What Economic System Does Catholicism Promote?

Short answer: None.

The ongoing debate among Catholics in America, highlighted by the two Catholic candidates for Vice President, is whether Catholics should support “capitalism” or “socialism.” There is a long-held misconception among many Catholics that the Church supports “socialism”, and proponents of this view cite Leo XIII’s groundbreaking encyclical, Rerum Novarum. However, Leo XIII explicitly condemns socialism, a direct condemnation repeated over and over by the Popes.
From Rerum Novarum, Paragraph 15:

Hence, it is clear that the main tenet of socialism, 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. The first and most fundamental principle, therefore, if one would undertake to alleviate the condition of the masses, must be the inviolability of private property. This being established, we proceed to show where the remedy sought for must be found

Indeed, paragraph 676 of _The Catechism of the Catholic Church_ identifies the Antichrist with any ideology which proposes to solve all humanity’s problems, and the context of the document quoted therein is an explicit statement that Communism is the AntiChrist.

The fact that Rerum Novarum elevates the dignity of the worker, and promotes labor unions, seemed to many to promote “socialism,” just as Bl. John XXIII’s declaration in _Mater et Magistra_ that the right to property is limited also seemed to many on the poltical Left and Right to be an endorsement of socialism.
Often, in political dialogue, several concepts get lumped together as “capitalism” and several others as “socialism,” when there are really several separate approaches:

Let me propose, as I suggested metaphorically the other day, that we use the following categories
1) Capitalism: an economy driven by stock ownership, by the notion that money necessarily reproduces itself
2) Free Market: the notion of letting people compete freely in the economic market
3) Liberalism or “Social Justice”: Taxing the upper portion of the population to support the lower portion, since experience has proven that the upper portion are not going to do it voluntarily.
4) Socialism: The government owning some or all aspects of the economy and providing those services for “free.”

Now, Distributism is the Church’s “third way.” The primary considerations of distributism are:

1) The fundamental right to property
2) The *limitation* of the fundamental right to property (Mater et Magistra), in that property reaches a point where it damages the individual (“Blessed are the Poor in Spiirt” and all that).
3) The “common good” or “solidarity”–the need of people to work together.
4) Subsidiarity–the principle that society exists for the protection of the family, and power should be as localized as possible to avoid the corruption that entails with higher power.
5) The inherent dignity of work.
6) The right of workers to own their own labors.

The major social justice encyclicals are Leo XIII’s _Rerum Novarum_, Pius XI’s _Quadragesimo Anno_, John XXIII’s _Mater et Magistra_, Paul VI’s _Populorum Progresso_, Bl John Paul II’s _Laborem Exercens_, JPII’s _ Sollicitudo Rei Socialis_, JPII’s Centesimus Annus, and Benedict XVI’s _Caritas in Veritatae_.

These encyclicals cover a *lot* of topics, so the Church released a _Compendium of Catholic Social Doctrine_.

Anyone interested in these issues ought to at least read the Compendium.

Because of the nuanced way the Popes address these issues, and because of the insistence of society on “polarizing” all issues, people understandably get confused. Plus, there is the question of how times have changed: often because what the Popes called for early on has been implemented, and there are now new problems (that’s why so many of the encyclicals are written precisely to commemorate anniversaries of their predecessors).

One example of this is “employee stock plans.” As a way of promoting the dignity of work and the rights of workers to own their labor, one of the Popes (I think it was Pius XI) proposed the notion of corporations sharing their stocks with employees. Stock sharing plans were originally condemned by many on the “Right” as a “socialist” notion, yet today they’ve become an ordinary part of business. Back in the late 1990s, Francis Cardinal George famously gave an address to a conference sponsored by _Commonweal_ where he said that liberal Catholicism is essentially obsolete: not that it’s bad, but it’s served its purpose. Both within the Church and in terms of the Church’s action in the world, what was considered “liberal Catholicism” 100 years ago has both done its job and sufficiently filtered through the Church at most levels, and to continue insisting on “liberalization” of the Church is to go beyond what was originally intended.

And while it seems so because of the television networks and the internet, “Polarization” is nothing new: I often use the example of St. John Bosco. The Socialists hated Don Bosco because he was teaching his boys religoin and pacifism. The Aristocrats hated Don Bosco because they thought he was in league with the Socialists by giving the poor food and shelter and education (this also shows why “liberal Catholicism” or “Catholic liberalism” was necessary at the time: even in Catholic countries, Catholic Aristocrats did not recognize their obligation to support the poor).

