The Catholic Ethic and the Spirit of Capitalism
by Michael Novak
The Free Press
The Catholic Ethic and the Spirit of Capitalism represents a strain of Catholic thought which rarely finds public voice in Australia. Although there must be legions of ordinary Catholics out working in the free enterprise system who appreciate the benefits that system can deliver, their views are not reflected in the statements of prominent Catholic media and of official Church committees, which, as the recent Wealth Inquiry showed, tend to ape the enthusiasms of the socialist Left.
In the USA the situation is different: there, many thoughtful and decent Catholics have stood up in public to defend free enterprise, among them Michael Novak and the Reverend Robert Sirico, who visited Australia in mid-1993 as a guest of the Centre for Independent Studies. Nor is the USA an isolated example, despite what the worldwide depredations of Liberation Theology may suggest. It is one of the theses of Novak's latest book -- a thesis ably supported by a mass of documentary evidence -- that during the Pontificate of John Paul I1 free enterprise has won the approval of the Papacy itself.
The book is intended, as its title suggests, as a riposte to Max Weber's famous thesis about the role of the "Protestant Ethic" in the development of modern capitalism. It is not, however, an historical rejoinder; nor does it need to be. It is now many years since Hugh Trevor-Roper and other historians began to remind us that many of the first capitalist centres sprang up in Catholic cities, such as Liege, Lille and Turin; and that the first "multinational" enterprises in Europe were the huge medieval farms run by Cistercian monks on a commercial basis. Novak acknowledges this historical work but has a different project: to "offer a vision", as he puts it, of how the Catholic ethic that he espies in the social thought of John Paul I1 may "undergird, correct, and enlarge the spirit of capitalism". Along the way he recounts the history of Papal statements on social concerns over the last hundred years.
CONTRA COLLECTIVISM
In 1891 Pope Leo XIII issued the founding text of the current tradition of Papal social thought, the encyclical letter Rerum Novarum. In this document he condemned those he called (very broadly) "the socialists", on the grounds that were they to succeed in transferring individual property to the community, they would "deprive the wage earner of the liberty of disposing of his wages, and thus of all hope and possibility of increasing his stock and of bettering his condition in life". The socialists' goal (collectivism, in modern parlance) was "manifestly against justice", for every man had the right by nature to possess private property. Property rights, according to Rerum Novarum, were "sacred". What is more, not only was collectivism unjust, it was also futile and counterproductive, for "if the incentives to ingenuity and skill in individual persons" which private property offered were to be abolished, "the very fountains of wealth would necessarily dry up; and the equality onjured up by the socialist imagination would, in reality, be nothing but uniform wretchedness and meanness for one and all, without distinction".
As unequivocally opposed to collectivism as he was, Leo XIII found two grave errors underlying the capitalist society of his day: it saw every individual as isolated and also as the equal of every other, paying insufficient heed to the weaknesses of many who could not be expected to compete with the rest on equal terms: "The present age handed over the workers, each alone and defenceless, to the inhumanity of employers and the unbridled greed of competitors". Thus Leo established the direction of Catholic social thought for much of the 20th century -- hostile towards collectivism but reformist towards capitalism. Capitalism had three saving features: private property; an insistence on the limited state; and the space it allowed for free associations, such as labour unions, social clubs, schools and religious organisations.
Novak identifies one essential feature of capitalism which Leo failed to discuss (whether positively or negatively), namely the market. He attributes this lacunae in Rerum Novarum to the circumstances in which it was written. Italy was still a predominantly agricultural economy locked in ancient customs. Politics, rather than economics, dominated the minds of its 19th-century leaders struggling to establish a unified State. More than this, however, Catholic intellectual life had been ravaged in the 19th century. After the French Revolution, many colleges, seminaries and monasteries had been appropriated by governments; many libraries disbanded. Leo had to make do with the resources and advisers that were available, and so left considerable scope for refinements by his successors.
THE STATE AND SOCIAL JUSTICE
In 1931 Pope Pius XI, commemorating Rerum Novarum, issued the next major document in the tradition, Quadragesimo Anno. This encyclical built upon Leo's appreciation of free associations and his view of the proper limitations of the state by enunciating the principle of "subsidiarity", to wit: that social tasks should be performed by the smallest possible unit, and that larger units (such as the state) should not take over functions capable of being performed efficiently by smaller ones (such as the family or Church or neighhourhood).
A more problematic addition to the tradition was the concept of "social justice". Novak argues that the usage of the term in Quadragesimo Anno falls victim to the charge of F.A. Hayek, that it confuses personal virtue with the state of affairs in a social system (a system, that is, beyond the direct control of any individual, however virtuous), and that the term is thus useless except as rhetoric for the defence of special interests. Novak then spends a good deal of time trying to rehabilitate the term "social justice" as a purely personal virtue, by which individuals associate to alter social conditions.
