Are Catholicism & Socialism Compatible?

Good books from a Catholic viewpoint on socioeconomic matters are always welcome, and attempts to explain the Church’s teaching on socialism are particularly appropriate today. Unfortunately, Can a Catholic Be a Socialist? does not fulfill either need, as it does not explain well either socialism and the reason for the Church’s condemnation of it or the nature and workings of the capitalist system.

In the 19th century, popes such as Pius IX and Leo XIII condemned the socialism of their times. But socialism had been an evolving and diverse movement from its beginnings. Not everything that 19th-century socialists professed was or is professed by socialists of the 20th or 21st centuries. The Church’s magisterium was well aware of this, so when Pius XI wrote Quadragesimo An­no (1931), he made a penetrating and careful analysis of socialism that is still definitive today. Pius wrote, “No less profound than the change in the general economy, has been the development occurring within socialism since the days when Leo XIII contended with this latter. At that time socialism could be termed a single system, generally speaking, and one which defended definite and coherent doctrines. Today, indeed, it has for the most part split into two opposing and hostile camps” (no. 111).

One of those two camps was communism, established in Russia a little over a decade before Pius wrote. It advocated “merciless class warfare and the complete abolition of private ownership,” and it showed “antagonism and open hostility” not only toward the Church but “even God Himself” (no. 112). Obviously, no Catholic could join or compromise with such a system.

What of the other camp? This socialism, Pius explained, “is much less radical in its views. Not only does it condemn recourse to physical force: it even mitigates and moderates to some extent class warfare and the abolition of private property. It does not reject them entirely. It would seem as if socialism were afraid of its own principles and of the conclusions drawn therefrom by the communists, and in consequence were moving toward the truth which Christian tradition has always held in respect; for it cannot be denied that its programs often strikingly approach the just demands of Christian social reformers” (no. 113).

Now, if the programs of such moderate socialists often strikingly approach the just demands of Christian social reformers, then surely Catholics could become socialists of this type. Not so. The reason, however, is not as obvious as it might seem. It is not necessarily because of any fault in the actual economic proposals of these moderate socialists, but rather because of a fatal flaw in any kind of true socialism: a philosophical materialism that lurks in its doctrines and practices, for socialism “conceives human society in a way utterly alien to Christian truth,” Pius explained (no. 117). It “affirms that living in community was instituted merely for the sake of [material] advantages which it brings to mankind” and not in order that we “may develop and evolve to [our] full faculties to the praise and glory of [our] Creator; and…attain to temporal and eternal happiness” (no. 118). As Pope St. John Paul II summed it up in Centesimus Annus (1991), “The fundamental error of socialism is anthropological in nature” (no. 13).

Hence Pius XI’s well-known condemnation: “No one can be at the same time a sincere Catholic and a true socialist” (no. 120). But a point of importance is the key word true in this condemnation. There have been those who, out of ignorance or confusion, label themselves socialists who are not really socialists. For example, a month after Quadragesimo Anno was issued, Francis Cardinal Bourne, archbishop of Westminster, stated that the British Labour Party did not fall under Pius’s condemnation, even though that party sometimes called itself socialist. It was not true socialism. Of course, there is no excuse for Catholics to label themselves socialists, even if their philosophical and economic proposals are above reproach. Besides creating confusion, one must ask why any Catholic would want to use that label. If all he desires are economic proposals that often strikingly approach the just demands of Christian social reformers, these are not, as Pius noted, “in any sense peculiar to socialism. Those therefore who look for nothing else, have no reason for becoming socialists” (no. 115).

Pope Benedict XVI echoed Pius XI when he wrote, “In many respects, democratic socialism was and is close to Catholic social doctrine and has in any case made a remarkable contribution to the formation of a social consciousness” (First Things, Jan. 2006). Thus, a Catholic ought not condemn out of hand a particular economic proposal that happens to be championed by a person or group known to be socialist. Rather, these proposals must be evaluated individually according to their harmony or lack of harmony with Catholic social doctrine.

