February 12, 2008KR BlogEthics

Of New Things (and Old) in Economic Philosophy

Since my previous blog mentioned the basis of G. K. Chesterton’s “distributism” in papal social teacing, I thought it might be helpful to provide an overview of the latter. One of the Catholic church’s groundbreaking documents was Pope Leo XIII’s encyclical Rerum Novarum (Of New Things, 1891), which Leo XIII wrote at a time of great social upheaval in many parts of the world, a time that saw the growth of industrialization, an increase in international trade of farm products, explosions and shifts of population, and the rise of labor and capital as conspicuous social and political forces. Among the responses to what has come to be known as the labor question was the “liberal” doctrine of laissez-faire, which saw in the unfettered economic forces of the marketplace the best hope for all. As one article in The Economist for 13 May 1848 put it, “Suffering and evil are nature’s admonitions; they cannot be got rid of; and the impatient attempts of benevolence to banish them from the world by legislation…have always been productive of more evil than good” (quoted in Crane Brinton et al., A History of Civilizatin: 1715 to the Present, 4th edition, Englewood, NJ: Prentice-Hall, 1967). At another extreme was the Marxist vision, which looked ahead to the rule of the proletariat and finally to a classless society in which all things are held in common.

As a practical solution to the ills of the world that he encountered in the fourteenth year of his pontificate, Leo XIII found neither position to be acceptable. Writing nearly twenty-five years after the publication of Marx’s Das Kapital, Leo begins his encyclical by defending a limited right to private property: “The earth indeed produces in great abundance the things to preserve and, especially, to perfect life, but of itself it could not produce them without human cultivation and care. Moreover, since man expends his mental energy and his bodily strength in procuring the goods of nature, by this very act he appropriates that part of physical nature to himself which he has cultivated. On it he leaves impressed, as it were, a kind of image of his person.” Leo’s explanation of the acquisition of private property–that we first acquire land by interacting with it, thus inscribing it with our identity–is reminiscent of John Locke’s explanation of such acquisition in The Second Treatise on Government (1609; see Book Five, chapters 26-27).

But Leo no more absolutizes the right to private property than Locke does. As Locke puts it, “Nothing was made by God for man to spoil or destroy” (5.31). For his part, Pope Leo agrees explicitly with St. Thomas Aquinas that in an absolute or metaphysical sense, God has bestowed creation on all humans alike, thus affirming a sense of ownership that draws an important distinction between the right to ownership and the proper use of what is owned: “But if the question be asked: How ought man use his possessions? the Church replies without hesitation: ‘As to this point, man ought not regard external goods as his own, but as common so that, in fact, a person should readily share them when he sees others in need'” (36). And again: “…when the demands of necessity and propriety have been sufficiently met, it is a duty to give to the poor out of that which remains” (36). This sharing of goods is one that Leo names a duty rather than an option. At the same time, he points out that this duty is one relating to the law of charity rather than strict justice, meaning that it will not readily submit to legislation. No doubt, Leo recognized that law can be a clumsy tool in such matters.

Nevertheless, there is a rub. Allowing that giving to the poor is a duty once the “demands of necessity and propriety have been sufficiently met” is no excuse for allowing the demands and mechanisms of the free market to have their way with human dignity. The needs of the human person, the needs for rest and adequate nutrition and clothing, as well as for cultural and spiritual pursuits, are always to be taken into account by any employer, for humans are never to be valued merely for “what they are worth in muscle and energy” (31). Part of what this respect for human dignity means is that a just wage is due to all workers, not merely the wage that the market will bear: “Among the most important duties of employers the principal one is to give every worker what is justly due him. Assuredly, to establish a rule of pay in accord with justice, many factors must be taken into account. But, in general, the rich and employers should remember that no laws, either human or divine, permit them for their own profit to oppress the needy and the wretched or to seek gain from another’s want” (32). Thus, one may never legitimately profit from hiring a worker willing to work for an unlivable wage.

