The End Of The Capitalist Era
In his book Jesus of Nazareth, Pope Benedict XVI wrote about "the cruelties of a capitalism that degrades man to the level of merchandise. . . ." Lest anyone should consider that to be a use of poetic license, consider a statement made in the same time frame by a leading syndicated columnist in defense of freemarket capitalism. In opposing a proposed raise in the federal minimum wage, George F. Will wrote: "The minimum wage should be the same everywhere: $ 0." His reason: " Labor is a commodity; governments make messes when they decree commodities’ prices" (italics added).
In better times a sophisticated pundit like Will would not state unashamedly that "labor is a commodity. . . ." He is either unaware or disdainful of the fact that the Clayton Anti-Trust Act passed in 1914 declared precisely the contrary: "That the labor of a human being is not a commodity or article of commerce" (sec. 6). The law was intended, among other things, to exempt labor unions from anti-trust prosecutions under the Sherman Act passed in 1890 when free-market capitalism was flying high. I would like to, but dare not believe that the appearance of Rerum Novarum in 1891 had any bearing on the change.
Herein lies exposed the evil and critical weakness in the capitalistic system as it exists today: the degradation of what economists term the factor of production, labor. Since its beginnings capitalism began downgrading the rank-and-file working human person to the level of a commodity. An economic system which devalues the majority of mankind is oxymoronic. It flagrantly contradicts the purpose of economic activity: to satisfy the temporal wants of the entire human race, not merely a chosen few. Since the creation of man, the preponderant majority of adult human beings have relied chiefly on the work of their heads and hands to maintain themselves and their families.
In 1848 Karl Marx predicted capitalism’s downfall in the Communist Manifesto which he coauthored with Friedrich Engels. Even though he saw its collapse as inevitable on the basis of what he perceived as "scientific laws," he nevertheless urged that "Workingmen of all countries, unite" to bring it about. That was one among many of the inconsistencies which critics of Marx perceived in what he proposed as scientific socialism. He and his followers juxtaposed that to less rigorous kinds of socialism contrived by earlier critics of capitalism, whom they regarded variously as "Bourgeois" and "Utopian Socialists."
It was a time when, fascinated by early successes among natural scientists in discovering laws governing the physical universe, economists too began proposing "laws" for their then infant science. It was also a time when those same natural scientists gradually appropriated the term "science" exclusively for themselves. In an earlier and perhaps wiser age it was applied more broadly, so that philosophy and theology too were regarded as sciences! Having virtually accomplished the reduction of science to what has to do with the material world, scientists then progressed to the point where they presented us with the means to destroy that world along with the people in it!
What is perhaps more significant, given that many of the socalled scientific principles which he proposed were subsequently discredited, Marx did in fact correctly indicate what capitalism is and when it began. This is notwithstanding the fact that he himself never used the word, capitalism. He employed the term capital as a systemic class concept, along with the expressions capitalist and capitalistic as modifiers. In the first volume of his major work, Das Kapital (1867), he dates capitalism’s beginnings to the time when, "The chevaliers d’industrie . . . succeed in supplanting the chevaliers of the sword by making use of events of which they themselves are wholly innocent." While allowing for "the first beginnings of capitalist production as early as the 14th and 15th century in certain towns of the Mediterranean," Marx maintained that "the capitalistic era dates from the 16th century."
That places Karl Marx as a historian a cut above those who proceed as though capitalism is a logical category transcending time and place. He viewed it as less than eternal — as having both a beginning and an end. Some who lionize capitalism, on the other hand, confuse its essence with abiding factors which predated the capitalist order, such as private property including ownership of the means of production. Others identify it with equally timeless elements like the profit motive and competition, which in fact simply express basic human instincts along with some of their excesses, like avarice.
Furthermore, to identify laissez-faire — meaning an absence of government intervention in economic affairs — with capitalism, as some do, portrays ignorance of history. Mercantilism, which involved substantial governmental control over economic life, often in the minutest details, was already a part of early capitalism in the context of the rivalry among emerging national states in their quest to become wealthy and powerful by accumulating gold and silver.
