Curing World Poverty the New Role of Property

JohnJohn H.H. Miller,Miller, C.S.C.,C.S.C., S.T.D.,S.T.D., editoreditor Curing World Poverty The New Role of Property John H. Miller, C.S.C., S.T.D., Editor Michael D. Greaney, Associate Editor Dawn K. Brohawn, Editorial Advisor Published by Social Justice Review In collaboration with the Center for Economic and Social Justice Social Justice Review Saint Louis, Missouri 1994 Copyright 1994. All rights reserved. SOCIAL JUSTICE REVIEW Central Bureau, Catholic Central Union of America 3835 Westminster Place Saint Louis, Missouri 63108 ISBN 0-9626257-5-2 Printed by Saint Martin de Porres Press New Hope, Kentucky 40052 Cover, layout and illustrations by Rowland L. Brohawn i Preface his book takes its origin from a seminar which several represen- Ttatives of the ecumenical Center for Economic and Social Justice (CESJ) gave in Rome in November of 1991 for members of religious communities having missionaries in the Third World. The reactions of those who attended our seminar are exemplified by a beautiful let- ter sent to our President, Norman Kurland, by the Rev. Harry Reusch, C.P. In it, among other things, Fr. Reusch remarks: “I found your CESJ seminar to be one of the most meaningful and thought-provok- ing of any I have recently attended.” Much of Fr. Reusch’s time is spent traveling through the mission fields of the Passionist Fathers, and he sees all too clearly that, “while there is much economic and social injustice in the U.S. and other First World nations, the problem is compounded beyond belief in our Third World nations. With Communism on the downgrade, some people may be tempted to believe that Capitalism has been thoroughly justi- fied and should now move ahead with full vigor. You and I know that is wrong. Some center road between Communism and Capitalism must be found. And this is what I believe you are trying very val- iantly to do.” We in CESJ find capital necessary, but so do the communists, socialists and laissez-faire capitalists. What a difference, however, there is among our understanding and uses of it. In communism, capital is used, but it is owned entirely by the State. Socialism indeed requires capital, but it is completely controlled by the State. Laissez-faire capitalism uses capital solely for the personal profit of a few. Even“democratic capitalism” is a well-intentioned but unwork- able attempt to harmonize political democracy with economic plu- tocracy. In CESJ’s proposal of expanded ownership of the means of production, we also retain the use of capital. Yet we insist that every worker—that is, everyone who works—has the God-given natural right to have the opportunity to own the most technologically advanced forms of capital, the means of production, exercise his right in decid- ing how that capital is to be used, and earn profits from what that capital produces. ii After our seminar in Rome, I insisted that we must not lose what we had just done, not stop there. We simply had to go forward and complete what we had started and publish in book form CESJ’s “center road” solutions to world poverty. It was thus that I was gently asked to “put my money where my mouth is,” to edit and publish the book. All too gladly I acquiesced. This proposal, as a Catholic priest, I believe to be the solution to what the Vicars of Christ have been pleading for society to do: extend ownership to the worker. For me, their pleadings have the ring of the Good News of the Gospel Applied. This Gospel of social and economic justice for all would not add an- other bureaucracy to the already top-heavy nation-states of the world, but would sound a clarion call to entrepreneurs, bankers, labor lead- ers and workers in the United States and other countries to apply in practical ways the Church’s doctrine that the goods of the earth are destined for all to possess and enjoy. As editor I am especially privileged to call attention to a work promoting what has been, for over a century, an intimate part of Pa- pal social doctrine, namely, the wider distribution of private ownership of property. The very title of this work—Curing World Poverty: The New Role of Property—is itself intriguing. Our approaches to caring for the world’s poor and needy have been, so far, merely temporary and su- perficial reactions. The in-depth causes of poverty—apart from un- willingness to work and certain unavoidable personal tragedies—are clearly the concentration of the world’s wealth in the hands of so few and the exclusion of the less well-off from the means, particularly productive credit, by which they can acquire property and propor- tionately augment their material and social well-being. To think of ownership of the means of production itself as the cure for poverty seems, at first, almost novel. And yet, besides mak- ing eminently good sense, the idea was first proposed a century ago by the illustrious world spiritual leader, Pope Leo XIII, in his 1891 encyclical Rerum Novarum. Subsequently, the concrete proposal was developed in the 1950s by Louis O. Kelso and Mortimer J. Adler in their monumental contribution to economics, published under the possibly misleading title of The Capitalist Manifesto (1958). This book promotes, not ownership in common (through the State or col- lective), but ownership by each person as a sacred and inalienable natural right. It insists that, as members of the human family, each one of us is entitled to equal access to institutions, laws, and other “social goods” that will empower everyone directly to acquire and share in the productive wealth of society. iii Starting in 1965 when CESJ’s president Norman Kurland joined Louis Kelso as his Washington counsel and political strate- gist, Kelso’s ideas began to take root in Washington. Then in late 1973, these two soldiers of justice found a powerful champion in Senator Russell Long, who single-handedly orchestrated the first of over 20 laws in America encouraging one of Kelso’s innovations— the employee stock ownership plan (ESOP). Today, United Air- lines, AVIS, and Weirton Steel are among the most celebrated of the 10,000 U.S. companies with ESOPs covering over 10 million workers. This new “social technology”—a mere first step in the re- humanization of the world’s major economic institutions and laws envisioned in Kelso’s radical breakthrough in economic theory—is catching on today in over twenty countries. So, there is nothing new about either the idea or the working out of a specific implementation. The tragic fact, however, is that both Kelso’s overall solution to world poverty and his practical ways of implementing it have been only superficially studied, grossly misun- derstood, but mainly ignored by economists and policy-makers wed- ded to traditional schools of economic thought. There is no need for me to go into the reasons why so simple an idea and such realistic programs, so much in accord with consistent Catholic social teaching, have been ignored. For what is the use of perhaps giving offense? What is important, indeed necessary, is to show mankind that widespread poverty is unnecessary. There is a workable means of effectively combatting poverty, and this is not through a redistribution of past wealth accumulations, but through the expansion of future ownership and profit sharing opportunities among working people, and their educated participation in manage- ment and shareholder decisions. No one claims, least of all I, that this solution will offset the manu- facture of a non-marketable or even harmful product, or will prevent a poorly-managed enterprise from failing, or will bring some form of utopia to the workplaces of the world. But the new solution honors well the dignity of the working man and woman. It gives them added impetus to contribute worthily to any enterprise, and indeed chal- lenges them to rise above a given status and job. And it is a way of providing workers with a supplemental and independent income from profits, beyond wages alone. Additionally, this new approach to economic development would provide a genuine preferential option for the poor, based on the prin- ciple of equality of opportunity, not equality of results. Through programs which equalize access among all persons to the means for iv becoming capital owners—including access to such uniquely “social goods” as monetary credit—these ideas and applications would sys- tematically lift unjust historic barriers between those at the top of the social ladder and those most affected by the lack of equal opportunities, privilege, status and personal sovereignty. Distributive justice would then follow naturally from full and equal justice in participation. We believe there is room for the State in our proposal, but it must always remain a strictly limited one: limited by the prin- ciple of subsidiarity. Despite what certain parties say, we are among the few economic and political proponents of the requirement of reduced government. Chief among our reasons is that the more the State interferes in the lives of its citizens, the bigger it gets and the more wasteful it becomes. It must, even in theory, be re- stricted by the very dignity of the human beings who compose its citizenry. Let human beings resolve their own problems. Let us stop worshipping the Golden Calf of the State’s infallible omni- science. It is almost self-evident to most informed people that their rights are NOT granted by the State.

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