Capitalism

CAPITALISM. - A word commonly used to indicate the structure of the economy of the modern and contemporary periods and understood in two different senses, according to whether one looks at the technical-productive aspect or at the ethical-social aspect, under which economic life may be considered.

The tendency to replace the work of man with mechanical means, a phenomenon that is encountered almost continuously and in a certain way marks the great stages of the economic history of humanity, was able to assert itself more greatly in more recent times, because of the more extensive exploitation of natural sources of energy, the ever wider application of scientific discoveries, and the use of machines in the methods of production. Considered in its technical-productive aspect, c., or more precisely the capitalist economy, is the economic system corresponding to the different proportion with which the two factors were employed in production properly so called and in the circulation of goods, with a growing prevalence of the material factor (capital), contrary to what had happened in earlier periods, during which labor was more widely employed. In this sense, c. must undoubtedly be credited with having contributed enormously to the well-being of humanity in general, having lightened the toil of man, raised the yield of labor, reduced the costs of production, accelerated the formation of savings, and increased world wealth. This manner of considering c., however, does not offer a special interest, inasmuch as the most serious problems that it has raised and still raises do not refer directly to the transformations introduced into the productive process, which constitute an undeniable progress in comparison with the technically more backward methods of production previously in use.

Greater interest, on the contrary, is offered by the ethical-social aspect of c., that is, the system of economic relations to which the aforementioned transformations have given rise, whether among nations in the world, or among the classes of production, as well as between the owners of capital and the consuming community within individual countries. Taken in this sense, it may be said that, historically speaking, c. had its beginning with the rise of the enterprise, the complete productive unit of the modern economy. Unlike the artisan's small workshop, in which the coefficients of production were identified in the same subject, at the same time owner of the instruments of labor, himself also a worker with a few employees, and likewise the manager responsible for production, in the enterprise the productive factors turned out to be divided into two distinct groups: on the one hand the owners of the instruments of production, on the other the simple workers, while the arbiter of production became the entrepreneur, a personality sometimes distinct, sometimes and more often identified with that of the owners of capital goods. The cause of the separation was the new requirements of production, whose greatly increased flow required investments of capital, both fixed (buildings, installations, machinery) and circulating (raw materials, financial means), not only of large dimensions, but also capable of being easily and skillfully maneuvered according to market fluctuations. Hence, especially in industry, the almost universal spread of wage labor, as a juridical institution concerning the economic relations between the classes of production; the multiplication of joint-stock companies, which facilitated the collection of large quantities of savings, distributing the risk of investment over a great number of savers; and the establishment of a managerial category of administrators and entrepreneurs, who freely disposed of substantial masses of wealth, whether they were entirely extraneous to, or participated in, the ownership of the instruments of production (share capital) for a share sufficient to assito secure for themselves the absolute predominance of the management of the enterprise. In this way there arose the tendency toward a progressive concentration of wealth in the hands of the directing classes and toward a widespread impoverishment of the working classes (proletariat), which were sometimes exposed to a state of actual unemployment, always to one of precariousness and economic insecurity in the face of the changing conditions of the labor market, which the new and more conspicuous investments of capital, required by the necessity of advancing ever further in the reduction of costs, rendered permanently unfavorable to the workers. In particular the demand for labor underwent altogether exceptional contractions in the periods of the so-called economic crises, that is, when the volume of production, markedly superior to the absorptive capacity of the market, brought about the arrest of productive activities and mass unemployment in some sectors or in the entire system of the national economy.

