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This article was originally
published in Caelum
Et Terra, Winter 1995, volume 5 no
1, and is used here with the author’s permission.
To obtain permission to
republish this article, contact the author by clicking on the link above.
Capitalism
no more means the affirmation of an individual,
or
a family's right to possess land, machinery, housing,
clothing, reserves of
food and the rest, than fatty
degeneration of the heart
means the normal function of the
heart as the circulator
of the blood in a healthy human
body.
-
Hilaire Belloc
A
problem that at the outset confronts anyone writing about capitalism is that of
definition. What exactly is
capitalism? Too often people will reply
uncritically that capitalism means private property, but this is clearly not
the case, since private property has almost always been with us, even in times
definitely not capitalistic. Nor is
'private property in the means of production' any better, for that is nearly as
common as the former. But unless one
comes up with at least a rough definition, any discussion of capitalism would
seem to be fatally compromised. Before
going any further, then, let us look at a few attempts to define, or at least
describe, capitalism.
First
perhaps we should look at those who, for some reason or other, do not bother to
define. Michael Novak edited a little
book entitled, The Denigration of Capitalism (1979), but what capitalism
is is rather taken for granted than defined. In fact, what Novak and the other contributors to this volume
seem to assume, is that capitalism is simply the present economic arrangements
in the Western world, plus Japan. There
are, however, two problems with this use of the word. First, what exactly about our present economic arrangements
enables one to call them capitalistic?
Is it our possession of private property? Our freedom to make contracts with very little supervision from
the government or anyone else?
Widespread separation of ownership and work? In the second place, in lumping together all of the Western
economies, plus the Japanese, and calling it one thing, one ignores major
differences, for example, the highly-structured German arrangements for worker
participation in management or the very many differences between U.S. and
Japanese approaches to corporate governance and competition.
Another
and highly regarded source, the International Encyclopedia of the Social
Sciences (1968), in its article "Capitalism" (vol. 2), gives a
sort of description rather than a definition.
"Capitalism is the economic and political system that in its
industrial or `full' form first developed in England in the late eighteenth
century." But what was it about
England in the late eighteenth century that constituted capitalism? The nearly complete disappearance of the
guilds? The rise of large firms
controlled by rich men? An increase of
financial speculation? New
technology? This article goes on to say
that "Self-interest as ultimately the servant of society, the minimization
of the role of the state and the institution of private property constituted
the essence of capitalism in the nineteenth and early twentieth
centuries." Note, however, that
the writer says, "in the nineteenth and early twentieth centuries." Here again there is clearly no attempt to
give a universal definition which gets at the essence of capitalism. And since we no longer live in the
nineteenth or early twentieth centuries, if we want to look at capitalism as it
exists in our own world, this definition would not seem sufficient.
A
source that ought to be both well known and well respected by Catholics,
Amintore Fanfani's Catholicism, Protestantism and Capitalism (1939),
gives a survey of opinions on what capitalism is, and Fanfani himself concludes
that it is in capitalism's spirit that we must look for its essence, i.e., that
in certain characteristics of the capitalist man, as distinguished from the
pre-capitalist, we can identify what capitalism really is. I will return to the spirit of capitalism
and Fanfani's observations a little later.
What
I consider the most satisfactory definition of capitalism, as opposed to the
spirit of capitalism, is a definition gleaned from the encyclical of Pope Pius
XI, Quadragesimo Anno (1931). He
speaks (no. 100) of "that economic system in which were provided by
different people the capital and labor jointly needed for
production." In other words,
capitalism is the economic system in which, for the most part, some
people provide the capital for financing an enterprise and others provide the
labor, that is, they work for wages on enterprises owned by the owners of
capital. This is in contrast, for
example, to the distributivist system championed by Hilaire Belloc, G.
K. Chesterton and others, which called for most men to work for themselves by
becoming owners of productive property, or in contrast to communism where
everyone worked for the state and thus (in theory) each worked for all and all
for each. Note, moreover, that in no
system does everyone conform to the general pattern; rather the majority of men
do so, and this sets the tone for a society.
In
discussing capitalism as a system in the abstract, one point must be made
clear: the separation of labor from
capital is not in itself unjust.