Representatives of the capitalist power structure in that phase of history saw to it from their seats in lawmaking bodies that their mercantile ventures were protected, and subsequently also their manufacturing industries as the Industrial Revolution progressed. The North American colonists felt the sting of those initiatives by the mother country, England, to the extent that such actions played a significant role in triggering the American Revolution in 1776.
Thus, the laissez faire reaction, which in England also came to be tagged as Manchester liberalism, was not always a part and parcel of capitalism. It emerged as the capitalist merchants and manufacturers felt secure enough to work out their economic destinies on their own, without what they came to perceive more and more as unwelcome government intervention in economic affairs. Business fluctuations emerged along with the capitalist system. They became endemic to it with varying degrees of severity and also with a certain rhythmic regularity to the extent that they came to be labeled as business cycles. After the severe strain on economic structures stemming from World War I, the capitalistic order suffered virtual collapse in the form of a worldwide economic depression. From a condition of laissezfaire quiescence, governments reentered the marketplace. Whether welcomed or not by the capitalist power structure, the situation had become so grave that their intervention had to be tolerated.
It took various forms in the different historical contexts in Russia, Italy, Germany, and also Great Britain and the United States. In the latter, the so-called New Deal bolstered the faltering economy by making radical changes throughout the economy including labor-management relations, agriculture, and the banking system. The New Deal, The War, And The End Of The Just Wage
It has been widely proposed, specifically among supporters of free-market capitalism who did not relish the prospect of having such intervention becoming permanent, that it was actually the Second World War which ultimately restored full employment and relative prosperity. Partisans of that ideology regard as ineffectual nuisances the various New Deal initiatives, in keeping with their notion that government intervention is in principle not a sound approach to ensuring economic well-being.
The fact that World War II itself involved massive government intervention throughout the economy as perhaps never before in our history escapes their attention. Along with strict manpower and materials allocations, it set aside the free operation of the wage and price mechanisms to a far greater degree than any of the New Deal initiatives. Also, the banking system was put at the service of the federal government’s fiscal needs. Subsequently the exponents of capitalism — relying on the appealing leitmotif of freedom — set about gradually deregulating substantial sectors of the economy, including specifically finance, the labor market, transportation, and foreign trade.
The progressive dismantling of what had been key American manufacturing industries, as an inevitable result of a naive doctrinaire free trade policy, has brought with it a dire associated consequence: the gradual elimination of effective labor unionism. This has, among other things, made it increasingly difficult for a workingman, "to maintain himself, his wife, and his children in reasonable comfort. . . ." as Leo XIII described the just wage more than a century ago! The United Auto Workers union, long a bellwether for what a labor union can accomplish for its workers in a framework of progressive labor relations, is slowly but surely being rendered ineffective.
Faced with a deluge of imports from non-union and lower wage economies, and those include foreign brands manufactured in our own South, the industry offers to buy out older workers by early retirement incentives. This makes it possible to replace them with younger workers who will be paid at something like half the level of former wages and benefits. It is a pattern which extends also to other industries, gradually making prosperity-sustaining wages a thing of the past. Meanwhile corporate executives who excel at coming up with all such unionbusting and job-exporting techniques are rewarded with compensation that would make the robber barons of an earlier capitalistic era blush.
At the same time, riotous free marketeering in the banking and financial sector has once again led to a crisis. The great collapse of the capitalist economy in 1929 spread from speculation by what seemed like one and all in the stock market. That was nurtured by loans from banks which themselves also could not resist the temptation to directly invest their depositors’ money in the surging market. However, the orgy on Wall Street soon foundered on the already critical underlying weakness endemic to the capitalistic economy: too much of the national income was being harvested by too few, making it impossible to market the great abundance of goods and services which the modern economy was capable of producing.
Productivity was rising nicely due partly to a mini-industrial revolution based on the rise of massproduction that spread from the automobile industry to other sectors of the economy. Labor unions, which were then hopelessly outclassed and ineffectual, could not gain a respectable share of the benefits of that rising productivity for the workers. Inevitably profits soared, and when reflected in stock prices, the stock market took on a life of its own so that it was soon out of touch with the real-life economy.
