Part One — Rerum Novarum
The following are excerpts from Rerum Novarum, the 1891 encyclical of Pope Leo XIII, On Capital and Labor, set forth, fittingly, in italics. We do not intend to represent that our selected excerpts necessarily defines the full intent and meaning of the encyclical although we think they overwhelm selections that have been used to infer that there is a preference for big government interventions in economic matters or that are used to defend socialism in all but name. They comprise a major portion of its teachings and are critical to understanding the intent of the encyclical. The selections are interspersed with our humble annotations in a colored typeface. Anything in bold black typeface in the selections from Rerum Novarum represents something we want to emphasize from that document.
The printing of Rerum Novarum we read was about 25 single spaced business size pages, with 64 numbered sections, a long paragraph or two to each section. Again we provide just excerpts here. The full document expounds on the fundamental natural right of private property; that economic classes are not evil in themselves; it critiques socialism; it emphasizes that justice in economic matters is not primarily a government function other that to make sure that laws pertain to all classes; that economic justice is something to be pursued as a Christian duty but that primarily it should come from negotiations between voluntary associations capital (owners or management) and labor (unions). Much guidance is given that the foundation of such organizations be laid in religion.
Excerpts with annotations:
4. To remedy these wrongs the socialists, working on the poor man’s envy of the rich, are striving to do away with private property, and contend that individual possessions should become the common property of all, to be administered by the State or by municipal bodies. . . . They are, moreover, emphatically unjust, for they would rob the lawful possessor, distort the functions of the State, and create utter confusion in the community.
5. . . . 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.
7. . . . Hence, man not only should possess the fruits of the earth, but also the very soil, inasmuch as from the produce of the earth he has to lay by provision for the future. Man’s needs do not die out, but forever recur; although satisfied today, they demand fresh supplies for tomorrow. Nature accordingly must have given to man a source that is stable and remaining always with him, from which he might look to draw continual supplies. And this stable condition of things he finds solely in the earth and its fruits. There is no need to bring in the State. Man precedes the State, and possesses, prior to the formation of any State, the right of providing for the substance of his body.
8 The fact that God has given the earth for the use and enjoyment of the whole human race can in no way be a bar to the owning of private property. . . . that the limits of private possession have been left to be fixed by man’s own industry, and by the laws of individual races.
Which says to this reader that it cannot be maintained that the Christian church calls for socialism or ownership of the means of production including land. Limits within that essential understanding are discretionary.
11. . . . the careful study of nature, and in the laws of nature, . . . has consecrated the principle of private ownership, as being pre-eminently in conformity with human nature, and as conducing in the most unmistakable manner to the peace and tranquility of human existence. The same principle is confirmed and enforced by the civil laws — laws which, so long as they are just, derive from the law of nature their binding force. The authority of the divine law adds its sanction, forbidding us in severest terms even to covet that which is another’s: “Thou shalt not covet thy neighbor’s wife; nor his house, nor his field, nor his man-servant, nor his maid-servant, nor his ox, nor his ass, nor anything that is his.”
This humble reader interprets this as the realization that presuming something is owed to another or others would bring constant turmoil and war and that is part of the fundamental wisdom of God’s commandment. The Church, the Pope, can not alter God’s word, including through the use of other guise in calls for “economic equality” through law (which after all is a cudgel) including species of it (excessive taxation). God kept it simple, anticipating the devices of charlatans, and sophists and the jealousies of us all.
14. The contention, then, that the civil government should at its option intrude into and exercise intimate control over the family and the household is a great and pernicious error. True, if a family finds itself in exceeding distress, utterly deprived of the counsel of friends, and without any prospect of extricating itself, it is right that extreme necessity be met by public aid, since each family is a part of the commonwealth. In like manner, if within the precincts of the household there occur grave disturbance of mutual rights, public authority should intervene to force each party to yield to the other its proper due; for this is not to deprive citizens of their rights, but justly and properly to safeguard and strengthen them.
But the rulers of the commonwealth must go no further; here, nature bids them stop. Paternal authority can be neither abolished nor absorbed by the State; for it has the same source as human life itself. . . . The socialists, therefore, in setting aside the parent and setting up a State supervision, act against natural justice, and destroy the structure of the home.
We humbly interpret this as a presumption against in loco parentis or the mommy state, the daddy state, or the welfare state.
17. . . . There naturally exist among mankind manifold differences of the most important kind; people differ in capacity, skill, health, strength; and unequal fortune is a necessary result of unequal condition. Such inequality is far from being disadvantageous either to individuals or to the community. Social and public life can only be maintained by means of various kinds of capacity for business and the playing of many parts; and each man, as a rule, chooses the part which suits his own peculiar domestic condition. . . .