Pau1 VI's Populorum Progressio (1967), on a different track, declared that "private property does not constitute for anyone an absolute and unconditional right". While avoiding the term "socialism", Paul VI began to speak of a necessary process of "socialisation". In one sense, Paul was looking back, beyond Leo XIII to the older Scholastic tradition, which had taught that all the goods of the earth were intended for the benefit of the common good. The "sacredness" of private property was more Lockean than Thomist (another indication of the weakness of Leo's resources). Yet Thomas, like his classical predecessors and Scholastic successors (and like Leo) affirmed private property pragmatically as the most efficacious means of realising the common good, and Paul appeared to be discarding this basic element of the tradition. Hence, by the time Karol Wojtyla became Pope John Paul II, the tradition of Papal social thought had become somewhat unclear in its direction.
CAPITALISM RIGHTLY UNDERSTOOD
With the social encyclicals of Pope John Paul II, Laborem Exercens (1982), Solicitudo Rei Socialis (1987) and Centissimus Annus (1991), the tradition's support for what Novak succinctly calls "capitalism rightly understood" has become progressively more explicit. In Centissimus Annus, the Pope criticises the excesses of the welfare state, recognises the social significance and contribution of entrepreneurship, and argues that the modern (free market) economic process, "throws practical light on a truth about the person which Christianity has constantly affirmed" and ought to be viewed "carefully and favourably".
As Novak explains, the key to John Paul II's social thought lies in his philosophical and theological understanding of the human person. Long before he assumed the Papacy, Karol Wojtyla had singled out the capacity to originate action, to conceive of new things and do (or make) them, as the clue to human identity. He found powerful support for his view in the Book of Genesis; man, being made in the image of God the divine Creator, is called to "create" after a fashion himself, doing so not ex nihilo (for only God can do that), but by subduing the earth and putting the goods of the earth to his own service. And just as the married man and woman in their sexual acts do not merely reproduce but procreate (that is, co-operate with God in creating new members of his Kingdom), so they are also co-creators in the economic realm:
"Man discovers his capacity to transform and in a certain sense create the world through his own work ... carrying out his role as co-operator with God in the work of creation".
It is this "creative subjectivity" of the human person which prompted John Paul II, in Solicitudo Rei Socialis, to speak of a "right to personal economic initiative", and in Centissimus Annus to acknowledge the value of entrepreneurship and to criticise the welfare state in those situations where it tended to stifle personal initiative and responsibility.
Novak's reconstruction of the tradition of Papal social thought is generally deft. He also does a very good job of countering those left-wing commentators who have tried to play down the extent to which Centissimus Annus favours free enterprise. The account is marred, however, by poor organisation. There are frequent digressions about the failures of socialism in Eastern Europe, and though these may have been intended to show how prescient the encyclicals were in their (respective) days, they end up merely disrupting the flow of the analysis. Also, despite managing to capture all the relevant points in the tradition, the analysis is actually less comprehensive in its discussion of John Paul II's predecessors than was Novak's earlier book, Catholic Social Thought and Liberal Institutions. In the current book, for example, a couple of John XXIII's and Paul VI's encyclicals are not even mentioned, and those that are, are not examined at any length.
POOR GUIDE TO ACTION
More serious still, Novak's suggestions for practical action, which take up the last third of the book, are mostly vague and question-begging; indeterminate injunctions of the "barriers to participation must be broken down" or "moral decay emanating from the adversary culture must be resisted" sort. Other neo-conservative writers, like Charles Murray and Michael Medved, have developed similar ideas far more thoroughly and usefully than Novak does here. And all that his attempt to rescue the term "social justice" really produces is a renaming of the old-fashioned virtue of civic responsibility.
I take it, then, that Novak fails to accomplish his goal of "undergirding, correcting and enlarging the spirit of capitalism". Despite saying (in the epilogue) that the book was intended mostly for non-Catholics, for much of the time he appears to be engaged in a purely intra-Catholic debate about what the official stance of the Church is towards capitalism and (by implication) which policy commitments it is proper for Catholics to hold as a result. The harder task of persuading non-Catholics that liberty, including economic liberty, is not an end in itself but rather a derivation from human "creative subjectivity", would require a book of a very different shape.
Yet provided one can shut one's eyes to the book's unrealised ambitions, what it does offer may still yield a certain measure of satisfaction. As readers of the White Picket Fence will probably know, relations between the hierarchy and the laity of the Catholic Church in Australia are far from straightforward. Factional fights in schools, in religious orders, in one parish and diocese after another since the Second Vatican Council, with priests and bishops (whether they be "progressive" or "orthodox") behaving like the most unscrupulous of politicians rather than like even-handed men of God, have grievously weakened respect for the authority of all members of the hierarchy. The situation has been compounded by theologians and journalists (not all of them non-Catholics) who have made contradictory claims about what the Church actually does teach, and what obligations Catholics actually do have.
In this context of confusion any book will be a boon which sets out what the highest authorities in the Church believe and teach about an issue. The Catholic Ethic and the Spirit of Capitalism is such a book, for all its flaws, and its wider dissemination should re-assure the ordinary enterprising Catholic that, regardless of what bunyip Peace and Justice Commissions might imply, he can go about his business while still retaining his fidelity to the Pope.
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