Friday, January 11, 2008

The Socialist Response

by Donald Goodman III

The casual reader, who has little surveyed the Catholic debate on economics,will immediately note that we spend comparatively little time on the issue of socialism. This was brought about for two primary reasons. Partly it was a pragmatic decision: most of the economic debate in Catholic circles is about capitalism, so it seems silly to argue about socialism, which all true Catholics, capitalist or not, detest. The second reason is a scholarly one: the Church has condemned socialism so unequivocally and so frequently, usually even using the word itself (as opposed to her condemnations of capitalism, which generally condemn its principles rather than capitalism as a concept), that it seems foolish to duplicate her efforts.

Nevertheless, there are a number of particular issues about socialism which ought to be addressed, and for that reason this section has been composed. First in importance, of course, though second in address, is the position of the Church on socialism, which is dispositive for all who believe in her moral authority. Second is the definition of socialism, which we believe has often been incorrectly formulated by falsely dichotomizing it with capitalism.

The Definition of Socialism

Socialism is that system in which none are owners of productive property. It is, of course, true that it is also that system in which none are owners of any property, but the productive property aspect is what particularly differentiates it. While this definition is far from mainstream, we think it to be the most accurate definition, and and the usual ones to have been falsely derived.

Essentially, it seems, capitalism, dominant in the West for a very long time, held itself up as the model and declared all that was not capitalism to be socialism. For the capitalists, whatever is not capitalism is socialism. Nash, for example, defines socialism as "an economic system that replaces the market as the means of providing for consumption, production, and distribution with central planning. Since the free market essentially summarizes all capitalist theories (unrestricted use of property, free competition, the importance of the profit motive within said market), Nash simply negates capitalism to come up with socialism. Not only is this sort of definition misleading, as we shall endeavor to prove; it also gives rise to the false dichotomy of capitalism and socialism, implying that there is no possibility of a third system which is not in some way a combination of the two. Of course, if you define socialism simply in terms of "not capitalism," then there is no third way; but this definition is clearly unacceptable.

It is simply disingenuous to define socialism in terms of capitalism because it assumes that no other road is possible. However, other ways are certainly possible; no one could claim that the medieval manor system, for example, or the Roman slave economy was either capitalism or socialism without destroying all meaning in the words. If socialism is supposed to refer to everything that is not capitalism, then these two systems, along with everything else, are certainly socialism, and ought to be proud of the name. But if socialism refers to an actual thing, a real and existing state of affairs with an actual identity of its own, then a much more specific definition is required than "one that replaces the market with central planning."

We would, therefore, seek to examine the chief characteristics of these two systems along with the central fact of economic life: production. On this ground, at least, some meaningful distinction beyond "it's not what we are" can be made. Also, this enables us to incorporate the Church's definition of capitalism into our scheme, which we consider to be paramount; for, as always, "if he will not hear the church, let him be to thee as the heathen and publican." So our distinction is founded on the distribution of productive property, since the Church considers that distribution to be the defining characteristic of capitalism; we therefore define socialism as that system in which none own productive property. While such systems generally hide that fact by claiming that the means of production are owned by "the people," "the state," or some other generally Rousseauvian catch-phrase, their claims are nothing more than dishonest veils, designed to ensnare the unwary into misunderstanding the nature of socialist theory. What, then, do we say of a system in a state like France, for example, or even, to a lesser extent, the United States? Most capitalists would call both nations socialist, though the United States much less so than France. In both countries, there is substantial economic regulation, which capitalists consider anathema; any system that incorporates such regulation, therefore, must not be a capitalist system, at least under the standard capitalist/socialist dichotomy which most moderns take as given. How would we classify such states?

We would classify them according to the division given above. If, in these states, the means of production are owned by a few, then it is a capitalist state; if the means of production are owned by none, it is a socialist state. The United States, then, is undeniably capitalist; in France the situation is less clear. We must inquire into whether the governmental regulations are such that the means of production are effectively owned by the state, operated for the sake of the state, or are they such that, while the owners of the means of production are limited, even severely limited, in their freedom of action, they are still truly the owners of those means and operate them for their own benefit? If the former, then France is a socialist state; if the latter, a capitalist.

