Just Wage Doctrine:What Happened?

Rupert J. Ederer

That question is every bit as valid now as it was inthe early part of the last century especially during theperiod that was scarred indelibly by what is now italicized and capitalized as The Great Depression. Atpresent, the American economy, hailed as the richest inthe world, is deteriorating into anew serfdom by adifferent roure than predicred by Friedrich Hayek {TheRoad to Serfdom. 1944). Hayek, who died in 1992, wasaformer socialist, who later successfully engendered thefear of encroaching socialism, into the hearts of generations ofdevout conservative ideologues. He parlayed hisscary scenario into, among otlier things, a Nobel Prizeand loftyperch alongside his men

tor Ludwig

von Mises as

member of

the renowned

Austrian

school of

economists.

Like Mises,Hayek was asecularistJew, who apparently recognized earlyon that the

Russian Revolution had run its course, so chat it wouldbe smarter to abandon that ship and climb aboard thenew capitalist colossus across the Atlantic. (Which explains how Trotskyites became neoconservatives!)

We are addressing here the same question now being

20 / CULTURE WARS

asked in her own way by a zealous authoress, BarbaraEhrenreich, as she tours the country promoting herbook; Nickel and Dimed: On (Not) Getting By inAmerica (2001). It deals with the growing millions ofAmerican workers wlio are already well along into thenew serfdom wliere one needs two minimum-wage-typejobs in order to eke out a subsistence. She is no run-of-the-mill social evangelist or socialisr zealot. To gathermaterial for her book Ehrenreich did hard time workingunder-cover at various minimum wage jobs as a waitress, motel maid, cleaning lady, and a Wal-Mart salesclerk. In a recent lecture this professed atheist urged

In a recent lecture this professed atheist ui^ed ChristiansIn her audience to "take your religion back/' while challenging the audience to name "any major religion or ethical system that requires the poor to give alms to the rich."

Christians in her audience to "take your religion back,"while challenging the audience to name "any major religion or ethical system that requires the poor to givealms to the rich."

Actually the just wage doctrine as first proclaimed to

the modern world in 1891 by Leo XIII in his encyclicalRerum Novarurn is alive and well. That is so at least inRome, where the white-clad figure ofPope John Paul IIstands fast like alighthouse amid the encroaching darkness. Beyond, in the storm-tossed turbulence of themodern culture wars, the message has become obscured. It encounters barriers which make some indifferent and others hostile. Most regrettably that includesmembers ofthe same Church which gave the world Re-rum Novarurn , and updated it on significant anniver-szry dates. In the boondocks far from Rome, duemainly to the widespread glaring failure in "middlemanagement, the Catholic Church appears to havedeteriorated into that same condition that Karl Marxascribed to the Church ofEngland during the f9th cen-rur\'. In hisAuthors Preface to the first volume of Z)<wKapitdl, Marx included this barbed comment: "TheEnglish Established Church, e.g., will more readily pardon an attack on 38 of its 39 articles than on one-thirt)'-eighth of its income." To sur\'i\'e in the unfriendly condition of the "separation of church andstate, the Catholic Church must solicit its sustenancefrom parishioners, and rich parishioners always have farmore to give than the poor. A smart-aleck priest let me

in on that secret long ago with a mischievous wink,when I discussed with him my interest in the Church'ssocial teachings. He remarked, 'That must go over bigwith the clergy."

Meanwhile, in the present-day United Stares, theWal-Mart economy, in league with its major partner,Communist China, paves the road to the new serfdom.As a consequence millions are reduced to working atMcjobs," paying at or a shade above the legal mini

mum wage. A small and diminishing number of well-paid survivors, like the auto workers, stand out likefossils of an earlier era. when strong labor unions pioneered wages and benefits that marked a sharp breakwith the Neanderthal free-market past. The harshworking conditions of that era, now recurring in ourtime, came to be known in Germanic countries as "diesoziale Frnge " {"the social question"). They provided thehistorical context for the first social enc>'clical addressedto the economic order in modern times bv the CatholicChurch.

Known in English as On the Condition ofLabor, Re-rum Novarum was issued in 1891 b\- Leo XIII who denounced the existing condition where workers foundthemselves, in his words, under "a voke little better

May2005 / 21

Pope LeoXIII

7 '

than slavery itself {R.N, 2}. The great pope defendedthe right of private ovvnersiiip also for workers againstthe socialists who were by then making large waves inEurope. At the same time, liberal capitalism was placingany significant acquisition of private property beyondthe reach of the working classcs. Among the remedieswhich Leo XIII proposed was the right ofworkers to organize in their own defense—a natural right which, asAdam Smith pointed our in his Wealth ofNations,capitalist employers had long exercised in their own interests. A highlight of the encyclical was the first statement ofthe just wage doctrine appropriate for the con-text of modern society.

While Leo XIII upheld the right ofworkers and employers to make "free agreements" as to wages, he indicated a dictate of nature more imperious and moreancient than any bargain between man and man." Thatturned out to be the right to a basic just wage whichmust be enough to support the wage-earner in reason

able and frugal comfort," and also to enable him to "putby a little property." What is more, it had to be adequate "to maintain himself, his wife, and his children"(R.N. 34-35).This meant that mothers must not be required to work outside the home to support the family;and the wage mustalso be such as to make modest s2lv-ings possible 34-35 ). From the wording in the

22 / CULTURE WARS

encyclical it is clear that the basic just wage constitutes aminimum due to every conscientious, full-time, adultworker whom employers find it worthwhile to hire; it isnot to be the ultimate achievement of many years ofwork, or the prerogative of the highly skilled. Beyondthat irreducible point, and within whatever reasonablelimits that social justice requires, workers may freelyagree with their employers on higher wages based onsuch factors as greater skill, experience, responsibility,and requisite education.