19. The great mistake made in regard to the matter now under consideration is to take up with the notion that class is naturally hostile to class, and that the wealthy and the working men are intended by nature to live in mutual conflict. So irrational and so false is this view that the direct contrary is the truth. . . . Each needs the other: capital cannot do without labor, nor labor without capital. Mutual agreement results in the beauty of good order, while perpetual conflict necessarily produces confusion and savage barbarity. Now, in preventing such strife as this, and in uprooting it, the efficacy of Christian institutions is marvelous and manifold. . . . in drawing the rich and the working class together, by reminding each of its duties to the other, and especially of the obligations of justice.A personal moral obligation not one that substitutes the power of the state.
20. Of these duties, the following bind the proletarian and the worker: fully and faithfully to perform the work which has been freely and equitably agreed upon; never to injure the property, nor to outrage the person, of an employer; never to resort to violence in defending their own cause, nor to engage in riot or disorder; and to have nothing to do with men of evil principles, who work upon the people with artful promises of great results, (are you listening Catholic liberals Saul Alinsky radicals, union thugs, advocates of job killing unsustainable wage and benefit packages) and excite foolish hopes which usually end in useless regrets and grievous loss. The following duties bind the wealthy owner and the employer: not to look upon their work people as their bondsmen, but to respect in every man his dignity as a person ennobled by Christian character. They are reminded that, according to natural reason and Christian philosophy, working for gain is creditable, not shameful, to a man, since it enables him to earn an honorable livelihood; but to misuse men as though they were things in the pursuit of gain, or to value them solely for their physical powers — that is truly shameful and inhuman.
This last part is all that Pope Francis really needed to repeat in his non – encyclical exhortation in order to make a brief point in his own supposedly non-economic document. Having overdone it, he owes the world a full and clear balanced exposition of the Church’s teachings and a lot better understanding of macro-economics than we have seen.
22. Regarding the sharing of material possessions  It is duty, not of justice (save in extreme cases), but of Christian charity — a duty not enforced by human law.
38. . . . if all may justly strive to better their condition, neither justice nor the common good allows any individual to seize upon that which belongs to another, or, under the futile and shallow pretext of equality, to lay violent hands on other people’s possessions. . . . But there are not a few who are imbued with evil principles and eager for revolutionary change, whose main purpose is to stir up disorder and incite their fellows to acts of violence. The authority of the law should intervene to put restraint upon such firebrands, to save the working classes from being led astray by their maneuvers, and to protect lawful owners from spoliation.
Apropos this, how is it that the U.S. Bishops organization the Catholic Campaign for Human Development (CCHD) got corrupted into funding a lot of Saul Alinsky type operations?
42 – 46 speaks to working conditions and how to establish justice and negotiate wages — to the effect the establishment of societies or boards (unions) 45. Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice. In these and similar questions, however — such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. — in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection.
End selections from Rerum Novarum (note these selections may be added to upon further evaluation)
Part Two – Quadragesimo Anno (full text here)
Quadragesimo Anno, On Reconstruction of the Social Order, is the encyclical issued by Pope Pius XI on the fortieth anniversary of the encyclical by Pope Leo XIII Rerum Novarum (see Part 1 of these pages). That a person cannot properly read latter without having read the earlier should be pretty obvious just from the name (Fortieth Year) but more thoroughly from the number of references, in a tone modern ears might find obsequious, but we will take to be a particular stylistic manner of professional courtesy, il papa a il papa.
The encyclical Quadragesimo Anno insists that it is consistent with Rerum Novarum, but in our judgement is possessed of statements that are inconsistent, or need more explanation as to their application, or predictably allow for corruption of the full intent of both. It is easily abused out of context. It embellishes too much on Rerum’s call for limited government involvement as a necessary adjunct to economic justice, to the extent of altering (corrupting) its message into an extensive call for government. We suspect it was both an overreaction to leftist critiques of Rerum and ignorance of the causes of the then world wide depression.
Sadly an objective understanding of macro-economic thought is not a discipline pursued prior to Papal pronouncements on economic matters.
To be sure, Quadragesimo Anno takes pains to condemn communism, dismissing almost out of hand its basic conceptualization as unholy, and further develops the case that socialism is (in our words) a siren call, to the conclusion that “no one can be at the same time a good Catholic and a true socialist.”
It is a statement inadequately heralded today, but one which had it been uttered so categorically with reference to “capitalism” would be included on the masthead of every leftist publication, and repeated endlessly as some sort of first and only “new” New Covenant commandment.
