[CHAPTER 11][    CHAPTER 11    ]

Centesimus Annus: Capitalism, No and YesCentesimus Annus: Capitalism, No and Yes

PAPAL SOCIAL THOUGHT WAS ONCE SAID TO LACK SOPHISTICATION in the social sciences and to be too focused on the individual. Centesimus Annus intends to expand its analytic apparatus broadly enough to contrast not just ideologies, but actual systems of political economy such as real, existing examples of socialism and real, existing examples of democracy and capitalism.

With some sophistication, the pope distinguished the sphere of the social from that of the state, and drew a line between civil society and government. He emphasized the importance of free labor unions, citizens’ initiatives, and free associations. In a passage reminiscent of Tocqueville’s worries about the “new soft despotism” of democracies, the pope launched a systemic critique of “the social assistance state,” contrasting local, “neighborly” work among the poor with the sterility of bureaucratic relationships.¹ Whereas for centuries the Catholic tradition had maintained a positive view of the role of the state in social life, John Paul II was especially careful and detailed in setting limits to the overly ambitious states of the late twentieth century.

There had never been any question in John Paul II’s mind that democratic institutions, whatever their faults, are the best available protection for human rights. He now added that capitalist virtues and institutions, whatever their faults, are the best available protection for democracy. To be sure, it was the famous section 42 of Centesimus Annus that drew most of the attention in the world’s press. Until that point in the encyclical, the pope had been dealing with the events that had changed the world since 1891, and especially the events of 1989, as background for his practical advice for the present. Then in section 42 the pope was at last ready to return to the underlying question being pressed upon him from Poland, Czechoslovakia, Hungary, the Third World, and many other quarters: After the collapse of socialism, what do you propose? It is worth giving his answer in full, since the only sensible answer to the question requires some care with the highly disputed term “capitalism.”

Returning now [for the third time] 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 even though it would perhaps be more appropriate to speak of a “business economy,” “market economy” or simply “free economy.” But if by “capitalism” is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.²

Point by point, this reply reflects the experience of those nations that since World War II have experienced both political liberty and economic prosperity. For example, recovering from the experience of Nazism, Germany after World War II had to undergo a major transformation which was not only economic, but also political and moral. In many of the formerly communist nations, the situation today is similar. In Anglo-American nations, a structure of law has evolved over centuries, from which slowly emerged the political, economic, and cultural institutions that together frame “the free society.” In fact, such neoliberal thinkers as Friedrich Hayek in The Constitution of Liberty and Bruno Leoni in Freedom and Law particularly stress these noneconomic factors. In The Spirit of Democratic Capitalism (1982), I called the resulting Gestalt a “tripartite system.” Democratic capitalism is not a “free enterprise system” alone. It cannot thrive apart from the moral culture that nourishes the virtues and values on which its existence depends. It cannot thrive apart from a democratic polity committed, on the one hand, to limited government and, on the other hand, to many legitimate activities without which a prosperous economy is impossible. The inarticulate practical wisdom embedded in the political system and in the moral-cultural system has profoundly affected the workings of the economic system. Both political decisions and the moral climate encouraged this economic development. At various times in American history, both the political system and the moral-cultural system have seriously intervened, positively and negatively, in the economic system. Each of the three systems has modified the others.

In the second part of section 42, cited above, Pope John Paul II carefully ordered the roles of all three systems—economic, juridical, and moral. As one part of the tripartite structure, capitalism rightly understood flows from the pope’s anthropology: “Man’s principal resource is man himself. His intelligence enables him to discover the earth’s productive potential and the many different ways in which human needs can be satisfied.”³ “Man,” he wrote again, “discovers his capacity to transform and in a certain sense create the world through his own work . . . carrying out his role as cooperator with God in the work of creation.”⁴ And yet again, “Man fulfills himself by using his intelligence and freedom. In so doing he utilizes the things of this world as objects and instruments and makes them his own. The foundation of the right of private initiative and ownership is to be found in this activity.”⁵

Moreover, the expression of personal creativity through work entails a social dimension: “By means of his work man commits himself not only for his own sake, but also for others and with others. Each person collaborates in the work of others and for their own good. Man works in order to provide for the needs of his family, his community, his nation, and ultimately all humanity.”⁶

In these texts we see the elemental form of the pope’s logic, from the image of the Creator in each person, to the work that flows from that source. Likewise, from the fecund mind of the creative God, to the exercise of human intelligence and choice in invention, initiative, and enterprise. Already in Sollicitudo Rei Socialis, the pope had seen that the right to personal economic initiative is a fundamental human right, second only to the right to religious liberty. Like religious freedom, economic initiative also flows from the “creative subjectivity” of the human person. This line of thought led the pope to discern the role of enterprise in economic activity.