It must be noted here that our minimum wage lawsdo not now and never did come close to requiring thekind of basic just wage proposed in the CatholicChurch's just wage doctrine. They were enacted to establish an irreducible limit below which dog-eat-dog,free competition could not drive the wages which thehapless workers often had no choice but to accept. Thefederal minimum wage in the United States is currentlyS5.15 an hour, which annualized comes to $10,712.That amount is far below what the government itselfhas established as the "povert)' level" for a family offour,which is $8.85 an hour, or518,400 annually The fairLabor Standards Act, which includes the minimum wageprovision, was passed in 1938, a few years into the GreatDepression. It originally established a 25-cent-an-hourminimum wage, which was scheduled to reach 40 centsin seven years time. That has been upgraded from timeto time, but it has always lagged behind the persistentinflation endemic to our economy since World War II.At present, an estimated 12 million people are workingat the minimum wage level. Countless others not covered by the federal law work for less, or at what the respective state minimum wages mandate, which issometimes lower and in a few instances higher. According todetailed budgets published regularly by the U. S. LaborDepartment starting in 1947, the annual income required for a family of four to live at a modest level isnow, depending on geographical location, in thearea ofS30,000 - 35,000. That figure takes into accountchanges in the cost-of-living since 1982 when the budgets were discontinued by the Reagan administration.

The pertinent question then is: what has become ofthe just wage doctrine since it was first proposed bythe Catholic Church in 1891? The Church itself hasupdated it repeatedly, both reaffirming and expandingthe concept, while warning about certain distortions.Pius XI commemorated the 40th anniversary oi ReriimNovariim by his encyclical Qiiadragesimo Anno whereby he developed the original doctrine significantly. Inthree separate encyclicals, Pius XI tookon the three die-

rators of his time: Stalin, Hitler, and Mussolini. Thus, itshould surprise no one char this pope did nor spare thecapitalists who were in their own way oppressing workers tar and wide. He established some basic parametersfor the doctrinc, adding certain prudential suggestionswhile cautioning against inordinate extrapolations.

First ofall, Pius XJ affirmed again that the wage mustsupport not only the worker but his family, thus rejecting the Leninist-style "emancipation" of women out ofthe home and into the work force. That led him topraise various systems bv which "an increased wage is

• I • . * ^paid in view of increased family burdens. . . ." Someemployers, attempting to live up to the Church's socialteachings conscientiously, undertook such family allowance payments on their own. If the matter is to be leftto individual employers, there lurks the possibility thatworkers with larger families could find themselves at adisadvantage when competing for employment. Recognizing chat, many governments in Europe and elsewhere (e.g. Canada) introduced family allowance systems, so that the cost was, to a degree, "socialized."

dards with regard to wages, product standards, andother conditions, thus facilitating the proper operationof the principle of subsidiarity by minimizing theneed for direct government intervention in economiclife. All else failing, including "wise measures of thepublic authorit)'," Pius XI indicated that a business wasnevertheless not entided to continue simply at the expense of its workers.

Finally the overall common good entered into thecalculation ot the just wage. Here the prospect of wagesbeing too high also became a consideration. This implied a reaffirmation of the Leo XJII insistence thatworkers and employers may enter "freely" into agreements concerning the amount of the wage 63).Such free agreements must be assumed to apply in setting wages that range above the minimum just wage forreasons indicated earlier (skill, experience, etc.). Nevertheless, these too must defer to the overall commongood. Too much income harvested by too few at the expense of too many can seriously impact that commongood. It is a lesson we have yet to learn!

Blessed John XXIIIcontributed to that particular aspect of the justwage doctrine in M^rteret Magistra (1961). Referring to the "economically developed countries," he warned that"great or sometimes verygreat remuneration is

had for the performanceofsome task of lesser im

portance or doubtfulutility." He continued:"Meanwhile, thediligentand profitable work thatwhole classes of decent

and hard-working citizens perform receives too low apayment and one insufficient for the necessities of life,or else, one that does not correspond to the contribution made to the community or to the revenues of theundertaking in which they are engaged, or to the national income" (70). Preposterous incomes placed atthe feet of our idols and "stars' in the entertainmentworld come to mind. Also, while the work and talentsofCEOs are generally ofgreat utility to their firms andto the economy at large, the extravagant levels ofcompensation which some of them receive also reaches outrageous levels. Such extremes are justified typically by

Known in English as On the Condition ofLabor,Rerum Novarum was issued in 1891 by Leo Xillwlio denounced the existing condition where workers found themselves: in his words, under "a yokelittle better than slaveiy itself (R.N. 2).

The Pope also related the just wage to the "state ofthebusiness" to take into account problems an enterprisemay at times face, making it difficult ifnot impossibleto pay a just wage. While never excusing bad management, Pius XI summoned the parties themselves towork out the problems where possible so that the justwage could be paid. The restoration of occupational organizations was proposed as a means toward that end.They were guild-like in that they included all parties—employers, workers, and owners—in the respective industries, trades, and professions. By resort to thesestructures, the parties themselves could establish stan

May2005 / 23

appeals to the "market," i.e., to the forces of "demandand supply." On the other side are some unspectacularand menial kindsof workwhichsociet)' couldnevertheless scarcely do without, as in health-care occupations,agricultural employment etc. where workers muststruggle to meet ordinarydaily living expenses.

Supplementary to his treatment of the just wageprinciple, Pius XI praised certain initiatives whichcould help to establish more humane relations andcloser ties between employers and workers. The relevantpassage in Qiiadmgeiimo Anno is presented in its en-tiret}' here to indicate why these were proposals of aprudential nature that did not alter the overriding primacy of the basic justwage doctrine.