But how does the book under review treat socialism? Unfortunately, Horn and Pakaluk attempt to equate socialism with communism or command economies. “Government ownership of the economy and the abolishment of private property” are the “mechanism by which socialism is supposed to achieve its grand promises,” they write. “Some people may say we shouldn’t use Communism’s failures as an argument against socialism…. But according to the textbook Essentials of Sociology, ‘The terms socialism and Communism are often used more or less interchangeably.’” Again and again, Horn and Pakaluk equate socialism with communism. They title their chapter on the Soviet Union “Socialism Gets a State.” They title their chapter on communist China “Socialism Goes Global.” They say Venezuela is an example of socialism but Scandinavia is not. The authors continually identify socialism, as much by suggestion as by explicit statement, with the worst sorts of regimes and programs. Yet Horn and Pakaluk certainly must be aware that organizations such as the Democratic Socialists of America disavow the methods and goals associated with Soviet-era governments. And it seems that the authors do know better, for more than once they acknowledge that there is such a thing as moderate socialism.

More problematic is their discussion of certain proposals recently put forward in the United States, such as Medicare for All. At one point, Horn and Pakaluk tell their readers that “a fully socialist health care system — an idea that more political candidates are beginning to float and more voters entertain — would be another example of central planning that should concern Catholics.” Later in the book, however, they say that the Nordic countries aren’t really socialist, despite the existence there of free college, national health care, and so on, and that “Catholics can reasonably disagree over whether the Nordic model should be replicated in other countries.” Whether these countries are socialist seems to be more of a verbal quibble than anything else. Yet why do Horn and Pakaluk suggest that certain policies of Nordic countries might be acceptable to Catholics, but when similar policies are proposed in the United States, they “should concern Catholics”? And if they are not examples of socialism, why even bring them up in a book dealing with socialism?

Horn and Pakaluk note the passage from Quadragesimo Anno quoted above, in which Pius XI recognized that the moderate socialists’ programs often strikingly approach the just demands of Christian social reformers. What are these programs and just demands? The authors reduce them to “stronger unions and worker protections,” which are well and good but are not what Pius was speaking about. Rather, he referred to “that type of social authority, which, in violation of all justice has been seized and usurped by the owners of wealth [and which] in fact belongs not to the individual owners, but to the State.” He noted that “it is rightly contended that certain forms of property must be reserved to the State, since they carry with them an opportunity of domination too great to be left to private individuals without injury to the community at large” (no. 114). This is what Pius XI meant when he said that some socialist programs “often strikingly approach the just demands of Christian social reformers.”

Let us now turn our attention to Horn and Pakaluk’s treatment of capitalism, to which they point as superior to socialism. They do well to recognize Pius XI’s definition of capitalism as “that economic system, wherein generally, some provide capital while others provide labor for a joint economic activity” (no. 100). And they are correct that Pius specifically says that this system “is not vicious of its very nature.” For surely there is no offense against justice if one man hires another to work for him, provided, of course, that he pays a just wage and observes the other stipulations of justice and charity. Whether such an arrangement as a general system of organizing an economy is wise is another matter.

The authors’ treatment of capitalism is lacking chiefly in two areas: in their understanding of the varieties of capitalism that have existed and presently exist, and in their discussion of the mechanisms that propel economic activity in a capitalist system.

Capitalism exists in a variety of versions, some better than others. In Germany, for example, an elaborate system of co-determination mandates worker representation on corporate boards and the extension of union contracts to an entire industry if a certain percentage of that industry has ratified the contract. Many East Asian nations experienced rapid economic growth when the government selected and aided industries it considered apt for success, although ownership of those industries remained in private hands. Still other nations have very little in the way of worker protections and permit a kind of dog-eat-dog capitalism. Early-19th-century English capitalism was notable for its brutality, with children as young as five working long hours in coal mines and factories. John Paul II offered a penetrating discussion of various types of capitalism, including that of “the affluent society or the consumer society,” which, in the end, “agrees with Marxism, in the sense that it totally reduces man to the sphere of economics and the satisfaction of material needs” (Centesimus Annus, no. 19). Moreover, with regard to the actual historical ideology of capitalism, John Paul noted that, as with socialism, it is materialistic and based ultimately on an atheism “closely connected with the rationalism of the Enlightenment, which views human and social reality in a mechanistic way” (no. 13).

Horn and Pakaluk are at pains to argue that socialism does not correspond to the realities of human nature while capitalism does. For example, in their criticism of what they see as the lack of incentive in a socialist society, they quote Adam Smith’s well-known dictum in The Wealth of Nations that “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” To expect everyone to act from the highest motives is simply contrary to our experience of humanity, they argue, and thus capitalism permits our self-interest to work for the good of others. But this idea can be criticized on more than one ground.

