Does the Church Favor Capitalism and Democracy?

Although the recent book by Fr. Maciej Zieba is titled Papal Economics: The Catholic Church on Democratic Capitalism, from Rerum Novarum to Caritas in Veritate, it is really not so much about papal economics as it is about papal political philosophy. Further, it is not about the Catholic Church’s teaching on democratic capitalism broadly speaking but about Pope Saint John Paul II’s teaching on democratic capitalism in Centesimus Annus.

Zieba, a Polish Dominican priest, seeks to give Centesimus Annus pride of place amongst all social encyclicals. He devotes only one chapter of six to seven prior social encyclicals, mainly to show continuity between them and Centesimus Annus. He even admits as much at the end of chapter one: “At the threshold of a new millennium, Centesimus Annus would introduce important new elements in the Church’s social teaching and assume the role of flagship of Catholic social doctrine. Any consideration of the Church’s teaching on democratic capitalism must pay special attention to Centesimus Annus, which is why this comprehensive encyclical is the subject of the chapters that follow.”

Incidentally, I believe that the position of pride of place amongst social encyclicals belongs to Leo XIII’s Rerum Novarum. It is so important that it is often seen as the beginning of the social teaching of the Church, with many thinkers showing a level of ignorance or neglect of the vast literature written on the subject by the Church before 1891.

Be that as it may, Zieba’s book is not about the Church’s social teaching in general but specifically about the Church’s teaching on democratic capitalism. And Centesimus Annus, having been written right after the fall of communism, is certainly the encyclical that most deeply delves into the subject of democratic capitalism.

 

Papal Economics reads as if it were written largely in the 1990s (and this is confirmed by the fact that most of the footnotes date from that period) and operates like a coup de grace in favor of democratic capitalism against communism. It would have been a more timely book had the author written in light of more recent events like the economic crash of 2008, rather than the historical period that began with the fall of the Soviet Empire up to the tragedy of September 11, 2001.

The book basically summarizes papal teaching within the framework of capitalism versus socialism and rejects

socialism as wrong at its core—as “proposing a remedy far worse than the evil” it was designed to cure, in the words of Quadragesimo Anno. Moreover, it is clear, especially from Centesimus Annus, that a democratic state characterized by the rule of law and endowed with a market economy deserves praise and respect as a place in which human freedom can find expression.

The popes did consistently reject socialism and give better remarks for what is often called democratic capitalism. But we need to look more specifically at what the popes really praised. Zieba nicely divides the core of his book into two chapters, one devoted to democracy and the other to capitalism, and we will discuss each in turn here.

Capitalism
Zieba sticks very close to JPII’s analysis of capitalism in Centesimus Annus. Like JPII, he draws a distinction between the unbridled de-humanized capitalism of the early industrial revolution and a capitalism “that recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector.” Like JPII, he recognizes that the critique of early capitalism also applies to today’s Western economies, although to a lesser degree than a century ago.

Papal EconomicsThe author then draws a distinction between libertarian/liberal capitalism, which is materialistic and has no concern for justice in wages, and the Ordoliberalism of post WWII Germany. The former, he says, suffers from Economism, which led to “three fundamental errors of liberalism: (1) an underappreciation of the importance of the ethical, legal, and institutional cornerstones of social life; (2) the failure to take human nature into account; and (3) the lack of critical reflection and the ability to make corrections.” On the other hand, the Christian Ordoliberals—Roepke, Eucken, and Chancellor Erhard, among others—believed that an economy must be based on God’s order, hence the term “Ordo.” That Order included a Christian understanding of human nature. The economic order, for it to be truly order, must conform to human nature. Roepke wanted a humane economy based on “widespread property ownership and distribution of income … balanced (for example, between industry and agriculture), and supports small and medium-sized companies, not just massive firms.” Zieba’s discussion of Ordoliberalism and his recognition of a more just form of capitalism in Germany, with its wider distribution of wealth, than that which exists in the United States and even other Western countries, is likely the strongest contribution of this book. In light of the current contrast between the growing German economy and the stagnant economies of the rest of Western Europe, these differences need to be studied further.

