The Primacy of (All) People in Catholic Social Doctrine

I’m used to being told I am wrong, but in an internet discussion I’m not used to my critics being respectful and actually reading what I’ve written. Perhaps Dan’s recent post is a forerunner of a wave of combox civility and reason; huzzah! It’s also beyond question that Dan, Bishop Blaire, and Catholic social theorists throughout history have the noblest of intentions: seeking the good of workers in economic relationships. For that they have my deep respect.

Dan takes issue with my critique of Bishop Blaire’s Labor Day Statment and with what I perceive as the Church’s misunderstanding of labor versus other factors of production. He believes I “elevates conservative economic doctrine higher than Catholic social doctrine;” he later recognizes consistency between Marxist and Catholic views on just wages, not because the Church agrees with Marxism but because Marx agreed with the Church. I might adopt the same approach and suggest that economists don’t necessarily agree with conservatives but conservatives tend to agree with basic economic principles more so than liberals, progressives, populists, greens, etc. There are certainly conservative economic positions that virtually all economists would reject: trade and immigration restrictions, massive subsidies to domestic industries, and other xenophobic policies that (don’t really) help American companies at the expense of foreign companies.

Adam Smith

I said nothing in my previous post that would be considered outside of mainstream economic thought. It is all standard microeconomic theory and can be easily verified by looking at, say, the textbook we use in my micro principles class (whose authors can hardly be characterized as hard-core conservatives).

I certainly support and defend Catholic dogma, but I’m unaware that the Church’s teaching on a living wage requires the same degree of assent as Her teaching on the Real Presence, the Trinity, or the Assumption. Indeed, some of our Bishops recognize the limitations of their economic expertise.

As to Dan’s two key points:

  1. Labor has primacy over capital.” We think of capital as impersonal machinery, and would rightly fault a business that chose to replace all of its two-year old but perfectly functional and efficient computers with brand new (and unnecessary) ones instead of using those funds to augment salaries. But recall that capital equipment itself is produced by laborers, and its purchase by companies is typically financed by savers being frugal, so reducing the reliance on capital will itself harm laborers and other people who make capital available. Capital makes labor more productive; the reason a backhoe operator gets paid more than a guy with a shovel is precisely because of the capital. I.e., if we want to increase the chances that people will get paid at or above a living wage, we need more capital, not less.
  2. It is appropriate and just to pay someone based on their needs, not merely their production.” It may be appropriate and just, but as I argued earlier, it is unrealistic in certain circumstances and may in fact be unjust. In my earlier post, see the examples of the two teenagers, Alan and Bob. As another (extreme) example, say that my brother opens a business that sells mud pies and he hires me, a lazy guy who just sits around at work all day blogging. Should he pay me based on my needs (main breadwinner to my wife and two sons)? It would be wonderful if he could, but realistically he won’t be able to because no one wants to buy mud pies (so the company gets no revenue to pay wages), and I am not contributing anything to the production of the business (so whatever he would pay me would come out of his or other hardworking employees’ pockets, an injustice to them).

Dan asks later “do you believe that revenue and price considerations are all that matter?” No, but it’s hard to pay a living wage if you have no revenue. Avoiding financial realities is a surefire way to doom a company, leaving its employees without jobs. “[D]oes work…have a subjective dimension that goes beyond that?” Yes, aside from the productivity of an employee, an employer certainly should consider that employee’s work ethic, loyalty, ability to get along with others, creativity, and lots of other subjective characteristics in determining their salary.

“[D]o you back a doctrine developed over better than a century by an array of popes, or one pieced together by a slew of intellectuals at conservative think tanks?” This neglects the largely free-market economic thinking of the medieval scholastics at Salamanca, but even if we consider 1891 to be the beginning of Catholic social thought, Rerum Novarum is still preceded by the Wealth of Nations and thinkers like J.B. Say, David Ricardo, and Bastiat. The economics Dan criticizes is not a modern ultraconservative offshoot devised by cigar-smoking intellectuals in dimly-lit offices of the Heritage Foundation or Cato Institute; it is mainstream economics. (Most economists, by the way, lean Democrat, and the premier international association, the AEA, certainly is left of center).

