Pope Benedict XVI and the Failure of “Oinkonomics”
by Rupert J. Ederer
I do not wish to trivialize an august matter by a wisecrack-title elicited from the two Greek words oikos and nomos whence economics got its name. Taken together they translate freely as management or governance of the household. That, ultimately up to the level of the national household, is what economic activity is all about. Therefore economics, notwithstanding its present shortcomings, is a valid science about a vital sector of human existence. It is nevertheless a work-in-progress and not an ancient science as compared, for example, with theology or philosophy. That is notwithstanding the fact that, two venerable ancient Greeks already provided some impressive original notions about economic matters: I refer to Plato’s Republic and Aristotle’s Ethics and Politics. Economics began to take shape as a science, i.e. as a systematized body of knowledge about how people organize human and material resources to satisfy their temporal wants, in a much later period of history amid the growing importance of rival European national states. It was also a time, incidentally, when theology had been marginalized, and philosophy had become disoriented – a time which ironically has nevertheless been designated by historians as the Enlightenment.
Scandalized perhaps by the bickering and eventually some horrendous deadly conflicts over the message which God had entrusted to mankind through the ministry of his Son and a motley crew of twelve, including some Galilean fishermen and a tax collector, philosophers contrived an indifferent, even apathetic, god. For some this was a distant and disinterested deity which entrusted the operation of the universe, including economic life, to laws devised and placed into operation by it from the beginning. Men had only to “discover” these laws so as to avoid interfering with their free operation.
With theism relegated to the uneducated peasantry, the more “enlightened” folks came to be known as deists. They influenced a group of men in France called Physiocrats – the first to refer to themselves as Les Économistes – who ventured to explain the “natural laws” which applied in economic life. (Present-day economists, most of them positivists, may be surprised to know that their science is a spin-off of what happened to theology during the Enlightenment!) Relying on the secure basis of the universal instinct for self-preservation, they translated this into self-interest in economic activity, with the equally universal, i.e. natural, competitive instinct providing the necessary control mechanism. That gave rise to the expression: Laissez faire, laissez passer, le monde va de lui-même. Later there came the law of markets, “discovered” by Jean Baptiste Say (1767-1832), revealing that supply eventually gives rise to its own equivalent demand. Then, to the great relief of employers everywhere, there was what certain socialists would later designate as the iron law of wages. According to it, population would adjust automatically so as to keep the wages of workers at bare subsistence. Such economic theories provided a welcome prospect especially among the rising class of merchant-capitalists and later industrial-capitalists who felt increasingly stifled by all manner of regulations imposed by governments as well as by left-over guilds. During that period, which economic historians have termed the Mercantilist Era, there was a general obsession among rulers to make their respective states dominant among the rising and contending national states by hook or by crook. Hook-or-crook involved all manner of regulations to assure a positive balance trade along with the influx of gold and silver to cover the negative balances.
The laissez-faire world-view reflected the emergent worship of the goddess Liberty that came with the French Revolution, involving among other things the eventual vile desecration of the great Notre Dame Cathedral in Paris. It persisted long after the worst excesses of that Revolution had given way to what, following the Napoleonic episode, appeared to be more sedate circumstances. What is more, it shaped the economic science which was emerging at that time into what came to be known as free market or liberal economics – the latter expression having since evolved in contemporary usage in the United States into its virtual opposite. With the growing political and economic power of Great Britain, the influence of figures like Adam Smith, Thomas Malthus, Jeremy Bentham, David Ricardo, and John Stuart Mill came to play a predominant role in the development of the young science. The kind of economics forged by these brilliant but philosophically misguided men was what Thomas Carlyle characterized aptly as “the dismal science.” The astute Scottish-born historian also termed as the “pig philosophy” Bentham’s ingenuous theory that all human actions are geared solely to deriving pleasure and avoiding pain, with individuals rather than governments obviously being better judges of what is pleasurable for them. That led Bentham to “pearls of wisdom” like: “Nothing ought to be done or attempted by government.” He had a great influence on John Stuart Mill whose libertarianism, among other things, eventually got his work placed on the Catholic Church’s Index of Forbidden Books. Meanwhile in his A Christmas Carol and elsewhere the novelist Charles Dickens employed his great genius to depict the glum social conditions brought about by free market capitalism.
Adam Smith (1723-1790), a Scot, was perhaps the most illustrious and influential among the classical economists. In his worldwide best-selling Inquiry Into the Nature and Causes of the Wealth of Nations he dealt a lethal blow to the critical notion of the common good, for which the state is in principle the ultimate protector. The book appeared first in 1776 and was eventually translated into all major world languages. In a chapter dealing with Restraints on Particular Imports, Smith entrusted the “public interest” to each person’s pursuit of his own self-interest. In his words that meant leaving the welfare of the nation to “every individual” who “intends only his own gain,” being “in this, as in so many other cases, led by an invisible hand to promote an end which was no part of his intention.” Thus, the man who began his scholarly career as a moral philosopher – an ethician – affirmed that simplistic act of faith by a remark brimming with cynical disdain for purposeful individual actions on behalf of the common good: “I have never known much good done by those who affected to trade for the public good.” He termed that: “…an affectation, indeed not very common among merchants, and very few words need to be employed in dissuading them from it.” Indeed, “very few words” were employed in the immediate period, and for many years to come, to dissuade men from curbing their swinish instincts in economic life. The quality which the first German pope in over a half millennium would term “gratuitousness” (Caritas in Veritate 34) vanished more and more from economic life. In the meantime, British economics carried the day, along with the aggressive spread of the Empire which came to include eventually one fourth of the world’s land area. The undeniable leadership of Great Britain in advancing the Industrial Revolution also played a part. The emerging class of capitalists and entrepreneurs who were shaping the economic structures of the era preferred free market economics, and they came to apply it with full force. Thus the “oinkish” antics of the pigsty, where greed predominated, became a part and parcel of economic activity as reflected in the developing economic science – a science which, in keeping with emerging positivistic inclinations, often reflected events more than it guided them.
