Toward the Future: Part 1 — The American Catholic Experience of Political Economy

1. TWO PRECIOUS LEGACIES

We American Catholics are privileged to have received two precious legacies: Catholic faith and citizenship in the United States. Voluntarily joining together, we the undersigned laypersons express our gratitude to God for both traditions. Confirming in our own practical experience the creative thinking of the Jesuit John Courtney Murray and the layman Jacques Maritain, we wish to show how this twin inheritance fires our vision of the future.4

We speak only for ourselves, by virtue of the freedoms blessedly protected by American traditions, and by virtue of the responsibilities of our vocation as lay Catholics. As the Second Vatican Council taught us:

The apostolate of the social milieu, that is, the effort to infuse a Christian spirit into the mentality, customs, laws, and structures of the community in which a person lives, is so much the duty and responsibility of the laity that it can never be properly performed by others.

We have also noted that on November 11-12, 1889, a Catholic Lay Congress convened in Baltimore to celebrate the 100th anniversary of the first Catholic diocese in the United States. Lay men and women from all over the United States (and several foreign lands) came to celebrate a “Te Deum,” to hear speeches on all aspects of American Catholic life, to discuss, and to dream. They took pride in American institutions, and in the liberty through which the nation’s 9 million Catholics were even then playing roles in every part of American life. They believed that Catholic thought had much to contribute to America, and America to Catholic thought.

We speak today from hard experience and in a spirit of realism. In a world of contingency and brokenness, in which every human being sometimes gives way to pride and sensuality; in a world of too little insight, frequent betrayal of cherished ideals, malevolence, and mortal danger to civilization, we know full well that on this earth there has never been, and there will never be, a society of full and perfect love, liberty, justice, and truth. We cherish the fact that our Catholic tradition, like our American tradition, is each in its own way anti-utopian. Both are future-oriented and both expect to face rigorous tests of experience. Both the Catholic Church and American institutions depend upon the practice of virtue, but neither is surprised by human sinfulness. From this enduring realism springs their ever-renewed vitality.

Approaching the subject of the U.S. economy, we feel two powerful emotions. First, daily engaged in a flawed human world, we hear the cry of many poor and needy ones, and we are painfully aware of continuing injustices. There is much yet to be done. Second, we feel immense gratitude toward this nation’s Founders, who first imagined — and to all Americans who maintain — the fundamental humanistic instincts embodied in the U.S. economy. Committed to liberty and justice for all, this economy has freed millions of families from poverty, given them an unparalleled domain of free choice, taught them virtues of cooperation and compassion, and unloosed upon this earth an unprecedented surge of creativity, invention, and productivity.

Like our predecessors, we too take pride in America’s historic resolve to eliminate poverty and injustice; like them, we see an unfinished agenda. We are dismayed to see, still, too many persons living in poverty. We see too many youngsters growing up without the benefits of a full family life and without the range of opportunities that would nurture the unique potential within them. Despite an immensely admirable struggle for civil rights during our lifetime, we still see instances of ugly racism. We have at times seen the sins and indifference which flow from a weak sense of duty and responsibility, in the face of America’s abundant liberties. Alongside inspiring and ennobling messages, we have seen examples of vulgar and demoralizing advertising. We have seen deplorable examples of waste, heedlessness of others, carelessness with the environment, indifference to civic values, hardheartedness, flagrant greed and other human vices. There is much that needs to be corrected in America, and much that needs to be reformed.

We are also painfully aware of faults within the practice of our Church, including our own faults, and of a certain lack of development in official Catholic economic thought. If our mood as we write is one of gratitude both for our Catholic and for our American traditions, it is also one of a sober awareness of the changes and reforms demanded of us.

The moment for broad public reflection on the U.S. economy is ripe; we are grateful to our bishops for summoning us to reflect on it. Since 1948, some 115 new nations have come into existence, exemplifying one form or another of political economy. The most fateful inheritance a people slowly shapes is the one determining its fundamental ordering of political, economic, and moral-cultural institutions. An unsound order dooms even virtuous peoples to misery. A fruitful order enables even ordinary peoples to achieve liberty and prosperity. Such orderings carry seeds of destiny. Many peoples, alas, are now entrapped in systems which, by regular pattern, lead to tyranny and economic stagnation. Relatively few have inherited — or chosen — systems which lead to liberty and economic development.

For that reason, those of us who are heirs of the American system — which our founders dared to describe on the Seal of the United States Novus Ordo Seclorum, “The New Order of the Ages” — bear a critical responsibility before all peoples. Some two hundred years ago, our forebears launched an experiment never seen before in history. Its “Bill of Rights” became the pattern for the Universal Declaration of Human Rights of the United Nations. Despite its beginnings as a fragile, struggling colony in a part of the world far distant from Europe, the unparalleled success of its political economy made it among the first of the modern developed nations. If the United States is not, today, a “Third World nation,” it is above all because of the fundamental ordering of its institutions. Orderings of institutions, like ideas, have consequences, and thus the American experiment has had consequences even for Catholic social thought.

Catholic social thought in its highest ideals for justice and virtue, has too seldom been brought to bear inventively on American needs and perplexities.

The American system pioneered for the Catholic Church a new model of religious liberty, and gradually influenced papal teaching on human rights. Its inventiveness and creativity blazed the trail for notions of “progress” and “development” which have lately appeared in papal thought. Its democratic institutions helped lead the Church from opposition to openness to democratic principles. The defense of labor unions by U.S. Catholic bishops helped sway Leo XIII towards his support for labor in Rerum Novarum (1891).

Nonetheless, the many contributions of the American experiment to Catholic social thought have been given too little recognition. And Catholic social thought, in its highest ideals for justice and virtue, has too seldom been brought to bear inventively on American needs and perplexities. As heirs of both traditions, we see their complementarily. Both realities — Catholic social thought and the American experiment — are dynamic and always in the process of development. Each can learn from the other. Each is, at certain points, incomplete. It is the duty of each generation of American Catholics to advance both.