In the presentstate ot human societ)', however, Wedeem it advisable that the wage contract should,

O '

when possible , be modified somewhat bv a contractof partnership, as is already being tried in various ways wich significant advantage to both wageearners and employers. For thus the workers and executives become sharers in the ownership or management, or else participate in some way in theprofits.(Q.y4. )

Such arrangements are by no means essential to thejust wage doctrine, and they were most definitely notintended to replace it. Whereas management-sharingdoes not impact directly on the way workers are remunerated, profit-sharing and ownership-sharing may doso. Profit-sharing, where businesses agree to share prof-

nesses that do not issue stocks, e.g. partnerships andsingle proprietorships, or for the many millions of government employees. Even where applicable, many employees would rather be free to invest any discretionarysurplus income according to their own personal preferences. There is valid concern that if a company falls onhard times, worker-co-owners stand to lose not onlytheir jobs, but their lifetimesavings may also be at risk.The shaky performance of the security markets in recent times makes stock ownership seem to many as adubious option for rank-and-fileworkers. The system isso tenuous now that whenever Chairman Greenspan ofthe Federal Reser\'e sneezes in public, stocks are proneto shed a billion or two of their market value.

Unfortunately, this provision gave rise to confusionin some circles where certain aspects of it soon took onlives of their own. Ultimately, none of those devices isasubstitute for the basic just wage, let alone a panaceafor promoting good labor relations or a sound social order overall. As Pius XI himself indicated, "those whohold that the wage contract is essentially unjust, andthat in its place must be introduced the contract ofpartnership, are certainly in error." In fact, he warnedthat "they do a grave injury to Our Predecessor whoseEncyclical not only admits this contract but devotesmuch space to its determination according to the principles ofjustice" (64). His immediate successor was alsoquick to correct such notions.

Pius XII issued no social encyclicals in the acceptedsense throughout his 19-year pontificate. However, so

cial teachings in the tradition of Leo XIII and

Pius XI were plenteousin his remarkable

Christmas Messages, andin other addresses be

fore various groups, aswell as in certain of his

enc)'clicals. The justwage principle specifically was reaffirmed

time and again. It also fell to him to straighten out certain exaggerations and misinterpretations of the teachings of his predecessors. One examplewas the address toCatholic employers visiting the Pope in Rome on May7, 1949. With regard to "ownership sharing," he said:"It would be just as untrue to assert that every particularbusiness is of its nature a society, with its personnel relationships determined by the norms of distributive justice to the point where all without distinction—owners

Pius XI praised certain initiatives which could help toestablish more humane relations and closer ties be

tween employers and workers.

its with workers on some prearranged basis, has a longhistory giving rise to some remarkable success stories.Ownership-sharing iswidespread enough to rate the acronym, ESOP (Employee-Stock-Ownership-Plan).However, such programs have also been used for ulterior motives, e.g. to ward off unionization, or to compensate for a basic wage that was below the standardwhich simple justice would require. Beyond that, employee stock-ownership plans are not suited for busi

24 / CULTURE WARS

or not of the means of production—would be entitledto their share in the property, or at the very least in theprofits, of the enterprise." He attributed that notion towhat he termed the "inexact" assumption that "everybusiness belongs naturally within the sphere of publiclaws." That was "inexact" because: "Whether the busi

ness is organized in the form of a corporation or an association of all the workmen as part-owners, whether itis the private property of an individual who signs awage-contract with all his employees, in the one case asin the other it falls within the competence of the private-law discipline of economic life." In other words theright to a justwage, sacrosanct as it is, by itselfdoes notgive rise to a right to infringe on the private propertyright of business owners.

Later, in a radio address to a national convention ofAustrian Catholics in Vienna on September 14, 1952,the same Pope said: "It is for this reason that Catholicsocial teaching which, besides other things, so emphatically champions the right of the individual to ownproperty, and also We Ourselves have declined to deduce, directly or indirectly, from the labor contract therightof the employee to participate in the ownership ofthe operating capital, and its corollary, the right of theworker to participate in decisions concerning operationsof the plant." He explained, "This had to be denied because behind this question there stands that greaterproblem—the right of the individual and of the familyto own property, which stems immediately from the human person." At the time, Germany was deliberatingenactment of a law which would allow workers in enter

prises beyond a certain size a voice in management{Mitbestimmungsrecht). Certain enthusiasts appealed toCatholic social teachings as indicating that they conveyed such a right.

I All such papal reservations notwithstanding, the Church's teaching since Leo XIII continually andclearly affirmed the right to a wagethat was more than simplya livingwage. It was also a saving wage,even though the way in which theworkers acquired and invested theirsavings was left to the parties involved, and not frozen into somepreconceived plan, no matter howsalutary one or the other might bein application. In other words, thejust wage has continuedas the centerpiece of Catholicsocial teachingsever since Rerum Novarum .

Lest there be any doubt whether the post-Vatican IItumult in the Church perhaps changed all of that, weneedonly lookat its reaffirmation by Pope John Paul IIwhen he marked the 90th anniversary of RerumNovarum with his own labor encyclical. Overall,Laborem Exercens offers us a remarkable theology ofwork. In terms which echo the economics of Heinrich

Pesch, it extols the prior position of human work in theeconomy as the "primar)' efficient cause in the processof production while capital, the whole collection ofmeans of production, remains a mere instrument or instrumental cause." (12) . That gives definitive expression to "the principle of the priority of labor over capital," which the Pontiff states "has always been taughtby the Church." It also provides the basis for what isperhaps the most dramatic emphasis on the just wageprinciple heretofore expressed throughout the Church'ssocial teachings. He wrote: "It should also be noted thatthe justice of a socioeconomic system and, in each case,its just functioning, deserve in the final analysis to beevaluated by the way in which man's work is properlyremunerated in the system." As if to avertany misinterpretation of that uncomplicated statement, the Pope repeated it, referring specifically to the just wage. "Hence,in everycase, a just wage is the concrete means of verifying thejustice of the whole socioeconomic system and,in any case, of checking that it is functioning justly"(19). (Italics in the original).