These phenomena, characteristic of the capitalist economy, could occur thanks to the principle of an unlimited individual freedom, which constitutes its intimate essence and distinguishes it from the other economic-social systems with which an attempt has been made to remedy the drawbacks attributed to it. Capitalism was in fact born from liberal economic doctrines, of which it put into practice the principle of a perfect freedom of initiative and of choice, recognized, at least in the abstract, to all economic subjects without distinction, to producers (capitalists and workers) no less than to consumers, on the hypothesis of a society in which the right of private property is in force. The concept of economic freedom is nevertheless highly equivocal and in reality amounts to a veritable servitude for those who find themselves in a position of inferiority in the face of wealth, that is, the workers and all those others who do not take part directly and with means of their own in national production, over whom those who find themselves in privileged positions end up exercising a despotic power to their own exclusive advantage. If it were possible to distinguish a theoretical capitalism from a historical capitalism, one would have to conclude that the former is identified with the theoretically perfect scientific constructions of classical economics, while the latter corresponded to an economic system which, though inspired by the ideal model of science, departed from it in practice in several respects, not only in the strictly economic field but also, and more so, in the social one. In this latter field, so to speak anti-liberal manifestations of capitalism, and at the same time its particular characteristics, were the systematic exploitation of human labor by entrepreneurs and the rise of de facto monopolies to the disadvantage of consumers. In the countries where the availability of capital was scarce and the supply of labor high, given competition, individual economic freedom meant for the workers low wages, excessively long work shifts, the employment of women and children in place of men, all to the advantage of the entrepreneurs, interested in reducing production costs in any way whatsoever, even at the expense of wage remuneration, with the aim both of increasing their profit and of resisting the competition which they too waged against one another for the conquest of the market by means of reducing the price of goods. The conditions of the workers were incomparably better in the countries in a phase of great economic development and well supplied with capital, where the labor market assumed a configuration favorable to them. But even in these countries the competition of the entrepreneurs brought about the ruin of the enterprises in which the reduction of price was not preceded by a parallel reduction of costs, and their absorption by those economically better equipped, which succeeded in dominating the market in a more or less absolute manner, depriving consumers of the benefits of competition. More frequently the domination of the market fell into the hands of compact groups of entrepreneurs who, rather than continue in a struggle that had often become unfair and without quarter, preferred to unite their enterprises in associated bodies (consortia, industrial syndicates, trusts, cartels), for the purpose of fixing the price of goods to be applied to the market by common agreement and in the common interest. In contrast with the liberal principle from which it had arisen, the capitalist economy everywhere assumed, albeit to a differing degree, a monopolistic character, permitting the holders of capital to exercise arbitrary predominance, if not always directly over the working classes, then over the mass of consumers, that is, over the entire population, rendered economically and politically subject to a limited number of men, whose economic power also knew how to impose itself easily upon the representatives of the public authorities. Among the capitalist monopolies, those deserving of mention are the ones that were headed by the leaders of high finance (the great banks), which, through their shareholding participation in the most important industrial complexes, were able to dominate entire sectors and the whole system of the national economy.

