Just Wage Doctrine: What Happened?
Rupert J. Ederer
That question is every bit as valid now as it was in asked in her own way by a zealous authoress, Barbara the early part of the last century especially during the Ehrenreich, as she tours the country promoting her period that was scarred indelibly by what is now itali book; Nickel and Dimed: On (Not) Getting By in cized and capitalized as The Great Depression. At America (2001). It deals with the growing millions of present, the American economy, hailed as the richest in American workers wlio are already well along into the the world, is deteriorating into anew serfdom by adif new serfdom wliere one needs two minimum-wage-type ferent roure than predicred by Friedrich Hayek {The jobs in order to eke out a subsistence. She is no run-of- Road to Serfdom. 1944). Hayek, who died in 1992, was the-mill social evangelist or socialisr zealot. To gather aformer socialist, who later successfully engendered the material for her book Ehrenreich did hard time working fear of encroaching socialism, into the hearts of genera under-cover at various minimum wage jobs as a wait tions of devout conservative ideologues. He parlayed his ress, motel maid, cleaning lady, and a Wal-Mart sales scary scenario into, among otlier things, a Nobel Prize clerk. In a recent lecture this professed atheist urged and lofty perch along side his men tor Ludwig von Mises as member of the renowned In a recent lecture this professed atheist ui^ed Christians Austrian In her audience to "take your religion back/' while chal school of economists. lenging the audience to name "any major religion or ethi Like Mises, Hayek was a cal system that requires the poor to give alms to the rich." secularist Jew, who ap parently rec ognized early on that the Russian Revolution had run its course, so chat it would Christians in her audience to "take your religion back," be smarter to abandon that ship and climb aboard the while challenging the audience to name "any major reli new capitalist colossus across the Atlantic. (Which ex gion or ethical system that requires the poor to give plains how Trotskyites became neoconservatives!) alms to the rich." We are addressing here the same question now being Actually the just wage doctrine as first proclaimed to
20 / CULTURE WARS the modern world in 1891 by Leo XIII in his encyclical in on that secret long ago with a mischievous wink, Rerum Novarurn is alive and well. That is so at least in when I discussed with him my interest in the Church's Rome, where the white-clad figure ofPope John Paul II social teachings. He remarked, 'That must go over big stands fast like alighthouse amid the encroaching dark with the clergy." ness. Beyond, in the storm-tossed turbulence of the Meanwhile, in the present-day United Stares, the modern culture wars, the message has become ob Wal-Mart economy, in league with its major partner, scured. It encounters barriers which make some indif Communist China, paves the road to the new serfdom. ferent and others hostile. Most regrettably that includes As a consequence millions are reduced to working at members ofthe same Church which gave the world Re- Mcjobs," paying at or a shade above the legal mini rum Novarurn , and updated it on significant anniver- mum wage. A small and diminishing number of well- szry dates. In the boondocks far from Rome, due paid survivors, like the auto workers, stand out like mainly to the widespread glaring failure in "middle fossils of an earlier era. when strong labor unions pio management, the Catholic Church appears to have neered wages and benefits that marked a sharp break deteriorated into that same condition that Karl Marx with the Neanderthal free-market past. The harsh ascribed to the Church ofEngland during the f9th cen- working conditions of that era, now recurring in our rur\'. In hisAuthors Preface to the first volumeof Z)
May2005 / 21 Pope LeoXIII
encyclical it is clear that the basic just wage constitutes a minimum due to every conscientious, full-time, adult worker whom employers find it worthwhile to hire; it is not to be the ultimate achievement of many years of work, or the prerogative of the highly skilled. Beyond that irreducible point, and within whatever reasonable limits that social justice requires, workers may freely agree with their employers on higher wages based on 7 ' such factors as greater skill, experience, responsibility, and requisite education. It must be noted here that our minimum wage laws do not now and never did come close to requiring the kind of basic just wage proposed in the Catholic Church's just wage doctrine. They were enacted to es tablish an irreducible limit below which dog-eat-dog, free competition could not drive the wages which the hapless workers often had no choice but to accept. The federal minimum wage in the United States is currently S5.15 an hour, which annualized comes to $10,712. That amount is far below what the government itself has established as the "povert)' level" for a family offour, which is $8.85 an hour, or518,400 annually The fair Labor Standards Act, which includes the minimum wage than slavery itself {R.N, 2}. The great pope defended provision, was passed in 1938, a few years into the Great the right of private ovvnersiiip also for workers against Depression. It originally established a 25-cent-an-hour the socialists who were by then making large waves in minimum wage, which was scheduled to reach 40 cents Europe. At the same time, liberal capitalism was placing in seven years time. That has been upgraded from time any significant acquisition of private property beyond to time, but it has always lagged behind the persistent the reach of the working classcs. Among the remedies inflation endemic to our economy since World War II. which Leo XIII proposed was the right ofworkers to or At present, an estimated 12 million people are working ganize in their own defense—a natural right which, as at the minimum wage level. Countless others not cov Adam Smith pointed our in his Wealth ofNations, ered by the federal law work for less, or at what the re capitalist employers had long exercised in their own in spective state minimum wages mandate, which issome terests. A highlight of the encyclical was the first state times lower and in a few instances higher. According to ment ofthe just wage doctrine appropriate for the con- detailed budgets published regularly by the U. S. Labor text of modern society. Department starting in 1947, the annual income re While Leo XIII upheld the right ofworkers and em quired for a family of four to live at a modest level is ployers to make "free agreements" as to