But what in all of these economic concerns is the state’s duty? Leo wants to ensure that the state does not become an oberbearing or intrusive presence in a family’s life, though at the same time it must provide a safety net for a family that “is in such extreme difficulty and is so completely without plans that it is entirely unable to help itself” (21). As a matter of course, the state should serve the entire commonwealth and groups within the commonwealth “through the entire scheme of laws and institutions,” thus creating a polis and culture that will see to the well-being of all. But here again special care must be taken for the sake of the less powerful and less privileged. Just as many in the church have over the years voiced a preferential option for the poor, so Leo signals a preferential option for workers: “In protecting the rights of private individuals, however, special consideration must be given to the weak and the poor. For the nation, as it were, of the rich is guarded by its own defences and is in less need of governmental protection, whereas the suffering multitude, without the means to protect itself, relies especially on the protection of the State” (54). But this special concern with workers should also be understood as ultimately in the interest of the state, for the “wealth of nations originates from no other source than from the labor of workers” (54). The worker’s part is to perform the agreed-upon and reasonable level of labor. This labor is among her or his contributions to the common good. In return, the public authority should concern itself with seeing to it that workers can live without hardship, and it should pursue whatever measures “seem in any way capable of benefiting the condition of workers” (51). Leo’s point is not to excuse the worker from thrift, a virtue that he much commends (63), but rather to promote such conditions as make thrifty living an option.

A thread that runs through the encyclicals pertaining to economic life is that the worker is never to be treated as a thing subject to market forces, never to be treated simply in terms of earning power. Rather, the worker is always to be treated as the subject of her or his labor. One may discern here one version of Kant’s categorical imperative: one may never treat another simply as a means to an end. Rather, persons must be treated in ways that affirm their right to cultivate themselves, to have leisure, to participate in the culture at large, and to pursue their spiritual aspirations free from coercion. In short, persons must always be allowed the right to cultivate, develop, and extend their humanness. A weighty part of this right remains the right to a just wage, a right at the center of Pope John Paul II’s encyclical On Human Work, written in observance of the 90th anniversary of Leo XIII’s Rerum Novarum. On the matter of a just wage, John Paul II uses quite explicit language: “Just remuneration for the work of an adult who is responsible for a family means remuneration which will suffice for establishing and properly maintaining a family and for providing security for its future” (19). This remuneration may come from a single salary “or through other social measures such as family allowances or grants to mothers devoting themselves exclusively to their families.” Again, John Paul II bases this principle on the fundamental “principle of the common use of goods.”

John Paul II maintained a tension between collectivist and capitalist strains of thought in their pure and simple forms. Work is made for humans, not humans for work, and the development and dignity of the human person must always be respected in any human enterprise. In the following passage, John Paul is commenting on the right to private property and what precisely this principle means in the church’s tradition: “The above principle, as it was then stated and as it is still taught by the Church, diverges radically from the program of collectivism as proclaimed by Marxism and put into practice in various countries in the decades following the time of Leo XIII’s encyclical. At the same time it differs from the program of capitalism practiced by liberalism and by the political systems inspired by it. In the latter case, the difference consists in the way the right to ownership or property is understood. Christian tradition has never upheld this right as absolute and untouchable. On the contrary, it has always understood this right within the broader context of the right common to all to use the goods of the whole of creation: the right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone” (14). For John Paul, this fundamental principle of common use of goods means that one may not own the means of production as capital in opposition to labor, nor that one may possess the means of production for the mere sake of possession; rather, the means of production must be possessed in the service of labor. What John Paul styles “rigid capitalism”–the notion that the private ownership of the means of production is an unassailable dogma of economic life–must undergo constant revision, for there is plenty of room for experimentation with how the means of production may be owned and managed without merely eliminating private ownership. Further, the rights of all workers–manual, intellectual, industrial, agricultural–must be recognized as objective realities and not merely as the “result of economic systems which on a larger or smaller scale are guided chiefly by the criterion of maximum profit” (17). At the same time, unemployment for those who are capable of work is an evil to be avoided, but in cases where it cannot be avoided, unemployment benefits are to be provided in recognition of the basic principle of the common use of goods, “or, to put it in another and still simpler way, the right to life and subsistence” (18). The rational coordination of all of these concerns and provisions rests with the state, not as a rigid and centralized power, but rather as the coordinator of an interacting array of programs that both assure basic justice and allow for the creativity and initiative of individuals and groups.