An Excerpt From Foundations of a Catholic Political Order

by Thomas Storck

[Editor's note: We thank Thomas Storck for granting permission to reprint an excerpt from his out-of-print book, Foundations of a Catholic Political Order. Mr. Storck will represent The Society for Distributism at next year's debate, Catholicism and Economics.]

...if we have food and clothing, with these we shall be content. But those who desire to be rich fall in temptation, into a snare, into many senseless and hurtful desires that plunge men into ruin and destruction. For the love of money is the root of all evils; it is through this craving that some have wandered away from the faith and pierced their hearts with many pangs. I Tim. 6:8-10

Come now, you rich, weep and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth-eaten. Your gold and silver have rusted, and their rust will be evidence against you and will eat your flesh like fire. James 5:1-3a

From these as well as other passages in both the Old and New Testaments we ought to be able to see clearly that there is some sort of a problem in regard to riches and moneymaking. Quite obviously the problem is complex and cannot be reduced to saying that all the rich are evil and will end up in Hell nor that the desire for material goods is evil. Neither of these statements is true. Neither, however, can Christians accept the modern world’s attitude toward riches and material things, an attitude which fails to see that there is anything to be troubled about. Catholicism, when it has been free to be true to itself, has always set up safeguards around the activities connected with money and the accumulation of wealth, safeguards for the common good and health of the community, as well as for the spiritual safety of the individual possessor of wealth himself, precisely because the Church knows the weakness of man and his propensity to sin.

Because of the original disaster that affects all of Adam’s descendants, man tends to disorder, his appetites tend to revolt against his reason. We see this clearly in reference to our sexual appetites, but perhaps twentieth-century Catholics do not see this quite as clearly in regard to our appetite for pecuniary gain as did our medieval fathers in the Faith. Moreover, I think that we have not always well understood what it is about our sexual appetites that is disorderly. Some, I fear, have tended to see sexual desire as in a class by itself, either somehow inherently evil, or at least tainted. But this is not the correct way of looking at the matter, for the problem is not in our sexual desire itself, but in the entire integration of our human nature.

Man’s sexual appetite and all that naturally goes with it were quite obviously created by God, and thus share in the original Divine approbation, “And God saw everything that he had made, and behold, it was very good,” Genesis 1:31. They were created for a purpose, namely to bring new human beings into the world, and ultimately into Heaven, in cooperation with Almighty God. What is wrong with our sexual appetite today, and indeed since the Fall, is that the appetite tends toward objects with whom it is impossible to obtain the end for which that appetite was given to us, that is, to beget children and bring up those children in the circle of a loving family. Our sexual desire, one of our concupiscible appetites, is indiscriminate and blind in its wants. Instead of being readily subordinate to its controlling purpose, the begetting and subsequent rearing of children, it simply wants what it wants. In the state of original justice the intellect easily ruled over all subordinate aspects of man, and thus would effortlessly have directed a man’s sexual desire exclusively toward his spouse, but since Adam’s sin this has not been the case. In our present condition we must all struggle to subject the concupiscible appetites to the rule of reason. But in this hard work of ruling our blind appetites we do not do anything against what is natural for us. We were created with reason as the ruling element in us and it is impossible to make sense of human beings in any other way; thus to restrain our blind desires within the bounds of reason, though at times a bitter effort, is simply to live as is natural to man, in fact, to live according to nature.

A similar thing is true of our desire for material things, which is the basis for man’s economic activity and all that goes with it. Since we have bodies we need material things, and this would have been true had the Fall never occurred. But instead of asking why we need material things, we make them ends in themselves, not means toward allowing us to cultivate what is important in life, namely, our spiritual lives, our intellectual lives, our family and social lives. As with our sexual appetite, our desire for money and material goods is now more or less indiscriminate and inordinate in its wants. But also as with our sexual appetite, our appetite for material goods was created for an end. Material goods exist for the sake of the more important aspects of our lives. Such goods are good only to the extent that they facilitate our easier attainment of spiritual, intellectual, family and social goods, just as sexual activity is good to the extent it furthers one of the three ends of marriage. And just as the sexual appetite run out of bounds hurts not only the individuals involved but the entire community, the same is true of our appetite for economic gain. Adam Smith notwithstanding, it is not the case that if each man seeks his own gain to the utmost the community will necessarily benefit thereby. History as well as common sense teach otherwise.

One of the main reasons why this is so hard for many otherwise orthodox Catholics to grasp today is, I think, that we have been so accustomed to attacks on free-market capitalism coming from socialists and communists, that we assume only they can have anything bad to say about our economic system. But just as the logic of looking at our sexual appetite and the role it ought to play in human affairs according to its own nature, leads us to conclude that man must put many restraints on his sexual conduct, which at the time feel as if they were going against his nature, but in reality are fulfilling that nature, in a similar fashion, if we ask ourselves fundamental questions about man’s capacity for and need of material goods, and look honestly at the disruptive effect unrestrained economic activity has on human society, we are led to propose strong curbs, curbs which indeed are different from those proposed by socialists, but which are equally contrary to our present system and to the desires of unrestrained greed.

If any Catholic is disposed to dispute this line of argument, then I would point out two different things which confirm what I have said. The first is the practice of medieval Christendom. The attitude toward economic activity that obtained in Europe during the Middle Ages was vastly different from our own. The following from Richard Tawney conveys some idea of the medieval outlook:

Material riches are necessary; they have a secondary importance, since without them men cannot support themselves and help one another; the wise ruler, as St. Thomas said, will consider in founding his State the natural resources of the country. But economic motives are suspect. Because they are powerful appetites, men fear them, but they are not mean enough to applaud them. Like other strong passions, what they need, it is thought, is not a clear field, but repression. There is no place in medieval theory for economic activity which is not related to a moral end, and to found a science of society upon the assumption that the appetite for economic gain is a constant and measurable force, to be accepted, like other natural forces, as an inevitable and self-evident datum would have appeared to the medieval thinker as hardly less irrational or less immoral than to make the premise of social philosophy the unrestrained operation of such necessary human attributes as pugnacity or the sexual instinct

Tawney continues with his description of medieval economic ethics,

At every turn, therefore, there are limits, restrictions, warnings, against allowing economic interests to interfere with serious affairs. It is right for a man to seek such wealth as is necessary for a livelihood in his station. To seek more is not enterprise, but avarice, and avarice is a deadly sin. Trade is legitimate; the different resources of different countries show that it was intended by Providence. But it is a dangerous business. A man must be sure that he carries it on for the public benefit, and that the profits which he takes are no more than the wages of his labor.

How unbelievably different is our modern attitude. With us not only is trade in goods no longer held to be a dangerous activity, but we see no problem even in trade in such nebulous things as commodity futures contracts! It is difficult to fully fathom the huge differences in our mentality from that of the medievals. Most Englishspeaking Catholics are infected to a greater or lesser extent with the modern and unchristian conception of economic life. Christopher Dawson sums up this modern attitude thus:

In the lands where these [new, non-Catholic] ideals had free play — Holland, Great Britain, above all New England, a new type of character was produced, canny, methodical and laborious; men who lived not for enjoyment but for work, who spent little and gained much, and who looked on themselves as unfaithful stewards before God, if they neglected any opportunity of honest gain.

The second thing to which I would appeal in confirmation of the line of argument I am making, is the corpus of modern papal teaching on the economy. As is well known, this body of doctrine began with the encyclical Rerum Novarum of Leo XIII in 1891 and, as of this writing, has continued down to Centesimus Annus of John Paul II in 1991. Though diverse, in that they were for the most part addressing the immediate needs of widely varying situations — the economy of 1891 is not that of 1931 nor yet that of today — nevertheless several basic themes can be discerned.

From the beginning, with Rerum Novarum, the Popes have made it clear that the economic system must serve mankind, and from this it follows that any particular economic arrangements must be judged on how well they in fact are serving the human race. Secondly, they have also pointed out again and again that it will always be necessary to bring other factors into the ordering of our economic affairs besides mere free competition. Some kind of legal framework is necessary to make sure that human goods are given their proper respect. One cannot depend either on the blind forces of the market or enlightened self-interest or even individual rectitude.

Now the purpose of the restraints on economic activity which this attitude demands is twofold. On the one hand, if the activities of moneymaking and the accumulation of external goods are firmly put in their place, men will be able to concentrate on what is really of importance in life. Men of good will, who in a capitalistic economy and society might devote too much of their energies to material things and even get entirely caught up in them, will be deterred from this not only by the explicit teaching of the Church, but also by that of the state and of all organs of society, such as educational institutions and publications, as well as by regulations firmly administered, which aim to prevent the beginnings of wrongdoing in these matters. These same regulations, on the other hand, backed by appropriate sanctions, will also help to forestall the actions of truly bad men, who would otherwise harm their fellows and the society as a whole.

Though no one can expect this apparatus to work perfectly, its aim is to uphold the common good by helping to enforce a notion of society that puts the general welfare first. Elsewhere Christopher Dawson notes that the traditional monarchies in Europe “had striven to keep the several orders of the polity within their appointed limits, to maintain the corporative system in industry, to regulate wages and prices, and to protect the peasants from eviction and enclosures.” This conception of society does not especially value some notions that are dear to Americans, such as continuous improvement in one’s standard of living or the chance to get rich. But it does aim to allow everyone to have at least enough, and to further ensure the maintenance of that social peace which is necessary if we are to apply ourselves to those things which are truly important. For if material goods exist only for the sake of other and non-material things, and if money in turn exists only for the sake of material goods, then money is twice removed from what is valuable in human life. But how a Catholic state actually tries to realize such an approach to living is the subject of the following sections of this chapter.