Similar to those described within individual countries were the phenomena that the capitalist economy presented on the international stage, whether as regards the competition of the owners of capital goods for the conquest of markets, from which political clashes and armed conflicts among the various countries often drew their incentive; or as regards monopolies, arising from the coalition of industrial complexes located in different countries or from the possession of natural resources of world interest on the part of individual groups of owners; or finally as regards the unequal distribution of wealth among nations. Particularly with regard to this last point, in which capitalism has given proof of its failure from the social standpoint, the very phenomenon of the concentration and the rarefaction of wealth among the classes of a people is found again among nations, some abounding in capital, in the form of resources of the soil and of large industrial equipment, existing in their own countries or in empires in some way subject to their influence, others on the contrary too numerous in population in relation to the economic resources of their territory. The consequence of this situation of imbalance between men and wealth is a strong inequality in the standard of living of the respective populations and the periodic recurrence of world economic crises, to which reference has previously been made. The crisis represents the highest point of the curve of so-called cyclical fluctuations, that is, of those periods of expansion and depression of economic activities, which recurred at nearly regular intervals in the two centuries of life of the capitalist economy. While admitting the grave social drawbacks that derive from the descending phase of such fluctuations, economic theory nevertheless discerns positive effects in the ascending phase and attributes the cause of the whole phenomenon to a situation of imbalance between the flow of savings and the volume of investments, determined by the state of saturation in which the markets available at that moment find themselves. The imbalance that has come about at first in a given country then reverberates also in the others, linked to the first by relations of commerce, until, once the excess wealth has been absorbed by the normal requirements of consumption and the depression has thus been overcome, prospects of profitable investments reopen for savings, permitting the resumption of productive activities and the beginning of a new economic cycle. But the deep cause of cyclical fluctuations, more than to the imbalance between savings and investments, which is only the immediate and in a certain sense local cause of the phenomenon, must be attributed more properly to the liberalist practice, as it was implemented by capitalism. The functioning of an international economic system founded on the freedom of exchanges is possible only on the hypothesis of a freedom that is in fact shared by all the elements that constitute it, that is, by men, by capital and by goods, and at the same time that obeys the requirements of the system itself, which must present a certain equilibrium between the availability of capital and the size of the population, and therefore between the returns of labor in the individual countries, a necessary condition for establishing between them lasting currents of exchange of more or less equal intensity on both sides. However, the criterion that presided in the capitalist economy over the exercise of economic freedom was the immediate advantages of the country and of the entrepreneurs, without any reference to future advantages and to the just interests of the other countries, so that capital did not flow, as would have been necessary, to the places that were most in need of it, given the profit, if not lower, certainly of longer maturity, that it would have yielded. Moreover, the movement of men and of goods, objectively not achievable in the form described, was positively hindered by certain categories of citizens, interested also in preventing variations unfavorable to them from occurring in economic life. In particular the capitalist producers hindered the entry of goods that prejudiced the development of production within the country; the working classes of the richly endowed countries opposed the entry of new workers, whose presence would have driven wages downward. For their part the governments, besides seconding such demands of the producing categories, did not fail to place other obstacles to the freedom of international traffic for reasons of a political nature. On the other hand economic freedom, as it was understood and practiced in the capitalist economy, while it lengthened ever more the distances between the various countries, accentuating the imbalance between the men and the capital existing in them, gave rise by natural consequence to excesses of production, due not so much to inevitable erroneous evaluations of the capacity of the markets, as to the impossibility of making a system function that is founded essentially on the principle of a real equilibrium of the economic forces among the parts that compose it. The weak side of capitalism in the field of international relations lies precisely in this constitutional contrast between the requirements of equilibrium, imposed by the very logic of the system, as well as the necessity of preserving national economic life in conditions of stability, in which the populations are interested, and an economic freedom which, left to itself, is not nor can be such as those requirements would demand. For the same reason the attempts resumed several times in the interval between the two wars to return to more or less moderate forms of freedom of international exchanges have all failed, including, as far as can be foreseen, the last one of 1948, carried out by the conference for International Trade (I.T.O.), in which, however, an attempt was made to reconcile the restoration of some freedom in economic relations among nations with the requirements of a policy of "full employment" within each country.

As a result of the drawbacks described above, as peoples, and especially the working classes, became aware of their social rights, the capitalist-liberal economy, which moreover has never existed in a pure state, progressively declined. Already before the First World War capitalism had had to fall back on less liberal positions within individual countries with regard to the problem of the changed relations between the classes of production. To the trade-union organizations of employers, created by them to protect their own class interests, analogous organizations of workers were opposed for the same purpose, which transformed the labor market from a regime of quasi-monopoly, held by the entrepreneurs, into one of bilateral monopoly, regulating those same relations by the method of collective contracts. The public authorities were moreover solicitous to protect the working categories with appropriate trade-union legislation, which also disciplined on the juridical plane the freedom of action of entrepreneurs with respect to workers. In the period between the two wars labor relations were also regulated by means of mixed trade-union organizations (various kinds of corporatism), more or less subject to the political influence of the State, in the countries governed by totalitarian governments, among which Italy, which, at the end of the last conflict, has returned to the old system, to which the countries governed by democratic governments had remained faithful. At the end of the First World War the problem of the relations between the capitalist producers and the consuming community received a different solution according to the ordi-

