We ended Part One of this guide to Rerum novarum with the encyclical’s reminder to the rich that they would have to answer to God if they were not generous with their riches. The focus of that first part was the staunch defence of the right to property. This part will look at the relationship between the state, the family and the Church and the responsibilities we have to the poor.
Just as Rerum novarum could be described as the ‘workers’ encyclical’, it could also be described as the ‘family encyclical’. It is noted that the family is a ‘true society’ which should govern itself (13). The family has rights prior to those of the community, and these rights arise from nature. It is stated firmly that: ‘The contention, then, that the civil government should at its option intrude into and exercise intimate control over the family and the household is a great and pernicious error’ (14). The state should assist a family if it needs aid and cannot get help from wider family or friends. Furthermore, the public authority should only step into the workings of the family to ensure that legitimate rights are enforced (perhaps if there is abuse or violence). Rulers, it is argued, should go no further (‘nature bids them stop’) because parental authority cannot be absorbed by the state. The encyclical notes: ‘The socialists, therefore, in setting aside the parent and setting up a State supervision [sic], act against natural justice, and destroy the structure of the home.’
It is argued that no practical solution will be found to the questions under discussion that does not incorporate religion and the authority of the Church: ‘All the striving of men will be in vain if they leave out the Church’ (16). The Church enlightens the mind, guides actions by her precepts, helps working people through the many associations she establishes, and also indicates where intervention by the state is necessary. It is then pointed out that inequality is both natural and advantageous, arising, as it does, from the many differences between people (17). Also, there will always be suffering, and those who pretend otherwise are deluding us and will bring forth ills worse than any from which people suffer currently (18).
Throughout the encyclical, class conflict is explicitly rejected because labour needs capital, and capital needs labour: ‘Mutual agreement results in the beauty of a good order, while perpetual conflict necessarily produces confusion and savage barbarity’ (19).
The duties of employers to employees (and the other way round) are then laid out (20).
Regarding the former:
The question of how to determine wages is then discussed. It is recognised that many things should be considered. However, somebody’s weakness or desperation should not be a consideration (20).
The question of the responsibilities of the rich, and the account which they will have to make at the last judgement, alluded to in Part One, is now addressed explicitly.
Riches are obstacles to heaven, and the rich should ‘tremble at the threatenings of Jesus Christ’ to whom ‘a most strict account must be given to the supreme judge for all we possess.’ The sharing of possessions with those in need is a duty only to be enforced by the law in extreme cases, but we must be generous with our riches. The distinction between our obligations under the law and those out of the generosity of our hearts is stressed (22).
It is also stated clearly that poverty is no disgrace, as Christ became poor for our sake. And there is nothing to be ashamed of in working for a living. Jesus not only spent most of His life as a carpenter, He was known by his trade: ‘Is not this the carpenter, the son of Mary?’ (23). It is our moral qualities and virtue that will lead to eternal happiness, not our status. Rich and poor need to join hands in concord and not indulge in class conflict. Strife would quickly cease if it were understood that we are all children of God. We all have a desire for the same last end, and the last end of eternal happiness is only withheld from the unworthy. The Church alone can reach our hearts and consciences so that we will love God and break down any barrier that blocks the way to virtue.
As well as the teachings of the Church, we also have her institutions within what we might now call ‘civil society’. These have lifted up the human race. If society is to be healed, there can be no other way than returning to the Christian life and Christian institutions (27). Though the Church is pre-occupied with spiritual concerns, she does not neglect earthly interests, and she desires that the poor rise out of poverty. The Church has always maintained many associations that provide relief to the poor, and this is an activity that was admired even by the enemies of the Church (29). The proposed systems of relief that are to be organized by the state will never make up for the devotedness and self-sacrifice of charity which should be drawn from the most Sacred Heart of Jesus Christ (31).
However, we should ask what part the state should play in providing relief, and the encyclical moves on to address this.
Rerum Novarum makes clear that any government should be properly constituted from a Christian perspective. The laws and general administration of the state should be such as to promote public well-being and private prosperity. This requires ‘moral rule, well-regulated family life, respect for religion and justice, the moderation and fair imposing of public taxes, the progress of the arts and of trade…’. This way, it is argued, every citizen will be happier and there will be peace and prosperity. Furthermore: ‘The more that is done for the benefit of the working classes by the general laws of the country, the less need will there be to seek for special means to relieve them’ (32). This is a point that would resonate with those economists who stress the importance of good governance and the rule of law for economic development.
All citizens should contribute to the common good of a nation, and they also share in the common good. But all citizens do not contribute to the same extent or in the same way. Those who govern the nation, and defend it in times of war, should be held in high esteem. Those who have a trade contribute to society in a different way, and government must watch over the interests of the working class so that they receive what is their due. It is for the good of all society that the working classes are treated with justice.
Once again, it is emphasized that the state must not absorb the individual or the family. Both must be allowed ‘free and untrammeled action’ consistent with the common good. The power to rule comes from God and, just as God acts with a fatherly love, the state should also serve the community (35).
Situations where the state might intervene through the ‘aid and authority of the law’ are mentioned (36). These include (inter alia) where any particular class is threatened with harm; maintaining peace and good order and a high standard of morality; where a strike puts people in imminent danger or may lead to a disturbance of the peace; where workers do not have time for religious duties; or where employers impose degrading conditions. However, ‘the law must not undertake more, nor proceed further, than is required for the remedy of the evil or the removal of the mischief’ (36). Again, this is consistent with the primacy of the family and civil society.
In 37, a sort of ‘preferential option for the poor’ is introduced. It suggests that the rich are better able to look after themselves and need less help from the state, but the poor need to be given special consideration – this especially includes wage-earners.
In the following paragraph, Pope Leo returns to the right to property which must be protected: nobody should seize what belongs to another in the name of equality or otherwise. It is argued that workers better themselves by justly acquiring property rather than by taking that of another person. The law should put a stop to revolutionaries who want to lay their ‘violent hands’ on the property of others, and we should protect the working class from them and stop the working class from being led astray (38).
Part Three will examine the later part of the encyclical which deals directly with the condition of workers, wages, unions and associations that assist workers.
Philip Booth is professor of Catholic Social Thought and Public Policy at St. Mary’s University, Twickenham (the U.K.’s largest Catholic university) and Director of Policy and Research at the Catholic Bishops’ Conference of England and Wales. He is also Senior Research Fellow and Academic Advisor to the Centre for Enterprise, Markets and Ethics.
Providing Christian commentary on the recent budget is not especially easy. There was a measure to remove the two-child cap on Universal Credit payments that was welcomed by many Christians. But the rest of the budget was really a collection of bits and pieces with many deferred tax rises, on which it is difficult to provide a Christian analysis.
Some Christians might welcome the significant increase in gambling taxes which will bring in relatively little revenue. However, even if we regard gambling as an ‘occasion of sin’ (to use the Catholic terminology), it does not follow that governments should tax or regulate it more. Taxes in this area can lead to serious problems of black markets. They also land squarely on the shoulders of the less-well-off.
One of the reasons for a succession of budgets which have involved tinkering around the edges is that the level of debt and social spending on the growing elderly population is so high, with the result that Chancellors of the Exchequer have been focusing on shoring up revenue – or at least attempting to do so. We thus have a situation where people are simultaneously complaining about record levels of taxation, a squeeze in welfare provision to people of working age and to children, problems in the provision of public services, and rising levels of debt. All these complaints have merit. Indeed, one of the problems is that we seem to demand incompatible policies from politicians: we should, perhaps, whatever our political sympathies, pause for a moment and empathise with politicians. Maybe we demand too much.
A time of crisis is a good time to go back to fundamentals. The Catholic Bishops’ Conference of England and Wales did that recently with the publication of Render unto Caesar, which included fine chapters from CEME staff members. Below I will highlight four areas from the document which merit further reflection from Christians. I will start with a major challenge and then move on to what could, in a sense, be regarded as responses to the challenge.
