Documentation: Economic Systems and Economic Ethics


June 1, 1986

In recent times many people, including Christians, have experienced a shift in their concept of sin — from a personal to a social approach. This clearly signifies a sharper conscience with regard to social injustice, but it also implies a diminishing awareness of personal sin. Many men and women believe that sin is just a lack of self-realization or an unsuccessful adjustment to the given conditions. Yet sin is, above all, personal wrongdoing in the face of God and a rejecting of that love which God the Father revealed to us in Jesus Christ. A person without divine grace is at the mercy of obscure powers. For sin means to being separated. It separates man from God, from himself, from his neighbor. Sin also settles into social conditions, which degenerate by dint of man’s sin into unjust conditions and thus simultaneously provide a fresh temptation to commit more evil, such as hatred and revenge — a temptation rather than a compulsion to commit sin. Unjust social conditions only furnish an analogy for sin: for social sin and for fundamental sin. It is human beings who sin, not the structure of society!

History teaches us that the freedom and dignity of human beings largely hinge on the regulatory system of the economy. It is usual for revolutions to be sparked, not only by political repression and loss of social rank, but also quite often by an economic system regarded as exploitative and nepotistic.

Christians will always impassionately fight against degrading economic systems, because oppression and exploitation denote not solely wrongdoing towards humankind or towards society but a sin against God, as well.


The Market-Economy Model

Under an ideal market-economy system, enterprises and plants draw up their economic plans on an independent basis. Landed property, housing, and means of production belong to private owners who can thus freely dispose of their property. Everyone is allowed to carry on a vocation and everyone can set up new firms. Supply and demand are ruled by a spirit of completely free competition. The numerous suppliers and customers who meet in the marketplace accept the given price of the anonymous market; moreover, the small dimension of their supply or demand leads them to assume that their actions will not exercise any impact on prices.

For centuries, Catholic scholars who studied the ethics of economic affairs have recognized the importance of markets. They took the view that competition in the marketplace can protect customers against excessive prices and exploitation. For example, Dominique Banez commented in the 16th century: Either the goods search for buyers, and this is one of the many reasons why prices sink, or else buyers search for goods and prices rise. In the writings of Konrad Summenhart from Wurttemberg (who died in 1502), we find the intimation that we should give preference to the economic system, which (in the words of Oswald von Nell-Breuning) manages to operate with a “minimum of morality.” As Summenhart notes: those who compete against each other have less brazenness and opportunity to sell their goods at usurious prices than the merchants who are in sole possession of such goods. If they did dare to demand excessive prices, people would flock to others who sell at lower prices. According to Luis Molina, prices should not be determined by a merchant’s profit and loss but by the assessment made by local society (commons aestimatio) at the place where the merchandise is offered. As Martin de Azpilcueta pointed out in the early 17th century, the customary view held by merchants of prices was right: “a product is only worth as much as one obtains for it in the marketplace.” However, this is true only if we mean the price which a merchant gets “at this place, at this time, pursuant to customary trade usage and in exchange for a cash payment” and if “monopoly, fraud, and deception” are ruled out. A sharp rebuke is delivered to the monopolists who endeavor to dominate prices by virtually becoming the sole sellers of merchandise in their branch of trade. In the 15th and 16th centuries, “monopoly” was an emotive word that had an effect like “capitalism” today.

The economic ethicists of the Catholic Church in former centuries were unjustly accused of teaching a “static” doctrine inasmuch as they set out to anchor everybody’s place in society and economic life on the basis of descent and status. Luis Molina pointed out that “all strata of society have the right to climb to a higher level if that proves to be their fate. No one is entitled to a certain position in life, and everyone can ascend and descend in society.”

However, it would be erroneous to regard the Catholic economic ethicists of the 15th and 16th centuries as the forefathers of economic liberalism. These theologians were concerned about the liberty and dignity of individuals, whose decisions in the marketplace must be oriented to socially determined assessment, and not to their egotistical use.

On the other hand, economic liberalism proceeded on the basis of other assumptions: during the Age of Enlightenment, it represented the ideal model for a free-market economy. Adam Smith felt sure that the economy — like the universe — possessed a given natural order and “pre-stabilized harmony” in which everything would run its course properly if one allowed the natural forces of freedom, the will to work, and competition to develop. Man should not interfere with this natural system; otherwise everything would end in disorder. The concern about general happiness is the business of God and not of man. An individual always only strives for his own profit, but an invisible hand guides him so that without design he simultaneously serves the commonweal.

It was rare to see such great, almost pseudo-theological hopes placed in the economy, as was the case at the beginning of the Industrial Age. People were borne along by a touching optimism that an epoch of general prosperity was about to begin for all classes of the population. At the outset of the Industrial Age, Western society and economy were marked by profound changes. A thousand years of ‘ aristocratic domination collapsed in the French Revolution. The third estate, the bourgeoisie, pushed ahead to gain political, economic, and cultural power, and in so doing toppled the privileged classes of the feudal system. The peasants, hitherto the large lower tier of the social pyramid, were liberated from serfdom and bondage. Henceforth, there would be no more subjugated classes.

