The economy is not like a monastery or a convent – where everyone has made a conscious decision to renounce their private pursuits and embrace the evangelical counsels of poverty, chastity and obedience. There, and only there, property is organised “from each according to his ability, to each according to his need” (a principle that Karl Marx wanted to apply to society as a whole – with truly disastrous results).
This arrangement works and is spiritually fruitful in a monastery because, and only because, it is voluntary. Each person has renounced the primary project of ordinary mammals – reproduction – and willingly surrendered the fruits of his or her labour to serve a common good, as determined by a superior whom he or she obeys (excepting sin) as the voice of God.
This calling is sacred and comparatively rare. The Church does not expect the majority of human beings to enter monastic life. In fact, for those who are not called to this radical inversion of natural human instincts, such a life would be a kind of hell. Every political attempt to organise society as if it were a monastery must end in a brutal dictatorship. And it always does.
When Leo XIII and his successors condemned every form of socialism, they were recognising that forcibly taking from people the property, fertility and liberty that monks and nuns willingly give up indeed amounts to a diabolical parody of the good. Let’s give those popes credit for being prophets: long before the gulag, and the famines and purges that decimated Russia, China, North Korea and Cambodia, had demonstrated the true evil of socialism, these theologically educated men saw it.
The popes were relying on more than logic; they also had the lessons of history. One lesson was in the form of the crackpot millenarian movements that had erupted in late medieval Europe, composed of outraged peasants and self-appointed messiahs who began as penitents trying to ward off the plague by scourging themselves and ended as armed mobs massacring Jews and merchants, creating short-lived tyrannies that tried to abolish liberty, property and the family. Another lesson came from the clear principles of the moral law written in both revelation and on the human heart. (The Pursuit of the Millennium by the historian Norman Cohn paints vivid, appalling pictures of medieval end-of-the-world movements, which the author sees as the forerunners of revolutionary socialism.)
Given that prices are the essential “data” by which consumers inform producers how much of something to make, they are at the very heart of human cooperation. It seemed only natural to thinkers like Marx that we should value objects based on how much work and thought had gone into them. But this theory does a poor job of explaining the actual prices that emerge in an open market: some items that require comparatively little effort to create (let’s say, suddenly fashionable hats) in fact command higher prices than the fruit of enormous labour (for instance, brilliant but difficult novels).
To compare apples with apples, a cheaply made but well-written television series such as Dr Who may please more consumers (and hence outsell) an expensive, overwrought movie such as Star Wars: Episode III – Revenge of the Sith.
While those of us on the outside may cry injustice, such outcomes are merely the fruit of adults making their own decisions about which products they really want. The “labour theory of value” is not what St Thomas Aquinas taught. As Samuel Gregg documents in his fascinating study of Catholic teaching on banking, For God and Profit, Aquinas rejected Aristotle’s view that those involved in commerce would become obsessed with their own riches and unconcerned with the common good. Instead, Aquinas held that it was entirely possible for people to engage in commerce and with correct intentions, such as the desire to help the needy or take care of one’s family.
Aquinas invested considerable effort in examining how one determined the justice of a given commercial transaction, how one measured the value of goods and what constituted a just price. In his view, it was normally the case that the measure of something’s value is the price it would presently fetch “in the market” (secundum commune forum).
Aquinas’s insight, forgotten by Marx and other 19th-century materialists, would be rediscovered in the 20th by the economists of the Austrian school. Instead of looking at the economy as a vast, mysterious machine intended to build up the wealth of an abstraction (such as the nation or race), the Austrians started small, like the Spanish scholastics. They began with the factors that influence each one of us in our daily decisions about which products to buy, where and how to work, and how much to save or invest.
An economic system that refuses to acknowledge how human beings express their moment-to-moment preferences will fail to help them achieve their goals. Applied consistently, such a system will yield only famines and tyranny; cobbled together piecemeal, as in the programmes of European socialists and left-wing Catholics, such a system grows an ever-larger apparatus of government, hiring ever more managers to damp down the chaos created by its irrationality and waste.
The more holes you drill in the bottom of the boat, the more sailors you need to bail, as Pope St John Paul II observed in his masterful critique of welfare state socialism, Centesimus Annus. Following up on the work of Pope Pius XI in Quadragesimo Anno, John Paul II reiterated the Church’s firm embrace of subsidiarity.
In 1931, Pius XI laid down a permanent roadblock that should have stopped any Catholic from supporting Soviet communism, National Socialism or even the vast expansion of federal control over consumers and producers that Franklin Roosevelt was promoting in the United States as the New Deal. Facing governments that were trying to absorb Catholic schools, nationalise major business, set wages and prices for every industry, and make individual citizens dependent not on their family, friends or even local government but on the centralised national state, Pius wrote:
Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organisations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them.
As Catholics and as rational human beings, we believe that freedom is better than coercion, and small-scale local solutions are better than ambitious national programmes, except in cases where a problem simply cannot be solved by private or local action.
Big central governments tend to impose blunt, one-size-fits-all programmes that trample on people’s rights; ignore real differences between life in, say, Brussels and Llanfairfechan, and empower unaccountable bureaucrats to trample the rights of citizens.