Regrettably Quadragesimo Anno goes on and on to take the truths of the earlier document too far. It is too easily taken to give aid and comfort to a heavy hand of government to an extent that would largely swallow the rule as regards socialism, in spite of its protestations. It fails to internalize adequately that an endorsement of extensive government control of the economy, through industrial and labor policy, through regulation and taxation, becomes government “possession” of those efforts in all but name. At some points it seems to realize the truth of the latter (55, 95 and other sections). In other points it is inconsistent.
It is too bad the publication of Ludwig von Mises’, Socialism or F.A. Hayek’s, The Road to Serfdom were not available to Pope Pius XI, coming five and 13 years, respectively after . They are not inconsistent in their basic understanding of socialism nor do any reject government per say, nor do they not recognize the importance of a moral order. The advantage would be the rigorousness of the socio-political- economic analysis and driving home the relentless nature of government planning, of more control leading to more control. They would reinforce much of what we think Pius XI was saying, helping to keep it on track.
Rerum called for government intervention as appropriate to protect rights of workers and to provide a level playing field for capital and calling for voluntary Christian ethics to “rule.” Quadragesimo embellishes the government part, (although does not seem to require it) allowing it to be used too easily to justify government’s heavy hand ultimately to the detriment of the poor, to the detriment of full employment and a sustainable economy. Although a 19th century document Rerum remains entirely relevant.
As was true of our effort in Part 1, we do not intend to represent that our selected excerpts necessarily defines the full intent and meaning of the encyclical Quadragesimo Anno. However we believe our selections do serve to support what is our purpose – setting forth neglected Papal pronouncements in support of economic freedom and others for which we believe it necessary to comment. As before, the selections are presented in italics and are interspersed with our annotations, meant to provide modern application of the stated principle, in a colored regular typeface. Anything in bold black typeface within the selections from Quadragesimo Anno represents something we want to emphasize from that document.
Excerpts with annotations:
Regarding the treatment of Rerum Novarum as seminal: Of some 82 formal citations at the end of the document 30 are to Rerum Novarum along with dozens more throughout the text made in a general fashion.
39. All these benefits of Leo’s Encyclical, Venerable Brethren and Beloved Children, which We have outlined rather than fully described, are so numerous and of such import as to show plainly that this immortal document does not exhibit a merely fanciful, even if beautiful, ideal of human society. Rather did our Predecessor draw from the Gospel and, therefore, from an ever-living and life-giving fountain, teachings capable of greatly mitigating, if not immediately terminating that deadly internal struggle which is rending the family of mankind. The rich fruits which the Church of Christ and the whole human race have, by God’s favor, reaped therefrom unto salvation prove that some of this good seed, so lavishly sown forty years ago, fell on good ground. On the basis of the long period of experience, it cannot be rash to say that Leo’s Encyclical has proved itself the Magna Charta upon which all Christian activity in the social field ought to be based, as on a foundation. And those who would seem to hold in little esteem this Papal Encyclical and its commemoration either blaspheme what they know not, or understand nothing of what they are only superficially acquainted with, or if they do understand convict themselves formally of injustice and ingratitude.
41. Yet before proceeding to explain these matters, that principle which Leo XIII so clearly established must be laid down at the outset here, namely, that there resides in Us the right and duty to pronounce with supreme authority upon social and economic matters. Certainly the Church was not given the commission to guide men to an only fleeting and perishable happiness but to that which is eternal. Indeed” the Church holds that it is unlawful for her to mix without cause in these temporal concerns”; however, she can in no wise renounce the duty God entrusted to her to interpose her authority, not of course in matters of technique for which she is neither suitably equipped nor endowed by office, but in all things that are connected with the moral law. For as to these, the deposit of truth that God committed to Us and the grave duty of disseminating and interpreting the whole moral law, and of urging it in season and out of season, bring under and subject to Our supreme jurisdiction not only social order but economic activities themselves.
The statement in bold above would seem to support that the economic system and the specifics of the approach used to address economic well being are prudential matters, as long as those laws do not violate moral laws or involve the adoption of anti-Christian philosophies such as communism and socialism).
46. Accordingly, twin rocks of shipwreck must be carefully avoided. For, as one is wrecked upon, or comes close to, what is known as “individualism” by denying or minimizing the social and public character of the right of property, so by rejecting or minimizing the private and individual character of this same right, one inevitably runs into “collectivism” or at least closely approaches its tenets. Unless this is kept in mind, one is swept from his course upon the shoals of that moral, juridical, and social modernism which We denounced in the Encyclical issued at the beginning of Our Pontificate. And, in particular, let those realize this who, in their desire for innovation, do not scruple to reproach the Church with infamous calumnies, as if she had allowed to creep into the teachings of her theologians a pagan concept of ownership which must be completely replaced by another that they with amazing ignorance call “Christian.”