The call for political freedom was linked to the demand for economic freedom. Only the efforts of free people working in a spirit of enlightened self-interest could produce prosperity. Adam Smith expressed the view: one had never experienced a situation in which those who asserted they were acting for the universal good had actually done much good, whereas everyone who pursues his own interests promotes those of the nation much more effectively than if he had really intended to promote them.


The Paleoliberal Market Economy

Pope John Paul II has referred to economies based on the ideas of old economic liberalism as “primitive capitalism.” The supporters of neoliberalism also recognize the undesirable trends in old liberalism and endeavor to disassociate themselves from such a doctrine. For instance, Alexander Rustow speaks of the “grave form of pathological degeneration of the market economy in the 19th and 20th centuries as it was destroyed from within by the luxuriant growth of extraneous elements hostile to the free market and trends towards monopolist domination.”

This does not deny the fact that self-interest and competition are dynamic factors. The Industrial Age did indeed produce immense economic achievements. With the support of scientific discoveries and the new opportunities inherent in free competition, man systematically gained control over the hitherto hidden forces of nature. He encompassed them within physics, chemistry, and biology, which swiftly advanced to become the basis of modern economy and the skeleton of our civilization. Inventions and discoveries followed in rapid succession. People’s average age rose from 35 to over 70. The living standards of the masses rose substantially.

However, the era of economic liberalism led to dangerous social uneasiness and brought on the “social question.” Despite the prevalence of optimistic hopes, workers suffered untold misery — especially during the first half of the 19th century. This misery was characterized by low wages, long working hours, and the use of female and child labor. If ever the name “proletariat” truly applied to the workforce of Industrial Age, then it was during the first half of the last century. By virtue of their bondage on the farmsteads, many people simultaneously forfeited their social security and so they decided to move to the factories.

Admittedly, there had been unprotected distressed citizens in the pre-industrial age. In some towns, seven to ten percent of the population consisted of beggars. In the year 1476, for example, Cologne had 40,000 inhabitants of whom 3,000 were known to be beggars. In the early stages of the Industrial Age, they were often rounded up by the police and sent to work in factories. As Gerhard von Schulze-Gavernitz observed: it was not the workman who became a pauper, but the pauper who became a factory- hand. This judgment is probably one-sided. For many sections of the population, factories became the source of their misery. Many independent craftsmen such as the weavers lost their livelihood. Moreover, another source of cheap labor began to swell the ranks of the proletariat and this was destined to prove the most important factor of all: namely, the very high birthrates among the working classes. The largest families in Europe were to be found in the 19th century. During the period from 1800 to 1930, Europe’s population jumped from 187 to 490 million.


An Outcry of Conscience

The allegation is not infrequently made in respect of German Catholics that they failed to see the proletarian misery of the 19th century, and that it was Marxian analysis which opened people’s eyes. However, this is not true. Leading figures among Germany’s Catholics studied the position of the workers long before Karl Marx. The Church’s social teachings had not yet expressed a view on the latest social developments, but Catholics acted in accordance with the dictates of their Christian conscience and their analysis came to the following result.

The main culprit was seen as liberal capitalism and its brand of unrestrained competition. In 1816 (i.e., two years before Karl Marx was born) Adam Muller referred to a money economy based on competition as the most universal manifestation of the anti-social spirit and egotism produced by the terrible revolutions of the past 30 years. A jurist and politician from Coblence, Peter Franz Reichensperger, wrote the following in 1846, two years before the appearance of the Communist Manifesto: “It has been virtually accepted dogma since Adam Smith that the advantages accruing to all individuals rebound to the advantage of the whole population.” Reichensperger went on to point out that this one-sided and myopic theory overlooks the fact that an individual gain purchased at the price of a tenfold loss by others is not a gain at all, but ruthless exploitation.

Class warfare loomed ahead. In 1823, the Mainze journal Katholik wrote that human society was being divided into two classes — into spendthrifts and hungry beggars, into human beings and packhorses, into rich and poor. This endangers human beings. Adam Muller complained in 1816 that entrepreneurs were the new priests of industry who dreamt comfortable and confident dreams about the world domination of industry without realizing that the vicious division of labor split people into wheels, rollers, spokes, and axles — thus undermining their moral and religious values.

