ECONOMY. - Right and prudent administration of goods. Etymologically (from the Greek οἰκονομία; οἶκος = house; νέμειν = to administer) economia would mean administration of the house, that is, of the goods, the patrimony and the family resources. But the meaning went on expanding and came to include, besides the notion of domestic society, also the notion of city and of State. Indeed, until not long ago, economia was considered only in relation to the State and public wealth (political economy); now, instead, it is considered also in relation to society and the social classes (social economy) and to the various fields in which it is exercised (rural, industrial economy, etc.) and finally in relation to the family (domestic economy).
Economia, therefore, embraces the whole complex of goods useful and suited to satisfying our needs, with the aim of preserving and improving our existence; and it is carried out through the voluntary exercise of physical and intellectual forces for the conquest of those goods. Now, these goods (called by the general term: wealth) are not only produced; but, once produced, they circulate and are distributed throughout the social mass and are applied to satisfying our needs (consumption); whence four primordial economic phenomena: production, circulation, distribution, consumption.
Economia will therefore be the systematic complex of sure knowledge concerning the order, the activity and the economic phenomena; and it can be considered as a science (exposition, verification, systematization of the general laws of the production and consumption of goods) and as an art (application of the laws to individual, family, social and national life).
As a human activity, economia cannot claim to be autonomous, but must necessarily be subject to the moral laws that govern the life and the relations of men, under penalty of producing sad and deplorable consequences.
ECONOMY AND MORALS
Economic science was born amoral with Adam Smith (An inquiry into the nature and causes of the wealth of nations, 1776). Later - thanks to other illustrious masters - always on the plane of absolute freedom, it had most flourishing developments. Having then descended from the spheres of speculation onto the practical field, here too, strengthened by perfected technique and without ethical restraints, it dominated freely, until it degenerated into tyranny. Public e., especially in Great Britain and, somewhat everywhere, also private e., above all in the industrial sector, immensely favored the development of capital; to the detriment, however, of human labor. Which, not considered at all as a factor of production alongside the swollen capital, was reduced by it to wretched slavery. In the production phase it was exploited with a maximum of 14 and even 16 hours a day; in the phase of distribution of the produced wealth it was silenced with the minimal compensation of a starvation wage.
These excesses, somewhat generalized and even justified by liberalist doctrine, exasperated the proletarians, who, strong only in the force of numbers, united to rise in revolt. The struggle was opened with the famous manifesto of C. Marx in 1848; it was skillfully continued under the command of socialism; today it is more insidious and bitter than ever. Despite the many claims secured, human labor still fights to the bitter end, or no longer only against capital. Many other obscure elements have insinuated themselves into the struggle. The numerical force of the workers is sustained by the powerful political machine of Russian communism, to which, however, they must pay the tribute of another form of slavery.
Catholics, while always and in every way they have striven to bring capital and labor back to their natural position of collaboration, in the scientific field have soon recognized in e. the character of a science in its own right, while at the same time upholding its subordination to morals.
Only a few authors of the second half of the last century, e.g., Fr. M. Liberatore, pushed this subordination to extremes, reducing e. to a simple chapter of ethics. It was perhaps the spontaneous reaction to capitalist tyranny, daughter of the spreading liberalism, fought in all sectors with the intransigence of the first fervors by the resurgent scholasticism. Today, the constant Catholic thesis is expressed in limpid terms and sanctioned by the supreme authority in Quadragesimo anno: «Although e. and moral discipline, each within its own sphere, rest on their own principles, it would be an error to affirm that the economic order and the moral order are so disparate and foreign to one another that the former in no way depends on the latter».
On the opposite bank, absolute economic freedom is no longer defended, but neither is it entirely renounced. A position is generally accepted which, in the golden age of liberalism, smacked of compromise. That is, a distinction is made between speculative e. and practical e., and it is admitted that the latter must submit to ethical precepts, the former not. And so the proof of great disorders, provoked by liberalism itself, has forced economic liberalism to beat a retreat on the practical field and to defend itself at least on the high peaks of speculation. But even here its resistance is impossible. It will appear clear from what will be said in justification of the Catholic thesis.