We would add that there is the possibility of the straw man lurking here. Certainly as regards current times the Catholic Church cannot be accused of turning a blind eye to systems of unfettered capitalism, or unfettered markets because such economic systems exist nowhere on earth . We would further add that there are too many examples of the minimization of the “private and individual character’ of property rights. We would appreciate it if popes would not conflate governmental favoritism shown the rich which are corruptions of free market systems, with free market “capitalist” philosophy.
47. In order to place definite limits on the controversies that have arisen over ownership and its inherent duties there must be first laid down as foundation a principle established by Leo XIII: The right of property is distinct from its use.  That justice called commutative commands sacred respect for the division of possessions and forbids invasion of others’ rights through the exceeding of the limits of one’s own property; but the duty of owners to use their property only in a right way does not come under this type of justice, but under other virtues, obligations of which “cannot be enforced by legal action.”  Therefore, they are in error who assert that ownership and its right use are limited by the same boundaries; and it is much farther still from the truth to hold that a right to property is destroyed or lost by reason of abuse or non-use.
Clearly, property rights are a priori and not to be obstructed because they are not used to someone else’s liking. Generally speaking, Christian virtue, not law, should apply to the use of property legitimately obtained. We still have a right to property even if we do not use it in what others think is the most charitable or Christian way.
55. And therefore, to the harassed workers there have come “intellectuals,” as they are called, setting up in opposition to a fictitious law the equally fictitious moral principle that all products and profits, save only enough to repair and renew capital, belong by very right to the workers. This error, much more specious than that of certain of the Socialists who hold that whatever serves to produce goods ought to be transferred to the State, or, as they say “socialized,” is consequently all the more dangerous and the more apt to deceive the unwary. It is an alluring poison which many have eagerly drunk whom open Socialism had not been able to deceive.
Take note, comfortable leftist academic, the holier than though, the managerial types, the limousine liberals, the denizens of the chancery offices, and those sophist politicians who presume to determine what portion of others wealth is theirs to distribute and for the earner or risk taker to keep.
57. But not every distribution among human beings of property and wealth is of a character to attain either completely or to a satisfactory degree of perfection the end which God intends. Therefore, the riches that economic-social developments constantly increase ought to be so distributed among individual persons and classes that the common advantage of all, which Leo XIII had praised, will be safeguarded; in other words, that the common good of all society will be kept inviolate. By this law of social justice, one class is forbidden to exclude the other from sharing in the benefits. Hence the class of the wealthy violates this law no less, when, as if free from care on account of its wealth, it thinks it the right order of things for it to get everything and the worker nothing, than does the non-owning working class when, angered deeply at outraged justice and too ready to assert wrongly the one right it is conscious of, it demands for itself everything as if produced by its own hands, and attacks and seeks to abolish, therefore, all property and returns or incomes, of whatever kind they are or whatever the function they perform in human society, that have not been obtained by labor, and for no other reason save that they are of such a nature. And in this connection We must not pass over the unwarranted and unmerited appeal made by some to the Apostle when he said: “If any man will not work neither let him eat.” For the Apostle is passing judgment on those who are unwilling to work, although they can and ought to, and he admonishes us that we ought diligently to use our time and energies of body, and mind and not be a burden to others when we can provide for ourselves. But the Apostle in no wise teaches that labor is the sole title to a living or an income.
Simplification – the rich should not be avaricious, hoarding, limit others opportunities, conspire in restraint of trade, pursue laws unto themselves . . . and labor should not be covetous or envious. The second highlight includes an admonition that should be unremarkable . . . that everyone who can should work . . . and yet we listen without reward for the Catholic left to condemn pandering politicians for the abuse of taxpayers as regards welfare matters. In the last highlighted line Pope Pius 11 seems to be saying that labor in and of itself does not create an entitlement to a living or an income? We think this has philosophical relevance to the issue of minimum wage and the so called living wage. Other statements in Quadragesimo Anno call for some sort of living wage for a family but is that obtained out of a moral claim or a legal claim? Other statements seem to support that a moral claim, or better said, a moral or Christian duty on the part of the payer, do not create an exercisable entitlement to another’s property by the laborer / payee except by agreement between the two parties. A taking, or the force of law, i.e. a wage policy is not called for other than to enforce an established agreement.
61. Therefore, with all our strength and effort we must strive that at least in the future the abundant fruits of production will accrue equitably to those who are rich and will be distributed in ample sufficiency among the workers — not that these may become remiss in work, for man is born to labor as the bird to fly — but that they may increase their property by thrift, that they may bear, by wise management of this increase in property, the burdens of family life with greater ease and security, and that, emerging from the insecure lot in life in whose uncertainties non-owning workers are cast, they may be able not only to endure the vicissitudes of earthly existence but have also assurance that when their lives are ended they will provide in some measure for those they leave after them.