Subsequently, the just wage doctrine was also included under the Seventh Commandment in the Cat

echism of the Catholic Chitrch (1992) which appearedunder the signature of Pope John Paul II. That Commandment has to do with theft, which reminds usthat the just wage in principle is due in commutative

May2005 / 25

justice. In other words we are dealing here with adoctri- laissez faire. Perhaps that is because die Scot, Adamnal matter—a moral teaching—^which Catholics are not Smith, expressed the ideology in the benign terms ofat liberty to ignore or interpret in amanner that nulli- an "invisible hand" which guides self-interest so that itsfies or contradicts what their Church is saying. As Pope untrammeled pursuit by the individual makes mattersJohn Paul II stated in his second social encyclical per- turn out for the best overall. Besides, die British did nottaining to the economic order, the Church's social doc- have the same historical baggage as the French withtrine is apart of moral theology {Sollicitudo Ret Socialis their subsequent Revolution and Reign ofTerror. It ap-

pears therefore that Smiths Wealth ofNations offered aGiven such clear and definitive moral teaching by the more presentable form of the libertarian economic phi-

Catholic Church for over acentury, and given die fact losophy. Successors, including David Ricardo, Thomasthat Pius XI in 1931 warned: "If in the present state of Malthus, J. Baptiste Say, and John Stuart Mill, built onsociety this is not always feasible, social justice demands it to craft the economic science, and their combined ef-diat reforms be introduced without delay which will forts came to be designated as "classical." These stellarguarantee every adult workingman just such a wage." figures firmly established and molded free market lib-we are endtled to ^k, "What happened.^". The discon- eralism which in its updated form has made aremark-certing fact is that its traditional just wage doctrine, not able comeback in our own time. That ideology fastenedun ike many other important moral teachings of the itself like aparasite onto capitalism which had alreadyChurch, has fallen on hard dmes. The opposing been in formanon during the two previous centuries,forces are multi-dimensional. They include avigorous Capitalism is defined here as the form ofsociety whererevivd on the ideological Right, and ametamorphosis those who own and direct the factor ofproduction capi-on t e traditional ideological Left. In addition, there tal become the dominant class in society succeeding thehas also been adiversion ofmany of the most zealous land-holding aristocracy.and militant elements at the heart of the Catholic In classical economics, where free competition was aChurch mto another direction. Finally in mortal com- "given" also for labor, the wage was accepted as beingbat agamst the M^isterium one should not be sur- eventually reduced to subsistence by ineluctable naturalpnsed to find subversion at times of essential doc- forces. The introduction of the Malthusian elementtrmes from withm by persons who present themselves provided the requisite mechanism for always forcingas supporters ofCatholic social teaching. Taken alto- wages toward the subsistence level, since it theorizedpther, such a confluence of diverse forces can perhaps that higher wages somehow induced workers to havebest be explamed in preternatural terms! more children. Given that children in those days often

went towork in mills, mines, and factories at the age ofsix, it would not take long for them to be a competitive

REVIVAL ON THE IDEOLOGICAL RIGHT force driving down the wages of their own parents.Xko .u -J 1 • I r.- 1 . . Ferdinand Lassalle, a Jewish socialist predecessor of^ The r^ival on the ideological Right involves aresur- Karl Marx, designated that capitalistic trap for workers

r r'® ' ?V'- - ^arx himsel? never swal-3 m V Malthusian theory, regarding it as aconve-b!«n ^h KA abominable conditions which capi-be^n «th EnUght^men,- based French physiocmcy. ^ass. Instead, he incor-where die economy was viewed, hke the human po„,ed the subsistence wage into his critique as en-Uws ® '' exploitative nature of capitalism. Hence.rctit^ltin f T' ''"T economists,se^nJ as tr® f""' <:ompetmon especially Ricardo, who was, like Marx, aJew. offered3urilt er, ® him aperfect pretext for advocating the demolition ofZbeke s^u hT h kl Tl, I' basically

Iblandishments of the goddess Ricardos depiction of capitalism, with its intense con-yi n7 . ™ Masses for their shares of the

follv I " T »nd critiqued.where liberalism traveled under die appealing motto: the need to mobilize an entire econLy for total

26 / CULTURE WARS

war, led to a significant dismemberment of the freemarket system, including price and wage controls, inaddition to materials allocation. That brief interlude,

along with the Intervening experiences with totalitarian societies, and the Cold War associated with thespread of Soviet Communism after World War IIhelped to nourish the desire for a restoration of freemarkets and theassociated ideology. On the theoreticallevel there was a concomitant reaction againstKeynesian economics which had emerged as an antidote to the Great Depression. John Maynard Keynesopposed the neoclassical explanation of economic reality even while he intended his intervention as a meansto save capitalism from itself Manyof the old school ofeconomists who grew up and were comfortable withAlfred Marshall's Principles ofEconomics felt themselvesthreatened by the "new economics," so they eagerlyclimbed aboard the pendulum for the swing back toward free market capitalism.

At the cutting edge of that renaissance were certainEuropean intellectuals of the so-called Austrian school,in particular the Jewish economists Ludwig Mises(1881-1973) and his understudy, the afore-mentionedFriedrich Hayek (1900-1992). As early as 1923 thegreat German Jesuit economist, Heinrich Pesch, had al-

thinkers like Arthur Laffer. I cite the Jewishnessof thesescholars simply to make it clear that their social thinking has nothing in common with Catholic social teachings. Their ideology approaches the "social question"from the opposite direction of Karl Marx, also a secularizedJew.

Unfortunately, influential Catholics in the UnitedStates, apparently always anxious to get into the greatAmerican swim, also flocked toward the neoliberal reaction. Typically such persons regard the Church's socialteachings as of a non-infallible genre which thereforeneed not be taken all that seriously. Generally they donot view with favor especially the first two of the greattrilogy of social encyclicals by Pope John Paul II, whichincludes Laborem Exercens, Sollicitudo Rei Socialis, andCentesimus Annus . Hence his establishment of the

Church's social teachings as a part of moral theology inSollicitudo ReiSocialis is disregarded. At the same timeit is precisely theologians like Michael Novak {TheSpiritofDemocratic Capitalism, 1982 ), Father RichardNeuhaus, and George Weigel who seem fascinated bythe restoration of free market economics.