Now once again bankers, hiding behind their accustomed mask of probity and stability, have gotten involved over their heads in the so-called "subprime mortgage crisis." That stems from a land-office business conducted for some years by lending institutions based on the well-nurtured conviction that housing prices could only go on rising. It is the kind of bait that enticed speculative as well as bona fide home-buyers. The former bought with the intention of selling after a short time in order to cash in on what by then, especially in certain parts of the country, seemed like forever rising housing prices. Needless to say, bank lending activity fed the ballooning prices just as it had contributed to rising stock prices in the 1920s debacle! In the spirit of characteristic one-upmanship, along with the commercial banks, investment banking firms too were lured into the burgeoning market and began marketing securities based on such mortgage activity.
As for the bona fide home buyers, the speculative demon was not totally absent among them either. Many borrowed beyond their potential on the assumption that housing values could only fatten indefinitely. Others simply could not qualify for the more normal and safer mortgages at moderate rates that remain fixed for long terms (e. g., 20-30 years). With the economy faltering — an eventuality which is not totally unrelated to the warfare which has upset the oil-based Persian Gulf economy including that of hapless Iraq — more and more of such borrowers cannot keep up their payments. Hence a growing wave of foreclosures plagues our nation and threatens its economic wellbeing.
The entire debacle, along with the ongoing narcotic credit-card binge, simply demonstrates once again the underlying weakness in an economic system powered by greed that is aided and abetted throughout by a banking system based on usury! It also highlights the duplicity of those who ritually decry government intervention in business matters, but are quick to accept government assistance when the economic skies darken and the going gets rough. The Federal Reserve System has already several times lowered the borrowing rate for bankers to a historic low level, with the predictable result that the thrifty have been penalized by a dramatic reduction in the rate of interest they are paid for their savings. To the surprise of the naive, the desired result that banks would lower rates significantly to borrowers has not materialized!
At the same time, we are now witnessing the spectacle that is uncharacteristic of a Republican administration: automatic rebates to one and all by the federal government so as to stimulate the lagging economy out of the encroaching economic recession.
Shades of the New Deal and its pump-priming ventures! The New Dealers at least got some worthwhile public works out of their programs. Scarier still, this Munich-born immigrant cannot help but reminisce about the desperate resort to printing-press money by Germany after the First World War. That episode was largely the result of impossible burdens imposed by the vengeful vulturine victors at Versailles. This one smacks of unbounded avarice among our compatriots, nurtured by the dubious wisdom enshrined in the renaissance of the same free-market ideology that led to economic disaster in 1929.
Now it is making the once respected and powerful United States, along with its dollar, long renowned as the "world currency," a laughing stock among the nations. Time will tell whether and how the American economy will sail through this latest crisis. But what does all of this have to do with the latest papal indictment of capitalism and the Marxian prediction of its collapse? Marx V. John Paul II
As for Karl Marx, the remarkable thing about him is that he could be so right about what was wrong, and so wrong about what is right! He saw early on the sad consequences of greed-ridden capitalism. He also perceived their relationship to the shoddy treatment of the factor of production, human work, which is the main source — the "primary efficient cause" of the wealth of nations — as John Paul II stated in Laborem Exercens (n. 52). This represents so basic a truth that even Adam Smith recognized it! Marx, however, entrapped by his own materialistic adaptation of the Hegelian dialectic and his flawed labor theory of value, came up with solutions that turned out worse than the capitalism he demonized.
Instead of illuminating and promoting the de facto solidarity that exists throughout the economy, he exploited the ongoing class conflict that was already the fruit of exploitative capitalism. He proposed to intensify it to the extent of eradicating the capitalist class, so as to bring about a classless society. That chimera would entail the abolition of private ownership of the material factors of production, in particular the by then, so important factor, capital. In practice, his grotesque and unnatural program resulted in the extermination of uncounted millions of people, most of them simple workers and peasants!
The Catholic Church, on the other hand, has presented a different approach to terminate the long reign of capitalism. However, it is worth noting that Pope Benedict XVI in his first encyclical — Deus Caritas Est — included the admission: ". . . the Church’s leadership was slow to recognize that the issue of the just structuring of society needed to be approached in a new way" (n. 27).