Suggests that work, thrift and saving (and we would add risk) are how we are to improve our lot not unjust takings . . . further that providing an inheritance is a good thing to do.
67. By this statement he plainly condemned the shallowness of those who think that this most difficult matter is easily solved by the application of a single rule or measure — and one quite false.
68. For they are greatly in error who do not hesitate to spread the principle that labor is worth and must be paid as much as its products are worth, and that consequently the one who hires out his labor has the right to demand all that is produced through his labor. How far this is from the truth is evident from that We have already explained in treating of property and labor.
Certainly labor must be paid what it has contracted to receive . . . without contradicting passages elsewhere this section cannot be taken as a statement that labor is to receive all proceeds from sales or even to the point of leaving only enough to “repair and renew capital” (see 55).
71. In the first place, the worker must be paid a wage sufficient to support him and his family. That the rest of the family should also contribute to the common support, according to the capacity of each, is certainly right, as can be observed especially in the families of farmers, but also in the families of many craftsmen and small shopkeepers. But to abuse the years of childhood and the limited strength of women is grossly wrong. Mothers, concentrating on household duties, should work primarily in the home or in its immediate vicinity. It is an intolerable abuse, and to be abolished at all cost, for mothers on account of the father’s low wage to be forced to engage in gainful occupations outside the home to the neglect of their proper cares and duties, especially the training of children. Every effort must therefore be made that fathers of families receive a wage large enough to meet ordinary family needs adequately. But if this cannot always be done under existing circumstances, social justice demands that changes be introduced as soon as possible whereby such a wage will be assured to every adult workingman. It will not be out of place here to render merited praise to all, who with a wise and useful purpose, have tried and tested various ways of adjusting the pay for work to family burdens in such a way that, as these increase, the former may be raised and indeed, if the contingency arises, there may be enough to meet extraordinary needs.
As regards wages, we presume this does not mean by force of law or it would contradict much else in this and in Rerum Novarum. Free markets, acquired skill sets, worker mobility, productivity propagate higher wages. If it is taken to mean more, as in some standard wage no matter the skill set, it becomes an economic fiasco, indeed absurdity. A low skill position should be paid at a level approaching a skilled person? Think of the repercussions of not relying on the market to determine what job gets a “living wage.” If society does not differentiate as necessary in the value of various skills then why would anyone acquire an advanced skill?
If a skilled electrician receives say $30 an hour, is a fast food clerk to receive say $25 because that is the minimum necessary to support a family? Would the electrician not rightly demand more, not only comparatively but in order to afford the sandwich that the fast food clerk makes because the cost of that sandwich will surely be driven much much higher? The upward spiral to costs and the accompanying downward spiral to productive job creation would be devastating to an economy, reeking havoc on all classes.
72. In determining the amount of the wage, the condition of a business and of the one carrying it on must also be taken into account; for it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers. If, however, a business makes too little money, because of lack of energy or lack of initiative or because of indifference to technical and economic progress, that must not be regarded a just reason for reducing the compensation of the workers. But if the business in question is not making enough money to pay the workers an equitable wage because it is being crushed by unjust burdens or forced to sell its product at less than a just price, those who are thus the cause of the injury are guilty of grave wrong, for they deprive workers of their just wage and force them under the pinch of necessity to accept a wage less than fair.
This seems to provide some balance to the earlier statement. Free markets determine wages and the success of a business pretty well. It us understood that poor performance cannot be used as an excuse for paying workers what has been agreed to. As regards permutations of the last part of this section, consider the following: it cannot apply to a business that cannot compete because they do not adapt or because other businesses do it better, going out of business is not a shameful act by the business owner if the workers are recalcitrantly unproductive or have excessive wage demands. The idea of the immorality of one business putting another out of business because of predatory practices, collusion and other restraints of trade is well taken.
76. What We have thus far stated regarding an equitable distribution of property and regarding just wages concerns individual persons and only indirectly touches social order, to the restoration of which according to the principles of sound philosophy and to its perfection according to the sublime precepts of the law of the Gospel, Our Predecessor, Leo XIII, devoted all his thought and care.
The exhortations or admonitions prior to this section are matters primarily of person to person responsibility, not social justice by law.
86. The teaching of Leo XIII on the form of political government, namely, that men are free to choose whatever form they please, provided that proper regard is had for the requirements of justice and of the common good, is equally applicable in due proportion, it is hardly necessary to say, to the guilds of the various industries and professions.
