A Note on Capitalism, Socialism, Economics, and Catholic Social Thought

A more detailed post needs to be composed on this topic, but two recent comments on two separate posts tell me that a clarification is in order. Although the terms “capitalism” and “socialism” are bandied about in disparate and imprecise ways, it should be clear to most observers that Catholic Social Teaching (CST) — the magisterial deposit which began to emerge in its modern form in the 19th C. — prescribes neither. In fact, CST is not, in and of itself, a socio-economic “system” or “ideology”; it is, rather, an expression of principles, rooted in reason and revelation, for a just social order directed toward the common good. CST contemplates that different societies at different times will vary with respect their express legal and political makeup. At the same time, CST takes no stand on what, if any, insights might be gleaned from the broad and contentious discipline known as economics. That is to say, CST does not rule out the findings of economic science, though it does not bless any particular paradigm or school as inherently superior to all of the others. If one economic school deserves to triumph, that will only come to light through rigorous reflection, theoretical inquiry, and empirical analysis (though some schools of economics reject this component).

One of the most vexing difficulties anyone faces when discussing these matters is the general lack of sophistication many parties have with respect to not only the tenets of CST, but the nature of the economics discipline itself. It is often argued, perhaps rightly in certain circumstances, that economics as a whole is a wrongheaded field of inquiry built upon a shoddy intellectual foundation comprised of erroneous anthropological assumptions and troubling reductionisms. This reality or, rather, this possibility has promoted some proponents of CST to cast aside economics altogether, as if knowledge of that field will inevitably taint an orthodox view of the Church’s social magisterium. Other, more moderate, voices have argued that while some economic insights are intellectually defensible and empirically verifiable in limited circumstances, they do not, in and of themselves, carry normative weight. These same voices often argue that a new economics, built out of sturdier stuff, needs to be developed. How this development might come about is an open question, and it is even fair to ask if economics, understood as a “neutral science,” is even the proper realm to carry out the important work of setting forth a concrete system of production and exchange which is both humane, just, and sustainable. Strangely, advocates for various free-market schools of economics, particularly “Austrian Economics,” seem to believe the onus of responsibility rests on others to develop a new, airtight economics before they have to pause and critically examine the theoretical shortcomings of their own paradigm.

While “Austrians” and other Catholics with a libertarian orientation should not be allowed off the hook, neither should defenders of orthodox CST fall into the error of believing that they can or ought to embrace socialist policies. In fact, there are a number of Catholics, young and old alike, who seem to be drifting down the socialist path as a reaction against the nauseating conflation of CST and unfettered capitalism promoted since the 1980s by the likes of Michael Novak, George Weigel, and writers associated with the Acton Institute. While their instincts are in the right place, their conclusions are off kilter. The answer to our present difficulties will not be found in layering on more and more regulatory schemas and entitlement programs any more than it will be solved by letting the “free” and “fair” market process do all of the lifting. In fact, CST routinely warns against the excesses of socialism and its more extreme variant, communism.

This isn’t a peripheral matter. Well-intentioned Catholics who advocate for socialist policies play directly into the hands of neoliberals and libertarians who argue, convincingly, that such policies are not only unsupported by CST, but are likely to make matters worse. To offer a very simpleminded example without addressing the embedded complexities, the passage of the Affordable Care Act (“Obamacare”) was justified in part by the unavailability of insurance to significant portion of the American population, including individuals who were designated as “high risk.” That was a real problem, though few took the necessary steps to ask why it was there in the first place. That is to say, they failed to examine the absurd regulatory schema that limited competition in the insurance market, likely to the detriment of existing insurance consumers and would-be consumers. Before plotting out a new regulatory program with heavy costs and far-reaching consequences attached, it would have been better to first ask if the formerly extant regulatory design was flawed and, if so, what could be done to correct it. No, a free-market in health insurance will never successfully insure all persons (particularly the high risk), nor is it likely to be affordable to all in need, but a more open market with less protectionism for incumbent insurance companies might have furnished a wider blanket of health-care coverage at lower costs than what we are currently seeing under Obamacare.

Now, before people start jumping down my throat and claiming that I have gone over to the “dark side,” take a moment to reflect on the sensibility of what I outlined above (with the large caveat that my analysis of the health insurance/health care problem circa 2008-09 is hyper-simplified). If a regulatory scheme is not working, that is, it is not producing the results we find socially desirable, then is the answer automatically a new, more complex, regulatory scheme or, perhaps, less regulation? Keep in mind that CST’s instinct is always for less regulation, that is, less top-down interference in the economy when such an approach is feasible and just. Making those determinations in the abstract is impossible, but they are the sorts of determinations which have to be made. Attempting to dance around these problems through a blind embrace of either socialism or communism cannot be the answer.