the political and social order of the various countries. Where the institution of private ownership of the instruments of production was preserved, save for limited exceptions, the public authorities, abandoning the traditional abstentionism patronized by liberal doctrine, increasingly intensified their interventions in the economic life of the nation, resorting in particular to the nationalization of enterprises of general interest (banks, means of communication, mines, etc.) and, especially after the last crisis, to various forms of regulated economy, limiting more or less severely the economic freedom of entrepreneurs in accordance with the political and social needs of the community. Where, on the other hand, the communist regime succeeded in establishing itself, as happened in the USSR from 1917 onward and, after the Second World War, in the countries situated beyond the "Iron Curtain," since the State and the bodies dependent on it replaced wholly or in very large part the private possessors of the instruments of production, the relations between capitalist producers and the community, together with those between the classes of production, were practically suppressed and incorporated into the system of political relations between the citizen and the State, which had become a supercapitalist State within communist society. In the field of international relations, governments generally established a policy of protectionism and control of trade, particularly in the last decades, hardening it further in the years of the great crisis of 1929, to the point of creating a system of economies almost closed within their own borders (autarky), with the aim of safeguarding the stability of national economic life, threatened by the entry of men and goods of foreign origin. The movement of men and goods is at present promoted through international agreements among the various countries, sometimes comprising entire groups of nations, as is the case for Western Europe, with a view to a future economic union among the countries adhering to the European reconstruction program (E.R.P.). In time, these countries should acquire and maintain a structure which, by integrating with one another and by means of an ordered system of multilateral exchanges, permits the most useful employment of the productive factors available in each of them and a state of equilibrium and improved well-being for all. A certain international equilibrium in the distribution of capital goods has been brought about in the present post-war period in an entirely new form, both in the principles that inspired it and in the particulars of its conception, through the same European reconstruction program, by virtue of which significant masses of wealth have been transferred by authority, in open contrast with liberal principles, from the places where it abounds and made to flow as gratuitous grants into the countries where it has greatly diminished, especially after the devastation wrought by the Second World War.

The system of regulated economy, adopted as an extraordinary measure in the years of the crisis and then continued without interruption in the periods of emergency of war and reconstruction, is destined to perpetuate itself in the internal life of nations, at least as regards the countries of Western Europe. The European economic union toward which they tend in fact requires an effective action of the State, which disciplines and directs individual activities toward a harmonious coordination of the various national economies, with the aim of raising the production and well-being of all countries. In this other respect as well, the classic postulates of liberal economy must now be considered to have set. According to these postulates, under the stimulus of individual interest, economic freedom is the most suitable means for attaining the highest level of production, in which the end of the economy would consist. On the contrary, as is today ever more widely admitted, the end of the economy is not so much the increase of wealth as rather a wealth distributed according to justice among the various social classes and the various countries of the world, which economic freedom has shown itself incapable of attaining on its own. The problem of the survival of c., of which there is often talk, must be viewed within this different framing of the entire economic problem. Once the principles of traditional liberalism have been surpassed — of a maximum indiscriminate product and of the private interest of the entrepreneur as the sole end and criterion of economic activity, from which originated what was called the "spirit" of c., thoroughly imbued with utilitarianism and materialism — there is affirmed everywhere, both in theory and in political practice, the more humane and more just principle of collective well-being, to which individual interest must be subordinated and which must therefore be contained within well-defined boundaries. It is not a matter of abolishing the ownership of the instruments of production and private initiative, creating in place of the old c. a more burdensome State c.; nor, still less, of halting the evolution of economic life or of modifying the present structure of the modern economy, returning to more backward methods of production, but rather of establishing in which sectors and to what extent, given the technical progress achieved by the economy, the instruments of production and economic choices must be left to the discretion of private owners and entrepreneurs, because they contribute to the public good of a more perfect social justice and of a well-being sufficiently diffused throughout the community. More than of survival and definitive decline of c., the question is to know what must be preserved of c., because it has proved useful to humanity, and what, for the opposite reason, must be subjected to a more or less radical process of revision. A problem, as can be seen, of limits as well as of means to be employed, in order to resolve it in the best way, taking into account the natural end of the economy and the factual conditions relating to the national and international environment in which the problem arises. Among the means that are today generally employed in countries with a democratic regime, besides the direct and indirect action of the State in the economic life of the nation and the control of public opinion over its external manifestations, mention is made of the so-called structural reforms, still in their initial state, aimed at transforming the wage relationship into some form of partnership contract, calling the working categories to participate in the management and profits of the enterprise together with owners and entrepreneurs. Wishing to escape the drawbacks of the old private c. and of the recent State c., an attempt is made, in other words, to strike a "third way," intermediate between the two extremes, along which the economy should set out, so as to leave private initiative to act within a well-defined radius of action, such that it does not oppose the attainment of the social ends inherent in economic life. With the due limitations of individual freedom, c. is therefore not destined to disappear entirely, but to renew itself in the consciousness of a more deeply felt social responsibility on the part of the possessors of wealth, there being no other alternative, beyond that of State supercapitalism, which, together with the disappearance of economic freedom, leads to the loss of every other individual freedom.