In this decade, many in the poorer nations, pausing to evaluate their own social experiments of the past forty years, are on the threshold of new choices. All peoples desire to have human rights effectively protected. All peoples desire economic development. To the extent that American Catholics have both institutional means and proven ideas which can assist all peoples toward their own high goals, we have the responsibility to share them. Not all systems do protect human rights; not all systems do engender economic development — reality imposes harsh tests. Both Catholic social thought and American practice impel us both toward effective institutions of human rights and toward economic development in all nations. The poor of the world cry out for liberty and bread. Hearing their cry, we pledge to come to their aid, both in tangible assistance and in ideas tested by reality. In this respect, we are not only Catholics and Americans, but children of one God, who calls us to be creative in assisting our brothers and sisters everywhere on this planet.

2. PRINCIPLES OF CATHOLIC SOCIAL THOUGHT

Historically, the idiom in which American institutions were first discussed was rather more influenced by Protestant thought and by the Anglo-Scottish Enlightenment than by Catholic thought. In our age, the relationship between Catholic social thought and U.S. institutions works to the benefit of both, each learning methods and nuances from the other, each correcting the other’s shortcomings. Central to Catholic social thought are three basic principles: the dignity and uniqueness of every single human person; the social nature of human life; and the principle of subsidiarity. These are expressed in classic papal documents as follows:

Any human society, if it is to be well-ordered and productive, must lay down as a foundation this principle, namely, that every human being is a person, that is, his nature is endowed with intelligence and free will. By virtue of this, he has rights and duties of his own, flowing directly and simultaneously from his very nature. Pacem in Terris. (emphasis added).

The cardinal ‘point of this teaching is that individual men are necessarily the foundation, cause, and end of all social institutions. We are referring to human beings, insofar as they are social by nature, and raised to an order of existence that transcends and subdues nature. Mater et Magistra, 219 (emphasis added).

[I]t is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry. So, too, it is an injustice and at the same time a grave evil and a disturbance of right order, to transfer to the larger and higher collectivity functions which can be performed and provided for by lesser and subordinate bodies. Inasmuch as every social activity should, by its very nature, prove a help to members of the body social, it should never destroy or absorb them. Quadragesimo Anno, 79 (emphasis added).

The first principle of Catholic social thought, the inalienable dignity of every single human person, flows from the fact that every human being is made in the image of God and is called to make free choices of immortal consequence in accordance with this image. Human worth and human rights are not given by the state; each person is “endowed by the Creator with certain unalienable rights.” And human dignity implies self-reliance, the responsibility of every free person for his or her well-being. It implies the vocation to distinguish genuine happiness from false. And it implies individual liberty.

The second principle expresses the social nature of all human life, binding every human being of past, present, and future in the one family of God. From the dignity of every single human person comes liberty of conscience. From the social nature of human life comes a social conscience, and a special virtue made prominent in modern times, social justice. In modern times, more than in earlier times, citizens (in free societies) have the capacity to shape the institutions under which they live; hence, they incur new social responsibilities, requiring what in the United States is called public-spiritedness or a civic spirit. These responsibilities are complicated by the pluralistic nature of American society. Some things which some find moral, others in such a society find immoral; and the reverse. Among us, even social responsibility therefore demands an unusual degree of tolerance and public civility, as well as the protection of the human and civil rights of all, even in dissent from one another on important moral matters.

The third basic principle of Catholic social thought mediates between the first two; it is the principle of subsidiarity. Recognizing that individual persons are tied by complex webs to many different social bodies — to families, neighborhoods, local communities, particular cultures, nations, and the global community as a whole — the principle of subsidiarity holds that social decisions ought to be taken by the community closest to the relevant concrete realities, and by the next higher level of social organization only when the lower cannot effectively do so. This principle respects the singularity and contingency of moral decision-making and thus its prudential character. Effective decisions must accord accurately with the details and nuances of reality itself. Decisions by higher social bodies, more removed from concrete realities, almost always involve a higher degree of abstraction. Such decisions are often necessary, but they are also frequently somewhat flawed by their relative remoteness. Since Christianity is a religion firmly rooted in the mystery of the Incarnation, it must necessarily be respectful of the singular and contingent aspects of historical human reality. The principle of subsidiarity, accordingly, tries to bring decision-making as close to the texture of reality as possible.

Here, too, new facets are brought out in traditional concepts of social justice. It is true that few Catholic social thinkers use the phrase “social justice” in exactly the same way. But all mean by it the distinctive virtue that reaches out beyond the circle of personal, intimate, and family life to the institutional needs of the larger society. Social justice is the distinctive virtue by which individuals freely associate themselves with one another to pursue goods held in common, especially public goods which cannot be achieved by individuals on their own. Social justice includes simple acts such as tutoring a poor child, but also complex ones such as organizing to redress grievances and to construct institutions which shape ordinary daily practices by fair routines.

Social justice is not a euphemism for collectivism. It is not a slogan for partisan purposes. It is not a species of egalitarianism, gray homogeneity, or indifference to diversity in need, talent or effort. Not all who cry “social justice” speak for the genuine Catholic conception. Critical discernment is necessary.9 Social justice is a many-faceted ideal, of which political economy is intended to be the institutional practice, and concern for the common good the personal expression. Thus, social justice has two aspects: it is both a virtue practiced by individuals, and a thrust toward improving the social order. The popes since Pius XI speak of social justice in terms of the virtues required for sound Christian living, and of socioeconomic systems which allow for and promote virtuous living.