The UK, in common with most other developed countries, has a historically large peacetime national debt. This is a burden we are imposing on future generations and, as Christians, we should be able to shed light on this topic. Whilst the subject is complex, it can be regarded as an injustice if a government consistently spends more than it takes in taxation without very good reason. Today, we spend the same on debt interest as we do on education and this has a real cost in terms of the tax burden on families. If the impact on disposable income leads to social conflict, government indebtedness injures the common good and human dignity. Indeed, people may misattribute blame for falling living standards to vulnerable groups such as migrants, thus undermining both the common good and the dignity of those groups.
Related to this problem of the government debt are the promises made to future generations of older people in terms of future pensions and healthcare provision. The projections of the government’s Office for Budget Responsibility suggest that our national debt will explode to around 350% of national income on current policies because of those obligations – and that is on pretty optimistic assumptions. No advanced provision was made by way of some sort of capital fund when these promises were made. It was just assumed that the number of younger people would always be sufficient to support the system. It was never realised that fertility rates might plummet, and people would live longer. These plummeting fertility rates are, in and of themselves, something which the Church might be concerned about. Does our society support family life? We will come to that topic below.
There is no shortage of examples where the common life of society and social peace have totally broken down as a result of high levels of government indebtedness. I hope that we are not going to relive that in the West, but we might.
But what about taxation? Let us consider three areas.
It can be argued that we have a very bad and inefficient approach to climate change policy. For around 100 years, economists have favoured taxes designed to reflect environmental harms caused by consumers or producers. Interestingly, the last two popes have done so too – in papal encyclicals Laudato Si’ and Caritas in Veritate. For example, Laudato Si’ mentions the ‘obligation of those who cause pollution to assume its costs’. This is a question of both distributive justice and economic efficiency. What politicians tend to do when it comes to climate change policy is to come up with incredibly complex and expensive methods of reducing carbon emissions rather ineffectively because they are frightened of the electoral consequences of explicitly taxing carbon emissions (for example by putting value added tax on domestic fuel consumption and using the revenue to reduce other taxes paid by the less well off). Once again, we should make it easier for politicians to do the right thing in this respect.
Another area which is ripe for reform is the relationship between local and central government. We cannot look through the lens of the Catholic principle of subsidiarity or the Calvinist principle of sphere sovereignty without being critical of the centralisation of government in the UK. This really involves delegation of certain powers to local authorities from central government. We must reform government so that at a variety of levels (starting with parishes and towns) local communities can have true responsibility in a whole range of areas and not just act as branch offices of national government.
Taking the principle of subsidiarity one step further, we should also ask whether we have a tax system that is designed to ensure that families can flourish. In the UK, unlike in countries such as France and Germany, the concept of the family is largely ignored in the tax system which is based on individual rather than household income, so that families in which one adult undertakes caring responsibilities rather than paid work are strongly discriminated against.
The way in which the tax and welfare systems interact penalises marriage and family formation – especially for people on low incomes. Figures produced by Marriage Care show that fewer than a quarter of low earners marry. And it is at low levels of earnings that the tax and welfare system are least conducive to marriage and family life. Christian teaching on the nature of marriage and the family would suggest that our tax system is fundamentally flawed and should be reformed.
We should remember, as Christians, that our obligations to the poor do not end when we have paid our tax bill. The early Church fathers gave pretty stark warnings about the duties of the rich. Riches can be ruinous of the soul. We must use our wealth to promote the common good whether through business, philanthropy, social enterprise or otherwise. In turn, the state should not take all our wealth from us. It should tread lightly and leave room for philanthropy and civil society (including Church) solutions to poverty and the promotion of welfare. This also involves having a tax system which encourages philanthropy. As it happens, that is one thing our tax system does get right.
Philip Booth is professor of Catholic Social Thought and Public Policy at St. Mary’s University, Twickenham (the U.K.’s largest Catholic university) and Director of Policy and Research at the Catholic Bishops’ Conference of England and Wales. He is also Senior Research Fellow and Academic Advisor to the Centre for Enterprise, Markets and Ethics.
This is a repost of an article originally published on the Catholic Social Teaching blog of St Mary’s University (https://catholicsocialthought.org.uk/).
Historical Context
Upon his election, Pope Leo XIV said that he was inspired to take the name ‘Leo’ by Pope Leo XIII’s work on Catholic social teaching. The newly-elected pope especially mentioned Pope Leo XIII’s encyclical, Rerum novarum. Pope Leo XIV related this to the current need to think about things afresh given the development of artificial intelligence (AI). This series of three blogs explores Rerum novarum. It is a radical and holistic call to orientate our whole lives towards God – including in the political, economic and social sectors. To try to distil it for its proposals, as many do, in the political, economic and social domains alone and to take it outside its religious context leaves it stripped of its essence.
After describing the context below, the three posts will take the themes of the document strictly in the order that they appear.
The encyclical begins by describing the situation in the world. Rerum novarum means ‘of new things’ in Latin. The document begins with the words: ‘That the spirit of revolutionary change, which has long been disturbing the nations of the world, should have passed beyond the sphere of politics and made its includence felt in the cognate sphere of practical economics is not surprising’. It quickly moves on to list a whole set of social relationships which were changing.
Arguably, Rerum novarum came about 140 years after the beginning of the events that inspired (or necessitated) it: the Church took time to reflect. Those events were (inter alia):
1760 – the beginning of the industrial revolution and urbanisation
1776 – US independence, and the publication of ‘The Wealth of Nations’ by Adam Smith
1789 – the French Revolution
1824 – the first commercial railway
1848 – revolutions across Europe (though not in Britain)
1867 – the publication of ‘Das Kapital’ by Karl Marx
1870 – Italian unification
Many of the changes above were related to the introduction of radically secularist ideas into the political domain.
There was an intellectual upheaval greater than any since the Reformation which would include widespread discussion about a range of ideas concerning political and economic organisation. These ideas included: total economic laissez-faire; utilitarianism; Scottish enlightenment liberalism; socialism; Marxism; secular republican nationalism; constructivist-atheist-rationalism (for example, French Revolutionary ideas). Many of these ideas proposed, in effect, an alternative state religion of secularism which posed an existential threat to the institutions of the Church and the promotion of the common good. There was a real fear, for example, that anti-Christian republicans, socialists, nationalists and Marxists (and these are different groups of people) would try to stamp out the Church. At the same time, there was a real fear that certain liberal or laissez-faire ways of thinking would destroy the dignity of the worker or remove Christian moral reasoning from the economic sphere.
Overall, Rerum novarum navigated the choppy waters of socialism and certain forms of value-free liberalism. It provided a modern alternative to, and a strong rebuttal of, radical secularism that was attacking the Church, often with the aim of replacing her with unrestrained political power.
The Right to Property
In the remainder of these posts, we will look at the specific issues discussed in Rerum novarum. But it must never be forgotten that there was one over-arching theme: the salvation of souls and the development of institutions, policies and the economic, social and political relationships conducive to that end.
Pope Leo begins by setting the scene, recognising the poor material condition of the working classes and the exploitation by richer classes. He notes the need to ensure the just protection of the poor, including by public institutions. However, he quickly states that socialism is no solution. He describes how ‘crafty agitators’ are perverting men’s judgements to stir up revolt: these crafty agitators were socialists and communists who had been criticised in no uncertain terms in earlier papal writing.
