Unfortunate Encyclicals or On the Actual Progress of Peoples

LewRockwell.com ^ | 6/22/2004 | Tom Woods

[synwojciecha]

There are few things more frustrating than writing a book, and then being confronted with a ceaseless stream of arguments you?ve already answered while you?re waiting for it to be published. That?s what has happened, though, with Thomas Storck?s recent attack on my Lou Church Memorial Lecture in Religion and Economics, which stirred some controversy and healthy discussion at the time but which was in general far better received than I could have expected. My book-length treatment of the subject will be available next year, but in the meantime I offer one last installment in the ongoing debate over Catholic social teaching and free-market economics.

Here is the point that my critics pretend to miss. It is all well and good for churchmen to say that churches should be built with the sturdiest materials in order that they might remain standing for as long as possible. But they go beyond their competence as churchmen and their ability to bind the faithful on pain of mortal sin as soon as they say, "The best building materials are A, B, and C, and the wisest techniques to use are X, Y, and Z." A churchman qua churchman has been vouchsafed no particular insight into such a question.

Storck thinks that my position, if applied to the social sciences generally, would entitle practitioners of those fields to whittle away Church teaching in the name of science, and that orthodox Catholics typically ignore such claims when social scientists make them. He writes, "When confronted, for example, with claims by psychologists or sociologists that the findings of their particular disciplines invalidate this or that teaching of the Church, we can know that their claims are not to be taken seriously." Storck claims that I am doing the same thing with economics.

But this is not a serious objection. For one thing, if a sociologist were to recommend abortion as a way to limit family size and make families more materially prosperous, that sociologist could not argue that since the Church, too, wants families to prosper, the Church should support abortion as well. Such proposals are immoral in and of themselves, and their basic immorality cannot be mitigated by an appeal to an alleged temporal advantage they might confer.

The point is that unlike the previous case, there is nothing intrinsically immoral about a worker and an employer reaching an uncoerced labor agreement; even Storck, I presume, is not a Marxist. One of the points I made in my lecture is that I can show that wages are increased by means of an economic order that respects property rights and in which no one?s gain comes at another?s coerced expense. Since, unlike abortion, there is nothing intrinsically immoral about the voluntary wage relation, surely I am free to recommend this morally neutral method (indeed morally preferable method, in that it involves no coercion or threats of violence, which surely must be resorted to only as a last resort) of increasing wage rates. Has any Church pronouncement ever said that it would be immoral, indeed a mortal sin, to advocate a free labor market?

No Catholic may support a policy that is intrinsically evil. The point is simply that when several morally licit policy alternatives are available, choosing between them becomes a matter of informed judgment and the proper exercise of reason. Pope Leo XIII once noted, "If I were to pronounce on any single matter of a prevailing economic problem, I should be interfering with the freedom of men to work out their own affairs. Certain cases must be solved in the domain of facts, case by case as they occur?. [M]en must realize in deeds those things, the principles of which have been placed beyond dispute?. [T]hese things one must leave to the solution of time and experience."

The Church herself says she wants the workingman and his family to be prosperous. This is a central theme of Rerum Novarum, and Msgr. John A. Ryan, the American priest who perhaps more than any other attempted to reckon with the question of labor and wages, himself acknowledged that men are "more susceptible to religious influence [and] can know and serve God better when they are contented and comfortable than when they are impoverished and miserable." Now if I can recommend a method for accomplishing that end that is not inherently immoral and that will be far more effective than any alternative that a bishops? conference might suggest (every single one of which would make the situation worse), then I do not see anything especially subversive in my offering that suggestion, Storck?s feverish insistence to the contrary notwithstanding.

The Church may certainly say that someone ought not to do this or that with his wealth, or that he should be honest in his business dealings, and so on. She may not say that the state has to be employed to bring about better working conditions, because she is incompetent to pronounce upon the best way to bring about better working conditions, just as she is incompetent to pronounce upon whether, assuming their production involves nothing immoral, I should use aspirin or ibuprofen for my headache. (I contended in my lecture that state-enforced improvements in working conditions actually tend to worsen the condition of employees, and that if they realized this, those recommending this position would certainly cease to advocate it. It is a position that doubtless never occurred to the popes in the first place, as indeed it does not occur to most people, but I believe my argument on this point is persuasive.)

