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Can Neoliberalism be Catholic?

Superb exchange going on over at dotCommonweal over a post about how certain political conservatives, like Rick Santorum or Michael Gerson, try to reconcile their Catholicism with the neoliberal paradigm. For once, even the comment thread is worth reading!

I think this is an important – if not THE important – debate about Catholicism and politics in the current election. Often, the debate over particular policies dominates, but in fact, what we should be looking at are the basic principles of the economic order. If a candidate fundamentally contradicts the basic principles, Catholics should have reservations about supporting him. In the post referred to above, “neoliberalism” is cast in terms of a pure free-market conception, in which governments take a minimal role in economic activity, providing for enforcement of contracts, a stable currency, etc. – protection against “force and fraud.” Others claim that Gerson forthrightly support subsidiary actors – such as families, community organizations, and churches – and so is not in fact individualist.

The (frequently made) mistake here is one that goes back to Edmund Burke, that “father” of conservatism. Burke seeks to deal with nascent industrial capitalism by (Warning: blogging oversimplification ahead…) distinguishing between a sphere of “culture” (or “civil society”) that can be fostered, and refuses to attribute social problems to the mechanisms of the market itself. He defends the market as good, over against the landed establishment (the “nobles”) of the pre-industrial order, which is who he is opposing. But for him, the market is not all there is. (One sometimes sees a variant of this in defending Adam Smith by noting one must read both The Wealth of Nations and The Theory of Moral Sentiments.)

There are two fundamental problems with maintaining this thesis today, which never seem to be adequately explained. First, Burke (like Adam Smith, in this way) is writing prior to the advent of large, joint-stock corporations. They are imagining relatively small-scale market actors. This observation is important for the second reason: it is overwhelmingly clear that large-scale corporate capitalism is destructive of small-scale community organization. As Wendell Berry has written repeatedly, community does not “have a value” measurable in economic terms, and therefore is constantly undermined by the market for the sake of its expansion. One could confirm this thesis by looking at massive, society-wide studies like Robert Putnam’s Bowling Alone, which chart the erosion of “social capital.” Or one could look at everyday experience and the Schumpeterian “creative destruction” that is the lifeblood of expanding capitalism – firms simply do not count social costs when moving a plant, forcing workers to take flexible hours, and a thousand other activities that undermine stable commitments to community organizations. (One of the things that could at least be said for the “robber baron” age of capitalism was that, by and large, these corporations had “hometowns” in which they invested. But the Chicago of Marshall Field or the Pittsburgh of Carnegie are gone.)

Political conservatives are not wrong to maintain that, absent a social “fabric” that is more “organic” to a community or neighborhood, bureaucratic programs have great difficulty making positive changes. But they are mistaken in assuming that “big government” is what erodes social capital. “Big business” is at least as problematic. Conservatives sometimes try to take cover in the works of Pope John Paul II, claiming that his work supports their minimal-state view (see, for example, a proof-texted reading of Centesimus Annus, paragraphs 49-51). But Benedict XVI (Caritas in Veritate, paragraph 38) makes clear that “caritas” is not simply saying something about civil society:

My predecessor John Paul II drew attention to the question [the need for a logic of gift] in Centesimus Annus, where he spoke of the need for a system with three subjects: the market, the State, and civil society. He saw civil society as the most natural setting for an economy of gratuitousness and fraternity, but did not mean to deny it a place in the other two settings. Today we can say that economic life must be undserstood as a multi-layered phenomenon: in every one of these layers, to varying degrees and in ways specifically suited to each, the aspect of fraternal reciprocity must be present.

That is, if you missed it, both market actors and state actors must find room for love WITHIN their activity. Bye, bye, Burke! Neoliberals must be extremely pained to imagine that the logic of gift should not only characterize corporate boardrooms, but also welfare offices.

Ultimately, Benedict’s work continues the tradition of CST, which maintains a balanced approach, accepting markets if they are “circumscribed within a strong juridical framework” by sound government regulation (see Centesimus Annus, paragraph 42), and if they are respectful of the institutions of civil society (including the family), which are in some sense “prior” to both market and state. This approach tends to fit uncomfortably with the rights-based individualism that sometimes contaminates Democratic attempts to work for the common good, but it outright contradicts the anti-government rhetoric of “free enterprise” that is routine among Republicans. It is ironic that candidates are now attacking Mitt Romney for his work at the takeover firm, Bain Capital, and Romney has fired back that he is shocked to find Republicans so desperate to attack him that they are now opposing “the free enterprise system.” The response from the others has been an attempt to distinguish between Romney’s takeover/outsource form of finance capitalism and “real” capitalism.