Indeed, the first remedy proposed in Rerum novarum is a very strong defence of private property. It is argued that the socialisation of property would be to the detriment of the working man, distorting the functions of the state and creating utter confusion. Rerum novarum contained a trenchant defence of the right to property and the institution of private property. The political context of the desire by socialists and secularists to destroy the Church, take the property of the Church and take the property of all individuals is important. However, it would be entirely inappropriate to dismiss Rerum novarum’s defence of private property by suggesting that it was contingent on these conditions. It is a central part of the document’s teaching and uses language that is clearly not context specific. Also essential, according to Rerum novarum, is the development of a polity in which many have the opportunity to hold property.
The argument for private property is tied to the status of a workman’s wages (5). A family’s savings, it is stated, are accumulated from wages and are therefore wages in another form. Given that Christians regard the taking of a person’s justly acquired earnings as a sin worse than theft, this has implications for how we view property. We are told that every person, by nature, has the right to hold property (6). This is part of our human nature because, in contrast to animals, man can reason and can therefore possess things not just for momentary use, but also to provide for the future.
It is then clearly stated that the right to private property does not contradict the principle of the universal destination of goods. Firstly, private property is a way of distributing responsibility for the goods of the world. Secondly, even if we are not owners, we benefit from what property produces. Private property is described as having, down the ages, been found to be pre-eminently in conformity with human nature and necessary for peace and tranquillity (11). Pope Leo then quotes divine law in relation to not coveting the property of another.
The tranquillity of a social order, which is an important justification for private property (a point also made by St. Thomas Aquinas), is then contrasted with socialism based on the community of goods which, Pope Leo states, would lead to ‘envy, mutual invective and to discord – the source of wealth would run down and that ideal of equality would involve a levelling down of all to a condition of misery and degradation.’ (15) The encyclical continues: ‘Hence, it is clear that the main tenet of socialism, the community of goods, must be utterly rejected, since it only injures those whom it would seem meant to benefit, is directly contrary to the natural rights of mankind, and would introduce confusion and disorder into the commonweal.’ It was then stated that the right to property is ‘inviolable’.
It is also important to note that the Catholic Church is very clear that, whilst the right to private property is conducive to a well-ordered, peaceful and prosperous society, this teaching sits alongside an obligation to use property for good purposes, including the support of the needy. In the modern world, we have come to assume that the state is the vehicle for the redistribution of property. In Christian thought through the ages, a strong moral responsibility is put on those who have material goods to help those who do not with substantial benefactions, a point developed later in the encyclical. If we do not live out that moral responsibility, we will have to answer to God.
This first blog post on Rerum novarum has only taken us through about a quarter of the encyclical. There is much to come on the family, the provision of welfare and the treatment of labour – once again, the teaching is placed in a very strong Christian context. These topics, and the rest of the encyclical, will be covered in the second and third posts.
Philip Booth is professor of Catholic Social Thought and Public Policy at St. Mary’s University, Twickenham (the U.K.’s largest Catholic university) and Director of Policy and Research at the Catholic Bishops’ Conference of England and Wales. He is also Senior Research Fellow and Academic Advisor to the Centre for Enterprise, Markets and Ethics.
Web-friendly and divided into sections (clickable endnotes):
Environmental sustainability is a central challenge for humanity. In areas of the United Kingdom water has been rationed in two of the last four years, partly because we have not managed to build a major reservoir for over 30 years. Not only greenfield, but also brownfield land on which housing could be built to ease our chronic shortage lies undeveloped. Fish stocks in some important species have dropped to dangerously low levels with high government-set catch levels aiming partly to preserve the UK’s fishing fleet. The carbon emissions strategy pursued by all recent governments has put the goal of achieving net zero by 2050 within reach, albeit at considerable, but perhaps now reducing, cost.
The first fruits of CEME’s programme on the economics and ethics of the sustainability challenge are published today. Markets and the Environment, by our Senior Research Fellow, Dr John Kroencke, considers what economic theory and the history of environmental policy tell us.
If we accurately grasp the scale of the challenge, we will immediately have strong feelings. One reason is that, once the fragility of the ecosystems in which we live is exposed, we see how precious they are. In Christian ethics we express this by saying that humankind and the world in which we live our earthly lives is part of a single created order, which the Creator lovingly holds in being. In the poetry of Genesis 1, God saw all that he had made, and it was very good.
A second reason is that sustainability challenges give us an insight into our own mortality and limitedness. In the earthier imagery of Genesis 2, our earthly bodies are of the same stuff as the dust of the earth. In that sense dust we are, and to dust we shall return.
A third reason is that we see stark trade-offs. The goods of conserving or regenerating ecosystems appear to conflict with other social goods. That is certainly a feature of all the UK challenges mentioned above. In these trade-offs we seem to face a certain loss, either of one kind of good, or of the other. We fear these losses in prospect. When they happen, they grieve us.
These strong feelings can lead us into one of two unhelpful responses. The first could be called environmental absolutism. We all feel that sometimes. Looking at some part of the planet, which particularly strikes us at that moment in all its preciousness and fragility, we have what seems like a moment of moral clarity. We can make no trade-offs. The very idea of cost-benefit analysis seems out of place. ‘Conserve or regenerate this at all costs,’ we feel, ‘and let the heavens fall.’
Yet we do have to make trade-offs, not only between environmental and other social goals, but even between different environmental goals. So we need not only moments of moral clarity, but also a worked through ethics and theology which is integrated with, not insulated from, economic thought.
Another unhelpful response is at the other extreme: what could be called laissez-faire fatalism. I suspect we all have moments of that too. It’s just too difficult, we feel, to work out these difficult trade-offs. If we try, there will be too much conflict, too much ‘politics’. Or, in a different version, the costs of environmental protection seem just too vast to contemplate: intuitively ‘it is just not worth it’. Surely ‘the market’, if left to itself, can work it out. Or can’t the economists just make the problem go away?
But that response will not work either. When we talk to economists about ‘leaving it to the market’, or indeed to them, they will first tell us that the losses in value caused by environmental harm will be in many cases far higher than the potential gains from the activities that cause it. They will tell us also about externalities and market failures. They will be disinclined to tell us what our environmental goals should be, and instead offer us efficient ways to achieve goals which we put to them.
They will also tell us that this kind of fatalism risks legitimising positions which have nothing to do with economics at all, but are rather forms of political posturing and the instrumentalisation of environmental policy for a broader ‘culture war’. This is one way one could see the 2024 manifesto pledge of the Reform Party to axe the UK’s Net Zero target, or the pause on renewable energy projects on federal land in the US. Economists can help us to get the economics right, but only if the politics and ethics of the debate permit that.
Once we accept that we need to think both economically and ethically, we then need to avoid two mistakes in how we do so. The first could be described as market-phobic. It is markets, some might say, which have created these problems. Do we not all agree that environmental goods are often public goods? Do they not often function as externalities to markets in other goods, which therefore inevitably fail to value them? Should we not then use market mechanisms as little as possible in addressing them? Should we not look instead to decisions by politicians and government officials to design the necessary actions, such as reductions in pollutants or emissions, and command and enforce them through the coercive power of the state?
The problem with this response is that it both exaggerates the ability of the state to do this with any efficiency, and overlooks the potential gains from well-shaped markets. A well-shaped market will harness large amounts of real-time information, even as that remains decentralised. It will summarise this in the rich, responsive information of price signals. These will enable diverse and dispersed individuals and groups to align their voluntary actions. By preserving existing property rights, or generating new ones, it will provide incentives for enterprise and innovation.
This type of potential has often been lost due to crude regulation, such as: opposition to zonal pricing for energy; regulated prices for water use; and the failure to develop more than an embryonic market in credits for nutrient run-off caused by much-needed house building. On the other hand the extraordinary growth of solar energy generation in Texas, stereotypically a place of ‘cowboy’ spirit and free-market principles, illustrates the power of a well-shaped market.
