Obviously, if you have to pay for justice, it isn’t justice. That’s not what we mean. We’re referring to the fact that meeting the demands of justice can — and does — often incur a cost in terms of time, resources, and money. This is not “buying justice,” any more than paying a judge a salary or jury members for their time is purchasing a verdict (although, obviously, the system can be subverted and corrupted).
No, what we’re talking about is the great question that all the social reformers we noted in the previous posting on this subject left unanswered: how to pay for the restructuring of the social order and turn people into capital owners without redistribution or any other form of injustice? This is not buying justice, but it is plunking down the cash to pay for its administration, or avoid or prevent injustice.
|Justice is the foundation of charity, not its predecessor.|
The bottom line here is that you don’t establish or maintain justice by unjust means — and that includes redefining justice to fit your particular program. At the top of the list is how people without adequate savings (or any savings at all) can acquire and possess private property in capital without at the same time committing an injustice against anyone else. After all, can anything be said to establish justice if it is done unjustly?
The question then becomes, How do people acquire and possess private property in anything? The obvious answer, of course, is ordinarily with money. Yes, ownership of something can be inherited, won in a lottery or contest, or even received as a gift. As a general rule, however, if someone wants to own something — legitimately (which is the whole point of this discussion) — he or she must pay for it.
|There is also future savings.|
And what do people pay with? We just settled that: with money. But what kind of money? It turns out that there are two basic types of money, based on the two fundamental types of financial securities: mortgages and bills of exchange.
These are confusing terms to many people, but they are easy to understand. It’s why the first principle of finance is to know the difference between a mortgage and a bill of exchange. A mortgage is a “past savings” instrument. Money backed with a mortgage type security is “past savings money.”
A bill of exchange is a “future savings” instrument. Money backed with a bill of exchange type security is “future savings money.”
These two designations tell us how money should be used. Past savings money should be used to purchase the existing goods that back the money. Future savings money should be used to purchase future goods that pay for themselves.
Understanding that there are two types of money lets us understand how to overcome the Great Divide between direct provision for people’s needs and making it possible for people to take care of themselves. When you think all money is past savings money, you automatically assume that anything someone has necessarily comes from somebody else.
|Shift into the future savings paradigm or get run off the road.|
When you recognize that there is both past savings money and future savings money, and how they are properly used, you suddenly realize that the old, limited “past savings paradigm” isn’t exactly wrong, but it is incomplete. And what is missing from the past savings paradigm is the fact that it lacks the potential to provide the means by which people without savings can legitimately become owners of capital.
And that leads to the Great Divide between those who insist that the State has the direct responsibility to meet people’s wants and needs, and those who insist that the State’s responsibility extends only to providing the environment and equality of opportunity, with a helping hand if things don’t work out. This also takes care of those who try to combine the best of both systems and end up getting the worst of the deal all around.
|Pope Leo XIII|
The guiding principle of the Just Third Way of Economic Personalism is that the primary or immediate responsibility for each person’s needs is the person him- or herself. The State’s responsibility is limited to providing access to the means of exercising each person’s natural rights of life, liberty, and private property within the limits of each person’s capacity to do so, and to assist on an emergency basis if need becomes extreme. This includes (but is not limited to) enforcing contracts, providing a “level playing field,” and providing for a minimum of people’s needs when all other recourse fails. As Pope Leo XIII explained in his summary of the role of the State (i.e., what comes under charity and what can be enforced under justice),
The chief and most excellent rule for the right use of money is one the heathen philosophers hinted at, but which the Church has traced out clearly, and has not only made known to men's minds, but has impressed upon their lives. It rests on the principle that it is one thing to have a right to the possession of money and another to have a right to use money as one wills. Private ownership, as we have seen, is the natural right of man, and to exercise that right, especially as members of society, is not only lawful, but absolutely necessary. “It is lawful,” says St. Thomas Aquinas, “for a man to hold private property; and it is also necessary for the carrying on of human existence.”“ But if the question be asked: How must one's possessions be used? — the Church replies without hesitation in the words of the same holy Doctor: “Man should not consider his material possessions as his own, but as common to all, so as to share them without hesitation when others are in need. Whence the Apostle with, ‘Command the rich of this world... to offer with no stint, to apportion largely.’” True, no one is commanded to distribute to others that which is required for his own needs and those of his household; nor even to give away what is reasonably required to keep up becomingly his condition in life, “for no one ought to live other than becomingly.” But, when what necessity demands has been supplied, and one's standing fairly taken thought for, it becomes a duty to give to the indigent out of what remains over. “Of that which remaineth, give alms.” It is a duty, not of justice (save in extreme cases), but of Christian charity — a duty not enforced by human law. (Rerum Novarum, § 22.)
The pope could not have been clearer. The State’s role is not to care for everybody as the socialists assume and the capitalists fear, but to make it possible for each person to take care of him- or herself. And how is that to be done? Leo XIII was clear about that, too:
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. (Ibid., § 46.)
|Maybe what's needed is a new, personalist paradigm.|
Unfortunately, Leo XIII made a mistake about money and assumed that only past savings money can be used to finance capital acquisition.
If a workman's wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income. Nature itself would urge him to this. (Ibid.)
Since this is not practical, both capitalists and socialists rejected the necessity of widespread capital ownership. They assumed that what Leo XIII really meant was that either the capitalists or the State should take care of everybody by paying or giving them enough money, and not worry about making people capital owners so they could take care of themselves.
Correcting this complete reinterpretation of natural law and the Christian message (not to mention the Jewish, Muslim, Hindu, etc., etc., etc., messages), Louis Kelso proposed that ordinary people be given access to future savings on the same terms as the currently wealthy. By collateralizing capital acquisition loans with capital credit insurance and reinsurance instead of existing accumulations of wealth, Kelso’s concepts removed the barriers to full participation in the common good that both capitalists and socialists thought were laws of nature.
One possible program applying Kelso’s concepts on a broad scale can be found in the Capital Homesteading proposal of the interfaith Center for Economic and Social Justice (CESJ) in Arlington, Virginia.