Peter Franz Reichensperger gave shocking accounts of proletarian misery, calling factories “dens of corruption and prostitution.” The worst features were the exploitation of children. “Is it really an exaggeration to say that, for those unhappy and helpless creatures, life is a curse and indeed hell on earth? Can labor bring happiness and blessing to a country which tolerates such abominations in its midst whilst enacting laws for the protection of nightingales and against cruelity to animals?” In 1845, Cardinal-Archbishop Giraud de Cambrai protested in a pastoral letter on the labor question about “human exploitation of fellow humans” — a phrase that originated in 1829 from the French followers of Saint-Simon, not from Karl Max.

The legacy of liberal capitalism will be communism. One year before the Communist Manifesto — in the autumn of 1847 — the Historisch-politische Blotter made the following prediction: “The proletarian revolution will assume a `pseudo-mystical and fanatical character’ and endeavour to build up an ‘apocalyptic empire of the future.’ ” A few years later, the same journal observed that communism “was not an impossibility, but a consequence of political development in Europe and therefore a more imminent danger than one believed.” The serfs would “sweep over our unsuspecting heads like a violent storm from the East and wield that wellknowri Eastern leather instrument of power designed to thrust happiness on people!”

Complaints are also heard about the attempt by bourgeois ideologists to confuse and agitate workers. Adolph Kolping lamented in 1848: “These babblers stood atop the barricades, and for their sake the blood of our young craftsmen started to flow.”


Proletarian Solidarity

In the second half of the 19th century, the working people of Germany made their mark in history by achieving self-awareness and solidarity as a class. However, an awareness of solidarity at first only meant a willingness and determination to join hands together. At that time, there were two main movements who were wooing the workers — the Christians and the Socialists. First the Catholic movement, designed to gather workmen within the fold; second, in impassioned opposition to the Christian Social movement, Marxism tried to assemble the working masses beneath its flag.

The socialist movement was still weak in the 1870s, but it did gather strength towards the end of the century. Karl Marx regarded the Christian Workers’ movement as a thorn in his side. When the German Catholic Convention met in Dusseldorf in 1869, Karl Marx was staying in Aachen with a wealthy cousin there. On September 25, 1869, Karl Marx wrote to Friedrich Engels: “I became convinced during my tour of Belgium, the sojourn in Aachen, and a trip up the Rhine that we must take energetic action against these clerics, especially in the Catholic districts. I shall ask the International to act. Wherever it seems appropriate to them, such dogs as Bishop Ketteler in Mainz and the parsons at the Dusseldorf Convention coquette with the Labor Question.”

The analysis of social conditions carried out by leading German Catholics in the last century is more precise and more valuable for today’s Third World than the “Marxian” analysis. In a recent lecture Father Andreas Muller expressed the view that many theologians keen to liberate the working population believe that the Marxian analysis of capitalism is still the most precise of all sociological methods. However, Marxian analysis has proved to be false in all its decisive statements.


The “Taming” of Capitalism

In view of the poverty suffered by wide sections of the working class, moves were naturally undertaken to redress this situation. Among Catholics, it was above all the laity who — long before the epoch of the papal social encyclicals — advanced concrete proposals on resolving the Social Question. No uniform program existed. Although one may regret this, it is precisely the differences in the programs, which indicate how much Catholics may differ in their approach to many practical issues. Two schools of thought militated against each other: a socio-reformist movement and a socio-political movement. Although both these schools of thought supported a free-market economy, each tried in a different way to tame paleo-liberal capitalism.

It was in no small measure due to these demands and in response to the inception of proletarian solidarity that the state began to look at the Social Question in the nineteenth century. In its fear of an organized workforce, and presumably because of the prickings of an uneasy conscience, bourgeois society began to lay the foundations of what today constitutes the imposing fabric of social security. Whereas industrial protection for children, adolescents, and women had made its hesitant start in England in the early 19th century, social insurance was the outcome of Bismarck’s efforts. This wise statesman had wanted to liberate workmen from the uncertainty of finding a livelihood by means of a social-insurance system. A laborer was entitled to work if healthy, entitled to care if ill, and entitled to a pension when old. If the soldiers of the army and the officials of the state got a pension, why not the laborers, too? That would be the implementation of Christianity in practice under a statutory requirement!

Nowadays, the free contract of service concluded between employee and employer has been replaced in substance by statutory provisions which guarantee legal protection for adolescents and women; a ban on child labor; social security in the event of illness, invalidity, unemployment and old age; guaranteed leisure time and vacations; the establishment of works councils; co-determination and co-management; and the establishment of industrial tribunals.

To these must be added the wide influence exercised by the state, public-law corporations, and international bodies by dint of economic measures. Economic policy-makers endeavor to rectify abuses, to curb inflation, to reduce unemployment, and to stimulate the economy by appropriate trading and monetary policies as well as by appropriate custom tariffs. At the same time, they also try to bring about more economic growth by boosting research, assisting vocational training, etc. Mention should also be made of fiscal provisions, cartel laws, trade and company law, stock exchange statutes, insurance company provisions, labor- management relations, co-determination, collective wage bargaining, and economic penal codes. We are miles away from the paleo-liberal economic system of “laissez-faire.”


