We have been examining what both G. K. Chesterton and Fulton
J. Sheen characterized as the great conflict of the modern age: the abandonment
of sound reason, and its replacement with false faith. As Chesterton said in his introduction to
Sheen’s first book, God and Intelligence,
“The
blasphemy is not ours [i.e., that of
the Catholic Church]. It is enough for
us that our enemies have retreated from the territory of reason, on which they
once claimed so many victories; and have fallen back upon the borderlands of
myth and mysticism, like so many other barbarians with whom civilization is at
war.” (Chesterton, “Introduction,” God
and Intelligence, op. cit., 11.)
The question at this point is how the Catholic Church, the
institution that both Chesterton and Sheen characterized as the last defender
of reason, seemingly abandoned its position and divided into warring camps,
“brother against brother.” Understanding
of Catholic social teaching has become so confused and contradictory that in
some circles even to mention it, especially the virtue of social justice, is
tantamount to cursing, while in others it is a subject fit only for ridicule. As Pius XI noted,
“[T]hose who would seem to hold in little esteem this Papal
Encyclical [i.e., Rerum Novarum] and
its commemoration either blaspheme what they know not, or understand nothing of
what they are only superficially acquainted with, or if they do understand
convict themselves formally of injustice and ingratitude.
“Yet since in the course of these same years, certain doubts have
arisen concerning either the correct meaning of some parts of Leo's Encyclical
or conclusions to be deduced therefrom, which doubts in turn have even among
Catholics given rise to controversies that are not always peaceful.” (Pius XI, Quadragesimo
Anno, §§ 39-40.)
I need to make one thing absolutely crystal clear at this
point. While CESJ is not a Catholic institution, neither I as an individual nor
CESJ as an institution believe that there is anything contrary to reason in
Catholic social teaching. As an
institutional position, we at the all-volunteer, interfaith CESJ (while we
remain open to correction on our understanding of these matters by competent
ecclesiastical authority of the Catholic Church) hold that Catholic social
teaching is the clearest and most consistent body of social thought that exists
in the world today.
We do not see the problem as being with Catholic social
teaching. Rather, the problem is with
individuals and groups who have divided Catholics and others by interpreting,
twisting, and adapting Catholic social teaching to fit an agenda or some
assumption, prejudgment, or misconception.
That is why we need to investigate the source of this error, and trace
its development, even if only briefly.
It is critical to understanding why I do not think that Chesterton’s
cause for canonization is going to gain any traction for quite a while.
As we saw in previous postings in this series, the Civil War
wrought a sea change in American society.
There were many aspects of this, but we are particularly interested in
one: the shift in understanding of rights as being inherent in people as an
aspect of human nature itself, to being a grant from God or the State
subsequent to the existence of people as human beings.
From a natural law perspective, prior to the war a system
was in place that recognized natural rights for some, while denying them to
others. In the South, the denial was
obvious: chattel slavery denied that some people had any rights at all. In the North matters were less apparent. Nevertheless, a growing number of
propertyless workers were nominally free, but had few effective rights that
necessarily accompany the human condition.
Thus, Orestes Brownson characterized the American Civil War as
a struggle between the agrarian capitalism of the South supported by chattel
slavery, and the industrial and commercial capitalism of the North supported by
wage slavery. The war had been caused in
part by the conviction of Southern slave owners (validated — or so it seemed —
by David Christy’s argument in Cotton is
King, 1855) that their economic survival, even that of the entire United
States and the British Empire, depended absolutely upon the slave cultivation
of American agricultural products, principally cotton.
The Northern victory ensured that the agrarian capitalism of
the South was broken — for a time. The
Homestead Act decentralized some land ownership, and made the shift from cotton
to wheat much more feasible than it otherwise would have been. The “Mills of Manchester” that had seemed an
insatiable customer for American cotton had found other sources of supply
during the war; fortunes were now being made in Egypt and India on the backs of
semi-slave labor, legal slavery having been abolished in the British Empire in
1833. America shifted from being
Europe’s source of fiber, to its breadbasket.
Unfortunately, trapped within the limited past savings
paradigm, the conviction that the only way to finance new capital formation is
to cut consumption and accumulate money savings meant that only the rich had
ready access to financial capital and capital credit on easy terms. This was both through government subsidy and
discounting bills at the state banks and the new National Banks, the quasi-central banking system that also
served as commercial banks.
The irony is that commercial banking was invented as a way
of being able to finance economic growth without
first having to cut consumption. Instead
of using existing accumulations of savings resulting from previous cuts in
consumption, commercial banking allows people to turn the present value of
future increases in production into money.
This money can be used to finance new capital
formation. When the new capital becomes
productive and generates a profit, a portion of the profits can be used to repay
the credit extended by the commercial bank, and cancelled.
During the Civil War, the issue of paper currency backed
only by government debt (the United States Notes, or “Greenbacks”) caused
inflation, and a loss of parity with the gold currency. Following the war, to restore parity of the
paper currency with gold, the government began “deflating” the currency, that
is, decreasing the amount to increase its value so that it would once again
pass at par with gold.
This caused great hardship among the homesteaders and small
businessmen who relied on existing pools of savings to finance
development. The large commercial and
industrial interests (most especially the railroads), on the other hand,
experienced unparalleled growth. Being
rich, they had collateral, and could create money at will for rapid expansion.
This caused a disconnect between productive power and
consumption power — and a growing demand for reform of the financial system as
the panics and depressions had increasingly serious effects. Socialism, especially after the Supreme Court
redefined the natural law (particularly private property) in its opinion in the
Slaughterhouse Cases, began to look very attractive to people.