Among neoliberals, Ronald Reagan was widely hailedas the larger-than-life paragon of political prudence.Not surprisingly they also credit him with, among

other things, winningthe Cold War and

bringing about the collapse of the Soviet Empire. Some Catholicsfeel that the Polish la

bor movement, alongwith its patron, PopeJohn Paul II and theLady who he feels protected him from the

assassin's bullet, had

something to do withthat.

On a more institutionalized level, the neoliberal cultfinds persistent expression in a "thinktank" whichcallsitselfthe Acton Institutefor theStudy ofReligion and Liberty. It is headed by an eloquent Catholic Priest, Rev.Robert A. Sirico. In his early formation. Father Siricowas greatly impressed by the works of — guess who? —the Austrian economists who personally had nothingbut disdain for the Catholic Church's teachings on social justice. His Institute, headquartered in Michigan,has a busy lecture schedule which extends worldwide.Publications are sent out gratis suggesting that the en-

The disconcerting fact is tliat its traditionaljust wage doctrine, not unlil<e many other important moral teachings of the Church, hasfallen on hard times.

ready labeled Mises as the principle exponent of "neo-Manchesterism" {Pesch/Ederer, Lehrbuch/Teaching Guide,V, 1 ,v). Hayeks book, The Road to Serfdom, alongwithhisopposition to Keynesian economics, made hima guru for many free marketeers. In the United Statesthe revival engaged the prestigious University of Chicago, with its brilliant Jewish libertarian economistMilton Friedman at the forefront. Neoliberalism received its most significant practical impetus during theReagan administration where tax and moneta^ policies reflected their thought and that of other Jewish

May2005/27

Michael Novak

terprise is well endowed. The watchword of the Institute is liberty, which surfaces reflexively in its ActonMotes , also in a more extensive publication Religion drLiberty, and in its elaborate scholarly journal, MarketsandMorality. Tht Acton Institute chdixzct^nzts itselfas "anonprofit, educational organization that seeks to promote a free and virtuous society characterized by individual liberty and sustained by religious principles."The question is whose religious principles? Needless tosay, they do not include the specific moral teachings ofPope John Paul II, with his insistence on the just wageas the concrete means ofverifying the justice of the

^ whole socioeconomic system." Nor would they supporthis proposal that "medical assistance should be easilyavailable for workers, and that as far as possible itshould be cheap or even free of charge" {LE. 19 ). ThePopes Peschian economic viewpoint about the priorityoflabor over capital would go over like the proverbiallead balloon with the Institute's corporate sponsors.

Some time ago Idared to propose the just wage concept to one of the scholars at the Institute. I receivedthe standard time-honored Chamber of Commerce-type cant in reply: that kind ofwage would cause inflation! Profits and outsized CEO compensation, ofcourse, are never considered inflationary in those circle!Since then I have been blasted in their journal for myfailure to comprehend elementary economic prin-

28/CULTURE WARS

ciples" {Markets and Morality Vol. 6 # 4, p.6l 1). Thequestion now becomes: whose economic principles? Ire-educated myself long ago using the economics oftheJesuit Heinrich Pesch who headed his treatment of thejust wage with the title: "The Just Wage as the Economically Correct Wage" {Lehrbuch/Textbook V, 2,p.77ff.) That coincides pretty much with what PopeJohn Paul II said about that wage in Laborem Exercens.It also reflects precisely what Oswald von Nell-BreuningS. J., an understudy ofPesch and generally acclaimed asthe ghost-writer of Quadragesimo Anno , wrote someyears ago. He proposed "that the determination of alleconomic parameters and the making of all other economically relevant decisions will aim at a wage andprice system in which the wages are thecornerstone, theindependent variable, in the system ofwages and prices"{Review ofSocial Economy, September 1951, p. 105).That is an opposite approach to what the classicaleconomists came up with and which their neoclassicaland neoliberal disciples, including the Acton scholars,continue topromote. For them wages are what is left after due allowance is made for profits and the salaries ofthose who get to make decisions about such matters,unilaterally, as a rule, and notwithstanding all talkabout the "forces" of the "free" market.

Unfortunately such neoliberal Catholics typicallymove about in a comfort zone which is not what theCatholic Church with its "preferential option for thepoor has in mind—an option established two thousand years ago in Marys Magnificat. They are more athome amid the royalistic aura of 18th century liberalism. In addition, they seem to have absorbed that Puritanical virus in American culture which involves athinly disguised disdain for those who, given their modest level of economic success, appear not to be amongthe predestined! It is not surprising that their endeavorsendupbeing well-endowed by an elite which finds suchintellectual support and ecclesiastical blessing both flattering and useful.

Already in 1971 the Catholic Church took note ofwhat was happening in this regard. In alargely ignoredand long since forgotten Apostolic Letter OctogesimaAdveniens by Paul VI marking the 80th anniversary ofRerum Novarum, thatPope referred to "a renewal of theliberal ideology" Acknowledging that it was a "reacdonagainst the totalitarian tendencies of political powers,"he asked: "But do not Christians who take this pathtend to idealize liberalism in their turn, making it aproclamation in favor offreedom?" He issued the appropriate warning: "They would like a new model,

more adapted to present-day conditions, while easilyforgetting that at the very root of philosophical liberalism is an erroneous affirmation of the autonomyof theindividualin hisactivity, his motivation and the exerciseof his liberty" (30).