Neoliberalism, Democratic Socialism, Marxism

Neoliberals also explicitly declare that free competition and a market economy are not the same thing. Although the old liberals called for freedom to contract one’s service and to compete, they overlooked the possibility of using freedom of contract to rescind free competition by creating monopolies. The domination of markets by monopolies, partial monopolies, oligopolies, cartels, syndicates, corn bines, and so forth must be stopped. Unavoidable monopolies must be placed under public control. Competition in performance does not automatically take place; on the contrary, it must be organized by the state. The economy must receive a set of rules, which permits freely competing entrepreneurs to develop their potential. This can be done by safeguarding the free formation of prices, by opening up markets, by controlling or prohibiting monopolies. This constitutive and regulatory intervention by the state in trade and industry must conform with the market, i.e., it must not stop the price machinery and the resultant self-regulation of the market.

One of the observations contained in Pope John Paul II’s encyclical on human labor applies to a large extent to the social market economy practiced in the Federal Republic of Germany: “Solidarity among working people, coupled with a clearer and more active awareness of the other side regarding the rights of workers, has in many cases brought about profound changes.”

Even though free democratic socialism in the West also derives from Karl Marx, it differs from Marxism in some significant respects, not least in the doctrine on social and economic processes of development. It supports a free- market system and explicitly stresses that it does not aspire to collectivism nor to a controlled economy. Instead, it wishes to promote the ownership of property among those sections of the population for whom this has hitherto been rendered virtually impossible by the prevailing social system. A characteristic feature of free democratic socialism is that it backs state interference in the economy more than other democratic parties do. Its weakness lies in its approach to society, based on a liberalist philosophy, which repeatedly manifests itself in its policies on culture, education, and schooling.

For a number of years now, the West has experienced an astonishing relapse into the salvation promised by utopian communism. The New Left, a very heterogeneous group, probably only agrees in its negation of the existing social fabric. But just how the new social and economic order would redeem future mankind from any alienation remains a sealed book: Eurocommunism, whose ideology rests on an atheistic and anti-religious philosophy of a Marxist character such as that developed by Antonio Gramsci for Italian communism, does not cease to be a form of communism. As long as the Eurocommunists are not in power, they behave in a social and democratic’ manner. Only when they have seized power do they show their true face.


The Market Economy in Catholic Social Teaching

The proponents of Catholic social doctrine deem the market economy to be the right basic form for the economic system. However, they are convinced of the need to give it a humane ideal. The following twelve preconditions have to be fulfilled:

1. Achievement of the economy’s objectives. As the Second Vatican Council pointed out, human beings are the originator and focal point and goal of all economies. The aim of an economy — expressed in purely formalist terms — lies in the sustained and assured creation of material preconditions designed to enable individuals and social entities to develop in a manner consistent with human dignity. As the encyclical Quadragesimo Anno noted, material goods should be available on a scale which not only suffices to meet vital and otherwise honorable needs, but also permits the development of a refined cultural life.

2. The market economy must not lead to Consumerism. the advertisements about consumer goods, which are intended to inform purchasers in objective terms, must not confuse them and obscure the facts by suggestive and excessive stimulating of the imagination and by appeals to the tempting possibility of possessing desirable things.

3. The market mechanism is not sufficient. Although free competition is justifiable and of undoubted usefulness the market mechanism is unable to act as the regulative principle underlying economic affairs.  Disposition over private property, market mechanisms, and striving for economics success must be complemented by the social aims of economic activities.

4. Control of economic power. Under a market economy, steps should be taken to prevent creation of centers of power or — where monopolies and cartels prove unavoidable — to subject them to controls.

5. The order of precedence among values. The economy is neither the only goal of human beings and society nor even the most eminent goal. A higher rank is held by the dignity and freedom of man, marriage and the family, religion and morality, cultural values, and the “final aim and end of all things,” God himself.

6. Capital and labor. It seems remarkable that Catholic social teachers have constantly posed the question during the last two centuries as to whether the separation between capital and labor, which has characterized the economic system since the Industrial Age, can be upheld in the Christian conscience. Pope John Paul II observed that one must by no means place labor and capital in contradiction to each other. In the opinion of Catholic social teachers, the contrast between capital and labor can be overcome or mitigated in two ways: by cooperation between partners, and by encouraging employees to participate in the formation of economic capital.

7. Technical progress and rationalization. As the economy and technology serve mankind, the decision-makers must be willing to see technical progress take place in harmonious development rather than in impetuous and crisis- ridden leaps forward.