In the first place, self-interest can be understood in more than one way. There is a rational or just self-interest that induces someone properly and in an ordered fashion to look after his own interests. Apparently, Smith was not speaking of this kind of self-interest, for it is fully compatible with benevolence, with the love called charity that we are commanded to have toward all. But self-interest can be understood in another way, a disordered way that has no regard for the needs or rights of others and seeks its own desires exclusively. If this kind of self-love happens to benefit another, it is purely by accident.

Now, supporters of capitalism commonly say that although the second kind of self-love might be unfortunate or even deplorable for the individual who possesses it, still it works for the benefit of the whole, since the butcher will sell you meat whether he has good will toward you or not. But this ignores the manifold opportunities for fraud and cheating that abound in the economy. But wait, supporters of Smith continue. If the butcher cheats or sells bad meat, his customers will vanish, so he’d better act justly regardless of how he feels. But if that were always the case, whence the common image of the used-car salesman who deceives his customers regularly? Not everyone can tell if a product is sound or not, and advertising can and does convince many of us to spend our money on useless and even harmful things.

In fact, we need not come down on either side of Adam Smith’s stark dichotomy of benevolence or self-interest. Many craftsmen and other small-business owners are motivated by a desire to manufacture a quality product and sell it at a fair price. To be sure, they hope and expect to make a living from this, but they are not necessarily aiming at nothing more than gratifying their self-interest. Much of the time, human motives are mixed, and Smith simply isolated one among many and pronounced that it was the mainspring of economic activity. Moreover, a society that constantly upholds Smith’s view as simple realism is apt by that very fact to exacerbate such selfish tendencies. If we are told over and over that it is fine to act purely from selfish motives, this is likely to become a self-fulfilling prophecy, and we will indeed end up with a society in which disordered self-interest rules. Even if fear of losing customers keeps the butcher’s conduct within bounds, this type of rhetoric is not likely to promote virtue in his soul.

Horn and Pakaluk do admit the difference between these two kinds of self-interest, saying that “greed and selfishness are not strictly the same as self-interest.” They also speak of “moral capitalism” and contrast it with the kind of motives Smith apparently thought were the norm. But the problem is that the authors appear to want it both ways. They inveigh against socialism for its supposedly exclusive dependence on benevolence, using Smith’s butcher as their countermodel — even quoting Smith that it is “natural selfishness and rapacity” that drives the economy — while at other times acknowledging the moral deficiencies of the butcher’s motivations and even admitting that capitalism offers temptations for materialism and consumerism.

Horn and Pakaluk claim over and over that socialism fails because of its lack of incentives, while capitalism uses incentives to induce people to undertake more dangerous or unpleasant jobs. Under socialism, they think, “Everyone [would receive] the same wages, [so] why would anyone be motivated to choose a dirty or dangerous occupation?” They contrast that with capitalism, under which “unequal wages thus adjust compensation to create incentives for people to do the jobs that need to be done.” Under socialism, on the other hand, “the lower classes are compelled to do everyone else’s dirty work” on account of their lack of political connections. This is truly a bizarre claim. Chicken-processing-plant workers, garbage collectors, hotel maids, and so on rarely receive high wages in our capitalist economy. They are driven to take those jobs because they need money, and those jobs are easy to get. And Horn and Pakaluk know this, for later in the book they write, “When a certain kind of labor skill is relatively rare…the price to buy this labor is higher than the price for more-common labor skills (like dishwashing).” Does anyone really doubt that under our capitalist system “the lower classes are compelled to do everyone else’s dirty work”?

Profit is the means by which capitalism offers incentives for productivity. But what is profit, and particularly, what is a just profit? St. Thomas Aquinas teaches that the profit of a seller is simply a payment for labor (stipendium laboris), not in the quantitative sense of David Ricardo’s (and Marx’s) labor theory of value but in the sense that the seller (or, by extension, manufacturer) is charging for the value the laborer has added to the product. Profits are not an open-ended invitation to charge as much as a seller can get away with, nor are they always a sign that a business is fulfilling a real human need, as abortion and pornography are profitable enterprises. But even in a capitalist economy, profits are hardly universal incentives. Both Horn and Pakaluk, for example, work for nonprofit organizations, and I am sure they both work hard, but they do not work for profits. There are many efficiently run entities that are not profit motivated, including many government entities. The motives for our actions are usually diverse, and to reduce them, as Adam Smith does, to crude, profit-maximizing self-interest betrays more of a Calvinist than a Catholic understanding of human nature.

