The topic of income inequality is popular not only among secular progressives but politically minded Catholics as well. If income inequality is a problem—and even libertarians would agree that it can be, depending on how the inequality comes about—the proposed solution is often for the government to “do something” about it, usually through confiscatory taxation of wealth and its distribution to whomever our politicians deem worthy of it. In the ideal progressive polity, our tax dollars would not only meet the needs of the poor but perhaps find their way into green-energy projects, spreading democracy abroad, and ensuring that everyone receives the kind of education that the state would like citizens to have.
Catholic objections to the libertarian rejection of confiscatory taxation are nothing new. Mark Shea recently denounced as “heresy” the libertarian argument that the state has no role to play in the distribution of society’s wealth. It is difficult to tell if Shea and those of like-mind reject the libertarian position simply because, in their view, it is a heresy—end of story—or if they’ve really examined the position and found it wanting on some logical or factual basis as well. Though Shea himself describes the strawman libertarian position he ridicules as “utopian,” suppose there were a version of the argument that made sense to him. Would it then still have to be rejected preemptively because it is “heresy,” or might we be obliged to pay attention to it?
I do not pose these questions on the assumption that libertarianism actually is a heresy, though I do believe that any idea taken to certain extremes is likely to become not only heretical but irrational and immoral as well. I am of the mind, however, that the Church does not reject what is true or good. Not only are several core libertarian principles on the matter of wealth distribution true and good, but they are also found in the seminal encyclical defining Catholic social thought, Pope Leo XIII’s Rerum Novarum. It is not controversial to suggest that Murray Rothbard, regardless of what we may think of some of his extreme positions, understood what libertarianism was (he practically invented it out of classical liberalism in the twentieth century); the same Rothbard viewed this encyclical as “to some extent middle-of-the-road and with a pro-labor bias” but “fundamentally libertarian and pro-capitalist.” Even if one ends up holding that he has completely misread and mischaracterized the encyclical, his statement ought to pique our curiosity. Why would the founder of modern libertarianism recognize his own philosophy in a Catholic social encyclical?
There are several reasons for this, and they all relate in some way to the proper role of the state in the distribution of wealth. First, Leo XIII unequivocally defends the natural, individual and inviolable right to private property (#9). Whatever a person creates through their own labor is rightfully and properly theirs, and no other person may seize it for themselves by force. It may well be that Rothbard and the anarcho-capitalist movement he spawned go too far in categorically rejecting the state and its claims on our income, but when we further consider the limitations that Leo XIII places on the state it is clear why he could appreciate the encyclical. For Leo XIII explicitly declares that charitable aid to the poor is not a matter for human laws to dictate, except in cases of extreme need (#22). How extreme need is to be understood is not made clear in the encyclical, but it is at least debatable that such needs are a) best assessed at the local level, not requiring an army of federal bureaucrats, armed agents, and massive budgets to meet, and b) may be at least partially or even wholly addressed without confiscatory tax policies.
Shea and other like-minded Catholic critics cite the same encyclical by Pope Leo XIII in an attempt to demonstrate the “heresy” of libertarianism, for at one point it does declare that free agreements between workers and employers regarding wages are not sufficient for economic justice (#45). And yet this was no stumbling block for Rothbard and other libertarian Catholics, for Pope Leo XIII never insists that the solution is, for instance, a mandatory minimum wage set by the federal government. More importantly, what we often don’t see in the various citations of this mandate are the conditions placed upon it by Leo XIII: the wage-earner is only deserving of wages that will support a clean and moral lifestyle. It is incumbent upon the worker to save and spend wisely, and certainly not the fault of the employer if he does not.
We could haggle endlessly over what truly constitutes a living wage, but I never see empirical evidence put forward to establish that equilibrium wages (what would result from totally free bargaining between workers and employers) in the United States would result in widespread destitution for morally upright workers and their families. On the contrary, it is now well-established that marriage practically abolishes poverty, that most minimum-wage employees are not supporting families (thus undermining the claim that we “need” the state to dictate wages), and that “poverty” in America is a dubious term. Among the poorest areas of the United States one will find high rates of crime, drug abuse, educational failure, sexual deviance, illegitimacy, and so on. This is not to say that people in these areas ought to be written off, but it is to say that no employer is obliged to subsidize their moral failings—and neither are we, the frugal, well-behaved wage-earners to whom Leo XIII refers. This is not just about the moral failings of the poor, as libertarians do not want to pay for the birth control pills of middle class college students or provide massive bailouts and subsidies for major banks and businesses either.
There are also the semantics of “distribution” and “redistribution.” Markets distribute wealth as much as governments do. If the empirical case can be made that they distribute wealth more fairly and rationally than governments, then what happens to the dogmatic insistence upon the role of the state in this process? It may also be that different cultures have different optimal balances between market freedom and state action. A small ethnically and culturally homogenous nation such as Denmark or even a larger one such as Canada may find a popular consensus for social democracy, if not outright socialism. That same model, to the extent it has been imposed by force upon America with her unique history and traditions as well as her vast array of diverse cultures, has been a colossal failure. It is also arguable that Danes, Canadians, and other participants in the social democratic model are in for a massive shock as they absorb more immigrants from the global South and their own aging and shrinking populations contribute less and less to the social safety net.
All of this is to say that complex economic and ethical issues cannot be resolved by shouting “heresy!” It would be antithetical to the spirit of Catholicism to suggest that anything other than the common good ought to be the ultimate goal of economic policies. It would also be antithetical to the spirit of Catholicism to suggest that there is only one way to promote it, and that all other ways are automatically heretical and forbidden. Libertarianism is only a “heresy” in the same way that every other idea becomes a heresy; when it is taken to irrational extremes or when it explicitly rejects a fundamental teaching of the Church. There is no reason why any self-identified libertarian has to do either.
Editor’s note: The image above titled “The Pope and the Inquisitor” was painted by Jean-Paul Laurens in 1882.