8. The despotic basic structure of business enterprises. Since the start of the Industrial Age, Catholic social teachings have always posed the question as to how the despotic structure of firms can be reconciled with working people’s spirit of self-responsibility. A modern enterprise — and this also applies to an office, shop, or administrative unit — can only function if all participants interact smoothly. Many entrepreneurs now see in every member of the staff from the very beginning a fellow human being and a neighbor, and they adopt all measures from this standpoint. Hence, the guiding thought is not profitability based on enlightened self-interest, but human dignity.

9. Worldwide responsibility. In his encyclical Mater et Magistra, Pope John XXIII exhorted those peoples who are sated with wealth and overabundance not to forget the position of those other nations whose population has to contend with such great internal difficulties that they almost perish of hunger and misery. The chain of misery can only be broken if development aid is substantially expanded, if arms expenditure is drastically cut, and if agrarian reforms are carried out in the developing countries. Competition on international markets does not suffice to master these tasks: worldwide regulative measures are necessary.

10. The safeguarding of employment. The examination of unemployment and the adoption of economic, cyclical, and monetary measures is not a matter for the Church, but the Church appeals to the conscience of the decision- makers.

Great importance for preserving workplaces attaches to the “indirect employer,” i.e., the fabric of national and international agencies, which are responsible for the whole implementation of labor policy. Pope John Paul II called for overall planning which transcends the limits of states.

The Church has the obligation to make sure that the unemployed are not overtly or covertly stamped as being unwilling to work. In addition, the Church will work to overcome the social isolation of the jobless. What unemployed men and women need is not pity, but understanding and loving care.

11. Environmental Protection. Measures must be taken to ensure that technical progress does not spoil the biosphere by excessive exploitation, waste, and pollution and that it does not damage the physical foundations of life on earth. This is a very old exhortation that is anchored in Christian tradition.

12. Redistribution system. The original distribution of the national product via economic processes has been rectified to an astonishing degree in modern industrial states by means of taxes and social-insurance contributions. However, the trend towards an all-providing state is disquieting. Catholic social teachings advocate, for the sake of human beings themselves, a strengthening of self-responsibility and a rejection of welfare-statism. In the long term, a nation cannot spend more than it has earned by its labors.


Centrally-Administered Economics

When viewed in its ideal form, a centrally planned economy is marked by the elimination of the structural features of a market economy. Individuals are not entitled to dispose of the means of production. Supply and demand are not harmonized by competition in the marketplace. There is no scope for private gain. A central administration, vested with immense powers, draws up the economic plan which regulates in detail the technical procedure and the distribution of the national product and which is binding for the entire economic process. Karl Marx alleged that centrally planned economies would assert themselves everywhere in the world analogous to the law of dialectical materialism. The more that technology and the economy develop in a given country, the more there will be an automatic growth of mass misery, oppression, bondage, degeneration, exploitation, and revolt among the working class. The capitalist shell would then be ruptured.

According to Marxist analysis, the dialectical leap from capitalism to Marxist socialism was to take place first of all in the highly developed industrial states of England, the United States, and Germany. But in fact, Marxism seized power in the agrarian countries of Russia, Poland, Romania, Bulgaria, and China; moreover, it did so by force of arms and not by dialectics.

Dialectical materialism assigns to the economic system a significance which determines the whole character of social life. After all, Karl Marx asserted that the legal, political, religious, artistic, or philosophical content of the ideological superstructure would be conditioned, determined, brought about, translated, or produced by the given economic circumstances. According to Karl Marx and Friedrich Engels, the intellectual content springs from the economic content: it is the inspired form of social conditions, which are also its cause. All these formulations are vague, one-sided, and highly questionable simplifications — as indeed are the theses of dialectical materialism in general.

After the collapse of capitalism comes an epoch, which exists in a strange twilight: “Between capitalist and communist society lies the period of revolutionary conversion of one into the other. This also corresponds to a political transitional period whose State can only be a revolutionary dictatorship of the proletariat.” Only after total victory over the capitalist countries does there begin, pursuant to the Marxist doctrine on the various periods of social evolution, the final phase of utopian communism. Marx himself was hesitant about describing in detail the final phase. He calls this condition the true realm of freedom. Cooperation and common possession of the earth would make humankind into an association of free people. Then society could inscribe on its colors: from each according to his abilities, to each according to his needs. A new era would commence. Karl Marx prophesied that everybody would then be able to do all sorts of things, which he felt like doing: to go hunting in the morning, fishing in the afternoon, and farming in the evening.

Lenin also believed in this secularized messianism. He wrote of thrusting wide-open the gateway leading to the transition from the first phase to the next higher phase. He knew that bourgeois academics scoffed at this theory and described it as a Utopia — which every citizen would receive, without any control of his working performance, as many truffles as he wanted, automobiles, pianos, and so forth. On October 18, 1961, Khrushchev even ventured the prediction that communist society with its overflowing bowl of plenty would in its essentials, be built up in the next 20 years.

