Advocating Marxism?

Nowhere in the encyclical does Francis denounce capitalism. Nowhere does he call for the abolition of either private property or the private ownership of the means of production - two cornerstones of Marxism. Certainly, he is concerned about our priorities as a society: "How can it not be a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion."  Francis is also concerned about the acceptance of social Darwinism:  "Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless."   And like such mainstream economists as Robert Skidelsky, he observed that wealth is a means to an end and not an end in and of itself:  "Money must serve, not rule!"

But Francis made one statement that made Limbaugh and Varney think they saw a Red:

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.

"This is just pure Marxism coming out of the mouth of the Pope," Limbaugh bellowed. "...the Pope here has now gone beyond Catholicism here, and this is pure political."

Varney added that "capitalism, in my opinion, is a liberator," and he drew the analogy that Pope John Paul II knew that free markets were necessary because he grew up under communism. Varney claims that "markets work well for everyone."

(It seems that Limbaugh and Varney are not familiar with either Mark 10:21-22 or  Luke 16:19-25.)

However, had they actually read the document, it is clear that Pope Francis was not calling for the abolition of capitalism, he was criticizing a particular style of capitalism:  laissez-faire.  In fairness, both commentators acknowledge that they are not Catholic, and they certainly demonstated ignorance about the teachings of the faith. That is, perhaps, the understatement of the day.

The Real Target: Distributive Justice

Limbaugh and Varney are really taking aim at is New Deal-inspired liberal economics - which is not about Marxism or destroying capitalism. Instead, it is about saving capitalism from those bad apples that would abuse it, seeing it only as a means to create non-meritorious wealth by dint of deceit and unscrupulousness.

Part and parcel of New Deal economics is Distributive Justice. Its roots are found in the works of Aristotle, Cicero, Maimonides and adopted into Catholicism by Thomas Aquinas. And it is Aquinas who defines distributive justice as follows:

...in distributive justice something is given to a private individual, in so far as what belongs to the whole is due to the part, and in a quantity that is proportionate to the importance of the position of that part in respect of the whole. Consequently in distributive justice a person receives all the more of the common goods, according as he holds a more prominent position in the community. This prominence in an aristocratic community is gauged according to virtue, in an oligarchy according to wealth, in a democracy according to liberty, and in various ways according to various forms of community. Hence in distributive justice the mean is observed, not according to equality between thing and thing, but according to proportion between things and persons: in such a way that even as one person surpasses another, so that which is given to one person surpasses that which is allotted to another.(1)

Aquinas addresses something either Limbaugh or Varney conspicuously do not: a duty to distribute with provision to the poorest of society

That is why with the issuance of Pope Leo XIII's 1891 encyclical, Rerum novarum (Of New Things; subtitled, "The Rights and Duties of Capital and Labor") Distributive Justice was adopted as the heart and soul of Catholic Economics.

What Is Distributive Justice?

The liberal economist Monsignor John A. Ryan (1869-1945) outlined six canons for the distributive justice of wages. The first three, needs; arithmetic equality; and efforts and sacrifices are ethical in nature; while the next two, scarcity and comparative productivity, are economic in nature. Any one by itself, consummate to the product produced, would not pay a worker a just wage. And while laborers of superior talents deserve greater reward for their efforts and creativity, the first canon of needs is prominent and must always be the first to be satisfied. All five when properly balanced against each other results in the equitable distribution of wages as described by the sixth cannon, human welfare.

It is the all-too-common mischaracterization of the canon of arithmetic equality that gives rise to the accusation that liberals are "levelers," "egalitarians" and of course, "Marxists" or "socialists." Conservatives and neoconservatives often score points by taking this one canon of distributive justice argument out of context by interchangeably using the term "redistribution of wealth." Our opponents erroneously claim that liberalism is about taking hard-earned income out of wealthier taxpayers' pockets and redistributing it to the poor solely for the sake of soaking the rich. Nothing could be further from the truth.