If things work a certain way, no Church pronouncement can make them work another way. That is the crux of my argument. "What was wrong with Catholic social thought in the nineteenth century," writes Fordham University?s Fr. James Sadowsky, "was not so much its ethics as its lack of understanding of how the free market can work. The concern for the worker was entirely legitimate, but concern can accomplish little unless we know the causes and the cures for the disease."

Father Sadowsky?s point seems perfectly obvious to me. My position, therefore, in no way involves the claim that the sciences per se, including economics, are exempt from moral evaluation. They are, however, exempt from technical critiques on the part of the Church, since churchmen may speak only as individuals on such questions and not for the Church as a whole. Thus if a certain medicine could be produced only by ripping the hearts out of living human beings, the Church should condemn such a thing, no matter how many doctors were in favor of producing the medicine. But if two kinds of medicines are suggested to treat a particular ailment, and no moral objection can be raised to either one, then in such an area the Church must defer to those who are schooled in that specialized science.

Let?s consider a real-life example: Pope Paul VI?s encyclical Populorum Progressio (1967). Here we have an official papal statement about the correct manner to bring about economic development in the Third World. Regrettably, every 1960s-era fallacy about Third World development is faithfully reproduced in this most unfortunate document. All of them have been spectacular failures. "Import substitution" policies have decimated Third World economies, though they are precisely what Paul VI recommended. Outside aid from the West and from global agencies, also recommended by the Pope as a moral imperative, has (as some tried to explain at the time) only served as an emollient that masked the destructive consequences of these governments? interventionist policies. It is revealing that South Korea, Taiwan, and Chile, faced with a cutoff in US aid and therefore having little choice, ultimately embraced the free market. Naturally, they prospered.

The state-led development policies earnestly recommended by the Pope have proven so disastrous that even their architects have come to admit their mistakes. Since the 1980s the late development economist Peter Bauer, who for decades had warned of the destruction that such development strategies would wreak in the Third World, has been treated as something of a prophet, while even the World Bank and the US Agency for International Development have been heard to utter mea culpas.

I should not have to point out that such things are embarrassing. But they are also entirely avoidable. While the Pope is surely free to instruct the Catholic population of our responsibilities toward our fellow men, as Pope Leo suggested he has no right as Pope to baptize one economic approach as the one most likely to be effective. It should be obvious that the grace of state attached to his office no more gives him special insight into what the best strategy for economic development might be than it teaches him how to repair an automobile. By any standard, the issue of (for example) whether free trade or a system of protective tariffs is more effective for a developing country - obviously a matter of legitimate disagreement among Catholics - is not one on which the Pope may appear to make a morally binding judgment.

There is a larger issue at stake in all of this. Populorum Progressio recommended a course of action for less-developed nations whose results have been appallingly bad, and which fewer and fewer serious scholars continue to advocate now. Bauer himself warned that the Pope?s writing on the subject "promotes policies directly at variance with the declared sentiments and objectives of the papal documents." These are unpleasant truths, and it gives me no satisfaction to recall them. But I ask Storck and anyone else who wants to shut down debate on economic subjects in Catholic circles to answer a few questions. Were people who were aware of Professor Bauer?s analysis morally obligated to cooperate in development ventures whose consequences they knew perfectly well had to end in destruction and chaos, or at the very least do more harm than good? Recall Paul VI?s examination of conscience for the lay person: "Is he prepared to pay higher taxes so that public authorities may expand their efforts in the work of development?" Now that it is more or less established - as Bauer was already trying to explain when Paul VI was writing - that the interference of "public authorities" in the work of development is precisely what has hurt so many developing countries, particularly in Africa, what is the status of the papal demand that people support state-led development? These are some of the very serious questions that arise from Catholic social teaching, and which will not go away no matter how hard Storck tries to condemn and silence those who dare to raise them. Not only are specific policy proposals all too fallible, but when enjoying the prestige of an encyclical they can unnecessarily trouble the consciences of good Catholics - whose disagreements are based not on any perverse desire to oppose the Holy See, but on specialized secular knowledge that they happen to possess.