wages, he indi now, depending on geographical location, in thearea of cated a dictate of nature more imperious and more S30,000 - 35,000. That figure takes into account ancient than any bargain between man and man." That changes in the cost-of-living since 1982 when the bud turned out to be the right to a basic just wage which gets were discontinued bythe Reagan administration. must be enough to support the wage-earner in reason The pertinent question then is: what has become of able and frugal comfort," and also to enable him to "put the just wage doctrine since it was first proposed by by a little property." What is more, it had to be ad the Catholic Church in 1891? The Church itself has equate "to maintain himself, his wife, and his children" updated it repeatedly, both reaffirming and expanding (R.N. 34-35).This meant that mothers must not be re the concept, while warning about certain distortions. quired to work outside the home to support the family; Pius XI commemorated the 40th anniversary oi Reriim and the wage mustalso be such as to make modest s2lv- Novariim by his encyclical Qiiadragesimo Anno where ings possible 34-35 ). From the wording in the by he developed the original doctrine significantly. In three separate encyclicals, Pius XI tookon the three die-
22 / CULTURE WARS rators of his time: Stalin, Hitler, and Mussolini. Thus, it dards with regard to wages, product standards, and should surprise no one char this pope did nor spare the other conditions, thus facilitating the proper operation capitalists who were in their own way oppressing work of the principle of subsidiarity by minimizing the ers tar and wide. He established some basic parameters need for direct government intervention in economic for the doctrinc, adding certain prudential suggestions life. All else failing, including "wise measures of the while cautioning against inordinate extrapolations. public authorit)'," Pius XI indicated that a business was First ofall, Pius XJ affirmed again that the wage must nevertheless not entided to continue simply at the ex support not only the worker but his family, thus reject pense of its workers. ing the Leninist-style "emancipation" of women out of Finally the overall common good entered into the the home and into the work force. That led him to calculation ot the just wage. Here the prospect of wages praise various systems bvwhich "an increased wage is being too high also became a consideration. This im • I • . * ^ paid in view of increased family burdens. .. ." Some plied a reaffirmation of the Leo XJII insistence that employers, attempting to live up to the Church's social workers and employers may enter "freely" into agree teachings conscientiously, undertook such family allow ments concerning the amount of the wage 63). ance payments on their own. If the matter is to be left Such free agreements must be assumed to apply in set to individual employers, there lurks the possibility that ting wages that range above the minimum just wage for workers with larger families could find themselves at a reasons indicated earlier (skill, experience, etc.). Never disadvantage when competing for employment. Recog theless, these too must defer to the overall common nizing chat, many governments in Europe and else good. Too much income harvested by too few at the ex where (e.g. Canada) introduced family allowance sys pense of too many can seriously impact that common tems, so that the cost was, to a degree, "socialized." good. It is a lesson we have yet to learn! Blessed John XXIII contributed to that par ticular aspect of the just wage doctrine in M^rter Known in English as On the Condition ofLabor, et Magistra (1961). Re ferring to the "economi Rerum Novarum was issued in 1891 by Leo Xill cally developed coun tries," he warned that wlio denounced the existing condition where work "great or sometimes very ers found themselves: in his words, under "a yoke great remuneration is had for the performance little better than slaveiy itself (R.N. 2). ofsome task oflesser im portance or doubtful utility." He continued: "Meanwhile, thediligent and profitable work that whole classes of decent The Pope also related the just wage to the "state ofthe and hard-working citizens perform receives too low a business" to take into account problems an enterprise payment and one insufficient for the necessities of life, may at times face, making it difficult ifnot impossible or else, one that does not correspond to the contribu to pay a just wage. While never excusing bad manage tion made to the community or to the revenues of the ment, Pius XI summoned the parties themselves to undertaking in which they are engaged, or to the na work out the problems where possible so that the just tional income" (70). Preposterous incomes placed at wage could be paid. The restoration of occupational or the feet of our idols and "stars' in the entertainment ganizations was proposed as a means toward that end. world come to mind. Also, while the work and talents They were guild-like in that they included all parties— ofCEOs are generally ofgreat utility to their firms and employers, workers, and owners—in the respective in to the economy at large, the extravagant levels ofcom dustries, trades, and professions. By resort to these pensation which some of them receive also reaches out structures, the parties themselves could establish stan rageous levels. Such extremes are justified typically by
May2005 / 23 appeals to the "market," i.e., to the forces of "demand nesses that do not issue stocks, e.g. partnerships and and supply." On the other side are some unspectacular single proprietorships, or for the many millions of gov and menial kindsof workwhichsociet)' couldneverthe ernment employees. Even where applicable, many em less scarcely do without, as in health-care occupations, ployees would rather be free to invest any discretionary agricultural employment etc. where workers must surplus income according to their own personal prefer struggle to meet ordinarydaily living expenses. ences. There is valid concern that if a company falls on Supplementary to his treatment of the just wage hard times, worker-co-owners stand to lose not only principle, Pius XI praised certain initiatives which their jobs, but their lifetimesavings may also be at risk. could help to establish more humane relations and The shaky performance of the security markets in re closer ties between employers and workers. The relevant cent times makes stock ownership seem to many as a passage in Qiiadmgeiimo Anno is presented in its en- dubious option for rank-and-fileworkers. The system is tiret}' here to indicate