Herbert Marcuse also believed in the great liberation, and in the new kind of human being who is no longer a matter for more or less arbitrary speculation, but who could be virtually deduced from the condition of productive forces. Jurgen Habermas expressed the view that the abuse of power could be prevented in a socialist collective by applying the principle of general discussion free from domination.

It is a striking, though understandable fact that social reformers usually display a preference for centrally planned economies when they are designing ideal economic systems. This has probably to do with the fact that planning, systematizing, and regulating appear to be more of an ideal than self-interest and competition. And as Clodovis Boff once observed, the theologians of “liberation” also more or less explicitly see socialism along the, horizon of the historic project, because a democratic and socialist society would offer better objective conditions for ensuring that the Church can fully express its catholicity.


The Historical Reality

During the pre-industrial era, centrally planned economies were rarely adopted as the state’s economic system. One can perhaps cite the pre-Columbian Inca Empire, when a pronounced agrarian collectivism and state socialism prevailed. But the Inca regime was not total state socialism. Landed property belonged to three owners: the temples, the Incas, and the village tribes. The only private property allowed was housing, household goods, and the fruits of the family plot of land. The sophisticated system of state socialism under the Inca Empire did not brook any disturbances. A strict penal code protected the State and public order.

Numerous countries have introduced a centrally planned economy since 1917, the first one being the Soviet Union. However, a total communist central administration has not proved possible anywhere, not even in the Soviet Union. The words “from each according to his abilities, to each according to his needs” still cannot be inscribed on the Soviet colors. There still exist wages, premiums, and piecework bonuses, which should fundamentally be rejected as “capitalist.” Lenin once declared: “The conversion of the entire economic mechanism of the State into a single huge machine and economic organism which functions in such a way that hundreds of millions of people can be governed pursuant to a single plan — that is the gigantic organizational task which has devolved upon us.” But Lenin had to admit: Bolshevist workers are still a long, long way from the Bolshevist working ethos based on working for the commonweal and inspiring people to work selflessly for the general population without norms, without reckoning with remuneration, and without reaching agreement on remuneration. For this reason, people had to be forced to work.

Speaking at the funeral for Konstantin Chernenko, the new Party chief of the Soviet Union Mikhail Gorbachev declared that he would adhere to a centrally administered economy and oppose everything which contradicts the norms of socialist life. Economic productivity would have to be increased, not least by stipulating that wages must accord with work results more than hitherto.

In 1920, N.I. Bucharin-Jevgeni and A. Preobrashenski published their ABC of Communism in which they wrote: “The workers are now in power, and their party is the governing party. A new complete form of democracy, proletarian democracy, has been achieved. In the Soviet Congress, there no longer sit professional chatterboxes, but laborers.” (Yet this was not the case, since intellectuals form the majority in Congress). Communist justice was conceived as a court of the working majority sitting in judgment on the exploiting minority. All of this sounds very hollow nowadays — quite apart from the fact that the two authors of the ABC of Communism were killed on Stalin’s orders.

The protests voiced by numerous scientists and authors in the Soviet Union is an outcry of an outraged conscience against the domination of force which, as Alexander Solzhenitsyn noted, misuses the masses like manure for the prosperity of small minorities, and especially the dregs of society. The call for freedom, which reverberated in recent decades in the Bolshevist, occupied parts of Central Europe — in the German Democratic Republic, Czechoslovakia, Hungary, and Poland — was forcibly repressed.

An attempt has been made for a number of years in some communist countries, including Yugoslavia and Hungary in particular, to render the centrally administered economy more flexible by permitting competition between state enterprises, and by switching certain economic decision-making to company level. This competitive socialism can no doubt point to certain achievements, but it is regarded with suspicious eyes by the Soviet Union. Pravda has recently voiced repeated warnings about revisionism and national communism.

The question has arisen — in view of the attempts by some socialist states to integrate structural elements of the market economy into a centrally planned economy and, on the other hand, the numerous regulative and rectifying measures adopted by the economic, financial, and social policy-makers of Western market economies — whether or not, it might be possible to bring the two economic systems closer together to a certain extent. But this idea and other convergence theories probably have little prospect of success in the light of the Soviet Union’s attitude.


Catholic Social Teachings and
Centrally-Administered Economics

As in a market economy, Catholic social doctrine is concerned above all in its study of centrally planned economies with men and women. Does the centrally planned economy realize the objective of economic activity, namely the proper and dignified provision of goods and services for human beings? Since the first centuries, the Catholic Church has discussed the question as to whether centrally directed economic entities can satisfy the dictates of a Christian conscience. The results may be considered fewer than three headings.

