Tuesday, June 16, 2020

The Dignity of Ownership

As we saw in the previous posting on this subject, we began this discussion a month ago after seeing an article in a webzine about the dignity of work, phrased in such a way as to suggest that it was work itself, rather than the human person doing the work, that takes priority.


In the article, “Nonessential Workers” and the Essential Dignity of Work,” there also seemed to be some confusion about different types of work, and even work as work, not to mention the concept of dignity.  It seemed to paint the situation as a single issue in black and white, while in reality it is a number of issues that get into some very gray areas.

After a discussion on whether it was work-as-work, or the human person, that had dignity, we ran up against a problem.  You see, the webzine in which the article appeared is a Catholic publication, the author is a Catholic, and the almost unquestioned authority on labor in the United States, and the source to which many people still defer on matters of social and economic justice relating to labor issues was a Catholic priest.

Msgr. John A. Ryan


So, what was the problem?  The priest in question, Monsignor John A. Ryan, was a modernist, a socialist, and had a New Age guru as his political and economic mentor: Ignatius Loyola Donnelly, “America’s Prince of Cranks.”  Himself known as “the Father of the Minimum Wage,” Msgr. Ryan’s efforts oriented social, political, and economic thought seemingly irrevocably in the direction of socialism, at least according to the solidarist economist Dr. Franz H. Mueller, student of Fr. Heinrich Pesch, S.J., and member of the K√∂nigswinterkreis discussion group that sent two of its members, Fr. Gustav Gundlach, S.J., and Fr. Oswald von Nell-Breuning, S.J., to Rome in 1931 to consult with Pope Pius XI on Quadragesimo Anno.

Msgr. Ryan’s social doctrine meshed perfectly with the Keynesian programs implemented during the New Deal (possibly derived from theosophist Jacob Sechler Coxey’s program from the early 1890s) and that continue in full force today.  One of the basic principles of Keynesian economics is that only a “job” entitles someone to income.  It doesn’t have to be productive work, as long as it’s a job for which someone is paid.

J.M. Keynes


In fact, under certain circumstances (according to Keynes), it is better that the job consist of doing something completely unproductive, just to generate income (“effective demand”) to clear existing production.  Even someone who is paid to do nothing is contributing to society in the Keynesian Universe, because he is “stimulating demand.”

Over the course of this series we’ve seen that neither Msgr. Ryan’s theories nor his behavior toward others indicated an adequate degree of respect for human dignity — by which we mean respect for the dignity of the actual human person, not humanity as a whole, the State, the government, or anything else.

Interestingly, the primary authority on which Msgr. Ryan claimed to rely for his social doctrine and theories — Pope Leo XIII’s encyclical Rerum Novarum — actually said almost exactly the opposite of what Msgr. Ryan alleged it said.  The very idea of a job that exists only to provide someone with income was unthinkable to Leo XIII; labor does not ennoble man, rather, man ennobles labor.  As he said,

Pope Leo XIII

It is surely undeniable that, when a man engages in remunerative labor, the impelling reason and motive of his work is to obtain property, and thereafter to hold it as his very own. If one man hires out to another his strength or skill, he does so for the purpose of receiving in return what is necessary for the satisfaction of his needs; he therefore expressly intends to acquire a right full and real, not only to the remuneration, but also to the disposal of such remuneration, just as he pleases. Thus, if he lives sparingly, saves money, and, for greater security, invests his savings in land, the land, in such case, is only his wages under another form; and, consequently, a working man’s little estate thus purchased should be as completely at his full disposal as are the wages he receives for his labor. But it is precisely in such power of disposal that ownership obtains, whether the property consist of land or chattels. Socialists, therefore, by endeavoring to transfer the possessions of individuals to the community at large, strike at the interests of every wage-earner, since they would deprive him of the liberty of disposing of his wages, and thereby of all hope and possibility of increasing his resources and of bettering his condition in life.  (Rerum Novarum, § 5.)

Leo XIII followed this with more discussion on the importance of ordinary people becoming owners of capital — including both land and technology as non-human “capital” in contrast to the human input to production, “labor” — both as a natural right and an economic necessity.  He concluded the first and main part of Rerum Novarum by declaring,

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. 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.  (Rerum Novarum, § 46.)

Be sure to translate accurately.


We need to make a slight semi-digression here.  Probably under the influence of Msgr. Ryan, this passage has often been creatively reedited to read “as many as possible of the workers to become owners” instead of “as many as possible of the people” — a significant difference.  This, of course, comes from the socialist belief that labor alone is responsible for all production and thus only labor grants the right to be an owner and conveys the rights of ownership . . . which would invalidate inheritance, charity, welfare, and so on.

The problem, of course, is that the substitution of “workers” for “people” contradicts not only the English translation, but the official Latin text.  “[P]rovidere ut quamplurimi ex multitudine rem habere malint” is rendered “so that as many as possible of the multitude would prefer to be provided the thing”; “quamplurimi ex multitudine” not “quamplurimi ex operarios.”

Returning to the main thread of our story, it is evident to anyone who isn’t irretrievably enmeshed in the new things of socialism, modernism, and the New Age, that the point of Rerum Novarum was not the dignity of labor or the dignity of capital, but the dignity of the human person, every child, woman, and man.  Someone’s dignity is enhanced by leading a productive, virtuous life, regardless whether one produces by means of his or her labor, capital, or both; the right to be an owner of capital is as natural to human beings as the right to own labor.

Aquinas: Big errors grow from little ones.


The only difference in Aristotelian-Thomist terms is that labor ownership is an “internal accidental” (attached to the human body), while capital ownership is an “external accidental” (not attached to the human body).  Unless you make the argument that human beings are only their physical envelopes (as materialists do), there is no real difference between capital ownership and labor ownership as a means of becoming productive.

There is, however, a slight problem in how Leo XIII suggested the beneficiaries of widespread capital ownership were to pay for it.  This doesn’t change the pope’s goal, however, just the means of reaching it.  The fact is, if you pay workers more in wages, they can’t save because the price level rises in response to both the increased demand and the increased cost of production.  In many cases, the workers are worse off than before.  Few people (if any) can afford to save in the required amounts necessary to purchase modern capital instruments.

Thus, the only problem with what Leo XIII said in this passage is with his prudential suggestion as to how capital acquisition should be financed: by cutting consumption and saving.  This, however, is not the only way to save.  Most new capital formation in fact, especially during periods of rapid or intensive economic growth, is not financed by cutting consumption in the past, but by increasing production in the future: “future savings” as opposed to “past savings.”  (This, by the way, is considered “the first principle of finance”: to know the difference between a mortgage, which is “past savings,” and a bill of exchange, which is “future savings.”)

Louis Kelso

Louis Kelso and Mortimer Adler solved Leo XIII’s inadvertent difficulty in the two books they co-authored.  These were The Capitalist Manifesto (1958) and The New Capitalists (1960), neither of which actually describes “capitalism” understood as concentrated private ownership of the means of production.

The subtitle of the second book is revealing: “A Proposal to Free Economic Growth From the Slavery of Savings.”  Kelso and Adler didn’t mean that savings are unnecessary, but that savings should work for people, rather than people work for savings.

#30#