Catholic social thought is particularly emphatic about the ordinary virtues necessary for the reliable and humane functioning of social institutions. Social institutions are not a shell which can be made to function equally well either by satanic or by angelic men. Catholic social thought is entirely realistic about daily human sinfulness, while insisting on the daily practice of all the human virtues. Early in his pontificate, John Paul II pointed out that the virtue of mercy is even more important to a social system than the virtue of justice. For when justice is practiced in a cold or vindictive spirit, without mercy and reconciliation, it is no longer in the image of the Christian God.

The popes since Pius XI have been insistent on a full range of social virtues necessary to the practice of social justice. In classic terms, they single out prudence (like charity, the informing force directing every aspect of the other virtues), courage, and temperance. Catholic social thought favors the virtues of simple rather than ostentatious living; restraint in personal passions, needs, and desires; honesty

Social justice is a many-faceted ideal, of which political economy is intended to be the institutional practice, and concern for the common good the personal expression.

(aware of being in the eyes of God) in all one’s dealings; regard for every other human being as a brother or sister in Christ; and that sort of humility which is a perfect honesty of the spirit, given neither to pretentiousness nor to any underestimation of one’s own abilities, but to a self-knowledge as accurate as God’s knowledge of the self. Such virtues enable social systems to function as they ought.

In what follows we attend more to questions of system and economic structure than to the virtues, not in order to slight the importance of the latter, but to address the most disputed points of the day. For in today’s world, even virtuous peoples, such as those of Poland, Chile and elsewhere, are caught within systems of political economy that frustrate the realization of their fullest potential.

In short, Catholic social thought addresses a paradox. Virtuous people can be undermined by systems of poor design. And good systems can be made to fail by a people of inapposite or flawed or unvirtuous behavior. Even though the classic Catholic teaching on the social virtues was developed in and for a pre-capitalist, pre-democratic era, much of it has perennial and universal validity. Moreover, as we shall see, the virtues required for pluralistic, democratic, and capitalist living, far from contradicting Catholic social thought, bring out from its treasure house new things and old. Thus, pluralistic living requires a new stress upon tolerance and civility. Democratic living requires a new stress upon personal initiative and social responsibility, rather than upon resignation and obedience. Capitalist living requires a new emphasis on enterprise, invention, social cooperation and habits of providence, rather than upon passive contentment and grateful dependence on others. The American experience has brought out new aspects of and new possibilities for the Catholic social virtues, without ceasing to be bound by what is permanently and universally valid.

3. WHAT THE INSTITUTIONS OF THE UNITED STATES

HAVE ADDED TO CATHOLIC SOCIAL THOUGHT

How can Catholic social thought, formed in Europe under significantly different circumstances, be brought into fruitful contact with American institutions and American experience? From the first,- bishops and lay persons — not least, Orestes Brownson in The American Republic” — saw marvelous new possibilities.

The Catholic bishops of the United States at the Third Plenary Council of Baltimore (1884) affirmed: “We think we can claim to be acquainted both with the laws, institutions and spirit of the Catholic Church, and with the laws, institutions and spirit of our country; and we emphatically declare that there is no antagonism between them…. We believe that our country’s heroes were the instruments of the. God of Nations in establishing this home of freedom; to both the Almighty and to His instruments in the work, we look with grateful reverence.” They urged Catholics “to take a special interest in the history of our country,” and they added: “We consider the establishment of our country’s independence, the shaping of its liberties and laws as a work of special Providence, its framers `building wiser than they knew,’ the Almighty’s hand guiding them.’”

Archbishop John Ireland of St. Paul declared before that Council: “I could not utter one syllable that would belie, however remotely, either the Church or the Republic, and when I assert, as I now solemnly do, that the principles of the Church are in thorough harmony with the interests of the Republic, I know in the depths of my soul that I speak the truth.”14 And again, in another sermon (1901): “I have unbounded confidence in American liberty and American justice; I believe that it is the sincere wish of our public men and of American citizens in general to give all classes their just rights.”

The Catholic Church in the United States, Bishop John Lancaster Spalding declared (November 16, 1884), “can have no higher temporal mission than to be the friend of this great republic, which is God’s best earthly gift to His children.”” And again: “Here, almost for the first time in her history, the Church is really free. Her worldly position does not overshadow her spiritual office, and the State recognizes her autonomy.”‘

The testimony of our ancestors is clear, and to their voice we add our own. The three fundamental principles of Catholic social thought — the dignity of the human person, the social nature of all human life, and the principle of subsidiarity — have correlatives in the fundamental American conception of the unalienable rights inhering in every single human person, in the fundamental principle of “the consent of the governed,” in the American conception of covenant and compact, in the American preference for decision-making as close to the affected decision makers as possible, and in the principle of federalism. (To be sure, neither Americans nor Catholics always live up to the full measure of such principles.) Because Americans have from the beginning seen themselves in a biblical light, as expressed in so many classic documents, it is by no means farfetched to discern the yeast of religious concepts in the slow historical emergence of our fundamental institutions. In the words of Jacques Maritain:

The Founding Fathers were neither metaphysicians nor theologians, but their philosophy of life, and their political philosophy, their notion of natural law and of human rights, were permeated with concepts worked out by Christian reason and backed up by an unshakeable religious feeling.

It is sound American practice to respect the rights of every single human person. It is sound American practice “to promote the general welfare” and to honor the common good, not only throughout the republic but in the international community and in international law. It is sound American practice to promote free associations at every level of society — local, national, and international — in the work of social justice: to redress grievances and to improve the daily workings of institutions. And it is sound American practice to respect the principle of subsidiarity.

The American nation neither coerces nor takes the place of conscience. Conscience, not nation, is supreme. In order to become American, one need not become less Catholic, less Jewish, less Protestant, less faithful to con-science. Indeed, the nation is always under judgment in the consciences of its citizens — and far more so under the judgment of God. In this sense, the American motto, “In God We Trust,” properly submits every form of patriotism, nationalism, and self-assertion to higher judgment. It does no honor to America to claim for her a special place in God’s care, except as all nations enjoy such care. We are grateful to God, not to exalt the nation, but to ask Him to lead her in His will.

