Taxes Aren't The Only Problem
I’ve noticed a few posts dealing with the problems of taxation and government spending. With the social teaching of our Church clearly warns against the dangers of burdensome taxation, it nonetheless remains that tax rates have been cut dramatically in the last 30 years, even as government spending has increased. The losses of tax revenue were offset by a massive accumulation of debt, because a society such as ours requires a great deal of wealth to continue functioning.
I will be the one to point out, then, that far more perilous to the position of the working American family is the stagnation and overall decline of real wages – wages adjusted for inflation – during that same stretch of time. Both global pressures as well as corporate and government offensives against the social position of the American worker have contributed to a decline in real wages and have caused a build up of consumer debt that rivals the government’s debt.
We were told by endless propaganda no different in its shrillness and anxiousness that cutting taxes on the incomes of the wealthy, on dividends and capital gains, on estates and every other business venture, would create jobs and prosperity for all.
The reality has been that an illusion of prosperity has been sustained through reckless lending and borrowing at all levels of society while the real foundations of wealth for the average citizen, the average worker, have been corroded away through negligence, stupidity and the naked greed of big business and the politicians who dutifully serve it.
Meanwhile the share of the national wealth commanded by the wealthiest 1%, and within that, the wealthiest .01%, has doubled. Wealth has become more and not less concentrated, and power along with it. This is bad for no other reason that we now have enterprises that are “too big to fail”, meaning, if they go, they’re taking a lot of people down with them.
The ruling class of this country wants it all, and its apologists want them to have it all – to be able to outsource our jobs and work people in third world countries to death for lower wages, to be able to shut down factories and bust unions, to strip away social programs and education budgets, to replace jobs that once enabled a man to sustain a wife and children on his own with jobs that require both parents to work, that are less stable and offer fewer benefits. Since the onset of globalization, the message has been loud and clear to the American worker: they must be “competitive” with workers in parts of the world where circumstances dictate they live in abject squalor. How does one compete with that?
The role of big business in this mess, of the massive concentrated wealth of the financial sector and the power it wields over the global economy, are facts of economic life that every Pontiff that has ever written on social questions has both acknowledged and condemned.
All of them without exception condemned the massive concentrations of wealth and power that characterize our society today, that enable a thin layer to completely dominate the financial affairs of the country and the world. This situation is just as, if not more unacceptable, than the size of government. Don’t believe me?
Pope Leo XIII wrote in Rerum Novarum:
“[T]he hiring of labor and the conduct of trade are concentrated in the hands of comparatively few; so that a small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than that of slavery itself.” (par. 3)
In Quadragesimo Anno, Pius XI commented extensively on “the changes which the capitalist economic system has undergone since Leo’s time”, including the reality that
“an immense power and despotic economic dictatorship is consolidated in the hands of a few… they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will… ” (par. 104-109)
Neither Leo nor Pius blamed governments as such for this problem but rather saw it as the logical consequence of the philosophy of economic liberalism – the idea that individualistic competition would naturally serve the common good. This is most clearly stated in paragraph 88 of Quadragesimo Anno, where he wrote – among other things:
“free competition, while justified and certainly useful provided it is kept within certain limits, clearly cannot direct economic life“
Here it must be said, however, that Pius XI did not believe that the government could provide a permanent solution to the problem, that it too would fail, “since it is a headstrong power and a violent energy that, to benefit people, needs to be strongly curbed and wisely ruled. But it cannot curb and rule itself.”
In the place of both unregulated economic activity that leads to concentrated wealth and power, and the “economic dictatorship” of the state Pius called for a third alternative:
“Loftier and nobler principles – social justice and social charity – must, therefore, be sought whereby this dictatorship may be governed firmly and fully. Hence, the institutions themselves of peoples and, particularly those of all social life, ought to be penetrated with this justice, and it is most necessary that it be truly effective, that is, establish a juridical and social order which will, as it were, give form and shape to all economic life.”
There are no “laws of economics” that bind us to the current downward spiral we find ourselves in, or, even if we should have a startling recovery, yet another great bust somewhere else down the line. Neither do such “laws” prevent any of us from taking the words of Pius XI seriously and seeking to create a new and just social order in our midst. We don’t have to live this way, and there are some 60 million Catholics in America alone, only a fraction of which would be needed for serious movement in another direction. But we will never escape the cycle if we heap all the blame either government or business. We must go much deeper than that.
There have been times during history, and there are places in the world today, where men are truly the masters of their own fate because they are owners that work together in community, because there is a basic recognition of the human dignity of each member of the community. I quote Chesterton’s wonderful exposition of Distributism, The Outline of Sanity:
“I hold the old mystical dogma that what Man has done, Man can do. My critics seem to hold a still more mystical dogma: that Man cannot possibly do a thing because he has done it. That is what seems to be meant by saying that small property is “antiquated.” It really means that all property is dead. There is nothing to be reached upon the present lines except the increasing loss of property by everybody, as something swallowed up into a system equally impersonal and inhuman, whether we call it Communism or Capitalism. If we cannot go back, it hardly seems worth while to go forward.”
Private property is the bedrock of individual freedom, but its communal use is the glue that holds society together and prevents its bonds from shattering and its individual fragments from mutating into the hideous monsters that have stomped on our society like Godzilla with a toothache. This is what I understand to be the core principle of Distributism, as well as Aristotle’s ideal political community, as well as the social teaching of the Holy Fathers. It is time to listen and more importantly, to implement.
It is time to surrender our secular ideological preferences to the wisdom of the Holy Fathers; that is in fact how Distributism got its start: a few bright minds took Leo XIII’s encyclical to heart; in Spain a few more a little later on took Pius XI’s to heart and started the Mondragon. What if there were 10 Mondragons or 100, all operating on Catholic principles? What stops that from occuring but an unjustifiable fondness for alien ideologies ultimately hostile to Catholicism?