Related articles and links |  1 of 2

A onetime leftist who morphed into a proponent of free-market capitalism, Catholic theologian Michael Novak has been a strong voice for the role of business in God's purposes for more than 20 years. Author of Business as a Calling and Toward a Theology of the Corporation, in which he likened multinational firms to Christ on the Cross, Novak spoke to CT about apparent moral failures in companies such as Enron Corp., WorldCom Inc., and Tyco International Ltd.

Post-Enron, is there anything you would add to Business as a Calling?

I reread my chapter where I mention [former Enron Corp. Chairman] Ken Lay, and it stands. The basic structure of what I want to say is intact: Business is a moral activity, and you can't escape the moral questions—both great good and great evil may be done.

Kenneth Lay wanted people in his company to think outside the box and open up new horizons. This is a good emphasis, but there is a great danger when this approach is applied to ethics. In technology and business models we can invent new things, but in ethics you can't. Virtues are permanent. The more innovative you are in business models and technology, the more guarded you must be in permanent standards.

What can we learn from the recent business scandals?

Tyco and Enron show the temptations that are powerful in fast growth when sound ethical standards are discarded as "outmoded." People who are imaginative and creative know their value to their firm—a few decisions can save or earn millions of dollars. As a result, they can think of themselves as beyond price, and their success can lead to moral carelessness. But I don't see any correlation between bad behavior and high executive pay.

The theological limit to high executive compensation, however, is that in a democratic republic the greatest danger is envy. If one class of citizens receives benefits that are out of touch with others, it generates passions that are dangerous to the republic. For this reason, corporate compensation should be reined in. It may be morally acceptable to do this, but at the same time, it is bound to raise bad feelings in a democratic populace.

The collapse of Enron and others is seen as a natural correction in the market. Should there be other safeguards?

The market itself does not provide enough safeguards. One task of government is to ease the impact of market corrections. Recent business failures should serve as an occasion to consider systemic changes that may be needed—in particular, a reexamination of the laws and regulations that tie the funding of employee health care and pensions to their employers. I'm open to suggestions about structural changes—for example, shifting toward medical and personalized pension accounts. It is outrageous that if a person dies at age 61, all Social Security funds revert to the state. This fund should be inheritable.

What should influence executive decisions beyond shareholder value?

Business leaders need to think about the politics of their work—the politics of human rights and republican self-government. They may not want to pay more than the local wage level, but they can provide other benefits—schools, housing, infrastructure, small businesses, and the health care they engender. They may need to take a short-term loss on profit margins.

How can pastors help businesspersons in their congregations?

The complaint I hear again and again is that very few pastors seem to understand or have sympathy for the calling of business. Few preachers take pains to understand, reinforce, and encourage business as a Christian calling.

next page... |  1 of 2

share this page

February 2003, Vol. 47, No. 2