Raged against the machine before it was cool

The main point in my previous post was to demonstrate that all factors of production (land, labor, capital, entrepreneurship) essentially relate to persons, and therefore all of these persons have a right to justice in economic relationships. Land is owned by landowners, who deserve justice in being compensated for their contributions in production. Capital is made by laborers and financed by savers, so if you rage against the machine at least don’t rage against the people who make the machine and the laborers who are more productive because of the machine. Entrepreneurship involves people who use their creativity and foresight, while taking considerable risk and usually delaying any compensation for themselves for years, to produce goods and services that make customers’ lives better.

Catholic social teaching develops, as it has since 1891. My hope is that, going forward, it gets away from the antiquated notion of a constant struggle between laborers and rich capitalists with their machines, and recognizes the reality that economic relationships are relationships between persons, all of whom deserve justice and respect no matter their role.

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20 thoughts on “The Primacy of (All) People in Catholic Social Doctrine

  1. Cindy says:

    Okay… I am utterly baffled as to why my comment got disliked 54 times. There is no dissent in it from Catholic teaching. I was advocating looking at RERUM NOVARUM as a guide for thinking about the relationship between capital and labor. I supported Pope Leo XIII’s view that Marxism is NOT consistent with Church teaching (in opposition to the blogger’s friend, who claims that Marx IS consistent). Pope Leo is very clear in RERUM NOVARUM that the elimination of private property (a key goal of Marxism) is antithetical to Catholic teaching. I did mention that traditional and quite conservative Latin Missals list “defrauding the laborer of his wages” as a “sin crying out to heaven for vengeance,” along with murder and sodomy – a point that indicates that treating the laborer with proper dignity is traditionally considered important. If I am reading the blogger correctly, then he would agree that the just treatment of the laborer is important – as is the just treatment of capital. I did not in any way indicate that labor supersedes capital. In fact, if I recall, RERUM NOVARUM argues in favor of a key point the blogger makes – i.e., that economic relationships are relationships between persons and that persons must be treated justly. If I disagreed with a point in the post, it was that Catholic Social Doctrine historically sees a binary opposition between capital and labor. I don’t recall that being the case in RERUM NOVARUM. But aside from that small disagreement, I don’t understand what was problematic about my comment. Can someone please enlighten me?

    1. Tim Shaughnessy says:

      The CV blog is perused by lots of people all over the spectrum of opinion. It’s not unusual to see two comments that take opposite opinions that have a similar number of “likes” or “unlikes.”
      Don’t take it personally; as I said above, I appreciated your thoughts.

      1. Cindy says:

        Thanks, Tim, for the encouragement. It has been extremely odd (almost comical, actually) to find so many of my comments hidden all of a sudden. I am thankful that you, at least, appreciate having some dialogue with me.

        1. Everett says:

          I also suspect there’s some way of “gaming” the system, for the purpose of hiding posts that someone may not agree with (from either side of the spectrum). I’m pretty sure I’ve gotten lots of downvotes for some posts that were “more liberal” and lots of downvotes for some that were “more conservative”. Frankly, I think the like/dislike system isn’t working particularly well, and they should consider alternatives.

  2. Rich says:

    May I complement you on a civil response to his civility in questioning you? I am impressed not so much with the content of the response- that I may or may not take issue with – but with the respectful tone in answering.
    This is how to have true Catholic conversation on important issues. Respect for the other person’s thought and examination of our own thoughts, do they actually mirror what we believe. Openness to the questions of others can lead to the needed dialogue, and not to the mere positioning that some many of us have become too comfortable with.
    Thank you for your article and your example.

