Monday, August 15, 2005

Memo to TCRNews: Context Matters

TCRNews's blog -- by way of la nouvelle théologie -- posts a rather curt Memo to the Acton Institute from John Paul II":

It is unacceptable to say that the defeat of 'Real Socialism' leaves capitalism as the only mode of economic organization. --Pope John Paul II, Centesimus Annus

In response, Santiago posts this quote from Michael Novak -- a good and necessary reminder to those in the habit of portraying Novak as an indiscriminate apologist for unbridled capitalism:

"Having always resented such moral imperialism as Paul Tillich's 'Every serious Christian must be a socialist,' and the British left's 'Christianity is the religion of which socialism is the practice,' I would by no means support he sentiment that "Every serious Christian must be a democratic capitalist," or that "Christianity is the religion of which democratic capitalism is the practice." As Centesiums Annus insists, the Catholic Church 'has no models to offer'--and, indeed, has powerful reasons to criticize many abuses and wrongs in the democratic capitalist societies. The Pope rightly insists that no worldly system can ever claim to be the Kingdom of God. What good would a Church be if it didn't constantly criticize the City of Man in the light of the City of God, sub specie aeternitatis? Indeed, as Thomas Pangle repots in his study of Tocqueville's Democracy in America, this emphasis on immortality and eternal life is the indispensable contribution of religion to the democratic experiment."

Michael Novak, The Catholic Ethic and the Spirit of Capitalism, New York, NY: The Free Press, 1993. Ppg. 142-143 of Part 2, "A New Birth of Freedom: John Paul II," in the section titled, "Toward a More Civil Debate."

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One might also add the following Initial reactions to Centesimus Annus by our favorite neocons (Neuhaus and Novak, Weigel in absentia), as compiled by The Acton Institute:

  • From Richard John Neuhaus (First Things):
    "While Centesimus Annus is a ringing affirmation of the free economy, there is nothing in it to justify complacency among the friends of capitalism. Socialism is dead, but 'the new capitalism' has hardly met the challenges raised by the pope."

  • From Michael Novak (The Washington Post, May 7, 1991):
    "The pope's splendid new encyclical. . . . adds a new characteristic to his defense of liberty. It has been clear for many years that Pope John Paul II supports democratic institutions more than any previous pope and sees them as the best way to secure human rights. It has also been clear to some that he supports a type of 'reformed capitalism.' But this new encyclical makes clear beyond a shadow of a doubt that the pope endorses the 'business economy,' the 'market economy,' or simply the 'free economy' as the goal he now proposes for formerly Communist and Third World societies. . . .

    "The institutional limitations on capitalism on which the pope insists are two: first, a juridical framework that protects other fundamental liberties besides economic liberty; and, second, a grounding of all liberties in a moral and religious core. In short, the economic system must be limited by a democratic polity and by a strong set of moral and cultural institutions. . . . Only in this way will it, better than other systems, meet basic needs and constantly raise the level of the common good of peoples. . . .

    "The pope's greatest originality . . . may lie in going beyond questions of politics and economics to questions of morality and culture. In a sense, the political argument of the 20th century has been resolved in favor of capitalism. Thinking of the chief battleground of the next century, the pope turns to the disappointing use that existing free societies are now making of their freedom. He turns to the inadequacies of modern culture and morals. . . .

    "You can tell the quality and depth of a nation's culture, the pope trenchantly states, by observing what it produces and consumes. This simple remark imposes a new moral accountability on capitalist firms, advertisers and media. In this century, the pope thinks free peoples have neglected their responsibilities to the quality of the moral atmosphere, the cultural ecology in which they try to raise their children and to be faithful to their destiny of free citizens. . . .

    "This is a great encyclical. It will release enormous energies in Eastern Europe, the Third World and advanced societies. It should read as well in 2091 as Leo XIII's accurate predictions about socialism in 1891 still read today. No other world leader could have produced such a profound tour d'horizon. Get a copy and see for yourself. You will be glad you did."

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Returning to the paragraph of which Stephen Hand cited only the first sentence, let's study it for a minute in its entirety:

We have seen that it is unacceptable to say that the defeat of so-called "Real Socialism" leaves capitalism as the only model of economic organization. It is necessary to break down the barriers and monopolies which leave so many countries on the margins of development, and to provide all individuals and nations with the basic conditions which will enable them to share in development. This goal calls for programmed and responsible efforts on the part of the entire international community. Stronger nations must offer weaker ones opportunities for taking their place in international life, and the latter must learn how to use these opportunities by making the necessary efforts and sacrifices and by ensuring political and economic stability, the certainty of better prospects for the future, the improvement of workers' skills, and the training of competent business leaders who are conscious of their responsibilities.

I would posit that the above recommendation is wholeheartedly supported by the Acton Institute, Fr. Neuhaus and Michael Novak -- the latter of course contending that the best way to rescue individuals from material poverty is to open the doors of opportunity to small business with proper training and support -- or, in the words of John Paul II, enabling them to "acquire expertise, to enter the circle of exchange, and to develop their skills in order to make the best use of their capacities and resources."