In the ensuing economic tumult, the rank-and-file workingmen became the new serfs, while lacking the minimum security enjoyed by the medieval serf class. Poor wages for service in the emerging capitalist plutocracy constituted the high price paid for being emancipated from feudal lords and the landed aristocracy. In the capitalistic system the worker came to be treated like merchandise on the market. Other industrial nations on the European continent and elsewhere had no choice but to conduct themselves in the same manner if they wished to remain afloat in the competitive struggle. The majority of mankind, including colonial subjects who provided an abundant supply of cheap labor in the imperial territories (which also provided cheap raw materials for the budding industries), emerged as the “down-trodden working class.” Their plight eventually stimulated the awakening of certain revolutionary spirits on the European continent, notably in Germany and France. The continent that had given birth to the free market ideology now nurtured equally talented agitators who fancied the prospect of putting an end to capitalist hegemony.
The German-born Jew-turned-atheist Karl Marx (1818-1883) was one among many socialists; but he left his mark as the most methodical and allegedly “scientific” one in moving the ideological pendulum to the opposite end of its arc from liberal or free-market capitalism. Other socialists before and after him included the moderate Frenchmen Claude Saint Simon (1760-1825) and Charles Fourier (1772-1837) who were classed as Utopian. More radical ones followed like Louis Blanc (1811-1882), and Pierre Proudhon (1809-1865) who proclaimed that “Property is theft.” There were other German revolutionaries besides Marx, like Karl Rodbertus (1805-1875) who proclaimed an “iron law of wages” (subsistence), and Ferdinand Lassalle (1825-1864) who first spoke of capital as “the dead instrument of past labor.” Then there were figures after Marx, like Karl Kautsky (1854-1938), and the two practicing revolutionaries, Vladimir Lenin (1870-1924) and Leon Trotsky (1879-1940), who began putting Marx’s nightmarish scheme into operation in 1917. More faint-hearted followers emerged who were referred to as “Revisionists” because they envisioned a more evolutionary approach to the socialist vision, like Eduard Bernstein (1850-1932). In any case, the world bears witness to the grim fact that the ideas promoted by Karl Marx eventually inspired a revolution which turned the world upside down in 1917; and it persists even now in somewhat bastardized form in the most populous nation on earth.
The appalling results as the world reshaped itself in the industrial era should come as no surprise. These included also the increasing abandonment of belief in God whom the Deists had sought to transform into an indolent caricature, now deemed preposterous and irrelevant by people like Marx, to name just one among a growing number of rebellious philosophers as well as economists. Perhaps it was that infringement on its domain which at last drew the active attention of the Catholic Church, in what Pope Benedict XVI himself characterized as a slow reaction. Belated or not, it did at last come in 1891 in the dramatic format of the encyclical Rerum Novarum by Pope Leo XIII. The Catholic Church felt forced to make its voice heard first of all in opposition to the all-out socialist attack on the right of private ownership of the material means of production, along with the flagrant abuse of that right by the capitalists. Then there was the need to reverse the dismantling of the all-important notion of the common good by the free marketeers, while at the same time opposing the grotesque one-sided caricature of it introduced by the socialists in the form of their hate-driven exclusivist class concept.
That was but the first of several encyclicals addressed to the economic order by successive Roman Pontiffs until the present and latest one by Pope Benedict XVI. Caritas in Veritate bears the official issue date 29 June 2009, although it did not actually appear until 7 July 2009. The delay is attributed to the perceived need to factor in the implications of the banker-driven, speculation-based collapse of the financial system in the United States, spreading to economies worldwide in autumn of 2008.
The usual gaggle of speed-readers showed up early to critique this at times complex work by Benedict XVI, the scholar-pope. Not much of what the Pope, a profound scholar, writes is lacking in complexity. So the encyclical does not lend itself well to a quick read. For the unsympathetic and impatient, that can lead to all manner of inane and often ideologically-based intimations like: social encyclicals are by no means infallible proclamations; they are prudential in nature; they suffer from the peculiar ideological bias of European popes along with their advisors and writers, etc., etc. And, of course, there is the predictable litany of “the pope should have” type second-guessing by those who feel that they certainly know better. Lost in the frenzy is, among other things, the important lesson presented by Pope John Paul II in the second of his important trilogy of social encyclicals, Sollicitudo Rei Socialis (1987). There the Polish pope, who held doctorates in both theology and philosophy (ethics), pointed out that the Church’s social doctrine “…belongs to the field, not of ideology, but of theology and particularly of moral theology”(41). In the area of faith and morals, the Pope by himself or in council with his bishops is accepted by Catholics as the sole divinely protected teacher.