Perhaps that is in keeping with a tradition of apologies established by John Paul II for prudential lapses by the Church at various times in its long history. However, along with it came a tribute to "Bishop Ketteler of Mainz" — in fact a contemporary of Karl Marx — among "pioneers" of what the Catholic Church would have to say about "the just structuring of society." Starting with Leo XIII and Rerum Novarum, often referred to simply as his "labor encyclical," the Church would indeed have much to say! In fact that Pope placed the Church in between the opposing parties: the capitalists and the socialists. He did so by rejecting both the hare-brained Marxian initiative to do away with private ownership of the material means of production, and the capitalist treatment of human labor as mere merchandise which had made the socialist mad-hatter venture seem credible to so many in the first place.
The encyclical Rerum Novarum which appeared in 1891, therefore several years prior to the crisis in the capitalist order following 1929, set the tone for social teachings by all Popes until the present. Together with the classic defense of private ownership of property along with emphasis on social responsibility for the way it is used, it upheld the right of workers to organize so as to secure and safeguard their well-being. This included, first and foremost the right to a just wage which would ensure a decent living for the worker and his family.
That was part and parcel of the "preferential option for the poor" which Leo XIII was also the first to propose ( R. N., n. 29). As was often the case, he did not use the express terms adopted later by his Successors, but he established the principles. (John Paul II first used the expression in Puebla, Mexico, in 1979). That implied corrective action also by the state — long since reduced to "night-watchman" status as mainly the guardian of the property rights for the wealthy.
The state as the ultimate guardian of the common good is to perform functions for people which they, along with lower social bodies, cannot perform at all or adequately for themselves. It was designated in subsequent social encyclicals as the principle of subsidiarity (cf. Pius XI, Quadragesimo Anno, nn. 79-80).
Then, in place of class conflict which, as proposed by Marx, was to be the operative principle in the transition toward full Communism, the Church proposed the principle of solidarity, meaning the recognition and performance in support of the actual interdependence that exists among people at every level of economic life (cf. John Paul II in Sollicitudo Rei Socialis, nn. 38-40; and Centesimus Annus, n. 10).
The late great Pope John Paul II linked together three great social encyclicals: Laborem Exercens (1971), Sollicitudo Rei Socialis (1987), and Centesimus Annus (1991) into what his Successor Pope Benedict XVI referred to as a "trilogy" (Deus Caritas Est, n. 27). In the process the Polish Pope synopsized previous teachings and updated them with brilliant new perspectives. Certain commentators wrongly suggested that Centesimus Annus endorses their own free-market ideology; and they tried to exalt it above the previous two, inferring that those represented a kind of ongoing "learning experience" on the part of the Pope. (He had two doctorates [ philosophy and theology], and he held professorships at Jagiellonian University in Krakow, and later also at the Catholic University in Lublin!) Actually it builds on the previous encyclicals, and specifically on Sollicitudo Rei Socialis where the Pope provided a protracted explanation of the concept solidarity, terming it "undoubtedly a Christian virtue" (SRS, n. 40). Then in Centesimus Annus he referred to it as the "principle of solidarity" (n. 10); and he identified it with the virtue of social charity that Pius XI had linked with social justice in Quadragesimo Anno in 1931 as the two principles requisite for reconstructing the social order (n. 88).
What is perhaps the most revolutionary thunderbolt among his social teachings addressing the economic order was presented by John Paul II in Laborem Exercens, the first in his trilogy of social encyclicals, actually his own "labor encyclical." Being germane to what will one day mark the end of the capitalist era, it is overlooked and dismissed, one might add for good reason, among those who cannot outgrow their conviction that capitalism is intended for all ages.
Consider that here the Pope twice affirmed the pivotal importance of the just wage in the economic order. In Part 19 — "Wages and Other Social Benefits" — we find: "It should be noted that the justice of a socioeconomic system and, in each case its just functioning, deserve in the final analysis to be evaluated by the way in which man’s work is properly remunerated in the system." Based on what John Paul II termed "the principle of the common use of goods," and on the fact that the wage is the basic means by which the worker gains access to goods, he added: "Hence, in every case, a just wage is the concrete means of verifying the justice of the whole socioeconomic system and, in any case, of checking that it is functioning justly."