Nevertheless, the "Whig Thomists" readily acknowledge that "free market" -- for all of its great potential -- is not without its flaws, and that John Paul II's endorsement of "the business economy" was a cautious and justifiably qualified endorsement.

To pursue this further, the Pope reminds us "there are many human needs which find no place on the market" -- and that in certain Third World contexts, the objectives specified by Rerum Novarum still remain valid and even constitute a goal "yet to be reached, if man's work and his very being are not to be reduced to the level of a mere commodity." Among these objectives are a sufficient wage for the support of the family, social insurance for old age and unemployment, and adequate protection for the conditions of employment.

The Pope goes on to affirm the legitimacy of trade unions and other workers' organizations in their demand for such rights:

In this sense, it is right to speak of a struggle against an economic system, if the latter is understood as a method of upholding the absolute predominance of capital, the possession of the means of production and of the land, in contrast to the free and personal nature of human work. In the struggle against such a system, what is being proposed as an alternative is not the socialist system, which in fact turns out to be State capitalism, but rather a society of free work, of enterprise and of participation. Such a society is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied.

Likewise, while acknowledging the legitimate role of profit as indication of a successful business, John Paul II reminds us that "profitability is not the only indicator of a firm's condition":

. . . It is possible for the financial accounts to be in order, and yet for the people -- who make up the firm's most valuable asset -- to be humiliated and their dignity offended. Besides being morally inadmissible, this will eventually have negative repercussions on the firm's economic efficiency. In fact, the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavouring to satisfy their basic needs, and who form a particular group at the service of the whole of society. Profit is a regulator of the life of a business, but it is not the only one; other human and moral factors must also be considered which, in the long term, are at least equally important for the life of a business.

Note -- It is interesting here that the Pope's characterization of a company as a "community of persons" and his criteria for a business to be considered genuinely successful by demonstrating behavior above and beyond the task of earning profit is not unlike that laid out by Michael Novak's advice to businessmen in Toward Business as a Calling: Work and the Examined Life:

. . . business as a mediating institution has seven internal responsibilities that arise from the nature of the corporation itself and an additional seven external responsibilities that are derived from Judeo-Christian religious teaching. In order to succeed, a business must: (1) satisfy customers with goods and services of real value; (2) make a reasonable return on the resources entrusted to it by investors; (3) create new wealth; (4) create new jobs; (5) defeat envy by generating upward mobility and by demonstrating that talent and hard work will be rewarded; (6) promote inventiveness and ingenuity; and (7) diversify the interests of the republic, thus guarding against majoritarian tyranny.

The following additional external responsibilities are not found in business as business but in the convictions of its practitioners who bring their faith to the business world: (1) to shape a corporate culture that fosters the three cardinal business virtues ["creativity", "community" and "practical realism"] as well as other virtues; (2) to protect the political soil of liberty; (3) to exemplify respect for the rule of law; (4) to reflect and act in practical effective ways, individually and with others, in order to improve aspects of society; (5) to communicate often and fully with investors, pensioners, customers, and employers; (6) to voluntarily contribute toward the improvement of civil society; and (7) to protect the moral ecology of freedom.

[Summarized in Michael Novak's Portrait of Democratic Capitalism, Edward W. Younkins Markets & Morality Volume 2, Number 1. Spring 1999].

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So whether one speaks of the "Whig Thomist's" endorsement of capitalism or John Paul II's oppostion to it, context matters -- and one cannot stress the necessity of examining the source to get the whole picture.

I'll close with John Paul II's address of the initial passage -- a lengthy citation, but bear with me, as he returns once again to the question:

. . . can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

The answer is obviously complex. If by "capitalism" is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a "business economy", "market economy" or simply "free economy". But if by "capitalism" is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.

The Marxist solution has failed, but the realities of marginalization and exploitation remain in the world, especially the Third World, as does the reality of human alienation, especially in the more advanced countries. Against these phenomena the Church strongly raises her voice. Vast multitudes are still living in conditions of great material and moral poverty. The collapse of the Communist system in so many countries certainly removes an obstacle to facing these problems in an appropriate and realistic way, but it is not enough to bring about their solution. Indeed, there is a risk that a radical capitalistic ideology could spread which refuses even to consider these problems, in the a priori belief that any attempt to solve them is doomed to failure, and which blindly entrusts their solution to the free development of market forces.

The Church has no models to present; models that are real and truly effective can only arise within the framework of different historical situations, through the efforts of all those who responsibly confront concrete problems in all their social, economic, political and cultural aspects, as these interact with one another. For such a task the Church offers her social teaching as an indispensable and ideal orientation, a teaching which, as already mentioned, recognizes the positive value of the market and of enterprise, but which at the same time points out that these need to be oriented towards the common good. This teaching also recognizes the legitimacy of workers' efforts to obtain full respect for their dignity and to gain broader areas of participation in the life of industrial enterprises so that, while cooperating with others and under the direction of others, they can in a certain sense "work for themselves" through the exercise of their intelligence and freedom.

P.S. But don't take my word for it. As Novak says: "Get a copy and see for yourself. You will be glad you did."