why these were proposals of a so tenuous now that whenever Chairman Greenspan of prudential nature that did not alter the overriding pri the Federal Reser\'e sneezes in public, stocks are prone macy of the basic justwage doctrine. to shed a billion or two of their market value. In the presentstate ot human societ)', however, We Unfortunately, this provision gave rise to confusion in some circles where certain aspects of it soon took on deem it advisable that the wageO contract should,' when possible , be modified somewhat bv a con lives of theirown. Ultimately, none of those devices isa tractof partnership, as is already being tried in vari substitute for the basic just wage, let alone a panacea ous ways wich significant advantage to both wage for promoting good labor relations or a sound social or earners and employers. For thus the workers and ex der overall. As Pius XI himself indicated, "those who ecutives become sharers in the ownership or man hold that the wage contract is essentially unjust, and agement, or else participate in some way in the that in its place must be introduced the contract of profits.(Q.y4. ) partnership, are certainly in error." In fact, he warned that "they do a grave injury to Our Predecessor whose Such arrangements are by no means essential to the Encyclical not only admits this contract but devotes just wage doctrine, and they were most definitely not much space to its determination according to the prin intended to replace it. Whereas management-sharing ciples ofjustice" (64). His immediate successor was also does not impact directly on the way workers are remu quick to correct such notions. nerated, profit-sharing and ownership-sharing may do Pius XII issued no social encyclicals in the accepted so. Profit-sharing, where businesses agree to share prof- sense throughout his 19-year pontificate. However, so cial teachings in the tra dition of Leo XIII and Pius XI were plenteous in his remarkable Pius XI praised certain initiatives which could help to Christmas Messages, and establish more humane relations and closer ties be in other addresses be fore various groups, as tween employers and workers. well as in certain of his enc)'clicals. The just wage principle specifi cally was reaffirmed its with workers on some prearranged basis, has a long time and again. It also fell to him to straighten out cer history giving rise to some remarkable success stories. tain exaggerations and misinterpretations of the teach Ownership-sharing iswidespread enough to rate the ac ings of his predecessors. One examplewas the address to ronym, ESOP (Employee-Stock-Ownership-Plan). Catholic employers visiting the Pope in Rome on May However, such programs have also been used for ulte 7, 1949. With regard to "ownership sharing," he said: rior motives, e.g. to ward off unionization, or to com "It would be just as untrue to assert that every particular pensate for a basic wage that was below the standard business is of its nature a society, with its personnel rela which simple justice would require. Beyond that, em tionships determined by the norms of distributive jus ployee stock-ownership plans are not suited for busi tice to the point where all without distinction—owners
24 / CULTURE WARS withstanding, the Church's teach I ingAllsincesuchLeopapalXIIIreservationscontinually notand clearly affirmed the right to a wage that was more than simplya living wage. It was also a saving wage, even though the way in which the workers acquired and invested their savings was left to the parties in volved, and not frozen into some preconceived plan, no matter how salutary one or the other might be in application. In other words, the just wage has continuedas the cen terpiece of Catholicsocial teachings or not of the means of production—would be entitled ever since Rerum Novarum . to their share in the property, or at the very least in the Lest there be any doubt whether the post-Vatican II profits, of the enterprise." He attributed that notion to tumult in the Church perhaps changed all of that, we what he termed the "inexact" assumption that "every needonlylookat its reaffirmation by Pope John Paul II business belongs naturally within the sphere of public when he marked the 90th anniversary of Rerum laws." That was "inexact" because: "Whether the busi Novarum with his own labor encyclical. Overall, ness is organized in the form of a corporation or an as Laborem Exercens offers us a remarkable theology of sociation of all the workmen as part-owners, whether it work. In terms which echo the economics of Heinrich is the private property of an individual who signs a Pesch, it extols the prior position of human work in the wage-contract with all his employees, in the one case as economy as the "primar)' efficient cause in the process in the other it falls within the competence of the pri of production while capital, the whole collection of vate-law discipline of economic life." In other wordsthe means of production, remains a mere instrument or in rightto a justwage, sacrosanct as it is, byitselfdoes not strumental cause." (12) . That gives definitive expres give rise to a right to infringe on the private property sion to "the principle of the priority of labor over capi right of business owners. tal," which the Pontiff states "has always been taught Later, in a radio address to a national convention of by the Church." It also provides the basis for what is Austrian Catholics in Vienna on September 14, 1952, perhaps the most dramatic emphasis on the just wage the same Pope said: "It is for this reason that Catholic principle heretofore expressed throughout the Church's social teaching which, besides other things, so emphati social teachings. He wrote: "It should also be noted that cally champions the right of the individual to own the justice of a socioeconomic system and, in each case, property, and also We Ourselves have declined to de its just functioning, deserve in the final analysis to be duce, directly or indirectly, from the labor contract the evaluated by the way in which man's work is properly rightof the employee to participate in the ownership of remunerated in the system." Asif to avertany misinter the operating capital, and its corollary, the right of the pretation of that uncomplicated statement, the Pope re worker to participatein decisions concerning operations peatedit, referring specifically to the just wage. "Hence, of the plant." He explained, "This had to be denied be in everycase, a just wageis the concrete means of verify cause behind this question there stands that greater ing thejustice of the whole socioeconomic system and, problem—the right of the individual and of the family in any case, of checking that it is functioning justly" to own property, which stems immediately from the hu (19). (Italics in the original). man person." At the time, Germany was deliberating Subsequently, the just wage doctrine was also in enactment ofa law which would allow workers in enter cluded under the Seventh Commandment in the Cat prises beyond a certain size a voice in management echism ofthe Catholic Chitrch (1992) which appeared {Mitbestimmungsrecht). Certain enthusiasts appealed to under the signature of Pope John Paul II. That Com Catholic social teachings as indicating that they con mandment has to do with theft, which reminds us veyed such a right. that the just wage in principle is due in commutative