THE CHURCH'S THOUGHT CONCERNING CAPITALISM

The judgment previously expressed of a revision, not a total suppression, of c. corresponds to the Church's thought regarding the same problem. The two social encyclicals of Leo XIII and of Pius XI, the Rerum novarum and the Quadragesimo anno, important also for the completeness of the synthesis with which c. is described in them in its manifestations of a historical character, and more recently certain letters, messages and discourses of Pius XII do not condemn c. in itself, as an economically advanced system technically founded on individual initiative and the private ownership of the instruments of production. Therefore, they took a position against the communist system and the extreme forms of a regulated economy proper to totalitarian States. Indeed, given the present tendency of the State to invade the natural field of individual activities, the supreme pontiffs have repeatedly denounced the danger of excessive interventions and of unjustified substitutions by the public authorities in the sector of the economy and of labor relations, pronouncing themselves unfavorably both on the nationalization of enterprises, not required by the demands of the common good, and on political arrangements that render « practically impossible or vain the right of property, both over consumer goods and over the means of production », and affirming the right of citizens to associate, within the framework of the laws, in autonomous bodies for the defense of their own category interests. In particular Pius XII, following in the footsteps of his predecessors, has pointed out the remedy presently most effective for healing one of the gravest social ills brought about by the dissociation of the factors of production, namely the subordination of workers to entrepreneurs and their mutual distrust and hostility, in the constitution of professional and corporative organizations of employers and workers, founded on the community of interests and responsibilities, with which the working categories would be called to participate in the direction of the national economy in conformity with the dignity of conscious participants in production.

Granted indeed the legitimacy of the institution of private property, since the dissociation of the productive factors cannot be entirely eliminated from the present structure of the economy, however much it may be reduced by extending cooperative or quasi-cooperative forms (shareholding, worker ownership) in the ownership and management of enterprises, the best solution for correcting the abuses of c. in labor relations seems to be the one which, without resorting to the direct action of the State, creates the climate and offers the means for a constant collaboration of the classes, founded on the convergence of interests regarding the development of production. For the same reasons mentioned above, the legitimacy of the wage contract must also be affirmed, which the Quadragesimo anno denies to be « unjust by its nature », — although « it is more prudent that, as far as possible, ... it be somewhat tempered by the contract of partnership » — provided that it entails a just remuneration of the work performed, such that, taking into account the particular conditions of the firm and the general conditions of the national economy, it allows the worker and his family, together with an honest sustenance, the possibility of raising their standard of living and of gaining access, through savings, to property of their own.

