The Social Purpose of Private Property
Managing as if Faith Mattered
By Helen J. Alford, O.P. and Michael J. Naughton
Publisher: University of Notre Dame Press
Review Author: Thomas Storck
Managing as if Faith Mattered, written by Sister Helen Alford, who teaches at the Angelicum in Rome, and Michael Naughton, who teaches both business and theology at the University of St. Thomas in St. Paul, attempts to address the very real problem that exists in the lives and work of managers in today’s business world, in that their training and outlook is entirely divorced from religious faith. Even in the case of those who consider themselves Christians, there is very often a gap between the faith they profess and the principles they apply in their work.
The authors warn, however, against “spiritualizers,” those who genuinely value “prayer and personal virtue…honesty and generosity” in their personal and even business relations, yet who do not see the relevance of religious principles to such structural issues as plant closings. Sadly, such spiritualizers “tend to become like the secularizers in practice. Religious faith serves them well as a source of personal meaning and help, but it has no place in organizational structures or decisions.”
To enable those who perhaps have never even tried to think about the larger issues raised by their work or by the economy, and who lack the conceptual framework to do so, the authors propose several topics to allow managers to begin to consider the moral implications of what they do. These topics include the purpose of business, job design, wage justice, ESOPs (Employee Stock-Ownership Plans) and other forms of worker ownership, and marketing. The book ends with chapters on authentic spirituality and on the liturgy, “the source and summit of our work.” Each chapter ends with study questions useful for discussion groups.
The book certainly raises points that should disquiet any true Christian. For example, it quotes a management textbook, “Management’s primary goal is stockholder wealth maximization,” and notes that George Soros’s financial speculation against the British pound “made a billion dollars” for him, but “severely damaged” the British economy. One wonders how speculating on exchange rates is “earning” anything, but, aside from that, in the Middle Ages any first-year theology student would have understood that any deliberate action, even if legal, that “severely damaged” the common good for the sake of private gain, would lead its doer to Hell as surely as murder or adultery. The fact that too often this has to be pointed out to the modern Catholic is a sign of how insipid our thinking on economic matters has become.
In a chapter entitled “The Purpose of Business,” the authors contrast the motive of shareholder wealth maximization — the “shareholder model” — with the “stakeholder model,” in which the interests of all groups connected with the firm are considered. Although they regard the latter as superior to the former, they find both lacking, and offer instead “the common good model,” in which a firm’s purpose is connected not just to promoting the goods of those who are directly linked to it, but the good of society as well.
A chapter on “Job Design” contains a critique of the still-dominant ideas of Frederick Taylor (“Taylorism”) and the legacy of Adam Smith, according to which job design and the division of labor are seen from the standpoint of productive efficiency alone. Although they cite Karol Wojtyla’s The Acting Person, they do not mention here the numerous insights of that same author after he became Bishop of Rome, particularly in his encyclical Laborem Exercens, about the human purpose of work and the human goods that must be preserved in work. Nevertheless, the chapter is a good introduction to a subject — job redesign from a Christian viewpoint — that is in its infancy.
In the next chapter, which deals with just wages, we are at the heart of the concerns of classic Catholic social teaching. Here again the problem is real, even if unrecognized: “In 1995, compensation for the CEO of Green Tree Financial, Lawrence Coss, totaled $65.6 million; for the same year, a credit manager for the same company, Rob Albin, received $21,000 and worked another job to make ends meet,” and “real hourly wages of young men with twelve or fewer years of schooling dropped by some 20 percent from 1979-1989.” Anyone, especially any Catholic, who does not see here sins that cry to Heaven for vengeance must be suffering from spiritual blindness. This chapter, in addition to championing such central Catholic teachings as the living wage, points out the disparity between U.S. and German or Japanese companies with regard to money invested in employee training. This is important because such training often results in higher pay for employees who have become more productive for the firms concerned. And the authors happily link the question of wages with the question of ownership, the subject of the following chapter, “Corporate Ownership.”
In this chapter, Alford and Naughton principally discuss ESOPs as a means to remedy some of the evils promoted by excluding employees from ownership, an exclusion that Pius XI recommended be changed back in 1931. Although they recognize that ESOPs “will not magically transform organizations” and that they are only a means for moving “in the direction of greater community,” they make a good case for their expanded use. Drawing on the work of such thinkers as Louis Kelso and Norman Kurland, and on the seminal book, Curing World Poverty (1994), and contrasting their ideas with those of Jerome Kohlberg, “the father of leveraged buyouts,” they elaborate the concept, again deeply rooted in papal teaching, of the social purpose of private property. For, as St. Thomas taught, although ownership of property might be private, its use and purpose must be public and common.
The next chapter, on marketing, was to me most curious. Although the authors do not mention it, advertising was generally prohibited in Catholic Europe before the French Revolution, and one of the key points of John Kenneth Galbraith’s book, The Affluent Society, is that advertising creates consumer demand where it did not before exist. Thus, to reconcile advertising or marketing with Christianity seems a bit farfetched. Much of the discussion in this chapter is couched in the pompous and turgid language of marketing literature which seems designed to disguise the fact that one wants to persuade people to buy something that apparently they would otherwise not buy. Talk of “relationship marketing” or characterizing marketing’s purpose as “integrating the customer into the design of the product and to design a systematic process for interaction that will create substance in the relationship” seems to me like a highfalutin way of describing what is simply the relentless quest for more money. References to St. Augustine or John Paul II do not redeem what is in effect an utterly amoral concern. To their credit, Alford and Naughton recognize that there is no principle in even the best marketing theory to distinguish useful goods that might benefit the public from evil or useless items. In their desire to meet the modern business world on its own ground and offer suggestions for reform, the authors fail to ask the question whether marketing is really an activity that comports well with the Faith or that is necessary for the good of society. Obviously, mankind needs external goods, but one wonders if we really need goods that we have to be persuaded to buy. John Kenneth Galbraith, not a Christian as far as I know, offers in fact a much more Christian critique of marketing than do Alford and Naughton.
There is much to praise in Managing as if Faith Mattered. It does not shirk many of the hard questions, such as the purpose of business, justice in wages, the need for broadening corporate ownership, or the evil of marketing harmful or useless goods. In many cases it takes a truly courageous stand fully consistent with the radical tradition of papal social teaching. It would indeed be a useful text for seminars among Christian managers and executives trying to discover how to make the faith they profess part of their working lives. But it also seems to pretty much accept the notion of big enterprises, the lack of individual ownership of productive property, and the constant invention and pervasive marketing of new products along with the inevitable commercialization of life. It is true that most moderns are hardly ready for the bracing economic thought of a Chesterton or a Peter Maurin, but it is toward their ideas that we should be moving, and ultimately no compromise between commercialism and Catholicism will be satisfactory.
Enjoyed reading this?
READ MORE! REGISTER TODAYSUBSCRIBE
You May Also Enjoy
It's a strange idea that a nation can spend its way to prosperity, but among economists it's not even controversial.
As the economy and culture become increasingly feminized, how long will it be before we start speaking of a "glass ceiling" for men?
The Church's teaching office is highly centralized, but her finances are highly decentralized -- making for a system prone to mismanagement and abuse.