May2005 / 25 justice. In other words we are dealing here with adoctri- laissez faire. Perhaps that is because die Scot, Adam nal matter—a moral teaching—^which Catholics are not Smith, expressed the ideology in the benign terms of at liberty to ignore or interpret in amanner that nulli- an "invisible hand" which guides self-interest so that its fies or contradicts what their Church is saying. As Pope untrammeled pursuit by the individual makes matters John Paul II stated in his second social encyclical per- turn out for the best overall. Besides, die British did not taining to the economic order, the Church's social doc- have the same historical baggage as the French with trine is apart of moral theology {Sollicitudo Ret Socialis their subsequent Revolution and Reign ofTerror. It ap- Given such clear and definitive moral teaching by the morepears presentabletherefore thatformSmithsof theWealthlibertarianofNationseconomicofferedphi-a Catholic Church for over acentury, and given die fact losophy. Successors, including David Ricardo, Thomas that Pius XI in 1931 warned: "If in the present state of Malthus, J. Baptiste Say, and John Stuart Mill, built on society this is not always feasible, social justice demands itto craft the economic science, and their combined ef- diat reforms be introduced without delay which will forts came to be designated as "classical." These stellar guarantee every adult workingman just such a wage." figures firmly established and molded free market lib- we are endtled to ^k, "What happened.^". The discon- eralism which in its updated form has made aremark- certing fact is that its traditional just wage doctrine, not able comeback in our own time. That ideology fastened un ike many other important moral teachings of the itself like aparasite onto capitalism which had already Church, has fallen on hard dmes. The opposing been in formanon during the two previous centuries, forces are multi-dimensional. They include avigorous Capitalism is defined here as the form of society where revivd on the ideological Right, and ametamorphosis those who own and direct the factor ofproduction capi- on t e traditional ideological Left. In addition, there tal become the dominant class in society succeeding the has also been adiversion of many of the most zealous land-holding aristocracy. and militant elements at the heart of the Catholic In classical economics, where free competition was a Church mto another direction. Finally in mortal com- "given" also for labor, the wage was accepted as being bat agamst the M^isterium one should not be sur- eventually reduced to subsistence by ineluctable natural pnsed to find subversion at times of essential doc- forces. The introduction of the Malthusian element trmes from withm by persons who present themselves provided the requisite mechanism for always forcing as supporters ofCatholic social teaching. Taken alto- wages toward the subsistence level, since it theorized pther, such a confluence of diverse forces can perhaps that higher wages somehow induced workers to have best be explamed in preternatural terms! more children. Given that children in those days often went towork in mills, mines, and factories at the age of six, it would not take long for them to be a competitive REVIVAL ON THE IDEOLOGICAL RIGHT force driving down the wages of their own parents. ^ TheXko r^ival on .uthe ideological-J 1 • I Rightr.- 1 involves. . aresur- FerdinandKarl Marx, Lassalle,designateda thatJewishcapitalisticsocialisttrappredecessorfor workersof r r'® ' ?V'- - ^arx himsel? never swal- 3 m V Malthusian theory, regarding it as aconve- be^nb!«n «th^h EnUght^men,- KbasedAFrench physiocmcy. abominable^ass.conditionsInstead,whichhe incor-capi- where die economy was viewed, hke the human po„,ed the subsistence wage into his critique as en- Uws ® '' exploitative nature of capitalism. Hence. rctit^ltin f T' ''"T economists, se^nJ as tr® f""' <:ompetmon especially Ricardo, who was, like Marx, aJew. offered 3urilter, ® him aperfect pretext for advocating the demolition of Zbeke s^u hT h kl Tl, I' basically Iblandishments of the goddess Ricardos depiction of capitalism, with its intense con- yi n7 . ™ Masses for their shares of the follv I " T »nd critiqued. where liberalism traveled under die appealing motto: the need to mobilize an entire econLy for total
26 / CULTURE WARS war, led to a significant dismemberment of the free thinkers like Arthur Laffer. I cite the Jewishnessofthese market system, including price and wage controls, in scholars simply to make it clear that their social think addition to materials allocation. That brief interlude, ing has nothing in common with Catholic social teach along with the Intervening experiences with totalitar ings. Their ideology approaches the "social question" ian societies, and the Cold War associated with the from the opposite direction of Karl Marx, also a secu spread of Soviet Communism after World War II larizedJew. helped to nourish the desire for a restoration of free Unfortunately, influential Catholics in the United markets and theassociated ideology. On the theoretical States, apparently always anxious to get into the great level there was a concomitant reaction against American swim, also flocked toward the neoliberal reac Keynesian economics which had emerged as an anti tion. Typically such persons regard the Church's social dote to the Great Depression. John Maynard Keynes teachings as of a non-infallible genre which therefore opposed the neoclassical explanation of economic real need not be taken all that seriously. Generally they do ity even while he intended his intervention as a means not view with favor especially the first two of the great to save capitalism from itself Manyof the old school of trilogy of social encyclicals by Pope John Paul II, which economists who grew up and were comfortable with includes Laborem