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Catholic Economics, Part 1: The Distorted History of Capitalism

Luiz Fernando Reis

Daniel Schwindt - published on 04/02/14 - updated on 06/08/17

Fortunately, Marx was not alone. There was another voice crying out in the social wilderness. This was the voice of Pope Leo XIII. Like many others, he saw the obvious evil of capitalism, which was dispossession, but he also saw that Marx’s cure would be worse than the disease. And so, in May of 1891, he issued the great encyclical Rerum Novarum, in which he roundly condemned both capitalism and socialism, righting the wrongs each had done to the idea of private property.

First he noted the sad conditions brought on by unrestrained capitalism:

“…the hiring of labor and the conduct of trade are concentrated in the hands of comparatively few; so that a small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than that of slavery itself.” (3)

Then he condemned the Marxist solution:

“To remedy these wrongs the socialists, working on the poor man’s envy of the rich, are striving to do away with private property, and contend that individual possessions should become the common property of all… But their contentions are so clearly powerless to end the controversy that were they carried into effect the working man himself would be among the first to suffer.” (4)

Finally, he proposed the true solution, which was the opposite of both Capitalism and Socialism:

“…private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners.” (46)

Capitalism had concentrated wealth to an extreme degree. Socialism sought only to finish the job, transferring the already concentrated ownership to the government. Leo XIII argued in the opposite direction of both, which is to say, in the direction of real ownership for the worker and his family.

The claim that socialism represents a dangerous concentration of ownership away from the family is taken for granted these days, so I need not prove that here. However, the claim that capitalism does the same thing is a modern day heresy, especially in conservative circles, and so that will require some defense. I intend to supply this defense next week.

Daniel Schwindtis a member of the Solidarity Hall thinker-space, and the author of several books including Holocaust of the Childlike and The Pursuit of Sanity.

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