In American thought, the phrase “social justice” also has indigenous correlatives. “Four score and seven years ago,” Abraham Lincoln said at Gettysburg, “our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.” At the Constitutional convention, the founders proclaimed the obligation of government “to promote the general welfare.” Citizenship is conceived as responsibility for pursuing ideals of liberty and justice, ideals which always transcend present attainments. The language of social compact, social contract, and social covenant has been native to the American mind since the Mayflower Compact.

Again, James Madison remarked that the American Constitution is not defended by ink on parchment but by the ordinary virtues of its citizens, and by the customs and institutions that express these virtues in regular routines. Without the practice of virtue, no institutions can function well. As one would empty social justice of its concrete expression by neglecting to practice it, so the drafters of the U.S. Constitution took for granted the public practice of the daily virtues which make its ordinances seem to represent common sense, and without which its provisions would fail.

It is one thing to have valid social principles; it is another, through trial and error, to work out the practical institutional arrangements through which these valid principles can be routinely embodied in the laws and habits of everyday life. Liberty and justice are achieved not solely in the heart, but also in institutions. In incarnating her teaching in the stuff of history, the Church has need of invention in the building of institutions. Such invention the American experiment has provided in abundance, as have movements in other nations.

There are two ancient enemies of the human race, against which both Catholic social thought and American institutions have been directed: tyranny and poverty. To liberate human beings from both is the object of political economy, that “new science” and art just coming to be born as the United States was founded. One root concern underlying the new experiment in political economy undertaken in the United States was human moral weakness; in theological terms, sin. Ordinary vices always accompany human life; it would be false utopianism to believe otherwise.

Since every human being sometimes sins, no human being can be trusted with too much power. A charismatic leader, no matter how benign, may have recourse to unchecked cruelty. Under torture, human beings have reason to fear their own capacities for moral integrity. Fear of human weakness, then, lies at the heart of liberal checks upon tyranny. To divide — and to check — social powers is the radical impulse of the form of political economy pioneered in the United States. This new type of political economy has been called by some “the commercial republic,” by others “capitalistic democracy,” by yet others “democratic capitalism.”

Whatever it is called, it is a political economy constituted by dividing the unitary social system of the ancien regime into three: an active political system, a dynamic economic system, and a vital moral and cultural system. These divisions parallel three divisions of the second part of the treatise of Vatican Council II on the modern world: politics, economics, and culture.”

It is an error to speak of the U.S. economy outside this threefold context; the U.S. economy does not stand unchecked and alone. By design and by necessity, each of the three structural systems invigorates, checks, and restrains the other two. It is an abuse when one of the three injures the other two. At times, on the negative side, religion or moral passion can distort democracy (e.g., prohibition). At times, economic monopolies or other abuses can distort it. And wayward democracy, as in “the tyranny of the majority” warned against by James Madison, can injure moral and religious liberties and economic freedoms. It is true that only the state, a part although not the whole of the political system, has coercive power, commanding the military and the police power. In this sense, the political system is stronger than the economic system or the moral-cultural system. Still, each of the three systems is required to hold the other two in due balance.

On the positive side, a just solicitude for the common good and a proper respect for law at times impels the political system to intervene in the economic system or in the moral-cultural order.” At times, economic necessities and moral habits inculcated by economic activities instruct citizens in virtues of prudence, moderation and realism, virtues indispensable to a democratic political system and a pluralistic moral-cultural system.” And, at all times, religious and moral virtues must suffuse citizens and economic activists, if the constitutional system is to be made to work creatively. In brief, each of the three systems both checks the other two and inspires in the other two its own particular virtues. In each person — simultaneously a citizen, economic activist, and seeker after the good and the true — all three systems are incarnated as one.

To an unprecedented degree, the Constitution of the United States defined the limits of government in the do-mains of conscience, intellectual inquiry, and public expression. The people of the United States have purposefully restricted the powers of the state with respect to the institutions of moral and cultural life (such as the family, the church, the press, and the universities). In parallel fashion, and also to an unprecedented degree, the people have restricted the powers of the state over economic institutions (of large businesses and small; of capital and of labor). It is the province of the virtue of practical wisdom to order things rightly. Of our order, the Third Plenary Council of Baltimore wrote, as we have noted, that the American Founders “built more wisely than they knew.” They were led, Orestes Brownson held, not solely by popular inspiration, but by a biblically nourished sense of just order, too often neglected by the populace.'” Morality forgotten, neither polity nor economy long endure.

In actual practice, each of the three systems may temporarily become too strong for the other two. Through time, in particular, the power of the state has vastly increased, often under the claim of seeking “the common good,” although not always achieving that good. It is appropriate in such a political economy that some citizens should encourage the aggrandizement of the political system, while others should champion the liberties of the economic and moral-cultural systems. Since case by case these are practical judgments, even those who share the same moral and religious values frequently disagree. In a system of checks and balances, excesses in one direction or another tend to be judged by their consequences and over time to be appropriately curbed. Vigilance on the part of free citizens is the price of liberty; a capacity for self-correction is part of the system’s design.

Interviewed in the press of France (Le Figaro, 29 August 1894), Archbishop John Ireland gave a clear description of the distinctively American ideal:

Socialist theories have far less chance in America than in Europe. In the first place, the sentiment of personal dignity and responsibility and the spirit of enterprise are much developed in the American people. It likes and appreciates individual liberty and respects the law. These dispositions do not lead to social revolution. Furthermore, there is room in the United States for all kinds of energy. Labor there insures honorable life; then, the greater number of Americans have conquered their situation by personal valor, at the price of efforts, perils, and heroic sacrifices. They are not disposed to share with others what they have gained by so much work. Then there are philosophical, moral, and political causes which elsewhere favor the development of Socialism, and have no force in the United States. I allude to administrative centralization, [to the] intervention of the Government in the affairs of citizens, to the military regime, and to authoritative traditions.