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Is the Acton Institute a Genuine Expression of Catholic Social Thought?

by Thomas Storck

Lord Acton (John Emerich Edward Dalberg-Acton, 1834-1902) is chiefly remembered today for his remark that power corrupts and absolute power corrupts absolutely, but it would be well were more generally known about him, for as a leader of liberal Catholicism in the nineteenth century he is a fitting symbol in the conflict between different versions of the Faith which has afflicted the Church since the 1960s. It is interesting, therefore, that Acton has been chosen as the patron of an institute in Grand Rapids, Michigan, an institute that is often considered as part of the orthodox Catholic "movement" in the United States. But as we will see, the institute's name and patron are well chosen, for it continues the tradition of liberal and even dissenting Catholicism that Lord Acton himself partook of and that many of the Acton Institute's supporters would doubtless blush to be identified with, if they knew exactly who Acton was and what he stood for.

The true face of the Acton Institute is clear from statements made, or formerly made, on their web site (www.acton.org), for example, their kind words about Ignaz von Döllinger (theological tutor of Lord Acton), who left the Church rather than accept the definition of papal infallibility by the First Vatican Council, and their opposition to censorship of pornography on the Internet, but in this article I will concentrate on their dissent from the social magisterium of the Catholic Church. I will examine assertions made by the Institute's president, Fr. Robert Sirico, to see whether they can be squared with the explicit teaching of the Church.

First, however, we must look at the underlying difficulty, the root, in fact, of the Acton Institute's dissent from the social doctrine of the Catholic Church. This lies in their unabashed acceptance of liberalism. In discussing liberalism it is imperative to recognize that this term, as used in papal teaching, does not mean the same thing as it does in contemporary political discourse in the United States. We would do well to spend some time discussing exactly what liberal means in order to understand the fundamental disagreement between the Acton Institute and Catholic doctrine.

Liberalism, as that term is used in papal teaching, and indeed in Europe and throughout most of the world, is that movement in Western civilization which arose in opposition to the Christian political and economic order of the Middle Ages, and to the continuation of that order by all or most European governments even after the Middle Ages ended. Thus these governments believed that they had duties toward God, including that of caring for the poor and seeing that the economy fulfilled its function of supplying all citizens with the material things needed for this life. Certainly these governments fulfilled their duties imperfectly, but none of them would have denied that it had such a duty.

Liberalism, however, in effect denies that the state or the human community is a creation of God or has duties toward him. At most, liberalism accepts that the individual has duties toward God. Important liberal theorists such as John Locke, held that society and the state originated in an agreement among men, the so-called social contract, and thus was a purely human creation, and as such, can have no inherent duties toward God. Liberal economic writers, such as Adam Smith, attacked the notion that the state should regulate the economy in the interests of the common good, positing instead that the economy was a self-regulating mechanism, the less interfered with by the state the better.

The Catholic Church confronted liberalism in the eighteenth, and especially the nineteenth, centuries. And against this liberal doctrine Pius IX, and even more clearly his successor, Leo XIII, taught that the state itself was a creation of God and thus had duties to God.

For men living together in society are under the power of God no less than individuals are, and society, not less than individuals, owes gratitude to God, who gave it being and maintains it, and whose ever-bounteous goodness enriches it with countless blessings.(Leo XIII, Encyclical Immortale Dei, November 1, 1885)

Liberals were not only hostile to the concept of the state as created by God and subject to his laws, but they opposed any efforts of the government to intervene in the supposedly self-regulating market. They loudly cried that such economic restraints retarded the progress of humanity. Now economic activity no longer was to need regulation, for the "invisible hand" of Adam Smith was to guarantee that greed and self-interest would work out the best for everyone.

What was the result of this new approach to economics and government? Pope Leo's classic description is worth repeating:

The ancient workmen's Guilds were destroyed in the last century, and no other organization took their place. Public institutions and the laws have repudiated the ancient religion. Hence by degrees it has come to pass that Working Men have been given over, isolated and defenseless, to the callousness of employers and the greed of unrestrained competition. The evil has been increased by a rapacious Usury, which, although more than once condemned by the Church, is nevertheless, under a different form but with the same guilt, still practiced by avaricious and grasping men. And to this must be added the custom of working by contract, and the concentration of so many branches of trade in the hands of a few individuals, so that a small number of very rich men have been able to lay upon the masses of the poor a yoke little better than slavery itself.(Encyclical Rerum Novarum, 2;May 15, 1891)

Thus liberalism, as used in papal documents, and as it affects the economic order, means something like what John Paul II has called "rigid capitalism" or "unbridled capitalism," a more or less free-market approach to the economy. It obviously includes important elements of what we in the United States call conservatism. Now let us turn to the Acton Institute's own statements and see how they characterize the relations of liberalism and Catholicism.

In a column in the September/October 1997 issue of Religion & Liberty, Fr. Sirico writes of John Paul II's encyclical Centesimus Annus, and asserts that in that document "two traditions have come together...religious orthodoxy and classical liberal social theory...." Whether Fr. Sirico's claim that Centesimus does indeed accept the liberal tradition is true or not, we will examine later, but it is interesting that Fr. Sirico is not bold enough to claim that the Church has always accepted the free market, for in the same article he writes that

the Church, during certain periods, has strongly criticized what was construed to be the free society, partly because some social thinkers conflated the theories of economic liberalism with moral libertinism, viewing them as one in the same and as mutually reinforcing.

But now, he claims, because "of the courage of John Paul II and his case in favor of the free society... No longer do we feel compelled to speak of classical liberalism and religious orthodoxy as belonging to two separate intellectual worlds."

Thus we have Fr. Sirico's frank admission that he stands in the tradition of liberal thought, so that if we find the Church has always condemned that tradition, then logically Fr. Sirico's entire enterprise will fall. For the popes objected to the tradition of liberalism not merely because they saw it as promoting "moral libertinism," but because their conception of the task of government is entirely at odds with Fr. Sirico's. The government as such is a creation of God, and as such has duties toward God and toward its subjects. It is not a mere enforcer of contracts, but must have an active care for the common good.

In the same article Fr. Sirico has some interesting words about Lord Acton. Speaking of the conflict between the Catholic and liberal traditions, Sirico says,

As the tensions mounted in the latter half of the nineteenth century, the allegiances of men such as Lord Acton were torn as they came to believe that they had to choose between spiritual authority and the dictates of reason, a situation the late scholastics would have seen as a grave departure from teaching of their master, Saint Thomas.

It is not just the late scholastics who would have viewed such a man with alarm, but St. Thomas himself. But the Angelic Doctor's reply would have been that the poor man in question had not reasoned well if he found himself opposed to the teachings of the Church. The necessary agreement between the Catholic faith and human reason does not mean the necessary agreement between the Catholic faith and Lord Acton's reasoning. Since our reasoning can err, but the Church cannot, it is clear which of the two must yield. This is not to denigrate reason, but to point out that no individual is infallible in his own reasoning power.

Before proceeding further we will look at some statements of various popes to see if there has been a consistent tradition of papal condemnation of liberalism, including the liberal tradition in both government and economics. In these selections, which I take from various papal documents, I will show how liberalism, either by name or not, has been explicitly defined as an enemy of Catholic faith and Christian civilization. First two selections from Pope Pius XI:

With regard to the civil power, Leo XIII boldly passed beyond the restrictions imposed by liberalism, and fearlessly proclaimed the doctrine that the civil power is more than the mere guardian of law and order, and that it must strive with all zeal "to make sure that the laws and institutions, the general character and administration of the commonwealth, should be such as of themselves to realize public well-being and private prosperity." (Encyclical Quadragesimo Anno, no. 25, May 15, 1931)

In fact, the Encyclical Rerum Novarum completely overthrew those tottering tenets of liberalism which had long hampered effective intervention by the government. It prevailed upon the peoples themselves to develop their social policy more intensely and on truer lines, and also encouraged outstanding Catholics to give such efficacious help and assistance to rulers of the State that in legislative assemblies they were not infrequently the foremost advocates of the new policy. (Ibid., no. 27)

Next a passage from Pope Pius XII:

And, while the State in the nineteenth century, through excessive exaltation of liberty, considered as its exclusive scope the safe-guarding of liberty by the law, Leo XIII admonished it that it had also the duty to interest itself in social welfare, taking care of the entire people and of all its members, especially the weak and the dispossessed, through a generous social programme and the creation of a labor code.(Address to Italian workers on the Feast of Pentecost, June 1, 1941)

Then a quotation from Pope Paul VI:

On another side, we are witnessing a renewal of the liberal ideology. This current asserts itself both in the name of economic efficiency, and for the defence of the individual against the increasingly overwhelming hold of organizations, and as a reaction against the totalitarian tendencies of political powers. Certainly, personal initiative must be maintained and developed. But do not Christians who take this path tend to idealize liberalism in their turn, making it a proclamation in favor of freedom? They would like a new model, more adapted to present-day conditions, while easily forgetting that at the very root of philosophical liberalism is an erroneous affirmation of the autonomy of the individual in his activity, his motivation and the exercise of his liberty. Hence, the liberal ideology likewise calls for careful discernment on their part.(Octogesima Adveniens, no. 35, May 14, 1971)

These statements alone ought to convince any Catholic who cares to think with the Church, that the Church has always opposed liberalism and its restricted notion of the role of government. But now I will take certain specific statements made by the Acton Institute, statements which reveal its application of liberalism to the economy, and contrast them with the teaching of the Church, including that of Centesimus Annus.