Pius XI says, in the very next paragraph, "the system as such is
not to be condemned." If such
separation were in itself wrong, than an elderly grandmother would sin were she
to hire the teenager next door to mow her grass or paint her porch. For in this case she supplies the capital
and he the labor. But we cannot stop
with that statement, for as I will argue, in the first place, capitalism is
always unwise, and secondly, the spirit of capitalism, or capitalism as it
really exists in the world, has always been unjust and likely always will be.
Why,
then, do I call capitalism unwise?
There are two reasons. In a
system of capitalism some men are chiefly suppliers of capital, that is, they
do not contribute either intellectual work, such as management skills, or
physical labor, to making any product or supplying any service. All they do is buy and sell stock and other
financial instruments. Since they thus
are one step removed from the process of production, they tend to see the economic
system in terms not of production for human needs, but of manipulation of money,
stocks, bonds, futures, etc. for their own profit. In other words, finance comes to be an end in itself and the
economic system is conceived of as existing for the sake of making some people
rich through financial transactions, rather than existing for the sake of
supplying our necessary material needs.
We can see in our own country an entire "industry" has grown
up, not around production of goods or services for human needs, but around the
buying, selling and manipulating of financial instruments. Though in almost any economy there will be a
need for some kind of financing of enterprises, and thus some financial
instruments would exist, as soon as these instruments become not means, but
ends, finance has become divorced from production, and thus from the purpose of
economics, which is none other than provision of the material goods needed for
a human life. The existence of a
powerful class of men whose life revolves around such derivative financial
instruments cannot but skew not only their outlook but the orientation of the
entire economic system. In addition,
the legal owners, those who actually own the stocks, for example, very often
have only the most tenuous relationship with their "property." Sometimes this "ownership" is
further mediated through a mutual fund.
This is hardly the kind of private property ownership championed by the
popes. Consider this papal
justification for the institution of private property, as stated by Leo XIII,
Men
always work harder and more readily when they work on that
which
is their own; nay, they learn to love the very soil which
yields in response to the labor of
their hands, not only food to
eat, but an abundance of the good
things for themselves and those
that are dear to them. (Rerum Novarum, no. 35)
We would try in vain to discover how an owner of
stock, for example, could ever "learn to love the very" shares of
stock which yield, not "an abundance of good things," but a dividend
check or a capital gain, in response to the labor of someone else's hands. With such a situation, instead of an economy
devoted to meeting real human needs, we have an economy devoted to making money
in any way possible, with ownership, control and labor separated to the
detriment of all three.
In
the second place, the separation of ownership from labor tends to create a
permanent class of non-owning workers, a circumstance often deplored by the
popes, and one which exacerbates class feeling and class warfare. This situation in turn produces men
alienated from their work and dulled in spirit. If the managers and directors of corporations had to work in coal
mines and on assembly lines we would soon see drastic changes in such
work. When one contrasts the wonderful
cooperative work of the medieval guilds, whose members put on complicated and
lavish religious dramas each year, with the modern worker in front of his
television set, we might well ask ourselves if being in charge of one's own
work does not have consequences far beyond the workplace itself. For under capitalism some men are in a sense
tools of those who are the owners of capital.
Even when the directors and their managers have good reasons for making
a decision which is perceived as detrimental to the workers, the workers do not
know what the reasons are and have no opportunity to join in making the
decision about what is best for the enterprise. To choose an example that I have heard about personally, in a
certain mining enterprise in Pennsylvania, when work is slack, the manager lays
off the miners for four days at a time, since they cannot obtain
unemployment benefits (which the firm is required to contribute to) unless they
are laid off for five consecutive days.
The management apparently claims that the firm cannot afford the extra
outlay for unemployment benefits. Is
this just? Does the firm need to do
this in order to survive? The point is
that the workers do not know.
