In his very able commentary on Quadragesimo anno, entitled “Die Soziale Enzyklika,” the Reverend Oswald von Nell-Breuning, S. J., says that this encyclical “has made ‘social justice’ at home in Catholic theology, has, so to speak, canonized the concept.” To be sure, the idea of social justice is not new in Catholic social teaching, but the phrase itself was used only rarely prior to the appearance of Quadragesimo anno. A short definition of social justice would be: Just treatment for every class in the community, particularly the working classes. Pope Pius XI uses and applies the expression in many places; for example, in discussing just wages, just interest, the rights and duties of property, and in describing the nature of the new social order which he sets forth. Social justice, he says, must permeate “all the institutions of public and social life, and must build up a juridical and social order capable of pervading all economic activity.” This then is the all-embracing and fundamental Catholic social principle.
The most helpful way of comparing the New Deal with Catholic social principles will be to consider briefly the main elements of the former and then examine them in the light of the appropriate principles and implications of social justice. Inasmuch as the new deal may be viewed as a program of recovery from the depression and as a system of social reform to outlast the process of recovery, we may conveniently divide our discussion accordingly. We take up first the legislative measures that aim at bringing about recovery.
I. ECONOMIC RECOVERY
The primary object of these enactments is to provide employment as rapidly as possible for our vast army of unemployed. That aim is obviously in close harmony with the demands of social justice. While Quadragesimo anno does not offer any specific remedy for this evil, it declares that the widespread and long-continued unemployment of the industrial depression “is a dreadful scourge,” and that wages should be so adjusted “as to offer to the greatest number opportunities of employment.” The measures adopted by Congress to remove or lessen this great scourge are quite definitely authorized by the great principle stated by Pope Leo XIII in Rerum novarum: “Whenever the general interest or any particular class suffers or is threatened with evil which can in no other way be met or prevented, it is the duty of the State to intervene.” Hence the construction of public works and the reduction of the working week specified in the various industrial codes under the NRA, are in exact agreement with Catholic social principles.
The policy of fixing minimum wages in the codes is likewise demanded by social justice; for it aims at justice to that very large section of the community known as wage earners. Pius XI reaffirmed and amplified Pope Leo’s declaration that the wage earner should receive decent remuneration. Pope Leo spoke of reasonable and frugal comfort for the worker; Pope Pius demanded “ample sufficiency” for the worker and his family. While the minimum rates actually set in the codes do not reach the level demanded in Quadragesimo anno, they do recognize the ethical principle of a decent minimum as against a minimum fixed by “free” contract and the haggling of the market.
Another object of the New Deal legislation is the prevention of unfair competition. In a recent address, Donald Richberg declared that the industrial codes leave individuals free to make profits so long as they practice fair competition, and fair competition, he continued, means justice not only to competing business men but to the wage earners. Neither Mr. Richberg nor any other official of the NRA has denounced unfair competition in stronger terms than has Pius XI in Quadragesimo anno. Limitless free competition, says the Holy Father, “permits the survival of those only who are the strongest, which often means those who fight most relentlessly, who pay the least heed to the dictates of conscience.”
Another aim of the New Deal is to prevent business men from receiving excessive profits. When he signed the National Industrial Recovery Act, President Roosevelt pleaded for the postponement of full initial profits, at least for the first critical months. A few weeks ago Secretary Wallace declared: “It is exceedingly important that business men never take again as large a percentage of the national income for profits and surpluses if our recovery is to be made permanent.” Donald Richberg demands “the lowest possible compensation for the use of money and property that will induce all necessary investment.” The latter formula might be regarded as a specific expression of the general principle laid down in Quadragesimo anno, that the proper share of capital is determined entirely by the demands of social justice. Therefore, if two percent interest on capital is sufficient to provide all the instruments of production that society needs, two percent is a fair return. There is no sacredness to six percent. The owner of capital can claim as a right only that rate of interest compatible with the common good.
Section 7 a of the National Industrial Recovery Act gives adequate legal recognition for the first time to the moral right of labor to organize. This is in close agreement with the principle laid down by Pope Leo XIlI and reaffirmed by Pope Pius XI, to the effect that workingmen’s associations should be so organized as to enable the worker to better his position to the utmost in body, mind and property.
The National Industrial Recovery Act provides machinery for raising the prices of farm products. The object is to establish a parity between these prices and the prices received by other economic classes for their products. As stated by Pope Pius XI, there should be “a reasonable relationship between the prices obtained for the products of the various economic groups, agrarian, industrial, et cetera.” Where this harmonious proportion is maintained, he continues, “men’s various economic activities combine and unite into one single organism and become members of a common body, lending each other mutual help and service.”