At times Horn and Pakaluk acknowledge the historical evils of capitalism and the actual remedies that over time mitigated those evils. After noting the hideous English industrial towns that Charles Dickens described, and the Marxist assumption that workers would violently revolt against such conditions, they say, “But the revolution never came, partly because the English government passed laws that restricted child labor, regulated workplaces, and improved public sanitation,” in other words, not because of market mechanisms but because of government regulation and the rise of unions. And, to their credit, more than once Horn and Pakaluk insist that strong unions are necessary as a counterweight to the power of capital. But here, as in other parts of their book, the authors speak out of both sides of their mouths. They attempt to justify sweatshops in Bangladesh by arguing that “for many of these workers the alternatives are even worse.” And they go so far as to quote approvingly the following from the anti-Christian economist Ludwig von Mises, who, speaking of 19th-century English industrial conditions, wrote, “It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation.”

So, was the only possible alternative to starvation for wives and children to work 12-hour shifts in mines or dangerous factories? Was it fine for children as young as five to be chained underground to coal cars? Such an argument can also be used to justify prostitution or slavery, as these likewise prevent “death by starvation.” A Catholic writing on such matters would do better to admit, with Leo XIII, that “it has come to pass that Working Men have been given over, isolated and defenseless, to the callousness of employers and the greed of unrestrained competition” (Rerum Novarum, no. 3).

Twice Horn and Pakaluk quote Pius XI that “economics and moral science each employs its own principles in its own sphere” (Quadragesimo Anno, no. 42). Unfortunately, they fail to quote the rest of the Pope’s sentence, which reads, “it is, nevertheless, an error to say that the economic and moral orders are so distinct from and alien to each other that the former depends in no way on the latter.” Although there is not, strictly speaking, a Catholic economics, neither is economics simply a “descriptive science that explains economic behaviors and outcomes,” any more than psychology ought to be simply a description of how human beings, good and bad, saints and sinners, react to various stimuli, with no reference to the healthy functioning of human nature. Any economics that is inspired by a Catholic vision of man and society will recognize the way laws, institutions, and technology affect these “economic behaviors and outcomes,” and how they promote, or fail to promote, justice and the common good. Such questions are at the heart of any serious consideration of economic conduct.

Horn and Pakaluk offer an appendix, “What About Distributism?” Sadly, they do not begin well: “Chesterton once summarized distributism this way: ‘three acres and a cow.’” Well, not exactly. Chesterton did use that phrase at least three times in his writings, but he was well aware that that was neither a summary nor a definition of distributism. “We certainly should not say that the meaning of a peasant state is that all people are peasants,” he wrote. Both he and Hilaire Belloc recognized that industrial operations would exist in a distributist economy, and that they would doubtless include businesses that were too large to be operated as single proprietorships.

Strangely, when speaking of capitalism, Horn and Pakaluk discuss what is in fact a very successful and large distributist enterprise, the Mondragon cooperatives in Spain, “the largest worker-owned cooperative in the world,” as they call it; yet they fail to recognize that this is an excellent example of the very distributism they hardly recognize can exist — and a far cry from “three acres and a cow.” Mondragon is something distributists have been writing about for decades. If, as Pius XI taught, and as Horn and Pakaluk recognize, capitalism means the separation of ownership and labor, then it is hard to understand how a worker-owned cooperative such as Mondragon could be an example of capitalism.

The authors assume that everyone in a distributist system would be an owner. “Most people are better off in [larger enterprises] than they would be if they were making direct use of their own resources through a self-owned business,” they write. This is probably true, but it is something distributists do not deny. Distributists do not expect every person to establish and run his own small farm or business.

On occasion during their discussion of capitalism, Horn and Pakaluk use what is, in fact, an example of distributism. They speak of a “butcher who hires a plumber to fix his sink, for which he pays him $100. That evening, the plumber returns to buy $100 worth of meat to feed his family.” Now, what is this except two distributist small-business owners providing needed services for the community and receiving just remuneration in return? Yes, such exchanges can and do exist in a capitalist economy; in a distributist economy, they are the norm.