    1. Tim Shaughnessy says:

      Thank you as well; a combox response that doesn’t include the phrase “Shaughnessy is an idiot;” imagine that!
      As I said at the beginning, we all want to pursue an economic system that treats people fairly and justly; there is just disagreement about the means toward that end.

  3. Sue in soCal says:

    If you want to see an economic model based on Church social teaching, the Economy of Communion – developed by the Focolare Movement and mentioned in Pope Benedict’s encyclical “Caritas in veritate” (section 46) – is structured to help address the questions of economic justice in a practical way that keeps the human person as a valued individual in mind. http://www.edc-online.org/en.html

  4. Sue in soCal says:

    If you want to see this economic model based on Church teaching I would point you to the Economy of Communion as envisioned – and practiced – in the Focolare Movement. This is the model mentioned in Pope Benedict’s encyclical “Caritas in veritate”, section 46.
    http://www.edc-online.org/en.html

  5. Cindy says:

    I am not an expert on economics, and I’m not an expert on Catholic Social Doctrine. But I have read RERUM NOVARUM, and I don’t recall it posing a binary opposition between capital and labor. If I recall, it supports your view that both groups deserve justice and respect. It is also clear that for Pope Leo XIII, Marx did not agree with the Church. In fact, Marxist views of private property were described as antithetical to those of the Church. It is also true, however, that the following are listed in my Latin Missal (1962 Roman Missal) as “Sins Crying to Heaven for Vengeance”: “Wilful murder | The sin of Sodom | Oppression of the poor | Defrauding labourers of their wages.” So we see here that traditional Catholic teaching does hold sins against the poor and against the laborer as equal to the sins of murder and sodomy. I don’t know what generalizations to make from all of this, but it seems that economic issues are important in authentic Catholic Social Doctrine and that both the poor and the laborer must be treated with dignity. Basically, I would just say that we should all start with reading and studying RERUM NOVARUM if we want to gain insight into the origins of Catholic thought as it grapples with labor and economics in an industrialized society.

    1. The Priority of Labor says:

      In addition to Rerum Novarum (1891), Laborem Exercens (1981) brings Church teaching on economic relations more into the present day. In it, Pope John Paul II emphasizes “the priority of labor over capital.” The first “is always a primary efficient cause, while capital, the whole collection of means of production, remains a mere instrument or instrumental cause.” Thus appears the error of economism, “that of considering human labor solely according to its economic purpose.” CEOs et. al. are more than justly compensated for their contribution to the production and distribution of goods and services. Indeed, they are unjustly compensated at the expense of workers and consumers which remains the crux of the problem. Greedy unfair workers, indeed.

      1. Tim Shaughnessy says:

        At the risk of being repetitive (since I’ve said this in this and my previous post), it is wonderful to consider human labor beyond its economic purpose and to pay people extraordinarily high wages, but doing so often threatens the financial viability of the company, and if doing so requires payments to landowners, shareholders, managers, investors, etc. to fall, then it can be an injustice to them.
        How do you know that CEOs are “more than justly compensated?” Do you have the ability to be a CEO? If so, then do it and take half the average CEO salary. See http://econfaculty.gmu.edu/wew/articles/05/ceos.html. I would caution against succumbing to envy before understanding what exactly is required in being a successful CEO.

        1. God is My CEO says:

          Those who can, do. Those who can’t, teach. Seriously, though, don’t lump in salaries of CEO’s of non-profits and small businesses. Go ahead, try to justify these CEO salaries as moral and workers’ salaries as “extraordinarily high”: http://www.forbes.com/lists/2011/12/ceo-compensation-11_land.html

          1. Tim Shaughnessy says:

            Yes, those are large salaries but I don’t see the relevance. Did you read the GMU link I provided?
            “Extraordinary” means “above ordinary;” workers who get paid higher than what is financially justifiable (like me in the mud pie example above) are getting paid extraordinarily high.
            A CEO through foresight, planning, and managerial expertise can increase the value of a company by tens of billions of dollars (which get distributed to workers, investors, and shareholders); is it unjust to pay them a tiny fraction of that as compensation for the huge risk of running a major company and for using their incredible God-given talents to help customers and shareholders around the world, not to mention keeping their employees employed?
            You don’t have to go far down the list to find salaries comparable to Hollywood stars and pro athletes, but people don’t get in a huff over entertainer salaries.
            As I said before: “I would caution against succumbing to envy before understanding what exactly is required in being a successful CEO.”