The German pope is by training, inclination, and long practice a theologian. This is reflected perhaps in the fact that all three of his encyclicals thus far, including the latest one, address the theological virtues: Deus Caritas Est (2005); Spe Salvi (2007); and Caritas in Veritate (2009). John Paul II had sought to emphasize that in its social doctrine the Church is teaching in the area of morals. The moral theology courses which I took as a young man in the seminary did indeed involve important tracts on the virtues. These included specifically the theological virtues of faith, hope, and charity, as well as the cardinal virtues: prudence, justice, temperance and fortitude. The early social encyclicals by Leo XIII and Pius XI placed great emphasis on justice and specifically social justice. Not that the virtue of charity was by any means omitted. Indeed the virtue of social charity was presented alongside the virtue of social justice in the landmark Pius XI social encyclical Quadragesimo Anno (1931) as the, “(M)ore lofty and noble principles” needed to establish social order (88). Even then, a specific definition of the virtue of social justice was not offered until several years later (1937) in his encyclical on Atheistic Communism (Divini Redemptoris). For a more detailed exposition about the virtue of social charity, many more years were to pass. This demonstrates among other things that the social teachings of the Catholic Church are a work-in-progress, and they cannot be treated simply as a discontinuous series of essays issued at the whim of various popes down through the ages.
Unfortunately Pius XII, the brilliant immediate successor of Pius XI, is neglected in matters relating to Catholic social teachings. While he did not issue any social encyclicals as such, he did reaffirm, elucidate, and expand the teachings of his predecessors in his many allocutions, radio messages, and encyclicals. For example it was that great Pontiff who first used the term solidarity with great and growing frequency in his masterful and eloquent Christmas Messages, as well as in other addresses on a wide variety of occasions. In fact the vernacular Spanish title given to his very important first encyclical, Summi Pontificatus (1939), was Solidaridad humana y Estado totalitario. Blessed John XXIII and Paul VI continued using the expression in the relevant sense throughout their own social encyclicals. Finally in 1987 John Paul II, devoted an entire chapter (V) in the second of his great trilogy of social encyclicals, Sollicitudo Rei Socialis, to explain the meaning and certain applications of the concept, solidarity. He ended up actually paraphrasing the “Pax opus iustitia” expression of the Old Testament Prophet Isaiah (Is. 32:17) by introducing the term, “Opus solidaritatis pax” (39). At that point, the man who had come to be known as the “Pope of Solidarity,” mainly because of his support of the Polish labor union, Solidarnosc, which was instrumental in making an end to the Soviet Empire, stated – or perhaps one should say, taught: “Solidarity is undoubtedly a Christian virtue”(SRS 40). The great Pope’s trilogy was completed in 1991 in the third of his social encyclicals, Centesimus Annus. There he wrote, referring to “what we nowadays call the principle of solidarity,” that “Pope Pius XI refers to it with the equally useful term ‘social charity.’”(CA 10). It is the same principle that Benedict XVI cites now in his social encyclical Caritas in Veritate (58), where he mentions solidarity some forty times in the critical relevant sense.
Caritas in Veritate is a wide-ranging social encyclical which deserves patient and careful study. An essay such as this cannot possibly do justice to all of the important elements contained in it. Certain of these stand out, and reflection on them can serve to orient and hopefully motivate further serious study. For example, one of the first things that may strike one about the Pope Benedict document is his decision to present it in commemoration of a now largely forgotten social encyclical, Populorum Progressio (1967), by an often vilified Roman pontiff whom many among those who consider themselves as Catholics prefer to forget. Paul VI (1963-1978) was and still is criticized by persons who blame him for the doctrinal and disciplinary tumult in the Catholic Church following the Second Vatican Council. It was a Council convoked by his predecessor, Blessed John XXIII, which he, Pope Paul, found himself in the position where he had to see it through to its completion. Furthermore it is now being gradually realized, perhaps after a more careful reading of the actual documents, that the doctrinal and liturgical chaos which followed the Council stemmed not from the conciliar decrees, but from what is termed the “spirit of Vatican II.” Such dissonance is not atypical of what followed other major Councils in the Church’s 2000 year history.
More specific to Pope Paul VI himself, it was he who overrode the consensus reached by the majority of the experts whom he appointed to study the moral implications of the evolving technology, especially the contraceptive pill, for the Catholic Church’s teaching about birth control. His prophetic encyclical Humanae Vitae (1968) provoked a reaction seldom equaled in intensity during the post-Reformation era. The repercussions of the ensuing virtual schism, as well as the actual schism stemming from liturgical changes activated in the Paul VI papacy, are grave and still ongoing for the Church and for the world. That being said, they are not directly relevant to what Pope Benedict XVI wished to deal with in Caritas in Veritate.
