The Position of the Social Encyclicals on State Dirigisme
in the Economy, Before and After 1989/90
To present the topic the author goes through five historical periods, drawing conclusions after each one. These periods create conditions for the emergence of modern Catholic social teaching, its initial development (first two social encyclicals), its further development, its development in the second half of the 20th century until 1989/90, and the main provisions of the teaching after 1989/90.
Firstly, modern Catholic social teaching began as a reaction to the plight of the worker and a revolutionary situation in the 19th century. It did not come suddenly. Before the first social encyclical letter of 1891, discussions in the Catholic environment on possible ways to improve the situation were carried out by representatives of higher clergy, academic scholars, and public figures. The discussions started with a desire to return to the social structure of the Middle Ages. Then the accent shifted towards preservation of the existing system and activation of the state authority. Although the role of the state in the economy during the 19th century was debated, some social proposals were put into practice. Labor associations and state social benefits emerged. The ideas of German Social Catholicism, with limited government intervention in the functioning of the market mechanism, as well as mutual cooperation in the work process, were taken as a basis for the first social encyclical.
Secondly, the first two social encyclicals (Rerum Novarum and Quadragesimo Anno) laid the main principles of modern social teaching. The principles of solidarity, subsidiarity and the concept of the common good were formulated. These principles strengthened the institution of private ownership and the state authority as a guarantor for a stable functioning of the economic system in the country. This system implied a mutual cooperation among economic entities namely labor and capital, as well as a specifically ordered structure of society. At each level of such a system the economic entities should independently perform their tasks. The role of the state was limited to lawmaking. Furthermore, the state could and should intervene in the operation of associated subsystems, if those systems could not cope with their tasks, and then terminate the intervention as soon as they could operate on their own normally. The Papacy also saw another aim for the state in the redistribution of income in favor of the poor. However, such redistribution should not threaten the existence of private ownership nor deprive people of their economic initiative. Moreover, government redistribution of income should be considered as a last resort. Pope Pius XI stressed the importance of charity and mutual assistance on the basis of bringing people together in voluntary associations on a professional basis. The idea of restoring the medieval guilds for mutual support of the workers was expressed by Pope Leo XIII as well. Ideas both from liberal capitalism and Marxist socialism were in conflict with the Church’s social teaching. The Vatican regarded both systems as inadequate, pointing both to the positive and negative aspects of them.
Thirdly, international practice in the second half of the 20th century showed that the world still decided to try both systems in the form of socialism and capitalism. However, these systems proved to be ineffective. Capitalistic countries were unable to achieve sustainable development without a strong regulatory state resisting various crises, while the countries of socialism began to show a lag in economic development compared to the countries with developed market economies, especially since the mid-1970s. By the end of the 20th century, two competing systems transformed themselves into the model of a mixed economy or the “third way” with a social-economic structure more or less corresponding to the Catholic social teaching. The degree of state control increased significantly in the former states of the market economy. In the former countries of socialism the market mechanism was allowed to operate. Supranational authorities have shown their presence. The beginning of the 21st century witnessed a growth of private charity as an implementation of the solidarity principle, as well as a clear manifestation of the subsidiarity principle in the economy and the social sphere, through the initiation of private and voluntary-corporative social responsibility.
Fourthly, during the second half of the 20th century the Vatican developed further the principles of solidarity and subsidiarity. The principle of personality with an emphasis on human dignity was formulated. Private ownership had a key focus and was perceived in the light of service to the common good. Private property and an active, but not intrusive, state were two foundations of the economy laying the groundwork for both peaceful sustainable development of the society and its spiritual and physical prosperity. On a par with that, the Holy See expressed concern that people have increasingly neglected private property. Since 1961, the Catholic social teaching proclaimed a strong state and market mechanism as the basic conditions that could guarantee the stable development of the economy and preserve private ownership. The Vatican urged the state to intervene in the market economy more actively to maintain stability, and price stability in particular. The state had to provide benefits for sickness, old-age, disability, as well as to promote charity and the establishment of self-help associations. On the one hand, the Second Vatican Council criticized sharp differences in wealth. On the other, it spoke out against high taxes, which, from its view point, reduced the capacity for charity. In addition, a concern for the rise of dependence on public benefits and reduction of initiatives was expressed. However, the state support of education for low-income citizens with the purpose of raising the moral level in the society and maintaining human dignity was considered to be very important. The issues of ecology were addressed. Since the 1980s, John Paul II drew attention to an overgrown bureaucracy articulating the need for honest work from staff and support for a high state authority. Along with that, the Second Vatican Council had indicated earlier possible ways to protest against the activities of the government, if it misused its power.
Fifthly, it is possible to highlight some innovations that have appeared in the Catholic social teaching since the transformation of the world economy in 1989/90. John Paul II gave a detailed overview of that, regarding what the Church cannot agree with and how the social teaching differs from both socialism and capitalism. The Church could not accept liberalism or socialism in its pure form, since each system had elements that were contrary to the Christian tradition, for example a brazen exploitation of resources with abuse of an economic power in the first case, and an inefficient economy with suppression of creativity and personality in the second. Both, John Paul II and Benedict XVI indicated the danger of an overly strong state, particularly in the area of redistribution and charity, as well as an excessive regulation of economic entities. The Vatican described the modern state bureaucracy as an obstacle for the individual, which cared more about its welfare than about the common good. But at the same time, the papacy supported keeping the state at the top of the social hierarchy as the controller of social development. A detailed discussion concerning the role of the state in protecting the environment took place. Due to the rights of private property, the Vatican suggested introducing taxes on pollutants. People were encouraged to adopt a responsible approach to nature and its resources. The idea of the further development of education as a tool for correcting public morality along with the law was emphasized. As a separate aspect of solidarity, there appeared a theme of preserving culture, including care for migrants and refugees supported first of all by Pope Francis. Catholic social thought continued to be concerned with economic and social development based on solidarity, personality, subsidiarity and the concept of the common good laid down by Catholic social teaching during the 20th century.
Now we can return to the question as to where the Vatican has placed new accents or strengthened the old ones concerning state regulation of the economy after the great transformation of 1989/90. It is not really possible to say that Catholic social teaching concerning state dirigisme regarding the economy has undergone significant changes. We can claim that the attention of the Holy See to the role of the state has grown alongside the development of the social teaching itself. The emphasis upon respect for the principle of subsidiarity has been definitely strengthened. Although, the state, with all its power, is vested with a role of the keeper and maintainer of the order in the country, it should not deprive the individual of her or his initiative and responsibility. Alongside this, one can note some new accents within the principles of subsidiarity and solidarity. These are issues of ecology, bureaucracy, charity and migration. The principle of personality and the concept of common good evolved in the direction specified after the Second World War. Private ownership as the foundation of Catholic social teaching still remains relevant. That is why the author would say that the Catholic social teaching preserves its basic positions even after the world transformation at the end of the 20th century. But this preservation is not conservation. The teaching, the same as the Church, progresses with the progress of people trying to find answers to new challenges, which indeed are the old ones. Therefore, the Church as the mother and guardian of homo, homo-christianus, is continually modifying the answer of Christ to seek first the kingdom of God.