Pope Francis vs His Predecessors on Capitalism, Part 2

So yesterday we saw that ever since the birth of capitalism, the Popes and also the bishops (in the documents of Vatican II), have not ceased to point out the deficiencies of that economic philosophy. We heard from Leo XIII in Rerum Novarum - which is a long document only tiny parts of which were presented. There is much in there of relevance, cited by succeeding popes. We also heard from Pius XI, John XXIII, Vatican II, and Paul VI. Unbridled capitalism was understood as liberalism, not conservativism, and seen as the equally defective but opposite error as marxism/communism/socialism.

Now let us hear from John Paul II. 1991 was the 100th anniversary of Rerum Novarum, and the occasion of him writing an encyclical on the topic, Centesimus Annus. Referring to Rerum Novarum, John Paul II writes:

[9]... A workman's wages should be sufficient to enable him to support himself, his wife and his children. "If through necessity or fear of a worse evil the workman accepts harder conditions because an employer or contractor will afford no better, he is made the victim of force and injustice". [The quote is from Rerum Novarum n.131.]

Would that these words, written at a time when what has been called "unbridled capitalism" was pressing forward, should not have to be repeated today with the same severity. Unfortunately, even today one finds instances of contracts between employers and employees which lack reference to the most elementary justice regarding the employment of children or women, working hours, the hygienic condition of the work-place and fair pay; and this is the case despite the International Declarations and Conventions on the subject and the internal laws of States. The Pope attributed to the "public authority" the "strict duty" of providing properly for the welfare of the workers, because a failure to do so violates justice; indeed, he did not hesitate to speak of "distributive justice".

John Paul II, the victim and enemy of Soviet Bloc communism, sounds a little Marxist himself in endorsing and reapplying this 100-year-old observations of one of his predecessors, doesn't he? Well, it would be a liberal error to say that if he criticizes capitalism, he must be a commie.

[33]... Many other people, while not completely marginalized, live in situations in which the struggle for a bare minimum is uppermost. These are situations in which the rules of the earliest period of capitalism still flourish in conditions of "ruthlessness" in no way inferior to the darkest moments of the first phase of industrialization. In other cases the land is still the central element in the economic process, but those who cultivate it are excluded from ownership and are reduced to a state of quasi-servitude. In these cases, it is still possible today, as in the days of Rerum novarum, to speak of inhuman exploitation. In spite of the great changes which have taken place in the more advanced societies, the human inadequacies of capitalism and the resulting domination of things over people are far from disappearing. In fact, for the poor, to the lack of material goods has been added a lack of knowledge and training which prevents them from escaping their state of humiliating subjection.

[35]...In this sense, it is right to speak of a struggle against an economic system, if the latter is understood as a method of upholding the absolute predominance of capital, the possession of the means of production and of the land, in contrast to the free and personal nature of human work. In the struggle against such a system, what is being proposed as an alternative is not the socialist system, which in fact turns out to be State capitalism, but rather a society of free work, of enterprise and of participation. [STATE CAPITALISM. You know, the people on the very top of the global economic food chain are capitalists. State capitalism is simply economic forces controlling the government, or vice-versa, but it amounts to the same. How many harsh capitalistic organizations - corporations - are run internally like communist dictatorships? An awful lot. What if every major industry in the US was privately held, but all held by one corporation and it dominated the government, what would the country be like? Probably a lot like Soviet communism. And consider that the US government is totally dependent upon the capitalistic Federal Reserve - you think the Fed cares if the government is socialist or not? Does it run on principles of free enterprise or on what is ultimately in its own best interest? Socialism is just "state capitalism" - a brilliant observation.] Such a society [the society of free work, etc., mentioned just before] is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied.

The Church acknowledges the legitimate role of profit as an indication that a business is functioning well. [So the Church is not Marxist or against free enterprise.] When a firm makes a profit, this means that productive factors have been properly employed and corresponding human needs have been duly satisfied. But profitability is not the only indicator of a firm's condition. It is possible for the financial accounts to be in order, and yet for the people — who make up the firm's most valuable asset — to be humiliated and their dignity offended. Besides being morally inadmissible, this will eventually have negative repercussions on the firm's economic efficiency. In fact, the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavouring to satisfy their basic needs, and who form a particular group at the service of the whole of society. Profit is a regulator of the life of a business, but it is not the only one; other human and moral factors must also be considered which, in the long term, are at least equally important for the life of a business.

