The impact of Catholic social teaching on the Maltese

Catholic Social Teaching, Economic Thought and 400,000 Maltese Author: EP Delia Publisher: APS Bank 2010 Extent: 246pp

APS Bank has been publishing a number of books beginning in 2001 with reports of the proceedings of annual APS Bank seminars as well as various occasional papers, almost all authored by its chairman EP Delia.

The bank’s intention is to seek to contribute to public debate on economic and social issues in Malta. The themes taken up include demographic, economic, political and legal issues.

This book presents a study prepared by the bank’s chairman following public debate in various for a after the publication of Benedict XVI’s encyclical Caritas in Veritate in June 2009.

`The publication brings together the three main areas involved in the subject: Catholic social teaching, economic thought and the par- ticular characteristics that make up the Maltese economy and society.

The background of course is Malta, at the time of publication consisting of 413,000 persons and projected to rise to 425,000 in 20 years’ time. An independent country which has recently joined the European Union and later the Eurozone. A country where one in seven may be defined as relatively poor – some 60,000 – increasing marginally over time. A country which demographically suggests an inverted population pyramid where the 60+ group will represent 33% of the totality and the under-15s only around 12% in 2050.

For me it was a novel experience to have an article by me (‘Based solely on emotion, economic policy can lead us to the Greeks’ – TMIS 21 March 2010) for which I thank the author.

The book begins with an excur- sus on the history of the Catholic social teaching from Rerum Novarum (1891) to Pius XI , Pius XII, John XXIII and Vatican Council II, Paul VI, John Paul II, to Benedict XVI. He then adds a note including what two Popes in particular have said to the Maltese people during their visits.

The second part focuses on economic theory. First come a series of longish quotations from some of the most recent writers on economic theory, from Stiglitz to Reinhart and Rogoff, not disdaining The Economist. Then come a series of essays, with an econometric bent, on various aspects of economics, such as on policy objectives and tools, on production and exchange processes, leading to a series of reflections comparing decision making, asset ownership and control according to capitalism, socialism and a worker participation/co-operative model.

Lastly, a sub-chapter on resource allocation through the ballot box. Democracy, Delia says, may hinder growth by reducing the rate of physical capital accu- mulation but it may also foster growth by extending the empowerment of people through education and health and also through lowering income inequality.

The author focuses on some ideas that link certain economic ideas to Catholic social teaching, such as the just wage, the family wage, minimum wage and social minimum.

The last section speaks about Malta. The author first analyses the various segments of the Maltese population, specifically by age. He is writing in 2009, that is after Malta’s accession to the EU and to the euro but before the financial crisis. Even then, according to the 2005 census, 60.4% of households had no dependent children; single parent households represented 2.6% of the total; civil marriages were still 800 a year and at a time when divorce had not entered Malta, 2,200 were divorced.

The rate of growth had stagnated and 15% of households were at the risk of poverty. At that time too, unemployment was rising, reaching 12,700 in March 2010.

Sometimes, in his analysis, Prof. Delia echoes the analysis given year after year by the Central Bank – nominal wage improvements have surpassed productivity improvements.

We now know there was nothing writ in stone: in fact, today unemployment has been brought down, government-induced costs, such as electricity, have decreased, and we are having a huge influx of foreign workers who are boosting national productivity and keeping wages down. And Malta seems to have come out of the recessionary spiral and institutional fatigue.

Even then, the proportion of Maltese who believed that corruption is widespread rose over the past months and more Maltese than the European average believe that corruption is prevalent in society.

Here is where Catholic social thinking should have influenced the choices made by the Maltese. With the benefit of hindsight we now know that Catholic social thinking did not impact except marginally in the choices made by the Maltese from 2010 till today. That is, as I see it, an indictment.