What is directly relevant here is the fact that Pope Benedict XVI is referencing this, his first strictly-speaking social encyclical, on the basis of ground broken by Paul VI in the encyclical Populorum Progressio in 1967. In fact it is in a certain sense its sequel. That is already noteworthy, since previous pontiffs have typically issued their social encyclicals to mark anniversaries of Rerum Novarum or some subsequent commemoration of it. One other noteworthy exception was the second social encyclical by Pope John Paul II, Sollicitudo Rei Socialis, which also commemorated Populorum Progressio in the 20th year after its appearance. What was distinctive about Populorum Progressio is that it was the first social encyclical addressing specifically the world-wide dimensions and applications of the principles, social justice and social charity - principles that Pius XI had presented for reestablishing “social order,” in economic life (Q.A. 88). Not that the alert old pontiff (who had to deal with the three radical dictators, Stalin, Hitler, and Mussolini) was unaware of the world-wide dimensions of the emerging situation! Directly after he established social justice and social charity as principles for restoring social order, he stated: “Further, it would be well if the various nations in common counsel and effort strove to promote a healthy economic cooperation by prudent pacts and institutions, since in economic matters they are largely dependent on one another, and need one another’s help” (Q.A. 89). For 1931, that was a remarkably prescient statement, foreshadowing the intensification of the solidarity among nations. It clearly anticipated the kind of social teaching that Pope Paul VI would establish as the central theme of Populorum Progressio; and it would provide a continuum along with what Pius XII would have to say in his first encyclical Summi Pontificatus (1939). His successor, Blessed John XXIII moved forthrightly into the worldwide dimension with both of his social encyclicals, Mater et Magistra (1961) and Pacem in Terris (1963), thus paving the way for Pope Paul VI and Populorum Progressio in 1967.
While the second of the Polish Pope’s social encyclicals ( Sollicitudo Rei Socialis) was for the most part dismissed in the United States with intense silence, Populorum Progressio (On the Development of Peoples) had aroused the ire of the kind of ideologues who would later come to be known as “neo-conservatives.” Aside from their bellicose political prepossessions in favor of preemptive wars which would eventually threaten to bankrupt the United States, in their economic ideology these folks are passionately devoted to the free market and to the kind of economic theory (“oinkonomics”) which inevitably comes with that, as the usury-based economic collapse in 2008 proved once again. Pope Paul VI, now hailed as Venerable by his Church, was treated harshly in the Wall Street Journal where his appeal for the global spread of social justice and social charity (solidarity) in Populorum Progressio was criticized editorially as “warmed over Marxism.”  He did not endear himself to those whose thinking failed to progress beyond 18th century economics and its latter-day revival by the two Jewish agnostics, Ludwig von Mises and Friedrich Hayek (a former socialist), joined later by the University of Chicago economist Milton Friedman. It did not assuage the feelings of their disciples at all that the gentle Pope, in his Apostolic Letter Octogesima Adveniens (35) in 1971, warned precisely against the “renewal of the liberal ideology.” (Again, the word liberal is used here in its traditional European sense which is the virtual opposite of its meaning in contemporary American usage).
Long after the blood-drenched instrument for the “liberation” of the masses – Madame Guillotine - had faded into history, worship of the Goddess of Liberty persisted in later centuries specifically in the confused political and economic thinking of leaders and common folk alike. As if to counter this ongoing cult, Pope Benedict devoted the Introduction to his first social encyclical to exorcising the distorted notion of liberty which has caused such great tumult in the modern era. The critical scriptural reference in this regard is the passage from St. John’s Gospel (8:32). It is cited as the first and also as the last such reference in the introductory chapter: “… then you will know the truth and the truth will set you free”. That has little to do with the freedom which libertarians everywhere, before and since the French Revolution, have been fantasizing about as they dance freely but blindly around the edge of the abyss, time and again toppling to their doom. As its title indicates, that represents the keynote for this encyclical. Its author says here: “Fidelity to man requires fidelity to the truth, which alone is the guarantee of freedom…:” paraphrasing the important words of Jesus Christ as contained in the quotation from St. John’s Gospel. Indeed, the fact that the scriptural quotation (Jn 8:32) is cited again near the close of the Introduction suggests that it is the leitmotif of Pope Benedict’s first social encyclical. He may have disappointed some by not getting involved in the more technical aspects of economics for which, as he states, he has neither the expertise nor the authority. He is not an economist or a business analyst, but the head of the largest and oldest Christian Church dating back to Jesus Christ and Peter, the Galilean fisherman. It is the same Church which Pope Paul VI had characterized as “an expert in humanity.” As John Paul II pointed out in Sollicitudo Rei Socialis (41), the Church’s social teachings have to do with theology, specifically moral theology. And aside from being the pope, in theology Benedict XVI, like his Polish predecessor, is a lifelong master. In the encyclical Caritas in Veritate he is presenting the truth specifically about charity and the gap its absence leaves, as he lays bare once again the moral causes underlying the ongoing deficiencies and encroaching breakdown of the economic order.
The present economic mayhem is related not merely to the widespread absence of charity, but also to our deficient grasp of the essential truths about human nature and human relationships specifically in the economic order. These include now, as in the time of Leo XIII, the true meaning of freedom; and it has little to do with what paleo-liberals like the French Physiocrats and the Anglo economists Adam Smith and John Stuart Mill, along with neo-liberals like Ludwig von Mises and Friedrich Hayek have proposed for our belief. Therefore, this encyclical may be seen precisely and above all as itself a great act of charity in that its author is presenting certain important truths about man in our once again faltering socio-economic order. That is neatly summed up by what Pope Benedict affirms at the outset – that “the Church’s social teaching ... is caritas in veritate in re sociali: the proclamation of the truth of Christ’s love in society” (5).