John Paul II saw creativity at work in such acts of discovery and discernment. He even saw in them a new form of “capital.” As pastor and theologian, of course, he went beyond a purely economic evaluation of innovation to make ethical judgments about its impact on individual persons and the common good. Although the origins of the word “capital” lie in a more primitive economic era, when capita referred to heads of cattle and the major form of economic capital lay in the ownership of land, the same word also suggests the Latin caput (head), the human seat of that very creativity, invention, and initiative the pope sees in “creative subjectivity.” Indeed, the pope himself alluded to the crucial shift from the primitive meaning of capital as land to its modern meaning as human capital, as we must now examine.

The pope’s thinking on this point again parallels that of Abraham Lincoln. In Laborem Exercens, the pope asserted “the principle of the priority of labor over capital.”⁷ Similarly, in his First Annual Message to Congress on December 3, 1861, rephrasing some of the words he had used at the Wisconsin State Fair in 1859, Lincoln wrote:

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital, producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation.⁸

Yet Lincoln also saw that the great cause of wealth is human wit, and grew quite eloquent in praising the role of invention in drawing wealth from the hidden bounty of creation. Similarly, he saw in the Patent and Copyright Clause of the U.S. Constitution a remarkable incentive for inventors and creators (and thus one of history’s great boons to human freedom), since the prospect of the temporary ownership of ideas (as property) “added the fuel of interest to the fire of genius.” In a similar spirit John Paul II wrote:

The earth, by reason of its fruitfulness and its capacity to satisfy human needs, is God’s first gift for the sustenance of human life. But the earth does not yield its fruits without a particular human response to God’s gift, that is to say, without work. It is through work that man, using his intelligence and exercising his freedom, succeeds in dominating the earth and making it a fitting home. In history, these two factors—work and the land—are to be found at the beginning of every human society. However, they do not always stand in the same relationship to each other. At one time the natural fruitfulness of the earth appeared to be and was in fact the primary factor of wealth, while work was, as it were, the help and support for this fruitfulness. In our time, the role of human work is becoming increasingly important as the productive factor both of non-material and of material wealth. Work becomes ever more fruitful and productive to the extent that people become more knowledgeable of the productive potentialities of the earth and more profoundly cognizant of the needs of those for whom their work is done.⁹

In a way different from that of Ludwig von Mises and Friedrich Hayek, but with an analogous concern, the pope saw work as building up the tacit, experiential, evolving network of a good society: “It is becoming clearer how a person’s work is naturally interrelated with the work of others. More than ever, work is work with others and work for others: It is a matter of doing something for someone else.”¹⁰

In an odd way, then, modern capitalism centers more and more attention on caput, on factors such as knowledge, insight, discovery, enterprise, and inquiry. “Human capital” becomes the major cause of the wealth of nations, more important even than natural resources. A country without natural resources can in fact become wealthy; another country quite rich in natural resources can remain very poor. The reader can think of his or her own examples, but for me—all due complexities added—Japan and Brazil offer a potent contrast. Such considerations led the pope to a new meaning of “capital.” In our time in particular there exists another form of ownership which is becoming no less important than land: the possession of know-how, technology, and skill. The wealth of industrialized nations is based much more on this kind of ownership than on natural resources.