We wonder what variety of moral forms of government the Pope has in mind. He has ruled out communism and socialism and we would should think species of them, indeed any economic dictatorship. What is left but a market oriented economy? Would a benevolent dictatorship or royalty meet the standards of a moral government? We think not. We think morality requires freedom or it is not morality. Furthermore we believe people have a responsibility, a duty, to self govern, to oppose tyranny. You cannot have freedom without a free economy. Only a free people creating a free economy would seem to meet the standards promulgated by Pope Leo XIII .
95. Anyone who gives even slight attention to the matter will easily see what are the obvious advantages in the system We have thus summarily described: The various classes work together peacefully, socialist organizations and their activities are repressed, and a special magistracy exercises a governing authority. Yet lest We neglect anything in a matter of such great importance and that all points treated may be properly connected with the more general principles which We mentioned above and with those which We intend shortly to add, We are compelled to say that to Our certain knowledge there are not wanting some who fear that the State, instead of confining itself as it ought to the furnishing of necessary and adequate assistance, is substituting itself for free activity; that the new syndical and corporative order savors too much of an involved and political system of administration; and that (in spite of those more general advantages mentioned above, which are of course fully admitted) it rather serves particular political ends than leads to the reconstruction and promotion of a better social order.
Corporate cronyism, so called public – private-partnerships, are not substitutes for free activity, they serve political favoritism.
98. There remains to Us, after again calling to judgment the economic system now in force and its most bitter accuser, Socialism, and passing explicit and just sentence upon them, to search out more thoroughly the root of these many evils and to point out that the first and most necessary remedy is a reform of morals.
101. With all his energy Leo XIII sought to adjust this economic system according to the norms of right order; hence, it is evident that this system is not to be condemned in itself. And surely it is not of its own nature vicious. But it does violate right order when capital hires workers, that is, the non-owning working class, with a view to and under such terms that it directs business and even the whole economic system according to its own will and advantage, scorning the human dignity of the workers, the social character of economic activity and social justice itself, and the common good.
109. The ultimate consequences of the individualist spirit in economic life are those which you yourselves, Venerable Brethren and Beloved Children, see and deplore: Free competition has destroyed itself; economic dictatorship has supplanted the free market; unbridled ambition for power has likewise succeeded greed for gain; all economic life has become tragically hard, inexorable, and cruel. To these are to be added the grave evils that have resulted from an intermingling and shameful confusion of the functions and duties of public authority with those of the economic sphere — such as, one of the worst, the virtual degradation of the majesty of the State, which although it ought to sit on high like a queen and supreme arbitress, free from all partiality and intent upon the one common good and justice, is become a slave, surrendered and delivered to the passions and greed of men. And as to international relations, two different streams have issued from the one fountain-head: On the one hand, economic nationalism or even economic imperialism; on the other, a no less deadly and accursed internationalism of finance or international imperialism whose country is where profit is.
The first highlight is something produced by crony capitalism, often in conjunction with labor and politicians conspiring against others. Free markets would constrain such abuse. The second highlighted part would not seem to support protectionism often pursued by labor or one world government.
110. In the second part of this Encyclical where We have presented Our teaching, We have described the remedies for these great evils so explicitly that We consider it sufficient at this point to recall them briefly. Since the present system of economy is founded chiefly upon ownership and labor, the principles of right reason, that is, of Christian social philosophy, must be kept in mind regarding ownership and labor and their association together, and must be put into actual practice. First, so as to avoid the reefs of individualism and collectivism. the twofold character, that is individual and social, both of capital or ownership and of work or labor must be given due and rightful weight. Relations of one to the other must be made to conform to the laws of strictest justice — commutative justice, as it is called — with the support, however, of Christian charity. Free competition, kept within definite and due limits, and still more economic dictatorship, must be effectively brought under public authority in these matters which pertain to the latter’s function. The public institutions themselves, of peoples, moreover, ought to make all human society conform to the needs of the common good; that is, to the norm of social justice. If this is done, that most important division of social life, namely, economic activity, cannot fail likewise to return to right and sound order.
The former has little serious application other than among the most unscrupulous market manipulating entities or individuals which actual free markets mitigate against. There existed at the time this encyclical was written no country that met the classical definition of totally free competition. Today the endemic problem is excessive restrictions. However then and today economic dictatorships exist. Free competition never really did. So then and today any claim of a real dichotomy is untrue. There is only too much heavy handed government and non-existent or non-enforcement of fair market principles.