First let us look at a quote from Lord Acton, printed on the cover of a leaflet distributed by the Institute. "Liberty is the highest political end of man..."! This assertion is hardly congruent with the teaching of the Catholic tradition. St. Thomas, for example, says that the end of society is "to live according to virtue" (De Regimine Principum, I, 14). And this truth, that both individual man and man in society are both ordered, not toward freedom, but toward virtue as the ultimate end, is the truth upon which the entire liberal tradition founders. Liberty the highest political end of man? Not justice, not virtue, not the common good? All else flows from this fundamental error, the error, in fact, of Lucifer, who desired liberty above all else. The society that values liberty as its highest political goal, that refuses to safeguard the common good (except by pious exhortations), that allows for complete freedom of contract - this will be the domain of the Devil and his adherents and apologists.

The next statement of Fr. Sirico's that we will look at is this: "So long as individuals avoid forceful or fradulent actions in their dealings with one another, government is to stay out of their business" (Acton Notes, January 1998). Anyone at all acquainted with the tradition of Catholic social thought knows that this can hardly be squared with the teaching of the Magisterium. To take but a few examples, we have Leo XIII's teaching in Rerum Novarum,

The richer population have many ways of protecting themselves, and stand less in need of help from the State; those who are badly off have no resources of their own to fall back upon, and must chiefly rely upon the assistance of the State. And it is for this reason that wage-earners, who are, undoubtedly, among the weak and necessitous should be specially cared for and protected by the commonwealth.(no. 29)

And, in a statement that utterly contradicts what Fr. Sirico says, Leo rejects the theory that free agreement between employer and employee should be the rule in economic affairs when he notes, in connection with the question of a just wage, that

there is a dictate of nature more imperious and more ancient than any bargain between man and man, that the remuneration must be enough to support the wage-earner in reasonable and frugal comfort.(Rerum Novarum, 45)

It is simply false to say that, absent force or fraud, the government should stay out of people's business.

We have already seen how in Quadragesimo Anno Pius XI says that Leo XIII "boldly passed beyond the restrictions imposed by liberalism, and fearlessly proclaimed the doctrine that the civil power is more than the mere guardian of law and order..." (no. 25). In other words, Pius XI explicitly denies the conception of government which Fr. Sirico champions, and like Leo, sees a strong, though not unlimited, role for the state. It is true that the popes have been careful not to call for a statist solution to socio-economic problems, but it should be clear that they definitely see an activist role for government, but within limits. However, these limits are not the limits that Fr. Sirico would like to impose on the state.

John Paul II in Centesimus makes clear that the state has a wider role than merely enforcing laws against force or fraud, but that it must be concerned with the

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.(no. 40)

And immediately he states: "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."

Other statements that John Paul makes in the same encyclical are equally damning to Fr. Sirico's position. First here is a statement from Centesimus, one of the handful that Fr. Sirico and those of like mind often quote:

It would appear that, on the level of individual nations and of international relations, the free market is the most efficient instrument for utilizing resources and effectively responding to needs.(no. 34)

But the Pontiff immediately goes on to say,

But this is true only for those needs which are "solvent," insofar as they are endowed with purchasing power, and for those resources which are "marketable," insofar as they are capable of obtaining a satisfactory price. But there are many human needs which find no place on the market. It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied, and not to allow those burdened by such needs to perish.... Even prior to the logic of a fair exchange of goods and the forms of justice appropriate to it, there exists something which is due to the person because he is a person, by reason of his lofty dignity.

A similar caution on the market may be found in the following statement of John Paul, speaking of the kind of society that we should desire and work toward:

Such a society 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.(no. 35)

These statements are enough for anyone to see that Fr. Sirico and Catholic teaching are not in agreement, for Fr. Sirico would never admit that the market needed to be "controlled," least of all by the state.

The apparent plausibility of Fr. Sirico's position comes from the fact that he contrasts the free market only with the evils of statism, socialism and communism. Most people think that either capitalism or some form of socialism are the only "live options" in economics. They are hardly aware that the economic arrangements advocated by the popes are neither those of socialism nor of free-market capitalism, and if someone were to tell them about distributism or solidarism, they would likely reply that since they do not presently exist, or perhaps never existed, they need not be taken seriously. This makes as much sense as to say that since there never has been a society in which chastity was entirely observed, we should not bother to promote chastity in our own society. Nor can we ignore the statement of Pope John Paul II in Centesimus that "it is unacceptable to say that the defeat of so-called `Real Socialism' leaves capitalism as the only model of economic organization" (no. 35). ("Real Socialism" means, of course, Marxist socialism or communism.)

I should also raise the issue of how far Fr. Sirico and his colleagues are misrepresenting others' opinions in their effort to promote classical liberalism. For example, on their website they have a section called "In the Liberal Tradition," in which they feature various thinkers whom they assert to be fellow liberals. Let us look at just two of them. First, St. Thomas Aquinas. They represent him as a liberal by quoting some of his words in favor of private ownership of property. By this preposterous method they might as well feature Chesteron and Belloc, both bitter critics of capitalism, but strong defenders of private property. In any case, I think Fr. Sirico knows that to defend private property (as I myself do) by no means places one in the camp of classical liberalism, but simply indicates that one is not a Communist.

Equally ludicrous is C.S. Lewis, whom they claim as one of their own, apparantly on the strength of favorable comments that he made about democracy and against unlimited government. They rather ignore the following words of Lewis from Mere Christianity:

All the same, the New Testament, without going into details, gives us a pretty clear hint of what a fully Christian society would be like. Perhaps it gives us more than we can take. It tells us that there are to be no passengers or parasites: if man does not work, he ought not to eat. Every one is to work with his own hands, and what is more, every one's work is to produce something good: there will be no manufacture of silly luxuries and then of sillier advertisements to persuade us to buy them. And there is to be no "swank" or "side," no putting on airs. To that extent a Christian society would be what we now call Leftist.

And in the next paragraph he says that we "should feel that its economic life was very socialistic...." This part of Lewis's beliefs seems to have been conveniently overlooked.

It is far from clear how Fr. Sirico and other Catholic libertarians can justify their attempt to reconcile Catholic tradition with classical liberalism. Do they really believe that the Church's social teaching and traditon can change so easily as to make obsolete centuries of the papal magisterium? Are they really unaware that such notable Catholic thinkers of the twentieth century who turned their attention to economics, as G. K. Chesterton, Hilaire Belloc, Christopher Dawson and many others, were critics of capitalism? I cannot answer these questions. But what we can know is that the Acton Institute's promotion of liberalism is not something that can be embraced by an orthodox Catholic. Sirico, like Acton and Döllinger, is not a safe guide but rather a dissenter from the fullness of the Faith, a blind guide who will only lead his followers into a pit. Please God, it will not be into the bottomless pit.

Published in Social Justice Review, vol. 93, no. 5-6, May-June 2002

©Thomas Storck
Thomas Storck writes from Maryland.

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The Justice of Distributism

by Thomas Storck

The basic assumption of bourgeois civilization was that the best interests of the world, the state and the community could be served by allowing each individual to work out his economic destiny as he saw fit. This is known as the principle of laissez faire. As far as possible individual life is unregulated by the state, whose function is purely negative, like that of a policeman. The less the state does, the better. It was not long until the evil of this principle manifested itself. If every individual is to be allowed to work out his economic destiny as he see fit, it will not be long until wealth is concentrated in the hands of the few and the vast majority are reduced, as Hilaire Belloc showed, to a slave state - Fulton J. Sheen[i]

In the spring 2002 issue of The Latin Mass, Mr. John Clark published an article called "Distributism as Economic Theory." I believe that his arguments and conclusions are not consonant with either the teaching of the Church or the thought of Hilaire Belloc, and I offer this article to clarify what the Church says on this matter, as well as to do justice to the memory of a great Catholic, Hilaire Belloc.

Mr. Clark rightly begins by defining his key term, "Capitalism." Clark's definition of capitalism runs thus: "Capitalism is an economic system in which private property is seen as a morally defensible right. Corollaries to this right include the right to free competition in the marketplace and the right to trade both domestically and internationally. Furthermore, the profit motive is seen by capitalism as morally defensible, and therefore there should be no legal limit as to the amount of money that one can legally earn" (p. 30).

Quadragesimo Anno

Clark contrasts this with Belloc's own definition of capitalism as "a state of society in which a minority control the means of production, leaving the mass of citizens dispossessed."[ii] Although I think Clark's definition is erroneous, Belloc's definition also suffers from the problem that it describes the nearly inevitable effects of capitalism rather than the distinguishing note of the system. For a better definition, then, I will turn to the 1931 encyclical of Pope Pius XI, Quadragesimo Anno. In section 100, the Pope refers to "that economic system in which were provided by different people the capital and labor jointly needed for production."[iii] In other words, the distinguishing mark of capitalism is that some men own the means of production and hire other men to work for them. These latter are the "mass of citizens" that Belloc claims do not share in the ownership of the means of production.

Let us examine the deductions which Clark makes from his definiton of capitalism. "Capitalism is an economic system in which private property is seen as a morally defensible right." As we saw above, this is not the distinguishing mark of capitalism, but it nonetheless makes a correct point: private property is a morally defensible right. But what Clark claims follows from this is false: "Corollaries to this right include the right to free competition in the marketplace and the right to trade both domestically and internationally." Though we are accustomed to regarding free use of private property as inherent in our right to it, this is not the case. In the Catholic Middle Ages private property was upheld, but not the right of free competition. As we will see, traditional papal teaching on property by no means upholds the notion that one can do whatever one likes with one's property.

Property Rights

Clark next turns explicitly to the question of property rights. He says, "Although distributism claims to be the champion of private property, it is actually antithetical to it" (p. 31). Clark tries to substantiate this claim by focusing on the legal method that Belloc suggested in The Restoration of Property ought to be used to bring about the existence of a distributist society. In brief, Belloc's suggested method of achieving more widely distributed property was to institute a system of highly graduated taxation so that those who owned concentrations of property, for example, a chain of stores, would sell off their excess property.