The pope’s emphasis on the “community of work” also led him to appreciate “entrepreneurial ability.” It is not so easy, he saw, to discern just how to match human needs and human resources in a productive and efficient way. In many nations today, economic failure, not success, seems to be the rule. The pope discovered that a kind of social foresight is key to avoiding failure:

A person who produces something other than for his own use generally does so in order that others may use it after they have paid a just price mutually agreed upon through free bargaining. It is precisely the ability to foresee both the needs of others and the combinations of productive factors most adapted to satisfying those needs that constitutes another important source of wealth in modern society.¹¹

In particular, the pope stressed the social aspects of entrepreneurship. A free economic system is nothing if not a social system of exchange, based upon voluntary agreement. The pope followed this logic closely:

Many goods cannot be adequately produced through the work of an isolated individual; they require the cooperation of many people in working toward a common goal. Organizing such a productive effort, planning its duration in time, making sure that it corresponds in a positive way to the demands which it must satisfy and taking the necessary risks—all this too is a source of wealth in today’s society. In this way the role of disciplined and creative human work and, as an essential part of that work, initiative and entrepreneurial ability becomes increasingly evident and decisive.¹²

At this point, everything that the pope had heretofore written about the acting person, about creative subjectivity, and about the fundamental right to personal economic initiative falls into place. He was in a position to render a systemic judgment: “This [modern economic] process, which throws practical light on a truth about the person which Christianity has constantly affirmed, should be viewed carefully and favorably.”¹³

This is an astonishing statement. The pope suggested that the free and cooperative economy sheds light on Christian teaching in a new way. And he did not neglect the virtues required to accomplish this task:

Important virtues are involved in this process such as diligence, industriousness, prudence in undertaking reasonable risks, reliability and fidelity in interpersonal relationships as well as courage in carrying out decisions which are difficult and painful, but necessary both for the overall working of a business and in meeting possible setbacks.¹⁴

The basis of the modern business economy, the pope wrote, “is human freedom exercised in the economic field.”¹⁵ This is a very important recognition. To papal approval for the free political life of democracy, it adds approval for a free economic life; and in both cases freedom implies accountability.

The pope even found it useful to say a good word for profit as “a regulator of the life of a business”:¹⁶ “The Church acknowledges the legitimate role of profit as an indication that a business is functioning well. When a firm makes a profit, this means that productive factors have been properly employed and corresponding human needs have been satisfied.”¹⁷ Like many good business writers today, the pope also stressed that profit is not the only regulator of the life of a business: “Human and moral factors must also be considered, which in the long term are at least equally important for the life of a business.”¹⁸ Business writers such as the late Peter Drucker have stressed the crucial role of various types of human relations within firms; the pope spoke of a firm as “a community of persons . . . who form a particular group at the service of the whole of society.”¹⁹

The Limits of Capitalism

Nevertheless, Pope John Paul II did not forget the costs of modern capitalism, based upon human creativity, whose other face is necessarily what Joseph A. Schumpeter called “creative destruction.” The pope wrote that “the constant transformation of the methods of production and consumption devalues certain acquired skills and professional expertise, and thus requires a continual effort of retraining and updating.”²⁰ He particularly worried about the elderly, the young who cannot find jobs, and “in general those who are weakest.”²¹ He referred to the vulnerable in advanced societies as the “Fourth World.”²²

Meeting their needs is the unfinished work of Rerum Novarum, including “a sufficient wage for the support of the family, social insurance for old age and unemployment, and adequate protections for the conditions of employment.”²³ All such deficiencies of a market system need to be redressed with practical wisdom. In some cases government will have to take a leading role; in other cases various sectors of civil society will. The pope was no libertarian—but neither was he a statist.

Christian ends leave a great deal of room within these boundaries for rival approaches to means, programs, and policies. The pope was also eager to distinguish capitalism rightly understood from the “primitive” or “early” type of capitalism of which he did not approve. The latter is characterized by (1) systems of “domination of things over people”; (2) systems “in which the rules of the earliest period of capitalism still flourish in conditions of ‘ruthlessness’ in no way inferior to the darkest moments of the first phase of industrialization”; and (3) systems in which “land is still the central element in the economic process, while those who cultivate it are excluded from ownership and are reduced to a state of quasi-servitude.”²⁴ In the Third World (quite visibly in parts of Latin America), landless multitudes suffer cruelly and stream toward the nearest megalopolis where pitifully little work (or housing) is available to them. Like Hernando de Soto, the pope saw that such propertylessness and exclusion characterize the conditions in which “the great majority of the people in the Third World still live.”²⁵

