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Catholic Economics, Part 2: Are You Sure Inequality is Inevitable?

Catholic Economics Part 2 Are You Sure Inequality is Inevitable Yves Cosentino

Yves Cosentino

Daniel Schwindt - published on 04/09/14

The medieval period was imperfect, but there’s a lot we can learn from it for today.

This is part two of a six part series on economics and Catholic social teaching. (Part 1)

If we visualize the sociopolitical framework of the Middle Ages, we see that it resembled a giant centrifuge: property, which is to say economic power, as well as political authority, was widely dispersed throughout Christendom. This meant that localities usually operated with a surprising degree of autonomy. The Capetian Kings, for example, who ruled France from 987 to 1328, could not impose direct taxation; the Bourbons, who came later, could not conscript soldiers. Both of these exactions, which we now take for granted as facts of our political order, are known to have caused revolts in the past.

However, at the end of the medieval period the centrifuge began to collapse. The forces of dispersion gradually dissolved, creating a sociopolitical vacuum, and centralization naturally ensued. While the causes of this “reversal of polarity” are no doubt multifaceted, the predominant revolution of the era, at least for the common man, was economic: it was the birth of that ideology which we now call “capitalism.”

Capitalism has always and everywhere acted as a centripetal force on those societies in which its principles are allowed to operate, drawing ownership inward toward a tightly-packed center. This “center of ownership” may take the form of a few wealthy individuals, but it may also take the form of the State itself. Socialism, after all, is nothing more than “State capitalism.” (Centesimus Annus, 35)

It may help here to cite a few statistics, not to prove our case—because statistics never prove anything—but rather in order to emphasize the degree of centralization that occurs under a capitalist regime:

In 2010, 80% of the American population combined to hold a minuscule 5% of the total financial wealth. This meant that 95% of our nation’s wealth was owned by a small minority. Within that minority, the wealthiest 5% held a whopping 72% of the nation’s total financial wealth (this also explains why the rich pay most of our taxes: if the top 5% has 72% of the total financial wealth, then it only makes sense that they would pay at least 72% of the taxes).

This is, of course, only in regard to the United States. The disproportion becomes even more astounding if we view things through to lens of globalism. As Pope Francis said in his recent exhortation, the result of has been an “economy of exclusion” which reinforces envy, strife, and sooner or later must end in hostilities which not even war could ever hope to solve. (Evangelii Gaudium, 59-60)

Returning to our historical point of view, we can see that this tendency toward extreme disproportion has been present from capitalism’s birth.

The Middle Ages, with its feudal structure and its guild system, had erected a vast economic “web.” This web was formed by a thousand concentric circles of semi-independent groups, connected through functional relationships, aimed at—even if never fully achieving—harmonious cooperation. This is diametrically opposite to the logic of capitalism, which homogenizes the entire structure, sets all particles in opposition to one another, and feeds on the heat of the resulting antagonism. One teaches man to seek his bread through stability and concord; the other through competition and chaos.

Considering these ideals, it is not difficult to see why the Middle Ages has been called the “Golden Age of the Worker.” If a man was a farmer, he worked on a share of land on his lord’s estate. His existence was not characterized by tyranny, but defined by duty and reciprocity. It is difficult for the modern egalitarian mind to imagine any hierarchical relationship which does not automatically imply injustice or oppression; nonetheless, both peasant and lord served one another in a well-defined and stable context of mutual responsibility, arranged according to their respective social functions. It is therefore no exaggeration to say that the relationship was complementary and even symbiotic.

If a man was not a farmer he was an artisan; he had a skill and a trade at which he was an artist and master. Each man, whether craftsmen or peasant, had things both practical and tangible to hand down to his children.

When the centrifuge began to implode, the first thing to die was agricultural feudalism. Expansion in commerce, technological advance, and modern banking practices all combined elevate purely financial wealth above the traditional forms of capital. The intangible instruments of the financier and the productivity of the industrialist quickly undermined land and title. The lords, their survival threatened by a rising merchant class, discarded the manners of nobility and instead adopted the mentality of the market.

If we were to sum up the transition in just a few words, we could say thatfealty was replaced by efficiency. The consequences that follow from this renovation are endless: fealty is necessarily a human and moral term which implies relationship and responsibility; efficiency is purely mathematical and thus excludes all supra-mathematical considerations. Personal bond became amoral contract.