More recently in an Apostolic Exhortation, Ecclesia inAmerica (1999), Pope John PaulII pointed out: "Moreand more, in many countries of America, a systemknown as neoliberalism' prevails; based on a purely economic conception of man, this system considers profitand the law of the market as its onlyparameters, to thedetriment of the dignity of and the respect due to individuals and peoples." He became more specific: "Attimes this system has become the ideological justification for certain attitudes and behavior in the social and

political spheres leading to the neglect of the weakermembersof society." (56)

METAMORPHOSIS ON THE LEFT

On the opposite side of the ideological spectrum, wefind militant feminism emerging as the altered andhighly effective ongoing attempt by the Left to subvertAmerican society. I say Left , because this movementinvolves the legacy of Lenin who championed the so-called "liberation" of women throughout his revolutionary career. In 1934 his Jewish wife N. K. Krupskayapublished a collection of his articles and addresses onthesubject in a largely forgotten bookentitledLenin onthe Emancipation ofWomen. It contains all of thejargonused by the militant feminists of our time. Its thrustwasdescribed in my article published in Fidelity (March1984), so I will not repeat details here. While the bookwas and is even now little noted, we need to look at thesuccess of more recent disciples, like theJewish feministBettyFriedan, in promoting the message: to emancipatewomen from home and family into the work force!Motherhood and home-making are virtually reprobateterms in our society now, to the extent that a womanwho insists on (andcanafford) staying home to care forher children has to apologize for politically incorrectconduct. Meanwhile, theday-care culture, a hallmark ofSoviet society, has become commonplace for preschoolchildren especially of the better-salaried mothers. Poorerchildren are entrusted to grandparents or , all else failing, to the streets.

It appears that the supreme irony in all of this hasbeen overlooked. Now we have the two ideologies ofLeft and Right combining to destroy the capacity of

American workers to earn a just wage. The success ofthe feminist gospel bolsters the efforts of free marketeers in making women the competitors of men in allsectors of the work force. In accordance with free mar

ket principles, a doubling of thesupply of laborshouldlead to something like a halving of wage rates. Sinceeconomics does not in factoperate with the precision ofa physical science as the Physiocrats proposed, I say,"something like a halving," Comparing, e.g. autoworker-type wages with the creeping prevalence ofnearminimumwage jobs—^say, Wal-Mart typewages—suggests that something like such a market adjustmenthas been underway. Capitalists now are often in a position where they can get two workers for the price ofone: both the man and his wife. Thus the two ideologicalopposites have become partners in ushering in the"new serfdom" of the working classes, which FriedrichHayek envisioned in his bookasresulting fromcreepingsocialism. ^

Added to that irony is anotherodd fellowship whichhas developed to undermine any prospect for a justwage. It has been too litde noted that the free tradeprogram was a traditional favorite chestnut of the classical free market ideology. Currently expressed as globalization , which forces American workers to competewith what is at times literally slave labor, it is championed by Democrats and Republicans alike. Thisshould surprise no one since both of their candidatesare ultimately bought by the powerful marketeers whopay to get them elected. But the plot thickens yet more!Whereas Japan,with laborstandards approaching thosein modern industrial nations, was formerly the greatchallenge to our balance of trade, China,with virtuallynothing remotely resembling humane labor standards,has since taken its place. Recall that Wal-Mart, amongothers, is a senior "partner" in thisenterprise!

Together, all of these elements have succeeded inbringing about the same end: a leveling of oureconomymarked by cheaplabor, alongwith the immobilization of the once vibrant American labor move

ment. Meanwhile, at the other end of the economicspectrum, the royalistic levels of compensation forCEOs are typically a function of howsuccessful theyare in comingup with smarter ways to cut labor costsby "out-sourcing" what used to be American jobs.Those are the forces which havehelped to render mootthe PiusXI appeal about social justice demanding thatreforms be introduced "without delaywhich will guarantee every adult workingman" a just wage.

May2005/29^

DIVERSION OR PREOCCUPATION AT THE CENTER of moral theology. Thus, whereas theneoliberals sterilize the just wage doctrine by attempt-As indicated, the Catholic Church at its center niake the just wage an automatic by-product of

from its lighthouse"—^has persistently and consistently Alice-in-Wonderland free market, there is also anproclaimed the just wage doctrine. In the "outback," egregious distortion ofthat doctrine from another andthings are often different. In die United States, for ex- ""^xpected source. We are now being asked to acceptample, the most militant forces within the Church "living wage system is ashort-term expedient,have to a large degree channeled their energies pre- Permitted under the principle of double effect to ad-dominantly into the campaign against aborrion. The emergency situation."prolife eflfort clearly engages the considerable zeal of remarkable statement appeared in the March/the most active laity in the Church at the present time. SocialJustice Review (p. 39), die offi-Some even remonstrate ifanyone diverts attenrion into publicarion ofdie Catholic Central Union (Verein )what they dismiss, at rimes disdainftilly, as "social jus- America . The CCUA was founded in St. Louis bytice issues. Among them there are, ofcourse, also ideo- Frederick Kenkel in 1908, and itis the oldest organiza-logical conservatives who regard the Church as the Re- America dedicated to the promorion ofCatholicpublican Party at prayer. Others have been understand- teachings. The preposterous norion that the justably turned off by the way some of the "social jusrice doctrine is an inferior "expedient," or perhapspeople" were taken in by liberation theology. Atypical ^ will do unril all workers can oneresponse when one brings up what seems to some become co-owners with their employers was re-prolife persons to be an arcane social teaching, is: the May/June issue in afollow-up article in-theres no use talking about a just wage if you don't show that Heinrich Pesch was in substantialfirst get to be born. Areflexive reply would be: there's agreement with it. The author, Michael Greaney, con-no use getring to be born ifafterwards you can't earn t^e viewpoints ofPesch and Centerfor Eco-enough to stay alive. The analogy has limitations. It is Social Justice—the "think tank" of theno disgrace to be poor, especially ifdiat is the fault of ^^^A— "appear to be perfectly consistent with eachsociety. To be aborted is a tragedy for both mother and itshows is that Greaney, aCPA, had bet-child, as well as cosmically for all ofsociety! craft! In his treatment ofwages, Pesch