At this point, one might ask on what grounds the Catholic Church is entitled to get involved in such mundane matters. Are not wages a matter for economists? John Paul II laid that objection to rest in Sollicitudo Rei Socialis where he established the Church’s social teachings as belonging "to the field, not of ideology, but of theology and particularly of moral theology" (n. 41).
Justice as such and in its various applications is a cardinal virtue, and virtues are traditionally treated in moral theology. What is more, the author of that encyclical had been a university professor of ethics in Poland before he became Pope; and justice in its various applications had already been a part of Aristotelian ethics for more than two millennia. In any case, with regard to the economics of the just wage, in 1923 an outstanding economist, Heinrich Pesch, SJ, had written about "The Just Wage as the Economically Correct Wage!" (cf. Pesch/ Ederer, Lehrbuch der National ökonomie/ Teaching Guide to Economics, vol. V, book 2, 77ff.).
That is to say: What is just in this regard is also economically correct! This comes close to being the equivalent of what the Polish Pope wrote in Laborem Exercens in 1981 about the "just wage" being "the concrete means of verifying the justice of the whole socioeconomic system" (n. 89).
The Jesuit Pesch (1854-1926) was one of a very few economists who articulated economic principles while also outlining a specific kind of economic system. Unlike most of his modern counterparts, he did not attempt to isolate the economic science totally from God, the moral law, and ethics! In his opening volume he stated: "For too long has the name of God been either totally excluded from scientific discussion, or it has at best been mentioned with a certain reticence or with tongue-in-cheek. Actually this most holy name should be professed before the whole world, so that at least where God’s dominion is acknowledged and where divine moral law is regarded with reverence, the true common good of nations can find a secure safeguard and a powerful affirmation. The practical application of a divine moral law whose norms are unchangeable does not deprive morality, as science today understands it, of a firm basis. On the contrary, it reaffirms respect for what tradition has provided thus far, and for what has already been accomplished in our science. In addition it alone secures for the highest social norms the stability, the constancy, and the universal validity which a merely historical and human tradition would never be able to provide" (Pesch/ Ederer, Lehrbuch, vol. I, book 2, p. 321).
The economic system which Pesch outlined was erected on the basis of what he termed the principle of solidarity, so that it came to be designated according to its underlying social philosophy as solidarism. As an economy it is also designated as the solidaristic system of human work since he juxtaposed it to what he referred to as “Adam Smith’s Individualistic System of Human Industry," as well as to Marxian socialism. The latter, he was in the somewhat unique a position of being able to critique in successive editions of hisLehrbuch der National ökonomie (1905 and 1924), both before-the-fact as a theory, and after-the-fact as a grim reality.
As for capitalism, the Jesuit’s critique of it was both definitive and devastating. His definition of it is concise, but accurate: ". . . capitalism is the dominion over the national economy by the acquisitive interests of those who own capital" (cf. Pesch/ Ederer , vol. IV, book 2, 158).
That "dominion" eventually extends to what Karl Marx had termed the “whole immense superstructure" (Critique of Political Economy, n. p. 21). For Pesch too capitalism involves ". . . the unfettered subjection of labor and of the entire national economy to the dominance of capital and the unlimited moneyed interests of those private persons who own capital." And the implications are far-reaching indeed: "In this sense of the word, ‘ capitalism’ has involved an understanding of the dominion by those who own capital, far beyond the limits of the economy, so as to involve also the political and cultural spheres."
Thus: "It controls the press, the sciences, the arts, the schools. It has taken great care to represent as ‘ cultural enlightenment’ the spread of the poison of the materialistic Weltanschauung throughout the entire nation, and notably among the working classes." What is more: "It has undermined individual as well as social morality, devastated family life, contaminated social intercourse, and divided people and nations into hostile armed camps." Therefore: "The gulf between the aristocratic part of the citizenry, those who own property, the bourgeoisie, and those who are without property, among them those who work for wages, the proletariat, has become obvious not only in the actual external manifestation of riches and poverty, but also in the depths of their hearts" (ibid., vol. II, book. 1, 252-253).
