Studies in Catholic Thought - Task 2 - Dominic McLachlan

Explore a significant social issue in either the local, national, or international context that invites a Catholic witness

A significant social issue in the modern world is the financialisation of property. Where we see exploitative business models with companies such as Blackrock and Macquarie Asset Management, who have built wealth off the treating of land as a financial asset. This is a social issue which invites a Catholic witness as it can be considered a violation of obligations to the human person, such as the right to shelter. Land is an inherently scarce resource, and such business models take advantage of this fact to make extremely large profits, rivalling that of businesses like Lockheed Martin, who make military vehicles and equipment which often require extremely expensive materials, and they rival these businesses without producing anything of material value.

Apply the principles of Catholic ethical teaching to the area investigated.

The question of property is heavily covered in Pope Leo XIII’s encyclical Rerum Novarum, published in 1891, covers the rights and duties of society in the face of new economic development and an industrialising, changing world. In which, he makes the point that private property is an aspect of natural law. Such that, property is an extension of the individual, who has a right to the fruits of his labour. Asset management and its financialisation of property is inherently in contradiction to this. Many who identify the evil of it, unfortunately, will often run to the opposite end of the political spectrum and call for the abolition of private property. However, Catholic witnesses and influences have been able to provide nuanced solutions, which allow for stopping this evil, without sacrificing many other goods by going to a system like communism. For example, the concept of Georgism is a system which proposes the idea of taxing soil, not toil, where land is understood as a common good, the unimproved land as it stands is taxed, whilst any development on the land remains untaxed, to incentivise development. Other similar ideas involve a tax model which lets land be taxed depending on the degree that the owner treats it as an extension or a financial asset. Where homeowners and factory owners are untaxed, landlords are taxed very little, and business models which exploit the worker, such as Blackrock, are made unsustainable by an extremely high, if not 100% tax. Such that, the worker is protected and private property as it ought to be is protected.