5.3.1 CST’s fourth way

Back to 5.2.7

Unit 5 Contents

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Through readings from the Compendium, the second part of the unit introduced some of the main elements of CST to do with economic life.  We are now in a position to sum up the Church’s teaching on this and to see how it is distinctive.

Your study from Unit 2 onwards has shown that CST’s position is different from both economic liberalism and state socialism.  Ever since Rerum Novarum, CST has rejected both of these views.

Earlier in this unit (5.1.6), I introduced a third main position in economic debate that I called ‘social capitalism’.  This refers to a view which accepts capitalism (in the narrow or strict sense of the term) but which insists on strong state regulation in order to achieve social outcomes.  You will recall that New Labour in Britain, under prime ministers Tony Blair and Gordon Brown, can be seen as having represented this position.

Now, CST might appear exactly in line with such ‘social capitalism’.  From what you have just read about institutions, this might appear true at least in relation to the two aspects of government’s role on which ‘social capitalism’ insists: guaranteeing acceptable conditions for workers, and providing high quality public services.

But there is one major respect in which CST is profoundly different from ‘social capitalism’.  I hope you can immediately identify what this is, from your study of this unit.

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Reflection

Can you think of what makes CST’s economic vision different from ‘social capitalism’?

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One main respect in which CST is very different from ‘social capitalism’ is, quite simply, that the latter accepts ‘capitalism’ in the strict sense of this term, whereas CST certainly does not.  ‘Social capitalism’ tries to control capitalism within a clear legal framework and to reap its promised financial benefits to fund public services.  In contrast, CST insists there must be a change away from capitalism, a moral change, so that what people do in market transactions is not subject to the overriding imperative of maximizing return to capital.

CST holds that all of what happens in markets – investment, supply, trade and consumption – should, instead, be subject to the principle of the universal destination of goods.  Of course all businesses have to make enough profit to stay in business, but this is a necessary means to their proper end of supplying things that really are ‘goods’ and ‘services’ for people.  In this way they contribute to the common good.

This is why Catholic Social Teaching on the economy is so distinctive.  It represents a position that is deeply different from all three of these other main positions in the economic debate of the past century.  It is a real alternative to economic liberalism, to state socialism, and to social capitalism.

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Reflection

Are you clear about the way in which CST’s position is different from all three of economic liberalism, state socialism and social capitalism?

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If, in responding to this Reflection, you can see clearly how CST’s position on business and economics is distinct from the other three positions we have considered, you have achieved some of the main ‘learning outcomes’ for this unit.  You also have a good foundation for going on to study further issues of business and economics in the perspective of CST.

But let us now turn to the issue of what it is best to call the position on economic life we find in CST.  This was one of the questions for discussion on the last screen (4.2.7).

Of the possible labels suggested there, ‘social market economy’ has the problem that it has been used by some who basically favour ‘social capitalism’.  For this reason it does not communicate the necessary critique of capitalism.

‘Common good economy’ is not bad, and does imply such a critique of capitalism, but it doesn’t directly communicate that CST holds a pro-market position.

Shalom economy’ sounds good, but depends on knowing something about the context from which the Hebrew word originates – so it inevitably begs questions.

Of the possibilities given on the last screen, this leaves, on one hand, John Paul II’s suggestions: ‘market economy’, ‘free economy’ and ‘business economy’.  On the other, there are the two ways of qualifying ‘market economy’ suggested there – by the words ‘solidary’ and ‘integral’.  Maybe you came up with a proposal that you would argue is better than any suggested there.  (If you did, I’d like to hear it.)

What is needed, it was noted there, is a simple and clear label that puts across that what CST favours is both anti-capitalist (strictly speaking) and pro-market.

It seems to me to make sense to combine one of John Paul II’s terms with one of those qualifiers: ‘solidary market economy’.  Here are some reasons for using this label.