That being said, there are nevertheless Ten Com- chapter entided: "The Just Wage as themandments, and we had best pay attention to all of Economically Correct Wage* {Lehrbuch/Teaching Guidethem, always! Indeed, both abortion and denying a §3. pp.77-114). His approach is "perfectly con-worker his wage are, according to the God's word, sins ®*stent" with that ofPope John Paul II, not at all withwhich cry to Heaven for vengeance. Also, the foremost " suggesting.leader for the culture of life movement, John Paul II, is switch from the expression "just wage" to "livingalso the author of adynamite trilogy of social encycli- ^^serves comment. The latter expression is get-

^ cals, i.e., social-jusrice-type teachings! The moral ofthe common these days perhaps because ofthestory is: lets not get so exclusive in our respective causes '̂ o^lsh preoccupation with establishing economics as athat we don't recognize how the Church's moral teach- science. Aliving wage suggests physical sur-ing does in fact resemble a "seamless garment." And surface it would seem notthat is notwithstanding the at rimes tendentious use of ethical imperatives. Barbara Ehrenreich, forthat figure ofspeech. example, also uses the expression, even though her en-

rire "crusade" is actually about jusrice. One problem—withthat "value-neutral" term is that it is essenriallySUBVERSION non-descriprive. A victim of injustice can live under a

bridge along with amisplaced shopping cart containingIn the ongoing all-out assault against the Catholic of earthly possessions.

Church and what it stands for, it should surprise no The CESJ people may have switched to use of theone ifthere is also subversion within. This applies as term "living wage" on the basis the patently ludicrouswell to the social teachings which comprise an essential theory presented in their manifesto, Curing World Pov-part ofwhat the Church has to say to the modern world published in 1994. The so-called Kelso-Adler

theory, whose basic thrust is that, since the continuing30 / CtniUREWARS

Industrial Revolution made the labor of human beingsinsignificant as compared with capital in enhancingproduction, workers have to become co-capitalists ifthey are to share in the bounty of the vast productiveoutcome of modern industrial society. Since human labor is no longer responsible for that outcome on a significant scale, wages, even those that may be just, inasmuch as they pay the workeraccording to his contribution, cannot possibly provide adequately for the needsof modern workers and their families. The dens ex

machina is some form of employee stock-ownershipplan (ESOP). Somehow, even the many millions whodo not work for stock-Issuing corporations, e.g., government employees, and those employed by singleproprietorships and partnerships, will end up with thekind of decent Income for which the Roman popeshave since 1891 called for the payment of the just wage.That is notwithstanding turbulence of the stock marketduring recent years, with billions lost by stockholders,and the bankruptcy of corporations like UnitedAirlines, among others, which havelong prided themselveson their ESOP plans.

Since neither Louis Kelso nor Mortimer Adler were

Christian, it is perhaps not surprising that they came upwith this proto-capitalistic scheme. It is actually an inverted version of yet another nonsensical theory, that ofKarl Marx. Marx held that all market value in productsis due solely to labor. Since he considered nature as free,

and capital as "past dead labor," he opposed privateownership of these and therefore also income fromthem. Kelso also ruled out natureas a separate factor ofproduction by simply lumping it together with capitaland coming up with what he called binaryeconomics,where there are only two factors of product: labor andcapital. Due to his conviction that "in our economy labor is erroneously recognized as the primary factor ofproduction," whereas actually "capital is the main producer of wealth in an industrial economy" {CuringWorld Poverty p. 25,26), workers can no longer expect aliving wage simply by their labor. Another Jewisheconomist, Nobel Prizewinning Paul Samuelson,shrugged off binary economics as simply "an amateurand cranky fad." That Is what Michael Greaneyand theCESJ are proposing as the "effect" that is superior tothe just wage whichJohn Paul II termed "the concretemeans of verifying the justice of whole socioeconomicsystems and, in any case, of checking that it is functioning justly" {LE 19). Laborem Exercens appeared in1981, allowing plenty of time for the CESJ people toget their thinking straightened out about this matter,and at the very least to stop presenting it as Catholicsocial teaching.

To invoke Pesch as somehow "congruent" with theCESJ program is to compound the felony. Aside fromestablishing the just wageas also "the economically correct wage," he not only did not disregard the secondand indispensable primary factor of production which

May2005 / 31

in classical economics had come to be known as land,but he designated it as nature—certainly amore accurate expression. He also indicated chat it was, like man(human work) an original factor, not a derived one likecapital. Like man (labor), and unlike capital, it can beindependently productive. The most sophisticated agglomeration ofcapital in the world, on the other handwill produce nothing unless it is activated by the primary original factor, man (labor). This approach alsohappens to correspond to the Biblical account ofhowhuman beings are destined to satisfy their temporalwants, i.e. to economize.

Quite aside from the presence or absence of any religious tenets, there was in Kelsos economics an underly-ing grievous ontological distortion. The material factorofproduction, capital, gets primacy over the humanfactor. Pope John Paul II, referred to it as "the error ofearly capitalism. . .wherever man is in away treated onthe same level as the whole complex of the materialmeans ofproduction (7). In this regard, therefore, thePope, not Kelso, is once again "perfectly congruent"with Pesch. John Paul II goes on to state that, " As aperson, man is therefore the subject ofwork," and alsothat he is the purpose ofwork, whatever work it is thatis done by man even if the common scale of valuesrates it as the merest service,' as the most monotonouseven the most alienating work" {LE 6). That led himto recall "a principle that has always been taught by theChurch: principle ofthepriority oflabor over capital"

, just happened to have just the right product availablefor workers to become capitalists—the employee-stock

1 ownership plan. What is more, many years ago (1931) aCatholic Pope (Pius XI) in a social encyclical

; {Quadragesima Anno) had conveniendy mendoned thatprogram as one among several which might be used to

! modify the wage contract (Q.A 65) (Emphasis added).Itwas therefore not the only possibility, and itwas alsonot mandated and, above all, it was to modify, not replace the wage contract and by implicanon the justwage principle. In fact, in the preceding paragraph hestated emphatically "that the wage contract is not es-sendally unjust, " denying with equal emphasis" thatin its place must be introduced the contract ofpartner

ship" (Q.A. 64). As indicated earlier, keeping certainzealots in line is a matter with which Pius XII had todeal on several occasions. Both pondffs upheld theirpredecessor Leo XIII with regard to the legidmacy ofthewage contract perse.