Exercens, Sollicitudo Rei Socialis, and Alfred Marshall's Principles ofEconomics felt themselves Centesimus Annus . Hence his establishment of the threatened by the "new economics," so they eagerly Church's social teachings as a part of moral theology in climbed aboard the pendulum for the swing back to Sollicitudo ReiSocialis is disregarded. At the same time ward free market capitalism. it is precisely theologians like Michael Novak {The At the cutting edge of that renaissance were certain SpiritofDemocratic Capitalism, 1982 ), Father Richard European intellectuals of the so-called Austrian school, Neuhaus, and George Weigel who seem fascinated by in particular the Jewish economists Ludwig Mises the restoration offree market economics. (1881-1973) and his understudy, the afore-mentioned Among neoliberals, Ronald Reagan was widely hailed Friedrich Hayek (1900-1992). As early as 1923 the as the larger-than-life paragon of political prudence. great German Jesuit economist, Heinrich Pesch, had al- Not surprisingly they also credit him with, among other things, winning the Cold War and bringing about the col lapse of the Soviet Em The disconcerting fact is tliat its traditional pire. Some Catholics feel that the Polish la just wage doctrine, not unlil
May2005/27 Michael Novak
ciples" {Markets and Morality Vol. 6 # 4, p.6l 1). The question now becomes: whose economic principles? I re-educated myself long ago using the economics ofthe Jesuit Heinrich Pesch who headed his treatment of the just wage with the title: "The Just Wage as the Eco nomically Correct Wage" {Lehrbuch/Textbook V, 2, p.77ff.) That coincides pretty much with what Pope John Paul II said about that wage in Laborem Exercens. It also reflects precisely what Oswald von Nell-Breuning S. J., an understudy ofPesch and generally acclaimed as the ghost-writer of Quadragesimo Anno , wrote some years ago. He proposed "that the determination of all economic parameters and the making of all other eco nomically relevant decisions will aim at a wage and price system in which the wages are thecornerstone, the independent variable, in the system ofwages and prices" {Review ofSocial Economy, September 1951, p. 105). That is an opposite approach to what the classical economists came up with and which their neoclassical and neoliberal disciples, including the Acton scholars, continue topromote. For them wages are what is left af ter due allowance is made for profits and the salaries of terprise is well endowed. The watchword of the Insti those who get to make decisions about such matters, tute is liberty, which surfaces reflexively in its Acton unilaterally, as a rule, and notwithstanding all talk Motes , also in a more extensive publication Religion dr about the "forces" of the "free" market. Liberty, and in its elaborate scholarly journal, Markets Unfortunately such neoliberal Catholics typically andMorality. Tht Acton Institute chdixzct^nzts itself as "a move about in a comfort zone which is not what the nonprofit, educational organization that seeks to pro Catholic Church with its "preferential option for the mote a free and virtuous society characterized by indi poor has in mind—an option established two thou vidual liberty and sustained by religious principles." sand years ago in Marys Magnificat. They are more at The question is whose religious principles? Needless to home amid the royalistic aura of 18th century liberal say, they do not include the specific moral teachings of ism. In addition, they seem to have absorbed that Puri Pope John Paul II, with his insistence on the just wage tanical virus in American culture which involves a as the concrete means ofverifying the justice of the thinly disguised disdain for those who, given their mod ^ whole socioeconomic system." Nor would they support est level of economic success, appear not to be among his proposal that "medical assistance should be easily the predestined! It is not surprising that their endeavors available for workers, and that as far as possible it endup being well-endowed by an elite which finds such should be cheap or even free of charge" {LE. 19 ). The intellectual support and ecclesiastical blessing both flat Popes Peschian economic viewpoint about the priority tering and useful. oflabor over capital would go over like the proverbial Already in 1971 the Catholic Church took note of lead balloon with the Institute's corporate sponsors. what was happening in this regard. In alargely ignored Some time ago I dared to propose the just wage con and long since forgotten Apostolic Letter Octogesima cept to one of the scholars at the Institute. I received Adveniens by Paul VI marking the 80th anniversary of the standard time-honored Chamber of Commerce- Rerum Novarum, thatPope referred to "a renewal ofthe type cant in reply: that kind ofwage would cause infla liberal ideology" Acknowledging that it was a "reacdon tion! Profits and outsized CEO compensation, of against the totalitarian tendencies of political powers," course, are never considered inflationary inthose circle! he asked: "But do not Christians who take this path Since then I have been blasted in their journal for my tend to idealize liberalism in their turn, making it a failure to comprehend elementary economic prin- proclamation in favor offreedom?" He issued the ap propriate warning: "They would like a new model,
28/CULTURE WARS more adapted to present-day conditions, while easily American workers to earn a just wage. The success of forgetting that at the very root of philosophical liberal the feminist gospel bolsters the efforts of free market ism is an erroneous affirmation of the autonomyof the eers in making women the competitors of men in all individualin hisactivity, his motivation and the exercise sectors of the work force. In accordance with free mar of his liberty" (30). ket principles, a doubling of thesupply of laborshould More recently in an Apostolic Exhortation, Ecclesia in lead to something like a halving of wage rates. Since America (1999), Pope John PaulII pointed out: "More economics does not in factoperate with the precision of and more, in many countries of America, a system a physical science as the Physiocrats proposed, I say, known as neoliberalism' prevails; based on a purely eco "something like a halving," Comparing, e.g. auto nomic conception of man, this system considers profit worker-type wages with the creeping prevalence of and the law of the market asits onlyparameters, to the nearminimumwage jobs—^say, Wal-Mart typewages— detriment of the dignity of and the respect due to indi suggests that something like such a market adjustment viduals and