A second mistaken response could be described as market-fundamentalist. Have we not learned from other sectors of the economy, others might say, of the perils of government control of economic activities? Do we not know the challenges of intermittent, centralised decision-making, and the likelihood of political capture of the process? Therefore a market solution is always to be favoured. The role of government should be as limited as possible, shaping a market with the largest possible scope, and leaving it to run.
The problem with this response is that it confuses a general, ideological claim with a specific, empirical one. Ideologically one can believe that markets generally have great benefits, while at the same time insisting on the need to consider what institutional arrangements will in fact best address each specific environmental challenge.
A better way than these is suggested by the insights which won Ronald Coase a Nobel Prize in Economics. These are considered by John in Chapter 2 of his report. If we consider the relative merits of addressing an environmental challenge through governmental command and control, or through community-based self-governance, or through a market system, this should be seen as a choice between institutional arrangements.
The relative efficiency of these depends in large part on what economists call transaction costs. Coase’s contribution was to emphasise their significance. They include costs: to gather information about needs, counterparties, costs and prices; to establish property rights, whether over fish or water; to draw up, negotiate, monitor and enforce agreements; and to resolve disputes. These costs exist in all kinds of institutional arrangements, but in different patterns.
In Chapter 3 John develops Coase’s insight and applies it to environmental regulation. Since the pattern of transaction costs differs in each context, different institutional arrangements will be superior in different contexts. The arrangement selected can best be seen as an emergent solution to a specific environmental problem.
This has implications for business-people. Sometimes they fear they will be perceived as complicating political solutions designed to cut-through and connect with the strong feelings mentioned at the outset. But John’s report implies that a more complex and nuanced debate is likely to be in the public interest. There is no substitute for close, comparative analysis. We need to relinquish the doctrinaire stances through which someone might try to short-circuit decision-making by, for example, putting trust always in the state, or always in an impersonally and abstractly conceived market.
At other times business-people fear that policy-makers or the public will see them as advocating for market solutions only because they suit them. Coase’s thought yields a framework for policymakers and citizens to distinguish proposals which offer efficient solutions, from narrowly self-interested arguments. This enables the formation of the durable coalitions needed to support long term investments. For example, on nutrient neutrality a well-designed market overcoming barriers to win-win trades between existing polluters and homebuilders could attract broad support.
The need is for a real-world approach which keeps initial assumptions down, takes the trouble to understand the context without pre-emptively ruling anything in or out, and prioritises arrangements which best promote flourishing and welfare.
That allows the re-integration of economics with ethics. It certainly introduces an ‘anthropological’ element. In choosing between state, community or market solutions we will need to attend to what kind of state, community or market will in practice exist. That will depend in part on what kind of people are making decisions in the state, community or market, and how they relate to one another.
As Christians we have particular insights to offer. The impossibility of outsourcing our personal ethical responsibilities wholly to state or market arises from the irreducibly personal call God makes on our lives. Each of us must respond to the call to follow the way of Christ. We have each been given a will and a mind. With these comes the ability to make our own decisions – and an accountability for them.
The primary commitment to the welfare of our neighbours, rather than to any form of ideology, including economic ideology, is seen in the command to God’s exiled people to attend to their context and to work to improve it: to ‘seek the welfare of the city where I have sent you… and pray to the Lord on its behalf’ (Jeremiah 29.7). Indeed our cities in all their diversity do need our prayers – as does the City and its economic and commercial institutions – as well as our government and other communities.
We know that markets work, but also that they work in different ways in different contexts. Perhaps it’s time for some of us to stand up as ‘Christian Coaseans’, committed to tackling environmental challenges, and committed also to the hard work of comparing solutions and championing the most effective.
Revd. Dr. Philip Krinks is the Director of CEME.
The Centre for Enterprise, Markets and Ethics was pleased to hold an event on 13 November 2025
Bishop of Oxford’s Office and the Church of England’s specialist on AI and tech within the Faith and Public Life Team
Tech Entrepreneur
It has been reported that executives within the motor industry have expressed frustration at the Chancellor’s intention to end the provision of luxury cars through the Motability scheme, which assists those in receipt of disability benefits with funding to lease a new vehicle. Motability itself is a private company and accounts for about a fifth of sales of new cars in the UK, last year having spent £2.8 billion in the provision of vehicles for about 815,000 users. Of the 700,000 vehicles that constitute Motability’s stock, around 50,000 are considered luxury brands, such as BMW, Audi or Mercedes-Benz. In addition to removing luxury vehicles – defended by Motability as representing only seven per cent of its offering – the government is considering other reforms, including reducing the tax breaks available through the scheme, such as exemptions from VAT and insurance premium tax.
While Motability itself has pledged to crack down on potential abuse of the scheme, figures from within the motor industry have criticised the possible reforms. They argue that reform will reduce the size of the market for new cars, increase prices, deter investment, cost jobs and reduce the number of vehicles subsequently moving into the used car market, with knock-on implications for pricing. In addition, it is claimed, the planned changes will affect social mobility and cost the Treasury revenue.
The two latter claims have arguably been addressed. On the matter of tax revenue, it has been estimated that ending the tax relief on Motability vehicles will save the Exchequer over £1 billion per year. With regard to the question of social mobility, a reformed scheme would still deliver that. As the Transport Secretary indicated in a recent radio interview, the government considers the scheme to provide important support for those with mobility needs and believes that it should continue to do so. At issue, therefore, according to a Treasury official, is the question of whether the scheme has lost sight of its original purpose and whether, by providing premium vehicles rather than essential transport, it is making good use of public money. As such, the government’s concern is essentially with matters of fairness.
The other concerns raised by industry figures – concerning jobs, investment, prices and the state of the market more broadly – are interesting in so far as they focus entirely on issues within the automotive sector. What, precisely, is being sought? It is natural for businesses to wish for certainty and consistency, without which it is difficult for them to make plans or operate with any confidence. This, however, does not appear to have been mentioned. Rather, what seems to be at issue is the financial support provided to the sector by way of the Motability scheme.
One might wonder, therefore, whether this constitutes an example of the kind of rent-seeking behaviour deplored by Adam Smith in his comment that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices.’ While this observation was made in the context of a discussion of trade corporations and competition in employment, it reflects Smith’s concern at the tendency of those in business to seek monopoly advantages or government regulation that favours their own operations. Such behaviour – whether in the form of lobbying for special tax exemptions or using a dominant market position to exclude competitors – aims to increase one’s own profits without offering any additional productivity in return. Is this what figures within the automotive industry are engaged in, essentially seeking government financial support for their own advantage? Are they arguing that the proposed reforms should be abandoned because they are ‘bad for the sector’?
It could be argued – and perhaps this is the contention of the executives in question – that helping the motor industry is in the public interest. Maybe there are grounds for continued government support – in effect by leaving the scheme to operate as it is – based on the wider economic benefits. Through the Motability scheme in its current form, the argument might run, the government supports investment and research within the motor industry, or at the very least the provision of jobs. It thereby restricts unemployment and encourages spending, thus stimulating economic activity more broadly and contributing to economic growth.
There may be an argument of this kind to be made, but it invites the question of whether a scheme designed to assist those with mobility problems represents the best means by which the government could provide a stimulus to growth via the automotive sector – and why via this sector rather than any other? We might wonder whether the Motability scheme has accidentally become part of the UK’s industrial strategy. That is to say, a scheme intended to support those with mobility problems – that is, a supposedly targeted form of welfare provision – appears to be serving as a form of demand support for the automotive industry, to which some within the sector feel entitled or believe is essential to their economic success.
The purpose here is not to adjudicate the merits of either the Motability scheme or the effectiveness of any form of government-funded demand support for industry. However, an arrangement that seems to function as both, without necessarily doing either well, surely requires revision, particularly if, to follow Smith, those who benefit commercially come to see the provision as something to which they are entitled – all the more so if that form of unintended support is in danger of collapse when government thinking on welfare provision is revised.