By contrast, the pope approved of “a society of free work, of enterprise, and of participation.”²⁶ He added: “Such a society is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the state so as to guarantee that the basic needs of the whole of society are satisfied.”²⁷ The words “appropriately controlled” exclude a pure version of laissez-faire, but are in line with the concept of the tripartite society envisaged in section 42. “Society” is distinguished from “state”; the moral and cultural institutions of civil society are distinguished from the political organs of the government. Both the society and the state check, balance, and regulate the economy. That the pope did not intend a socialist method of “control” is obvious from the preceding sentence, wherein the pope was crystal clear: “What is being proposed as an alternative is not the socialist system.”²⁸

In the same spirit, the pope repeated three times that “it is unacceptable to say that the defeat of so-called ‘real socialism’ leaves capitalism as the only model of economic organization.”²⁹ But here as elsewhere his cure for unbridled capitalism was capitalism of a more balanced, well-ordered kind. For he immediately proposed as a remedy:

It is necessary to break down the barriers and monopolies which leave so many countries on the margins of development and to provide all individuals and nations with the basic conditions which will enable them to share in development. This goal calls for programmed and responsible efforts on the part of the entire international community. Stronger nations must offer weaker ones opportunities for taking their place in international life, and the latter must learn how to use these opportunities by making the necessary efforts and sacrifices and by ensuring political and economic stability, the certainty of better prospects for the future, the improvement of workers’ skills and the training of competent business leaders who are conscious of their responsibilities.³⁰

Similarly, in section 42, after having introduced capitalism rightly understood, the pope attacked “a radical capitalistic ideology”:

Vast multitudes are still living in conditions of great material and moral poverty. The collapse of the communist system in so many countries certainly removes an obstacle to facing these problems in an appropriate and realistic way, but it is not enough to bring about their solution. Indeed, there is a risk that a radical capitalistic ideology could spread which refuses even to consider these problems in the a priori belief that any attempt to solve them is doomed to failure, and which blindly entrusts their solution to the free development of market forces.³¹

By “radical capitalistic ideology,” the pope seemed to mean total reliance on market mechanisms and economic reasoning alone. In the United States, we usually call such a view “libertarianism”; it is the view of a small (but influential) minority. American libertarians do not “refuse to consider” the poverty of multitudes; they offer their own sustained analyses and practical remedies, and with some success. The economy of Chile has become one of the leading economies of Latin America, in part through the sustained advice of libertarians from “the Chicago school,” who were once much maligned.

Ironically, nonetheless, the pope preferred to call the capitalism of which he approves the “business economy,” “market economy,” or simply “free economy.” This is probably because of European emotional resistance to the word “capitalism.” My own reasoning in preferring to speak of “democratic capitalism,” rather than the “market economy,” is to avoid sounding libertarian—that is, narrowly focused on the economic system alone. For in reality, in advanced societies the institutions of both the juridical order and the cultural order do impinge greatly on, modify, and “control” the economic system. Indeed, any religious leftist or traditionalist who still believes that the United States is an example of unrestrained capitalism has not inspected the whole thirty-foot-long shelf of volumes containing the Federal Register of legally binding commercial regulations. One might more plausibly argue that the economies of capitalist nations today are too heavily (and unwisely) regulated than too lightly.

In the real world of fact, the business economy is restrained by law, custom, moral codes, and public opinion, as anyone can see who counts the socially imposed costs they are obliged to meet—and the number of employees they must hire (lawyers, affirmative-action officers, public-affairs officers, inspectors, community-relations specialists, pension-plan supervisors, health-plan specialists, child-care custodians, and so on). The term “democratic capitalism” is an attempt to capture these political and cultural restraints that limit any humane economic system. It is defined in a way broad enough to include political parties from the conservative to the social democratic, and systems as diverse as those of Sweden and the United States.

In a similar vein, John Paul II noted three clear moral limits to the writ of the free market: (1) Many human needs are not met by the market but lie beyond it. (2) Some goods “cannot and must not be bought or sold.”³² (3) Whole groups of people are without the resources to enter the market and need nonmarket assistance. The market principle is a good one, but it is neither universal in its competence nor perfectly unconditioned. It is not an idol.

In addition, the pope thought in terms of international solidarity. The whole world was his parish. The pope’s frequent travels to the Third World were meant to dramatize the primary human (and Christian) responsibility to attend to the needs of the poor everywhere. Economic interdependence and the communications revolution have brought the Catholic people (and indeed all people) closer together than ever before. This fact brought to John Paul II’s attention many moral and social imperatives surrounding and suffusing economic activities. For example: Care must be taken not to injure the environment.³³ States and societies need to establish a framework favorable to creativity, full employment, a decent family wage, and social insurance for various contingencies. The common good of all should be served, not violated by a few. Individuals should be treated as ends, not as means, and their dignity should be respected.