That being said, any book on capitalism written post 2008 must address the crash and Great Recession, and the silence of this book on these subjects (only briefly mentioned in the Afterword of the paperback edition but not the hardback version published a year earlier in 2013) is a major drawback that makes it seem out of date. Zieba seems to prefer to stick to what JPII said in 1991 as if the history of stagnant wages since then, and the recent economic collapse, say nothing new about modern capitalism. Flat and falling wages (and the high personal debt that was built up to sustain a standard of living), excessive leverage, ever increasing government debt, and usury lie at the root of the crisis. How capitalism can be modified to alleviate those problems—something that various papal encyclicals address—is a necessary discussion that this book lacks.

The German Ordoliberals, by developing a system of trade schools and an economy heavily based on solidarity including a much lower ratio between CEO salaries and those at the bottom, went far towards addressing unjust wages and from which the US can learn. Nevertheless, even the Ordoliberals neglected to address usury and excessive leverage, among other things, and so their order was incomplete.

Zieba concludes his Afterword with the hope that purely scientific economics will be replaced with a more human economy. I heartily agree, but we must understand that a humane economy means employment for all who desire it, and at a just wage. Capitalist economies are going to have to become much more solidaristic in order for that to happen. I don’t see that on the near horizon, but Zieba is right in indicating that Papal encyclicals provide a major contribution towards that end. They need to be a part of any public discussion or a truly humane economy will not be achieved.

Democracy
This book’s discussion of democracy reads like that of a man seeking solid political roots but is honest enough with himself that he knows he hasn’t really found it. Coming out of Communist Poland, Zieba wants to love democracy. Further, he wants to say that John Paul II offers a more explicit affirmation of democracy than his predecessors when the Polish pope says:

The Church values the democratic system inasmuch as it ensures the participation of citizens in making political choices, guarantees to the governed the possibility both of electing and holding accountable those who govern them, and of replacing them through peaceful means when appropriate. Thus she cannot encourage the formation of narrow ruling groups which usurp the power of the State for individual interests or for ideological ends (CA 46).

But during the crash of 2008, didn’t a narrow ruling elite related to Wall Street banks usurp the power of the state and receive a multi-trillion dollar bailout? Main Street was forced to bailout Wall Street, literally by having the taxpayer make good on lost bets of bankrupt entities like AIG. So, democracy, as it is currently practiced, is not supported by Pope John Paul II. Zieba admits as much: “In the same paragraph, the pope addresses ‘the principle of the rule of law, in which the law is sovereign, and not the arbitrary will of individuals.” John Paul II continues:

If there is no ultimate truth to guide and direct political activity, then ideas and convictions can easily be manipulated for reasons of power. As history demonstrates, a democracy without values easily turns into open or thinly disguised totalitarianism…. Totalitarianism arises out of a denial of truth in the objective sense. If there is no transcendent truth … then the force of power takes over (CA 46,44).

Yet, Zieba wants to say that the words of JPII

mark an advance in Catholic social teaching. George Weigel aptly describes the evolution of “the Church’s encounter with democracy” as a “process of transition from hostility (Gregory XVI and Pius IX) to toleration (Leo XIII and Pius XI) to admiration (Pius XII and John XXIII) to endorsement (Vatican II and John Paul II), and now to internal critique.

But the age-old Catholic hostility to democracy is still present if by democracy we mean that whatever the majority votes for defines what is right. The rule of law that JPII is referring to is objective truth rooted in human nature, not whatever laws the majority votes for and enacts.

What is going on here is that since the word “democracy” connotes good things to the vast majority of people in today’s world, Zieba (and his fellow democratic capitalist advocates) do not want to lose the marketing game by condemning, or too harshly critiquing, something that the world perceives as good; so, instead, they say that democracy could be good, but only if it conforms to objective truth. Agreed. But then they try to say that it typically is based on that truth, or at least that it can be, given Christian cultural roots. But democracy does not guarantee that—as Zieba well explains—and so we must conclude that democracy is really at best an agnostic political system. It could be good or bad depending on whether the majority understand what is true and votes for what is in the common good, or whether they vote the treasury into their own pockets. Zieba realizes this, and says as much in his last chapter, but he seems to want to have his cake and eat it too.