That grim prophetic assessment led Pesch in 1925 to this bleak prognosis for the capitalistic order: "The capitalistic system of free enterprise was able to propel production to a high level, but it was not capable of distributing the product throughout all of society in a manner which would bring about the material well-being of a nation. It not only robbed a man of his dignity, but all too often also of the price of his efforts. Unrestrained competition ended up in monopolization. Speculation shaped the market and determined the price structure. Excessive profits took the place of the fair return to labor. Even someone who rejects the Marxian concepts of value and surplus value will have to recognize how dangerous is the capitalistic and speculative appropriation of surplus value, which bears no relationship to any real services rendered to society. It is simply not possible for an entire nation to go on working indefinitely for the well-being of a handful of capitalist magnates and speculators" (Pesch/ Ederer II, 1, 252).
The future will manifest whether and how long it is "possible for an entire nation to go on working indefinitely for the well-being of a handful of capitalist magnates and speculators." The past and the present have long since indicated clearly that such a condition is in any case both inefficient and unjust, as the Catholic Church has stressed continuously in its social teachings since 1891.
Since then, a timeless principle for social order has emerged at the forefront of those teachings. As indicated earlier, Pope John Paul II in his trilogy of social encyclicals explained it and designated it as the principle of solidarity. Actually he had come to be known as the "Pope of Solidarity" after he publicly backed the Polish labor union, Solidarnosc, with the force of his great personality and teaching prowess. Together they brought down Soviet rule in Poland, an action that soon afterward led to the dissolution of the entire Soviet empire. It remains to be seen whether the important concept, solidarity, if once understood and absorbed into widespread operation in the post-Soviet world, can also at last bring about the end of the capitalist era!
For the spadework in developing and presenting that principle, specifically with regard to how it applies to economic life, the Polish Pope was beholden to the Jesuit Heinrich Pesch. It was he who first applied it to a form of economy he deemed superior to both capitalism and socialism, since it is compatible with human nature and therefore with a Christian concept of social order.
Prior to John Paul II, the substance of Pope Pius XI’s encyclical Quadragesimo Anno was attributed largely to two of Pesch’s Jesuit understudies, the centenarian Oswald von Nell-Breuning (18901991), and Gustav Gundlach, SJ (1882-1963). The latter became the leading adviser for Pius XII on such matters. Although that Pope wrote no social encyclicals as such, his many brilliant messages and discourses over a 19-year pontificate were replete with remarkable contributions to the growing deposit of the Church’s social teachings.
It was he who began frequent use of the term solidarity in the relevant sense. In fact his very first encyclical in 1939, Summi Pontificatus, appeared in Spanish-speaking countries as Solidaridad humana y Estado totalitario. Subsequently his Successors Blessed John XXIII and Paul VI made frequent use of the expression in their social encyclicals as did John Paul II. Benedict’s Uncle & Solidarity
For Pope Benedict XVI there is an additional influence. Fr. Georg Ratzinger (1844-1899), the Pope’s great uncle, was a contemporary of Heinrich Pesch. In fact, his remarkable work, Die Volkswirtschaft in ihrer sittlichen Grundlagen (transl. The Economy and Its Moral Foundations), published in 1881 and revised in 1895, is often quoted throughout the five volumes of Pesch’s Lehrbuch.
Ratzinger indicated how modern technology enhanced the de facto solidarity that exists among people involved in production; and he referred to that as the "law of solidarity." Being a loyal Catholic priest, Georg Ratzinger perceived the notion of human solidarity in St. Paul’s exposition of the doctrine of the Mystical Body of Christ, as Pesch did also in his Lehrbuch (I, 2, p. 197). Its denial in the modern capitalistic order, "with its private speculation and raw egotism," Ratzinger indicated, "naturally gave rise to socialism." Thus, "every decrease in wages, is greeted as progress, because that enables each individual entrepreneur to fatten his profits at the expense of the workers."
He continued: "It is taken for granted that every improvement in technology only increases the profits of the individual capitalists, while the masses of workers plunge ever more deeply into the abyss of dependency, poverty, and misery" (p. 246). The Ratzinger genetic link appears to be not sympathetic to capitalism!
