The Corporatist Remedy to Economic Liberalism

April 10, 2019

In the contemporary world, particularly in the West, it is commonplace for Catholics and non-Catholics alike to accept economic liberalism as not only normative, but inevitable.

That is to say, few can conceive of an economic order that does not privilege acquisition, usury, and the so-called “free market” above the common good of man in society. While economic liberalism can be dialed-up or down depending on political temperaments, the “received wisdom” from professional economists and liberal ideologues has settled on the notion that state “interference” in the market is bad per se and can only be justified in limited circumstances, such as to prevent the monopolization of certain industries or to protect common resources such as waterways. Even though most Western states, including the United States of America, have established complex regulatory apparatuses within their respective legal systems, there are continual calls for the deregulation of industry and the curtailing of social protections for workers such as the right to unionize.

It is little wonder then that the class antagonism between owners and workers that fueled so many socialist uprisings in the 19th and 20th centuries is still prevalent today. Moreover, the ideology of individualism, a pernicious outgrowth of liberal ideology proper, contributes to a socio-economic situation where the professions have been atomized and workers have lost a sense of solidarity with each other.

Although post-industrial economies such as the United States present their own unique challenges and difficulties, the wider problems associated with economic liberalism were readily apparent more than a century ago when Pope Leo XIII laid down his landmark encyclical Rerum novarum. With the rapid spread of industrialization and the global economic catastrophe wrought by unchecked avarice in the early 20th century, Pope Pius XI, in his own social encyclical Quadragesimo anno, called for a departure from liberal economic order back to a guild-based system more akin to what existed in the Middle Ages. The system Pius XI proposed is commonly referred to as corporatism.

Eileen Egan (center) with Poles released from Siberian labor camps next to a National Catholic Welfare Conference’s war relief services bus sometime near the end of World War II. (Catholic News Service file photo)

What is Corporatism?

Before proceeding, it is necessary to define what corporatism is and why Catholic leaders like Pius XI and lay Catholic writers such as the journalist Eileen Egan defended it. In a booklet published in 1941 by Our Sunday Visitor Press, What is the Corporative System?, pgs. 5-6, Egan provides the following overview:

The corporative remedy starts from the basic evils. It advocates a return to ethical standards in the conduct of all business. Instead of holding out individual profit as the be-all and end-all of business enterprise, the common good would be the criterion of action. 

This would bring back the idea of a just wage for the working man, that is, a wage that would provide for him and his family the physical and cultural conditions of a good life. Since it is unjust to limit the owning of property to a few, a wider distribution of property would be a necessary condition of a good social order.

Another result of bringing moral principles back into the economic life of the nation, would be the serious attempt to create security for the ordinary wage-earner. Since the wage-earner is a man made in the image and likeness of God, he has a positive right to a just wage, a modicum of security and the ownership of some portion of the world’s goods.

If the tonic of such moral principles were injected into the sick body of our social order, the evil effects of class war would cease. As a machinery to attain such excellent ends, the [American Catholic] Bishops point to the corporative system [in their publication “The Church and Social Order.”]. It is applicable to many political frameworks, for example, republican or monarchic. In each locality, workmen and employers of the same vocation would form unions in which both groups would actively participate for the good of all. These would band together with all other workers and employers of the same field in the entire nation.

These powerful federations, representing all interests of the vocations, would set standards of work and production to protect the public, and would promulgate and enforce just provisions of work, wages and general welfare for the wage-earner. Even agricultural and cultural pursuits could be organized in the same manner, so that no worker would be left alone and unprotected against injustice. The greater part of the work for social and economic justice would be done by the regional unions of employers and employees, but the state would have to be a watchful guardian of the rights of the weak.

A Moral Economy

It is clear from the outline of corporatism provided above that it is an economic system predicated upon moral principles rather than avarice. Individualism is replaced by solidarity and professional associations work to overcome class warfare. Such an arrangement may be difficult to fathom in socio-economic order that constantly encourages individuals to “get ahead” at the expense of others, but so be it. Christ’s Church, and the Catholic social doctrine it sets forth, is directed at overcoming the world, that is a world beleaguered by sin, rather than making peace with its unlawful tenets. While greed and materialism will remain perennial problems until the Second Coming, the Church has proposed and maintains teachings that can give rise to an economy that treats man with proper dignity.

Why have so many Catholics shied away from the corporatist remedy to our ever-present economic ills? While a full answer cannot be provided here, no doubt the general state of doctrinal confusion wrought by the Second Vatican Council deserves a hefty share of the blame. Although it is commendable that certain writings of the post-Vatican II popes have called back to the principles articulated by the likes of Leo XIII and Pius XI, other less guarded declarations, such as those routinely made by Pope Francis, have led some Catholics to view the Church’s social doctrine as suggestive rather than binding. Equally problematic is the effort by some ostensibly Catholic organizations and thinkers to promote economic liberalism as the only way forward while misleading their fellow Catholics into believing that the Church has nothing to say on economic affairs.

However, for traditional Catholics in particular, the corporatist remedy deserves study and reflection. Even though contemporary society may be a long way off from operationalizing its principles writ large, corporatism’s emphasis on solidarity and just treatment can be readily put into practice by all Catholics in their professional lives. In so doing, Catholics can not only hold themselves in harmony with the Church’s social teachings, but demonstrate to non-Catholics that there exists a horizon beyond economic liberalism.