Pius XII has also indicated with two felicitous expressions the irreducible opposition between Catholic social doctrine and communist doctrine as regards the goals to which they respectively tend and the methods of action that they propose for attaining them. « Not all proletarians, but all proprietors »; « not revolution, but evolution »: an evolution « concordant, ... progressive and prudent, courageous and consonant with nature, enlightened and guided by the holy norms of justice and charity ». Although the two phrases signify an open condemnation of communist objectives and methods, they implicitly also sound as a reprobation of the fundamental principles and the practice of c. regarding the end of the economy, the concept of national wealth, the means and the forms that must be employed to attain it better. According to Catholic doctrine « the economic wealth of a people does not consist properly in the abundance of goods, measured according to a purely and strictly material computation of their value, but rather in what such abundance really and effectively represents and offers as the material basis sufficient for the due personal development of its members ». Since « the national economy, just as it is the fruit of the activities of men who work united in the state community, so it aims at nothing other than to ensure without interruption the material conditions in which the individual life of citizens can fully develop ».

Catholic doctrine therefore rejects, both on the scientific plane (classical theory) and on the practical plane (liberal capitalist economy), a conception of the economy that intends to resolve the problem of production separately and independently of the problem of the distribution of wealth set on the bases of a true social justice. A science that studies the manner in which the wealth of nations is increased, abstracting from the natural needs of man and considering economic subjects as almost simple centers of force, without the due recognition of their dignity as persons and their moral duties, in an exclusively materialistic vision of social reality, is a science that Pius XI defined as built on « false opinions » and on « fallacious suppositions ». Nor can the Christian conscience accept in any way an economic system which, inspired by the principles of such a science, generates or renders permanent social inequalities incompatible with the natural end of material goods, arousing in national and international society rivalries and conflicts between classes and peoples. The Church has therefore reproved « as contrary to the law of nature » traditional c., insofar as it is the cause, on the one hand, of « excessive concentrations of economic goods, which, often hidden under anonymous forms, manage to evade their social duties and almost place the worker in the impossibility of forming a property of his own »; on the other, of an « innumerable multitude of those who, deprived of every direct and indirect security of their own life, no longer take interest in the true and high values of the spirit, ... slaves of anyone who promises them in some way bread and tranquility ». The capitalist economy is wont to boast vainly on its own account of having accumulated great quantities of savings, which have made possible an increase in production unprecedented in history, with which it has been possible to satisfy the needs of humanity notably grown during the last century. This nevertheless does not invalidate the gravity of the accusation that those savings were too many times the fruit of indescribable renunciations by the workers, to which they were constrained for a long period, until, only later, associated in trade-union organizations, they succeeded in bending in their favor the scales of justice in the distribution of the product.

It suffices to think that, limited to Italy, before 1868, the year in which the Zanardelli penal code went into effect, the strike was considered a crime; while the first official affirmation of international importance, which denied that labor could be considered as a simple commodity, was pronounced by the newly born League of Nations, a few years after the First World War had given its fruits of blood shed on the battlefields of an entire continent. The Church does not ignore the irreplaceable function of savings in the economic process; indeed it exhorts to it, as an expression of the natural virtue of temperance. But it denies that saving must be only a privilege of the few, and moreover of those who on the scale of individual needs have reached so high a degree of satisfaction that it is equivalent to the lack of primary goods for large masses of the population. The compensation owed to the owner of the instruments of production and to the entrepreneur must indeed be higher than that of his other collaborators, since they bear the responsibility of the enterprise and assume a greater risk in the initiative of production. But they also have, more than the others, the obligation "to contribute through saving to the growth of national capital. And since one must not lose sight of the fact that it is exceedingly advantageous for a sound social economy that this growth of capital should come from as many sources as possible, it is therefore highly desirable," Pius XII will say, "that workers too may participate with the fruit of their saving in the formation of national capital." The advocates of liberal economics object in this regard that, in the solution of the problem of distribution according to Catholic principles, it is impossible to obtain the quantity of saving that the requirements of production would demand, particularly in countries poor in capital, since the working classes are more inclined to devote their income to the immediate necessities of consumption. The objection, however, loses much of its force on the hypothesis that saving, especially if modest, is suitably encouraged and effectively protected by institutions of a private character and above all of a public character, since it is the general task of the public authorities to meet and assist, or even to take the place of, private initiative whenever the latter proves insufficient to procure the common good of society, which in the case in question consists in an equitable distribution of national wealth.