peoples." He became more specific: "At has been underway. Capitalists now areoften in a posi times this system has become the ideological justifica tion where they can get two workers for the price of tion for certain attitudes and behavior in the social and one: both the man and his wife. Thus the two ideologi political spheres leading to the neglect of the weaker calopposites have become partners in ushering in the membersof society." (56) "new serfdom" of the working classes, which Friedrich Hayek envisioned in his bookasresulting fromcreeping socialism. ^ METAMORPHOSIS ON THE LEFT Addedto that irony is anotherodd fellowship which has developed to undermine any prospect for a just On the opposite side of the ideological spectrum, we wage. It has been too litde noted that the free trade find militant feminism emerging as the altered and program was a traditional favorite chestnut of the clas highly effective ongoing attempt by the Left to subvert sical free market ideology. Currently expressed as glo American society. I say Left , because this movement balization , which forces American workers to compete involves the legacy of Lenin who championed the so- with what is at times literally slave labor, it is champi called "liberation" ofwomen throughout his revolution oned by Democrats and Republicans alike. This ary career. In 1934 his Jewish wife N. K. Krupskaya should surprise no one since both of their candidates published a collection of his articles and addresses on are ultimately bought by the powerful marketeers who thesubject in a largely forgotten bookentitledLenin on payto get them elected. But the plot thickens yet more! the Emancipation ofWomen. It contains all of thejargon Whereas Japan,with laborstandards approaching those used by the militant feminists of our time. Its thrustwas in modern industrial nations, was formerly the great described in my article published in Fidelity (March challenge to our balance of trade, China,with virtually 1984), so I will not repeat details here. Whilethe book nothing remotely resembling humane labor standards, was and is even now little noted, we need to look at the has since taken its place. Recall that Wal-Mart, among success of more recent disciples, liketheJewish feminist others, is a senior "partner" in thisenterprise! BettyFriedan, in promotingthe message: to emancipate Together, all of these elements have succeeded in women from home and family into the work force! bringing about the same end: a leveling of our Motherhood and home-making are virtually reprobate economymarked by cheaplabor, alongwith the immo terms in our society now, to the extent that a woman bilization of the once vibrant American labor move who insists on (andcanafford) staying home to care for ment. Meanwhile, at the other end of the economic her children has to apologize for politically incorrect spectrum, the royalistic levels of compensation for conduct. Meanwhile, theday-care culture, a hallmark of CEOs are typically a function of howsuccessful they Soviet society, has become commonplace for preschool are in comingup with smarter ways to cut labor costs children especially of thebetter-salaried mothers. Poorer by "out-sourcing" what used to be American jobs. children are entrusted to grandparents or , all else fail Those are the forces which havehelped to render moot ing, to the streets. the PiusXI appeal about social justice demanding that It appears that the supreme irony in all of this has reforms be introduced "without delaywhich will guar been overlooked. Now we have the two ideologies of antee every adult workingman" a just wage. Left and Right combining to destroy the capacity of
May2005/29 ^ DIVERSION OR PREOCCUPATION AT THE CENTER neoliberals sterilizeof moralthe justtheology.wage doctrineThus, whereasby attempt-the As indicated, the Catholic Church at its center niake the just wage an automatic by-product of from its lighthouse"—^has persistently and consistently Alice-in-Wonderland free market, there is also an proclaimed the just wage doctrine. In the "outback," egregious distortion ofthat doctrine from another and things are often different. In die United States, for ex- ""^xpected source. We are now being asked to accept ample, the most militant forces within the Church "living wage system is ashort-term expedient, have to a large degree channeled their energies pre- Permitted under the principle of double effect to ad- dominantly into the campaign against aborrion. The emergency situation." prolife eflfort clearly engages the considerable zeal of remarkable statement appeared in the March/ the most active laity in the Church at the present time. SocialJustice Review (p. 39), die offi- Some even remonstrate ifanyone diverts attenrion into publicarion ofdie Catholic Central Union (Verein ) what they dismiss, at rimes disdainftilly, as "social jus- America . The CCUA was founded in St. Louis by tice issues. Among them there are, ofcourse, also ideo- Frederick Kenkel in 1908, and itis the oldest organiza- logical conservatives who regard the Church as the Re- America dedicated to the promorion of Catholic publican Party at prayer. Others have been understand- teachings. The preposterous norion that the just ably turned off by the way some of the "social jusrice doctrine is an inferior "expedient," or perhaps people" were taken in by liberation theology. Atypical ^ will do unril all workers can one response when one brings up what seems to some become co-owners with their employers was re- prolife persons to be an arcane social teaching, is: the May/June issue in afollow-up article in- theres no use talking about ajust wage if you don't show that Heinrich Pesch was in substantial first get to be born. Areflexive reply would be: there's agreement with it. The author, Michael Greaney, con- no use getring to be born ifafterwards you can't earn t^e viewpoints ofPesch and Centerfor Eco- enough to stay alive. The analogy has limitations. It is Social Justice—the "think tank" of the no disgrace to be poor, especially ifdiat is the fault of ^^^A— "appear to be perfectly consistent with each society. To be aborted is a tragedy for both mother and itshows is that Greaney, a CPA, had bet- child, as well as cosmically for all of society! craft! In his treatment of wages, Pesch That being said, there are nevertheless Ten Com- chapter entided: "The Just Wage as the mandments, and we had best pay attention to all of Economically Correct Wage* {Lehrbuch/Teaching Guide them, always! Indeed, both abortion and denying a § 3. pp.77-114). His approach is "perfectly con- worker his wage are, according to the God's word, sins ®*stent" with