Perhaps not surprisingly, there are a couple of interesting items on the international scene that relate to the Just Third Way. Otherwise, this has been a rather quiet week as we wind down from attending the ESOP Association conference last week, and prepare for next week’s monthly CESJ meeting.
|Leo XIII: "The law should favor ownership."|
• Monday of this week marked the one-hundred twenty-sixth anniversary of the issuance of Rerum Novarum, “On Labor and Capital.” In 1891, Pope Leo XIII addressed the problem of socialism, following up on his first two encyclicals in 1878 that highlighted the evils of modern society — chiefly socialism — which followed up on the encyclicals of Pius IX. In 1931, Pope Pius XI followed up Rerum Novarum with Quadragesimo Anno (“Forty Years After”), “On the Restructuring of the Social Order,” and in 1937 with Divini Redemptoris (“Divine Redeemer”), “On Atheistic Communism.” Where Leo XIII had lumped all socialism together (thereby inadvertently giving “escape hatches” to both kinds of socialists, who each claimed the pope was only talking about “the other guy”), Pius XI carefully addressed “religious socialism” in Quadragesimo Anno and “scientific socialism” in Divini Redemptoris. Not by coincidence, Quadragesimo Anno and Divini Redemptoris are the two encyclicals in which Pius XI presented his social doctrine and explained the act of social justice, by means of which the institutions of the social order could be restructured without recourse to capitalist distortions or socialist contradictions. This is explained in a pamphlet by CESJ co-founder Father William Ferree, Introduction to Social Justice (1948).
|Modern banking started in Italy. It can restart there.|
• We see in the news today that Alitalia, the Italian national airline, is going on the auction block. As reported in the Wall Street Journal (“Italy Says ‘Arrivederci’ to Carrier” 05/19/17) in an article featuring a photo of Sophia Loren — who doesn’t have all that much to do with the story, but who cares? — workers and shareholders were unable to come together despite “months of fruitless talks.” The only problem is where to find a buyer. As the lead-in opined, “Alitalia is up for sale, but government faces tall task finding buyer after years of losses.” It does seem odd, however, that nobody appears to be looking at the obvious first choice for a buyer for an airline the pope uses, and in the same week that saw the one-hundred twenty-sixth anniversary of the issuance of Rerum Novarum in which Pope Leo XIII clearly stated in § 46, “We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners.” Why not, then, sell the airline to the workers? The Italian legislature could easily pass any necessary enabling legislation, and the workers could purchase 100% of the company at its fair market value, with a loan given by a consortium of Italian commercial banks and rediscounted at the Bank of Italy, thereby providing a model for the restructuring of the European financial system by backing the new money with a private sector asset (Alitalia) instead of questionable Italian government debt — after all, modern banking started in Italy, so why not re-start it there? By using the U.S. model of an S-Corp ESOP, the airline would pay no corporate income taxes, freeing money for debt service, but all dividends and benefits paid to the workers would be treated as ordinary taxable income. Allocate shares equally across the board each year, and “rebalance” the accounts so that everyone’s proportion of ownership is exactly the same each year, give everyone immediate 100% vesting after two or three years, pass through the vote, have profit-sharing based on some equitable formula, and participatory management, and Alitalia could quickly become the most profitable airline in Europe — and the most justly run in accordance with the principles of Catholic social teaching.
• On Sunday of this week, Gerhard Cardinal Müller gave a talk at St. Thomas More Cathedral in Arlington, Virginia. The Cardinal, who is Prefect of the Congregation for the Doctrine of the Faith, is in the position considered the “Number Three Spot” in the Vatican, right after the Pope and the Secretary of State. His talk was on the importance of rebuilding marriage and the family — for which the Just Third Way can provide solid a program to establish and maintain the economic and financial foundation.
|Harold G. Moulton|
• We obtained a rare copy this week of Readings in the Economics of War (Chicago, Illinois: University of Chicago Press, 1918), edited by J. Maurice Clark, Walton H. Hamilton . . . and Harold G. Moulton. It was only by chance that we came across the book, as it is listed in every source but one under either J.M. Clark alone, or “Clark and Hamilton,” leaving Moulton as editor number three out in the cold. As anticipated, the book contains contemporary discussions of how the various belligerents financed World War I. We haven’t done more than flip through it yet, but there is a section on the pros and cons of debt or taxes to finance the war . . . and using debt comes across (at least after a brief look) as a distant second, as would become even more apparent when an increase in government debt became viewed as the only recourse for financing anything, and using the tax system primarily to engage in “social engineering” as John Maynard Keynes advocated, although even he said to use taxation instead of debt in World War II.
|Courtesy of Guy "the Fulton Sheen Guy" Stevenson|
• Here’s the usual announcement about the Amazon Smile program, albeit moved to the bottom of the page so you don’t get tired of seeing it. To participate in the Amazon Smile program for CESJ, go to https://smile.amazon.com/. Next, sign in to your account. (If you don’t have an account with Amazon, you can create one by clicking on the tiny little link below the “Sign in using our secure server” button.) Once you have signed into your account, you need to select CESJ as your charity — and you have to be careful to do it exactly this way: in the space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice Arlington.” If you type anything else, you will either get no results or more than you want to sift through. Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice Arlington” into the space provided, hit “Select” — and you will be taken to the Amazon shopping site, all ready to go.
• We have had visitors from 33 different countries and 43 states and provinces in the United States and Canada to this blog over the past week. Most visitors are from the United States, the United Kingdom, Canada, Australia, and India. The most popular postings this past week in descending order were “5. Man Versus Machine,” “Cardinal Müller and the Just Third Way, Part I,” “News from the Network, Vol. 10, No. 19,” “Thomas Hobbes on Private Property,” and “Cardinal Müller and the Just Third Way, Part II.”
Those are the happenings for this week, at least those that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we’ll see that it gets into the next “issue.” If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated, so we’ll see it before it goes up.#30#