Perhaps the management is right and this is the only way the enterprise
can continue to exist. And since the
mine pays comparatively high wages for that region, people continue to work
there. But it would seem that the
workers have an interest, if not a right, to participate in such a
decision. If the management is indeed
correct, the workers might well agree with that decision, if they had access
to the facts. They cannot be
treated as mere pawns, to be moved about as though they were not rational
creatures. As John Paul II wrote in Laborem
exercens (no. 15), "the person who works desires not only due remuneration
for his work; he also wishes that, within the production process, provision be
made for him to be able to know that in his work, even on something that
is owned in common, he is working `for himself.'" [emphasis in
original] The Pontiff goes on to say
that when he is a tool of a bureaucracy - and that would be true whether that
bureaucracy were capitalistic, socialistic or even cooperative - the worker
feels that he is "a mere production instrument rather than a true subject
of work with an initiative of his own."
Capitalism, with its separation of ownership from work, does not
normally allow a worker to be a "true subject of work." An
economy is likely to go wrong, then, when it is largely characterized by the
separation of ownership from work. All
economies will always include some examples of such separation, as in my
example of an elderly woman hiring the teenager next door to do some work for
her. But clearly such economic
transactions are trivial in comparison to the entire volume of economc activity
that constitutes the gross domestic product.
The question is, how is the great majority of such economic activity
conducted - by worker-owners and cooperatives of workers or by wage-earners and
financial speculators? Nevertheless,
one must recognize that theoretically it would be possible for a society
to conduct its economy justly and sanely under capitalist arrangements. But such an undertaking would, I fear, be
far beyond the ability of fallen man.
This brings us, then, to a consideration of the "spirit of capitalism,"
or capitalism as it is actually conducted by the children of Adam.
Here
is Fanfani's succinct summary of capitalism in action.
Modern
man, who is capitalistic, regards wealth as the best means
for an ever more complete
satisfaction of every conceivable need;
he also regards it as the best means
for improving his own
position. He considers goods as instruments to be used ad
libitum by their possessor. He does not recognize any claim on
them on the part of third parties not
their possessors, still
less does he think it unlawful for
their possessor to use them so
as to obtain an unlimited increase or
their reproduction at ever
diminishing cost.
Perhaps to most moderns, especially Americans,
Fanfani's statements seem like truisms.
After all, is not my wealth supposed to be the means for my
getting richer and richer? But the
pre-capitalist, particularly the medieval, paid attention to some neglected
words of St. Paul, "...as long as we have food and clothing, let us be content
with that" (I Tim. 6:8). And, a
fortiori, as long as we ourselves have much more than food and clothing, let us
be content with that. Thus the
medieval man did not think that he had a right to limitlessly increase his
income or wealth, even by the use of legal means, if he already had enough
material goods. There was plenty of
other things to do, and, unavoidably, an eternity to prepare for. Or as Fr. Bede Jarrett put it in his Social
Theories of the Middle Ages (1926),
Merely
to engage in commerce for the purpose of making more money
was not a sufficient justification,
for money should be only a
means to an end. To make it an end in itself was to spoil
man's
life, because life thenceforward
became robbed of definite
purpose.
Likewise,
the medieval did not think that just because the poor had no legal call
on any of his money that therefore they had no moral call on it. He believed that, as far as any truly
surplus income he had, that is, income required neither for the necessities of
life nor for a reasonable accommodation to his own social state, he was a
trustee for the poor. In other words,
it was his job to figure out the best means of getting rid of income he did
not need. As a modern commentator,
Msgr. John A. Ryan wrote,
In
other words, the entire mass of superfluous wealth is morally
subject to the call of grave
need. This seems to be the
unanimous teaching of the moral
theologians. (Distributive
Justice, 3rd ed., 1942)
Capitalism,
however, has brought with it its own spirit, a spirit which regards wealth not
as a necessary means for supplying our earthly needs, but as something to be
increased beyond measure. What do I
mean by "beyond measure?" I
mean by it something fairly precise, for obviously in speaking of the correct
measure of our earthly needs, man himself is the measure. Thus, for example, a man can eat only so
much food in a day. If he wanted three
times as much food every day as he could properly eat, he would be desiring to
multiply his possession of food beyond measure. Every man needs a dwelling.
Perhaps some few could make an argument that they need more than one. But surely at some point any legitimate
need for more houses would be passed. A
man who claimed the need for (say) four houses, is obviously asking for more
than he needs. And so on with the rest
of our property. Material things exist
to satisfy reasonable human needs, not unlimited human wants. Fanfani, indeed, summarizes Catholic teaching
on the acquisition of wealth as follows.
