Some Definitions and a Few Papal Statements

"The tension between East and West is an opposition...between two concepts of the development of individuals and peoples, both concepts being imperfect and in need of radical correction.... This is one of the reasons why the Church's social doctrine adopts a critical attitude towards both liberal Capitalism and Marxist Socialism." (Pope John Paul II "Sollicitudo Reis Socialis")

Before entering into any serious discussion, argument, or debate, it is always imperative to define ones terms. Any form of argumentative reasoning, or reasoned discussion which lacks definitions, or offers at best poor definitions, is bound almost almost inevitably to lead towards confusion rather than towards clarity. It is also likely to lead away from the common goal of truth, rather than towards it.

My previous two posts, "The Anti-Capitalists Creed" and "The Anti-Socialists Creed", serve as a starting point to what I hope will be a fairly lengthy series of posts dealing with economic issues. As their titles suggest, both posts were credal in nature-- more focused on statements of belief, than in forming arguments or demonstrating proofs. However, as this series continues, we will turn more to the argumentative side of these topics, and hence I believe that it is necessary before going any further to define a few important terms. Also, since the perspective from which I will be writing these posts is unapolagetically Catholic, I feel that it is also important to cite a few Papal statements to better clarify the Church's own position on economic matters.

Today I would like to focus particularly on the issue of Capitalism-- to define the word and to examine its various forms. In my last post I did offer a brief definition of Socialism, although I hope to go into this in greater detail as well in some future post. I also cited the statement from Pope Pius XI from his encyclical Quadregesimo Anno, in which he writes that "Socialism...cannot be reconciled with the teachings of the Catholic Church, because its concept of society is utterly foreign to Christian truth." However, as concerns both definitions and Papal statments, the issue of Capitalism is far more complex. Many forms of Capitalism exist which do not resemble the basic definition of the word itself, and Church's own position on Capitalism, while generally critical, is mixed and less clear than her position on Socialism. For this reason it will be necessary to divide between various forms of Capitalism, and to offer a balanced sampling of Papal statements concerning Capitalism.

Merriam-Webster has this to say about Capitalism: "an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market."

Similarly, the American Heritage College Dictionary defines Capitalism as "An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market."

Finally, capitalism.org says that:"Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.Under capitalism the state is separated from economics (production and trade), just like the state is separated from religion."

It is not difficult to note the repeated emphasis on private ownership in all of these definitions. Such an emphasis should be pleasant for me since my conviction concerning the rights of private ownership run very deep indeed. It is also worth noting that the statements of the Catholic Church on economic issues (as has been demonstrated in the previous posts) show firm support of the idea of private property. Yet the Church has been highly critical of Capitalism at many times. It seems that there may be a disconnect between the definition of Capitalism and its core ideals on one side, and its actualization on the other.

Concerning the basic principle of Capitalism Pope Pius XI wrote: "...hence it is evident that this system is not condemned in itself. And surely it is not of its own nature vicious." Yet we have the also the quote at the beginning from Pope John Paul II to consider as well.

To see if there is a disconnect between the definition and the actualization of Capitalism one merely has to look at the various forms of Capitalism. There is such a thing as State Capitalism. That seems oxymoronic given the strict emphasis on the separation of State and economics found in the definition from capitalism.org, cited above. Again, Corporate Capitalism is a form of Capitalism which involves some measure of market interference from the State in the form of bail-outs, etc. Thus we see clearly that the Capitalism of which Pope Pius XI spoke and that of which Popes John Paul II and Benedict XVI spoke need not necessarily be precisely the same thing.

In opposition to state and corporate controlled forms of Capitalism, we have liberal or laissez faire Capitalism. Laissez faire ("Let them do" or "Leave them alone") is a form of Capitalism in which the free market is everything, and the State has no part in the market whatsoever, being relegated to merely protecting property rights. This idea was strongly promoted in the 18th century by Vincent de Gournay and others, and remains to this day the Capitalist ideal for many people. "When I say “capitalism,” I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism—with a separation of state and economics, in the same way and for the same reasons as the separation of state and church." (Ayn Rand)

While it may be possible that men such as Gournay were protesting against unfair government regulations of the market, it may be wondered if they ever fully thought out the consequences of a completely unregulated Capitalism. Regardless, the key point to laissez faire is the idea that left alone the market will automatically right itself if it should become unbalanced. Let nature take its course, in other words. To a simpleton such as myself that sounds a lot like saying "Don't worry about the overpopulation of deer in the forest, the wolves will take care of them soon enough." That may be very good and well for the animal kingdom, but have we forgotten that markets are made up of people? How much abuse must be tolerated, how many fortunes lost, how many impoverished spirits crushed, as we leave it alone to fix itself?

I am afraid that I find laissez faire Capitalism to be a very pretty way to say "Greed". A certain unscrupulous type of fortune seeker loves an unregulated market, and woe to those who stand in his way! However, I also believe that laissez faire also actually leads to State or Corporate Capitalism. This will be examined more in future posts, but for now let it suffice to say that when I refer to Capitalism I am referring chiefly to laissez faire, Corporate, or State Capitalism, not so much to the ideals of private ownership as described in stricter definitions of Capitalism.

Let me close with another Papal quote, this one from Benedict XVI. In his New Year's Day address this past January he spoke of "the prevalence of a selfish and individualistic mindset which also finds expression in an unregulated capitalism, various forms of terrorism and criminality." Crime and terrorism. Lovely company in which unregulated capitalism was so unceremoniously dropped by the recent pontiff....