So, the Church gives us various principles to apply and consider. However, She gives great freedom in *how* we consider them. The Social Justice Encyclicals all emphasize that so long as Catholics are seriously trying to apply these principles, we have to apply then in context of our societies. This is important, because we may often disagree with how our Catholic brethren apply these teachings, but if they’re citing the principles, we have to presume their goodwill in trying to follow the Church’s teachings.

This is why some people speak of “non-negotiables”. Abortion, for example, is black-and-white. The Church says abortion is wrong in every and all circumstances, and governments are obligated to make it illegal. However, there are other areas like “social teaching” or Just War Theory where the Church gives principles and leaves it up to governments to apply them. So it’s important to recognize what the Church says in these matters. However, many Catholics try to argue that since issues like economics and war have room for interpretation, teachings on issues like abortion should also have room for interpretation.

Now, part of “room for interpretation” is the recognition of the particular issues facing particular countries, as well as the existing political and economic structures of those countries. Sometimes, the Vatican will address a problem with concern about what’s going on one place and it gets misapplied to other countries. For example, Pius XII and Leo XIII gave various documents and speeches where they condemned Socialism/Communism, and they were clearly addressing countries where Socialis or Communist revolutions were happening. In condemning secular regimes which sought to sever Church and State and free the State from the Church, they condemned “religious liberty.” Some have taken this as a condemnation of the “religious liberty” practiced in the US, but both those Popes also praised the kind of liberty promoted in the US (so long as the government recognizes it must listen to the Church on matters of Natural Law).

Well, the Church assigned national episcopal councils with the task of determining how best to apply Catholic Social Teachings in their countries. That’s why the United States Conference of Catholic Bishops will occasionally issue a document like _Faithful Citizenship_ from a few years ago.

In the US, however, we have a problem that our episocopal conference is tied to a vast bureaucracy. The major pre-Vatican II Catholic organizations, such as the Legion of Decency (which used to practically control Hollywood but is now the milquetoast USCCB “Film Office”), into one bureaucracy in DC called the “United States Catholic Conference,” and the bishops were, collectively, the “board of directors” of that organization. Then there was the “National Conference of Catholic Bishops,” which met annually to decide on the application of Church teachings and liturgical norms to America. Since the NCCB was technically the Board of Directors of the USCCB, they finally merged into the USCCB, so now the lay employees of what used to be USCC (some of whom aren’t even Catholic) can issue documents that now seem to have the authority of “The Bishops.”

So just as the public and the media do not understand the difference between some priest at the Vatican issuing a statement, the Vatican newspaper writing an article, a Vatican Congregation issuing a document or the Pope issuing a document, so too any statement that comes from “The USCCB” is treated as having the authority of an entire vote by the Bishops. And even if the Bishops collectively vote on something, it still has little technical authority because each bishop is sovereign in his diocese, and any individual bishop has the right to opt out of a USCCB “decision.”

So something comes up like the “USCCB condemns the Ryan Budget,” and that becomes “common knowledge,” even if the USCCB never technically said it. In terms of the Paul Ryan debate, I have not researched deeply enough to know where the alleged “USCCB condemnation” comes from but it is clear that Ryan considers Catholic Social Teaching in his thought, and Ryan himself has made the argument that the “common good” cannot be served by a bankrupted government.

Throughout the world, socialist governments are going bankrupt. The states with the worst economic crises right now in the US–California, PA, etc.–are the most socialist. The “democratic socialist” governments of Europe are collapsing just as the Leninist governments did 20 years ago. Yet, somehow, people keep insisting socialism works, that socialism is the answer to the world’s economic problems, etc.

Meanwhile, though the Church has critiqued certain aspects of capitalism, none of the Popes have condemned capitalism. Rather, because capitalism promotes the right to property, the Popes have said time and again that capitalism is the best context for building a society more based upon CST. Refer back to the example of stock sharing plans.

Subsidiarity says that ownership should be de-centralized. The late conservative philosopher Russell Kirk argued that capitalism and socialism are “two sides of the same coin” because both promote centralization. Neither laissez-faire capitalism nor socialism is in accord with the principle of subsidiarity because one gives the majority of power to the rich, and the other gives the majority of power to the government. Distributism is about distributing the power to produce wealth evenly among the people.

Solidarity is about the common good, but the common good is not served by socialism any more than laissez-faire capitalism. However, as conservative Christians often argue, in a society that promotes economic freedom, individuals have the freedom to use their money for good (though, again, a baseline safety net is necessary because history has shown individuals will not do that). That is what “social justice” means–moderating the injustices of society using the government.

We cannot have a truly “free market” without some level of government regulation. A market dominated by monopolies is no more free than a market dominated by the government.

