Tuesday, May 12, 2009

John Paul II on Capitalism and Socialism

HT to Mark Mitchell at Front Porch Republic for this quote. [My comments are in square brackets and bold]

This is from Centesimus Annus. Here John Paul II reflects on two meanings of the word “capitalism.”

“Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress? [John Paul II is writing in 1991]

“The answer is obviously complex. If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy,” “market economy” or simply “free economy.” [Here John Paul II clearly endorses the market economy as a good thing. So Catholic Social Doctrine cannot simply be reduced to the critique of capitalism and the advocating of socialism. But note what comes next.] But if by “capitalism” is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative. [The pope here endorses a certain kind of capitalism, democratic capitalism, in which there are two (actually many) major power centers: government and business. When and to the extent that business begins to take over or control government we have a problem. The fewer corporations there are and the less competition there is, the fewer hands the power of business resides in. And the larger government is, the easier it is for government bureaucracy and big business to become intertwined. So the smaller the government and the greater the degree of distribution of property and the more competetion between business corporations, the more likely it is that there will be a genuine democratic capitalism. Obviously, recent trends in both the US and Canada are of great concern here. We are definitely going in a dangerous direction.]

“The Marxist solution has failed, but the realities of marginalization and exploitation remain in the world, especially the Third World, as does the reality of human alienation, especially in the more advanced countries. Against these phenomena the Church strongly raises her voice. Vast multitudes are still living in conditions of great material and moral poverty. [Marerialism is built on a false anthropology and can manifest itself negatively both in capitalist and socialist countries.] The collapse of the Communist system in so many countries certainly removes an obstacle to facing these problems in an appropriate and realistic way, but it is not enough to bring about their solution. [Communism is a kind of state capitalism that concentrates power in the hands of the party elite.] Indeed, there is a risk that a radical capitalistic ideology could spread which refuses even to consider these problems, in the a priori belief that any attempt to solve them is doomed to failure, and which blindly entrusts their solution to the free development of market forces.” [State capitalism can arise either from socialism, in which the government takes over business, or from the type of liberal fascism in which big business merges with big government through the development of a managerial bureaucracy.]

Final Comment:
Both capitalism and socialism are modern ideologies coming out of the Enlightenment, which tend toward ignoring original sin and naively embracing "scientific solutions" to all social problems. Both are therefore dangerous. The real danger of totalitarianism arises from the concentration of economic and political power in the same set of hands. This can occur through capitalistic monopolies colluding with big government or it can occur through a socialist revolution that puts all power into the hands of the party.

Christians should beware of authoritarian utopianism in whatever form it takes. In Canada, the scientific management of the totality of social life by a managerial class of bureaucrats who share the ideology of the Enlightenment suspicion of tradition and the possibility of endless progress is well-advanced. In the US it appears to be taking a quantum leap forward under Obama.

5 comments:

Peter Dunn said...

"The answer is obviously complex. If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy,” “market economy” or simply “free economy.”"

I agree. And I believe that consistently this was my working definition of capitalism when promoting it as a better political-economic system in the comments on your earlier post ("What happened to Craig Carter").

"Both capitalism and socialism are modern ideologies coming out of the Enlightenment, which tend toward ignoring original sin and naively embracing "scientific solutions" to all social problems." If, however, capitalism acknowledges self-interest as the primary impetus towards productivity, isn't that an acknowledgment of original sin? That to me is why socialism and marxism don't work--generally people do not care about the needs or interests of others. So capitalism, by drawing from a more realistic anthropology, has a greater possibility of working in our fallen world than communism or socialism with its overly optimistic view of humanity.

Craig Carter said...

Peter,
Yes, capitalism recognizes hte fact of original sin to an extent, but in the Enlightenment version this recognition is incomplete in not recognizing what must be done to restrain the exploitation of the weak by the strong. The faith of an Adam Smith in the invisible hand presumes that unregulated capitalism will result in prosperity and human happiness. In this lies the inadequacy of its recognition of original sin.

The role of government is necessary to restrain the strong, keep monopolies from forming, prevent price fixing, give labour a fighting chance to obtain a fair share of the profits etc. In other words, the pure rational theory does not work alone, but must be supplemented by messy, government intervention in setting the rules.

Too much government intervention is as bad as too little. So it is a matter of practical wisdom, not pure theory, to know what to do at any given point in time. This practical wisdom requires virtue, which is a pre-modern concept, as opposed to the correct rational theory, which is a typically modern concept.

Peter Dunn said...

This is a very important point you make. Thank you.

Brandon Jaloway said...

Great article! And excellent replies! You are very right when you say that, "Too much government intervention is as bad as too little..." One further principle which helps to define the proper role of government is the principle of subsidiarity. It states that a larger body of government (e. g. state, national) should not take over the roles and powers of a smaller and more local government unless the smaller government is unable to properly deal with the issues. This solves a lot of problems.

Craig Carter said...

Brandon,
Agreed. The principle of subsidiarity rules out creeping soft totalitarianism by constantly pushing down power and decision-making responsibility.

A good example of the violation of this principle is the consolidation of gigantic school districts operated by faceless bureaucrats totally disconnected from parents. These institutions become labs for social engineering, rather than extensions of parental teaching. We need small districts with parents on the boards overseeing what the paid administrators are doing.