Let me return, finally, to my Lou Church Lecture. The conclusion to be drawn from my discussion of wages there is that if you want wages to rise, then eliminate all taxes on capital, just for starters, and get the state out of the way of private investment. The resulting increase in investment will raise the productivity of labor; that, in turn, means more goods, lower prices, and increased purchasing power for everyone. The kinds of tax, wage, and other economic policies that the Storck school recommends as a faithful reflection of Catholic social teaching will do the opposite, and can therefore be expected to have precisely the opposite effect. Why should I not be permitted to say this? Storck gives no answer, other than - surprise - to call me names for raising the question.

Storck can rage all he likes about the shocking impudence of Thomas Woods and behave as if my impertinent questions merit no serious reply at all, but a reasonable person reading what I said would not conclude that the issues I raised were either frivolous or flippant, or could simply be dismissed with a stern appeal to authority and an implied admonition to shut up already. Bad economic advice does not magically become good economic advice just because a pope or even a series of popes have offered it, any more than poor architectural advice would become good architectural advice for the same reason. Sooner or later the substance of my argument will have to be addressed.

June 22, 2004

Professor Thomas E. Woods, Jr. [send him mail] holds an AB from Harvard and a PhD from Columbia. He teaches history, is associate editor of The Latin Mass Magazine, and is co-author of The Great Façade: Vatican II and the Regime of Novelty in the Roman Catholic Church (2002). His most recent book, The Church Confronts Modernity: Catholic Intellectuals and the Progressive Era, has just been released by Columbia University Press.

Copyright © 2004 the Ludwig von Mises Institute

Thomas Woods Archives

[synwojciecha]

I'm not a huge fan of the Rockwell types, nor the Ludwig Von Mises Institute, but Tom Woods is very insightful. He's right on here.

[synwojciecha]

Thought you might find this interesting. Can someone ping the Catholic list? I'm new, so I don't know how. I think this article should spark some vigorous discussion.

[sinkspur]

Msgr. John A. Ryan, the American priest who perhaps more than any other attempted to reckon with the question of labor and wages, himself acknowledged that men are "more susceptible to religious influence [and] can know and serve God better when they are contented and comfortable than when they are impoverished and miserable." Now if I can recommend a method for accomplishing that end that is not inherently immoral and that will be far more effective than any alternative that a bishops? conference might suggest (every single one of which would make the situation worse), then I do not see anything especially subversive in my offering that suggestion, Storck?s feverish insistence to the contrary notwithstanding.

Woods should ditch the theology and stick to economics.

The Church is woefully inept in its neutrality on economic systems. Instead, we still hear, from Rome, discourses on "distributing the wealth".

[synwojciecha]

Woods should ditch the theology and stick to economics.

He's a historian. I knew him when I was at Columbia. Anyway, he's got a really sharp wit. I think he should have been a lawyer.

Still, don't you think he makes a good point here? I mean, the USCCB takes positions on everything from gun control to the minimum wage. Doesn't it seem like they're stepping a wee bit outside the area of their competence?

[B-Chan]

The Church is a spiritual organization. Its mission is to spread the Truth of Jesus Christ in order that mankind may live in accord with God’s Will, and that by this souls may be saved. In this mission the Church and her Pontiff are protected by the Holy Spirit and cannot err. The Holy Father is guaranteed by the Holy Spirit to teach infallibly the Truth of the Christian Faith.

However, this charism of infallibility does not necessarily extend to the Pope’s teaching on other issues, such as economics. With regard to the things of the world, the Holy See is entirely capable of error (as is any other organization of human beings).

