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The Virtue of Innovation

Can it be a sin to not start a company?  Or to have an idea for a product and fail to bring it to market?

Cardinal Tarcisio Bertone, the number two man on the Vatican org chart beneath only the pope, suggested the answer could be yes in recent remarks. That is one of several interesting observations to draw from his recent address to the Executive Summit on Ethics for the Business World, which was cosponsored by the curial council concerned with social justice. He began by acknowledging the important role played by the free market: “The attainment of a good and prosperous life on the part of great numbers of people—and at least in theory, by all—would be unimaginable were it not for business leaders who create jobs, wealth, and new products, and for innovations which are constantly expanding human opportunities and freedom.”

During the course of his address, the Cardinal made several other important points:

  • He hailed Joseph Schumpeter, who coined the phrase “creative destruction,” and is often cast as an uncaring boogey man as a result, as an exemplar of “sound economic thinking.”
  • He emphasized the imperative of private employment: “Innovation and new initiative are needed if business, the economy and the market” are to generate the jobs necessary to employ folks, especially young people.  By doing so, business “serve[s] the common good” and helps people “become, not problems, but resources and opportunities: for themselves, for business, and for society as a whole.”
  • He strongly rejected central planning and nationalization of industry: “Business today has to become more and more involved with these common goods [such as water and energy sources], since in a complex global economy it can no longer be left to the state or the public sector to administer them: the talent of the business sector is also needed if they are to be properly managed.”
  • He called for a move beyond “corporate social responsibility”: It is not enough for a company to “go green” or donate through its corporate foundation to its local community. “Nowadays business leaders who want to take the Church’s social teaching seriously will need to be more daring, not limiting themselves to socially responsible practices and/or acts of philanthropy (positive and meritorious though these may be), but striking out into new territories.” The two new territories the Cardinal mentions? Employment opportunities for young people and business partnership for “common goods.”
  • He cited the moral imperative of innovation:Finally, as I noted at the start of the post, he said that “business leaders” fail their ethical obligations “when they fail to produce quality products, ignore innovation, fail to create wealth and jobs, and pay no taxes.”

It has been popular in Catholic certain circles, especially given the Pope’s comments last week regarding commodities speculation, to diss the free market. Cardinal Bertone’s remarks on ethics and business provide a needed counter-balance to those charges.