Word on the street is Pope Leo XIV is issuing a new “encyclical” on May 15, 2026. The document, provisionally titled Magnifica Humanitas (hmmm . . .) is expected to be a follow-up on Pope Leo XIII’s 1891 effort, Rerum Novarum, “On Labor and Capital,” which some (erroneously, if it matters) consider the first “social encyclical.”
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| Leo XIV (if you didn't know) |
Why should we care? After all, CESJ is not a Catholic or even a religious organization, and the Just Third Way is not a religious movement. We don’t even take up collections . . . although, if you insist, we do take contributions, which you can do on the CESJ website. We also give sermons, er, that is, lectures and seminars, on the principles and applications of the Just Third Way. Such as this blog posting.
And that is why we, a non-religious organization, care about the new encyclical and view it as a great opportunity to focus attention on the Just Third Way, particularly as applied in a proposal we call the Economic Democracy Act (EDA).
As we said, CESJ is not a Catholic organization, but its basic principle is the natural law “written in the heart” of every human being. CESJ was co-founded by a Catholic priest, Rev. William J. Ferree, S.M., Ph.D. and accepts the social teachings of the Catholic Church, chiefly as presented in the encyclicals Rerum Novarum (1891), Quadragesimo Anno (1931), and Divini Redemptoris (1937), and now in what will probably be titled Magnifica Humanitas. The focus is expected to be human dignity and — of course — social justice.
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| Leo XIII (XIV - XIII = I) |
But what is “social justice”? In our view, and to oversimplify, social justice is the virtue directed at the common good of all humanity: that vast network of institutions — social habits — within which human beings as “political animals” acquire and develop virtue (“human-ness”) and therefore become more fully human. All humans are as fully human and are human in the same way as all other humans but have acquired different degrees and kinds of virtue and vice — individual habits.
Thus, oversimplifying even further, social justice does not mean doing good but making it possible to do good. One of those goods is that (as Leo XIII said) “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.)
The question is, How? Leo III and, later, Pope Pius XI, suggested paying workers more so they could save and buy capital. That, however, for many reasons is unrealistic.
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| Mortimer J. Adler |
Fortunately, Louis Kelso and Mortimer Adler addressed this problem in their co-authored books, The Capitalist Manifesto (1958) and The New Capitalists (1961). The subtitle of the latter sums up Kelso’s basic concept: “A Proposal to Free Economic Growth from the Slavery of Savings.”
Kelso did not mean saving is bad. Saving is essential to finance capital formation. What he meant is that we should not be trapped — enslaved — by the idea that the only way to save is to cut consumption in the past. That is why Kelso proposed shifting saving from cutting consumption in the past, to increasing production in the future: changing the basis of “money” used for capital investment from claims on existing assets, to claims on the present value of the future stream of income from new or existing capital.
Understanding there are two kinds of money — past savings money and future savings money — Kelso realized two things. One, the proper use of past savings money is to finance consumption, not production. Two, the proper use of future savings money is to finance production, not consumption.
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| Louis O. Kelso |
This solves the problem. Only the rich can use past savings. Everybody — as Kelso demonstrated with his invention of the ESOP — can use future savings. Unfortunately, a lot of people don’t realize this, and we don’t expect to see it in the new encyclical . . . to which, of course, anyone would reasonably respond, “Why should we?”
Obviously, not even the pope can put something into an encyclical if he doesn’t know about it (we have a hunch “papal infallibility” might not apply in such a case). That is why we think it is a good idea for the pope to consider another encyclical as a follow-up to Magnifica Humanitas, possibly on the upcoming centenary of Quadragesimo Anno in 2031.
We think such an encyclical would help guide people everywhere in the challenge of redesigning their basic economic policies and institutions — especially monetary, financial, and tax systems that are today widening the gap between the richest few and the majority of humanity. The goal would be to extend universal and equal capital ownership opportunities in the future without harming property rights of existing owners — to lift up the 99% without pulling down the 1%.
The primary focus of such an encyclical would be the economic empowerment and full development of every person based on the three principles of economic justice presented by Kelso and refined by CESJ:
· Participative Justice,
· Distributive Justice, and
· Social Justice.
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| Pius XI (Quadragesimo Anno author) |
Such an encyclical could be followed up with an interfaith conference, and then by a series of interdisciplinary conferences, exploring how best to implement economic personalism throughout the world. The goal would be to provide every child, woman, and man in the world with equal access to the means to become capital owners. In this way Leo XIV, as a global teacher, communicator and servant-leader, could catalyze unified action to build a Culture of Life which respects the dignity, empowerment and freedom of every human being regardless of individual faith, philosophy, or lack thereof.
This is not the place to describe details, ramifications, or possible complications of the theory or practice of the Just Third Way of Economic Personalism. Those can be found on the CESJ website and the many publications, some of which are available as free e-books on the website.
No, the important issue here is to identify the one world leader whom we believe has the prestige and the power to understand, accept, and promote the Just Third Way of Economic Personalism as the optimal corrective to today’s catastrophic global situation. We are at a turning point in history, and as Lincoln said in his 1862 Annual Message to Congress, “We shall nobly save, or meanly lose, the last best hope of earth.”
That leader may be His Holiness, Pope Leo XIV. The corrective is, in part, an encyclical on economic justice that could be issued on the upcoming centenary of Quadragesimo Anno in 2031.
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