My point: when a given Pope writes an encyclical on an issue of secular import, he is entirely capable of being wrong about whatever secular issues (e.g. astronomy, economics, etc.) might be brought up in his text. However, as believers we may rest assured that his teachings on issues of faith and morality in a given encyclical — no matter what its topic might be — are always going to be true, sound, and orthodox in nature.

[synwojciecha]

The problem is, sometimes it's hard to draw the line between a secular and moral issue.

[sinkspur]

Still, don't you think he makes a good point here? I mean, the USCCB takes positions on everything from gun control to the minimum wage. Doesn't it seem like they're stepping a wee bit outside the area of their competence?

Absolutely.

They're not competent in their area of competence; why they make statements on capitalism is beyond me.

[synwojciecha]

Wow! We actually agree on something! Has Hell frozen over?

[Mike Fieschko]

As a sedevacantist, Woods does not speak as a Catholic

Would you provide backing for your labelling Woods a sedevacantist?

[Qwinn]

"The Church is woefully inept in its neutrality on economic systems. Instead, we still hear, from Rome, discourses on "distributing the wealth"."

While the Church does indeed reject absolute capitalism (and heck, even simple anti-monopoly laws are sufficient to keep it from being -that-), it -wholly- rejects socialism and communism.

From the Catechism:

2425 - "The Church has rejected the totalitarian and atheistic ideologies associated in modern times with "communism" or "socialism"."

First off, if you're going to say that the Church should have no voice regarding the flaws of pure capitalism, then it should not have a voice regarding the flaws of communism or socialism either. Considering the tremendous influence the Church had in bringing down the USSR, you sure that's a position you want to take?

Secondly, even if your answer to that is "yes", just to be -honest-, if you're going to decry the Church for taking a position against one, you should at least -mention- that they also take a position against the other extreme, rather than presenting your single-sided bookkeeping as the entirety of the reality, and making the Church sound like some sort of pro-communist organization.

Qwinn

[Aquinasfan]

His interpretation of Populorum Progressio as "an official papal statement about the correct manner to bring about economic development in the Third World" is simply misleading. I do not see an endorsement of import substitution, and if the document does address the practice, it does not use the words "import" or "substitution". As far as endorsing foreign development aid, I only see an endorsement of food aid.

That's what I suspected. I'll have to check it out.

[Desdemona]

later

[Aquinasfan]

OK. I read most of the encyclical and agree with your assessment. This selection is typical:

54. All nations must initiate the dialogue which We called for in Our first encyclical, Ecclesiam Suam. (56) A dialogue between those who contribute aid and those who receive it will permit a well-balanced assessment of the support to be provided, taking into consideration not only the generosity and the available wealth of the donor nations, but also the real needs of the receiving countries and the use to which the financial assistance can be put. Developing countries will thus no longer risk being overwhelmed by debts whose repayment swallows up the greater part of their gains. Rates of interest and time for repayment of the loan could be so arranged as not to be too great a burden on either party, taking into account free gifts, interest-free or low-interest loans, and the time needed for liquidating the debts.

The donors could certainly ask for assurances as to how the money will be used. It should be used for some mutually acceptable purpose and with reasonable hope of success, for there is no question of backing idlers and parasites. On the other hand, the recipients would certainly have the right to demand that no one interfere in the internal affairs of their government or disrupt their social order. As sovereign nations, they are entitled to manage their own affairs, to fashion their own policies, and to choose their own form of government. In other words, what is needed is mutual cooperation among nations, freely undertaken, where each enjoys equal dignity and can help to shape a world community truly worthy of man.

The passages that the author cites as controversial are mostly rhetorical questions:

On the part of the rich man, it calls for great generosity, willing sacrifice and diligent effort. Each man must examine his conscience, which sounds a new call in our present times. Is he prepared to support, at his own expense, projects and undertakings designed to help the needy? Is he prepared to pay higher taxes so that public authorities may expand their efforts in the work of development? Is he prepared to pay more for imported goods, so that the foreign producer may make a fairer profit? Is he prepared to emigrate from his homeland if necessary and if he is young, in order to help the emerging nations?