The defining characteristic of capitalism, the separation of ownership and work, though not in itself unjust, easily leads to injustices and abuses. Why? Chiefly for two reasons. When a class of persons, the owners of capital, are at least one degree separated from the actual production process, from the provision of useful goods and services to the community, they tend to become more interested in sales instead of real goods. In the most extreme form of capitalism, the corporation, the legal owners of the company, the stockholders, are so far removed from the actual productive process that they are at times scarcely aware of what the company actually does, so long as their dividend checks keep coming or the stock price rises. In fact, shares of stock change hands on Wall Street with such rapidity every minute of every day that it is something of a myth to speak of the corporation’s owners, when ownership changes constantly. This focus on selling instead of producing, which capitalism tends to create, in turn colors the whole society so that the attainment of wealth becomes the unacknowledged goal of society instead of seeing external goods as simply necessary or helpful accompaniments for a life oriented toward the family, intellectual and cultural goods, and, ultimately, God.

Second, when ownership is separated from work, workers are always an expense item for those who own capital, an expense item which it is in their interest to lower as much as possible. What for capitalists are labor costs, for the workers are their livelihoods and those of their families. Moving a factory to a cheaper location might seem to make sense for someone who merely supplies the capital necessary for production, but it hardly makes sense for someone who depends on that factory for the job that supports him and his family.

When ownership of the means of production is distributed among workers and families, other factors besides the purely economic enter into every economic decision. In an economic downturn, for example, workers who are also owners will naturally look upon themselves and their families as more than mere “labor costs” and hence consider other options besides layoffs or plant closings. They will see the economic factors as part of a complex of factors that necessarily impact much more than questions of money. Each person’s family (immediate and extended), his friendships, his parish, his attachment to his own locale, and so on are as relevant as the level of profit. But as long as the capitalist economic structure is in place, the mass of workers will not even have the opportunity to consider such noneconomic factors or make these kinds of decisions.

Horn and Pakaluk at times acknowledge the tendency of capitalism to remake all of society in its own image. They write, “Modern capitalism makes the temporary euphoria and pleasure associated with the activities of buying and selling a temptation to engage in too much, too often, to where it becomes an idol, wholly divorced from its purpose of serving virtue and the genuine human needs of ourselves and others.”

But they appear to think that, except perhaps for prohibiting shopping on Sundays, the way to fight such evils is purely a matter of individual virtue, of prayer and the sacraments. Without in any way discounting the need for prayer and the sacraments, reliance on those alone is not sufficient for most people. To change institutions without promoting virtue is fruitless, but not to recognize that better institutions can promote virtue will likewise frustrate the best of intentions. To discourage any human evil or vice — for example, divorce — we need to cultivate individual virtue and change laws or institutions. For human beings are not individual monads, unconnected to or uninfluenced by the culture in which they live. Peter Maurin, cofounder of the Catholic Worker movement, said he wanted a world in which it is easier to be good. This is not the world of capitalism, where the divide between capital and labor has a tendency to reduce everyone to mere consumers and turn workers into mere expenses. But distributism does desire a world in which our institutions and economic arrangements will foster, as much as possible, what is best in our fallen human nature, a nature that is wounded but still essentially good.

For Adam Smith, a product of Calvinist Scotland, human nature has nothing good in it, and thus the only motive we can rely on is self-interest. But a Catholic outlook sees things otherwise and knows that despite sin, original and actual, human beings are capable of virtue and that a society or system that does its best to foster virtue will likely end up with more of it than a society or system in which virtue is held to be irrelevant to its central activities.

To answer the question Horn and Pakaluk pose in the title of their book: No sincere Catholic can be a true socialist. For unlike the ideologies of both socialism and capitalism, the Catholic Church teaches and promotes a society in which all of life functions as a harmonious whole leading to Heaven. Or, as Pius XI put it, “If [the moral law] be faithfully obeyed, the result will be that particular economic aims, whether of society as a body or of individuals, will be intimately linked with the universal teleological order, and as a consequence we shall be led by progressive stages to the final end of all, God Himself, our highest and lasting good” (Quadragesimo Anno, no. 43).

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