The tasks to be met by the good society are many. No system is as likely to achieve all these goods as a market system is; but in order to be counted as fully good, the market system must in fact achieve them. The pope explicitly commended the successes registered in these respects by mixed economies after World War II. But he also stressed how much still needs to be done. Finding good systems is a step forward, but after that comes the hard part.

Toward a More Civil Debate

Centesimus Annus is so balanced a document that, even while neoconservatives such as myself took it up with enthusiasm, many on the left also quickly embraced it. Quietly, some even pointed out that the left these days is in favor of markets, enterprise, economic growth, and personal initiative. The Latin American left and a few others reacted grudgingly, perhaps because of the intense emotional commitment of many to “liberation theology.”

Even some on the North American Catholic left first responded to Centesimus Annus with shocked silence, followed less by an exposition of its themes than by an attack on neoconservatives for “hijacking” the encyclical. For example, a leading American Catholic progressive columnist, Father Richard P. McBrien, warned: “Neoconservatives who seem to exalt democratic capitalism as if it were the moral as well as the economic norm for the rest of the world cannot, on the basis of this encyclical, enlist the pope in their cause. Pope John Paul II is more cautious and more critical.”³⁴ As evidence, McBrien cites section 42: “Is this [capitalism] the model which ought to be proposed to the countries of the Third World?” McBrien replies: “If I understand the neoconservatives’ position correctly, their answer would be, ‘obviously yes.’ For John Paul II, the answer is ‘obviously complex.’” This passage reveals that McBrien confuses neoconservatives with libertarians. In fact, it is neoconservatives who introduced the idea of political, moral, and cultural counterbalances to capitalism into Catholic social thought. That is why without hesitation or cavil they endorsed the precise words the pope used, as an echo of their own. Even the sentence: “The answer is complex.”

The editors of the lay Catholic journal Commonweal also shared McBrien’s confusions. As a counterpoise to the encyclical’s “praise for the freedom and efficiency of market economies,” they quoted another line from the encyclical: “Even the decision to invest in one place rather than another is always a moral and cultural choice.” Then, they added in their own voice: “So much for the magic altruism of the Invisible Hand.”³⁵ That is precisely the reason why some of us have long emphasized, with John Paul II, the legitimate roles of the political system and the moral-cultural system in supplementing and correcting the market economy: to go where the market alone cannot.

In the not-so-centrist Center Focus, the newsletter of the radical Center of Concern, Father Jim Hug, S.J., fastened on a sentence from section 56: “Western countries, in turn, run the risk of seeing this collapse [of Eastern European socialism] as a one-sided victory of their own economic system, and thereby failing to make corrections in that system.”³⁶ He also liked section 34: “There are many human needs which find no place in the market. It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied, and not to allow those burdened by such needs to perish.” (Such a sentiment, said Samuel Johnson, is the test of any good society.) Astutely, Father Hug concedes that “some of the language and emphasis of Centesimus Annus suggests that U.S. neoconservatives helped to shape its content.” He urges the left to outdo the neocons next time: “We in the progressive segment of the Church justice community need to become ‘wise as serpents’ to the ways of influencing Vatican teaching.”³⁷

Most assuredly, Centesimus Annus is no libertarian document—and that, to many of us, is its beauty. Quite as the Commonweal article asserted, “What the encyclical grants to market mechanisms it does not take away from its witness to injustice or defense of the poor.” It denounced conditions of “inhuman exploitation.”³⁸ Quite truly, as Father Hug writes: “Centesimus Annus does not, then, anoint any existing system.” The pope saw a great many faults in the economic, political, and moral-cultural systems of even the most highly developed societies. His conclusion was as pointed as the obelisk in the center of Saint Peter’s Square. He made a nuanced, complex, but entirely forthright judgment about “which model ought to be proposed to the countries of the Third World, which are searching for the path to economic and civil progress.” His considered judgment? The “business economy,” “market economy,” or simply “free economy.”³⁹ But these too must be regulated by law and moral virtues. What could be plainer?

