than a dozen essays analyze this claim from various angles, some more successfully than others. They call for progress in today’s dire economic landscape, particularly on issues of poverty and the wildly unequal distribution of wealth. Without exception, the essays shed light on the dual task of shaping and implementing a moral vision of the economy, one that works to benefit even the most marginalized.

Particularly welcome is how the authors embrace an expansive interpretation of social health and well-being, one that insists on broad participation in economic decisions and planning. All underscore the Catholic social principle that income and wealth creation are by no means ends in themselves. All the essays address questions about the deepest aspects of human well-being and meaning. As a consequence, this volume merits a place of honor in the body of normative literature on the economy.

The Oxford Handbook of the Welfare State also offers a substantive, though very different, approach to our understanding of welfare history and policy. Although it does not dwell on the larger question of values and comes tightly wrapped in pragmatic terms about utility and effectiveness, the four dozen essays in this impressive volume reveal much about human progress as exemplified in the historical project known as the welfare state.

It would be hard to argue with the publisher’s claim that this collection is the authoritative guide to the contemporary welfare state. The essays cover every conceivable aspect of the history and characteristics of welfare-state programs, in various parts of the world. Particularly interesting are the historical accounts of the role played by public opinion, political parties, labor unions, religious institutions, and pioneering individuals in the genesis and consolidation of government policies, including family services, housing benefits, public-supported pension programs, and various types of social insurance. The prominent role played in the nineteenth century by such diverse figures as Otto von Bismarck, Pope Leo XIII, and Victor Hugo highlights the mixed motives, strange bedfellows, and peculiar confluences that gave rise to a panoply of early welfare-state programs. (The front cover, spine, and side flaps whimsically display dozens of colorful postage stamps that commemorate the expansion of welfare-state programs around the world.)

One revealing episode, treated in several of the essays, is the founding of the National Health Service in Britain. Although sometimes maligned, even by many of those whose lives it has served, it nevertheless represents a major achievement in the fitful history of universal health-care provision. It is particularly illuminating to consider the effect this distinctive British experience of wartime solidarity had on undermining class divisions and in generating support for the Health Service and then other essential social services. After witnessing the astonishing sacrifices and unparalleled heroism displayed by all strata of British society during World War II, who would dare oppose the recommendations of the 1942 Beveridge Report and its blueprint for an inclusive, comprehensive welfare state? It was in this context that the phrase “welfare state” was coined.

This volume brings together some of the finest scholars in social policy, political economy, and sociology at the top universities and study centers in Europe, North America, Australia, and beyond. The wealth of material that compares cross-national policy deepens our understanding of such questions as why the U.S. welfare state is such a laggard by Western European standards, and what might happen as a result of our recent tentative commitment to extending health care.

This collection arrives in an economic environment that is hostile to social provision and ambitious government programs. The most severe financial crises have unfolded in the most advanced welfare states of Western European and other industrialized societies. These developments have led to drastic austerity programs, a shrinking of the public sector, and to the privatization of services and raises in the retirement age. Such trends are not ignored in this volume. The final section, in fact, deals with the sustainability of welfare states. If we hope to sort out the claims and counter-claims regarding government intervention in the economy, the historical lessons of the welfare state will be crucial. Concerns about retrenchment make scholarly works like this one more important than ever.

It remains an open question whether market-driven economic growth will ever adequately serve the needs of the common good, especially the needs of the poorest. Both these volumes contribute to the ongoing challenge of reconciling ethical values with the market logic of efficiency and profit. While further effort will be demanded to expand the intersection where economics and ethics meet, these volumes supply useful tools to imagine and implement a better, more just economic order.