Now THAT would be an interesting distinction for Republicans to develop! Because, after all, that suggests there is “good” capitalism and “bad” capitalism. Which is exactly what CST believes.



  1. For anyone interested in a concise, manageable take on Edmund Burke in his historical context, check out the chapter in Jerry Muller’s The Mind and the Market. Superb resource.

  2. Thanks for the post David.

    So I was talking to my economist father yesterday, and we were talking about the “narrative problem.” One of his friends/colleagues Randall Wray (Who I highly recommend looking up his articles/blogs) has been pointing out that it is not a matter of REGULATION OR NOT but of what type of regulation. A market is by definition regulated by the rules set up, etc. So we’re clouding the issue when we talk about deregulation or re-regulation….what in fact happened is the government didn’t “Deregulate” but regulated differently (such that it was regulation to the advantage of large corporations and the financial sector’s dangerous practices and to the disadvantage of society at large, middle class, workers, etc.)

    So the question which emerges and which seems very much in line with Benedict XVI is — Who is the regulation benefiting/protecting? and which leads back to Economic Justice For All’s what does the economy do to people? for people? and how do people participate in it?

  3. Great post, David. I would add two points:

    (1) Conservatives are right, of course, about subsidiarity. The problem is, we can’t just say things like “the family is the foundation of a good society.” We have to analyze intermediary institutions and ask hard questions about how they can better serve the common good. Among ethicists, few liberals or conservatives do this.

    (2) The contemporary Catholic approach to business is prophetic and under-appreciated, as you suggest. I would love to see more conversation about what constitutes good business. Good Catholic economic ethics is not simply about creating more jobs but creating jobs that are good for persons and society. With this perspective, we can say that growth is not always good; it depends on what kind of growth we’re talking about.

  4. David, or others, what do you think of this response? I share the view that we often are too critical of Republicans, relative to Democrats, when it comes to individualism:

    “Individualism is such a natural temptation it would be shocking if we found it only on one side of the political spectrum. If on the right it is found in the more libertarian side of conservatism, on the left it shows up in the idea that the state should provide each person with sufficient support to not have to rely on others for help, making each person’s primary relationship be with the state rather than with other people and institutions. (This seems to work: through a mixture of cause and effect we find that the most splintered families are among those who require government aid while the greatest tendency to intact family and social structures is found at the higher end of the income scale.) This can come out in all sorts of unexpected ways. I recall being struck by it particularly a while back when talking with a relative (relatively progressive) who lives in Germany, and who maintained that the German outlawing of homeschooling (educating your children yourself in Germany rather than at a recognized school can be grounds for having your children taken away by the state) was just because it was the state’s duty to protect the right of a child to a good education from any educational delusions the parents might be under.

    Radical individualism is such an attractive error in modern affluent societies, it would be surprising if we found it only on one side of the political aisle. If we imagine that the other side is completely owned by it, while ours is only occasionally afflicted, we are probably failing to understand either side well.”

  5. The question that needs to be asked is how compatible is the Catholic tradition with “liberalism” in general and I mean this in the philosophical sense. The logic that says, government out of my bedroom is of the same vein as government out of my wallet. To put this in a context of which partisan group most mirrors the Catholic tradition is the wrong starting point. Both political liberals and conservatives hail from the liberal tradition; a product first of the Reformation and much later the enlightenment. The Catholic tradition as many of you well know, defines freedom, rights, the good in substantially very different ways than that found in the liberal tradition. This is in my opinion the more important subject to explore.

  6. Charlie,

    I find this critique very interesting. On the one hand, I would disagree that support for government programs like Social Security and healthcare is individualist. I view my support for these programs as an expression of solidarity and a recognition of the reality that not everyone has family support. Having access to programs like these doesn’t mean our primary relationship is to the state; families and communities are still able to offer all kinds of social support on a smaller scale. And in poor neighborhoods, they often do. While divorce and single parent families are more prevalent at the bottom of the economic spectrum, so are networks of care and solidarity in extended families and churches. I would hesitate to say that wealthy families are the strongest or most admirable. In David McCarthy’s terms, they are often the most “closed homes” or the most individualist.