In practice, the exercise of liberty requires the creation of what Archbishop Ireland calls “room”; in short, a limited government giving freedom scope.

One of the clearest limitations on the state is the principle of private property. Catholic social thought holds that the right to private property is a natural right, guaranteeing to conscience the means of self-expression, and holding the state in check . (This right, which the Church too exercises, also anchors the liberty of the Church.) The right to private property is further justified in the light of the common good. For private property makes possible the right ordering of the use of goods, providing incentives for good stewardship, and imposing upon all responsibilities to respect the rights and property of others. Its existence is reflected in the ancient commandment: “Thou shalt not steal.”

A word about the proper use of property is in order. This right is not absolute or abstract; it is based on a practical judgment about the superior creativity of a system of private property. It is vindicated by a wise stewardship, which brings forth from property greater productivity than before. Moreover, those who own property have responsibilities to God, to their communities, and to all their fellow human beings. Thus, Thomas Aquinas once wrote that a human being “ought to possess external things not as his own but…so that…he is ready to communicate them to others in their need. Hence, the Apostle says (1 Tim 6:17-18): ‘Charge the rich of this world…to give easily, to communicate to others.’ ” This view is not limited to Christians. Aristotle wrote that “moral goodness will ensure that the property of each is made to serve the use of all, in the spirit of the proverb which says ‘Friends’ goods are goods in common.’”

Modern possibilities add to ancient wisdom the imperative to use property dynamically. In the Catholic understanding, those who own more and have greater talents face higher moral obligations; in proportion to their wealth and talents, they incur heavier responsibilities toward others. Property, in this understanding, is placed in their care for creative, productive, wise, and generous use. Owners are temporary stewards of a portion of the earth, and each one of us will one day give to the Creator an ac-count of our stewardship, and especially of our practical assistance to the poor.

The unprecedented liberty given to economic activities in the United States, like all liberties, has created some new social problems and inevitable abuses. Yet, accompanied by such governmental actions as the Homestead Act, the change in mortgage terms after World War II, and other incentives, the attachment of the American people to the exercise of property rights has given the United States historically unprecedented proportions of home ownership. It has also led to unprecedented economic activism. Even in the year 1800, with a population of only four million inhabitants, the U.S. had given birth to more business corporations than the rest of the world combined.” Perhaps no one has caught the spiritual significance of the principle of private property, whether in a home or in enterprise, better than G.K. Chesterton:

For the mass of men the idea of artistic creation can only be expressed by an idea unpopular in present discussions — the idea of property…. Property is merely the art of the democracy. It means that every man should have something that he can shape in his own image, as he is shaped in the image of Heaven.

Theologically speaking, one reason for the institution of private property is that human beings are embodied persons, that is, incarnate. As such, they need material things through which to express their judgments in word and act. Another reason is the doctrine of sin. Human beings on the whole and for the most part, act more carefully with respect to their own goods than to those placed in the common care. But a third reason may be most decisive. Human beings, made in the image of God, are creative; and their creativity is elicited and encouraged when they have dominion over the stuff of their creation, and when they share in its fruits. Thus, the deep respect for invention, for improvement, for patent laws and for laws respecting royalties which blossomed in the United States, called into being an historically unprecedented flowering of practical creativity.

Aware that they were creating a new civilization in a new land, aware that they were creating a new path for humankind, Americans could hardly think in terms other than those of “creation theology.” Thus, Archbishop Ireland:

We cannot but believe that a singular mission is assigned to America, glorious for itself and beneficent to the whole race, the mission of bringing about a new social and political order, based more than any other upon the common brotherhood of man, and more than any other securing to the multitude of the people social happiness and equality of rights. With our hopes are bound up the hopes of the millions of the earth …The world is in throes; a new age is to be born — “Magnus ab integro saeclorum nascitur ordo.” The traditions of the past are vanishing; new social forms and new political institutions are arising; astounding discoveries are being made of the secrets and the powers of nature; unwonted forces are at work in every sphere over which man’s control reaches. There is a revolution in the ideas and the feelings of men. All things which may be changed will be changed, and nothing will be tomorrow as it was yesterday save that which emanates directly from God, or which the Eternal Power decrees to be permanent.

In Europe, during the eighteenth and nineteenth centuries, the Church had reason to be skeptical of the word “liberty.” On the Continent it seemed to be linked to license, to lawlessness, even to destruction. In the United States, by contrast, liberty was linked not only to law, and not only to cooperation and mutual respect, but also to immense creativity. In 1858, Archbishop John Hughes of New York prepared a report for the Roman Curia in the Vatican, clearly distinguishing American ideas from Continental ideas:

In this Country, “Liberty” is the watch word, the boast, the pride of all men….Liberty, in this country, has a very clear and specific meaning. It is not understood in Europe, as it is here. Here, it means the vindication of personal rights; the fair support of public laws; the maintenance, at all hazards, of public order, according to those laws; the right to change them when they are found to be absurd or oppressive. Such, in brief, is the meaning of the word liberty, as understood by the people of the United States.

It was Karl Marx who first named the economic system of “bourgeois democracy” (which he held to be illusory) “capitalism.” He did so to separate, per impossibile, capital from labor. But the word has another root: it comes from caput, head. The cause of the wealth of nations is inventive intellect, the creativity of the human intelligence, seeking to decipher the wealth hidden in creation by the Creator himself, and to this the new American assiduously applied himself, as Bishop Spalding described: “The millions are building cities, reclaiming wildernesses, and bring forth from the earth its buried treasures.””

