Loyola Business Blog

Social Justice and Free Enterprise

Recently, I read the Pacem in Terris encyclical issued more than 50 years ago by Pope John XXIII. I was surprised at the extent to which it provides (perhaps unintentional) support for free enterprise. Today, when so many decry business as oppressive, it was refreshing to discover a moral rationale for private ownership of property and free association among people—fundamental preconditions for efficient, effective, and ethical capitalism.

The encyclical focuses on how our world can move toward “positive peace,” which is not merely the absence of violence but rather the reduction of the causes of violence and the development of societal capacity to respond to conflict with reason and negotiation instead of with force. In that light, businesses operating in a free enterprise system are well positioned to help build peace.

Peace through commerceis a three-fold idea. First, trade, investment, job creation, and the like create interdependencies among the participants, whether they are countries or groups within countries. The prospect of losing the benefits related to those interdependencies (e.g., imports and exports) can be a deterrent to violence. That is, commerce can promote “negative peace” (the mere absence of violence) by raising the opportunity cost of violence. Second, commerce can promote positive peace by reducing the factors that lead to conflict. For example, the benefits of commercial activities, such as providing income for those who did not have work, may reduce economic disparities. Third, commercial interactions develop the capacity for compromise. Conflicts are more readily addressed when opponents trust one another to negotiate in good faith. This is more likely to occur when they have engaged in commercial transactions in the past.

Through my research, I have encountered many enterprises that engage in activities intended to promote positive peace by employing members of disadvantaged groups, providing opportunities for members of opposing ethnic groups to interact with one another toward common goals, and mediating conflicts between groups. Sometimes, in a situation of heightened tension, a business can contribute to stability simply by continuing its operations.

At Loyola University Maryland’s Sellinger School of Business and Management, we focus on business leadership as vocation. One would be hard pressed to find a Sellinger course that does not in some way integrate ethics. In fact, Sellinger has adopted a strong focus on building a better world through and with business. This focus finds life in our faculty research, interactions with the business community, and student programming. Our annual Building a Better World Through Business event week features entrepreneurs who have championed this approach to the world and a pitch competition focused on social enterprise. Our Business Leader of the Year always recognizes a Baltimore business leader who has been successful in business and has also contributed significantly, in his or her personal and professional life, to the welfare of the community.

We realize our focus is not proprietary—nor should it be. We simply hope to help promulgate these principles as a Jesuit business school dedicated to peace and prosperity.

Kathleen Getz
Dean, Sellinger School of Business and Management

Dean Getz