It's time for one of the greatest Catholic economic thinkers to be rediscovered.
The passing of the eminent American Catholic economist, Dr. Rupert J. Ederer, at the age of ninety on Thanksgiving Day 2013 calls attention to the great, but equally unsung, economic thinker and system that he devoted most of his career to furthering: Heinrich Pesch, S.J. and solidarism. Pesch, who died in 1926, was thought to have inspired Pope Pius XI’s great social encyclical, Quadragesimo Anno, five years later. In spite of Pesch’s relative obscurity, Ederer called him an economic “system builder,” on par with Adam Smith, Karl Marx, and John Maynard Keynes, although the system he constructed was based firmly on Catholic teaching and the natural law. The word “solidarism” rings of the principle of solidarity, which has been stressed more recently in Catholic social teaching. In fact, solidarism is also referred to as “the solidarity work system.” There is some indication that Pesch’s solidarism influenced the famed Solidarity trade union movement in Poland that rose to prominence a generation ago and led the way to the collapse of Eastern European communism.
What, broadly, are the basics of solidarism? First, it rejects both individualism and collectivism and seeks to uphold the good of both the individual and society. In short, it embraces the common good as understood by sound ethics. Second, there is a solidarity among all men because of, simply, their common humanity. There is also a more particular solidarity among people in the same nation and within the same occupation or industry or area of the economy. That means that there is or should be solidarity between employers and workers; both need each other to achieve successful economic results. This does not mean that there may not be competing interests on each side — so that, say, labor unions don’t have a purpose — but that these interests can be balanced and reconciled. Class conflict is not inevitable. Its stress on such solidarity distinguishes solidarism from both economic liberalism and Marxism.
Third, the worker cannot be reduced to a mere factor of production, nor can economics be made the be-all-and-end-all, so that everything is reduced to economic calculation. This is what Pesch termed “economism,” a term picked up by both the German economist Wilhelm Roepke and Pope John Paul II. Fourth, the market and its advantages are accepted as givens by solidarism — and economic freedom is a good thing. Neither, however, may be unrestrained. While competition is valuable and plays a crucial role in economic life, it cannot be its ordering principle. That can only be human dignity.
Fifth, in line with this, while there are certainly market inclinations and forces (e.g., supply and demand) they cannot be treated as rigid “laws” (a notion that came from the Enlightenment). While market forces may help allocate resources effectively, solidarism rejects the notion that if the economy is just left alone, the results will almost automatically work out to the good of everyone (indeed, this is the very thing that Pope Francis recently addressed). While self-interest, like the interests of labor and management, is legitimate, it can also be destructive and so — like what James Madison said about factions — it must be regulated and channeled in a way that does not undermine the common good. Like Roepke, solidarism believes that economics cannot be separated from ethics, that it requires a sound social and cultural context, and that there is an appropriate role for state action.
Sixth, the sense of solidarity motivates the solidarist to promote occupational groups or other sorts of arrangements of those taking part in a particular industry — which must be voluntarily agreed to, and not imposed by the state — that would aim at a kind of enlightened self-regulation. The state could thus step back and not engage in the heavy regulation and micromanagement that we have become so accustomed to (with all their attendant problems), though it would continue to oversee economic activity and intervene where appropriate in its role as the chief guarantor of the common good.