In practice, this meant first of all the enclosing of the peasant commons, effectively depriving an entire class of their subsistence. This “Enclosure Movement” changed the very make-up of England from a widely dispersed agricultural population to a smattering of masses within the newly formed cities. Thus, we can see in this demographic transformation the first signs of concentration. The world was becoming smaller.

Agriculture as a vocation, tied as it was to the patient fertility of the seasons, was doomed to remain depressed for centuries—a problem which Pope John XXIII found significantly distressing. (Mater et Magistra, 123-125)

Next to die was the guild system, and this too would to be lamented by future popes. (Leo XIII, Rerum Novarum, 3, 49) As the guilds disappeared, so did the sacred progression from apprentice to master. This structure had to die once the capitalistic assumptions about self-interest gained moral assent. If competition and the profit-motive are virtues and not vices, then why would any master blacksmith want his apprentice to rise to independence and become his equal? The masters themselves, without any structure of stabilizing cooperation, quickly decreased in number to whoever was most “competitive”. The apprentice became the “employee”—destined to exist in permanent subordination. What was once a path to adulthood became frozen, locking many craftsmen into a strange sta
te of perpetual professional adolescence. Wage-work became a lifelong norm where previously it had been a temporary stage of growth.

The skilled trades, like the land, became consolidated. This amounted to a dispossession not only of property but of the very possibilities of existence. It was inflicted on both the craftsmen and the farmers, bringing an end to the Golden Age of the Worker. The Age of Capitalism was born, and with it a new class of man: the proletariat. In this way, the centralization of the professions followed immediately behind centralization of the populations.

This profit-driven concentration virtually created the phenomenon of Pauperism in England. The paupers themselves could actually be considered the first example of what we now call the “labor market.” This should shed some much needed light on the modern myth of the labor market as something necessary and beneficial to society and to the worker. Adam Smith knew better. He wrote in his Wealth of Nations that the employer always wields a significant advantage over the employee; so much so that the idea of the two striking an equal bargain is truly fantastic. The “free contract” between employer and employee is thus contrary to Adam Smith, commonsense, and recorded history.

Also, a quick note on “job creation”: if this economic revolution accomplished anything, it accomplished “job creation.” But far from being a blessing, job creation was just another symptom of the disease. The only kind of society that needs “jobs” is a society that has given up on the expectation of independence and ownership as a normal and natural destination. The Middle Ages had no need for employers whose decisions may create or destroy jobs by the thousands—men in the old order were too busy directing themselves. Capitalist job creation, for the ex-peasant and ex-craftsman, really translates to subordination, dependence, and a loss of possibilities.

It was in this weakened state that the working class entered the Industrial Revolution. We all know of the abuses that took place in those factories—all under “free agreement” with an employer. It was an age of great wealth, yes, and great poverty: a paradox which is one of the hallmarks of the capitalist regime, and which has not disappeared even if it has been exported.

And so it was this sort of widespread oppression which occasioned the Marxist response—that infamous cure which proved worse than the disease itself. Remember: socialism simply completes the capitalist process, transferring property control from the rich to the government. Socialism hates capitalism by way of the Oedipus complex—the two are rivals only because they fight over the same end, which in either case is “economic dictatorship.” (Quadragesimo Anno, 88)

In summary: progress has offered us two materialist ideologies which, due to their logic of efficiency, bring about inevitable economic and political concentration. Further, the principles of each are essentially eschatological rather than historical—they are based, not on past successes, but on promises of a blessed future state which never seems to come. Any solution, if it is to do us any good, must be the opposite: it must be both “centrifugal” and realistic.

It is the argument of this series that such a solution can be found in the corpus of Catholic Social Teaching. The principles of CST meet both of the aforementioned requirements. They are centrifugal, seeking first and foremost a wide distribution of ownership amongst families. (Rerum Novarum, 46; Quadragesimo Anno, 57-59) They are also realistic: they have worked before and are therefore capable of being adapted and applied to modern circumstances.

Even if one does not agree with the need for a Catholic Economy, we should at least agree that something must be done to offset present inequalities, if for no other reason that to preserve our democratic principles. After all, political power follows immediately behind economic power. If I have intermingled the economic with the political throughout this discussion, it is only because the two are inseparable: if economic equality is destroyed, political equality dies with it. If 5% of the population has 72% of the economic power, then the remaining 95% are politically undermined.

I am not arguing for an egalitarian utopia, nor would I demand a perfectly uniform distribution of wealth; but I will suggest that when it takes $7 billion to run for president, the common voter, who usually has no excess income to speak of, is not simply politically impoverished—he is being patronized.

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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