The Capitalist Response

John Clark, no Seattle Catholic - A Journal of Catholic News and Views:

(...) As a matter of historical fact, capitalism almost literally began in the backyard of the Vatican. As Raymond De Roover explains in The Rise and Decline of the Medici Bank: 1397-1494: "Modern capitalism based on private ownership has its roots in Italy during the Middle Ages and the Renaissance."

Even the premiere economic historian Joseph Schumpeter admits that:

"by the end of the fifteenth century most of the phenomena that we are in the habit of with that vague word Capitalism had put in their appearance, including big business, stock and commodity speculation and 'high finance'..."

Simply put, the Bellocian thesis that capitalism has Protestant origins must be summarily rejected. It is significant that modern capitalism found its origin in Catholic countries at the height of the glory of Christendom, when faith still mattered. It is also significant that the Medici Bank, which existed as both the figurative and literal center of the capitalist world, had one customer that did business with it more than any other: the offices of the Catholic Church.(...)

After all, there are quite a number of extremely influential Catholic economists from whom he could have chosen. If the reader would please forgive the length of the following, I would suggest that the greatest Catholic thinkers on economic questions would include the following:

St. Bonaventure (the thirteenth century doctor of the Church who laid out an extensive moral application of property rights).

St. Albert the Great (who developed a moral defense of the lawfulness of business as well as establishing the "need theory of value").

Pope Alexander III (who provided an ethical foundation for the formula of a "just price").
Alexander of Hales (thirteenth century Franciscan chairman in theology at the University of Paris who, according to Odd Langholm, produced the "first clear definition and denunciation of monopoly in medieval theological literature").

Henry of Ghent (the thirteenth century master of arts at Paris who provided the moral defense of personal financial investments for future needs).

St. Bernardino of Siena (fifteenth century scholastic whose treatise De Contractibus et Usuris is considered by economists as perhaps the first general survey of the field of economics).

Richard of Middleton (thirteenth century regent master of arts at the University of Paris whose theories on international trade are considered by economists as breakthroughs).

Blessed John Duns Scotus (fourteenth century Franciscan whose commentaries on usury provided a pivotal understanding about the nature of money itself).

Roland of Cremona (thirteenth century regent master of arts at Balogna, who wrote a 1400 page confessional manual addressing questions of wealth and property).

St. Antoninus (archbishop of Florence until 1459, whom Schumpeter describes as "the first man to whom it is possible to ascribe a comprehensive vision of the economic process in all its major aspects").

Pedro Fernandez Navarrete (seventeenth century scholastic canonist who outlined the financial and moral perils of high taxation, whose theories pre-dated "The Laffer Curve" by almost four hundred years).

Cardinal Cajetan (sixteenth century general of the Dominican Order whose theories on the morality of exchange and pricing in De Cambiis provided a major ethical support for free market economic principles).

St. Alphonsus Liguori (eighteenth century doctor of the Church whose theories on the nature of capital would shape economic ethical theory henceforth).

Martin de Azpilcueta Navarrus (sixteenth century Dominican canon lawyer at Salamanca who developed the purchasing power parity theory of exchange rates).

Covarrubias y Leiva (sixteenth century bishop of Segovia who promoted the utility theory of value).

Francisco Suarez (sixteenth century chair of theology at the Jesuit College in Rome, who promoted the natural rights view of private property).

Leonard Lessius (seventeenth century student of Suarez who defended the capitalist principle of the entrepreneur being paid much more highly than other workers).

Laurentius de Ridolfis (fifteenth century canon lawyer who produced the first detailed discussion of foreign exchange).

(...) While Pope Leo XIII was admittedly concerned about the economic environment of his time which followed industrialization, he certainly was no anti-capitalist. On the contrary, he simply condemned the abuses of capitalism, not capitalism itself. That is a rather large distinction. Condemning the abuses of a thing is not the same as condemning the thing. One year prior to Rerum Novarem, Pope Leo XIII, in Sapientiae Christianae, condemned the abuses of the education of children; he did not say that the education of children is an abuse.

Pope John Paul II is really the first modern Pontiff to delve into capitalism proper, and analyze it on its own merits.

In Laborem Exercens, Pope John Paul II writes:

...it should be recognized that the error of early capitalism can be repeated wherever man is in a way treated on the same level as the whole complex of the material means of production, as an instrument and not in accordance with the true dignity of his work — that is to say, where he is not treated as subject and maker, and for this very reason as the true purpose of the whole process of production.

As close as a pope has ever come to fully endorsing a specific economic system occurred in Centissimus Annus. Speaking of capitalism, Pope John Paul II writes:

Certainly the mechanisms of the market offer secure advantages: they help to utilize resources better; they promote the exchange of products; above all they give central place to the person's desires and preferences, which, in a contract, meet the desires and preferences of another person. Nevertheless, these mechanisms carry the risk of an "idolatry" of the market, an idolatry which ignores the existence of goods which by their nature are not and cannot be mere commodities...

Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

The answer is obviously complex. If by "capitalism" is meant an economic system which 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...

(...) The position of the greatest scholastic minds of the Church on the subject of trade is this: 1) international trade was ordained by God; 2) it is vital to the survival of the state; and 3) the effort to restrict trade may be a sin against charity.

In De Regno, St. Thomas says that entirely self-sufficient communities are impossible. Thomas writes:

One cannot easily find any place so overflowing with the necessaries as not to need some commodities from other parts. When there is an overabundance of some commodities in one place, these goods would serve no purpose if they could not be carried elsewhere by professional traders. Consequently, the perfect city will make a moderate use of merchants.

The perfect city is one that engages in trade. St. Bonaventure, the great Franciscan Doctor of the Church, argued that international trade must be moral because without trade, "many regions could not exist."

A late scholastic named Vitoria claimed that eternal law, natural law, and positive human law favored international trade. He wrote that to restrict the goods of an area from being supplied to another was not only economically unsound, but actually claimed that it was "iniquitous and against charity." Therefore, one can see that the Church has always been supportive of trade. (...)

Conclusion

As I mentioned in my Latin Mass article, capitalism and each of its component parts has been defended for centuries by the greatest minds of the Church. While capitalism continues to be attacked by the intelligentsia of the world, it has brought prosperity unknown prior to its arrival in countries across the world. Not even Belloc doubted its efficiency. Instead of attacking capitalism, perhaps Catholics should use the monetary tools at their disposal to produce Catholic businesses in an effort to glorify God.

May we all have the faith and courage to do so.