1. Utopian Communism. A number of Church Fathers and theologians deem it possible that, but for the Fall of Man, it would have been possible to attain a form of communal economy without private property, i.e., a utopian communism. However, this idea reveals unmistakably stoical influences. Seneca believed that the first human beings in the world had innocently followed nature. Everything had been done together. “And then there erupted into these supremely well-regulated conditions human greed . . . and in this greed for plenitude, man lost everything.” Some of the main Church teachers put forward similar doctrines. For example, St. Ambrose wrote that God had given the earth to all people as their commonwealth; private property had arisen from avarice. In the Eastern Church, the Patriarch of Constantinople John Chrysostom taught the same doctrine: Originally, God left one and the same earth to all. Discord only appeared when man started to utter those cold words “mine and thine.”

We may assume that people living in a paradise on earth would not have satisfied themselves with locusts and wild honey, but would have subjugated the earth by joint planning on a scale, which we can hardly imagine. This would have been possible because, as Thomas Aquinas observes, the discordant spirit of greed would have been lacking so that common management would have been possible without any danger of strife.

2. After the Fall of Man, a centrally directed economy without pernicious consequences was only feasible in small compact communities. Each family — and especially the families of farmers, craftsmen, and merchants — bears the characteristics of a centrally directed economy. As a communal unit for living and educating, working and obtaining a livelihood, the family is normally protected against an abuse of power, though past experience has taught us that paternal and maternal authority can degenerate and lead to the maltreatment of children. Each monastery should be an image of the holy parish of Jerusalem. The unifying force is the complete freedom, which assumes its shape in the vow of poverty, celibacy, and obedience. In economic terms, a monastery is subject to central direction. The monastic rules decreed by St. Benedict state: everything shall be the common property of all and no one shall call anything his own.

Occasionally, the question arises as to whether larger communities, such as Christian congregations, could be centrally directed economic entities. In a sermon given in Constantinople, John Chrysostom expressed the following view: “If all men and women were to give up their money and to transfer all their fields, possessions, and houses, I estimate that this would produce a million pounds of gold, and perhaps even two or three times as much. Apart from the foreigners and Jews here in Constantinople, there are about 100,000 Christians including 50,000 poor persons. How simple it would be to provide the poor with sufficient to live on.” Perhaps you will object: but what shall we do when everything has been used up? John Chrysostom replies: “Do you seriously believe that this immense wealth could ever be used up?” On noticing the unease caused by this remark among his audience, Chrysostom added soothingly: “But I only mean this theoretically. No one need take fright, neither the rich nor the poor.”

3. After the Fall of Man, the only economic system, which could be considered for the state was a socially oriented market-economy based on private property. For a centrally administered economy poses a danger to the freedom and dignity of man.


Rejecting a Centrally-Administered Economy

Catholic social teachers have voiced the following misgivings abut centrally planned economies:

Self-responsibility and individual initiative are eliminated. In a market economy, every household and every firm proceeds in accordance with its own plans. This accords with the individual freedom and independence of human beings. As the Second Vatican Council pointed out, private property — including the private ownership of the means of production — contributes to the self-delineation of the person and imparts the absolutely necessary scope for shaping the personal life of every individual and of every family in a spirit of self-responsibility. It must virtually be regarded as an extension of human freedom. The coordination of innumerable individual plans takes place in the market pursuant to the interplay between supply and demand with the help of money as a common unit of account. Hence, the market economy is a process of adaptation. However, this does not exclude the possibility under a market economy that individual plans rest on data and processes whose interaction amounts to coordination.

By contrast, individual freedom and independence are eliminated under a centrally-planned economy so that the state must incessantly struggle against idleness and unwillingness to work, introduce coercion to work, or adopt elements of the market-economy system such as wages and bonuses. W. A. Karpinski pertinently characterizes this situation when he explains that bonuses, certificates, badges, medals, and decorations are very important educational methods for rousing and stimulating workers into disciplined conscientious fulfillment and over-fulfillment of their working tasks. This accounts for the presence in every factory in the Soviet Union of workers who have over-fulfilled the norm by 200 percent, 300 percent, and sometimes even 1000 percent.

According to Thomas Aquinas, the communist system can best be implemented by making the workers into slaves whom one can easily subject to central direction. Adam Smith made the following observation: the experience gained at all times concurs in that the work done by slaves, even though it only requires their cost of living, is ultimately the dearest of all,: because anybody who may not acquire anything for himself can have no interest other than to eat as much as possible and to work as little as possible.

A warning against total planned bureaucracy. Under a centrally administered economy, the delimitation of responsibilities as under a market economy is replaced by a huge planning apparatus to which everything is subject. In the Soviet Union, the overall plan is published as state law and then applied to the various provinces. The provincial administrations in turn apply the plan to the various factories and enterprises. On this basis, each factory or enterprise works out the plan for the departments, which then pass it on to the working groups in the form of shift-work schedules and to the individual workers as production norms. The each with which disturbances can slip into this complicated bureaucratic system is known to Soviet functionaries. It repeatedly happens that plans cannot be fulfilled. In order ensure in this case that everything does not grind to a halt the State must “dispose of large reserves.”