First, the canons of distributive economic justice only apply when the employer enterprise can first provide his family with their basic needs. Secondly, it kicks in solely to justly distribute profits proportionately based upon meritorious contribution. Cleary, that is not Marxism but a fairer form of capitalism.

Modern distributive justice was first enunciated by Catholic progressives during the early 1890s and more clearly articulated in The Bishops' Program of 1919. Led by economist-priest Monsignor John A. Ryan many in the Church were beginning to embrace the reformist ideas of the protestant Social Gospel movement then being pursued by progressive ministers such as Walter Rauschenbusch.

The Role of Progressive Taxation.

Progressive taxation has nothing to do with "the confiscation of wealth." Such an interpretation is - once again - based upon a serious misunderstanding, focusing on only one of the six interdependent cannons of distributive justice: arithmetic equality. Instead progressive taxation seeks to maintain the wealth of those who succeed by playing by the rules. This means helping the middle class maintain a standard of living for which many of its members struggle every day to maintain.

It is not merely the percentage of taxes paid that defines justice, but the payment in proportion to wealth created by each individual after which the basic necessities of life have been first satisfied. The working poor and the lower echelons of the middle classes should not be forced to pay a flat tax rate equivalent to wealthier members of our society; the overwhelming majority of the former's income goes to basic needs such as food, clothing and shelter. They have little or no superfluous income. Thus, their tax burden should be the lightest.

Middle-class workers have a bit more superfluous income, but in light of their decreasing power in this area, care should be given to their tax burden. Yes, they should pay proportionately more than the poor, but always with the caveat that they fund many of our government programs.

If the middle-class or even lower echelon wealthy have some superfluous wealth by the dint of operating a small business that, too must be taken into account. The owner of a small trucking company or a produce distributor is more prone to suffer financial hardship than the CEO of a Fortune 500 company. Furthermore, small business owners generally reinvest a greater proportion of their personally created wealth into their endeavors than does the hired executive. Because they are in the middle of the economic spectrum and reap the fewest benefits from the government, they naturally have a greater resentment of the abuse of tax revenue. They are the ones who, more and more, are struggling to maintain their measure of hard-earned wealth that they have created for themselves.

The stock conservative argument that our present tax system is one based upon "the envy of wealth" or "is a redistributer of wealth" is a fraud. Instead it is a value for value transaction-especially for the very wealthy. If the rich want to argue that a 90% or 70% top tax bracket is onerous, they may have a point. But having Bill Gates pay a federal tax rate of about 41% does not put a crimp in his lifestyle; he will not be denied self-development. In fact, in the early 1960s when the highest tax bracket was 90%, the conservative writer Willmoore Kendall proclaimed that if the top bracket were to be lowered to 40%, it would allow anyone to become "smacking rich."

It is the wealthy who have the most to gain but who lately have been contributing the least. Yes, the rich are entitled to their rewards, but their wealth is their reward, not massive tax rebates. And if they want to protect their wealth, it does not come without a cost: A just and progressive taxation system.

Protecting wealth means paying for military and homeland defense, as well as for "first providers" such as police, fire fighters and EMS workers. Protecting wealth means having enough funds to ensure that the Justice Department and the Securities and Exchange Commission can go after those who would engage in fraud and stock manipulation in an effort to unjustly separate the wealthy from their money. Protecting wealth means sufficiently funding the F.D.I.C. to protect citizens against bank failure.

The greater proportion of their tax burden does not come from income going primarily for basic necessities, but from overabundant, superfluous income. How can we bemoan their inability to buy a third or fourth vacation home when many hard-working Americans do not even have basic health care, let alone have the ability to purchase private property?

There is nothing wrong with being a millionaire. We should not discourage wealth creation, but encourage it. However, where we differ from the right is that wealth must gathered and maintained more fairly. Does this mean an egalitarian redistribution of wealth? No -- but, it does mean adhering to the principle that our tax contributions fairly correlate with the benefits we receive the government.

On the False Charge of Marxism.

Distributive Justice capitalism is not Marxism -- although that is what many of its critics on the Right falsely allege. Instead it is a third way that strives to ignore the arbitrary power that often results from the unchecked power that accompanies both Marxism and yes, laissez-faire capitalism.