"There must be a differential tax on chain-shops, that is, on the system whereby one man or corporation controls a great number of different shops of the same kind. To control two such may involve but a small tax, to control three a larger one in proportion; and so on, with the curve rising steeply until the ownership of, say, a dozen in the territory over which the government has power becomes economically impossible."[iv]

Clark and Belloc

Now, is there anything morally wrong with such a scheme? Let us consider the various charges which Clark brings against it. First of all, he quotes various Renaissance Catholic theologians on the evils of unjust taxation and on what he calls "state redistribution" of property. Unjust taxation is, of course, ipso facto unjust. But the question here is whether Belloc's plan is unjust or not. To quote writers who inveigh against unjust taxation without first establishing whether Belloc's proposed taxation is unjust, is to be guilty of what in logic is called a petitio principii, that is, begging the question.

Nor does his quote from Pedro de Navarra help - "Taxes can be tyrannical...if one is taxed more heavily than others..." (p. 32.) - for this writer was doubtless talking about two persons in the same circumstances being taxed at different rates.[v] More importantly, we must note that the context of all the quotes from these Renaissance theologians was their objections against the absolute monarchies of the time instituting excessive taxation for the support of the king and his court. But in fact, the very aim of Belloc's taxation was that no one would ever have to pay the tax at all! The entire aim of the taxation scheme to institute distributism was that people would not accumulate property in such amounts that they would have to pay the highly progressive taxes that accompanied the ownership of large amounts of certain kinds of property. The denunications of the theologians that Clark instances are simply beside the point.[vi]

Moreover, Belloc himself was against high taxation: "High taxation is incompatible with the general institution of property. The one kills the other. Where property is well distributed resistance to big taxation is so fierce and efficacious that big taxation breaks down."[vii]

This difference in attitude toward taxation flows from the different ways property is regarded in a distributist and in a capitalist society. In the former, property and all external goods are considered necessary precisely because they are necessary for the welfare and support of the family. It is the decent support of the family that is sought, not the maximization of income. Thus property will be so intimately connected with a man and his family, that he will have a fiercely protective attitude toward it and resist high taxation.[viii] But under capitalism, property is viewed simply as something with a money value, which is to be sold if a good price comes along. And although capitalists no doubt dislike paying taxes also, if one is thinking solely of money values, it often makes good business sense simply to write off high taxes as necessary costs of doing business.[ix]

Redistribution of Property?

Next let us consider Clark's charge of government "redistribution" of property. "`Redistribution of the means of production' is an economic fallacy" (p. 32) Clark avers. But distributism, as sketched by Belloc, has absolutely nothing to do with government acquiring, distributing or redistributing any property at all. Private owners, aware of the coming institution of a distributist system of taxation, would be free to sell off their property to any other private owner they chose. The government would not be involved in such transactions at all. One may support or oppose such a system, but to call it "redistribution" by the government makes no sense at all.

In order to evaluate the justice or injustice of Belloc's proposals, we must next look at Clark's statements about property rights and the question of property ownership.

Clark quotes from Thomas Aquinas's Commentary on the Politics of Aristotle: "It is a good thing that each one shall enlarge his possessions more, applying himself to them more carefully as being his own" (p. 33). Thomas is here summarizing and expanding upon Aristotle's refutation of Plato's argument for the community of goods, i.e., for ownership of all property in common, such as Plato advocated in his Republic. The full sentence as translated from the Latin says, "Another good is that each one will multiply his possession more, applying himself to it more carefully since it is his own."[x] Thomas, following Aristotle, is simply pointing out that, generally, one will take more care of his own property than of common property. However, one cannot deduce from this any notion that the unlimited enlargement of a man's possessions is good either for himself or for society. Elsewhere Aquinas makes this clear. In the same Commentary he writes, "Political economy, however, which is concerned with the using of money for a definite purpose, does not seek unlimited wealth, but wealth such as shall help towards its purpose, and this purpose is the good estate of the home."[xi] And in the Summa Theologiae, he says, "...the appetite of natural riches is not infinite, because according to a set measure they satisfy nature; but the appetite of artificial riches is infinite, because it serves inordinate concupiscence ...."[xii] Moreover, such quotations could be multiplied from Catholic theologians. For example, although Clark claims that St. Antoninus "viewed the profit motive as both moral and financially essential" (p. 33), in fact that saint wrote: "If any merchant exercises his art, not for some honest end, as the government of the family, the profit of the country or other like one, but principally out of great greed, he gains an infamous profit."[xiii]

What does this have to do with Belloc's distributism? Simply that, if the purpose of riches is the support of a man and his family, then no one has any right to more than is necessary for the decent support of his family. If we ask ourselves why God has created man so that he must engage in the activity of producing external goods, the answer is obvious: economic activity is meant to serve the more important aspects of life, our spiritual, family, social, intellectual and cultural lives; it is not an end in itself. Therefore it is not necessarily a tyrannical act if our political arrangements determine our use of property so that we seek the amount of worldy riches necessary for a decent human life, but not more. As St. Thomas pointed out further in his De Regno, the aim of men living together in society is not riches but virtue.[xiv] And he pointedly says, "If abundance of riches were the ultimate end, an economist would be ruler of the people."[xv]

Pius XI v. Tony Honore

But what of man's natural right to private property? Would not such a notion of the state conflict with it? Mr. Clark derives his notion of private property from Tony Honore, professor of law at Oxford University (p. 31), who is not a Catholic theologian. But Pope Pius XI, in his encyclical Quadragesimo Anno thought otherwise. He rejects both "individualism" and "collectivism" but clearly states that ownership has a "twofold aspect...which is individual or social accordingly as it regards individuals or concerns the common good." Therefore, "Provided that the natural and divine law be observed, the public authority, in view of the common good, may specify more accurately what is licit and what is illicit for property owners in the use of their possessions."[xvi] We do not have a right to do whatever we may please with our property. Thus distributism does not violate "the fundamental right of private property as traditionally taught by the Church" as Clark charges (p. 31). Rather it attempts to establish man's right to private property on a firm foundation, private property as the necessary means of support for the individual and his family.

Distribution of Income

Clark quotes St. Thomas' De Regno on the matter of distribution of income to the effect that "an architect who plans a building is...paid a higher wage than is the builder who does the manual labor under his direction" (p. 32).[xvii] No one disputes this. Belloc is not arguing for equality of property or equality of incomes. But the Catholic tradition by no means sanctions just any distribution of income. Pius XI, for example, in the encyclical already quoted, makes this remark about Catholics at the close of the nineteenth century and their opinions on the need for social reform: "Such also was the opinion of many Catholics, priests and laymen, who with admirable charity had long devoted themselves to relieving the undeserved misery of the laboring classes, and who could not persuade themselves that so vast and unfair a distinction in the distribution of temporal goods was really in harmony with the designs of an all-wise Creator."[xviii]

No distributist desires equality of income or property. However, consider these figures on "the ratio of the pay a CEO makes versus that earned by a factory worker. In the late 1960s, it was 25 to 1 and as recently as 1980 it was 42 to 1. By 1999 it had risen to a whopping 419 to 1."[xix] One may perhaps be allowed the opinion that a 25 to 1 ratio was quite sufficient to safeguard the incentives that entrepreneurs apparently require.

The philosophy of property that capitalism contains and promotes is not the philosopohy of property that traditional Catholicism promotes. Property as the support for a man and his family, yes; but not the unlimited acquisition of property, so that a society is kept in turmoil by economic dislocations, plant closings, and so that individuals themselves are corrupted by what Holy Scripture calls the "root of all evils" (I Timothy 6:10). Traditional Catholics, when they consider economic questions ought to consult the encyclicals and other writings of the Popes, especially Leo XIII, Pius XI and Pius XII, and the works of St. Thomas. There they will find a rich teaching on the proper place of material wealth, and it will not be a teaching consonant with capitalism, whose founders and theorists were eighteenth century Deists openly in revolt against the traditional Christian conception of society.[xx]

________________

[i]. Communism and the Conscience of the West (Indianapolis : Bobbs-Merrill, c. 1948) pp. 16-17.

[ii]. Quoted by Clark on page 30, but taken from Hilaire Belloc, The Restoration of Property (New York : Sheed & Ward, 1946) p. 19.

[iii]. The original Latin speaks of the economic system "qua generatim ad commune rei oeconomicae exercitium ab aliis res, ab aliis opera praestaretur." Acta Apostolicae Sedis, vol. 23, no. 6, June 1931, pp. 209-210. All citations from Quadragesimo Anno are taken from the Paulist translation as published in Seven Great Encyclicals and elsewhere.

[iv]. The Restoration of Property, p. 69.

[v]. Clark takes his quote from Alejandro Chafuen's book, Christians for Freedom : Late-Scholastic Economics (San Francisco : Ignatius, c. 1986). This source does not shed any further light on the context of the quote, but it is surely absurd to suggest that de Navarra believed that it was unjust for a rich man to be taxed more heavily than a pauper.

[vi]. Moreover, Clark presumes that these Renaissance theologians have some specially weighty authority in theology. But this is not the case. In comparison with papal teaching or with the teaching of St. Thomas Aquinas, these Renaissance theologians have no more authority than any other group of theologians. In no way can their opinions be equated with what Clark calls "the traditional teaching of the Church" (p. 30).

[vii]. The Restoration of Property, p. 119.

[viii]. Pope John Paul II, in Centesimus Annus, speaks of the purpose of private property as "one's personal development and the development of one's family" (no. 6).