A more effective approach would be to consider the UK’s welfare needs independently of any industrial strategy and to implement policies designed to achieve the best outcomes in each area respectively. Such an approach could reflect a coherent economic vision aimed at yielding the economic goods of labour market participation, increased prosperity and targeted and effective welfare provision.
To develop this kind of economic vision, we must engage with fundamental issues concerning our values, the kind of society we want to build and the kind of economic arrangements which will support it. Do we seek simply an increase in wealth, or are there other outcomes to be pursued, too? Are we hoping simply for growth, or growth of a particular kind? How should the increased wealth be distributed? What kind of employment do we wish to see provided: simply ‘jobs now’, or sustainable, productive work that is conducive to human flourishing in the long run? These questions oblige us to consider what kind of prosperity we seek.
Ultimately, we are brought to reflect on our conception of the good – both for individuals and society more broadly – for it is only with a grasp of such notions that we can make sense of the question of whether a particular sector ought to receive support from government, or whether measures to grow the economy are appropriate.
Without this, there is the possibility that economic support from government will always be subject to the competing claims of self-interested groups seeking their own advantage, used haphazardly to address one crisis after another as each arises, or spent on various projects to ‘promote growth’, without coherence or overall purpose.
Neil Jordan is Senior Editor at the Centre for Enterprise, Markets and Ethics. For more information about Neil please click here.
You may work, but are you a working person? This might just sound like an annoying exam question: probably one from the exams once sat by CEME’s philosophers and theologians, rather than by our economists. In fact it now appears to be crucial. It could determine your, and Britain’s, prosperity.
Back in 2024 page 21 of the Labour Party election Manifesto pledged not to ‘increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.’ In other words, while there would be tax rises after the election, there was a pledge to protect a defined group of ‘working people’. This made good sense as an electoral strategy, even if depended partly on vagueness. A lot of people assumed, perhaps naively, that the protected group included them. Because they worked, they were a working person.
A year ago, as the new government’s first Budget neared, the Prime Minister was pressed to clarify the definition. In an interview on 23rd October 2024 with the BBC’s Chris Mason he was asked whether ‘those who work, but get additional income from assets such as shares or property, would count as working people’, Keir Starmer said, no, they did not count. What he meant was a person who ‘goes out and earns their living, usually paid in a sort of monthly cheque’ and who can’t ‘write a cheque to get out of difficulties’.
The problem was that this definition now excluded anyone with a small amount of savings. A Number 10 spokesperson rushed to clarify. People with a ‘small amount of savings’ were included in the protection. This was not quantified, but included ‘cash savings, or stocks and shares in a tax-free Individual Savings Accounts (ISA)’. (Depending on the punctuation, that example may prove to have been a hostage to fortune, given rumoured changes to Cash ISAs.)
The next day on the Today programme the very capable Exchequer Secretary (now Chief Secretary) to the Treasury, James Murray, was asked five times whether landlords were also protected. Do they work? With grace and admirable resilience he declined to answer. He may have understandably felt there ought to be easier questions on the exam paper. Entrepreneur and broadcaster Steph McGovern pointed out wryly on The Rest Is Money that caring for tenants as a landlord had been the toughest job she ever had.
Later that day the Chancellor was asked on LBC, perhaps mischievously, whether the Prime Minister, already lavishly pensioned after retirement as Director of Public Prosecutions, counts as a working person. ‘The Prime Minister gets his income from going out to work and working for our country,’ she said. ‘He’s a working person. He goes out to work.’
Ultimately the major tax measure in the 2024 Budget was a rise in Employer National Insurance Contributions. To preserve the manifesto pledge, the Chancellor relied, not on a definition of the group of people involved, which was wide, but on the type of impact. She made a distinction between payment and incidence. Still not to be raised were taxes where the payments were actually made by working people: happily for her this was not true of Employer NICs. Able to be increased, however, were taxes where the incidence fell on working people: unhappily perhaps for them this was true of Employer NICs.
Fast forward a year and the approach of the 2025 Budget has raised the definition again. It appears the definition of working people may be about to narrow considerably. Sky News obtained last week what it described as ‘an internal definition of “working people” used by the Treasury’, where ‘officials have been tasked with protecting the income of the lower two-thirds of working people’, estimated as people earning below around £46,000. If so the Manifesto pledge would be being retrospectively redefined as applying to only this sub-group of working people.
In addition the concept of ‘protecting income’ could also drastically water down the pledge for everyone. It would shift it from the level of each individual tax to the collective net impact of tax changes. The pledge had been understood as capping the level of individual taxes: ‘we will not increase National Insurance, the… rates of Income Tax, or VAT.’ That may no longer hold, even for the lower two thirds of workers. Rather, one or more of the broad-based taxes could be raised on the lower two thirds of workers, so long as the net impact of tax, or even overall fiscal, changes leaves the lower two thirds of workers no worse off. (This is the kind of thinking used in the ‘distributional analysis’ tables which accompany UK budgets, showing the net impact of budget measures on each percentile of income.)
Much could be said about the economic wisdom of all this. No doubt it will be, including by us at CEME. For now I want rather to make a theological point about the whole debate. Theologically I would certainly give the government credit for their original pledge and their willingness to wrestle with a definition.
That is because they are acknowledging that work matters. And that is right. It matters to each of us, and to our neighbours, and to God. As Richard Turnbull puts it in Work as Enterprise: Recovering a Theology of Work, ‘Christian theology provides both a moral and a spiritual language about work – a language that conveys principles of enterprise, beauty and relationships’ (page17). There is a trace of this in the government’s pledge: an instinct to valorise work, to encourage it and to preserve as much as possible of a worker’s share of the fruits of their labour.
On the other hand the pledge, even as originally framed, has three drawbacks. First it risks creating a divisive narrative. It identifies one group, the real workers, who will be protected from tax increases, and an out group, who will not be. By making pledges only about income and consumption taxes, it also implies that the wealth which some work generates is somehow a particularly legitimate target for additional taxation, as Neil Jordan suggested last week. Perhaps the language was even intended to carry a hint of Marxist class analysis. But certainly it was about ‘othering’. (In that way it recalls equally unhelpful attempts in the past to distinguish the ‘deserving poor’ from those taken to be less deserving.) Of course choices have to be made about who pays what. Of course the argument of broader shoulders bearing heavier burden always has merit in any community. But setting the issue up in the language which hints at class conflict has many downsides.
Secondly identifying a sub-group as working people encourages a debased view of work. Surely most of the population aged 8 to 88 are working people. Retired people supporting charities with their time and wisdom are doing work. Family members who care for their loved ones are doing work. Even our young people at their studies and training are doing work, if of a preparatory kind. Richard Turnbull suggests definitional features of work (page 17) include: human activity which carries both intrinsic and extrinsic value; requiring physical, emotional or intellectual energy; resulting in human development; and providing for human need. Of course another important characteristic of much work is that it relates in some way to economic exchange, and that is also to be celebrated. But when the concept of work is deployed within a potentially divisive narrative about differential tax policy, it risks being narrowed. Something which should be seen as having, to use Tom Holland’s favourite word, a ‘sacral’ element, is reduced to the financial element of paid employment.
Finally the understanding of paid work which underlies this policy narrative seems outdated, if not nostalgic. Like the Prime Minister, I grew up with a cheque book. Now ‘just Monzo me, bro’, as the younger generation would say. But, more fundamentally, as Richard Turnbull’s thoughtful introduction also suggests, ‘work is not a static concept’ (page 7). Payroll employment remains the most significant form of paid work, but it is no longer the only form available. We have now had four industrial revolutions, not just one. To look ahead, at CEME we have already been working on, and are about to discuss, the issues raised by a fifth: the use of Artificial Intelligence, which has the potential to change the world of work.