I want to stress that Centesimus Annus gives encouragement to social democrats and others of the moderate left, as well as to persons who share my own proclivities and those whose preferences are further to my right. It is not a party document. Part of its brilliance lies in its discernment of several constellations in the vast night sky of social goods. John Paul II saw, as it were, the stars that those on the reasonable left are following, but also the stars that attract those on the reasonable right. Some reasonable persons, if they are also partisans, tend to glance past the stars that others follow, to focus with passion on their own. John Paul II had the largeness of mind to keep all the stars in view, and with remarkable equanimity and balance. Indeed, I had the happy experience in London in April 1992 of hearing a leftist church worker describe Centesimus Annus as virtually a Labour Party manifesto, in the conference room of an institute sometimes described as a Thatcherite think-tank, among conservatives delighted with the fair play that Centesimus Annus had shown toward enterprise and with the nobility it saw in civil society. The Tories liked its praise of creative subjectivity and its criticism of the welfare state (see section 48), while the Labourites were pleased to note the limits it set to market principles and its various appeals to state assistance.

Nonetheless, it took nearly a whole year for a serious essay to be offered by the American Catholic left. Addressing “Christian Social Ethics After the Cold War,” David Hollenbach, S.J., a specialist in religious ethics and figure of the Catholic left, gingerly requested room in the conversation for a chastened socialist vision from Latin America and the liberal agenda of the American bishops. Here is how that plea poignantly concludes:

Those who have been led to believe that Centesimus Annus endorses “really existing capitalism” should take a hard look at the text. I hope that this modest “note” will encourage both such careful reading and subsequent talking in the spirit of solidarity and commitment to the common good that permeates the encyclical.⁴⁰

Very nicely put. Hollenbach later quotes (but only in part) one of my favorite passages from Centesimus Annus, as follows:

The fact is that many people, perhaps the majority today, do not have the means which would enable them to take their place in an effective and humanly dignified way within a productive system in which work is truly central. . . . Thus, if not actually exploited, they are to a great extent marginalized; economic development takes place over their heads.⁴¹

But the two sentences that Hollenbach leaves out in his ellipsis are central to the pope’s argument, since they put the stress on human capital:

They have no possibility of acquiring the basic knowledge which would enable them to express their creativity and develop their potential. They have no way of entering the network of knowledge and intercommunication which would enable them to see their qualities appreciated and utilized.⁴²

In other words, the communication of knowledge and the opening of markets and trade are among the best services that advanced societies can offer to the poor of the Third World.

Further, John Paul II insisted that the poor of the Third World must be allowed to become more economically active. But this will require basic structural reform, including changes in the laws of those Third World nations (particularly in Latin America) that hold most enterprise by the common people to be illegal. Skipping this radical critique of precapitalist states, Hollenbach interprets the pope as merely restating the formulation used by the U.S. Catholic bishops, which seems to picture the people as passive: “Basic justice demands the establishment of minimum levels of participation in the life of the human community for all persons.”⁴³ In the pope’s view, by contrast, governments must support the fundamental right of all persons to personal economic initiative. The pope stressed the creativity and activism of the poor, and criticized the barriers (often imposed by states) to the full exercise of their potential.

In summarizing John Paul II’s proposed remedy for Third World ills, Hollenbach cites its promarket beginning: “The chief problem [for poor countries] is that of gaining fair access to the international market. . . .” But he leaves off its even more significant ending: “. . . based not on the unilateral principle of the exploitation of the natural resources of these countries but on the proper use of human resources.”⁴⁴ Here again the pope focused on human knowledge and creativity. These need to be developed to their full potential. These need proper institutional support. These are the source of wealth. Repressing them is a very great evil. Most Third World states cruelly punish or neglect the human creativity of their citizens. More strikingly still, the two sentences the pope supplies that lead into this passage are quite stunning:

Even in recent years it was thought that the poorest countries would develop by isolating themselves from the world market and by depending only on their own resources. Recent experience has shown that countries which did this have suffered stagnation and recession, while the countries which experienced development were those which succeeded in taking part in the general interrelated economic activities at the international level.⁴⁵