[ix]. I should point out here that no one in a distributist society would be forced to become an owner of productive property. Doubtless some would remain in the position of employee. But the employer/employee relationship would no longer be the usual economic mode of society. The characteristic mark of a distributist society would be widespread ownership of productive property, even if not everyone chose to own such property.[x]. "Aluid bonum est quod unusquisque magis multiplicabit possessionem suam insistens ei sollicitius tamquam propriae." Commentary on the Politics, book 2, lectio 4.

[xi]. Quoted in Bede Jarrett, Social Theories of the Middle Ages (Westminster, Md. : Newman Book Shop, 1942) p. 155.

[xii]. Summa Theologiae, I-II, q. 2, a. 1 ad 3 [xiii].

Quoted in Joaquin Azpiazu, The Corporative State (St. Louis : Herder, 1951) p. 145.

[xiv]. "It seems moreover to be the purpose of the multitude joined together to live according to virtue.... the good life moreover is according to virtue; the virtuous life therefore is the purpose of the human community." In the original, "Videtur autem finis esse multitudinis congregatae vivere secundum virtutem.... bona autem vita est secundum virtutem; virtuosa igitur vita est congregationis humanae finis." De Regno, I, 14. (This work is also known as De Regimine Principum.)

[xv]. "Si autem ultimus finis esset divitiarum affuentia, oeconomus rex quidam multitudinis esset." Ibid. Consider also these words of John Paul II in his encyclical Centesimus Annus, in which he describes the mainly U.S. attempt in the years after World War II to defeat communism by trumpeting the material benefits of our economy. "Another kind of response, practical in nature, is represented by the affluent society or the consumer society. It seeks to defeat Marxism on the level of pure materialism by showing how a free-market society can achieve a greater satisfaction of material human needs than Communism, while equally excluding spiritual values. In reality, while on the one hand it is true that this social model shows the failure of Marxism to contribute to a humane and better society, on the other hand, insofar as it denies an autonomous existence and value to morality, law, culture and religion, it agrees with Marxism, in the sense that it totally reduces man to the sphere of economics and the satisfaction of material needs" (no. 19).

[xvi]. Quadragesimo Anno, sections 45, 46 and 49.

[xvii]. This is in De Regno, I, 9.

[xviii]. Quadragesimo Anno, section 5. Emphasis mine.

[xix]. Elisabeth Lasch-Quinn, "Markets and Morals," The Washington Times, Sunday July 21, 2002, p. B8.

[xx]For a good account of this, by someone who favors the new capitalist order, see Ralph Lerner, "Commerce and Character : the Anglo-American as New-Model Man" in Michael Novak, ed., Liberation South, Liberation North (Washington : American Enterprise Institute, c. 1981) pp. 24-49.

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Distributism, State Power and Papal Teachings

by Thomas Storck

Last spring an interesting dialog took place in the pages of The University Concourse on the subject of distributism, which is the economic system elaborated in the first half of the twentieth century by such Catholic writers as G. K. Chesterton, Hilaire Belloc and Fr. Vincent McNabb. Its most complete exposition was in Belloc's book, The Restoration of Property (1936). In the latest round of this controversy there seem to be several points which are especially at issue. The first is the question of the role of the government in promoting a just economy, in particular, a distributist economy. For example, Dr. Kevin Schmiesing, in his article in the May 4 Concourse, advocates what he calls a "free economy," in which a just society would be brought about by "moral suasion in a call for simpler living, more generous aid and care for the impoverished and marginalized, and more voluntary efforts to ensure that all people participate in the productive process through ownership of property," and in which the government would have little role. And Mr. Philip Harold similarly warns against the "temptation" to rely overmuch on governmental power to implement a program of economic justice. Therefore we should first look at this question of the role of the state and of state power in creating and maintaining a just economic order.

THE ENTIRE ENCYCLICAL TRADITION

It would be easy for me and for the others who have taken part in this discussion to state our opinions about the degree and kind of governmental intervention in the economy which is justified. But in doing so we would too often be simply asserting our opinions. I suggest that the correct method of procedure for us as Catholics is to look to the entire encyclical tradition, that is, the tradition of modern papal social teaching beginning with Rerum Novarum in 1891 and embodied in encyclicals and other documents down to the present day. There we will find an interrelated body of doctrine addressing this very question, as well as other questions about the relationship between the moral law and the economy. In my previous articles I quoted several passages from these encyclicals, but I cannot recommend too highly to the readers of this journal that they return to the sources and read these seminal documents in their entirety, especially Rerum Novarum of Leo XIII, Quadragesimo Anno of Pius XI, and the present Holy Father's three social encyclicals, Laborem Exercens, Sollicitudo Rei Socialis and Centesimus Annus. Nor is it the case, as some have asserted, that somehow Centesimus represents the overturning of all the previous documents--as if the Church had suddenly disavowed all that she formerly taught. Centesimus is firmly in the same tradition as its predecessors.

NEITHER MINIMIZING NOR MAXIMIZING STATE POWER

Suffice it to say that the general attitude taken by these documents toward the role of the state in the economy is one of neither minimizing nor maximizing state power. Certainly the principle of subsidiarity, which Dr. Schmiesing cites and which Pius XI formulated in Quadragesimo Anno--that the state should not assume tasks best left to lower groups--is of fundamental importance, but that same Pontiff in the same encyclical notes that the economic proposals of the moderate socialists of his day (1931) "often strikingly approach the just demands of Christian social reformers" (QA, no. 113) and that "certain forms of property must be reserved to the State, since they carry with them an opportunity of domination too great to be left to private individuals without injury to the community at large" (QA, no. 114).

I cite these remarks simply to show that the papal, and perforce the Catholic, approach to state power in the economy cannot be reduced to Dr. Schmiesing's principle of "less rather than more state intervention." But I do not want to start a war of papal quotations. I would prefer that all our readers look at the encyclicals themselves, and I trust to their good sense and open minds in doing so.

NO NEUTRALITY

Moreover, there is another aspect of the question of the government and the economy that we should keep in mind. This is that, no matter what a government does or does not do with regard to the economy, it is taking a stand. Just as a state that passed no laws condemning abortion could not take refuge in the sophistry that it was neutral on the subject, so a state that takes a hands off attitude toward the economy is taking a position on the economy just as much as the most statist regulatory regime that one can imagine. It is impossible for a government not to affect the economy, either by its laws or its lack of laws. There is no such thing as simply "allowing the economy to be itself," for the economy, like all the other creations of mankind, must have some framework in which to function. The question is, shall this framework be one that we try to make (as much as we can) a Christian framework, or one that follows the deistic philosophy of the eighteenth century?

Another point that was raised in our discussions concerns what are often called "occupational groups" or "guilds." These entities are not only an integral part of the distributist program, but have figured very largely in papal teaching. In Quadragesimo Anno Pius XI devoted a good deal of space to describing how these groups would function, and his successor, Pius XII, continued to champion them. Nor does John Paul II neglect them, as when, in Laborem Exercens, he refers to "intermediate bodies with economic, social and cultural purposes; they would be bodies enjoying real autonomy with regard to the public powers, pursuing their specific aims in honest collaboration with each other and in subordination to the demands of the common good...." (no. 14)

Anyone acquainted with the papal social tradition would immediately see here a reference to occupational groups.

However, I still must answer Dr. Schmiesing's question: Would the decisions of these groups be backed by the power of the government or would they be merely voluntary organizations such as the American Bar Association?

Pius XI contrasts the occupational groups with free associations such as the ABA, and pointedly notes that he hopes that a flourishing of free associations will "prepare the way and...do their part toward the realization of those more ideal vocational fellowships or 'groups' which We have mentioned" (QA, no. 87). Generally Catholic commentators on this question see the occupational groups as analogous to the medieval guild on this point, in that in order to practice a certain trade or profession one was required to be a member of the appropriate guild and abide by the decisions of the guild. And the power of the state stood ready to enforce guild decisions, if necessary. However, the government did not set guild policy nor appoint guild officials, who were elected by the members. This sort of arrangement often puzzles those accustomed to capitalism. They understand purely private entities and they understand the government. But the notion of some sort of intermediate body, with a real role to play in bringing order to the economy, yet not a department of the government is strange to them. But before concluding that such bodies are unnecessary or harmful to the economy, I would simply urge my readers to remember that the tradition of economic thought with which we Americans are most familiar stems ultimately from the deistic tradition of Adam Smith, a bitter enemy of the Catholic Church incidentally.(1)

Space unfortunately prevents me from going into detail about the role of occupational groups in the economy, but we must remember that they are not an example of state power, but of the natural grouping of those working to further the same endeavor.

ABUSES OF CORPORATE POWER

Dr. Schmiesing cites various examples of the abuse of state power. I deplore them as much as he does. But it would be as easy to bring up examples of the abuses of private corporate power, beginning with Rerum Novarum, which speaks of "a small number of very rich men [who] have been able to lay upon the masses of the poor a yoke little better than slavery itself" (RN, no. 2). Moreover, as I set out at more length in my first article (January 28), distributism is not a statist system. Just because it rejects the unrestrained competition of capitalism (something also rejected again and again by the Popes), does not mean that it makes use of the government to regulate the economy. Distributism calls for the wide ownership of private property, with the laws (for example, the tax code) designed to discourage the concentration of property in the hands of a few. It is hard to find anything in the Catholic tradition which is against such arrangements.