We have seen that it is unacceptable to say that the defeat of so-called "Real Socialism" leaves capitalism as the only model of economic organization. It is necessary to break down the barriers and monopolies which leave so many countries on the margins of development, and to provide all individuals and nations with the basic conditions which will enable them to share in development. This goal calls for programmed and responsible efforts on the part of the entire international community. Stronger nations must offer weaker ones opportunities for taking their place in international life, and the latter must learn how to use these opportunities by making the necessary efforts and sacrifices and by ensuring political and economic stability, the certainty of better prospects for the future, the improvement of workers' skills, and the training of competent business leaders who are conscious of their responsibilities. ...

[39]... All of this can be summed up by repeating once more that economic freedom is only one element of human freedom. When it becomes autonomous, when man is seen more as a producer or consumer of goods than as a subject who produces and consumes in order to live, then economic freedom loses its necessary relationship to the human person and ends up by alienating and oppressing him.

40. It is the task of the State to provide for the defence and preservation of common goods such as the natural and human environments, which cannot be safeguarded simply by market forces. Just as in the time of primitive capitalism the State had the duty of defending the basic rights of workers, so now, with the new capitalism, the State and all of society have the duty of defending those collective goods which, among others, constitute the essential framework for the legitimate pursuit of personal goals on the part of each individual.

Here we find a new limit on the market: there are collective and qualitative needs which cannot be satisfied by market mechanisms. There are important human needs which escape its logic. There are goods which by their very nature cannot and must not be bought or sold. Certainly the mechanisms of the market offer secure advantages: they help to utilize resources better; they promote the exchange of products; above all they give central place to the person's desires and preferences, which, in a contract, meet the desires and preferences of another person. Nevertheless, these mechanisms carry the risk of an "idolatry" of the market, an idolatry which ignores the existence of goods which by their nature are not and cannot be mere commodities.

That's enough from Centesimus Annus. John Paul II makes his point pretty clearly. Economic activity must be at the service of authentic human goods, of which economic freedom - that is, the ability to engage in free enterprise - is only one, and not necessarily the most important. The profit motive has advantages - but it also has pitfalls that are dangerous. In being subordinate to other important goals of enterprise - that is to say, authentic human goods that can limit profitability - the desire for profits often sees these authentic human goods as unjust hindrances.

In Sollicitude Rei Socialis of 1987, he said, "The Church's social doctrine is not a "third way" between liberal capitalism and Marxist collectivism, nor even a possible alternative to other solutions less radically opposed to one another: rather, it constitutes a category of its own. Nor is it an ideology, but rather the accurate formulation of the results of a careful reflection on the complex realities of human existence, in society and in the international order, in the light of faith and of the Church's tradition. Its main aim is to interpret these realities, determining their conformity with or divergence from the lines of the Gospel teaching on man and his vocation, a vocation which is at once earthly and transcendent; its aim is thus to guide Christian behavior."

So, the Church looks at the Gospel, the authentic anthropology that situates man at the center of God's creation as His image, but a fallen image and prone to sin, and applies these to what she sees around her. Sin can affect economic activities and philosophies and whole systems. Capitalism and socialism both suffer from the effects of sin. The solution is not a third "economic system" but a moral, virtuous approach to human freedom in economic matters. This presupposes moral, virtuous persons as players in free economic activities. If economies and governments are to be just and virtuous, the people must be, too. Atheism - be it Ayn Rand capitalism or Marxist communism - cannot ensure anything but tyranny of those in power and exploitation of those without it.

You can find similar expressions of JP-II's thought in 1991's Laborem Exercens (sec.7; written for the 90th anniversary of Rerum Novarum); and in his address to the participants in the colloquium "Capitalism and Ethics" in 1992. He probably addresses the topic without using the term "capitalism" on many other occasions, but I searched for this particular term at the Vatican website.

Now let us turn to Benedict XVI. The Pope Emeritus has not addressed the term "capitalism" directly in a major doctrinal or pastoral document. He does say briefly the same sort of things as JP-II in a message for the World Day of Peace on January 1 of this year, in the midst of dealing with financial and banking troubles at the Vatican: "In effect, our times, marked by globalization with its positive and negative aspects, as well as the continuation of violent conflicts and threats of war, demand a new, shared commitment in pursuit of the common good and the development of all men, and of the whole man. It is alarming to see hotbeds of tension and conflict caused by growing instances of inequality between rich and poor, by the prevalence of a selfish and individualistic mindset which also finds expression in an unregulated financial capitalism."

You can also find a very interesting paragraph that mentions a "reckless capitalism" in the context of a "technological Prometheanism" and an "atheistic anthropology" in an address to the participants in the Pontifical Council Cor Unum.

So now has Pope Francis, as The Atlantic seems to think, identified a "new enemy" of the Church in capitalism? Francis definitely has a more emphatic style, he speaks more from and to the heart as opposed to the head, and I think he could use some help picking the right words. But it is clear that the substance is very much in line with the Church's perennial critique of capitalism.