Capitalism: The System Or the Regime?

Many celebrated the downfall of Communism as the triumph of capitalism. Certainly there is some truth to this. But while Catholic social teaching utterly rejects Communism and Socialism, it does not embrace capitalism without qualification. The Pontiffs offered a clear understanding of the service of the market for the common good.

 In Centesimus Annus, http://www.vatican.va/holy_father/john_paul_ii/encyclicals/documents/hf_jp-ii_enc_01051991_centesimus-annus_en.html  Bl. Pope John Paul II makes a distinction between two forms of capitalism. The first is morally acceptable: “If by capitalism is meant an economic system that recognizes the fundamental and positive role of business, the market, private property, and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a business economy, market economy, or simply free economy” (n. 42).

Bl. PJP II contrasts this to a second form of capitalism where “freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of a human freedom in its totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious.”  Capitalism understood in this way, is a market emancipated from the moral law. It is evident in places where the wealthy can corrupt the laws for their private benefit. It is also evident in places where societies encourage the sale of immoral and irreligious products and services.

By contrast, the just form of capitalism has a “strong juridical framework”, that is, a system of laws that provide justice for both rich and poor in light of the common good. The law is not merely a tool for wealthy persons to secure their privileges. Further, a society cannot allow the market to compromise its moral and religious character. Catholics and other religious people of an earlier era, for example, boycotted movies that offended faith and morals.

In distinguishing between these two forms of capitalism, BL. PJP follows the teachings of his predecessor, Pope Pius XI. While remarking on Pope Leo XIII’s teaching in Rerum Novarum  http://www.vatican.va/holy_father/leo_xiii/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum_en.html on capitalism, Pius XI  explained that “with all his energy Leo XIII sought to adjust this economic system according to the norms of right order; hence; it is evident that this system is not to be condemned in itself. And surely it is not of its own nature vicious” (Quadragesimo Anno, n. 101).    http://www.vatican.va/holy_father/pius_xi/encyclicals/documents/hf_p-xi_enc_19310515_quadragesimo-anno_en.html

Pius XI distinguished this from what he called the capitalist “regime” or the rule of society by capitalists for their private advantage. The capitalist regime “violate[s] right order when capital hires workers, that is, the non-owning working class, with a view to and under such terms that it directs business and even the whole economic system according to its own will and advantage, scorning the human dignity of the workers, the social character of economic activity and social justice itself, and the common good.” The last phrase is especially important, for the capitalist regime works to bend the law for the private advantage of business against the common good.

The distinction made by these Popes helps us see that many of the present day evils associated with “capitalism” are not with the system (to use Pius XI’s phrase), but with the regime, the wealthy find ways for the government to protect their interests to the detriment of workers and the common good. This regime further promotes goods and services to the detriment of moral and religious character of society, as one sees today in the entertainment media.

In light of this we must be careful not to draw socialism in its various forms as morally equivalent to capitalism. Capitalism can be a means for promoting the common good. It is the capitalism freed from the moral law and juridical restraints, the capitalist “regime” that must be rejected as the moral equivalent of socialism and Communism.

Dr. Arthur M. Hippler, The Wanderer

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On another forum, a fellow JUser made the following observation…..