Over the next month it looks like some or all British working people may need to prepare for unwelcome fiscal news. Looking even further ahead, as the AI revolution accelerates, perhaps we will have to adopt Bill Gates’ suggestion and ‘tax the (Working) Robots’. I don’t know what political leverage robots will have, working or otherwise, but I fear they will find that Benjamin Franklin’s rule applies no less to them. If so they had better prepare like us for the two certainties of death (or at least obsolescence) and taxes.
Revd. Dr. Philip Krinks was recently appointed as Director of CEME.
In March this year, I raised the question of whether the council tax premium on second homes constituted a solution to difficult problems – namely shortages of housing in some areas and straitened local authority finances – or was in effect a sumptuary law of sorts.
The Moral Issue
An important question was whether there was any ethical justification for the premium. One justification might be that investing earnings in a second home is in effect acting against the public interest, such that councils use the premium to discourage ‘hoarding’ of a scarce resource (housing). In response, however, some argue that such an outlook is naïve: second homes are often unsuitable for local residents, particularly first-time buyers, usually because of their age or character and cost, while in other cases, owners who renovate very old properties, far from diminishing the stock of habitable homes, actually add to it in the long run.
A further justification would be that the council tax premium helps to fund local services, yet critics argue that second home owners are thereby charged disproportionately for services – services that they do not even use all year round. As such, the rate charged appears to constitute supranormal taxation, legitimated by the additional wealth represented by possession of a second home. The suggestion here is that there is an ethical justification for taxation at a higher rate, as though wealth (or certain ‘lavish’ uses of it) is somehow immoral – a notion which historically lay behind certain sumptuary laws and which appears to be finding support at present. Recent discourse has suggested growing interest in new wealth taxes and there has been discussion of tax rises to target the wealthy in the forthcoming budget.
Interestingly, the government has not so far taken the view that wealth is unethical, the Chancellor having stated in the past that hers was now the party of wealth creation and written that wealth creation would be the defining mission of the government. While this was questioned from both sides of the political divide, as to whether it the proper role of government or even a desirable objective in itself (when perhaps wealth distribution might be considered a more pressing issue), there was clearly no suggestion on the Chancellor’s part that wealth was ‘unethical’.
The Economic Issue
On the economic aspects of the premium, I suggested that these would need to be observed before any conclusions could be drawn about their success as policy measures, and noted that historically, sumptuary laws, in addition to being difficult to assess, tend to have unintended consequences. The results of any council tax premium are likely to differ according to the area in which they take effect, as well as the manner in which they are implemented – and it is probably too early to make any kind of general judgement regarding their success or otherwise – but developments in one council are interesting.
A Local Case
It has been reported that Pembrokeshire County Council, which has the second highest number of second homes in Wales, has reduced its council tax premium on second homes twice in the space of 12 months. Having been increased to 50 per cent in 2017 and then 100 per cent in 2022, the rate has been reduced from a high of 200 per cent in 2024, to 150% and in recent weeks, to 125%.
It would appear that hundreds of second homes have been offered for sale in recent months, which would suggest that as a measure designed purely to increase housing stock, the premium could be considered successful. However, such properties have been slow to sell because prices are too high for local residents to afford. To date, therefore, the measure could not be said to address the lack of suitable available housing in the area, though there remains the question of market dynamics will lead to a longer term ‘correction’ of prices.
Unintended Consequences
It is evident that the premium as implemented has had unintended consequences. There is anecdotal evidence that the reduced number of holiday homes is having a negative impact on tourism in the area, Pembrokeshire being home to popular holiday destinations such as Tenby. Those in favour of the premium question its effects on tourism but any such decline in economic activity is likely to result in reduced tax revenues. It is of interest that a public consultation revealed a majority of non-second home owners (64 per cent) preferring a reduction in the premium on second homes.
Furthermore, the latest reduction in the council tax premium, effective from April 2026, will cost the council £1.4 million in potential income next year, which makes higher council tax increases for permanent residents more likely.
Conclusion
There are indeed serious challenges to be addressed by local authorities. Suitable, affordable housing is often in short supply and many are facing serious budgetary difficulties. A higher charge on second homes suggests itself as an obvious measure for addressing both but it is possible that the effects will not be as anticipated. A final assessment of the council tax premium would need to consider both broader moral questions and whether it accomplishes its economic aims. In areas where there is no strong tourist industry, perhaps a premium will have a minimal effect on local economic activity, or second homes offered for sale will not be out of reach of local buyers. Even where the policy shows signs of success, however, it is likely that other measures will be needed to address problems with housing supply. Where the desired outcomes fail to materialise, there remains the question of what grounds exist for a second home premium, beyond disapproval.
Talk given at the Danube Institute’s Conference, Budapest, 2nd October 2025. Brian also gave an interview about related topics.
Mrs Thatcher became Prime Minister in May 1979 at a time when the UK economy was suffering from ‘the British disease’ and known as ‘the sick man of Europe’.
We had just emerged from the ‘Winter of Discontent’, during which there had been constant industrial disputes and strikes, many unofficial, uncoordinated and local. Some years earlier inflation had reached 27%. The Chancellor of the Exchequer Denis Healey had been forced to go, cap in hand to the IMF to avoid defaulting on our debts; no one would lend us money. We were bust. Inflation was still 13% in 1979 rising to 18% in 1980. Over the decade mismanagement of the economy and trade union militancy had led to the downfall of three governments: those of Wilson in 1970, Heath in 1974 and Callaghan in 1979. There was in British society a sense of helplessness, a feeling that the country had lost its way.
Mrs Thatcher set out to find practical remedies for the problems facing the British economy. She realised that not all could be achieved at once and I believe she thought of the response to the challenge in terms of three major steps.
First inflation must be defeated.
Second the size of the state in the economy must be reduced.
Third the market economy must be strengthened.
To start with it would be impossible to improve the standard of living without bringing inflation under control and establishing financial stability.
Inflation had been accompanied by rising unemployment which was not the Keynesian expectation. Inflation created uncertainty. It deterred business investment. It was hated by the public. Unexpected rises in the cost of living led to hardship with consequences such as higher interest rates which continued long after inflation had come down.
Although she was a practical politician, Mrs Thatcher was always interested in ideas. She was genuinely intellectually curious. She invited people into Number 10 from all sorts of different fields in order to explore ideas: historians, environmentalists, educationalists, theologians, architects and so on. And the field of economics was no exception. She valued meeting economists from abroad such as Milton Friedman, Fredrick von Hayek, Karl Brunner, Allan Meltzer as well as central bankers such as Otmar Emminger, and Karl Otto Pöhl (Bundesbank Presidents) and Fritz Leutwiler (Chairman of the Swiss National Bank).
Unlike many economists in the UK and senior officials at the Bank of England, these academic economists and practical central bankers saw inflation as a monetary phenomenon. They claimed they had achieved price stability in their countries because they had successfully controlled money supply growth, not because they had introduced prices and income policies. (Incidentally, money growth had been the traditional explanation for inflation in the writings of David Hume, Adam Smith, and Alfred Marshal – and even Keynes had spent six years in the 1920’s producing two large volumes entitled A Treatise on Money (1930), analysing the Quantity Theory of Money). This approach was also that of a small number of contemporary British economists such as Professor Alan Walters, whom she appointed as a special adviser based in No10, and Professor Harry Johnson, who held a joint chair of economics at the London School of Economics and the University of Chicago. By contrast these were not the views of the Bank of England or the UK Treasury which were still strongly influenced by Keynesian thought.
However, recognising that inflation was a monetary issue proved to be far easier than controlling the growth of money itself. How was it to be measured? How easily was it to control in the short term? How stable was the demand for money? How might it change when there were changes in the regulatory structure of the banking system, such as Competition and Credit Control 1971? Or external shocks to the system such as the Great Financial Crisis in 2008-9? These were difficult existential challenges for the Bank of England tasked with controlling money supply growth and financial stability. Controlling money supply growth however ensured that by 1986 retail price inflation had fallen to 3.4%.