A major theme that persists throughout Caritas in Veritate is introduced in the last paragraph of the Introduction. As it was to his predecessors, including Pope Paul VI whom Pope Benedict is commemorating by this encyclical, the concept solidarity is crucial to his social teaching, directed as it is to the global “de facto interdependence” (9) that has become increasingly pertinent also for world peace since the era following World War II. Populorum Progressio was devoted in a distinctive manner to the grave implications that came with the start of the post-imperial era. It was then that a huge gulf in living standards between the established industrialized nations and the many newly constituted independent nations – the so-called Third World – became an especially serious challenge to the harmony and peace of the world. Pope Benedict expressed his concern here, since interdependence which has long since become a critical fact of life “is not matched by ethical interactions of consciences and minds that would give rise to truly human development”(9). In other words, what the Pope finds troubling here is the lack of progress in the area of social charity - the Christian virtue of solidarity proclaimed by John Paul II in Sollicitudo Rei Socialis (40). This becomes ever more apparent as he proceeds through the six chapters of the encyclical.
The Message of Populorum Progressio
For a Church which still suffers from internal contention between those who felt that the Second Vatican Council provided a pretext for changing everything including defined doctrines of faith and morals, and those who took scandal to the extent that they rejected the Council itself, Pope Benedict appropriately emphasizes here the link between the body of its social doctrine and the Vatican II Pastoral Constitution Gaudium et Spes. The former includes Populorum Progressio which this encyclical commemorates explicitly, as well as Sollicitudo Rei Socialis issued by John Paul II 20 years later. Perhaps suggesting the reason why he is commemorating a largely overlooked encyclical by a man whose papacy was considered by some as disappointing, the German Pope tells us that “... his social magisterium … was certainly a social teaching of great importance.” He indicated the reason for this: “Paul VI clearly understood that the social question had become worldwide;” also: that “he grasped the ideal of a single family of peoples in solidarity and fraternity.” Thus: “… he proposed Christian charity as the principal force at the service of development”(13).
As if to assure a restoration of attention for an under-appreciated pope, Pope Benedict draws attention to three other social documents by Pope Paul VI: first there was the Apostolic Letter Octogesima Adveniens (1971); and then there were two “without any direct link to social doctrine.” They are the encyclical Humanae Vitae (1968), and the Apostolic Letter Evangelii Nuntiandi (1975). The first was certainly related to the body of social doctrine, as it opposed both the Marxist ideology as well as the “renewal of the liberal ideology” which in the United States is the neo-conservative (or neo-liberal) return to free market economics. It also warns against “the danger constituted by utopian and ideological visions that place its ethical and human dimensions in jeopardy.” Utopian visions would seem to include the persistent and often recurring nostalgic distributism where, it seems, all would be resettled as owners of a small parcel of land allowing space for agriculture with modest husbandry, or self-employment at some craft. As the saying goes: “That ship has sailed!” As Pope Benedict stated here: “The idea of a world without development indicates a lack of trust in man and in God”. It is an opposite reaction to one of two opposing naive responses to resolving “the social question” which the Church has now been addressing seriously in its social teachings from 1891 to 2009! The Pope identifies the two here: “Idealizing technical progress or contemplating the utopia of a return to humanity’s original state, are two contrasting ways of detaching progress from its moral evaluation and hence from our responsibility”(14).
While Pope Benedict states that Humanae Vitae and Evangelii Nuntiandi do not have a direct link to social doctrine, there is no denying a definite indirect link. Among other things, Thomas Malthus (1766-1834), the Anglican minister noted for his gloomy population theory, has been ranked among classical economists since long before demography emerged as a separate discipline. His theories in somewhat updated form – often characterized later as neo-Malthusianism – about an inveterate and irremediable disproportion between population growth and food supply, along with the impact on wages and on economic development, continue to influence contemporary discussion until now. Indeed the population factor continues to play an important role in the economic policies of many nations. And in the widespread anti-natalist policies at large in today’s world lies the obvious link to the Church’s social teaching.
As for Evangelii Nuntiandi, Pope Benedict indicates: “Between evangelization and human advancement – development and liberation – there are in fact profound links”(15). The Church is entitled to speak about this because it deals with “the meaning of man’s pilgrimage through history in company with his fellow human beings” with reference to “the goal of that journey…” That is what led Pope Paul VI to shed “the light of the Gospel on the social questions of his time”(16). And what makes Populorum Progressio “still timely in our day” is its vision of “development as a vocation.” That “development” he informs us has to do not “with merely technical aspects of human life” but with “the meaning of man’s pilgrimage through history in company with his fellow human beings…and with identifying the goal of that journey…”(16).
