In preparation for writing a pastoral letter on the American economic system, the U.S. bishops are expected to make use of a statement issued in 1919 by a group of bishops under the auspices of the Administrative Committee of the National Catholic War Council, later to become the national Catholic Welfare Council. The latter was the forerunner of the present U.S. Catholic Conference.
Written in the immediate aftermath of World War I, the 1919 statement — known simply as “The Bishop’s Program” — sought to apply Catholic social principles to the problems of post-war reconstruction. The author of the statement was Father John A. Ryan, who composed it hurriedly in a five-hour burst of writing. According to Fr. Ryan’s biographer the document was “literally snatched off Ryan’s desk, and the committee issued it forthwith as their own view.” (For a full account see Francis L. Broderick, Right Reverend New Dealer: John A. Ryan, Macmillan, 1963.)
“The Bishop’s Program” contained many specific proposals directed to the perceived conditions and needs of the time, as well as a more general statement of principles. It is the latter which we reproduce here, in keeping with our aim of helping our readers stay informed on the U.S. bishops’ forthcoming pastoral letter.
Ultimate and Fundamental Reforms
Despite the practical and immediate character of the present statement, we cannot entirely neglect the question of ultimate aims and a systematic program; for other groups are busy issuing such systematic pronouncements, and we all need something of the kind as a philosophical foundation and as a satisfaction to our natural desire for comprehensive statements.
It seems clear that the present industrial system is destined to last for a long time in its main outlines. This is to say, private ownership of capital is not likely to be supplanted by a collectivist organization of industry at a date sufficiently near to justify any present action based on the hypothesis of its arrival. This forecast we recognize as not only extremely probable, but as highly desirable for, other objections apart, Socialism would mean bureaucracy, political tyranny, the helplessness of the individual as a factor in the ordering of his own life, and in general, social inefficiency and decadence.
Main Defects of Present System
Nevertheless, the present system stands in grievous need of considerable modifications and improvement. Its main defects are three: enormous inefficiency and waste in the production and distribution of commodities; insufficient incomes for the majority of wage-earners, and unnecessarily large incomes for a small minority of privileged capitalists. Inefficiency in the production of goods would be in great measure abolished by the reforms that have been outlined in the foregoing pages. Production would be greatly increased by universal living wages, by adequate industrial education, and by harmonious relations between labor and capital on the basis of adequate participation by the former in all the industrial aspects of business management. The waste of commodity distribution could be practically all eliminated by cooperative mercantile establishments, and cooperative selling and marketing associations.
Cooperation and Co-Partnership
Nevertheless, the full possibilities of increased production will not be realized so long as the majority of the workers remain mere wage-earners. The majority must somehow become owners, or at least in part, of the instruments of production. They can be enabled to reach this stage gradually through cooperative productive societies and co-partnership arrangements. In the former, the workers own and manage the industries themselves; in the latter they own a substantial part of the corporate stock and exercise a reasonable share in the management. However slow the attainments of these ends, they will have to be reached before we can have a thoroughly efficient system of production, or an industrial and social order that will be secure from the danger of revolution. It is to be noted that this particular modification of the existing order, though far-reaching and involving to a great extent the abolition of the wage system, would not mean the abolition of private ownership. The instruments of production would still be owned by individuals, not by the State.
Increased Incomes for Labor
The second great evil, that of insufficient income for the majority, can be removed only by providing the workers with more income. This means not only universal living wages, but the opportunity of obtaining something more than that amount for all who are willing to work hard and faithfully. All the other measures for labor betterment recommended in the preceding pages would likewise contribute directly or indirectly to a more just distribution of wealth in the interest of the laborer.
Abolition and Control of Monopolies
For the third evil mentioned above, excessive gains by a small minority of privileged capitalists, the main remedies are prevention of monopolistic control of commodities, adequate government regulation of such public service monopolies as will remain under private operation, and heavy taxation of incomes, excess profits and inheritances. The precise methods by which genuine competition may be restored and maintained among businesses that are naturally competitive, cannot be discussed here; but the principle is clear that human beings cannot be trusted with the immense opportunities for oppression and extortion that go with the possession of monopoly power. That the owners of public service monopolies should be restricted by law to a fair or average return on their actual investment, has long been a recognized principle of the courts, the legislatures, and public opinion. It is a principle which should be operative in competitive enterprises likewise, with the qualification that something more than the average rate of return should be allowed to men who exhibit exceptional efficiency. However, good public policy, as well as equity, demands that these exceptional business men share the fruits of their efficiency with the consumer in the form of lower prices. The man who utilizes his ability to produce cheaper than his competitors for the purpose of exacting from the public as high a price for his product as is necessary for the least efficient business man, is a menace rather than a benefit to industry and society.
Our immense war debt constitutes a particular reason why incomes and excess profits should continue to be heavily taxed. In this way two important ends will be attained: the poor will be relieved of injurious tax burdens, and the small class of specially privileged capitalists will be compelled to return a part of their unearned gains to society.
A New Spirit a Vital Need
“Society,” said Pope Leo XIII, “can be healed in no other way than by a return to Christian life and Christian institutions.” The truth of these words is more widely perceived to-day than when they were written, more than twenty -seven years ago. Changes in our economic and political systems will have only partial and feeble efficiency if they be not reinforced by the Christian view of work and wealth. Neither the moderate reforms advocated in this paper, nor any other program of betterment or reconstruction will prove reasonably effective without a reform in the spirit of both labor and capital. The laborer must come to realize that he owes his employer and society an honest day’s work in return for a fair wage, and that conditions cannot be substantially improved until he roots out the desire to get a maximum of return for a minimum of service. The capitalist must likewise get a new viewpoint. He needs to learn the long-forgotten truth that wealth is stewardship, that profit-making is not the basic justification of business enterprise, and that there are such things as fair profits, fair interest and fair prices. Above and before all, he must cultivate and strengthen within his mind the truth which many of his class have begun to grasp for the first time during the present war; namely, that the laborer is a human being, not merely an instrument of production; and that the laborer’s right to a decent livelihood is the first moral charge upon industry. The employer has a right to get a reasonable living out of his business, but he has no right to interest on his investment until his employees have obtained at least living wages. This is the human and Christian, in contrast to the purely commercial and pagan, ethics of industry.