Moreover, this last point concerns more directly the method by which the Catholic and the capitalistic conceptions hold that one must proceed in order to attain the end of the economy. Born and developed in the first period of its existence at the time of the so-called "industrial revolution," capitalism has remained in a certain sense revolutionary in the manner in which it has carried out its program of maximum production in absolute terms. Classical theory had indeed demonstrated that individual freedom and private interest, through a very dense network of apparently disconnected and disorderly actions, would bring the economic system to a position of equilibrium, provided that the ideal conditions it supposed were realized (one need only think of Bastiat's "economic harmonies"). On the contrary, since those conditions were not realized at all, or were realized only very imperfectly, the capitalist economy has given rise to a varied and continuous series of imbalances of an order not only social (imbalances in the distribution of individual incomes within the same country, in the distribution of capital and wealth among the regions of the same country and among the nations of the world), but also economic (imbalances between saving and investment, between production and consumption), the former represented by a more or less unequal participation of citizens in the enjoyment of material goods and the other advantages of economic progress, the latter by a loss of wealth, in the form of productive factors and consumer goods not sufficiently utilized. Recent and more accurate investigations of economic thought, more closely adhering to reality, have therefore led to the conclusion that imbalance constitutes the normality of economic life and that in particular the cyclical fluctuations previously described, precisely a consequence of the aforementioned economic imbalances, should not be regarded, as in the past, as phenomena of a pathological character, but simply as physiological, on the hypothesis, it is understood, of a market economy. Economic becoming would thus by its very nature follow a wave-shaped movement, in which phases of expansion alternate with those of depression, arising first of all in the countries to which the initiative of world economy falls in turn and consequently then spreading also to the other countries. The concept of "order," which appeared a true conquest of early economic thought, and certainly was such on the strictly scientific plane of pure economics and on the hypothesis of an ideal world, has been repeatedly contradicted on the plane of facts. Today one speaks rather of an "order sui generis," which in practice is equivalent to a veritable disorder, generating economic no less than social hardship, both within individual countries and in international society, whose cause is traced back to the principle of individual freedom and private interest, which constituted, so to speak, the soul and the driving force of capitalism. Catholic doctrine does not accept an economic freedom placed exclusively at the service of individual interest, insensitive to the social needs of the community and especially of the economically weaker categories; nor a market economy, the collective expression of that freedom, which allows only the strongest to survive, only then in some cases to oppress them under the weight of their own strength, as is easily visible in moments of crisis, in which the exuberant production of periods of prosperity is exhausted. "Those very same, very few in number, who seem to hold in their hands, together with the most immense riches, the destinies of the world; those very same very few men — observed Pius XI in the encyclical Caritate Christi compulsi, while the great crisis of 1929 was raging — who by their speculations have been or are in large part the cause of so much evil, are themselves very often the first and most clamorous victims, dragging down with them into the abyss the fortunes of countless others." The same Catholic doctrine cannot even accept, if only because of the disastrous consequences of a social and political order that it entails in the field of international relations, the concept of an economic progress that advances with shocks and jolts, making the various countries pass from great prosperity to great indigence even amid the abundance of goods previously accumulated, because of the undisciplined freedom of action of entrepreneurs, which moves and directs its course. Liberal economists are wont to observe that precisely in periods of expansion, in which initiatives multiply prodigiously under the stimulus of large profits, economic progress takes its most decisive steps toward further improvements, which remain definitively acquired for humanity once the period of depression has been overcome. The reply is that the same happens in periods of war, when the imperatives of military offense and defense impart to technology a strongly accelerated motion, with results however too costly for all humanity, even if they ultimately redound to its benefit in the period of peace. The same may be said of the advances that the world economy is wont to register in periods of expansion, too harshly paid for in those of depression; for which reason a "progressive and prudent evolution, courageous and consonant with nature, enlightened and guided by the holy norms of justice and charity" is undoubtedly to be preferred, even if less rapid, but more continuous and more constructive, rather than a "revolution," to which in a certain sense the more or less profound innovations in the technique of production, which individual freedom manages to bring about in the ascending phase of the economic cycle, may be compared.