    But there is a point worth considering here, related to my point above that Catholics (along with many conservatives) talk subsidiarity but don’t systematically address how to put it into practice. What if parish communities supported single parents not just by helping them get government help but by offering room in our homes? What if government programs encouraged single elders and single parents to live with their families or (if that isn’t possible) in group houses? As Catholics we should be able to draw on our tradition’s embrace of solidarity and gratuity to envision better alternatives.

  7. This is to respond to Charlie (and to the substance of the pingback from American Catholic). In very bullet-point terms.

    (1) Both Democrats and Republicans are systemic afflicted with individualism. One can see it wherever their “rights” language begins and ends. Republicans appear overly “individualistic” when it comes to, say, property or guns, but not when it comes to marriage or sex (abortion). Democrats kinda the other way (though they are pretty individualist about property, too.) I think anyone, anywhere can accuse the Democrats of being individualist on a whole range of issues. But on this one, the Republicans are on the individualistic side.

    (2) That said, I made the following comment above: “Political conservatives are not wrong to maintain that, absent a social “fabric” that is more “organic” to a community or neighborhood, bureaucratic programs have great difficulty making positive changes.”
    This is an (admittedly indirect) way of saying “if you just throw money at teachers, schools, poor neighborhoods, people out of work, etc., you won’t necessarily solve problems, and you may create some you didn’t intend.” I think this is more or less what Julie means about conservatives being “right” on subsidiarity. But most conservative rhetoric (and practice) is just as much against any kind of local control over property rights, local ability to tell businesses what they can and cannot do, etc., or “local welfare” as it is against federal programs. I think it would be great to have a conversation about the how to change social programs to make them more effective. But if people keep simply attacking the social programs (e.g. “socialized medicine,” “job-killing environmental regulation”), then we get nowhere.

    I’ll agree there are too many straw men in this debate. But let’s be clear: the Catholic social tradition is critical of unrestained capitalism and of unrestrained socialism. It wants a regulated market economy that protects and serves the common good. This does not fit well with either Democrats or Republicans. If we could all get to this place, then Catholics might be able to do something effective and interesting.

  8. Further in response to Charlie:

    The commenter mentioned Germany outlawing homeschooling. As might be realized, the Germans are interested in avoiding people being educated into certain heinous and false propaganda (e.g. denial of the Holocaust!) in which they have an understandable public interest. So one might discuss prudentially whether banning homeschooling is the right policy – but the idea of public education as something that helps people break out of family prejudices – well, that’s just true. I think there are a lot of problems with public schools in America, but I certainly think that exposing religious prejudice or creationism (to use two examples where there is clear Catholic teaching against them) as false and wrong is a fundamentally good thing.

    The concern that conservatives (rightly) have in mind, however, are ways in which the state may undermine any kind of appropriate dependence on the family, and ways in which public education might in fact itself sponsor false ideologies. OK, well, then, we should come out and SAY what the false ideologies are. And we should indicate the good of social bonds. I recently did a paper on marriage and consumerism, looking at the significant problems lower-income persons have in forming stable families. What has caused this? The unstable, low-paying job market for persons with less than a college education? The fact that marriage might make a person ineligible for welfare benefits that they are eligible for as a single parent? The fact that we make public we will provide support to women to bear and raise children (as opposed to abort them??)? The development of mass-media-driven subcultures that glamourize out-of-wedlock childbearing, rampant impersonal sex, etc.? The “sorting” of society into geographically isolated enclaves, where all poor people are clustered together and isolated from their wealthier neighbors? My point in shooting off all these questions is to make clear that the problem is complicated – and that we should be talking about ALL of these factors. Conservatives only want to talk about some of them, secular liberals only want to talk about some of them. Catholics should want to talk about all of them. The idea that government-sponsored health care or social security payments NECESSARILY promote individualism seems to me to be a leap. They certainly can. But then, do we as a society have responsibilities to the sick and the elderly? Given that we do not allow people to die in the streets (as old or sick), apparently we think we do. And so we then can discuss the best policies to figure out how to enable that support. But we can’t really pretend that we don’t need social policies at all.


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