Gratuity in the Market by Stratford Caldecott

I am taking the liberty of sharing a post by Stratford Caldecott from his excellent site The Economy Project.  Enjoy.

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Gratuity in the Market

In Caritas in Veritate, Pope Benedict tells us that “if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot completely fulfil its proper economic function” (35). That trust has today been severely undermined. He adds that “in commercial relationships the principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within normal economic activity” (36). So what do we make of the market, and of the Pope's warning?

There is a kind of flow, or exchange, making the world go round. This is the flow of self-gift, sometimes called love. It is what creates the world, and keeps it going. But it is reflected or echoed within creation in many different ways, and as far as human organization is concerned it is reflected in two main ways. There are two ways in which to exchange or share tangible goods: it may be done either as a gift, or as a transaction. In a transaction – corresponding to contract-style relationships in law involving commodities – one thing is given in return for another. This may be a kind of barter, where I give you my sheep in return for your goats, or it may involve money. Money was invented for situations where I don’t happen to want your goats, or anything else that you have at the moment, but I might want something later. We establish currency as a medium of exchange. Money is therefore a symbol of the spirit of love within the market: it connects everything together and enables it to flow. That explains why it can so easily become a false god.

Read the rest on The Economy Project