This way of describing socialism is much more in line with the statements of the Church. Leo XIII holds that "[s]ocialists seek to transfer the goods of private persons to the community at large," making no mention of any replacement of free competition with central planning. The holy pontiff even declares "that the fundamental principle of Socialism" is to "make all possessions public property." It is clear, then, that Leo XIII considered the distribution of property (or, in the case of socialism, the complete lack thereof) to be the defining characteristic of the socialist system, just as it was the same of the capitalist.

Pius XI likewise regarded socialism as primarily a scheme of distribution of property, rather than as simply the negation of free competition. Pius divides socialism, in his time, into "two opposing, and often bitterly hostile camps," the first of which is communism. The communists, of course, are to be condemned because of their primary characteristics, which the pontiff identifies as "[m]erciless class warfare and complete abolition of private ownership." The other camp he does not give a name, but can be identified by the name of "moderates." These "moderates" are marked by the fact that their camp "mitigates and moderates to some extent class warfare and the abolition of private property, if it does not reject them entirely." While he insists that "[i]t must not be imagined. . . that all the Socialist sects or factions which are not Communist have in fact or in theory uniformly returned to this reasonable position," he is adamant that these are the two major divisions in his time.

Notice, however, that he applies the name "reasonable" to those socialists who have abandoned the two primary marks of the school, namely, class warfare and the destruction of all private property. In his writing on these socialists, Pius is full of nothing but praise, filling his words with "it is rightly contended" and "[j]ust demands and desires of this kind," assuring us that their principles "contain nothing opposed to Christian truth, nor are they in any sense peculiar to Socialism." If socialism consists entirely in such claims, then it has ceased to be socialism and is perfectly acceptable to the Catholic religion. Of course, the holy pontiff's warnings about socialism when it remains socialism, even in the smallest particular, must not be forgotten; but neither must it be forgotten that socialism, like capitalism, does contain certain elements of the truth, and if it limits itself to those elements, then it is not a heresy, though it would be silly for it to continue to use the same name.

Pius's analysis of the acceptability of socialism of both schools, however, rests entirely upon those two principles: class warfare and the abolition of property. There is no mention of central planning, and certainly no identification of socialism with such planning. Indeed, when Pius reasons about the bases of socialism and its roots in a faulty conception of human nature, he is focusing on obsession with material goods which brings about their rejection of private property, which they hold is more effciently produced by a collectivist state. It is this sense, in which socialists are obsessed with the most efficient production of material goods, in which socialism and communism are, "even in their mitigated forms, far removed from the precepts of the Gospel." Pius, then, identifies socialism with the abolition of property, which is motivated by a disordered desire for material goods. On the other hand, many of the claims with which capitalism identifies it, such as central planning and state ownership of certain industries, Pius actually identifis as positive goods, proving that when the capitalists condemn "socialism" they are not condemning the same thing that Pius condemned. This fact is extremely important to remember when discussing the economic teaching of the Church and which systems she has condemned and which she has not.

So when the Church teaches on socialism, she is teaching on that system in which none own productive property; she is not teaching on those systems in which central planning replaces the fluctuations of the market as the director of economic life. This is important to remember when we hear the vehement condemnations of socialism which are dispersed throughout the social encyclicals. Oftentimes, this condemnation will be used as a condemnation of such systems as Nash identifies with socialism; namely, any system in which the market is not given completely free reign. The Church, however, means to condemn only those systems which deny the legitimacy of property, not those which utilize central planning. In fact, as is evident from some quotations given above, central planning of the economy is positively supported by the Church, though always subject, of course, to the principle of subsidiarity.

Read Donald Goodman's book.

Interview with Thomas Storck

On Cooperative Ownership

John Médaille Interview in Romania

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