Ultimately the notion of “development as a vocation” involves “the central place of charity within that development”(19). And since Pope Paul VI pointed out that “the causes of underdevelopment are not primarily of the material order … we are to search for them in other dimensions of the human person, first of all, in the will, which often neglects the duties of solidarity.” It is worth recalling here that solidarity is the same as what Pius XI nearly a century ago referred to as “social charity.” He established it then as one of the two “noble principles” (along with social justice) needed to reestablish social order! Pope Benedict now cites precisely “the lack of brotherhood among individuals and peoples as a major cause of underdevelopment; and he indicates the need for what Pope Paul had termed, “the need for deep thought and reflection of wise men in search of a new humanism.” But that is not enough, because reason “cannot establish fraternity.” “This originates in a transcendent vocation from God the Father who loved us first, teaching us through the Son what fraternal charity is.” Therein lies precisely the Christian vocation!
Human Development in Our Time
The second chapter provides the update to our own time with frequent references to the current “crisis.” Basically there is an admission that, despite much economic growth, the vision of Pope Paul VI in Populorum Progressio – and that encyclical was already permeated by what seemed to be a Cassandra-cry of desperation - remain unfulfilled. It resounds with a lament that basic flaws present in 1967 remain even now. The utility of profit as a valid concept is affirmed, so long as it remains as “a means toward an end,” (21) and not as the overpowering “exclusive goal” itself that is generated by “improper means and without the common good as its ultimate end.” That synopsizes in few words a quintessential element of the Catholic Church’s social doctrine! Clearly the debacle of 2008 saw profit once again becoming the “exclusive goal” generated by “improper means,” with the common good nowhere in sight either as a proximate goal or as its “ultimate end.” At its core are financial institutions engaging in usurious transactions and speculation in real estate and other financial instruments so sophisticated that ordinary mortals cannot understand, let alone explain, what is going on. The notion of the common good is greeted by such operators even now with the same cynicism evident in Adam Smith’s 18th century discussion of the “public good” mentioned earlier. Also, the “invisible hand” is indeed at work extracting money from the citizens’ pockets in order to pay the usurers. And those unscrupulous operators are basically no different from the ones Pope Leo XIII warned about when he spoke of the prevalence of “rapacious usury” in 1891 (RN 2). The instruments have changed. Now they include also high interest rate credit cards, and so-called adjustable-rate mortgages by which countless numbers of unenlightened citizens have spent themselves into bankruptcy.
With admirable insight, Pope Benedict points out: “ The world’s wealth is growing in absolute terms, but inequalities are on the increase.” Furthermore, “In rich countries, new sectors of society are succumbing to poverty and new forms of poverty are emerging.” At the same time: “In poorer areas some groups enjoy a sort of ‘super-development’ of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situation of dehumanizing deprivation.” And so, “The scandal of glaring inequalities’ continues.”(22)
It is at this point in Caritas in Veritate that Pope Benedict begins to dwell on the plight of workers as a consequence of the unhealthy drift of economies in the situation leading up to the present crisis. In other words, he is back to the unfinished business of Rerum Novarum faced by Leo XIII. The pressure to “outsource production at low cost” leads among other things to “deregulation of the labor market.” (25). That may lead, among other things, to “a downsizing of social security systems … with consequent grave danger for the rights of workers.” The German pope then speaks of a resultant “powerlessness” on the part of workers’ associations, and of “trade union organizations” experiencing “greater difficulty in carrying out their task of representing the interests of workers…” In the United States, after the enactment of significant progressive labor legislation during the New Deal era in the 1930’s, there followed an unprecedented growth in union membership and power. Soon after World War II a reverse reaction set in beginning with the passage of the Taft-Hartley Act in 1947. Today, American labor unions represent scarcely half as many workers as in 1945; that is aside from government employee unions which came as a relatively new concept starting in the 1960’s. (They represent in certain significant respects a different phenomenon). Since then “traditional networks of solidarity have more and more obstacles to overcome … . (T)he repeated calls issued within the Church’s social doctrine beginning with Rerum Novarum for the promotion of workers’ associations that can defend their rights must therefore be honored today even more than in the past….”(25).
Pope Benedict XVI associates the growing “uncertainty of working conditions with “a climate of deregulation” which definitely became a factor in countries like the United States where the neo-liberal mentality took increasing hold after the 1970’s. That was bolstered even more by the surge in globalism which led to protective tariff reductions worldwide. (Largely forgotten was the fact that in the original European Common Market, nations were not admitted as new members until they had already reached a certain level of parity in basic labor standards so as to avoid unfair competition with the workers in the original founding nations). From that stem the conditions giving rise to his concern about “the new forms of psychological instability” which lead to “difficulty in forging coherent life-plans, including that of marriage.” Being the head of his Church, Benedict XVI can do no less than deal with the whole man – who is more than simply a factor of production! That leads the German Pope to concern also about “the freedom and creativity of the person and his family and social relationships, causing great psychological and spiritual suffering.”(25)
Those who operate on the erroneous assumption that later social teachings by the Church supercede prior ones, rendering them obsolete, are hereby put on notice that this is not so! Some among the privileged sectors of society have been breathing a sigh of relief for some time over the fact that the power of organized labor which began to increase following the earlier social encyclicals, has since diminished with the vehement re-emergence of the self-righteous free market mentality. They forget that what genuinely works in the legitimate interests of the majority of the population, can scarcely be regarded as opposed to the good of society overall, in other words, the common good. The working classes in any normally configured post-agricultural social economy constitute the preponderant majority of people who derive most of their income from their work. If they are not secure and prosperous, their society is not secure and prosperous. Pope Leo XIII emphasized that point in Rerum Novarum back in 1891 (34), and it is no less true today. The “current crisis” of which the Pope speaks again here can only highlight this fact.