THE ROLE OF LAW

A third and very important point that is at issue in our controversy concerns the role of the law as coercive agent. Both Dr. Schmiesing and Mr. Harold warn that using the laws to promote economic justice must tend to become a violation of human freedom. And in the first place, I repeat that any attempt to establish a Christian economic order must be preceeded and accompanied by a renewed preaching of the Gospel. Men's hearts must turn to God if the society is to turn to God. But this does not mean that the law can never have a punitive effect. One last quotation from Pius XI in which he refers to the laissez-faire philosophy of the nineteenth century will illustrate what I mean.

A stern insistence on the moral law, enforced with vigor by civil authority, could have dispelled or perhaps averted these enormous evils. This, however, was too often lamentably wanting. For at the time when the new social order was beginning, the doctrines of rationalism had already taken firm hold of large numbers, and an economic teaching alien to the true moral law had soon arisen, whence it followed that free rein was given to human avarice.(2)

In most matters we recognize that the law is both teacher and restrainer of evil doers. Thus we want to prevent abortion even if we cannot convert the abortionist. Our Catholic ancestors applied the same philosophy to the economic order, and however much they strove to convert those who injured the common good by their greed, they also sought to restrain them precisely to protect the most economically vulnerable members of the society.

EFFECTS ON FAMILIES

Probably the biggest reason that Americans today have difficulty thinking about making fundamental changes in the economy is that we are convinced that our economy is doing so well. Every day we are bombarded with positive economic statistics from rising Dow Jones averages to increased GDP or worker productivity. But one way to put this in perspective is to ask, How many families can afford to live on the income of the father alone? If we accept that a normal family life allows a mother to devote herself full-time to the care and education of her children, what can we say about an economy that makes a normal family life so difficult for so many? Despite the statistics, I do not think such an economy can be regarded as healthy.

My plea and hope is that Catholics will allow themselves to ask some fundamental questions about the economy which go beyond the usual assumptions which we receive from the culture around us. Then we can look at what our Catholic tradition has said and perhaps find some surprising truths, but truths which are nonetheless part of the salvific message of Jesus Christ, as held and taught by his teaching Church until the end of time.


(c) Thomas Storck. All Rights Reserved.

Thomas Storck's latest book is Christendom and the West : Essays on Culture, Society and History. He is a contributing editor of The New Oxford Review and a member of the editorial board of The Chesterton Review. This article first appeared in the University Concourse, Franciscan University.

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Footnotes:

1 Adam Smith described the Catholic Church during the Middle Ages as "the most formidable combination that ever was formed against the...liberty, reason, and happiness of mankind...." The Wealth of Nations, bk. 5, chap. 1, pt. 3, art. 3.
2 Quadragesimo Anno, no. 133

© The University Concourse, October 3, 2000

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A Giant Among Catholic Economists

by Thomas Storck

Heinrich Pesch, 1854-1926, a German Jesuit priest and economist, is largely unknown in the U.S., but arguably he is one of the most important and influential Catholic thinkers of the past few centuries. It was to the thought of Pesch and his disciples that Pope Pius XI turned to in composing his monumental encyclical Quadragesimo Anno (1931), and it is from Pesch that John Paul II has taken many of the ideas of his own social encyclicals, including the idea of man as the subject of work, of man's dominion over the world as founded on his exercise of work, and even the key term "solidarism" (solidarity). Indeed, it sometimes seems uncanny, after reading John Paul, to turn to Pesch and see the same ideas, sometimes presented in nearly the same words. Any thinker who has had such influence over more than one Supreme Pontiff is worth knowing better.

Since the publication of Adam Smith's Wealth of Nations in 1776, the study of economics in the English-speaking world has largely moved in the direction of a deductive science, divorced from ethics and without an explicit philosophical basis in the nature of man, although in actual fact covertly accepting the hedonism of thinkers such as Thomas Hobbes and Jeremy Bentham. Almost every beginning student of economics today is initiated into a system of analysis which uses a few simple but powerful tools to examine the economic transactions of producing, buying and selling, saving, etc. These analytical tools tend to treat economic activity as basically mechanical in nature, with each economic actor seeking only to maximize his interests, which are conceived almost entirely as monetary. Man's economic activity can thus be largely reduced to a mathematical expression, and articles in economic journals are full of graphs and equations. But in the 10 volumes of Heinrich Pesch, there is hardly any mathematics at all, though this is not due to ignorance or inability. Although he began the formal study of economics late in life (in 1901 at the University of Berlin), his decision to eschew the use of mathematics in economics was deliberate. Thus, Pesch begins his work with a consideration of the nature of man and his relation to the world around him, of the family, of society, and of property. He does not omit a discussion of what should be the proper methodology of economic science and its relations to the other social sciences, which is something today's conventional economists rarely consider.

Anyone familiar with the atmosphere of contemporary economics texts will find the atmosphere of Pesch very different. Conventional economics seeks as much as possible to imitate physics -- to be, as mentioned earlier, a deductive science whose contents can, in theory, be presented almost entirely mathematically. There is no careful development of subject matter based on the nature of man or the family or society, no consideration of what an economy is ultimately for. But Pesch is the antidote to this approach. He is aware that no subject can be divorced from its philosophy, that no one will understand something thoroughly if he does not see it in its larger setting. Thus, his work is characterized by the step-by-step development of theses, careful definition of terms, and constant reference to first principles.

But this is not to say that the Lehrbuch is not really an economics text. Although it includes philosophical discussions and continual reference to theological principles, it is not a philosophical or theological work. It is a full and technical examination of economic theories. Pesch examines and discusses all the important topics in economics, both technical and ethical; questions of wages and prices, land and farming, ownership and welfare; and such intricate subjects as banking and foreign exchange. While it is true that some of the subject matter has changed considerably since Pesch wrote, rarely are his observations without value or interest.

The amount of erudition contained in the Lehrbuch is amazing. The views of every important economic theorist, especially those writing in German, French, or English, are considered, including those whom Pesch rejects, such as Karl Marx and Adam Smith and Malthus. And whatever good can be found in these erring thinkers, Pesch finds, sifts, corrects, and places within his own framework. Often, as with his discussion of the principle of marginal utility, he neither wholly accepts nor wholly rejects the received theory, but qualifies and refines it. In all this he is very like Thomas Aquinas, who considered the views of the ancient pagans, earlier Catholic writers, and even Arab and Jewish philosophers contemporary to him in formulating his own philosophical and theological opinions. Speaking of St. Thomas, Pesch the modern Jesuit is like the medieval Dominican in more ways than one. For Pesch, unlike most writers on economics, is not afraid to acknowledge God, the God who created man with a certain determinate nature, and thus, from studying that nature, one can conclude what God's intention was for how the human race should live.

Pesch has definitely written a Christian work. Those who ridicule the notion of a "Catholic economics" forget that for a Catholic, all truth, whether from reason or revelation, is valuable, and a Catholic thinker who neglects the truths of revelation does so at his own intellectual peril.

Pesch, as a Catholic economist, necessarily rejects socialism and all forms of collectivism. He places private property -- along with the family and the state -- as one of the three pillars of the social order. At the same time, he rejects free-market capitalism, for from his examination of the nature of man and society, he is led to the idea of the mutual interdependence of all members of society. Thus, his system is called Solidarism -- or the Solidaristic System of Human Work -- which in outline will be familiar to all readers of the papal social encyclicals. For example, as both Leo XIII and Pesch point out, because capital and labor depend on each other, or, more precisely, since owners and workers depend on each other, there should not be any fundamental conflict between these different economic agents. And there is no reason to suppose that society will flourish best when each member tries only to advance his own economic welfare, any more than that the family maximizes its own happiness when each member thinks solely of his own interests.

Pesch was, above all, concerned with the human beings for whom Christ died. In discussing the business cycle, for example, he writes, "To be sure, it is said that while business cycles open wounds they also heal them again. Today they cause loss, tomorrow, profit! But what about those cases where loss and profit do not recur to the same people or the same classes of people, so that some are carried to the dizzying heights of wealth, while others are reduced to economic ruin?"

These kinds of thoughts occur to many of us only during economic downturns. But they ought to be the thoughts that Catholic thinkers constantly keep before their eyes. In our own country, the ratio of pay between a CEO and a factory worker has gone from 25 to 1 in the late 1960s, to 42 to 1 in 1980, to 419 to 1 in 2002. Pesch considered such extreme discrepancies in income an evil, and he quotes approvingly the statement that the "differences in society should not reach a point where a nation ends up divided into two halves: one half too rich, the other half too poor."

Pesch proposes and argues for several features as part of his system, which those familiar with the tradition of Catholic social thought will immediately recognize. One is the occupational group or "guild," sometimes called an industry council in the U.S. This type of organization, strongly championed by Pius XI and Pius XII, and mentioned at least in passing by nearly every subsequent pope, is one of the key institutions in Pesch's economic program. Its abandonment by most Catholic thinkers since the 1950s is simply another example of how we have thrown out important elements of our Catholic intellectual tradition with hardly any advertence. Other aspects of the Catholic tradition in economics that Pesch discusses and supports include the importance of farming and rural life, the just price, and the just wage. Pesch notes that a just price can best be determined within the occupational groups mentioned above. "In order that a general consensus [on prices] may establish itself in the most concrete and objective terms, it is advisable to set up organizations within which producers, merchants, and buyers can express their views." Herewith, the common retort of supporters of free-market capitalism, "But who is going to determine the just price?" is rendered nugatory in Pesch's system, for when occupational groups have been established, such questions largely take care of themselves.