112. One section of Socialism has undergone almost the same change that the capitalistic economic system, as We have explained above, has undergone. It has sunk into Communism. Communism teaches and seeks two objectives: Unrelenting class warfare and absolute extermination of private ownership. Not secretly or by hidden methods does it do this, but publicly, openly, and by employing every and all means, even the most violent. To achieve these objectives there is nothing which it does not dare, nothing for which it has respect or reverence; and when it has come to power, it is incredible and portentlike in its cruelty and inhumanity. The horrible slaughter and destruction through which it has laid waste vast regions of eastern Europe and Asia are the evidence; how much an enemy and how openly hostile it is to Holy Church and to God Himself is, alas, too well proved by facts and fully known to all. Although We, therefore, deem it superfluous to warn upright and faithful children of the Church regarding the impious and iniquitous character of Communism, yet We cannot without deep sorrow contemplate the heedlessness of those who apparently make light of these impending dangers, and with sluggish inertia allow the widespread propagation of doctrine which seeks by violence and slaughter to destroy society altogether. All the more gravely to be condemned is the folly of those who neglect to remove or change the conditions that inflame the minds of peoples, and pave the way for the overthrow and destruction of society.
Just wondering how that might apply to Islamic jihad , preemptive armament if not war, and of course the concept of just war.
116. Yet let no one think that all the socialist groups or factions that are not communist have, without exception, recovered their senses to this extent either in fact or in name. For the most part they do not reject the class struggle or the abolition of ownership, but only in some degree modify them. Now if these false principles are modified and to some extent erased from the program, the question arises, or rather is raised without warrant by some, whether the principles of Christian truth cannot perhaps be also modified to some degree and be tempered so as to meet Socialism half-way and, as it were, by a middle course, come to agreement with it. There are some allured by the foolish hope that socialists in this way will be drawn to us. A vain hope! Those who want to be apostles among socialists ought to profess Christian truth whole and entire, openly and sincerely, and not connive at error in any way. If they truly wish to be heralds of the Gospel, let them above all strive to show to socialists that socialist claims, so far as they are just, are far more strongly supported by the principles of Christian faith and much more effectively promoted through the power of Christian charity.
At this point we are relating to this encyclical more and more
117. But what if Socialism has really been so tempered and modified as to the class struggle and private ownership that there is in it no longer anything to be censured on these points? Has it thereby renounced its contradictory nature to the Christian religion? This is the question that holds many minds in suspense. And numerous are the Catholics who, although they clearly understand that Christian principles can never be abandoned or diminished seem to turn their eyes to the Holy See and earnestly beseech Us to decide whether this form of Socialism has so far recovered from false doctrines that it can be accepted without the sacrifice of any Christian principle and in a certain sense be baptized. That We, in keeping with Our fatherly solicitude, may answer their petitions, We make this pronouncement: Whether considered as a doctrine, or an historical fact, or a movement, Socialism, if it remains truly Socialism, even after it has yielded to truth and justice on the points which we have mentioned, cannot be reconciled with the teachings of the Catholic Church because its concept of society itself is utterly foreign to Christian truth.
Very important. Clearly he understands what socialism is about. Unfortunately he does not understand the relentlessness of government. The tyranny of majorities cannot be dismissed. The conversation should always be returned to keeping government in bounds in service to economic progress for all.
118. For, according to Christian teaching, man, endowed with a social nature, is placed on this earth so that by leading a life in society and under an authority ordained of God he may fully cultivate and develop all his faculties unto the praise and glory of his Creator; and that by faithfully fulfilling the duties of his craft or other calling he may obtain for himself temporal and at the same time eternal happiness. Socialism, on the other hand, wholly ignoring and indifferent to this sublime end of both man and society, affirms that human association has been instituted for the sake of material advantage alone.
119. Because of the fact that goods are produced more efficiently by a suitable division of labor than by the scattered efforts of individuals, socialists infer that economic activity, only the material ends of which enter into their thinking, ought of necessity to be carried on socially. Because of this necessity, they hold that men are obliged, with respect to the producing of goods, to surrender and subject themselves entirely to society. Indeed, possession of the greatest possible supply of things that serve the advantages of this life is considered of such great importance that the higher goods of man, liberty not excepted, must take a secondary place and even be sacrificed to the demands of the most efficient production of goods. This damage to human dignity, undergone in the “socialized” process of production, will be easily offset, they say, by the abundance of socially produced goods which will pour out in profusion to individuals to be used freely at their pleasure for comforts and cultural development. Society, therefore, as Socialism conceives it, can on the one hand neither exist nor be thought of without an obviously excessive use of force; on the other hand, it fosters a liberty no less false, since there is no place in it for true social authority, which rests not on temporal and material advantages but descends from God alone, the Creator and last end of all things.
120. If Socialism, like all errors, contains some truth (which, moreover, the Supreme Pontiffs have never denied), it is based nevertheless on a theory of human society peculiar to itself and irreconcilable with true Christianity. Religious socialism, Christian socialism, are contradictory terms; no one can be at the same time a good Catholic and a true socialist.