In every new territory, the Congress had decreed that land-grant colleges be established, on the principle that intellect is the cause of the wealth of nations. Speaking to the Wisconsin State Agricultural Society (30 September 1859) Abraham Lincoln praised the creativity of “free labor,” with its natural companion, “universal education”:

I know nothing so pleasant to the mind, as the discovery of anything which is at once new and valuable — nothing which so lightens and sweetens toil as the hopeful pursuit of such discovery. And how vast and how varied a field is agriculture for such discovery. The mind, already trained to thought in the country school, or higher school, cannot fail to find it an exhaustless source of profitable enjoyment. Every blade of grass is a study; and to produce two where there was but one, is both a profit and a pleasure.

In Laborem Exercens, Pope John Paul II spoke of “the priority of labor over capital.” He defined capital as inanimate, labor in terms of the human person (and he included among laborers intellectual workers, managers, and active owners).35 In a similar way, but in order to distinguish free labor from slave labor, Abraham Lincoln had much earlier affirmed that “labor is prior to, and independent of capital.”36 In yet another sense, both capital and labor are embodied in human beings. Skills, knowledge, drive and ambition are forms of capital; the role of “human capital” has come to be much stressed by economists in recent years. Capital as well as labor is embodied in tools. The point of wealth itself is to increase the scope of human action and exertion, that is, to increase the scope (and ease) of labor. In short; in every economic activity, both capital and labor are inseparable. Both are to some extent embodied in every person. And the effectiveness of labor depends directly and primarily on the quantity and quality of capital with which it is employed. To separate capital from labor as two classes is a dreadful mistake. Pius XI expressed this relation elegantly in Quadragesimo Anno.

Lincoln’s own answer to Marx is, in effect, contained in his description of the American system. Social classes are not fixed; class struggle is not the law of history:

Many independent men, in this assembly, doubtless, a few years ago were hired laborers. And their case is almost, if not quite, the general rule. The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself; then labors on his own account another while, and at length hires another new beginner to help him. This, say its advocates, is free labor — the just and generous and prosperous system which opens the way for all, gives hope to all, and energy and progress and improvement of condition to all.

And, repeating these identical words in the First Annual Message to the Congress (3 December 1861), Lincoln added:

No men living are more worthy to be trusted than those who toil up from poverty — none less inclined to take, or touch, aught which they have not honestly earned. Let them beware of surrendering a political power which they already possess, and which, if surrendered, will surely be used to close the door of advancement against such as they, and to fix new disabilities and burdens upon them, till all of liberty shall be lost.

From the first taking of our national census to the last are seventy years; and we find our population at the end of the period eight times as great as it was at the beginning. The increase of those other things which men deem desirable has been even greater. We thus have at one view, what the popular principle applied to government, through the machinery of the States and the Union, has produced in a given time; and also what, if firmly maintained, it promises for the future. There are already among us those, who, if the Union be preserved, will live to see it contain two hundred and fifty millions. The struggle of to-day, is not altogether for to-day — it is for a vast future also.

From the first, in short, government, enterprise and moral virtue — all three — entered into the conception of the American system. Ours is a system of practicality. It is not a system of government alone, or of enterprise alone, or of moral principle alone. All three, though separated, are bound together as one. This network of effective institutions in all three great spheres of life adds to Catholic social thought an incarnation of institutions that do work. The separation of systems has worked, not only for ourselves, but in other lands as well: mutatis mutandis, in war-leveled Japan and West Germany after World War II, increasingly today in East Asia and in leading nations on every other continent. There is no reason to believe that analogous institutions of human rights and economic development have lost their power to help the peoples of the world.

 4. NEW PRINCIPLES OF POLITICAL ECONOMY

James Madison, architect of the Bill of Rights, once argued that to set such a Bill in writing was unnecessary. The rights of Americans, he argued, are not defended by “parchment barriers,” but by the habits and institutions of the American people.” Habits and institutions are precisely what Catholic social teaching needs in order to become incarnated in everyday life. Principles do not suffice. Lived practice is necessary. What are some of the distinctively American habits and institutions, especially significant in the economic sphere and transferable to any who would wish to learn them?

There seem to us to be three American habits especially deserving of comment: the practice of free association; the habit of cooperation; and the underlying virtue of both, typically called by Americans “the principle of self-interest rightly understood.” There has been no more clear-eyed observer of these qualities in American life than the great French Catholic aristocrat, parliamentarian, and social thinker, Alexis de Tocqueville, whose sense of American originality we here trace.

(1) The Practice of Free Association. Although European commentators even today often oppose American “individualism” to European “collectivism” and “solidarity,” the true identity of the American character is best revealed in its associative instinct. Thus, Tocqueville:

Americans of all ages, all conditions, and all dispositions, constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds, — religious, moral, serious, futile, extensive or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found establishments for education, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; and in this manner they found hospitals, prisons, and schools. If it be proposed to advance some truth, or to foster some feeling by the encouragement of a great example, they form a society. Wherever, at the head of some new undertaking, you see the Government in France, or a man of rank in England, in the United States you will be sure to find an association.

These qualities persist in the United States. Through a multitude of private associations, American citizens in 1983 gave $65 billion dollars in charitable assistance. About 55% of adult Americans took part in voluntary work and together contributed many millions of person/hours.” During 1983, more new businesses were established — 601,000 — than in any previous year in American history.

The vast majority of Americans today work with others. There are currently 15 million business enterprises in the United States, among 104 million employed civilians.” The words which Tocqueville penned in 1832 are still valid:

…I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in getting them voluntarily to pursue it….Thus the most democratic country on the face of the earth is that in which men have in our time carried to the highest perfection the art of pursuing in common the object of their common desires, and have applied this new science to the greatest number of purposes. Is this the result of accident?

Tocqueville did not think it an accident. He argued that where privileged classes dominate, or where government dominates, tyranny ensues. Where, by contrast, equality of condition obtains, and government is limited, a new law of social association comes into play. Governments, he thought, should not be the only active powers: associations ought, in democratic nations, to take the place of powerful private individuals and state bureaucracies. Free citizens should voluntarily combine their efforts to act for themselves.

