Wednesday, June 13, 2007


is the subject of an article from the archives of New Oxford Review by John C. Medaille. It discusses the various encyclicals on economics by Leo XIII, Pius XI, and JPII, which oppose capitalism:

What are our economic options? Must we have either capitalism or socialism? Socialism's obvious failures (Russia) and putative successes (China) have been brutally oppressive, while capitalism's dubious results (a consumerist culture, ubiquitous advertising, wage-slavery, corporate conglomeration, practical monopoly) confront us daily in America. Are these the only alternatives?

On this subject the Catholic Church has great wisdom to offer. For more than a century the popes have shown themselves to be astute analysts of socialism and capitalism, and John Paul II has brought the papal critique to an unprecedented pitch of incisiveness. Both economic systems, he has written, are "in need of radical correction.... This is one of the reasons why the Church's social doctrine adopts a critical attitude towards both liberal capitalism and Marxist collectivism" (Sollicitudo Rei Socialis, hereinafter SRS).

A radical correction means, of course, correction at the root. And John Paul in his encyclicals on economics and society has exposed the root error of both socialism and capitalism. Both are fundamentally materialist. Thus both fail to recognize man's full nature. Though different in practice, capitalism and socialism share underlying philosophical assumptions that operate to reduce man to a cog of an economic system. They tend to absolutize economic life. In so doing they marginalize man's spiritual and religious dimension either by openly persecuting it (as socialism does) or by treating it as a private matter deserving of no place in the public sphere (as capitalism does). Thus they not only thwart man's spiritual freedom but also hamper his economic initiative and his achievement of his true economic vocation.

Since the American system is not socialist but capitalist, this article focuses on the Catholic argument against capitalism, primarily as made in the encyclicals of Leo XIII, Pius XI, and John Paul II. It then goes on to outline a corrective called Distributivism, a response first formulated by G.K. Chesterton and Hilaire Belloc, which is based on the realistic premise that power follows property.

Here again Distributivism arises as the Catholic answer to the evils of current day economic systems, and here again Father Sirico's Action Institute would be outside of the realm of Catholic teaching.

The worker's union is given as a method for the leveling of the ownership of property. From the article:

But if labor is primary, what is this to mean in actual practice? The answer is the just wage. But how are we to determine what constitutes a "just wage"? It is not up to the mere "free consent" of the parties, a point on which all the encyclicals agree. This arises from the fact that labor has a social function, namely, the support of families.

For a wage to be just, it must be sufficient to support a family. "The wage shall not be less than enough to support a worker who is thrifty and upright" (RN). This wage must also allow support of the family without requiring mothers to work outside the home (LE).

However, the "family wage" is not an end in itself, for the just distribution of productive property still needs to be achieved. Hence, the wage must be sufficient so that the workingman, through his savings, can acquire property of his own (RN). This is the heart of papal policy: that "the propertyless wage-earner be placed in such circumstances that by skill and thrift he can acquire a certain moderate ownership" (QA).

Finally, it should be noted that the right to a just wage is emphatically not a mere pious wish. It is a requirement of objective morality, a requirement that cannot be subordinated to the "criterion of maximum profit." The just wage "must constitute the adequate and fundamental criterion for shaping the whole economy" (LE).

Finally, in summary the article states:

Distributivism is based on the realistic and intuitively grasped notion that power follows property, combined with a genuine love of freedom and a desire to spread the benefits of freedom and economic initiative as widely as possible. It is a real response to the call of the Church for "a change of lifestyles, of models of production and consumption, and of the established structures of power which today govern societies" (CA). As such, it deserves the serious and prayerful consideration not only of Catholics but of all followers of Christ.

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