In the previous posting on this subject, we looked at the necessity of reconnecting people to society and concluded that “persons without power must have the means of obtaining power, and those with power must have the means of securing it.”
Applying the general guidelines in the previous posting to economic life, we distill them into four tenets that aim to secure both the possession and the optimal exercise of our natural rights within the common good of the economy. We can therefore call these the “Four Policy Pillars of a Just Market Economy”:
· Widespread direct capital ownership, individually or in free association with others (the “fatal omission” from the major schools of economics today),
· A limited economic role for the State, so that economic power resides in all the citizens and the State remains economically dependent on its citizens,
· Free, open, and non-monopolistic markets, within a strong juridical order as the best means of determining just wages, just prices, and just profits, and
· Restoration of the rights of private property, especially in corporate equity.
Similar to the way that the three principles of economic justice must be understood as integrated elements of a system if they are to be effective, the four policy pillars of a just market economy provide the fundamental guidelines for establishing laws and practical measures to create a personalist economy. We will now examine them in order, today looking at widespread direct capital ownership.
Pope Pius XI
Higher wages or better benefits are not the goal of economic personalism. The hallmark of an economically just society (and, more broadly, of social justice) is its systematic approach to balancing the demands of participative and distributive justice by lifting institutional barriers which have historically denied equal ownership opportunities to every citizen. As Pius XI declared in Divini Redemptoris,
Society cannot defraud man of his God-granted rights. Nor can society systematically void these rights by making their use impossible. It is therefore according to the dictates of reason that ultimately all material things should be ordained to man as a person, that through his mediation they may find their way to the Creator. (Divini Redemptoris, § 30)
A major flaw in the wage system is not simply that it limits most people’s income to what they can get from selling their labor, but that wages are given, granted, or gained through government intervention or collective bargaining pressures backed up with the threat of State intervention. This runs counter to the demands of an economically just society, in which persons exercise free choice within a system of equal ownership opportunities and checks-and-balances to keep power spread to every person.
Fr. Heinrich Pesch, S.J.
Most proposals for social betterment, whether capitalist, socialist, or Welfare/Servile State, focus on increasing income or providing benefits directly. This, as the solidarist labor economist Goetz Antony Briefs (1889-1974) noted in his book, The Proletariat (1937), is inevitable when most people lack capital ownership. As Briefs, a student of Father Heinrich Pesch, S.J. (1854-1926), explained,
The higher standard of living for the worker has been gained at the sacrifice of economic independence and self-reliance along many fronts, and the process still goes on. The picture has, of course, its reverse side. The workers to whom these benefits have accrued have less and less chance to improve their status. Wage earners have become established in the proletarian mode of existence, this being the price exacted by capitalism for its alleviation of their lot. Let this process be carried to its logical conclusion, and what is the result? An industrial seigniory, extended over great drab masses of economic dependents, individuals whose life depends on their finding or keeping a job. The area which used to be occupied by self-respecting, self-reliant property owners with small or medium-sized holdings — the home territory of the bourgeoisie and the breeding place of democracy — is so no more. (Briefs, The Proletariat, op. cit., 252.)
While Pesch did not recognize a particular act of social justice, he described private property as one of the “three institutional ‘pillars’ of economic society.” The others are “marriage and the family” and “the State as guardian of the positive legal order required by the value and rights of man.”
When Pesch wrote, Austrian and German Catholic socialists insisted that property is merely prudential. This, obviously, was simply a restatement of their traditional dogma that private property should be abolished. It was also, in part, a direct reaction to Pesch’s unyielding stance on the sacredness of private property. As Alfred Diamant (1917-2012) explained,
Hilaire Belloc
Because man was the center of the social system, he also was at the center of economic activity. Therefore, Pesch accepted the principle of wage labor and of the separation of labor and capital. (Lehrbuch der Nationalökonomie, 1, 17 – 18) He demanded, however, that the community, acting through the State, interfere to prevent capitalist excesses which might threaten the economic status of individuals, and especially their private property which they must have to be able to fulfill their function in society. (Ibid., 1, 188, 206 – 207)
Commentators who consider widespread capital ownership prudential matter forget there has never been a society that, having redefined the institution of private property, avoided a similar redefinition of life and liberty. This inevitably undermined the power and therefore the dignity of the human person. By challenging the primary means intended by God to sustain human life and liberty and support the dignity of the human person in the temporal sphere, socialists effectively redefine what it means to be human, as well as what it means to be alive or free.
There is also the problem of the fundamental principle of socialism, that meeting material needs relegates everything else, especially capital ownership‚ to unimportance; the end justifies the means. As Hilaire Belloc said of the various schemes such as social credit, they are not concerned with property, that is, with power, but with income.
Admittedly, redistribution would solve the problem of how propertyless workers are to meet their survival needs. It would, however, do nothing to assist them in becoming virtuous, which is (after all), the primary goal of Catholic social teaching, not the creation of a race of happy and satisfied slaves.
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