The Economy of Solidarity

Happened across a (PDF) essay which will be of interest as the country re-assesses "economics", in light of Santorum's rock-star speech following Iowa.

...Pesch had to defend himself against "theologizing" his economics, and he did so admirably in the Foreword of the final edition of the second volume.9 There he took the opportunity to point out that all economic
systems presuppose an underlying theology and philosophy which, together, he referred to as a Weltanschauung. For the old liberal economics which ensouled the capitalistic market economy, there was the naturalistic philosophy and deistic theology of the Enlightenment. For Marx, and for the socialists, it was was materialism and the Hegelian dialectic. Those who pretend to offer a "value-free science" are, in Pesch's terms, "under the influence of a positivistic, naturalistic Weltanschauung. " Whatever else may be said about Smith and Marx, and for that matter Keynes, they were scarcely "value-free."

True dat.  We don't have to recapitulate the "positivism" discussion, which also affects "law."  Suffice it to say that positivism is one of the manifestations of the dictatorship of relativism, condemned in no uncertain terms by Benedict XVI.

Eventually, the German Jesuit's astute critique of Malthus and his population theories also needed to be presented. Far from passe, the dour Anglican minister's analysis and prognostications still color the renewed neo-Malthusianism of our own time, and it infects the thinking of asute scholars like Wilhelm Roepke. Pesch cut through the fallacies, and provided the reassuring motto: if you take care of the quality of your population, you need not be concerned about its quantity.

Kinda sounds like an argument for education reform, no?

Pesch presented the economic process in its logical sequence proceeding from production, to exchange, to income distribution. That contrasts with the contrived, artificial divison into macroeconomics and microeconomics that became standard after Keynes revolutionized the old way of looking at economic reality

Gee.  A unified economics!

Economists have for some time now accepted the proposition that to be truly "scientific," economic reality must be expressed in mathematical terms. Thus economics progressed inevitably from physiocracy to physics. On occasion, younger colleagues have confided to me, off the record of course, that the mathematical method in which they are totally immersed leads to dubious results and a false sense of security. That is inevitable in a science dealing with human acts, not physical laws and properties. (Alfred Marshall, himself a mathematician, was far more modest about the pretensions of the mathematical approach than most contemporary
economists.)

So.  Pesch (and others) figured out that human activity is not necessarily Spock-ish "logical."  No kidding.

...a portion of.the first volume is devoted to what some may regard as matter for sociology.and political science. Included are chapters on the family, the state, and.private property which Pesch terms the "Pillars of the Social Order." For him,the state was not the enemy, as is widely suggested today in conservative circles. Instead, it is the highest natural society, standing at the end of the.chain in the order of subsidiarity as the final guardian of the common good. As for the family, no one who observes the dissolution of family life in our
own time could fail to notice how devastating that is also to the economic order. Pesch, incidentally, was steadfast in his belief that capitalism, barring drastic reform, would bring about the destruction of the family. A look at what is happening in American society today appears to support his prophetic insights. What the socialists proposed to do in their finely-spun theories, the capitalists accomplish by making the pursuit of profits at all costs their ultimate guiding principle

(I can hear the Libertarians' heads exploding....)  But note well:  "private property" IS a 'pillar.'

Moreover, Conservatives are correct to regard the State as 'an enemy' to the degree which the modern State has ignored the principle of subsidiarity.  IOW, they're not "wrong."  The State's arrogation of powers which are not its own following the principle is inimical to prosperity by virtue of the fact that it is inimical to the family and private property.  There is a reason for the 9th and 10th Amendments; the Framers were not stupid.

...what I regard as the three cardinal principles in Quadragesimo Anno were present in Pesch's work: the principle of subsidiarity, the principle of occupational groups, and the virtues of social justice and social charity as ultimate regulating principles of the social order. These three are mutually supportive of each other like three legs of a tripod. If individuals cultivate the two virtues—and Pope John Paul II has told us that social charity is the same as the virtue of solidarity- much less activity will be required on the part of
the state to maintain sanity and stability in the social order. Likewise, the occupational groups, if they are once reconstituted, will make it easier for individuals who choose to operate with an eye always on the common good, to do so. At the same time, such individuals within the framework of particular industries will help to keep the occupational organizations themselves from becoming merely selfish pressure groups which put their own narrower interests ahead of the overall common good. And ultimately, the state, which has as its object safeguarding and promoting that overall common good, is there to intervene in the event that individuals, singly or in organized groups, lose sight of it. In other words, where all of these three cardinal principles of social order are in place, each corroborates the other.

It would be very interesting to learn what Pesch/Ederer mean by "social justice."   There is a logical inference here that 'social justice' is really rendered to individuals, not "classes"; IOW, Pesch refused to adopt the Marxist worldview which is echoed in the Socialists' class-warfare.  But it's not defined in this paper.

Here we pause to explode a few more Libertarian/Capitalist heads:

The great trilogy of social teachings addressed to the economic order by Pope John Paul II provides the ultimate clear corroboration of Peschian thought. The first of the three encyclicals, Laborem Exercens, presents a theology of work, and an emphasis on the centrality of the just wage in economic life which are concordant throughout with Pesch's presentation of human work as the principal source of the wealth of nations.

Classical econ states that there are three foundational ways to make money.  Simplified, they are mining, agriculture, and manufacturing.  Secondary activities include finance, distribution, and various services such as law and accounting.  No matter:  each of the activities require labor input.  The less 'just' the wage, the more the State will intervene (as we have seen.)

...Sollicitudo Rei Socialis could justifiabily bear the English title: On Solidarity! Perhaps its most distinctive feature is the careful development of that concept. It is here that the Pope declares solidarity, that was central to Pesch's solidaristic economic system, to be a "Christian virtue." (SRS 40). And in the Centesimus Annus, he equated solidarity with the expression "social charity" used by Pius XI in Quadragesimo Anno but never
defined by him. That is a very important addition to the Church's social teachings, since social charity was coupled with social justice as the twin virtues that were proposed by that Pope as ("M)ore lofty and nobler principles" for regulating the social order (Q.A. 88). Indeed, Pius XI specified that social charity (solidarity) was to be "the soul of this order."

One does not have to be Catholic to understand what John Paul II was talking about.  These are Christian principles, not 'proprietary to Catholicism'.  You've heard of Lutheran Social Services, right? 

By the way:  vestiges of this economic thought and its 'solidarity' are shot through Santorum's economic plan.  It is not an accident that Santorum links the health of the family with the economic health of the State.  It is not an accident that Santorum blatantly emphasizes manufacturing-growth in his tax plan.  It is now up to Santorum to bring the (Federal) State back to where it belongs in the order of subsidiarity.