Pesch's discussion of the just wage is surely one of his most original contributions to economic and moral theory, for he speaks of the concept of the "just wage as the economically correct wage." After noting that a man's labor is ordinarily capable of producing enough to provide for himself and his family, Pesch goes on to say, "The employer who, by his own ineptitude, uses labor in such a way that it does not come up to doing what it is capable of doing, would nevertheless be required to pay the kind of wage which labor is intended to provide. However, if labor is utilized properly in accordance with its natural purpose, and the employer pays a wage which does not provide for labor's livelihood, then he violates commutative justice. Finally, an industry which, even under normal circumstances is not in a position to pay wages corresponding to what wages are supposed to accomplish, is lacking in economic justification. This means that the requisite consumer demand is lacking, and such an industry no longer has a place in the pattern of satisfying normal human wants."

In other words, if the only way in which an employer can afford to sell his product is to set his prices so low that he cannot afford to pay his workers a living wage, then clearly his product lacks sufficient consumer demand. It is as if he had to bribe the public to buy his product by charging less than its genuine production cost. Today we are inundated with cheap goods produced abroad, sometimes, as with those produced in China, in conditions little better than slavery. This is a distortion of the economic process. If the item is worth buying, it is worth paying a price that fully compensates all who are involved in its production. If someone revived chattel slavery today and boasted that he could undersell his competitors, who would doubt but that his entire enterprise was an economic as well as a moral evil, no matter how cheaply he could produce? The same logic must be applied to any enterprise that cannot afford to pay its workers a just wage. This kind of analysis, which respects both real economic facts as well as ethical principles, is characteristic of Pesch and of the Catholic tradition at its best.

Pesch's translator, Rupert Ederer, Professor Emeritus of Economics at the State University of New York at Buffalo and himself born in Germany, has devoted much of his life to translating and popularizing Pesch's work in the English-speaking world. In addition to the Lehrbuch, Ederer has translated several of Pesch's other works, including an earlier book of selections from the Lehrbuch. This present effort crowns a life dedicated to the Church's social apostolate. It would be difficult to overstate the importance of this book now appearing in English for the first time. Since Pesch's magnum opus is both long and expensive, I would suggest that for most readers the last four or five volumes will hold the most interest. It is in those that Pesch most directly confronts capitalist thought and argues for a Catholic position. But academic libraries, and anyone else with sufficient time and money, ought to purchase the entire set. For a Catholic who intends to be a serious student of economics, who wishes to promote the Social Reign of Jesus Christ, it is an essential starting point. For to read Pesch is to begin to think scientifically about economics from a Catholic point of view. Those who have studied conventional economics will find in Pesch a new starting point for thinking about economics, a starting point that is faithful both to economic facts and to the Church's teaching. Pesch is a writer and thinker of first rank, whose work is simply too important to ignore.

Thomas Storck is a Contributing Editor of the NOR and author, most recently, of Christendom and the West: Essays on Culture, Society and History.

Lehrbuch der Nationalöko-nomie/Teaching Guide to Economics. By Heinrich PeschTranslated and edited by Rupert J. Ederer. Edwin Mellen Press. 10 volumes. . $1,349.50. (Individual volumes available separately. Twenty percent discount for credit card orders by phone. Call 716-754-2788.).

©New Oxford Review
February 2005

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Economic Science and Catholic Social Teaching

by Thomas Storck

Even among otherwise orthodox Catholics in the United States there is generally little knowledge of or interest in Catholic social doctrine, that body of Catholic teachings which concerns man in society, especially with reference to the political and economic orders. Since Leo XIII began vigorously to develop and apply this teaching to the changing conditions of the modern world, especially with his encyclical Rerum Novarum (1891), Catholic social doctrine has seemed to many to constitute an alternative both to free-market capitalism and all forms of socialism and communism. But lately an objection to Catholic social teaching has arisen from an unexpected source, in fact, from some of those who claim to be especially devoted to Catholic life and tradition as it existed before the Second Vatican Council. This is ironic, for during that era Catholic social teaching was championed much more than it is today by the hierarchy, including the papacy, and was, I think, much more in the consciousness of the ecclesiastically literate Catholic. But the objection that has arisen from some who call themselves traditionalists is novel in one respect, yet in another respect not. It is novel in that it bases its explicit rejection of such doctrine on the supposed teachings of the science of economics. But it is not novel in that the hallmark of dissenters and heretics throughout the ages has been precisely to take some human science, theology or philosophy often, elevate it above the teaching magisterium of the Catholic Church and pose the false quandary: If I accept such and such a teaching of the Church I must go against my God-given reason. But since reason is from God, I cannot contradict it. Therefore I must reject this teaching of the Church.

The latest among those who take this approach is one Thomas Woods, Jr., who argues that Catholic social teaching and economic science are fundamentally at odds, and that it is the former that must yield to the latter. Woods is not shy about stating his position.

The primary difficulty with much of what has fallen under the heading of Catholic social teaching since Pope Leo XIII's Rerum Novarum (1891) is that it assumes without argument that the force of human will suffices to resolve economic questions, and that reason and the conclusions of economic law can be safely neglected, even scorned.... This attitude runs directly counter to the entire Catholic intellectual tradition, according to which man is to conform his actions to reality, rather than embarking on the hopeless and foolish task of forcing the world to conform to him and to his desires ["Catholic Social Teaching and Economic Law: An Unresolved Tension," paper delivered at the Austrian Scholars Conference at the Mises Institute, Auburn, Alabama, March 2002, p. 4. The entire paper is available here].

And he dismisses as "perfectly nonsensical" the claim that his position "involves himself in `dissent' from Church teaching" ("The Trouble with Catholic Social Teaching," lecture delivered at the Austrian Scholars Conference, Mises Institute, Auburn Alabama, March 2004, p. 2.). Why? Because

In the absence of any attempt to address these issues [i.e., the issues that Woods considers important], it is difficult to see how the economic claims of the social encyclicals can actually constitute authoritative Catholic doctrine binding upon the consciences of all the faithful” ["Catholic Social Teaching and Economic Law: an Unresolved Tension," pp. 33-34].

And he goes on to say:

One hesitates to describe Catholic social teaching as an abuse of papal and ecclesiastical power, but surely the attempt to impose, as moral doctrine binding the entire Catholic world, principles that derive from the popes' intrinsically fallible reasoning within a secular discipline like economics, seems dubious. At the very least, it appears to constitute an indefensible extension of the prerogatives of the Church's legitimate teaching office into areas in which it possesses no inherent competence or divine protection from error [Ibid., p. 35].

This is the question in a nutshell: Thomas Woods believes that certain teachings of Leo XIII, Pius XI, Pius XII, John XXIII, Paul VI and John Paul II, teachings which these pontiffs certainly conceived of as part of their legitimate teaching authority, are wrong because he thinks they contradict the tenets of economics.

Now in the first place, I must agree with Woods, that both cannot be right. If these economic beliefs are correct then the papal teaching is wrong, for truth cannot contradict itself. Otherwise we would be headed toward the notion of a double-truth which was implicit in some of the theories of the medieval Latin Averroists, that is, that the same thing could be true in philosophy and false in theology. But as every loyal Catholic knows, there is not nor can there be any conflict between authentic Catholic teaching and the genuine findings of any human science. Such a thing is not possible.

What can one say in reply to Woods, then? First, that since a whole series of popes has taught certain moral truths connected with economics which they believed was entirely within their competence, it is monstrous for anyone claiming to be a Catholic to argue against this teaching, and second, that what Woods represents as the teaching of economics is in fact simply one economic view among many, and that thus it is not the science of economics that is at odds with Catholic doctrine, but simply one school of thought representing ultimately the fallible reasoning of human beings.

In the first place, then, any instructed and orthodox Catholic will have no difficulty in dismissing Woods' claims at once, even without investigating his arguments. When confronted, for example, with claims by psychologists or sociologists that the findings of their particular disciplines invalidate this or that teaching of the Church, we can know that their claims are not to be taken seriously. Of course, usually it is necessary to refute them in order to show those outside the Church, or those weak in faith, that the teachings of the Church have not been disproven. But in principle, Woods' claims are no different from those made by many another partisan of one pet theory or idea after another. The popes have been quite explicit about their competence to teach in these areas of economic morality. Let us look at just two of their statements.

We approach the subject with confidence, and in the exercise of the rights which belong to Us. For no practical solution of this question will ever be found without the assistance of Religion and the Church. It is We who are the chief guardian of religion, and the chief dispenser of what belongs to the Church, and We must not by silence neglect the duty which lies upon Us [Leo XIII, Rerum Novarum, no. 13].

We lay down the principle long since clearly established by Leo XIII that it is Our right and Our duty to deal authoritatively with social and economic problems. It is not of course for the Church to lead men to transient and perishable happiness only, but to that which is eternal. Indeed "the Church believes that it would be wrong for her to inferfere without just cause in such earthly concerns"; but she never can relinquish her God-given task of interposing her authority, not indeed in technical matters, for which she has neither the equipment nor the mission, but in all those that have a bearing on moral conduct. For the deposit of truth entrusted to Us by God, and Our weighty office of propagating, interpreting and urging in season and out of season the entire moral law, demand that both social and economic questions be brought within Our supreme jurisdiction, in so far as they refer to moral issues [Pius XI, Quadragesimo Anno, no. 41].

Mr. Woods may think that they have overstepped the bounds of moral theology into technical economic questions, but that is not what they thought. When not just one, but even more so many supreme pontiffs teach the same truths and consider that they have a perfect right to do so without this constituting an "abuse of papal and ecclesiastical power," then surely any orthodox and loyal Catholic must accept the popes' own notions of the limits of their teaching authority. As I said above, every dissenter and heretic in the history of the Church elevates some idea of his own, which he feels he has good reason to accept, into a principle higher than Catholic teaching. What makes Woods different from them? If a psychologist or sociologist claimed that his knowledge made it impossible for him to accept Catholic teaching on sexuality, we would dismiss his arguments as worthless, and rightly so. But who is Thomas Woods to set up his own boundaries as to what is and what is not acceptable for the Church to teach? What are his credentials to constitute a parallel magisterium? The Catholic Church has been teaching in the area of economic morality for centuries. Mr. Woods' quarrel is not with a few recent popes but with the entire tradition of Catholic teaching on economic morality.