Capitalism, defined as a system where the owners and managers of capital dominate the economy and thereby society at large, and manipulate these in their own interests without regard for the common good, has nevertheless outlasted Marxian socialism and its dire predictions. That may be because Marxism was laden with the kind of contra-natural ideological baggage which made its early demise inevitable. During what was historically speaking its brief existence on this planet, it had to be put into place and sustained with outrageous force and based on internecine hatred between the working class and the ruling class. Such bitter animosity is in certain respects more unnatural and counterproductive than the greed that drives the capitalistic system.
Solidarity, on the other hand, represents an inevitable condition among people at all levels of society. In fact it is so natural that it all too often remains unrecognized. That assumes we are talking about real life and not some fictional Robinson Crusoe economy. People are in fact normally social; and living in society does in fact imply interdependence! As Pesch expressed the Principle of Solidarity in the first volume of his Lehrbuch, “When we speak of solidarity in social life, we have in mind in a most general sense, first of all, social interdependence, the actual mutual dependence of people on one another."
But there is a further important consideration: "This reciprocal dependence on the well-being of other persons in society is therefore no mere de facto relationship. Inasmuch as the reciprocity and community of interests has its foundation in man’s rational nature as one of its imperatives, solidarity also represents a moral relationship between man and his fellowman. Even if the downfall of one’s fellowman were to one’s advantage, one is not permitted to wish for this, let alone help bring it about. Social intercourse is supposed to be a benefit and a blessing for mankind, not a curse and a source of its corruption" (Pesch/Ederer , vol. I, book 1, pp. 36-37).
The survival and continuance of the human race, starting with the family, itself requires at least a minimal cooperation among persons. As Adam Smith recognized in his Wealth of Nations, economic units begin to thrive the more they specialize their production and then exchange their specialized products with other specializing economic units. That applies on up to the level of national and eventually international interdependence and cooperation. In each instance a common good emerges which is far greater than the total of what inward directed economic units or individuals could possibly produce!
The Marxist system, although it promoted solidarity among "comrades," called for animosity between classes. Capitalism, while allowing the de facto relationship necessary for successful production and profits, veiled the "moral relationship between man and his fellowman." By free competition and the promotion of self-interest, it did in fact at least implicitly "wish for" and promote "the downfall of one’s fellowman," losing sight entirely of the glaring fact that "social intercourse is supposed to be a benefit and a blessing for mankind, not a source of its corruption."
The present emerging crisis may turn out to be just another of the breakdowns that have recurred in the capitalist era since its beginnings. If it worsens it could also trigger a pendulum-like swing toward some Orwellian form of oppressive social control, as was the case with the emergence of the late, unlamented Marxian, and now Maoist, socialism. Genuine and lasting improvement will require recognition of and deference to the ubiquitous interdependence — solidarity — among all persons who make up the economy. That will involve also a reordering of what economists of the past era designated as the factors of production: “land, labor, and capital." An end to capitalism will involve the installation of the work of human beings at all levels in the first place among those “factors of production."
That is because of " the principle of the priority of labor over capital," as Pope John Paul II expressed it in Laborem Exercens (n. 52). This does not involve some new revelation. It simply recalls the ancient philosophical truth that "labor is always a primary efficient cause, while capital, the whole collection of means of production, remains a mere instrument or instrumental cause." Therefore it establishes what the Polish Pope referred to as, "the primacy of man in the production process, the primacy of man over things" (n. 12). That is because "Everything contained in the concept of capital in the strict sense is only a collection of things" (n. 57). (All italics in the original).
That having been established, "labor" will at last no longer be treated like "merchandise" in the market place. Instead even the least skilled but still needed adult worker will be entitled to that just wage which the same Pontiff termed, "the concrete means of verifying the justice of the whole socioeconomic system" ( LE, n. 89). Such a wage also happens to be a minimum prerequisite to make possible the continued smooth operation of today’s hyper-productive world economy.
With that assured, sound judgment, finding expression amid socially oriented market forces and subject to appropriate social control, will allow the more skilled, gifted, talented, and experienced to earn appropriate higher incomes. Otherwise there will be a continuance of woeful maldistribution of the providential largesse which modern technology makes possible, along with the poverty in the midst of plenty and recurring crises that have become endemic to capitalist disorder.