The bottom line is the bottom line.
128. And so, Venerable Brethren and Beloved Sons, having surveyed the present economic system, We have found it laboring under the gravest of evils. We have also summoned Communism and Socialism again to judgment and have found all their forms, even the most modified, to wander far from the precepts of the Gospel.
132. The root and font of this defection in economic and social life from the Christian law, and of the consequent apostasy of great numbers of workers from the Catholic faith, are the disordered passions of the soul, the sad result of original sin which has so destroyed the wonderful harmony of man’s faculties that, easily led astray by his evil desires, he is strongly incited to prefer the passing goods of this world to the lasting goods of Heaven. Hence arises that unquenchable thirst for riches and temporal goods, which has at all times impelled men to break God’s laws and trample upon the rights of their neighbors, but which, on account of the present system of economic life, is laying far more numerous snares for human frailty. Since the instability of economic life, and especially of its structure, exacts of those engaged in it most intense and unceasing effort, some have become so hardened to the stings of conscience as to hold that they are allowed, in any manner whatsoever, to increase their profits and use means, fair or foul, to protect their hard-won wealth against sudden changes of fortune. The easy gains that a market unrestricted by any law opens to everybody attracts large numbers to buying and selling goods, and they, their one aim being to make quick profits with the least expenditure of work, raise or lower prices by their uncontrolled business dealings so rapidly according to their own caprice and greed that they nullify the wisest forecasts of producers. The laws passed to promote corporate business, while dividing and limiting the risk of business, have given occasion to the most sordid license. For We observe that consciences are little affected by this reduced obligation of accountability; that furthermore, by hiding under the shelter of a joint name, the worst of injustices and frauds are penetrated; and that, too, directors of business companies, forgetful of their trust, betray the rights of those whose savings they have undertaken to administer. Lastly, We must not omit to mention those crafty men who, wholly unconcerned about any honest usefulness of their work, do not scruple to stimulate the baser human desires and, when they are aroused, use them for their own profit.
133. Strict and watchful moral restraint enforced vigorously by governmental authority could have banished these enormous evils and even forestalled them; this restraint, however, has too often been sadly lacking. For since the seeds of a new form of economy were bursting forth just when the principles of rationalism had been implanted and rooted in many minds, there quickly developed a body of economic teaching far removed from the true moral law, and, as a result, completely free rein was given to human passions.
Crony politics and heavy handed government then and now produce economic hardship in violation of much of the stated principles of this and Rerum Novarum. Yes, laws against conspiracies in restraint of trade and promoting free market principles should be enforced! But that is wholly different from socialistic concepts to produce income equality by force of law. If Q-A calls for government are properly read to enforce free market principles then we have no major concern, only with it being misread. The rhetoric unfortunately indicates a misunderstanding of free market principles and under appreciation of corporate and government collusion as the problem, special laws or lack of laws that violate free market principles and guard against fraud and the like. Care should be taken to defend the distinction rather than blame free markets per se. A free market economy is not a lawless economy.
137. But in effecting all this, the law of charity, “which is the bond of perfection,” must always take a leading role. How completely deceived, therefore, are those rash reformers who concern themselves with the enforcement of justice alone — and this, commutative justice — and in their pride reject the assistance of charity! Admittedly, no vicarious charity can substitute for justice which is due as an obligation and is wrongfully denied. Yet even supposing that everyone should finally receive all that is due him, the widest field for charity will always remain open. For justice alone can, if faithfully observed, remove the causes of social conflict but can never bring about union of minds and hearts. Indeed all the institutions for the establishment of peace and the promotion of mutual help among men, however perfect these may seem, have the principal foundation of their stability in the mutual bond of minds and hearts whereby the members are united with one another. If this bond is lacking, the best of regulations come to naught, as we have learned by too frequent experience. And so, then only will true cooperation be possible for a single common good when the constituent parts of society deeply feel themselves members of one great family and children of the same Heavenly Father; nay, that they are one body in Christ, “but severally members one of another,” so that “if one member suffers anything, all the members suffer with it.” For then the rich and others in positions of power will change their former indifference toward their poorer brothers into a solicitous and active love, listen with kindliness to their just demands, and freely forgive their possible mistakes and faults. And the workers, sincerely putting aside every feeling of hatred or envy which the promoters of social conflict so cunningly exploit, will not only accept without rancor the place in human society assigned them by Divine Providence, but rather will hold it in esteem, knowing well that everyone according to his function and duty is toiling usefully and honorably for the common good and is following closely in the footsteps of Him Who, being in the form of God, willed to be a carpenter among men and be known as the son of a carpenter.