Man
has necessities, needs that must be satisfied, and, if
temporal goods can satisfy them, it
is a duty and legitimate to
seek to acquire such goods, bearing
in mind two rules, first that
they must be acquired by lawful
means, secondly that the amount
acquired must not exceed the need.
The fact that someone has the money to buy four
or five or fifty houses, does not confer on him any moral right to possess
them. And, to the medieval mind, it did
not necessarily confer on him any legal right either.
It
should be easy to see that capitalism in action has produced a different kind
of man from that produced by medieval economic ideals. And if this is the case, it leads naturally
to the second part of this article, namely, cultural considerations of
capitalism. It is to these cultural
considerations that I now wish to turn, taking cultural in its broad meaning of
what constitutes the life of a particular people, although the form of that
life is revealed in sharpest relief by those activities we most commonly call
cultural, such as music, art and literature.
Now
it should be obvious that a society's economic arrangements have a profound
impact on all areas of its culture, indeed, the economic system is an important,
though subordinate, part of any culture. But just because economic activity is by its nature a subordinate
part of any society does not mean that the type of economic activity that a
culture has is not of very great importance.
One obvious example is what a society spends its excess wealth on. Excess wealth is that wealth not needed to
provide the ordinary human needs, such as food, shelter, and so on. The Middle Ages spent much of its excess
capital on providing for and adorning the worship of Almighty God and endowing
learning. We spend it on further
commercial activities, useless products, lascivious entertainment, sports. When we endow educational institutions it is
with the expectation that they will dutifully invent new gadgets designed to
make our lives easier and will help us compete with other nations for a greater
share in world trade. Seldom would we
think of endowing men who would spend a lifetime studying theology and
philosophy. The reason that we do this
is the fact that capitalism has created a different type of man. A man who no longer sees his material
possessions as subordinate, and in a sense, unimportant aspects of his
life, who does not tremble as he recalls that greed as well as lust can damn a
man eternally. Our politicians
unashamedly speak of an ever greater and greater standard of living. We take it for granted that what were
luxuries for our fathers are by right necessities for us. We shape our civilization to reflect the
capitalist priorities of our souls.
It
is, moreover, logical that money, or financial instruments that represent
money, would be the characteristic form of wealth in a capitalist culture, for
money is not useful for any real thing or activity. We cannot eat it or wear it, build houses out of it, play music
with it, write books on it. Like
capitalist financial speculation, it is one step removed from the actual
process of supplying material goods for man's needs. And since money is mobile, modern capitalistic man has likewise
lost his sense of place. Thus he sees
nothing incongruous in putting up hamburger restaurants and discount stores
everywhere, even though these often help to destroy truly local economies and
make every town and village look exactly alike. But if money can be made, the capitalist cares not about what
effect the process of production is having on the social order or the
environment.
And
if we want to understand the perversity and alienation of so many artists and
writers in the modern age, we would do well to understand that they are
reacting against a culture already perverted by the spirit of capitalism. A misshapen culture naturally provokes
misshapen responses. Only the doctrine
of wealth for wealth's sake could have brought about the equally absurd
doctrine of art for art's sake. Both
are wrong because both fail to subordinate the legitimate activities of
wealth-creating and artistic creation to their inherent purposes, which
ultimately are the welfare of mankind and the glory of God. But if capitalists can claim that their
peculiar activity is exempt from any control but that imposed by itself, why
cannot artists claim the same thing?
Both claims would have seemed foolish and perverse to a medieval, and
indeed, they should both seem foolish and perverse to a Catholic of any era.
The
capitalistic spirit has so permeated our culture, that we now see all of life
in terms of capitalistic economic arrangements. For example, students in universities now often regard themselves
as consumers. And as consumers, do they
not obviously have the right to judge the product offered to them? To demand something new if they are
displeased? Education now becomes a
commodity, advertised and sold according to the capitalist mode to consumers
who evaluate it with the same standards they might use to evaluate toothpaste
or canned beans. No longer do the
teachers - once called by the term, masters - no longer do they have
wisdom to impart to their students. Now
the students calculate whether the information being imparted will really help
them get a better job or a promotion, and if not, they will withdraw from the
institution, perhaps even sue it for educational malpractice.