Pope Benedict has more to say with regard to “the mobility of labor associated with a climate of deregulation.” He states that “… uncertainty over working conditions caused by mobility and deregulation, when it becomes endemic, tends to create new forms of psychological instability, giving rise to difficulty in forging coherent life-plans including that of marriage.” And “This leads to situations of human decline to say nothing of the waste of social resources.” The Pope once again relates such problems to “new forms of economic marginalization,” which “the current crisis can only make worse.”
Why this concern about labor, long regarded among free marketeers in the same way as any other “merchandise” on the market? Because the Church in its social teachings never tolerated considering the labor of human beings as a commodity! Neither did the United States, at least in terms of legal formality, since passage of the Clayton Anti-Trust Act in 1914. In order to exempt labor unions from prosecution under the Sherman Anti-Trust Law (1890), Section 6 of the Clayton Act states: “The labor of a human being is not a commodity or article of commerce.” Therefore, after pointing out “the great psychological and spiritual suffering” caused by unemployment, Pope Benedict takes the occasion here “to remind everyone, especially governments engaged in boosting the world’s economic and social assets, that the primary capital to be safeguarded and valued is man, the human person in his or her integrity.” He adds a statement from the Vatican II document, The Church in the Modern World, that is highly relevant also for economic life in our present crisis: “Man is the source, the focus and the aim of all economic and social life” (63). That was reaffirmed with great emphasis in the second great labor encyclical - Laborem Exercens - where Pope John Paul II, the one-time stone-quarry worker, wrote: “We must emphasize the primacy of man in the production process, the primacy of man over things.” As for capital: “Everything contained in the concept of capital in the strict sense is only a collection of things” (LE 57). That is where John Paul II introduced the concept – economism – which has become more commonplace since his time. He defined the error of economism as: “… that of considering human labor solely according to its economic purpose” (LE 60).
That discussion led to the emphasis on “solidarity with poor countries in the process of development” which Pope Benedict felt “can point toward a solution of the current crisis…” (27). How so? “Through support for economically poor countries by means of financial plans inspired by solidarity – so that these countries can take steps to satisfy their own citizens’ demand for consumer goods and for development – not only can true economic growth be generated, but a contribution can be made towards sustaining the productive capacities of rich countries that risk being compromised by the crisis” (27). There appears to be a suggestion of the kind of “pump-priming” activity as took shape also in the last great crisis during the 1930’s. It is interesting that the Pope is offering this in the context where he is speaking of “food and access to water as universal right of all human beings….”
At this point Pope Benedict made what some may choose to regard as a digression from the purely economic aspects of the problem at hand, i.e. the economic crisis. He introduced the “question of respect for life,” and the attendant denial of the right to religious freedom. He nevertheless insisted that “the important question of respect for life … cannot in any way be detached from questions concerning the development of peoples.” Why? Because the notion, poverty and underdevelopment must be considered in association with “acceptance of life, especially in cases where it is impeded in a variety of ways” (28). One problem seems to be the widespread failure to regard the working human person as not only a consumer of food and other resources, but also as their main producer. It has been said: “With every mouth comes a pair of hands.”
The noted British economist Colin Clark (1905-1989) sided with a minority of the experts with whom Pope Paul VI chose to consult about the population problem in terms of the food supply and the new technological breakthroughs in birth control, (mainly “the pill”). Clark had drawn attention to the incentive that population pressure brought to bear for more intensive production and the wiser use of available resources, for example in countries like Japan and the Netherlands. In the end, the Pope’s decision coincided with Clark’s thinking. But since then, even while food production increased dramatically in nations that had been considered economic “basket cases,” birth control, including even government-enforced limitation of births (China), and euthanasia have spread widely. In fact we have reached the point where in much of Europe, as well as Japan, birth rates have fallen below the replacement level. Pope Benedict XVI points to what has transpired, with the warning: “When a society moves towards the denial or suppression of life, it ends up no longer finding the necessary motivation and energy to strive for man’s true good” (28).
But what of “the denial of the right to religious freedom?” Given the daily headlines about terrorist bombings and countless deaths and destruction in some parts of the world in the name of religion, can there be any doubt but that, “Violence puts the brakes on authentic development and impedes the evolution of peoples toward greater socio-economic and spiritual well-being”(29)? The Pope, being the world’s foremost religious leader, could not neglect mentioning at this point also how the impact of “the deliberate promotion of religious indifference or practical atheism on the part of many countries obstructs the development of peoples, depriving them of spiritual and human resources.” That is because: “God is the guarantor of man’s true development.”