Lest anyone argue that the Church has never defined infallibly the social doctrines stated in papal encyclicals, we should remember that infallibility extends beyond merely the teachings of the solemn magisterium to the teaching of the ordinary and universal magisterium. (The First Vatican Council, in its Dogmatic Constitution, De Fide, chap. 3, taught: "Further, all those things are to be believed with divine and Catholic faith which are contained in the Word of God, written or handed down, and which the Church, either by a solemn judgment or by her ordinary and universal teaching [magisterium], proposes for belief as having been divinely revealed.") At least some of the contents of the papal social encyclicals, for example, the doctrine of the just wage, would seem to have been repeated enough times so that they qualify as part of the ordinary and universal magisterium. And even those matters which may not rise to the level of the universal magisterium, are by no means optional matters for Catholics. Pius XII authoritatively stated in his encyclical Humani Generis of 1950 the following:

Nor must it be thought that what is expounded in Encyclical Letters does not of itself demand consent, since in writing such Letters the Popes do not exercise the supreme power of their Teaching Authority [Magisterium]. For these matters are taught with the ordinary teaching authority [Magisterio enim ordinario haec docentur], of which it is true to say: "He who heareth you, heareth me"... [No. 20].

And the Second Vatican Council, in its Dogmatic Constitution on the Church, Lumen Gentium of 1964, taught:

[A] loyal submission of the will and intellect must be given, in a special way, to the authentic teaching authority of the Roman Pontiff, even when he does not speak ex cathedra in such wise, indeed, that his supreme teaching authority be acknowledged with respect, and sincere assent be given to decisions made by him, conformably with his manifest mind and intention, which is made known principally either by the character of the documents in question, or by the frequency with which a certain doctrine is proposed, or by the manner in which the doctrine is formulated” [No. 25].

Moreover, when one looks closely at this matter, one will discover that what Woods solemnly proclaims to be the teachings of economics are in fact only the opinions of one particular sect of economists. In fact, the Austrian school, to which Woods adheres, is a minority school of economists. It is true that many neoclassical economists would agree with many of Woods' criticisms, but there are other schools of economic thought whose findings harmonize well with Catholic social thought. Woods himself mentions, and excoriates, the German historical school. There is also the American institutionalist school, and there are others. Woods has no more right to consider his own economic ideas as equivalent to the entire field of economics than a Kantian philosopher has to regard the teachings of Kant as equivalent to the entire field of philosophy. If such a philosopher were to say, "There is a conflict between the teachings of the First Vatican Council and the science of philosophy on the ability of human reason to demonstrate the existence of God," we could easily point out to him that there are other schools of philosophy, such as Thomism, that have no such conflict, and that he is wrong to claim for his own school the mantle of philosophy as a whole. But this is exactly what Woods has done for economics. His own school says this, therefore economics as a whole says this. The faulty reasoning here should be evident. Woods quotes with approval the following statement of Professor William Luckey:

The fact that Catholic economic teaching, put forth as unchanging and required of belief, did not square with what Austrian economists know to be true, has created an agonizing crisis of conscience for such economists ["The Trouble with Catholic Social Teaching," p. 6, my emphasis].

Woods and Luckey have raised the fallible reasoning of a group of economists, a group which does not even command majority opinion within its own discipline, into an infallible voice of truth which they consider to be able to trump the teachings of the supreme pontiffs! Contrary to what Woods continually asserts, to question Austrian economics is not to question the validity of human reason; it is simply to question the validity of certain dubious conclusions reached by one group of men who enjoy no charism of infallibility.

Woods also makes much of the economic teaching of a group of sixteenth and seventeenth-century Spanish theologians who have sometimes been claimed as precursors of Woods's views, or of something like them anyway. There is some reason to question whether this similarity between their views and his own has not been greatly overstated. (I will instance only one example. In his first paper Woods (p. 8) quotes a passage from Juan de Mariana on the folly and evil of a ruler attemping to set a price of a good "in such a way that the legal price should differ from the natural.... Men are guided in this matter by common estimation founded on considerations of the quality of things, and their abundance or scarcity." Now "common estimation" was a traditional scholastic way of discovering a just price. Common estimation was the common opinion of men in general as to what was a reasonable price, and though it might in many cases be based in part on factors that included certain market forces, such as the "abundance or scarcity" of the item in question, the important point to recognize is that common estimation and the market price of Austrian or neoclassical economics do not mean the same thing. That is, even if in some cases they might coincide, they do so for different reasons. Moreover, this subject opens up the entire question of what is a market price, since all markets are subject to legal and customary rules, and whether in fact it makes any sense to speak of a market price. Rather, the question is: what market price exists under such and such a legal and social regime.) In addition, I will point out two things. First, if it were the case that these theologians agreed completely with Woods, what would that mean? Absolutely nothing. They have no special status above other theologians, and against the teaching of the popes their views carry no weight whatsoever, any more than the myriad of theologians of today whose views are widely quoted against authentic papal teaching. And secondly, if, as Woods avers, the vicars of Christ have overstepped the bounds of moral theology by their teachings on economic morality, what gives these Spanish scholastics, who were theologians not economists, any particular authority in this field? Is Woods making an argument from authority? If he is it fails, for by his own claims theology has nothing to say on these particular questions. If, on the other hand, he is simply claiming them as intellectual precursors, and appealing to the weight of their arguments, then I do not see any reason why I should specially attend to them, particularly as they (according to Woods) teach contrary to the popes and are no more infallible than any other economic writers.

Woods is especially agitated because he thinks that without his own conception of economics it must cease to be a science. Although I know of nothing in scripture or tradition that guarantees that economics is a science, nevertheless what he says does not necessarily follow. Heinrich Pesch, the great Jesuit economist, whose thought provided the background for the encyclical Quadragesimo Anno, and whom Woods criticizes, strongly defended the status of economics to be a science, but a human and a social science, one that depends at least in part on the free acts of human beings. We are not required to give up the claim that economics is a science if we accept Catholic social teaching.

Although it is not my primary intention to engage in an economic debate with Woods, I must say just a word to show how the economic arguments he makes are far from compelling. The model of an economy which both neoclassical and Austrian economics present, and the economic policies which Austrian economists usually champion, are not the obvious conclusions of economic reasoning as they would have us believe. For economic activity always takes place within a legal, social and technological framework, and the structure of that framework to a great degree conditions and determines the shape which economic activity takes in any particular society. There was no economic reason, for example, why the guilds of the Middle Ages, which controlled the urban economies of Europe and severely limited competition among craftsmen, need have come to an end, and the economy which resulted from the demise of the guilds was largely the creation of a changed intellectual climate, not the result of so-called economic laws. Nor are limited liability corporations, which currently dominate our economy and which were created only in the nineteenth century due to emerging state general incorporation laws, the inevitable products of economic forces, but rather were brought into being by the free acts of legislatures. Market forces always work within a certain framework, and economic outcomes depend more on how these frameworks are structured than on the market forces alone. Thus within broad limits human beings have the ability to structure the way in which they conduct economic activity, and the notion that there is only one way which is sanctioned by so-called economic laws is false. Human beings create their legal and social institutions and can alter them. There is no reason why these institutions cannot be designed or reformed in such a way so as to facilitate the application of Catholic social teaching. (A concrete instance of how market forces always work within an institutional framework is the story of the Nova Scotia fishermen from the 1930s. "Their catch of fish and lobsters was handled by local dealers who in many cases kept the fishermen in a state of peonage. While Maine fishermen were getting about fifteen cents a pound for lobsters, the Nova Scotian fishermen were receiving as little as two cents a pound. All other prices were scaled down in the same ratio. For everything they bought, however, from their scanty food purchases to nets and lines, they paid top prices, with the result that they were invariably bowed down with a load of debts. Appalling poverty, illiteracy, poor health and the worst possible housing conditions existed throughout this section." In order to better their condition, priests from St. Francis College helped the fishermen organize cooperatives. By means of marketing cooperatives they were able to bypass the local middlemen and deal directly with wholesalers in large cities. In their first shipment of lobsters to Boston they received fifteen cents per pound net. The distribution of income before the establishment of the cooperatives was not the result of the operation of economic laws, but rather of the legal and social institutions within which these economic forces operated. These institutions were changed and a new set of institutions was created within which market forces could operate. This is an illustration of the freedom men have to change the framework and thus change the way economic forces operate to bring about a more just distribution of income. See Bertram B. Fowler, The Co-operative Challenge (Boston : Little, Brown, 1947) pp. 128-29.)

Lest any reader be tempted to think that I am too exercised over this topic, and my disagreement with Woods is simply a small matter over different interpretations of Catholic social doctrine, let me quote from Pope Pius XI. In his first encyclical, Ubi Arcano of December 1922, Pius introduced the notion of "social Modernism." He spoke of those Catholics who give lip service to doctrine concerning the social order, including "Catholic teaching concerning...the rights and duties of laborers...in industry" but who "by their spoken and written word, and the whole tenor of their lives" disregard and belittle this teaching. Pope Pius says of this, "In all this we recognize a kind of moral, judicial, and social Modernism, and We condemn it as strongly as We do dogmatic Modernism." I am sure that Thomas Woods would not like to be placed among the dogmatic modernists, but Pius XI definitely places him among the social modernists. And thus that saintly and traditional pontiff condemns Thomas Woods' views, condemns them "as strongly as We do dogmatic Modernism."

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©Copyright 2004

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