that ofPope John Paul II, not at all with which cry to Heaven for vengeance. Also, the foremost " suggesting. leader for the culture of life movement, John Paul II, is switch from the expression "just wage" to "living also the author of adynamite trilogy of social encycli- ^^serves comment. The latter expression is get- ^ cals, i.e., social-jusrice-type teachings! The moral ofthe common these days perhaps because ofthe story is: lets not get so exclusive in our respective causes '^o^lsh preoccupation with establishing economics as a that we don't recognize how the Church's moral teach- science. Aliving wage suggests physical sur- ing does in fact resemble a "seamless garment." And surface it would seem not that is notwithstanding the at rimes tendentious use of ethical imperatives. Barbara Ehrenreich, for that figure ofspeech. example, also uses the expression, even though her en- rire "crusade" is actually about jusrice. One problem —withthat "value-neutral" term is that it is essenrially SUBVERSION non-descriprive. A victim of injustice can live under a bridge along with amisplaced shopping cart containing In the ongoing all-out assault against the Catholic of earthly possessions. Church and what it stands for, it should surprise no The CESJ people may have switched to use of the one ifthere is also subversion within. This applies as term "living wage" on the basis the patently ludicrous well to the social teachings which comprise an essential theory presented in their manifesto, Curing World Pov- part ofwhat the Church has to say to the modern world published in 1994. The so-called Kelso-Adler theory, whose basic thrust is that, since the continuing
30 / CtniUREWARS Industrial Revolution made the labor of human beings and capital as "past dead labor," he opposed private insignificant as compared with capital in enhancing ownership of these and therefore also income from production, workers have to become co-capitalists if them. Kelso also ruled out natureas a separate factor of they are to share in the bounty of the vast productive production by simply lumping it together with capital outcome of modern industrial society. Since human la and coming up with what he called binaryeconomics, bor is no longer responsible for that outcome on a sig where there are only two factors of product: labor and nificant scale, wages, even those that may be just, inas capital. Due to hisconviction that "in our economy la much as they pay the workeraccording to his contribu bor is erroneously recognized as the primary factor of tion, cannot possibly provide adequately for the needs production," whereas actually "capital is the main pro of modern workers and their families. The dens ex ducer of wealth in an industrial economy" {Curing machina is some form of employee stock-ownership World Poverty p. 25,26), workers can no longer expect a plan (ESOP). Somehow, even the many millions who living wage simply by their labor. Another Jewish do not work for stock-Issuing corporations, e.g., gov economist, Nobel Prizewinning Paul Samuelson, ernment employees, and those employed by single shrugged off binary economics as simply "an amateur proprietorships and partnerships, will end up with the and cranky fad." That Is what Michael Greaneyand the kind of decent Income for which the Roman popes CESJ are proposing as the "effect" that is superior to have since 1891 called for the paymentof the just wage. the just wage whichJohn Paul II termed "the concrete That is notwithstanding turbulence of the stock market means of verifying the justice of whole socioeconomic during recent years, with billions lost by stockholders, systems and, in any case, of checking that it is function and the bankruptcy of corporations like UnitedAir ing justly" {LE 19). Laborem Exercens appeared in lines, among others, which havelong prided themselves 1981, allowing plenty of time for the CESJ people to on their ESOP plans. get their thinking straightened out about this matter, Since neither Louis Kelso nor Mortimer Adler were and at the very least to stop presenting it as Catholicso Christian, it is perhaps not surprising that they came up cial teaching. with this proto-capitalistic scheme. It is actually an in To invoke Pesch as somehow "congruent" with the verted version of yet another nonsensical theory, that of CESJ program is to compound the felony. Aside from Karl Marx. Marx held that all market value in products establishing the just wageas also "the economically cor is due solely to labor. Sincehe considered nature as free, rect wage," he not only did not disregard the second and indispensable primary factor of production which
May2005 / 31 in classical economics had come to be known as land,, just happened to have just the right product available but he designated it as nature—certainly amore accu for workers to become capitalists—the employee-stock rate expression. He also indicated chat it was, like man1 ownership plan. What is more, many years ago (1931) a (human work) an original factor, not a derived one like Catholic Pope (Pius XI) in a social encyclical capital. Like man (labor), and unlike capital, it can be; {Quadragesima Anno) had conveniendy mendoned that independently productive. The most sophisticated ag program as one among several which might be used to glomeration ofcapital in the world, on the other hand! modify the wage contract (Q.A 65) (Emphasis added). will produce nothing unless it is activated by the pri Itwas therefore not the only possibility, and it was also mary original factor, man (labor). This approach also not mandated and, above all, it was to modify, not re happens to correspond to the Biblical account ofhow place the wage contract and by implicanon the just human beings are destined to satisfy their temporal wage principle. In fact, in the preceding paragraph he wants, i.e. to economize. stated emphatically "that the wage contract is not es- Quite aside from the presence or absence of any reli sendally unjust, " denying with equal emphasis" that gious tenets, there was in Kelsos economics an underly- in its place must be introduced the contract of partner ing grievous ontological distortion. The material factor ship" (Q.A. 64). As indicated earlier, keeping certain ofproduction, capital, gets primacy over the human zealots in line is a matter with which Pius XII had to factor. Pope John Paul II, referred to it as "the error of deal on several occasions. Both pondffs upheld their early capitalism. . .wherever man is in away treated on predecessor Leo XIII with regard to the legidmacy of the same level as the whole complex of the material thewage contract