Catholic social teachings voice serious misgivings about this system. Do not the bureaucratization and the failure of economic plans endanger the achievement of economic goals? Will not the citizens suffer want in the interest of supra-economic goals, which are stipulated by the central administration?

A centrally-planned economy is the root of the social discord. Proceeding from Aristotle, Thomas Aquinas pointed out that working people would rise in protest against the functionaries under a communist economy. The workers would have to drudge in return for meager rations, while the functionaries take it easy and enjoy the lion’s share of the profits.

The former Chairman of the Presidium of the Supreme Soviet, Mikhail Ivanovich Kalinin, furnished an involuntary example of the grumbles of the collectively organized persons against the functionaries. During a visit to a Kolkhoz in his home village, Kalinin went out into the fields accompanied by six or seven of the main village officials. “As w approached, one of the working women pointed to my companions and called out: Mikhail Ivanovich, just look at how many menfolk you have taken with you on your walk round the field while we women do all the work! Why don’t you get them to work, too, I rejoined. It’s not so easy to get the to do anything, replied the women. And then turning to my companions, who were the chairman of the collective together with the Komsomol and education officials, I said It wouldn’t harm you to mow a couple of hectares of flax since the people are in any case already in the field and there is nothing for them to do in the village. This decision drew loud applause from the women.”

Centrally-administered economies endanger human freedom and dignity. In particular when viewed against the immense productive apparatus of a modern economy, a centrally-planned economy represents a huge concentration of power which — given the sorry state of human nature — is bound to cause irresistible temptations to abuse one’s power. The small family and monastery communities are also centrally-directed economic units. However, the direction lies in the hands of the parents or the abbot or abbess. In this case, one can normally rule out an abuse of power. On the other hand, the person or persons who stand at the head of a state’s centrally planned economy enjoys not only economic power but also political and military, propagandist and cultural, socio-political and policing power. As Leo XIII once remarked, a state, which becomes the sole provider of jobs threatens individuals’ freedom, so that one should abhor rather than desire such a communal state existence.

Pope John Paul II drew our attention to the fact that Marxist collectivism — which calls for class struggle and wishes to set up the dictatorship of the proletariat so as to introduce the communist system throughout the world — is not in a position to realize the primacy of human beings over the use of capital as an instrument. Under this system, man is not primarily the subject of labor, but is in fact “a sort of product from the economic and productive circumstances which mark the given era.” Capital falls into “the direct control of another group of persons who dominate the whole economy by virtue of their position of power.” Is it not dismaying that the Church in Poland must defend the human dignity of workers against a system, which once boasted that it would bring liberation for workers?

Atheism, dialectical materialism, and secularized messianism are inherent in the system of centrally administered economies of the Bolshevist countries. Karl Marx thought of religion as a mystic veil of fog, a concoction of one’s own mind, and the opium of the people. Lenin declared that those who occupied their minds with God were spitting at themselves in the worst possible way, since religion is like cheap liquor. Stalin alleged that the world develops in accordance with the laws of motion which govern matter and which do not need any world spirit.

Pursuant to the laws of dialectical materialism, Nature develops from the inanimate to the animate while Society develops from slavery to bondage, then to the proletariat, and finally to the “new man.” Leon Trotsky, one of Stalin’s many victims, broke out in jubilation: “In that time, man will become incomparably stronger, wiser, and freer. His body will be more harmonious, his movements more rhythmic, his voice more musical. The forms of existence will gain a dynamic theatricality. The average human being will ascend to the level of an Aristotle, a Goethe, a Marx. New peaks will soar above this mountain ridge!”

It is tragic that Bolshevism has seized control over the Slavic peoples who built up Europe on the foundations of Greek and Roman antiquity together with the Celtic, Romanic, and Germanic peoples — a Europe that has achieved unity under a common Christian faith. Bolshevism attempts to separate the Slavic peoples from the Christian faith and from Europe. In his encyclical Slavorum Apostoli to mark the 1,100th anniversary’ of Saints Cyril and Methodius, Pope John Paul II demands that the Slavic peoples must continue to be allowed to profess their Christian faith and to live without hindrance and in accordance with their conscience. Indeed, the Catholics of Czechoslovakia recently demonstrated the extent to which Christians in the Bolshevist countries suffer from religious persecution to the whole world at two of their places of pilgrimage, Velehrad and Lovoca.


  • Joseph Cardinal Hoffner

    Joseph Höffner (1906 – 1987) was a German Cardinal of the Roman Catholic Church. He served as Archbishop of Cologne from 1969 to 1987, and was elevated to the cardinalate in 1969.

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