“In my judgment,” Hollenbach writes, “the principles [of Centesimus Annus] call for major changes both in the domestic arrangements presently in place in the United States as well as in the global marketplace.” On that point, Hollenbach and I read the encyclical the same way. On what those “major changes” should be, however, Hollenbach and I are in different camps. The pope systematically recommends changes that open up and extend the benefits of market systems and encourage the domestic development of human resources. But Hollenbach has nowhere considered the concrete steps necessary to bring about “the proper use of human resources” in the Third World, particularly in the institutions that make personal economic creativity possible. One needs to ask him: How does one improve the skills of ordinary people, their knowledge, know-how, and capacities for enterprise (that is, human capital)? What institutional changes are necessary in Bolivia, Brazil, Colombia—and south central Los Angeles?

Recall Michael Ignatieff’s description of the moral flaw in the British Labour Party, as shown by the loss of four straight elections, including that of 1992: “Labour always tells people what it is going to do for them. It never encourages them to do it for themselves.”⁴⁶ Far better is it to build up institutions of enterprise and creativity, the social supports for that personal exercise of creativity and self-determination of which human dignity consists.

This was John Paul II’s point: A clear call for creative approaches to replace tired progressive remedies, while giving the latter due credit for what they did achieve. There was room in the pope’s house for many arguments among different tendencies and parties. But it was also important for those who disagreed to include each other in the discussion, and to conduct that discussion forthrightly, openly, and civilly.

The Catholic left (in the United States, at least) has expressed substantive agreement with Centesimus Annus even while showing considerable annoyance that the neoconservatives like it more than they. The left sees the poor and the vulnerable as passive, awaiting the ministrations of the state. The right and the center see the poor as capable, creative, and active. The left clings to its appeals to action by the state; it has become conservative in rhetoric, looking backward. The center and the right long for a new beginning, and sound positively radical in their demand for civil society, rather than the state, as their main hope for the future. Those in the center and on the right tend to emphasize all the encyclical’s appeals to civil society; those on the left (but not so much as before) tend to emphasize the state. This debate among left, center, and right—besides being unavoidably built into the tripartite system—is altogether healthy.

Paul Adams reminds me that since, though not necessarily because of, Centesimus Annus, there has been much emphasis in some fields of social work on “empowerment.” This term points to the practice of demanding assistance from government when strictly necessary, yes, but also recognizing that it is better to enable people to tap into their own wisdom, creativity, and initiative. See, for example, the reaction against deficit and needs-focused approaches to community development that only do things for the poor. More often praised among practitioners nowadays is Asset-Based Community Development. From hard experience, social workers have come to recommend strategies that build up civil society and increase local initiative. They stress the danger of the “doing-for” approaches of state or private charities. Too often “help” from outside sets communities back by inducing dependency and passivity. How best to help the poor, in practice? The answer is obviously complex!

Having always resented such moral imperialism as Paul Tillich’s “Every serious Christian must be a socialist,” and the British left’s “Christianity is the religion of which socialism is the practice,” I would by no means support the sentiment, “Every serious Christian must be a democratic capitalist,” or “Christianity is the religion of which democratic capitalism is the practice.” As Centesimus Annus insists, the Catholic Church “has no models to present,” and, indeed, has powerful reasons to criticize many abuses and wrongs in democratic capitalist societies.⁴⁷ The pope rightly insists that no worldly system can ever claim to be the Kingdom of God. What good would a Church be if it didn’t constantly criticize the City of Man in the light of the City of God, sub specie aeternitatis? Indeed, as Thomas Pangle reports in his study of Tocqueville’s Democracy in America, such an appeal to the viewpoint of immortality and eternal life is the indispensable contribution of religion to the democratic experiment.⁴⁸

The dread menace of communism, which in the Soviet Union alone took and blighted millions of lives, has been defeated. The ideology of socialism (at least as an economic idea) has been discredited, except among those whose investment in it has been too heavy to surrender quickly. In the long run of history, socialist economics will appear to have been a distraction. Our descendants may well wonder how so many of us, at least for so long a part of our lives, could have been taken in by it. Why didn’t we heed Leo XIII’s predictions about its futility and its immense damage to humanity? The death of socialism gives us an opportunity to think in fresh ways and to begin again with a new burst of social creativity. To have established that perspective, and to have set before us the immense challenge to create something much better than anything now available, is the true achievement of Centesimus Annus.