The year was 2013 and Mario Draghi had delivered a speech about economic policy in Munich. Head of the European Central Bank at the time, Draghi’s words carried a lot of weight. The European Union was also in a financial crisis. Several eurozone members, most notably Greece, Portugal, Ireland and Spain, had been either unable to repay or refinance their government debts.
Draghi delivered that important speech at the Katholische Akademie and many Catholic thinkers and economists still remember his words eight years later. Draghi stressed the importance of not separating economic concerns from morality: “Ultimately, we must be guided by a higher moral standard and a profound belief in creating an economic order that serves every person.”
Draghi — nicknamed “Super Mario” for his ability to get the job done — has been appointed Italy’s prime minister by Italian President Sergio Mattarella, ending a months-long political crisis that saw Giuseppe Conte’s fragile left-wing parliamentary coalition collapse.
This is a major political news story, of course. However, journalists also need to pay attention to the impact that Catholic social teachings have on this economist’s thinking and strategies.
Here’s some background. Conte came to power just two years ago as a compromise candidate after two ideologically opposed political parties (the right-wing Lega party headed by Matteo Salvini and leftist Five Star Movement of Luigi DiMaio) failed to garner a majority in parliament. Instead, the parties came to a power-sharing agreement and Conte was made prime minister.
Salvini left the coalition hoping he could come to power in new national elections, but left-wing parties were able to come together and maintain a majority that kept Conte in power. But Conte fell out of favor with the Viva Italia party following a squabble on how to spend European Union COVID-19 stimulus funds amid continued national lockdowns.
Enter Draghi, a 73-year-old Rome-born economist who isn’t a politician. Instead, he’s been installed to try to bring these warring parties together and put the pandemic-plagued nation back on solid economic footing.
Italy has, of course, been hard-hit by the virus. A year later, it has left the nation’s economy in tatters and with nearly 90,000 dead. That put the country eight overall in the world when it comes to the number of dead.
Economic uncertainty has been amplified in areas of Italy with levels of unemployment were high even before the pandemic struck. Southern regions like Sicily and Campania, initially spared from the contagion during the first wave, were thrust into the red zone last fall as infections rose. Foreign Policy reported that the number of people at risk of poverty and exclusion from welfare and rights that other residents have access was over 50 percent compared to a national average of 27 percent and just over 20 percent across the 27 European Union countries. Italy is a member of the Group of Seven and one of Europe’s biggest economies.
What does Draghi bring to the table? He was educated in Jesuit-run schools and earned a doctorate at MIT. To the progressive left, he’s a banker. For the populist right, a technocrat. For most Italians, he’s seen as their only hope a year after the pandemic began.
How will Draghi govern? How will Catholic social teachings factor in helping lockdown-weary Italians — from business owners forced to shutter their stores to the unemployed — achieve economic stability?
Journalists can look for answers in that 2013 speech. Here is an excerpt:
The crisis has dented people’s confidence in the capacity of markets to generate prosperity for all. It has strained Europe’s social model. Alongside the accumulation of staggering wealth by some, there is widespread economic hardship. Entire countries have been suffering from the consequences of misguided past actions – but also from market forces that are sometimes beyond their control.
In a sense, the “social question” of the 19th century, which inspired the Catholic Social Doctrine, has re-emerged – but today it transcends national borders: what is the right framework for reconciling free enterprise and individual profit motives with concerns for the common good and solidarity with the weak?
In recent decades, this question seemed to be approached from a purely economic perspective. The invisible hand of the market, if only left unconstrained, would eventually generate better outcomes for all. The rational actions of ‘homo oeconomicus’ were seen as divorced from ethical concerns about compassion, charity and decency. It seemed forgotten that Adam Smith, the philosophical father of market economics, saw his “Wealth of Nations” as inextricably linked to his “Theory of Moral Sentiments.”
In the speech, Draghi also extolled the virtues of Cardinal Reinhard Marx, who serves as archbishop of Munich and Freiburg.
Here I find myself in the company of Marx. Not Karl, but Reinhard. Cardinal Reinhard Marx has rightly insisted that “the economy is not an end in itself, but is in the service of all mankind.”
And caring for the welfare of our neighbors is not only an ethical principle of the Christian faith: it also makes eminent economic sense. No-one knows this better than the successful entrepreneurs of Bavaria. Interdependence is not just a catchword. The economic health of the countries around you affects us here and now.
So these are the challenges facing European policy-makers today: how do we recreate confidence in the capacity of our economies to grow and generate prosperity so that they can ultimately serve the people? How do we shape our economic model so that it reconciles individual freedom and social justice? And how, as the European Union, do we strike the right balance between the responsibilities of individual countries and those of the Union as a whole?
Draghi’s ability to strike that balance is what led Pope Francis last summer to appoint him ordinary member of the Pontifical Academy of Social Sciences. Headquartered at the Vatican, the group promotes the study of social sciences — primarily in the field of economics, law and political science — through dialogue it offers the church elements useful to the development of its social teaching and modern society.
That came a year after he had received an honorary degree from the Universita Cattolica del Sacro Cuore (Catholic University of the Sacred Heart) based in Milan. The Italian Jesuit magazine, La Civilta Cattolica, wrote of Draghi: “As president of the European Central Bank, he was decisive in saving the economic and monetary union, and thanks to his contribution, we have the extraordinary opportunity to complete it today.”
CONTINUE READING: “Can ‘Super Mario’ And Catholic Social Teaching Rescue Italy’s Faltering Economy?”, by Clemente Lisi at Religion Unplugged.
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