  • A ‘solidary market economy’ is exactly what CST stands for, for the following reason.  Solidarity is, as John Paul II put it, a matter of “firm and persevering determination to commit oneself to the common good” (as quoted in 1.1.6 and 2.2.10). The corresponding adjective, ‘solidary’, communicates exactly a positive commitment to business practices that are consistent with the ‘universal destination of goods’ and thereby the common good.
  • Equally, business which has subjected itself to the capitalist imperative cannot be ‘solidary’ in that way, because that imperative makes private gain the overriding factor in economic activity.  Hence this word marks CST’s position out from the narrowly capitalist one.
  • What about ‘integral’?  This communicates CST’s commitment to seeing people, not as material beings only, but as whole persons created for relationship with God.  Yet it doesn’t put across the specific commitment to the common good in the way that ‘solidary’ does.
  • Adding this adjective to any of the three shorter labels suggested by John Paul II communicates helpfully what CST positively stands for – so we could speak of a ‘solidary business economy’ and a ‘solidary free economy’, just as much as a ‘solidary market economy’.  These three all mean the same.  But using ‘market’ in the label is helpful because it communicates clearly that CST is not advocating state control/ownership of business.
  • Perhaps most significantly, ‘solidary’ has long been used in Catholic social thought, especially to refer to its distinctive position in economics – or at least equivalent words have been used in languages other than English!  Most influentially, Heinrich Pesch SJ (1854-1926), writing in German, published two immense studies of economics and Christianity in which he employed the terms ‘solidary’ and ‘solidarism’ (in German,  solidarisch and Solidarismus) to label the position for which he argued.1. His work was a major influence on Pope Pius XI’s 1931 encyclical Quadragesimo Anno, and from this on later development of CST.  Even though those terms are still not well known in English, they are much more widely used in, for example, French, Spanish and Portuguese, as well as German.  It is against this background that they appear in recent CST statements.  You have come across ‘solidary’ once or twice in earlier readings, and I noted (5.2.2) that the Compendium calls CST’s overall position “an integral and solidary humanism” (#327).  The fact that this term is associated specifically with CST is one good reason for using it – this helps to put across that CST’s stance on economic life is distinctive in relation to others.

You may wish to read an article about Heinrich Pesch. The author, Rupert Ederer, undertook the huge task of translating his work into English – which has resulted in publication of 15 volumes!

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Optional reading (12pp)

Rupert J. Ederer, ‘The Longest Economics Textbook’ (7 Mar. 2012)

This is published at the website of Inside the Vatican magazine.

Ederer died in 2013, aged 90. R.I.P.

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Our study of Catholic Social Teaching on economic life leads to the conclusion that it advocates a solidary market economy.

We can say that this is CST’s ‘fourth way’ – because it is distinctive from all of economic liberalism, statist socialism and social capitalism.2

All that said, it is not the name that really matters, of course, but the substance of the stance CST takes.  We shall shortly compare and contrast that label with a different one for CST’s position, one that has recently come to prominence through the work of a leading contemporary contributor to Catholic economic thought, Stefano Zamagni.  He uses the term ‘civil economy’.

But before that, we shall look at a major objection that some would make to CST’s vision.

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End of 5.3.1

Go to 5.3.2 But is CST’s vision realistic?

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  1. English translations of Pesch’s two major works have been published only since 2000.  These are Teaching Guide to Economics (five volumes in original German; ten volumes in English translation),  translated and edited by Rupert J. Ederer (Edwin Mellen Press, 2002-2003), and Liberalism, Socialism and Christian Social Order (five volumes), translated and edited by Rupert J. Ederer, (Edwin Mellen Press, 2000-2006).  For an introduction to Pesch’s economics, see Jim Wishloff, “Solidarist Economics: The Legacy of Heinrich Pesch”, Review of Business 27, no. 2 (2006): 33-46. 

  2. Although discussing mainly political positions rather than economic ones, I argued that CST represents such a ‘fourth way’ in N. Townsend, ‘Government and Social Infrastructure’, in God and Government, eds J. Chaplin and N. Spencer (SPCK, 2009), pp. 108-133. 

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