[synwojciecha]

As a sedevacantist, Woods does not speak as a Catholic, but he shamelessly pretends to do so.

Criticism of the Pope on matters of practical policy, however rash and disrespectful, does not make one a sedevacantist.

On the other hand, falsely accusing someone of sedevacantism constitutes the sin of slander. I suggest you examine your conscience.

[synwojciecha]

Here's an example of Paul VI pontificating in ignorance on economics:

57. Highly industrialized nations export their own manufactured products, for the most part. Less developed nations, on the other hand, have nothing to sell but raw materials and agricultural crops. As a result of technical progress, the price of manufactured products is rising rapidly and they find a ready market.

Technical progress leads to a reduction in prices of manufactured goods as production effeciency improves. His Holiness has it backwards.

But the basic crops and raw materials produced by the less developed countries are subject to sudden and wide-ranging shifts in market price; they do not share in the growing market value of industrial products.

This poses serious difficulties to the developing nations. They depend on exports to a large extent for a balanced economy and for further steps toward development. Thus the needy nations grow more destitute, while the rich nations become even richer.

The above analysis is downright Marxian.

Free Trade Concept Inadequate

58. It is evident that the principle of free trade, by itself, is no longer adequate for regulating international agreements. It certainly can work when both parties are about equal economically; in such cases it stimulates progress and rewards effort. That is why industrially developed nations see an element of justice in this principle.

But the case is quite different when the nations involved are far from equal. Market prices that are freely agreed upon can turn out to be most unfair. It must be avowed openly that, in this case, the fundamental tenet of liberalism (as it is called), as the norm for market dealings, is open to serious question.

His Holiness has all but endorsed tarrifs for developing nations. His statements about how unfair it is for third world countries to have to import manufactured goods is as close to an endorsement for import substitution as one can get.

And if the above isn't explicit enough for you, how about these passages:

60. As a matter of fact, the highly developed nations have already come to realize this. At times they take appropriate measures to restore balance to their own economy, a balance which is frequently upset by competition when left to itself. Thus it happens that these nations often support their agriculture at the price of sacrifices imposed on economically more favored sectors. Similarly, to maintain the commercial relations which are developing among themselves, especially within a common market, the financial, fiscal and social policy of these nations tries to restore comparable opportunities to competing industries which are not equally prospering.

His Holiness endorses farm subsidies and and corporate welfare in developed nations. Later, he goes on to encourage developing nations to immitate them:

Here again international agreements on a broad scale can help a great deal. They could establish general norms for regulating prices, promoting production facilities, and favoring certain infant industries. Isn't it plain to everyone that such attempts to establish greater justice in international trade would be of great benefit to the developing nations, and that they would produce lasting results?

To take the cake, we have his Holiness endorsing price controls and industrial subsidies for politically favored industries, policies that have impoverished millions in Latin America, Africa, and elsewhere.

Tom Woods, though often rash and imprudent in his criticism of the Vatican, is spot on in this analysis. The fact is, Paul VI and other popes have pontificated on economic matters and in so doing have displayed massive ignorance.

[Mike Fieschko]

Sure. He wrote a book with Chris Ferrara.

See above. Click the link. Read the description.

Do I understand you to be saying that what's in The Great Facade indicates Woods is a sedevacantist? If yes, what in the book supports your claim?

Paraphrasing Douglas Adams: 'Ah, this is obviously some strange usage of the word "sedevacantist" that I wasn't previously aware of.'

[synwojciecha]

Do I understand you to be saying that what's in The Great Facade indicates Woods is a sedevacantist? If yes, what in the book supports your claim?

Quite the opposite. The Great Facade indicates that Woods is not a sedevacantist. That's why I'm accusing of slander the one who accused Woods of being a sedevacantist. Forgive me for not being clearer.

[synwojciecha]

I'd just like to add, though, that while Woods and Ferrera are neither sedevacantists nor heretics nor schismatics, their criticisms of the post-conciliar popes are so rash and brazen that one cannot help but conclude that they are failing to give the Church hierarchy the obsequium religiosium it is are due on all non-infallible matters.