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Wednesday, May 26, 2021

The Secret History of Rerum Novarum

As we saw in the previous posting on this subject, the agrarian socialist Henry George managed to make his brand of “the Democratic Religion” headline news throughout the English-speaking world in 1886 and 1887 by running for mayor of New York City . . . although people wonder to this day just what it was he expected to be able to do once he was in charge of the Big Apple.  New York may be the center of the universe (especially if you’re a New Yorker), but even the center of the universe isn’t the entire universe or even the whole state of New York.


That’s not to say there wasn’t some fallout from the campaign.  George’s cohort, the renegade Catholic priest by the name of Father Edward McGlynn got himself excommunicated for disobedience for refusing to go to the Vatican as ordered to explain himself . . . after first complaining that he was being oppressed because he hadn’t been given the chance to go to the  Vatican to explain himself. . . .

Of more interest to the more orthodox and less socialist people, however, both Catholic and non-Catholic, was what happened later.  It seems that at the height of the frenzy caused by the antics of George and McGlynn during and following the 1886 New York City mayoral campaign, Bishop Bernard John McQuaid of Rochester, New York, wrote a series of letters to Archbishop Michael Augustine Corrigan of New York City.

Father Edward McGlynn


In one of these missives, McQuaid noted that “Many of [George’s and McGlynn’s] poor people have been led astray by the use of the names of Cardinal Manning and Bishop Nulty” to give the impression that the Catholic Church endorsed socialism.  McQuaid then commented that “The Holy Father will probably issue a dogmatic decision on the question.” (Letter of January 22, 1887 from McQuaid to Corrigan. University of Notre Dame Archives.)

McQuaid’s letter appears to be the first hint of what would eventually be issued in 1891 as Rerum Novarum, “On the Condition of Labor.”  Considered by many authorities to be the first social encyclical, that is clearly not the case.  This is obvious from the fact that the formal title is an allusion to Gregory XVI’s 1834 encyclical Singulari Nos, “On the Errors of Lamennais,” which referred to what would become known as socialism and modernism as rerum novarum — “new things.”

This does not detract from the genuinely revolutionary nature of the document.  While not the first social encyclical, Rerum Novarum was a new type of social encyclical.  Starting with Mirari Vos in 1832, previous social encyclicals had condemned errors and presented authentic doctrine.  In Rerum Novarum Leo XIII did that, but added a specific suggested program as an alternative to socialist proposals.

Archbishop John Ireland


Not that the road had been particularly smooth.  Following his excommunication for disobedience, McGlynn published a vitriolic article in the North American Review condemning the Catholic Church for requiring clergy to wear the Roman collar and not accepting socialism.  Most of his ire, however, was directed at the alleged mandate for parishes to establish parochial schools and indoctrinate children in anti-American beliefs under pain of excommunication. (Edward McGlynn, “The New Know-Nothingism and the Old,” The North American Review. August 1887, Vol. 145, Issue 369, 192-205. Archbishop John Ireland’s 1890 address to the National Educational Association of the United States, “State Schools and Parish Schools,” may have been in part a response to McGlynn’s article.  Archbishop John Ireland, The Church and Modern Society, Vol. I & II.  St. Paul, Minnesota: The Pioneer Press, 1905, I.215-232.)

For his part, George alienated a large number of supporters by insulting — or allowing to be insulted — William O’Brien, editor of The United Irishman, journal of the Irish National Land League. (The Irish National Land League, Conradh na Talún, founded 1879, suppressed in 1881, and revived in 1882 as the Irish National League.  The organization in the United States retained the name National Land League.) Without O’Brien’s knowledge or permission, George announced the Irish leader as the featured speaker at the largest pro-George rally ever assembled.  O’Brien declined, saying he was in New York to promote Irish nationalism, not Henry George.  Georgists’ subsequent display of bad temper and petulance disgusted many people. (“Angry with O’Brien,” Washington Evening Star, June 6, 1887, 1; “The Big Labor Parade,” Bridgeport Morning News, June 6, 1887, 1; “Mr. O’Brien Commended: All But the George People Say He Did Well,” The New York Times, June 7, 1887.)

