This essay is part of a series which is outlined here.

A strong theme in the complaint against the free market system is the appeal to justice. Indeed, Distributists base their theories on the great Catholic Social Teachings in the encyclicals of Popes like Leo XIII and Pius XI who defended the institution of private property and the right of the worker to a just wage at times of great upheaval.

“The elements of the conflict now raging are unmistakable, in the vast expansion of industrial pursuits and the marvellous discoveries of science; in the changed relations between masters and workmen; in the enormous fortunes of some few individuals, and the utter poverty of the masses…” (Rerum Novarum, 1891)

“Free competition has destroyed itself; economic dictatorship has supplanted the free market; unbridled ambition for power has likewise succeeded greed for gain; all economic life has become tragically hard, inexorable, and cruel.” (Quadragesimo Anno, 1931)

The popes urged that workers be paid a just wage, and expressed their hope that they would manage their income frugally in order to better their situation,

“If a workman’s wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income.” (Rerum Novarum)

…encouraged the worker to save and obtain the security of property in land,

“when a man engages in remunerative labor, the impelling reason and motive of his work is to obtain property, and thereafter to hold it as his very own. … if he lives sparingly, saves money, and, for greater security, invests his savings in land, the land, in such case, is only his wages under another form… If working people can be encouraged to look forward to obtaining a share in the land, the consequence will be that the gulf between vast wealth and sheer poverty will be bridged over, and the respective classes will be brought nearer to one another.” (Rerum Novarum)

…and warned against the excesses of both individualism and collectivism.

“Accordingly, twin rocks of shipwreck must be carefully avoided. For, as one is wrecked upon, or comes close to, what is known as “individualism” by denying or minimizing the social and public character of the right of property, so by rejecting or minimizing the private and individual character of this same right, one inevitably runs into “collectivism” or at least closely approaches its tenets.” (Quadragesimo Anno)

Lets take those major issues one at a time. On the topic of the just wage, the Catechism quotes Gaudium et Spes (Vatican II):

“Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good.”

That is to say, a man who works for a living ought to be paid enough to support his family through his labors. Is the free market meeting this criteria in America today? It seems obvious to me that it is. (I say a little more about the wage level in 2.B.1.) The just wage does not demand for the lower income individual any of the toys and excesses that capitalism has made so prevalent in our society: Microwaves, cell phones, cars, new clothes, and so on for ever. Indeed if these things were necessary then all workers who lived before their invention were in a state of fundamental injustice! Yet it can scarcely be denied that anyone working hard and living frugally in America today can provide his family with an abundance of food, clothing, and clean shelter, of a quality that would be envied historically. If this was not so in 1891 or 1931, when all of economic life was called “tragically hard, inexorable, and cruel,” we can only conclude that the free market has triumphed against all other economic systems in raising the standard of living to unheard-of levels.

Among the things a just wage does not require a man to be able to afford is an 80/20 mortgage on a large suburban home, which brings us to our second point. It is clear that the Popes do not expect a wage earner to be able to plunk down a down payment on his first day on the job. They speak of ownership in the land as something that has to be scrupulously saved for over some time. Its clear that this is quite possible in America today, simply by avoiding the continuous expenditures on frivolities that have become so common due to our great prosperity.

Thirdly, the popes warn against the excesses of both individualism and collectivism, and rightly so. I wholly endorse the values of distributive justice (properly understood), subsidiarity, and the special care for the poor. Advocating the preference for economic liberty does not contradict any of this. One only need to take a cursory look at the kinds of economic regulation the free market advocate supports in order to see that justice has not been left out. I will not try to list even a majority of the examples that are possible, but here is a small sampling. It is illegal to steal from others in any of a variety of creative and ambiguous ways. It is illegal to trade securities based on insider information. It is illegal to lie for economic gain in a variety of circumstances such as false advertising, etc. Although free-market advocates see the enforcement of contracts as one of the primary roles of government in the economy, some contracts, such as the case where only one party is obligated to do something, are considered invalid on the grounds of fairness. It is illegal to sell yourself or others into slavery, or to hold slaves. There are restrictions on what kind of interest rates can be charged of those in debt, and no amount of debt can cause a person to surrender their freedom in lieu of payment. All these laws and more safeguard justice while preserving the basic economic freedom of man to buy and sell.

To sum up, on the grounds of economic prosperity, whatever complaints against the factual results of free competition may have been appropriate in 1891 or in 1931 are no longer valid. The wages paid in America are more than what justice requires, and often numbingly high to the point that we loose all perspective on “poverty”. There is ample opportunity to obtain ownership of both land and capital. The papal condemnation of unrestrained competition was always founded on some of the results, at that time, and not the mere existence of economic liberty. It is undeniably clear that the legal system under which the free market operates makes ample considerations for the demands of justice today.

I will add one more point to close. While the popes encourage the worker to save and plan ahead in order one day to obtain property, you will find in their social encyclicals none of the insistence of Distributists that all men must have ownership of productive capital. The continuing existence of a working class who labors for a wage is taken for granted by the popes, who say,

“The great mistake made in regard to the matter now under consideration is to take up with the notion that class is naturally hostile to class, and that the wealthy and the working men are intended by nature to live in mutual conflict. So irrational and so false is this view that the direct contrary is the truth. Just as the symmetry of the human frame is the result of the suitable arrangement of the different parts of the body, so in a State is it ordained by nature that these two classes should dwell in harmony and agreement, so as to maintain the balance of the body politic. Each needs the other: capital cannot do without labor, nor labor without capital. Mutual agreement results in the beauty of good order, while perpetual conflict necessarily produces confusion and savage barbarity. Now, in preventing such strife as this, and in uprooting it, the efficacy of Christian institutions is marvellous and manifold. First of all, there is no intermediary more powerful than religion (whereof the Church is the interpreter and guardian) in drawing the rich and the working class together, by reminding each of its duties to the other, and especially of the obligations of justice.” (Rerum Novarum)

and also,

“As for those who possess not the gifts of fortune, they are taught by the Church that in God’s sight poverty is no disgrace, and that there is nothing to be ashamed of in earning their bread by labor.” (Rerum Novarum)