Unlike Marxism, the model presented here still centers on the twin goals of private property ownership and profit motive. And unlike under Marxist regimes our government does not become the ultimate owner of property nor of the means of production. Instead, it acts as the umpire to assure that laws and mechanisms exist to allow workers to better bargain for a fairer share of private profits, safer working conditions and the ability to acquire private property.

Marxism desires to do away with both profit and private property. Distributive Justice concentrates on the democratization of capitalism through the fairer distribution of profits to all those who produced a given product or provided a specific service.

Capitalism at its best unleashes creative forces that have provided a vast improvement in standards of livings in many, many societies. But while capitalism is the most efficient vehicle across the board, it has also been uneven and sometimes unfair in its results. The trick is to make capitalism more democratic and thus more just.

For far too long this viable economic philosophy has been in the hands of buccaneer types who see market-based economics as an excuse to satisfy greed and do so under the guise of "economic freedom." Clearly, there is no freedom for the collateral victims of economic practices that have no consideration for the common good. As we have seen in the 1920s and in the post-Reagan years, unfettered capitalists left to their own devices will only care about one thing and one thing only: maximizing profit. Government's proper role is to not to eliminate their capitalistic instinct, but to prevent that instinct from causing unnecessary collateral harm.

The distributive justice model differs from the laissez-faire model is in its understanding that a just form of capitalism requires a sturdy government guarding against exhibitions of arbitrary economic power. Its mechanisms include the governmental oversight of financial institutions, progressive taxation and policies that favor the distribution of profit primarily based upon an individual's contribution in creating such profit.

"Good Catholic Doctrine."

This is far from the first time a Catholic has been called a Marxist or a Socialist for wanting to use the power of government to ensure that capitalism be fairer and less predatory. It is a battle that was being fought a hundred years ago often in the form of providing workers with safe working conditions.

Shortly after the infamous Triangle Shirtwaist Factory fire, two prominent Catholic politicians took up the cause of Distributive Justice. They were then-New York State Senator Robert Wagner and then-Assembly Speaker Al Smith -- two giants whose imprimatur would be on FDR's New Deal. As Dave Von Drehle recounts in his book, Triangle: The Fire that Changed America:

The work of 1912 produced a series of new laws in the 1913 legislature that was unmatched to that time in American history. The Tammany Twins [Wagner and Smith] pushed through twenty-five bills, entirely recasting the labor laws of the nation's largest state. There were more fire safety laws - by that point, two years after the Triangle fire, nearly every deficiency in the Asch Building [the site of the Triangle fire] had been addressed. Automatic sprinklers were required in high-rise buildings. Fire drills were mandatory in large shops. Doors had to be unlocked and had to swing outward. Other new laws enhanced protections for women and children and restricted manufacturing by poor families in their tenement apartments. To enforce the laws, the Factory Commission pushed through a complete reorganization of the State Department of Labor.

Business leaders didn't quite know what had hit them. But gradually they started making their complaints known. Real estate interests, in particular, were upset by the number of safety modifications they were required to make. One member of the Factory Commission, Robert Dowling was a New York real estate man, and he often found himself dissenting from the sweeping recommendations pushed by the volunteer staff. (Eventually he resigned from the commission, blaming Francis Perkins, in particular, for going too far.) He saw it as his job to remind Wagner and Smith of the costs involved in their unprecedented reforms. During one executive session, he referred to the statistics on the number of people killed in factory fires. Notwithstanding the catastrophe at the Triangle, he ventured, "It is an infinitesimal proportion of the population."

Mary Dreier was shocked. "But Mr. Dowling," she cried, "they were men and women! They were human souls. It was a hundred percent for them."

Smith jumped in on Dreier's side. "That's good Catholic doctrine, Robert! He declared.

Not Marxism or even socialism; as Al Smith said, just "good Catholic doctrine."

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(1) Thomas Aquinas, Summa Theologica, "Question 61: The Parts of Justice, Article 2."