The monetary policies adopted by the national administration seek to attain and maintain the general level of prices which prevailed in 1926. Were this brought about, hundreds of thousands would be enabled to pay their debts and save their homes and properties from foreclosure and bankruptcy. They would discharge their indebtedness in money having something like the same purchasing power as the money that they had borrowed. If prices could be kept stable after the 1926 level is finally reached, new loans could be made and repaid on a fairer basis than has ever been possible before. Neither debtor nor creditor would lose through mere changes in the purchasing power of money. These conditions would bring about a larger measure of social justice.
The last element of the recovery program that we shall consider is that which is concerned with slum clearance and the provision of decent dwellings for the low-income workers. Of course, this will take a long time to realize and will require billions of dollars of public money in loans and outright expenditures. Nevertheless, it is in conformity with the great principle quoted above from Rerum novarum. Inadequate housing is a moral and social pestilence in these United States. Apparently it cannot or will not be mitigated or eliminated by private capital. The returns by way of interest and profits are not sufficiently attractive. Therefore, there is nothing left but public action and public expenditure, which means federal action and federal expenditure.
II. ECONOMIC RECONSTRUCTION
Turning now to the question of economic reform or reconstruction, we can lay down as certain the proposition that another depression will inevitably come within a few years unless fundamental and comprehensive measures are adopted to maintain whatever degree of recovery is achieved. Excessive investment, superfluous producing capacity and inadequate consuming power in the hands of the masses would again set in motion all the familiar phenomena which produce industrial recession. Happily these dangers are realized by many industrialists, by all labor leaders, and by some of the most influential members of Congress and of the national administration. They see the necessity of continuing indefinitely the organization and control of industry set up by the NRA, and of extending the National Industrial Recovery Act far beyond July 1, 1935. The codes of fair practice with their maximum hours, minimum wages and all the other regulatory features must become permanently imbedded in our political and industrial system.
The accord between this program and the principles of Quadragesimo anno is easily perceived. Permanent regulation of industry by the codes and the NRA implies the complete rejection of the laissez-faire, economic liberalism and so-called rugged individualism. President Roosevelt and the most enlightened members of his cabinet are aware of these implications, and they have frequently declared that an end must be made of unlimited competition and corporate domination. Pope Pius XI has denounced individualism, liberalism, unlimited competition, and the threefold concentration of economic power. In the place of the old order he would set up a new juridical and social order pervading all economic activity and imbued with the spirit of justice.
While the industrial associations and codes of fair competition established under the NRA do not comply fully with the requirements of the occupational group organization demanded by Pope Pius XI, they could easily be brought into substantial conformity therewith. The principal additions required for this purpose would be full participation by labor in drawing up and administering the codes, and labor sharing in management, profits, and ownership.
The activities and aims of the New Deal point inevitably to heavy taxation of large incomes and inheritances. A considerable increase of taxes will be necessary to meet the interest on and amortization of the bonds issued to finance public works and the other expenditures of the recovery program. High taxes on incomes and inheritances will be required for another reason, which is not yet generally appreciated; that is, to prevent excessive investment and the creation of superfluous instruments of production. Practically all of those excesses can be traced to large corporate and individual incomes and savings. If a considerable part of the excess is taken by the government through taxes for expenditures upon public works and all sorts of services and goods which enrich the common life, employment will be provided for millions who can never again hope to find a place in the operations of industry. Our automatic machines and our mass production methods have made these millions of workers permanently superfluous.
This proposal is in evident harmony with Catholic principles. As a fiscal measure, it complies with the well-known principle that taxes should be levied in proportion to ability to pay. As a social program, it safeguards in a fundamental and comprehensive way the common good. If all workers can be kept employed at good wages, general prosperity will be assured. The Holy Father says that men’s superfluous incomes are subject to “grave obligations of charity, beneficence and liberality”; that constantly increasing wealth “must be so distributed amongst the various individuals and classes of society that the common good of all be thereby promoted”; and that the distribution of goods “must be brought into conformity with the demands of the common good and social justice.” A better distribution through taxation and expenditure for employment on public works and institutions seems to provide in our society the most practical way of realizing the ends laid down by the Holy Father.
The social order envisioned by the New Deal resembles that demanded by Pope Pius XI in a still more fundamental way than has thus far been considered. It implies an economic system that is neither individualism nor socialism. It assumes the abolition of the anarchy and manifold injustices of the former and avoids the political despotism and economic inefficiency of the latter. It would provide the maximum attainable measure of self-government by the industries themselves. If it gives labor full participation in the codes it will ensure the maximum of industrial democracy. It would reserve to the state the functions which, in the words of Pope Pius XI “the state alone can effectively perform,” namely, “directing, watching, stimulating, and restraining as circumstances suggest or necessity demands.” In a word, this social order would provide a via media, perhaps the only possible via media between capitalism and communism.
