The current budget battle between the two dominant American political parties involves two familiar, age-old, disagreements on how to provide prosperity for as many people as possible. From the political forces on the right we have a firm belief that economic growth happens through a free and unregulated market system. This tradition comes to us from the legacy of American capitalism that was developed from Alexander Hamilton and those who shared his economic vision. The political left on the other hand believe that an unregulated market is volatile and inherently unequal thus it is threat to democracy unless the forces of democracy are able to regulate the market for the benefit of the common good. This vision was inspired by Thomas Jefferson and his legacy of promoting American democracy as a way of addressing political and economic injustice.
While this partisan duel is underway we in the Catholic community are also observing another important milestone within our social tradition. This year makes the 120 anniversary of the Papal Encyclical Rerum Novarum. This document that was promulgated by Pope Leo XIII in 1891 has sparked the Catholic social tradition which continue with the recent encyclical by Pope Benedict XVI, Caritas in Veritate. The Catholic social tradition has addressed numerous issues of social concern but in light of the current economic crisis is worth noting that both Rerum Novarum (RN) and Caritas in Veritate (CV) have focused their social analysis on the economic question and the concern regarding Communism on the one hand and Market Fundamentalism on the other. With this blog post and the others that we will be developing within the next few weeks Fr. Sebastian MacDonald, CP and I will reflect on the Catholic social tradition and what it tells us about the current economic situation and financial crisis which is now manifesting within the budget debate. This post will highlight the tradition of economic justice as developed between these two encyclicals.
In the most simple terms, capital and labor have always been pitted against one another. In a market system capital and labor are vital ingredients to the economic engine. Each side has historically set itself apart from the other by emphasizing its own position with regards to how it interprets freedom and control (rule of law). For example, the capitalist system is big on freedom from external controls imposed on it by outside forces, distorting the free give and take of market mechanisms. But, by a strange turn of the knife, this same system imposes extensive controls on the working class, disallowing them certain freedoms, such as those concerning the right to assemble and voice their opinions. Similarly, the labor group is big on freedom to express itself, to assemble, to organize, to bargain for certain privileges, etc. But it is also found on the side of controls, both of its members who have to conform to union dues and rules, and also of the owners, on those occasions when labor gains the ascendancy in its disputes with capital, and can call the shots about the privileges and benefits it demands from the owners. So the freedom-control conflict is as central to this issue as the capital-labor dispute.
In the current struggle for balance between these two forces labor is again at a growing disadvantage. The increase use of automation and the surplus of cheap labor in Asia and Africa has diminished the bargaining power of labor. The recent situation in Wisconsin where the bargaining rights of workers have been legislatively threatened highlights this concern. The globalized economy has brought us back to the original concern that the Church expressed 120 years ago with the struggle between capital and labor.
Hence, by degrees it has come to pass that working men have been surrendered, isolated and helpless, to the hardheartedness of employers and the greed of unchecked competition. … To this must be added that the hiring of labor and the conduct of trade are concentrated in the hands of comparatively few; so that a small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than that of slavery itself. RN #3
Catholic social teaching has consistently reminded us that the economy is at the service of humanity and not vice versa. The tradition has been very critical of the emergence of profit as an end in itself and it has been condemned by both Pope Paul VI and Pope Pius XI as the “international imperialism of money.” Pope Benedict XVI adds to this consistent teaching as well.
I would like to remind everyone, especially governments engaged in boosting the world’s economic and social assets, that the primary capital to be safeguarded and valued is man, the human person in his or her integrity: “Man is the source, the focus and the aim of all economic and social life” (CV #25)
Nonetheless, wealth production is a worthwhile, indeed a necessary, ingredient of a healthy society based on possessions of one’s own goods. Paragraph 8 of Rerum Novarum stated a firm defense for private property and Catholic social teaching has consistently promoted that stance. There’s no question here of disregarding or diminishing the importance of wealth or private property. It’s a matter of adequate distribution of wealth/capital, so that a truly capitalist system can prevail, wherein everyone is a capitalist, that is, a holder/owner of true capital. When capitalism is understood as the prerogative of only a few, then the capitalist system fails its promise.
Based on these considerations a frustrated Catholic may find him or herself asking the question: “What economic system does the Catholic Church support? Does it support a socialist or a capitalistic system? The answer is neither.
As far as the Church’s teaching is concerned the struggle between the absolute power of the State and the absolute freedom of the Market is a struggle between two idols that enslave the human person by forcing it to serve an extrinsic value outside of itself. In absolute terms both the State (under communism) and the Market (under neo-liberalism) are idols and the Church has rejected such interpretation of either institutions.
Instead the Church has defended a well ordered balance between the state and the market which serves the human community. In this regard the recent development of Catholic social teaching has offered a system that pursues the common good through a balance between the principles of subsidiarity and solidarity. Subsidiarity defends the freedom of the individual and the local social unit by professing that any social power, responsibility and authority that can be relegated to the most local social unit (eg. family, community associations, municipalities, etc.) ought to be. Solidarity on the other hand is a Catholic principle that dictates that our economic and social policies ought to take into consideration the common welfare especially with regards to those in need. Thus it is that Pope Benedict XVI articulates the interrelationship of these two principles in this way:
The principle of subsidiarity must remain closely linked to the principle of solidarity and vice versa, since the former without the latter gives way to social privatism, while the latter without the former gives way to paternalist social assistance that is demeaning to those in need. (CV #58)
The Church refuses to be caught between a moral struggle between two absolute systems. Instead the Church challenges us to explore an alternate system that can integrate the freedom of the market with the responsibility of the democratic state in serving the basic dignity of every individual and the common good of all. In our next blog post we will explore an alternative economic system that can do this through the Gospel mandate to “Love one another” and to foster a system that can promote a compassionate rather than a competitive relationship between one another.