The supreme pontiffs, from Leo XIII to Pius XII, have spoken out several times against the concept of economic freedom and of the free market — the field of action and the guiding principle of such freedom — as it was understood in the two centuries of capitalism's existence, and all the more energetically the more its negative effects outweighed the positive ones. "Free competition, although it is certainly a fair and useful thing if kept within well-defined limits, can in no case be the helm of the economy," wrote Pius XI in Quadragesimo anno: "nor can that directive office be taken, much less, by that economic supremacy which in recent times has been replacing free competition; for since it is a blind force and a violent energy, in order to become useful to men it needs to be wisely curbed and guided... It is necessary that free competition, confined within reasonable and just limits, and still more that economic power, be in fact subject to the public authority, in what concerns the office of the latter. Finally, the institutions of peoples must adapt the whole of society to the requirements of the common good, that is to say, to the laws of social justice; whence it will necessarily follow that so important a section of social life as economic activity is will in turn be brought back to a sound and well-balanced order." In recent years Pius XII has again condemned that capitalism which "arrogates to itself an unlimited right over property, without any subordination to the common good"; just as he has also denounced in contemporary society the existence of "some mechanism which, far from being in conformity with nature, conflicts with the order of God and with the purpose that He has assigned to earthly goods," against which the worker's effort to improve his conditions runs up. The internal arrangements of nations and the action of public authorities must therefore together lead the national economy to the attainment of the common good of a wealth equitably distributed among the population, in particular by eliminating the most serious degenerations of an undisciplined freedom, such as monopolies, and in general by building embankments around the freedom of the strongest, which naturally tends to overstep the limits of what is just. The overcoming of capitalism is therefore not, according to the social thought of the Church, a work reserved exclusively to public authorities, as is maintained by communist doctrine and by the advocates of a merely centralized economy, and also by liberal doctrine, which invokes it in vain against monopolies, with the aim of preserving the market as far as possible in conditions of competition. It must also and above all be the result of new juridical arrangements, which impose upon the classes of production, directly concerned in the solution of the problem, a mutual renunciation of unlimited freedom and of their own exclusive individual interests, thus creating the premises of an effective and lasting collaboration in justice and social peace. With regard to the sector of international economic relations, Pius XII has affirmed the necessity of a return "to the wise and unshakable norms of a social order, which on the national terrain as on the international one erect an effective barrier against the abuse of freedom, no otherwise than against the abuse of power." In such a new order, "founded on moral principles, there is no place for narrow egoistic calculations, tending to monopolize the economic sources and the materials of common use, in such a way that the nations less provided by nature remain excluded from them." After the vainly attempted experiments of economic isolation, in the interval between the two wars, to escape the exceptionally harmful consequences of capitalism in the international world, the harsh experiences of the last conflict, originating in large part, like the one that preceded it, from economic motives, have informed the various governments about the necessity of putting into practice the principles promulgated by the Church, re-examining the principle of the absolute sovereignty of the State in defense of nationalist interests and laying the premises of an economic cooperation among the countries of an entire continent, a first step toward a future and broader international economic cooperation.

Alberto De Marco