Rafael Termes: A Model of Business Ethics and Human Virtues

Rafael Termes (1918–2005) started his studies in the Jesuit School of the Fathers of Sarriá in Barcelona. Those were difficult times in Spain for Catholics. The Spanish Republic was established on April 14, 1931. Soon after, at the beginning of 1932, the Jesuits were expelled. Parents improvised by creating private educational alternatives. So did the Jesuits. Dressed as peasants, the Jesuits continued to teach their students. 

Termes credits the educational method used in these private schools for how it helped build his character. Teachers ranked students in each class. A lower-ranked student, however, could challenge those above him in an educational contest and take their places. Termes praised the impact of this competitive environment: “Today in Spanish secondary education, under the pretext of not traumatizing the student or affecting their dignity, no one is corrected, encouraged, or rewarded.” In addition to what one learned in class, “our wills were strengthened for the fight against life.” He graduated from high school at 15.

He studied engineering at the university, and during those days Termes found his Christian vocation through José Luís Múzquiz (1912–1983), who became one of the first three priests of the Opus Dei prelature. Múzquiz, also studying engineering, described the importance of offering our daily work to God and fulfilling the ordinary duties of a Christian. While Múzquiz went on to help disseminate the Opus Dei apostolate throughout the United States, Termes had a prolific career as an intellectual entrepreneur, banker, mentor, and writer.

Termes was among the small team that founded IESE, the Instituto de Estudios Superiores de la Empresa, at the University of Navarra in Barcelona, which later became one of the top 10 business schools in the world. The bank he co-founded, Banco Popular Español, became highly profitable. Termes led the Private Bank Spanish Association for over a decade (1977–1990). He was certain that bankers could also become saints. This became an official reality when the Catholic Church declared Enrique Shaw (1921–1962), an Argentine banker, a Servant of God in 2001, a first step in his canonization cause. 

Termes cultivated an independent and respectful stance with the clergy when discussing economic topics. One day he crossed paths with an acquaintance in front of the building of the Spanish Episcopal Conference. His acquaintance chided him: “Are you here to get directions on what to say and write?” Rafael answered, “No! I am here to explain to them how the economy works.” During his visit to Guatemala to receive an honorary doctorate from the Universidad Francisco Marroquín, Termes was asked to debate Monsignor Gerardo Humberto Flores Reyes (1925–2022). Carroll Ríos de Rodríguez, trustee of the university and chairwoman of the Fe y Libertad think tank, recalls that “Termes was uncomfortable confronting an ecclesiastical authority but handled it with elegance.” 

I first met Rafael Termes over 30 years ago, after he wrote a generous introduction to my book on the origins of economics. In the late 1990s, the Acton Institute, publisher of this magazine, hosted an important program for Mexican bishops near Cuernavaca, and we had the privilege of having Termes as one of the speakers. Termes wrote important books such as El Poder Creador del Riesgo (The Creative Power of Risk) and many relevant papers on ethics, economics, and business. His most significant publication, however, was his book Antropología del Capitalismo (Anthropology of Capitalism). The first version (1992) was based on his acceptance speech upon being inducted into the Royal Academy of Moral and Political Science. The expanded version, published in 2004, received the Premio Libre Empresa (Free Enterprise Award) from the Fundación Rafael del Pino.

In this book, Termes offers a detailed explanation of the history of economic thought, focusing on views about the human person. He devotes 20 pages to analyzing Adam Smith’s moral philosophy and 40 to John Stuart Mill. He spent so much time on the latter because there are so many well-intentioned people who, like Mill, are liberal in ideas but socialists at heart: “liberal de mente, socialista de corazón.” 

In Antropología del Capitalismo Termes describes Jean-Jacques Rousseau as “a precursor of the perversion of democracy, evident in many situations that we can contemplate today, and characterized by the presence of unlimited democratic governments.” On John Locke he writes that “his philosophical ideas fit perfectly with economic liberalism.” Other authors frequently quoted included Aquinas, Hume, Turgot, Tocqueville, Hayek, Rothbard, Mises, and John Paul II. 

Termes was an early critic of environmental doomsayers. He studied Bjorn Lomborg’s “conversion” from left-wing environmentalist to rational analyst of ecological issues. He also defended globalism, which would bring together countries that respect freedom, private property, and the rule of law. He was convinced that the poorest African nations could prosper if they adopted a free economy and avoided corruption. 

His conclusions are full of wisdom: “Rather than seeking the anthropology of capitalism, we must postulate an anthropology for capitalism. If we want capitalism to bear its best fruits from all points of view, we must not try to correct the system’s functioning coercively but rather morally regenerate the environment in which it functions.” He argued that we should “promote the improvement of the ethical-cultural system and the legal-institutional system to adapt them to an anthropology based on the nature and value of man, as a rational and free being, with its own purpose that is, at the same time, immanent and transcendent.” For him, “the debate about capitalism from an anthropological point of view is just beginning. It may become the most exciting controversy of the coming time.”

Rafael Termes valued freedom above all other human qualities: “I have always said that if an economic system provided better material results in exchange for violating freedom, greater economic well-being would have to be given up to save freedom.” He added:

The goodness of a system, its moral value, is not measured by the results, as the supporters of consequentialism would like, but by the way of producing these results, which depends, fundamentally, on the way of understanding what man is and which translates into how, within the system in question, the people involved or affected by it act and are treated.

How can we work to achieve free and virtuous societies? Termes believed that we are all responsible and that “the only way capable of ensuring the integral development of man is self-control.” Today many use the term “flourishing” rather than “integral development.” The latter concept is more tied to a belief in true human nature than is the concept of flourishing. He understood self-control and self-government in light of a Stoic Christian viewpoint. Economic decisions should consider the impact of the choice on the flourishing of others and the person who makes the choice. Social harmony should also enter into our economic decisions. 

Termes called for a person’s deep commitment to each action. Rules are empty words when detached from that commitment. From an ethical point of view, behaving ethically because it improves the bottom line is insufficient. He defined ethics as the set of objective norms that helps people choose freely and responsibly, actions that help them reach their ultimate end.

In sum, Termes stressed that a good professional must practice human virtues in his work. He did just that at his bank, in the academy, and in his writings. 

By Alejandro Chafuen, Managing Director, International at the Acton Institute