    2. Tim Shaughnessy says:

      I didn’t mean to suggest that Rerum Novarum pits labor and capital against each other. I think it is relatively even-handed but is somewhat colored by conventional thinking at the time (in much the same way that Pope Benedict’s encyclicals have incorporated discussions of environmental stewardship).
      I was clear to state that I think some theologians “misunderstand” these concepts, not that they are completely wrong. I just think that theologians are theologians; they (fortunately) do not spend gobs of time in seminary taking three or four semesters of economics. Given that, and though they certainly DO have a responsibility to inform the faithful about not abandoning morality in the work- or marketplace, I think there are times when, as I said in my previous post, statements can sound uninformed and therefore are less likely to be taken seriously by people who HAVE taken three or four semesters of econ.
      I certainly don’t have a problem with considering defrauding laborers (or anyone) as sinful. Laborers should be paid according to justice; so should everyone else.
      Thanks for the thoughtful reply.

      1. Cindy says:

        Thanks, Tim, for your respectful reply and thanks also for clarifying your view of RERUM NOVARUM. As I mentioned, I’m not an expert in economics, just a lay Catholic who has read the encyclical. I can understand what you mean by its being bound to its era. Pope Leo is writing only about 40 years into the industrial age and is, to some extent, responding to the early attempts to radicalize labor along Marxist lines. If I recall correctly (sorry, I haven’t read the encyclical in about 4 years), Pope Leo looks at a middle ground between capital and labor and tries to bring labor back from the brink that Marxism would plunge it into. I do think that the encyclical is quite impressive given that it’s really the first attempt of the Church to wrestle with these issues in the industrial age. It may, as you say, lack economic sophistication. But it does lay the groundwork for much later Catholic social teaching – both in terms of subsidiarity and economic justice. Please feel free, btw, to correct me wherever my statements are inaccurate. I do not pretend to have the depth of understanding on this topic that you do. Thanks again for the dialogue.

    3. Antonio A. Badilla says:

      I don’t agree with everything you stated, but I don’t understand why 54 people disliked what you wrote. The same happened to me weeks ago and I was completely bewildered at the negative reaction because what I wrote appeared to me to be reasonable.

      1. Cindy says:

        Antonio, I can’t imagine you writing something that I would give a “dislike” to. I sometimes disagree with you on prudential matters, but you are grounded in Catholic orthodoxy and you always write in a reasonable tone. (Catholic orthodoxy is what matters most to me). I, on the other hand, got angry in a couple of posts late last week after I learned about the abortion exceptions on the Romney ticket and wondered if the negative reaction to those posts was following me to other threads. At any rate, I’m sorry to hear that you got such a negative reaction to one of your posts.

  6. bitsnbytes says:

    It’s a surprise to me that protectionist subsidies are considered “conservative” economic measures. I must have skipped Adam Smith’s chapter endorsing those.

    1. Tim Shaughnessy says:

      You’re right; Adam Smith’s whole point in writing the Wealth of Nations was to refute mercantilism, the idea that it is best to horde gold by increasing exports and reducing imports. Conservatives typically fall victim to the “infant industry” or “dumping” rationales for protectionism (including subsidies), arguing that domestic industries need protection because they can’t compete against more established or cheaper foreign competitors.
      My impression of conservatism is that it espouses free trade until domestic industries are threatened by foreign competition.

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