At the same time, since the term”confessional state” connotes something bad to anyone who isn’t a Catholic (and even to many who are), Zieba wants to separate the system that he advocates from what is called a “confessional state”: “This democracy is miles away from the ideological or confessional state.” Perhaps I have a major disagreement over definitions with Zieba because I would say that an ideological state is miles away from a confessional state, yet he equates the two. I think he sets up a straw man of a confessional state to be an ideological one because it is politically incorrect to favor a confessional state.

But what is a belief in objective truth, Christian anthropological truth as he calls it, if it is not a confession of faith? Basing a political system upon these objective truths of Christian anthropology—as he wants to do—is confessional whether he wants to use that word or not. Furthermore, it is disingenuous, and disrespectful to all the great Catholic leaders of history prior to the French Revolution, to say that they were imposing an ideology upon people against their will. The confessional state, properly understood, is not the imposition of the Catholic faith upon unbelievers by force of the state; it is simply a political economy whose laws are rooted in the objective truths of the faith. A confessional state is still just a state. And if it is truly confessional, then it must conform to the principle of subsidiarity, meaning that it must not impose anything as law that can be better dealt with by other social institutions, like the family, businesses, charitable institutions, and the Church. In other words, if it is truly a confessional state then it will recognize the legitimate limits of the functions of a state as we confess them to be: respecting the principles of subsidiarity and solidarity, limiting itself to only what is in the common good, and respecting the dignity of all human persons including their freedom to practice a different religion. A state cannot be totalitarian/socialistic if it is confessional. Yet, Zieba equates the two.

A confessional state need not be a democracy, and that is why the idea of a confessional state troubles people who advocate a liberal capitalist democracy. Yet, they admit that a democracy that isn’t rooted in Christian anthropological truths—truths that respect the dignity of all human persons—will become totalitarian, as history has shown.

Using this logic then, we must conclude that a democracy is only good to the extent that it is confessional, and that a confessional state is legitimate whether or not it is a democracy. As Catholics, we recognize that the laws, rights, rules, and regulations of all political economies should respect the four pillars of Catholic social thought: the dignity of all human persons, the principle of subsidiarity, the principle of solidarity, and the common good. Whether or not the political economy is democratic is less relevant.

Zieba, having come from Communist Poland and recognizing that liberal democracy is better than communism, wants to say that the popes have approved of liberal democracy more than they actually have. However, he recognizes that JPII “does not go so far as to conclude that democracy is the best, or even the closest to Christianity, or all existing political systems. His approval of democracy is rather reserved…. He also draws attention to the inherent instability of democracy and the problems that result from depending on the will of the majority.” Yet, Zieba still concludes, erroneously in my opinion, that “it is possible to affirm that a democratic system supplies the desirable anthropological minimum—that it corresponds to a realist vision of the human person.”

In reality, democracy offers no vision of the human person. We think it does only because Western democratic systems continue to live off the accumulated capital of their Christian past. Zieba admits this when he says that the foundation of liberal democracy is something that liberal democracy itself cannot guarantee, and quotes Christopher Dawson: “The Liberal faith [in democracy] owed its strength to the elements that it had derived from the religious tradition it attempted to replace. Thus, in so far as it succeeded in secularizing European culture, it undermined the foundations on which its own existence depended.” Zieba concludes his book by saying that Christianity can exist without democracy but democracy needs the moral foundations of Christianity or it will tumble into totalitarianism. He seems to be optimistic that that foundation will be retained; the headlines we read these days would lead one to conclude otherwise.

Editor’s note: The image above titled “Stump Speaking” was painted by George Caleb Bingham in 1886.

Anthony Santelli

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Anthony Santelli II is the CEO of AES Capital, co-Founder of the Catholic Finance Association, and a long-time member of the Society of Catholic Social Scientists. He earned his Ph.D. in Economics from George Mason University.

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