Why do you think “capitalism” has such a bad reputation and that pejorative connotations attach to it?
Capitalism is associated with the hunger for profit that follows from the capitalist premise that each person ought to be free to do as he wishes provided he does not prevent another from doing what he wishes. This goes back to what we said about human motivations and the confusions some have created between the profit motive and the wider concept of the satisfaction of all desires and interests. Adam Smith held that the profit motive would exist under any economic structure and that it is utopian to hope for its disappearance. The advantage of the market system—in which all players are subject to the rigors of competition, free of governmental intervention—is that it creates a situation in which businessmen can satisfy their desires only if they first satisfy the desires of the general public. The market channels this motivation into healthy and socially beneficial ways. When the state intervenes on behalf of different interest groups, however, there is no guarantee that this will redound to society’s benefit.
Won’t you even grant the historical perception of the allegedly negative effects of capitalism upon the working classes?
It’s almost impossible to convince people that that negative version of capitalism’s initial effects is false, even though the historical evidence refutes it. The images that come from English novels from that era prevail. As C. S. Lewis once said, the problem lies not in introducing new ideas into the popular mind, but in removing false ones. The idea of the worsening condition of the poor due to capitalism seems ineradicable. But modern historians have amply shown that the industrial revolution raised the people’s standard of living. The most obvious evidence is that it permitted the population to increase, demonstrating at least that people under capitalism could survive, whereas before they would die.
Do you believe the Catholic Church has always been anti-capitalist?
Well, if one studies Catholic economic thought in the Middle Ages and the Renaissance, we find Dominican, Jesuit, and Franciscan clergy supporting quite modern economic doctrines. We find there the idea of utility, for example. After all, the banking system began in Italy before the Reformation, and the Italian cities originated finance capitalism. The French Revolution is a factor in the Church’s opinion: it was associated with liberalism; liberalism advocated the removal of feudal structures; and the Church was as much the beneficiary of those structures as was the nobility.
But the social teaching of the Church is generally regarded, rightly or wrongly, as anti-capitalistic. Is this a faulty reading of Rerum Novarum and Quadragesimo Anno, or were they, in fact, anti-capitalistic?
I believe that Rerum Novarum was certainly more favorable to capitalism than to socialism. It maintained that capitalistic risk-taking leads to excesses and therefore ought to be subject to certain controls—but that’s not a rejection of capitalism’s essence. The belief that it should be controlled was not ethical, but economic. They feared that if the market were permitted to operate freely something horrible would happen. But this is a claim that stems from an economic, not a moral, judgment.
This prejudice of the Church against capitalism is not limited to developing Latin countries: the North American Bishops have issued a pastoral letter highly critical of the capitalist economy.
So they did. I suppose they got the type of economic advice they were looking for, the kind that left-wing economists provide, more left-wing even than the Democratic Party’s Brookings Institute. Well, I don’t share that economic doctrine.
To what extent do North American Catholics share those points of view?
Has it led to any response?
No, not either way. I don’t think it’s been perceived as terribly relevant, although I won’t say it isn’t. I believe there is a concurrence between what clergymen think and the viewpoints of certain intellectuals. In the academic world economic ideas very similar to those supported by the American Catholic Bishops still hold sway.
To Be Continued