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Neoliberalism, Its Missing Foundation and the Principle of Gratuity in Pope Benedict Xvi's Encyclical Caritas in Veritate

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Neoliberalism, Its Missing Foundation and the Principle of Gratuity in Pope Benedict Xvi's Encyclical Caritas in Veritate BUILT UPON SAND: NEOLIBERALISM, ITS MISSING FOUNDATION AND THE PRINCIPLE OF GRATUITY IN POPE BENEDICT XVI'S ENCYCLICAL CARITAS IN VERITATE By David Michael Laville A thesis submitted to the Faculty of the College of Registration and the Department of Theology of the Toronto School of Theology in partial fulfillment of requirements for the degree of Master of Arts in Theology awarded by the University of St. Michael’s College © Copyright by David Michael Laville 2012 ii ACKNOWLEDGEMENT I hope, in some small way, that this thesis can contribute to a better future for the human family. The journey to its completion has been a long and rewarding one, and I owe a debt of deep gratitude to many individuals. To begin with, I would like to thank Gordon Rixon and Peter Bisson for giving me the op- portunity to delve into this topic area, and for their continued guidance and patience in seeing it through to completion. Closer to home, I cannot thank my parents, Paul and Lorraine, enough for their steady en- couragement and emotional support. Likewise, my sister, Theresa, was a continual source of inspi- ration when I felt overwhelmed and doubted my ability to complete this project. I hope all three of you fully appreciate how meaningful your words and actions were to me. Much peace and many blessings to all who seek to build a better, more loving and just world!! David Laville iii ABSTRACT BUILT UPON SAND: NEOLIBERALISM, ITS MISSING FOUNDATION AND THE PRINCIPLE OF GRATUITY IN POPE BENEDICT XVI'S ENCYCLICAL CARITAS IN VERITATE Master of Arts in Theology 2012 David Michael Laville Department of Theology of the Toronto School of Theology University of St. Michael’s College In light of the relationship between love, truth, and charity that is elucidated for the human family in Caritas in Veritate: On Integral Human Development in Charity and Truth, the neoliberal form of globalization, especially as exemplified in Milton Friedman’s Capitalism and Freedom, is soteriologically deficient in that it is divisive and does not promote the welfare of the whole human family. iv CONTENTS ACKNOWLEDGEMENT ........................................................................................................................ ii ABSTRACT ............................................................................................................................................ iii CONTENTS ............................................................................................................................................ iv INTRODUCTION .....................................................................................................................................1 Caritas in Veritate as a Theological Lens .............................................................................................2 Neoliberalism and Its Influence on Globalization .................................................................................2 Neoliberalism as a Deficient Soteriology ..............................................................................................4 Caritas in Veritate - Answer to Neoliberalism’s Failure ......................................................................5 Organization ..........................................................................................................................................5 Implications ...........................................................................................................................................7 Chapter One ...................................................................................................................................................9 CARITAS IN VERITATE ............................................................................................................................9 Historical Antecedents of Caritas in Veritate .......................................................................................9 Adam Smith and the Birth of Laissez-Faire ......................................................................................9 The Great Transformation – Laissez Faire in Action ......................................................................10 The Modern Church and Catholic Social Teaching ........................................................................13 Leo XIII: Rerum Novarum and the Industrial Revolution ...............................................................17 Working Class Misery .................................................................................................................17 Socialism and Private Property ...................................................................................................19 Defence of Humanity before Ideology ........................................................................................20 CST and the Economic View of Humanity .................................................................................21 Benedict XV: Ad Beatissimi Apostolorum ......................................................................................23 Paul VI: Populorum Progressio ......................................................................................................25 v Benedict XVI: Caritas in Veritate .......................................................................................................28 Human Freedom: Christ’s Witness and the Empowering Love of God ..........................................28 Caritas in Veritate: The Source of the Church’s Social Teaching ..................................................30 A Necessary Weave in the Fabric of Society ..................................................................................31 Lessons of Populorum Progressio: Progress as Vocation ...............................................................35 Challenges and the Failings of Modern Development ....................................................................37 Gift and Gratuitousness ...................................................................................................................41 Market is Not Pure.......................................................................................................................44 Gratuity as a New Criterion for Judging Globalizaton ................................................................47 Gratuity and Communion as Living Water .....................................................................................48 Chapter Two ................................................................................................................................................51 CAPITALISM AND FREEDOM AS A REPRESENTATIVE OF NEOLIBERALISM .........................51 Historical Antecedents of Neoliberal Beliefs ......................................................................................52 Adam Smith – Magic of the Marketplace .......................................................................................52 Productivity and The Division of Labour ....................................................................................53 The Almighty Self-Interest ..........................................................................................................55 Moral Fullness of Smith ..............................................................................................................57 Commutative Versus Social Justice ............................................................................................59 Laissez Faire and the Free Market Experiment ...............................................................................60 The Can-Do Ethos – A Dormant Period for Modern Laissez Faire Proponents .............................63 Birth of Modern Liberalism: Mises and Hayek - Modern Neoliberal Philosophers .......................64 Mont Pelerin ....................................................................................................................................67 Milton Friedman’s Statement of Faith – Capitalism and Freedom .....................................................69 vi The Liberal Ideal .............................................................................................................................69 Competitive Capitalism: Voluntary and Informed Economic Exchange ........................................72 Salvation through the Free Market ..................................................................................................76 Monopolies ......................................................................................................................................79 Labour Unions .................................................................................................................................81 Distribution of Income ....................................................................................................................81 From Friedman to Hegemony .............................................................................................................83 Implicit Neoliberal Soteriology ...........................................................................................................84 Chapter Three ..............................................................................................................................................90 CRITIQUE OF NEOLIBERALISM’S SOTERIOLOGY IN LIGHT OF CARITAS IN VERITATE ......90 The Church and Humanity’s Salvation Story in a Global World ........................................................90
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