For Tocqueville, “the science of association is the mother of science; the progress of all the rest depends upon the progress it has made.” And he added: “Amongst the laws which rule human societies there is one which seems to be more precise and clear than all others. If men are to remain civilized, or to become so, the art of associating together must grow and improve.”

Catholic social thought — of which Tocqueville, as a serious layman, was a nineteenth-century exemplar — has strongly supported the principle of association. One finds many passages in Leo XIII, Pius XI, and other popes including Pope John Paul II emphatic in this regard.” Yet no people in the world has shown greater practical skill in forming associations, encouraged by the very design of their political economy, than Americans.

We underline here the crucial role of associations in the economy. If an inventor of a new product or a new service wishes quickly to share his invention with the public through the market, such a person naturally forms an association with many others: with lawyers, venture capitalists, managers, workers, distributors, etc. When the state does not command such things, citizens must voluntarily cooperate to do them on their own. The power of association is the great power of a free economy. Through the principle of association, the free economy has proven its immense creativity in human history.

This same principle operates to meet the social needs which lie outside the marketplace. Countless libraries, schools, clinics, orphanages and other “non-profit” associations characterize the U.S. economy. No branch of the Church universal has generated so vast an array of such associations as the American Catholic Church. Indeed, more citizens in the U.S. derive their income from non-profit activities than from employment in the great industrial firms of the Fortune 500.48 Non-profit enterprises are of enormous importance to the welfare of U.S. citizens in every sphere; through education and in other ways, they contribute much to economic dynamism, too. In return, so fruitful is the U.S. “for profit” sector that it supports over 25 percent of the total civilian work force in non-profit activities, including both government and the private sector.

(2) The Habit of Cooperation. Much has been written about the free economy as a sphere of “competition.” Indeed, it is so. The graveyard of defunct corporations and business enterprises is many times larger than the list of the living. New technologies regularly render industries based upon the old obsolete. The path of a free economy is marked, like that of God’s creation itself, with what Schumpeter has called “creative destruction.”” The old dies, the new, nourished by the old, is constantly being born. Yet this law of competition is often cited polemically, in such fashion as to overlook the far more powerful and fundamental law of cooperation, which lies at the heart of every successful enterprise. Where human beings voluntarily associate themselves in a common task, their success or failure depends to a very large extent upon their capacities for instinctive, regular, and habitual cooperation with one another. An enterprise divided against itself cannot stand.

The Republic itself is witness to this principle. The principle is repeated, again and again, through all the miniature republics which compose it. Again, observing how different in this respect the New World was from the Old, Tocqueville remarked:

Although private interest directs the greater part of human actions in the United States, as well as elsewhere, it does not regulate them all. I must say that I have often seen Americans make great and real sacrifices to the public welfare; and I have remarked a hundred instances in which they hardly ever failed to lend faithful support to each other. The free institutions which the inhabitants of the United States possess, and the political rights of which they make so much use, remind every citizen, and in a thousand ways, that he lives in society. They every instant impress upon his mind the notion that it is the duty as well as the interest of men to make themselves useful to their fellow-creatures; and as he sees no particular ground of animosity to them, since he is never either their master or their slave, his heart readily leans to the side of kindness. Men attend to the interests of the public, first by necessity, afterwards by choice: what was intentional becomes an instinct; and by dint of working for the good of one’s fellow-citizens, the habit and the taste for serving them is at length acquired.

Those of us with long experience in the business enterprise, large or small, have reason, over and over again, to be grateful for the cooperative habits of all those with whom we work, from the highest to the lowest. Without their mutual teamwork, no enterprise could function. We have also had reason to see how much damage can be done by failures in communication, by breakdowns in voluntary cooperation, by festering discontent, and even by a single unusually disruptive personality in a key position. The system works best by incentives, by the flowering of natural virtues, by candor and open communication, by a sense of dignity and belonging. Good managers and good workers are characteristically team players, caring individuals. Since most human beings, ourselves included, are not saints, we are well aware of daily failings in this regard. Moreover, in the real world, every sort of character must be accommodated. The rule is not sweetness and light, but tolerance of one another’s sharp edges, quirks, drives, and manners. Often successful persons, whether “bosses” or workers, are prima donnas, irascible, temperamental, gruff, driving, difficult. Working with one another is not always pleasant, and sometimes those who are the most difficult to work with or under, succeed somehow in drawing the best out of us, obliging us to perform at higher levels than anyone else ever has. Athletes under a variety of coaches know as much.

The principle, however, is intact: the more an enterprise exemplifies the qualities of a family or a team (families and teams, too, deal with us as we are, not in some idealistic way) the higher premium there is upon cooperation to the benefit of productivity and the general sense of well-being.

Free institutions, while absorbing all the quirks of human nature, cannot survive a rupture in the spirit of cooperation. For they function, not by coercion, but by freely accepted mutual obligations, owed by one person to another. Lacking these, Americans properly complain, demand reforms in the way things are done, speak of injustice, and, in numbers unprecedented in any other world economy, leave one employment for another.

Every moral principle is made clear by failures and by abuses. Every firm, even the best, sometimes fails the test of the cooperative principle. Beyond doubt, however, Americans seek human satisfaction in their employment, and especially a sense of belonging and mutual cooperation — and they are right to do so. This is the principle by which both non-profit and profit-making enterprises are properly judged in America.

(3) The Principle of Self-interest Rightly Understood. In classical philosophy, well known to Tocqueville, many virtues (such as Aristotle’s liberality, magnificence, and contemplation) seemed to be most attainable by those of noble station, who did not have to get their hands dirty. Tocqueville grasped clearly that, in the history of virtue, the American spirit had worked a decisive revolution of great importance to the future of the human race.