Returning to specifically economic measures toward the end of the chapter, there is the requirement that “economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner” (32). In addition Pope Benedict restates the need “to prioritize the goal of access to steady employment for everyone.” The reason given makes this one of the very significant, specifically economics-related proposals in the encyclical: “Through the systemic increase in social inequality, both within a single country and between the populations of different countries ( i.e. the massive increase in relative poverty), not only does social cohesion suffer, thereby placing democracy at risk, but so too does the economy, through the progressive erosion of ‘social capital’: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence.” What is more: “Economic science tells us that structural insecurity generates anti-productive attitudes wasteful of human resources, inasmuch as workers tend to adapt passively to automatic mechanisms, rather than to release creativity.” That leads to this incisive papal statement. “Human costs always include economic costs, and economic dysfunctions always involve human costs”(32).
In the forty years that have passed since Populorum Progressio, the Pope continues: “… its basic theme, namely progress, remains an open question…” That is now aggravated by “the current economic and financial crisis.” Problems like “high tariffs imposed by economically developed countries” persist; and these “still make it difficult for the products of poor countries to gain a foothold in the markets of the rich countries”(33).
The “principal new feature” since Populorum Progressio has been “the explosion of worldwide interdependence, commonly known as globalization.” And that has progressed at what Pope Benedict refers to here as a “ferocious pace.” What it implies is at one and the same time a “great opportunity” and the threat of “unprecedented damage and…great divisions within the human family.” Perhaps the threat underlying the ominous prophetic tone throughout Populorum Progressio is coming to realization in our time! Obviously de facto interdependence, now more than ever on a global scale, implies the need for its recognition and acceptance in charity in the form that Pius XI termed it – social charity, – or in its John Paul II expression, solidarity. Here Pope Benedict XVI reverts to the term – “civilization of love” – which his immediate predecessor attributed to the pope whom he is commemorating by this encyclical.
Rupert J. Ederer is professor emeritus of economics at SUNY Buffalo and the translator of Heinrich Pesch. This piece, the first of a two-part article, appeared in the March 2010 issue of Culture Wars. The second part appears in the May 2010 issue. Professor Ederer is the author of Economics as if God Matters: Over a Century of Papal Teaching Addressed to the Economic Order.
 Adam Smith, The Wealth of Nations (New York: Random House, 1937), p. 423
 Benedict XVI, Deus Caritas Est, 27 (2005)
 “Now it is of the very essence of social justice to demand from each individual all that is necessary for the common good.”
 Cf. the definitive 3 volume work in German: Soziale Summe Pius XII, compiled by Arthur-Fridolin Utz, O.P. and Joseph-Fulko Gröner, O.P., and published by the Paulus Verlag in Freiburg, Switzerland in 1961.
 Many years ago I was privileged to serve with the noted British economist Colin Clark on a lecture panel in St. Louis dealing with the so-called overpopulation problem. Clark, the father of nine, was one of the experts appointed to Pope Paul’s commission of advisors for the encyclical Humanae Vitae. The Pope sided with the minority, which included Clark, in opposition to artificial birth control.
 John Paul II used the expression “neoliberalism” in his Apostolic Exhortation Ecclesia in America (56) in 1999; and Paul VI had referred to it in 1971 as “a renewal of the liberal ideology” ( Octogesima Adveniens, 35).
 Wall Street Journal, p. 14, March 30, 1967.
 Much of United States coinage until recent years bore the Liberty image in various forms and poses.
 It is most unfortunate and not without some irony that the Pope’s proof-readers erred in posting this all-important very first scriptural reference in his encyclical as John 8: 22. That passage in St. John’s Gospel is totally irrelevant to the terms of the discussion. John 8:32, on the other hand, is of the utmost relevance in that it posits truth as the guarantee of true freedom to do what is right – i.e. what corresponds to both justice and charity.
 For whatever reason, none of the popes who wrote social encyclicals have mentioned by name the great Jesuit economist Heinrich Pesch (1854-1926) who, in a five volume work, developed the outline for an economic system which he called Solidarism. Its operative principle is solidarity the application of which he extended throughout society from its cell unit - the family - to intermediate (occupational) groups, to citizens of the same country, and eventually to “the universal solidarity of all mankind.” Cf. Heinrich Pesch S.J., Lehrbuch der Nationalökonomie/Teaching Guide to Economics, trans. Rupert J. Ederer. (Lewiston, N.Y. : The Edwin Mellen Press, 2002), Vol. II, Bk.1, pp. 235-316.
 One should consider the prospects of redeploying the millions of hyper-industrious inhabitants of Hong Kong, or for that matter the population of New York City or London to small shops or farms. This could imply perhaps a post-doomsday scenario which, pray God, will remain science-fiction, like the kind of economy it proposes.
 Heinrich Pesch identified the pressure stemming from population growth as leading to greater productivity, i.e, to a wiser use of available resources. His conclusion about the relationship was summed up by his proposition: “ …where care has been taken to safeguard the quality of a nation’s people, generally there will be no need for concern about their quantity.” (Pesch/Ederer, op. cit. II, 2, p. 193).
 Depending on whose figures one uses, CEO compensation is now some 431 times that of non-management production workers as compared with 71 times their pay in 1965.
 A most significant recent statement about human labor and its priority is the John Paul II social encyclical Laborem Exercens. It proves definitively that the status of human labor and the just wage to which it is entitled still holds top priority in the Church’s social teachings. See paragraph 89.
 Cf. Colin Clark, Population Growth and Land Use, (New York: St. Martin’s Press, 1968).
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