The Popes promote a notion of “living wage,” which has filtered through society but become corrupted as many such notions tend to be. So people hear “living wage” and think “socialism,” but living wage means paying each employee what he or she is worth given human dignity. It is a principle that goes back to at least Aristotle. In Catholic teaching, “living wage” also refers to considering a person’s family size and obligations so that each individual has enough money to support those he or she needs to. This is not the same as a “minimum wage,” which insists on a baseline pay for all workers, at the same rate. The problem witha “minimum wage” is it encourages inflation. “Living wage” both recognizes the true value of all individuals while avoiding the notion of overpaying someone.

The CST encyclicals are also consistent in noting the limitation of wealth. No individual should have too much wealth or economic power. We can debate about how much is too much or how to regulate it, but the Popes give multiple explanations of why it is wrong for any individual to have too much wealth, yet many Americans, including by a Protestant and Masonic worldview rather than a Catholic one, would insist that this is “unChristian.” People have a blind eye to Luke 12 and Matthew 5, and the numerous other places where Jesus condemns wealth as such (camel and the eye of a needle and all that).

However, whatever the Church’s critique of capitalism, none of the proposals in the CST encyclicals amount to or endorse Socialism: socialism takes away the dignity of the worker. Ask any government employee if he or she has ownership in his or her work, and you’ll have your answer on that one.

Distributism is about giving each family just enough means to produce a living, and then letting them be free to do so. It’s about limiting the capacity of any one agent in society to make too much money–Chesterton proposes this be done by guilds or unions: i.e., a particular profession’s guild determines the just wage for that profession and apportions the zones for each member to work without competing with others). We are so addicted to the drug of “progress,” however, that we don’t want to accept an economic system that promotes subsistence rather than “prosperity.”

We’re so worried about “debt,” an artificial construct based upon “funny money,” espeically in our modern age, that we refuse to accept the notion of letting people start from scratch. Once again, however, forgiveness of debt is a recurrent theme in both the Old and New Testaments and in papal teaching: in the Old Testament, God *requires* forgiveness of all debt every 7 years, and Scott Hahn argues that the fact Israel ignored this Commandment was a major reason for the Babylonian Exile (which lasted for as many years as the Sabbath years the Israelites failed to obey).

Chesterton famously said that Christianity has not been tried and found wanting but found difficult and not tried. The same is true of Distributism and Catholic Social Teaching: if we *really* followed what Jesus teaches in the Gospel–and CST is really nothing more than an expansion of Matthew 5 and Luke 12 to modern issues–it would be difficult. It would require breaking down our entire way of looking at economics and society, and reforming from the ground up. This is why many Catholics argue capitalism and a libertarian approach, for now, is best, because of the “accepted” models, it’s the only way to work our way up from the bottom. At least those systems, as the Popes have acknowledged, respect the fundamental right to property, which socialism does not.

So I never get the notion, common among Catholics, that the Church’s preference is for socialism, and the alliance with Capitalism is just an alliance of convenience.

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4 responses to “What Economic System Does Catholicism Promote?

  1. I hate to say it, but I think on economics, Biden is closer than Ryan. But I can’t see how economics MATTERS much in the role of Vice President.

    I do wish, however, that one or both of them would take the time to research what you have in this article- and write a speech that doesn’t reference the Godless Atheist Trinity of Friedman, Keynes, and Mises. Their absolute morality-free economics really ranks equal to me with Marx, Lenin, and Mao.

    As in worth nothing.

  2. Pingback: What is this thing called socialism? - Page 9 - Christian Forums

  3. I take it that by “none” you mean “neither” or “neither nor any mixture of them” counting capitalism and socialism as the two main systems.

    Chesterton brothers based Distributism (with Fr Vincent Mc Nabb and Belloc), Dollfuss based and Mussolini came closish to basing Corporativism, and what’s his name based Social Credit on Church teaching.

    The Church endorses private property. It does not endorse private enterprise to the extent of endorsing what amounts to attacking other men’s property or health. It does not endorse taking interest, a k a excessive paying back of a money loan (excessive as compared to the sum lent), except in cases where the interest merely pays the wages and locales or half of it (other half payed by taxation) of municipal pawn shops meant to protect the poor from the real interest takers or usurers.

    And since it endorses private property and therefore to some extent (not rapaciously) private enterprise, but not usury, it would agree with socialists abolishing interest but not with confiscatory taxation or directer expropriations.

    I think Cristina Kirchner is maybe the one statesman today whose economics are fairly on par with Church teaching. Debate open whether confiscation of much Repsol assets (Spain based company) violates private property or protects indigenous small property. I am not sure which it is.

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