I doubt whether men were more virtuous in aristocratic ages than in others; but they were incessantly talking of the beauties of virtue, and its utility was only studied in secret.

By contrast, Tocqueville observed, “the inhabitants of the United States almost always manage to combine their own advantage with that of their fellow citizens.” The poor, he noted, were as apt to do so as the rich.

In the United States hardly anybody talks of the beauty of virtue; but they maintain that virtue is useful, and prove it every day. The American moralists do not profess that men ought to sacrifice themselves for their fellow-creatures because it is noble to make such sacrifices; but they boldly aver that such sacrifices are as necessary to him who imposes them upon himself, as to him for whose sake they are made….They therefore do not deny that every man may follow his own interest; but they endeavor to prove that it is the interest of every man to be virtuous.

Americans, too, follow “those disinterested and spontaneous impulses which are natural to man,” but, even when they do, Tocqueville notes, they try to show that both their self-interest and that of others have been served. This is an egalitarian conception of virtue, open to all, of every station. It is admirably conformed to human weaknesses, and yet “checks one personal interest by another,” and thus directs the passions toward virtues crucial to the common good. The principle of interest rightly understood “suggests daily small acts of self-denial. By itself it cannot suffice to make a man virtuous, but it disciplines a number of citizens in habits of regularity, temperance, moderation, foresight, self-command; and, if it does not lead men straight to virtue by the will, it gradually draws them in that direction by their habits.”

A free political economy does not discourage great acts of heroism and self-sacrifice; far from it. It encourages many to dream very great dreams, spiritual as well as temporal, transcendent as well as secular. But a free society is not constructed upon the belief that humans are angels.56 The sound daily working of its institutions depends upon the practice of common virtues accessible to all, conformed to common weaknesses, checking the worst excesses, and trying to inspire the common best.” Such common virtues, hidden from view, often go unsung.

“Love your neighbor as yourself,” the gospels instruct us. In this profound saying, a certain kind of self-love is used as the measure of the love of one’s neighbor. In the divine ordering of love, St. Thomas Aquinas wrote, “…it is necessary that the affection of man be so inclined through charity that, first and foremost, each one loves God; secondly, .that he love himself; and thirdly, that he love his neighbor. And among the fellow-men, he ought to give mutual help to those who are more closely united to him or who are more closely related to him.” The American principle of self-interest rightly understood falls far short of the full message of the Gospels. It is appropriate to a commonwealth of sinners. While the Church has an obligation to encourage even heroic virtue, builders of political economy must be modest; hence, Tocqueville makes bold to conclude:

I am not afraid to say, that the principle of interest rightly understood appears to me the best suited of all philosophical theories to the wants of the men of our time, and that I regard it as their chief remaining security against themselves. Towards it, therefore, the minds of the moralists of our age should turn.

These days, American elites are often so critical of their own people and culture that some are certain to object: “Association and cooperation may have been visible in Tocqueville’s time; today, heartlessness and anonymity prevail.” Two sorts of facts tell against this objection.

First, immense progress in civil rights occurred, not in the nineteenth century, but in our own. Group relations in twentieth-century America certainly meet higher standards of ecumenism, mutual respect, and integrated fellowship than in any previous period. Organizations for social purposes and associations of every sort thrive. It would be difficult, indeed, to show that Americans are less tolerant, less generous, or less cooperative in social action of every kind in the twentieth-century than a century ago.

Secondly, as Walter Lippmann pointed out in The Great Society, the new age of industrialization introduced a novel moral principle into economic relations. In prior ages, one part of society could gain only at the expense of others; capital investment and creativity changed the rules. “For the first time in human history,” Lippmann wrote, human beings had constructed “a way of producing wealth in which the good fortune of others multiplied their own” and “the golden rule was economically sound.” The production of wealth and the abolition of poverty moved in tandem. Poverty could no longer be regarded as the natural state of a majority but as an ever shrinking problem which could be overcome. Lippmann called this new vision “The Good Society”:

Until the division of labor had begun to make men dependent on the free collaboration of other men, the worldly policy was to be predatory. The claims of the spirit were otherworldly. So it was not until the industrial revolution had altered the traditional mode of life that the vista was opened at the end of which men could see the possibility of the Good Society on this earth. At long last the ancient schism between the world and the spirit, between self-interest, and disinterestedness, was- potentially closed.

Objectively, in the internal design of the system, and subjectively, in the rise of social awareness and compassion, the ancient dichotomy between self-interest and the common good has at the very least been diminished. To produce goods and services that make life better for others serves not only self-interest but the common good. And the perception has grown that it is in the self-interest of the affluent genuinely to help lift up the poor and the needy (but not to keep them in dependency). Self-interest rightly understood does not automatically serve the common good; but neither does it automatically undermine it. In that creative space, the ideal of economic development has attained moral and even religious significance. Its driving force does not depend on extraordinary altruism, but on far more ordinary and statistically more frequent motivations. This is not a weakness; it is a social strength. And the practice of virtue is institutionally unimpeded.

In summary, we believe that the new principles of political economy forged in the American experiment offer rich materials for critical reflection in Catholic social thought. Not by accident has the American political economy been fertile in promoting the practice of association, the habits of cooperation, and the habits of the heart guided by self-interest rightly understood — that self-interest which reaches out to embrace the interests of others, near and far. Religion takes no direct part in the government of society, but in encouraging such habits, as Tocqueville recognized, it is the foremost of the political institutions of the land. The generosity of the American people, praised by popes as early as Pius X and as recent as John Paul II, is not simply an aggregated sum of individual virtue; it is the recurrent fruit of institutions designed to promote social generosity. Where generosity of soul is lacking, Americans quickly feel that something in their common life is amiss. Typically, they bestir themselves to recover their original sources and to seek reform. The sources of these reforms lie in the institutions established by the Founding Fathers, “building wiser than they knew, the Almighty’s hand guiding them.”

 

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