Mrs Thatcher recognised that for the monetary policy to be successful, fiscal policy should accommodate monetary tightening and not work against it. This it did through the creation of a Medium Term Financial Strategy (the first ever for the UK Treasury) which linked targets for money supply growth to public sector deficits, public sector borrowing and the annual Budget. Alan Walters claimed that
It is difficult to exaggerate the importance of the commitment to the MTFS. It provided a frame of reference for all financial and economic policy. Never in the post-war history of Britain had the spending programs and the revenue and taxation consequences been so closely associated at the highest level of government decision making.
(p.83, Britain’s Economic Renaissance, OUP, 1986)
This framework provided effective fiscal discipline and led to the notorious 1981 budget. This was condemned by 364 UK academic economists in a letter The Times following a ‘round robin’ initiated by two Cambridge University professors, Frank Hahn and Robert Neild. For them, the uncomfortable fact was that this budget proved to be the turning point for Britain’s economic renaissance.
After having set out on a policy to introduce monetary discipline the second element in her policy was to reduce the scale of the state.
The case she made was that the state took too great a share national income, so government spending as a proportion of GDP needed to be reduced. The public sector borrowing requirement was crowding out private sector borrowing, so it, too, needed to be cut. In addition, state owned industries would be much better managed as commercial entities rather than being answerable to elected politicians in parliament.
This led to the policy of privatisation – steel, airlines, telecommunication, cars (Jaguar), gas, electricity, aerospace, petroleum, coal and so on. What was remarkable about privatisation was the way in which the policy, once shown to work in the UK, was adopted in the following two decades by so many countries throughout the world.
The scale of the state was also reduced by a housing policy which allowed the sale of council houses by local authorities to their tenants at considerable discounts, ranging from 33-50%, depending on their tenure. This meant a highly significant transfer of wealth and the ability of new house owners to pass their property on to their children.
The third element of Mrs Thatcher’s economic policy focused on strengthening the market economy.
In 1974 Mrs Thatcher and Keith Joseph had set up the Centre for Policy Studies to make the case for a market economy. By enabling prices to change and firms to enter or exit markets, they believed a market economy could achieve a more efficient allocation of resources than state planning, public ownership or government bureaucracy ever could.
They were also convinced that markets should be placed in the broader context of social responsibility. Many of the criticisms of the market economy were that it produced a culture of greed, individualism, and ‘dog-eat-dog’. They thought the creation of greater wealth through the market economy must be achieved alongside greater resources being available for those in need, whether due to ill-health, advanced age or deprivation.
Strengthening the market economy involved the abolition of rent controls, the abolition of foreign exchange controls, the removal of constraints on competition in banking and the London Stock Exchange – permitting foreign companies to enter London’s financial market – the removal of general controls over prices and wage growth and an almighty battle against trade unions to allow management to manage their firms without constant interruption from militant unions. This last required bitter battles in parliament and confrontations between police and protesters.
Her economic policy focused on wealth creation was part of a wider policy framework which increased parental choice and standards in education and training and increased expenditure in health and welfare. The social market economy provided the safety net for those unable to benefit directly from greater wealth. Standards in schools were improved. Scientific research dealing with technology and radical innovation was supported.
Thatcher’s economic policy had a coherence to it. It set out to achieve stable prices, reduce the size of the state and create a vibrant but socially responsible market economy. She succeeded in some areas: the importance of monetary policy in defeating inflation, reducing the size of government spending in GDP from 43% to 35%, strengthening an enterprise culture, extending home ownership and privatising state-owned industries. In others she did not succeed: the privatisation of water and railways, the imposition of the community charge for local services (the ‘poll’ tax) and increasing charitable giving.
There is one final point I would like to make.
While Mrs Thatcher engaged with the specific details of monetary policy or trade union legislation, this was in the service of an underlying moral world view. However, the idea that she had an ‘unidentified morality’, as Shirley Letwin has suggested, is somewhat misleading.
What she had was more than an intellectual framework or worldview. It is perhaps better understood by the German word Weltanschauung, which means not just an intellectual framework, but a driving force animating one’s being and generating a purpose for life’s work.
This for Mrs Thatcher was undoubtedly her Christian faith, something she made very clear in her speech to the General Assembly of the Church in Scotland on May 21st, 1988, in which she identified ‘three beliefs’ of the Christian faith.
First, that from the beginning man has been endowed by God with the fundamental right to choose between good and evil. Second, that we are made in God’s image and therefore we are expected to use all our own power of thought and judgment in exercising that choice; and further, if we open our hearts to God, he has promised to work within us. And third, that our Lord Jesus Christ the Son of God when faced with his terrible choice and lonely vigil chose to lay down his life that our sins may be forgiven. (Christianity and Conservatism, edited by The Rt Hon Michael Alison MP and David L. Edwards, Hodder & Stoughton, 1990, p.334)
She also spoke of ‘my personal belief in the relevance of Christianity to public policy’, recognising both the importance of the teaching of the Old and New Testaments and especially the importance of the family, on which ‘we in government base our policies for welfare, education and care’. (Speech by Mrs Thatcher to the opening of the General Assembly of the Church in Scotland, 21st May 1988, Christianity and Conservatism)
I believe you will never really understand Mrs Thatcher’s economics or politics unless you grasp her Judaeo-Christian worldview.
In conclusion, I believe this is ultimately the greatest legacy which Mrs Thatcher gives us today on the Centenary of her birth.
Brian Griffiths (Lord Griffiths of Fforestfach) is a Senior Research Fellow at Centre for Enterprise, Markets and Ethics (CEME) and Founding Chair of CEME (serving as Chair until 2023). Among other things he served at No. 10 Downing Street as head of the Prime Minister’s Policy Unit from 1985 to 1990 and Chair of the Centre for Policy Studies (CPS) from 1991 to 2001.
How We Found Our Callings
While all definitions of calling share in common the notion that work becomes meaningful within a person’s life, they differ on whether the source of the calling is internal, based on one’s own values, needs, and preferences, or external, based on either a calling from a higher power, a ‘transcendent summons,’ or a sense of fulfilling one’s destiny. Our own academic work together – which began with research on how the work of 9/11 victims was seen in the eyes of their close relations, and which has led to the publication of two books and several scholarly papers – feels secular in origin. We were both called to academia within a year of 9/11, when we were both living and working in New York City as management consultants, and although the call came from both a world in need of repair and from inside of us, it did not in our experience come from on high.
Religious and Secular Callings in the Financial Capital of the World
The first name on the New York City Medical Examiner’s list of casualties of the September 11, 2001 terrorist attacks is that of Father Mychal Judge. He died carrying out his calling amid danger, praying to God over victims when he was killed by falling debris. Many people who died that day in a variety of uniforms were characterized as having lived out their callings, according to research we conducted. Most obviously, included are first responders like Jonathan Ielpi, a firefighter who followed his father into a profession in which he was ‘more concerned about others than he was about himself,’ Whether or not those callings were equally heroic, their origins were not always overtly religious.
Some callings sounded decidedly secular in origin, such as those of trader Frank Garfi, who ‘found a job that suited him precisely…fast-paced, demanding and as power-filled as an extreme sport,’ and trader Atsushi Shiratori, who was ‘so obsessed with the stock market that he once spent a two-week vacation in a day-trading salon. Sheryl Rosenbaum, who had known since her childhood visits to her father’s accounting office that ‘this was what she wanted to do,’ continued while she raised two young children of her own.