As e. provides for the material needs, so ethics provides for the spiritual needs of man, insofar as he is a conscious and free person and therefore responsible for his acts. In the evident distinction and difference of their finalities is justified the distinction and difference of the two disciplines and of their respective principles and procedures. But such a difference does not succeed in breaking their contact on a common point.
The needs which they respectively provide for, although different in their content, are yet equally human needs. It is evident. And this human character is essential not only to ethics, but also to economic science. It is so true that it is an exclusively human science; nor does there exist an economic science for beasts or for natural energies. These have their place in e.; but, without taking part in its final phase, they exhaust their task in its instrumental phase. It is quite another thing for man. Even the physical and psychic forces of man, according to the proper laws of their yield, are engaged in the production of wealth; and, up to this point, man is on the same instrumental plane as physical and animal forces. But e. is not all in production, which represents only one of its phases and not even the most important one. The other phase of the circulation and distribution of wealth, with a view to their consumption, is also essential to it. This second phase constitutes the end of e., while the first is only its means. And it is known that means must be proportioned to the end. In e., therefore, the distributive phase is not only essential, but also the principal one, because it is the final phase, from which the instrumental phase of production derives both its reason for being and its nature and limits.
Now it is precisely in this final phase of distribution that e. asserts itself as an exclusively human science, because in it only man takes part; machines, beasts do not. Certainly machines too are repaired and beasts fed; but on what title? Not on the title of remuneration and distribution of the wealth realized in the preceding productive cycle; but only to preserve them, as efficient means, for a subsequent cycle of production. For man it is not so. He takes part in the distribution of wealth, with a view to which the preceding productive cycle was opened, which now, in it, reaches its finality, namely: to procure for man the means necessary for his development, according to the requirements of his nature. Man too repairs the machine of his body, more or less worn out in a productive cycle; but he does not do this only to preserve himself as a valid instrument of further production. For him, preserving physical forces is, in the scale of his human needs, the least noble, but the most necessary. Therefore with the goods produced and become his own through distribution he immediately repairs his physical forces; in order then to proceed to satisfy his higher needs, until he reaches, as far as will be possible for him, the complete perfection of his nature, conscious and free.
Who does not see thus that e. is essentially and exclusively the science of man, insofar as he is distinguished and raises himself above the other beings?
Three evident conclusions follow:
1) Since man is a unitary being, despite the duality of his integral parts, body and spirit, it is clear that the requirements of the body must be satisfied without conflict, indeed in positive harmony with the requirements of the spirit. Consequently economic science, which provides for material needs, is inferior and subordinate to morals, which provides instead for the higher needs of the spirit. Therefore in a negative sense it must accept its limits; in a positive sense it must adopt its directives.
2) The distinction between speculative and practical e. cannot be admitted. The former would be the complex of cause-effect relations, relative to the production, circulation, distribution and consumption of wealth; such relations, however, would be considered in their absolute value, independently of every relation with man. The same relations, instead, seen operating in human life, would constitute practical e., the only one subject to morals.
But — as has been established above — the whole of economics is a human science, that is, it has a relation to man and is therefore dependent on morality. Yes, there are in economics parts which, detached from the others and considered in isolation, can prescind from any relation to man: for example, the relations of production and circulation as such. But considered in this way they are only mathematical or mechanical or technical relations, which economics can make use of without their yet being formally economic relations. Economic science does not lie in the sum of its parts, but in the harmony of all of them; and such harmony derives from its ultimate end, which is certainly that of providing man with the material means for his complete development, material and spiritual.
Therefore every part of economics, like every sum of its parts, either is considered apart from this purpose and then is not economics, but only a pre-economic element; or it is considered in function of this purpose, and then it becomes at the same time an economic science, human, and as such, subordinate to morality.
3) The morality to which economics must be subordinated cannot be just any morality, but must be the true morality. Now the only true morality — after the redemption of Jesus
Christ - is the one that raises itself to the height of theology and is transfigured in it. Every economy must procure the material means by which man can satisfy the needs of body and spirit, natural and also supernatural. And since the supernatural values were entrusted by Jesus Christ to the infallible custody of the Roman Catholic Church, the economy - in order to be truly such - must consult and listen to it. For the history and development of the economy, v. SISTEMI ECONOMICI.
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