Monday, November 23, 2015

Justice-Based Management, I: Is There a Role for the Corporation?

It’s common today among many individuals and groups to disparage “the corporation” (meaning business corporations) as inherently evil.  Corporations consistently make the “Top Ten List’ of the things people love to hate.  Other things on the list, of course, are “the rich” (considered non-persons and thus things without rights), “the government” (a social tool, and therefore a thing), “the banks” (including central banks, especially the Federal Reserve), anybody who ticks you off or disagrees with you (and who therefore loses all rights, becoming a thing), and so on.

Are corporations and capitalism synonymous?
Recently, in one of the FaceBook groups to which we belong, someone posted a link to an article from the September 17, 2015 issue of TED (“The Electrical Distributor”) Magazine: “What Does ‘Corporate Culture’ Look Like in Distribution?  The individual who shared the post observed,

“This is where critics, like Mark Shea [a noted Catholic commentator — ed.], regarding Capitalism get it wrong. They tend to think the system is completely bent out of shape and couldn’t possibly be reformed. They blame it on the culture, which, true enough, is a problem, and not just in corporations — but it’s where such people focus their angst. And yet, if you can’t change corporate culture into something positive, then how in the world can we expect to change any culture, including the Culture of Death?”

Fr. William Ferree, S.M., Ph.D.
Assuming that the individual sharing the post stated Mr. Shea’s position accurately, Mr. Shea (and others like him) would not appear to have an adequate understanding of social justice — which he (and others like him) could easily obtain by reading CESJ co-founder Father William Ferree’s pamphlet, Introduction to Social Justice (1948).  The fact is that “the corporation” is a necessary component of social justice.

Social justice deals with the organized groups or “bodies” of the common good.  “Corporation,” in fact, means “put into a body.”  As Pius XI noted in the explication of his social doctrine,

“If, therefore, We consider the whole structure of economic life, as We have already pointed out in Our Encyclical Quadragesimo Anno, the reign of mutual collaboration between justice and charity in social-economic relations can only be achieved by a body of professional and inter professional organizations, built on solidly Christian foundations, working together to effect, under forms adapted to different places and circumstances, what has been called the Corporation.” (Divini Redemptoris, § 54.)
Did Pius XI endorse Il Duce?

Did the pope mean the Fascist “Corporate State” as many have supposed?  Hardly.  He made that clear in the encyclical itself.  In addition, a month or so after he issued Quadragesimo Anno, he condemned the Fascist Corporate State in no uncertain terms.  Did he mean what has been called “the Industry Council Plan”?  No, that is just fascism under another name.

As Pius XI explained in Quadragesimo Anno (and which has been very carefully ignored by both individualists and collectivists), he meant free associations similar to what Alexis de Tocqueville described in Democracy in America:

“Moreover, just as inhabitants of a town are wont to found associations with the widest diversity of purposes, which each is quite free to join or not, so those engaged in the same industry or profession will combine with one another into associations equally free for purposes connected in some manner with the pursuit of the calling itself. Since these free associations are clearly and lucidly explained by Our Predecessor of illustrious memory, We consider it enough to emphasize this one point: People are quite free not only to found such associations, which are a matter of private order and private right, but also in respect to them ‘freely to adopt the organization and the rules which they judge most appropriate to achieve their purpose.’ The same freedom must be asserted for founding associations that go beyond the boundaries of individual callings. And may these free organizations, now flourishing and rejoicing in their salutary fruits, set before themselves the task of preparing the way, in conformity with the mind of Christian social teaching, for those larger and more important guilds, Industries and Professions, which We mentioned before, and make every possible effort to bring them to realization.” (§ 87)

Pius XI: the pope's clear language twisted out of shape.
Oddly, noted Catholic commentator Thomas Storck insists that these associations are “not strictly speaking voluntary,” a confusing and contradictory statement given the clear language of Pius XI. Further, social justice is impossible unless people are free to organize in groups, for as a social virtue, social justice — the virtue directed to the reform of the institutions of the common good, including the corporation — can only be carried out by members of groups. In any event, in moral philosophy no virtue is truly virtuous if it is not free, as Fulton Sheen made clear in his book, Freedom Under God.

 The fact is that Father Ferree considered the business corporation a key institution in the restructuring of the social order for which Pope Pius XI called, as Father Ferree made clear in other writings:

“But if Pius XI’s ‘what has been called the corporation’ has nothing to do with Mussolini, what does it have to do with? How about the General Motors Corporation, among others of similar characteristics?

“This is not at all far-fetched, as we will see in a moment; and the fact is that it addresses directly the greatest social injustice in Western Civilization which is now being generalized to the whole world by the twin processes of industrialization and ‘development.’

An adversarial relationship was established.
“The difference between modern developed civilization and the subsistence civilization which was all that the world ever knew before modern times is the ability to manage what we now call ‘capital tools.’ Subsistence civilization is marked by hand tools and animal (including human) labor. Production is rigidly limited because there is no use giving forty rakes to a single worker. Forty rakes must be given to forty workers; and — as far as production per person is concerned — you are right back where you started! Capital tools, on the other hand, are by definition of unlimited size and complexity. A whole modern oil refinery is a single tool, manipulated by one worker from a single console, with the addition only of necessary maintenance and transport. It is in the introduction of such capital tools, with the resulting unlimited production in relation to persons, that the modern world was born.

“A fateful mistake was born with it. The laws for this new world could only be made by minds from the subsistence world, with the result that the corporation — the going concern of capital production — was legally defined as the absentee stockholder owners. Labor, the living and breathing enterprise, was defined as outside contractors!

“Thus in one stroke the whole of society was built on an adversarial relationship which, given enough time, would tear it apart. Two classes were created, one of which wanted low costs of production and high prices for goods, and would use every means to get them; the other class wanted high wages and low prices, and would struggle by every means possible to get them.

“When Karl Marx realized what was happening, he decided that only the collectivity could be allowed to own capital tools, even if a ‘new man’ and a new society had to be created by force to set up this arrangement.” (Rev. William J. Ferree, S.M., Ph.D., Forty Years After . . . A Second Call to Battle, unpublished ms. fragment, cir. 1984.)

The question then becomes, What are we supposed to do about reforming the corporation?  We’ll look at that next Monday.


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