The History of Religious Callings
The notion of work as a calling has religious origins. As fellow management scholars Stuart Bunderson and Jeff Thompson detail in one of the foundational academic studies of calling toward work, the Protestant Reformation – and specifically the writings of Martin Luther – witnessed the transition of ‘calling’ from a narrow association with clergy work to a broader association with potentially any type of work. The important part was performing one’s work diligently and faithfully, laying the foundation for Max Weber’s notion of the Protestant Work Ethic.
This historical period also marked the culmination of a gradual transition of perceptions of work ‘from curse to calling,’ in the words of philosopher Joanne Ciulla. In Ancient Greece, work – especially manual labor – was seen as drudgery, punishment, and a distraction from one’s main goal of living a good life which was fully experienced in the life of the mind and certain types of leisure pursuits. When work becomes a calling, it becomes not a means to an end, but a meaningful end unto itself, a way to make a unique contribution to the world. The religious view of calling still has purchase in today’s conversations, in both scholarly writings and in the popular press. However, a different view has also emerged more recently that takes this same spirit into an explicitly non-religious context.
The Rise of Calling as a Secular (and Managerial) Concept
In another study, Thompson and Bunderson suggest that religious callings are typically ‘outside-in,’ emphasizing ‘destiny and duty’ and anchored in ‘societal obligations or an external summons.’ They contrast them with secular conceptualizations of calling that are typically ‘inside-out,’ emphasizing ‘passion and self-fulfillment’ and anchored in ‘internal preferences.’ Proponents of the former may express skepticism about whether the latter constitute ‘true’ callings. Proponents of the latter may doubt whether duty absent the passion to carry it out is sufficient to constitute a calling. Proponents of both tend to recognize that the best callings are those in which one feels to called in one’s heart to do what one is called by the world to do – or, in the words of theologian Frederick Buechner, ‘where your deep hunger and the world’s deep gladness meet.’
By the mid-1970s, when the field of management and organizational behavior was gaining traction as an academic discipline, scholars and other writers were increasingly considering work as a calling in a non-religious sense. For example, Studs Terkel’s famous compendium of interviews, Working, had a section titled, ‘In Search of a Calling’ that featured an editor, an industrial designer, and a nun-turned-massage therapist.
Jobs, Careers, and Callings
The presence of calling in management research – where we first encountered it – originated with a book by Robert Bellah and colleagues, Habits of the Heart. This book was not about callings or even work – the section on work was just over five pages long, the same length as a section on ‘leaving church’ – but rather about understanding how Americans’ private lives contributed to or detracted from their civic engagement. Yet, the writings about work proved to have a profound and outsized impact in codifying how ordinary people relate to their work. Based on interviews, the authors distinguished between work as a job or a means to make money, a career or a means to climb a career ladder, or a calling where work is a meaningful end in itself and ‘morally inseparable from [a person’s] life.’
These categories were further popularized and disseminated when they became the subject of study within organizational psychology by Amy Wrzesniewski and colleagues as one of three work orientations. In a pioneering study, Wrzesniewski found that, compared to a job or career orientation, employees who viewed their work as a calling reported greater satisfaction with work and with life and missed fewer days of work. As in Martin Luther’s view, any work could be viewed as a calling by the person holding it – even seemingly low-paid, low-status, and/or ‘dirty work,’ from hospital cleaners to zookeepers to administrative assistants. As a psychological construct, work orientation held that two people with the same position in an organization could come to view their jobs in wildly different ways: one a job, the other a calling.
What Do We Know Today?
Callings Can Be Sacred And/Or Secular
Academic research on work as a calling has exploded in the past two decades, which almost exactly mirrors a focus in the popular press on finding one’s calling through work. Reviews of calling research are quick to note the dual (if not dueling) perspectives on whether callings are sacred or secular. The neoclassical view of calling preferred by Bunderson and Thompson aims to build directly on the classical, religious view put forth by Luther and later Weber, defining calling as ‘that place in the occupational division of labor in society that one feels destined to fill by virtue of particular gifts, talents, and/or idiosyncratic life opportunities.’ The modern view, articulated by Dobrow and Tosti-Kharas, defines calling as ‘a consuming, meaningful passion people experience toward a domain, such as work.’
Both Kinds of Calling are Paths to a ‘Good Life’
A recent meta-analysis, of which Jen was a coauthor, examined more than 200 empirical studies of calling over the past 20 years, finding that experiencing a strong calling toward one’s work was related to a sense that one’s life was good. Whether a function of our work-centered modern culture, or of some jobs becoming objectively ‘better’ in post-industrial society, work is no longer necessarily a curse. The meta-analysis authors then looked at whether the type of calling, internal/modern or external/neoclassical, related to different types of well-being, hedonic (happiness or pleasure) or eudaimonic (meaningfulness, purpose, and self-realization). Both internal and external callings related to both types of well-being; however, internal callings were more strongly related to hedonic well-being, while external callings were more related to eudaimonic well-being.
What Does This Mean for Workers?
Callings Have Great Benefits…
In any case, possibly because we spend so much of our waking time at work, feeling that work has positive meaning has the potential to enhance our own and others’ flourishing. This is especially so with eudaimonic well-being, which can be supported by callings whether they are religious or secular in origin.
…And Can Come at Great Costs
Yet, the picture of how callings contribute to our lives is complicated, because they often demand sacrifices that can have deleterious effects on our well-being. The zookeeper study, which employed a neoclassical lens, portrayed calling as ‘a painfully double-edged sword.’ On one hand, a sense of calling elevated the importance and meaningfulness of work in subjects’ lives; on the other hand, it required sacrifices in the form of pay, long hours, and even social esteem. Further research supports that, regardless of whether callings are seen as secular or religious, they are intensely-felt and may involve a host of irrational behavior, from over-estimating one’s ability at work to ignoring the advice of trusted mentors to sacrificing money. A study of church ministers found that those with strongest callings had the hardest time disengaging from work at the end of the day, which in turn negatively affected their sleep quality and their vigor the next morning.
Callings are Worth Pursuing…
All of this is to say that, if we are fortunate enough to have a choice in the matter, we should choose wisely about whether to pursue work as a calling and which callings are worth pursuing. We should be realistic about what to expect of a calling, because even people who love their work may not be happy about the sacrifices and demands it requires every day. The cliché that if you ‘do what you love and you’ll never work a day in your life’ is often false, as anyone who has so much passion for their work can attest when the lines between their personal and professional lives blur to the point that they cannot escape work. We should also be mindful about whether some callings are ‘better’ than others. In our 9/11 research, which was based on close relations’ idealized reflections of how they wished their loved ones’ lives to have been, we found not only that a disproportionate share of victims were depicted as having worked at a calling but also that those callings which emphasized helping others and cultivating relationships with them were particularly admired. In those portraits of victims’ lives, their close relations found reasons for why even the most mundane or low status work – including that of receptionists and security guards and window washers – might have been worth loving.
…But Are Not a Panacea
As university professors, we counsel students not to feel undue pressure to ‘find their callings,’ especially as a surefire path to a perfect life. We teach them that some people are born knowing exactly what they were called to do and others search their entire lives in vain for a calling. They can’t control which one they might be, but it is within their control to carefully consider what pursuits are worth undertaking in a life worth living.
Jennifer Tosti-Kharas is the Camilla Latino Spinelli Endowed Term Chair and Professor of Management at Babson College.
Christopher Wong Michaelson is the Barbara and David A. Koch Endowed Chair in Business Ethics and Academic Director of the Melrose and The Toro Company Center for Principled Leadership at the University of St. Thomas and on the Business and Society faculty at NYU’s Stern School of Business.
Jen and Christopher are the authors of Is Your Work Worth It? How to Think About Meaningful Work (New York: Public Affairs, 2024) and The Meaning and Purpose of Work: An Interdisciplinary Framework for Considering What Work is For (London: Routledge, 2025).