What will no longer be acceptable, will be the type of outrageous excesses manifested by a proliferation of billionaires, along with CEOs who receive exorbitant compensation for their skills in exporting well-paying American jobs to countries where labor standards border on slave-labor conditions. Nor would a sound social order tolerate a plague of parasites in society who earn preposterously great levels of remuneration for, as Blessed John XXIII put it, "the performance of some task of lesser importance or doubtful utility" (Mater et Magistra, n. 70). The capitalist era will finally end, when something closely akin to the ideas proposed over the past century by what that Blessed Pope referred to in one of his two masterful social encyclicals as the "Mother and Teacher of nations" gain widespread acceptance. In what is now routinely referred to as a "post-Christian society," that is unlikely.
Nevertheless, time and again over its 2,000-year history, the Catholic Church has played a leading role in civilizing the world. That is true specifically with regard to the labor of human beings which from time immemorial has been taken for granted, while those who were powerful or fortunate enough to gain possession of land and other material resources moved into the forefront of society. In fact, through much of history what they owned included also human beings. Slaves constituted a large part of the workforce throughout the ancient world; and in the United States slavery persisted halfway through the 19th century.
Elsewhere, particularly in Catholic Christian Western Europe, serfdom had gradually replaced slavery as the predominant labor supply. The lot of serfs was still harsh, in keeping with the general economic climate of the times. But there was a gradual often imperceptible improvement, as Benedictine monks, for example, toiled throughout Europe to instill an awareness of the dignity and importance of simple labor by extolling it along with prayer as their rule of life.
Eventually in medieval Europe towns appeared and grew into cities; and in time they emancipated themselves from the great manorial estates and rule by the landed nobility. In these, guilds of craftsmen and merchants were formed, and they demonstrated how the precepts of their Christian faith could serve to improve the lives of their members in both a material and broader cultural sense. That included early application of the principles of occupational solidarity, as well as subsidiarity. Since the guilds embraced both the employers (masters) along with their employees (journeymen and apprentices) according to their respective crafts or functions, they promoted the common good not only of their own occupational group, but also of the wider community.
This was accomplished to a large extent without some great centralized control by a monarch or by the landed aristocracy. It enabled the latter to concentrate on such functions as providing protective service against invaders. Meanwhile the guilds looked out for the members’ welfare in a way that also served the broader common good. This involved such matters as regulating competitive practices, justice in pricing and in the remuneration of their members, along with work standards and training requirements.
The rise of the individualistic spirit which was already part and parcel of the Protestant Reformation, e. g., the Calvinist notion that economic success indicated Divine favor, led among other things also to the decadence and eventual decline of the guilds. As the more forceful and ruthless emerged and were able to ignore the ancient guild rules, the big fish more and more swallowed the smaller. The ownership of larger shops, better tools, etc., gradually moved the factor of production capital, the produced means of production, into the foreground of emerging modern economic life, along with those who possessed it, i.e., the capitalists.
The real heyday of capitalism lay ahead and came into full flowering with the Industrial Revolution. when the need for substantial amounts of capital became the rule. The old guild regulations about fair competition were abandoned in the emerging dog-eat-dog markets, bolstered by the free-market ideology that emerged during the late 18th century. Workers, especially of the less skilled variety which became more and more predominant in mines, mills, and factories, while no longer slaves or serfs, now became the "merchandise" of capitalist overlords. Grown men found themselves competing for a livelihood with women and children wherever conditions permitted. Their labor became indeed a "commodity," on the market, and they were treated accordingly.
It is a woeful plight for which eventually only the "Mother and Teacher of nations" has the proper remedy in her priceless social teaching. But that, it has been said, remains for the time being "one of the best-kept secrets in America!"
+ + + (Dr. Ederer is Professor Emeritus of Economics at Buffalo State College, and this country’s leading authority on the German economists who influenced papal teaching on social justice, social charity, and social action in the 20th century.)
This item 8282 digitally provided courtesy of CatholicCulture.org