Charles Stewart Parnell, League President


Repeated attempts to persuade McGlynn to comply with the two conditions for lifting his excommunication — apologize and go to Rome as originally ordered — were repeatedly rejected.  Instead, McGlynn invariably chose to grandstand and air his grievances. (“Another Foolish Priest,” Meriden Daily Republican, August 4, 1887, 1; “Rebellious Priests,” The Toronto Daily Mail, August 15, 1887; J.U. Heinzle, S.J., “Galileo Galilei and Dr. McGlynn,” The Catholic World, October 1887, Vol. 46, No. 271; “Will Be Taken Back,” The Boston Evening Transcript, October 27, 1887, 1; “Dr. McGlynn Talks Back,” The New York Sun, November 6, 1887, 11; “Dr. McGlynn Must Recant to Regain Favour,” The Toronto Daily Mail, July 17, 1890, 1; “Dr. M’Glynn Restored,” The Irish Canadian, August 28, 1890, 4)

Catholic bishops attacking public schools


On one occasion McGlynn outraged Catholic and Protestant alike by delivering a “vulgar tirade” in which he called Leo XIII an imbecile. (“Look On This Picture And On This,” Waterbury Evening Democrat, January 13, 1888, 2.) Anxious to keep his name before the public, especially after he announced his candidacy for president in opposition to George, (“Dr. McGlynn and Mr. George: Former Master and Pupil are Very Much at Odds,” The New Evening York World, February 11, 1888, 1.) McGlynn claimed there were attempts to bribe him into compliance that he “scornfully rejected,” although no evidence of any such offers exist. (“Defiant McGlynn.  Henry George’s Ex-Partner Says He Is Still On the Warpath,” Sacramento Daily Record-Union, December 3, 1888, 1.)

G.K. Chesterton advocated ownership.


What broke the stalemate was Rerum Novarum, issued May 15, 1891.  Socialists were taken completely by surprise.  They had expected the usual condemnations which, of course, were not lacking. (Rerum Novarum, §§ 4-5, 14-17) What caught them off guard was the proposed alternative to socialism, which can be summed up in two key points:

·      Redistribution that the socialists present as mandatory and a permanent solution, is a voluntary and temporary charitable expedient except in “extreme cases” when duly constituted authority can enforce limited redistribution by law, (Ibid., § 22.) and

·      In contrast to the socialist abolition of private property, there is to be a restructuring of the social order to shift economic life from the wage system to an ownership system that will encourage “as many as possible of the people to become owners.” (Ibid., § 46.)

There was, however, a serious omission from the papal program, and it was fatal.  Not being  conversant with modern financing techniques, the only suggestion Leo XIII had about how ordinary people can become capital owners is to pay workers more so they can accumulate savings. (Ibid.)

Walter Reuther


There are two problems with the pope’s recommendation.  One, increasing pay without a corresponding increase in productivity typically raises the price level, often more than the wage increase.  This usually nullifies any wage increase, making it virtually impossible to save. (Walter Reuther, Testimony before the Joint Economic Committee of Congress, February 20, 1967.)

Two, relying on past savings to finance new capital not only restricts ownership to those with savings, it also decreases consumer demand.  Decreasing demand makes any new capital less likely to be profitable and thus less able to pay for itself out of the profits it generates. (Harold G. Moulton, The Formation of Capital.  Washington, DC: The Brookings Institution, 1935, 28-29.)

Financing with future increases in production instead of past decreases in consumption as Louis Kelso and Mortimer Adler advocated in their second book, The New Capitalists (1961), gets around these problems. (Louis O. Kelso and Mortimer J. Adler, The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings.  New York: Random House, 1961.) Both capitalists and socialists, however, were quick to seize on the presumed impossibility of financing expanded capital ownership to justify their own positions.  Capitalists asserted that what the pope proposed supported them, at least as long as they treated workers better.

In other words, as far as the capitalists and socialists were concerned, nothing had changed . . . until the socialists had a little time to reflect and get moving to respond to this new threat — which is what we will look at in the next posting on this subject.