perse. means ofproduction (7). In this regard, therefore, the One might add at this point that the UAW, which Pope, not Kelso, is once again "perfectly congruent" represents one of a diminishing group of American with Pesch. John Paul II goes on to state that, " As a workers earning ajust wage, also has aprofit-sharing person, man is therefore the subject ofwork," and also agreement (not involving employee stock-ownership) that he is the purpose ofwork, whatever work it is that with the "Big Three" American auto manufacturers. is done by man even if the common scale of values Wages are generally adequate to enable the workers to rates it as the merest service,' as the most monotonous buy stock in the respective companies ifthey so choose. even the most alienating work" {LE 6). That led him They may also prudendy choose to invest their savings to recall "a principle that has always been taught by the elsewhere. Church: principle ofthepriority oflabor over capital" In the meantime, Louis Kelso and Mortimer Adler are both gone, as is Norman Kurland, formerly the president Ultimately the economy is about satisiying wants of of CESJ, and an im all people [Bedarfdeckungsprinzip] not about enrich portant co-author of the CuringWorldPov ing a small number of capitalists. erty manifesto. He was an accountant like Michael Greaney, who now serves as the research director in {LE. 12). At that point he applied the identical Aristote- the grand tradinon ofthe Curing World Poverty at the lian-Thomistic terminology as Pesch, stating that in the Center for Economic and Social Justice. Given that process ofproduction labor is always aprimary efficient Greaney stated in a letter; "I have administered ESOP's cause, while capital, the whole collection of means of for almost 20 years," someone more cynical than this production, remains a mere instrument or instrumental writer might be tempted to suspect that there is more cause" (Emphasis in the original). than zeal for the Church's social teachings at work here. According to Kelso, labor (man) is actually on a The just wage doctrine would appear to stand in the lower "ontic" (Pope's term LE 13) level in the order of way of ever more ESOPs, and even eventually a whole being than capital, so he must become a capitalist to world of ESOP's! That could explain why Michael survive and prosper. As befits asuper-salesperson, Kelso Greaney is now ata point where he feels hemust make 32 / CULTURE WARS the preposterous proposal that "a living wage system is medieval guildsmen who could not begin to imagine a short-term expedient permittedunder the principle of the variety and number of things which workers pro double effect to address an emergency situation." What duce in our time. ismore, he then becomes even moreoutrageous byen As for trying to ascertain the relative contributions listing Pesch in support of his absurdities and asserting which the factors of production capital makes to the that "the views of Father Heinrich Pesch and CESJ ap product, as compared with what labor contributes, pearto be perfecdy consistent with each other." Having Pesch put little stock in attempts to attribute specific spent over a quarter of a century translating Peschs productiveoutcomesto the various factors. He waswell works into English, I know that this is nonsense, per aware that neoclassical economics attempted to do this hapsborn of desperation. on the basis of its standard demand and supply, i.e. If Michael Greaney wants to be a Pesch scholar I market principles. He cited the renowned Austrian would suggest that he should begin at the beginning. economist Eugen von Bohm-Bawerk who held that "it The great Jesuit economist entitled the opening sec is simply not possible to determine the physical share tion ofhis Lehrbuch: " § 1. Man as Lord ofthe World which eachof the complementary factors: labor, capital According to Gods Ordinance" {Ibid. Vol. I, 1, p. 1). and land contributed to the product" {Lehrbuch/Teach- Then came "§2. Work as the ing Guide, V. 2, p. 7). Means to Exercise Dominion Ultimately, the economy is Over the World," {Ibid. p.10), about satisfying wants of all followed by "§3. The Service people \Bedarfdeckungsprinzip) Provided by Our Natural Envi not about enrichinga small num ronment {Ibid. p. 19).Thus, un ber of capitalists. That is what like the disciples of the Kelso- brought Heinrich Pesch to his Adler theory, he did not regard conclusion about the "just wage either labor or nature (land) as as the economically correct irrelevant or of diminishing im wage," His solidarist economics portance. Accordingly, when he isbased on the primacy of the hu began analyzing the factors of man being in the economy as the production, he stated: " The only factor of production which main efficient cause {causa is not only a means, but also the efficiens principalis ) of produc subject of economic activity as tion and of products is, above well as the object for which eco all, human intellectual and nomic activity takes place. physical labor power and work Therefore, it is the proper func {Ibid. IV, 1. p. 354). Kelso and tion of the economy to provide a his disciples got carried away by their fascination with decent living for human beings modern technology, apparently forgetting that every who for the mostpart always did and always will derive gadget, from the first crude ax to the most sophisti their main livelihood from work. cated modern computer, was first conceived, con It is scarcely surprising that the neoliberals found structed, then put into operation and maintained by a little to rejoice about in theJohn Paul II labor encycli working human person. Nor should anyone take seri cal Laborem Exercens. Neither apparently did the folks ously the Kelsonian fear that the increased production at the Centerfor Economic and SocialJustice. That is un which sophisticated capital brings into the economic derstandable, inasmuchas the CESJ does not profess to calculus will reduce the overall need for workers. Eco be Catholic in the majority. But then it should stop nomics 101 students learn early on that technological sailingunder the papal flag. That is subversion! Those innovation does not reduce the overall need for workers. Catholicamongthem,on the otherhand, who arehon It merely shifts it into additional and diflFerent direc estly committed to Catholic social teachings owe it to tions to the eventual advantage ofall who contribute to themselves to devote some serious study to Laborem the economic product. Howelse to explain the millions Exercens. It is a pearlof greatprice! more employed today than in the days of the skilled
lltey2005 / 33