One might add at this point that the UAW, whichrepresents one of a diminishing group of Americanworkers earning a just wage, also has aprofit-sharingagreement (not involving employee stock-ownership)with the "Big Three" American auto manufacturers.Wages are generally adequate to enable the workers tobuy stock in the respective companies ifthey so choose.They may also prudendy choose to invest their savingselsewhere.

In the meantime, Louis Kelso and Mortimer Adlerare both gone, as isNorman Kurland,formerly the presidentof CESJ, and an important co-author ofthe CuringWorldPoverty manifesto. Hewas an accountant

like Michael Greaney,who now serves as theresearch director in

the grand tradinon ofthe Curing World Poverty at theCenter for Economic and Social Justice. Given thatGreaney stated in a letter; "I have administered ESOP'sfor almost 20 years," someone more cynical than thiswriter might be tempted to suspect that there is morethan zeal for the Church's social teachings at work here.The just wage doctrine would appear to stand in theway of ever more ESOPs, and even eventually awholeworld of ESOP's! That could explain why MichaelGreaney is now ata point where hefeels hemust make

Ultimately the economy is about satisiying wants ofall people [Bedarfdeckungsprinzip] not about enriching a small number of capitalists.

{LE. 12). At that point he applied the identical Aristote-lian-Thomistic terminology as Pesch, stating that in theprocess ofproduction labor is always aprimary efficientcause, while capital, the whole collection of means ofproduction, remains a mere instrument or instrumentalcause" (Emphasis in the original).

According to Kelso, labor (man) is actually on alower "ontic" (Pope's term LE 13) level in the order ofbeing than capital, so he must become a capitalist tosurvive and prosper. As befits asuper-salesperson, Kelso

32 / CULTURE WARS

the preposterous proposal that "a living wage system isa short-term expedient permittedunder the principle ofdouble effect to address an emergency situation." Whatismore, he then becomes even moreoutrageous byenlisting Pesch in support of his absurdities and assertingthat "the views of Father Heinrich Pesch and CESJ appear to be perfecdy consistent with each other." Havingspent over a quarter of a century translating Peschsworks into English, I know that this is nonsense, perhapsborn of desperation.

If Michael Greaney wants to be a Pesch scholar Iwould suggest that he should begin at the beginning.The great Jesuit economist entitled the opening section of his Lehrbuch: " § 1. Man as Lord of the WorldAccording to Gods Ordinance" {Ibid. Vol. I, 1, p. 1).Then came "§2. Work as theMeans to Exercise Dominion

Over the World," {Ibid. p.10),followed by "§3. The ServiceProvided by Our Natural Environment {Ibid. p. 19).Thus, unlike the disciples of the Kelso-Adler theory, he did not regardeither labor or nature (land) asirrelevant or of diminishing importance. Accordingly, when hebegan analyzing the factors ofproduction, he stated: " Themain efficient cause {causaefficiens principalis ) of production and of products is, aboveall, human intellectual andphysical labor power and work{Ibid. IV, 1. p. 354). Kelso andhis disciples got carried away by their fascination withmodern technology, apparently forgetting that everygadget, from the first crude ax to the most sophisticated modern computer, was first conceived, constructed, then put into operation and maintained by aworking human person. Nor should anyone take seriously the Kelsonian fear that the increased productionwhich sophisticated capital brings into the economiccalculus will reduce the overall need for workers. Eco

nomics 101 students learn early on that technologicalinnovation does not reduce the overall need for workers.

It merely shifts it into additional and diflFerent directions to the eventual advantage ofall who contribute tothe economic product. Howelse to explain the millionsmore employed today than in the days of the skilled

medieval guildsmen who could not begin to imaginethe variety and number of things which workers produce in our time.

As for trying to ascertain the relative contributionswhich the factors of production capital makes to theproduct, as compared with what labor contributes,Pesch put little stock in attempts to attribute specificproductiveoutcomes to the various factors. He waswellaware that neoclassical economics attempted to do thison the basis of its standard demand and supply, i.e.market principles. He cited the renowned Austrianeconomist Eugen von Bohm-Bawerk who held that "itis simply not possible to determine the physical sharewhich eachof the complementary factors: labor, capitaland land contributed to the product" {Lehrbuch/Teach-

ing Guide, V. 2, p. 7).Ultimately, the economy is

about satisfying wants of allpeople \Bedarfdeckungsprinzip)not about enrichinga small number of capitalists. That is whatbrought Heinrich Pesch to hisconclusion about the "just wageas the economically correctwage," His solidarist economicsisbased on the primacy of the human being in the economy as theonly factor of production whichis not only a means, but also thesubject of economic activity aswell as the object for which economic activity takes place.Therefore, it is the proper function of the economy to provide adecent living for human beings

who for the mostpart always did and always will derivetheir main livelihood from work.

It is scarcely surprising that the neoliberals foundlittle to rejoice about in the John Paul II labor encyclical Laborem Exercens. Neither apparently did the folksat the Centerfor Economic and SocialJustice. That is understandable, inasmuchas the CESJ does not profess tobe Catholic in the majority. But then it should stopsailingunder the papal flag. That is subversion! ThoseCatholicamongthem,on the other hand, who arehonestly committed to Catholic social teachings owe it tothemselves to devote some serious study to LaboremExercens. It is a pearlof greatprice!

lltey2005 / 33