Capitalism
and its accompanying industrialism is so much a part of the atmosphere of our
day that we fail to see how our entire existence is organized around its
demands. Thomas Molnar comments in
regard to industrialism,
Seen
from the vantage point of our habits engendered by our
thoroughly
industrialized society, it is hard even to imagine
life in countries not yet
industrialized, at least to the same
degree. Spain is a good example of the latter. Holidays,
saints'
days, local fiestas lasting for several days, family
celebrations, and so on, have at
least as great an impact on the
course of life as work and
efficiency-mindedness. Next to work
rhythm there is also a leisure
rhythm, not in the sense of "rest
from work" but as a form of the
outlook on existence. (Authority
and Its Enemies, 1976)
While on the one hand spending huge sums of money
on leisure, we nevertheless look at it as justified only for the sake of future
productivity. The traditional view,
expressed, for example, by Aristotle, is that work is for the sake of leisure,
the very opposite of what we believe today.
As Josef Pieper wrote, "the value we set on work and on leisure is
very far from being the same as that of the Greek and Roman world, or of the
Middle Ages..." (Leisure, the
Basis of Culture, 1952). Even to
utter such statements is to invite bewilderment. Perhaps a modern does not so much disagree with this statement as
fail to comprehend what it could possibly mean or how it could possibly be
realized in this world. For us of the
capitalistic world, only a course of reading in the masters, both classical and
modern, can teach us how to esteem properly both work and leisure and grasp
their place in the social order.
But
the capitalistic spirit goes even further.
An advertisement in our local newspaper for a Protestant congregation
says, in part:
If
you are serious about making changes in your behavior, or
in how you feel, we can help
you. Using dynamic Bible
principles, massive changes can take
place in your marriage,
family and personal life. We can help you overcome [the
following]
Then follows a list of over twenty conditions,
including Alcoholism, Smoking, Depression, Worry, Fears, Hyperactivity,
Loneliness, Fatigue, Insomnia, and Guilt.
With only a few changes, this could be an ad for a psychology clinic or
a therapist. Religion is here sold as a
consumer item, on principles no different from those used to sell soap or used
cars. It is no wonder that bastard
religions such as Scientology, which also market themselves as means for
solving our myriad personal problems, have the success they that they do.
This
capitalist spirit even infects marriages, with some couples drawing up marriage
contracts before their wedding, as if they were entering upon a business
partnership. Capitalism has so
influenced our thinking that now marriage, religion, education are all
conceived after capitalistic models. Of
course we do not realize that we do this.
But because we are so accustomed to think in a capitalist manner,
we extend that kind of thinking to all of life, hardly noticing what we are
doing. Just as during the Middle Ages
certain feudal customs entered the Church, and, for example, bishops commonly
entered upon their jurisdiction with a ceremony little different from that used
for lay nobles, so have we done with capitalism.
But
wait. Am I not behind the times? Has not the Pope himself endorsed capitalism
and therefore blessed our entire economic and social life? Is not modern America now the model for the
whole world and the next millennium? To
read some tendentious interpretations of John Paul II's 1991 encyclical, Centesimus
Annus, one would think so, but the Holy Father's words, both in that
encyclical and subsequently have made it clear that the Church's position has
not changed. Indeed, every faithful
Catholic ought to know that her position canot change. As John Paul II said during his recent trip
to Latvia, "...the Church, since Leo XIII's Rerum Novarum, has
always distanced herself from capitalistic ideology, holding it responsible for
grave social injustices."
Catholics must beware any clique, no matter how loyal to the Church they
may seem on the surface, which attempts to make its peace with an anti-Catholic
notion of the social order. And any
notion or organization of society which does not subordinate things to their
ends, e.g., which fails to subordinate economic activity to the life of man in
society, directly goes against that human and Christian notion of society which
the Church has always upheld. We
Catholics must not be content with a faith that is restricted to our private
lives. We must prepare the way of the
Lord, of Christ, the King of all nations and societies, of every aspect and
element of life and society. The Social
Kingship of Jesus Christ demands as much, and neither the hostility nor the
lack of understanding on the part of the modern world should be able to keep us
from this labor.
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