The word socialism is freely tossed around in the public square, especially on social media. Too often, though, it’s either a misnomer for some government initiative younger left-wingers like or a demon-label for some government initiative right-wingers dislike. Sometimes, it’s the same initiative. Conservatives and libertarians also misapply it to welfare programs and regulations; I’ve even seen it used to describe the government-enforced economic shutdown (“Welcome to socialism!”). Some may be surprised to learn the Catholic Church doesn’t support socialism. After all, we’re supposed to be for the poor, right?
To understand why, we must first learn what socialism is. And what socialism isn’t.
Who Owns the Means of Production?
In the world of finance, capital refers not to money but to physical objects the business uses to generate revenue — the means of production. This includes an unimaginable number of things, from a mechanic’s crescent wrench to UPS’s fleet of delivery vans, from a farmer’s harvester combine to an auto manufacturer’s plant, including even the copier paper and ballpoint pens in the front office. The distinction between capitalism and socialism is the answer to the question: Who owns the means of production?
In a capitalist system, private individuals own all the capital, whether as sole proprietors, partners, or corporations. In a socialist system, the government owns the means of production as the representative of the people. In the ideal communist system, all goods are owned in common by workers themselves, usually in smaller, self-governing collectives or communes. However, countries that begin with communist revolutions quickly revert to socialism, rationalizing it as an intermediate stage toward true communism. (No communist country has yet succeeded in moving beyond this interim step.)
Socialist theory comes in different flavors which vary according to the mechanisms of state ownership and its extent. Nevertheless, the extent to which the government owns businesses and, as the owner, dictates wages and prices is the extent to which socialism sets up a command economy, as opposed to the ideal capitalist free-market economy. In extreme cases, such as the Soviet Union, only incomes gained by criminal activity don’t come from the government. Such a system necessarily requires a huge bureaucracy to administrate it. This would be the case even without totalitarian restrictions on freedom of speech and religion.
What Socialism Isn’t
Now, most educated libertarians will concede that some services are best provided by the government for the benefit of all, rather than by private entities for a profit: law enforcement, national defense, etc. However, the right emphasizes limited government offering only what they consider the most essential public services; the left seeks to expand the range of services. Moreover, the right views government regulation as a costly, intrusive, and largely unnecessary burden on economic activity. By contrast, the left views regulation as a necessary curb to coercive, exploitative, and socially or environmentally detrimental business practices.
Nevertheless, neither expanding government services nor proliferating regulation makes a system socialist. European countries to which the postmodern “Bernie Bro” points as examples of socialism, such as Sweden or Germany, are in reality capitalist systems with expanded government services. Such countries take a broader view of what government services are essential than do American conservatives and libertarians, and are willing to make the necessary economic tradeoffs to provide those services. But their governments don’t own the factories or farms. Ergo, not socialist.
Modern welfare systems didn’t originate with socialism, but rather with a correction to capitalist theory associated with economist John Maynard Keynes. In Keynesian demand theory, excessive concentration of a system’s income at the top leads to insufficient consumption at the middle and the bottom. Since the top can’t consume enough to make up the shortfall, this leads to economic decline. Keynes proposed that the government use social safety-net programs as a means of transferring some of that excess income from the top back to the bottom of the pyramid, stimulating demand and stabilizing the boom-and-bust cycle.
The Right of Property Ownership
Socialism, then, isn’t giving poor people “government cheese.” It isn’t the government’s provision of a service for the common good, like road construction. It isn’t burdensome regulation and taxes. It isn’t a police state, though at its extreme it may require a police state to maintain. Rather, socialism at its purest strips the individual of property and business ownership rights in the quest to achieve economic equality among citizens. In essence, the government doesn’t just regulate the market; rather, it becomes the market.
But it’s precisely because socialism deprives the individual of property rights that Catholic social teaching rejects socialism. CST roots the right of property in the universal destination of goods: Since all good things belong radically to all of us, it follows that we each have a share of these good things that’s ours alone. While CST holds that the right is only to sufficiency (rather than absolute, as in Austrian-school economics), it nevertheless maintains that the right of property is a human right. The right to own a for-profit business is a natural and necessary extension of that right.
In his 1891 encyclical Rerum Novarum (On Capital and Labor), the foundation of CST, Pope Leo XIII argued for the right of property from the human need to work for our daily bread. “There is no need to bring in the State. Man precedes the State, and possesses, prior to the formation of any State, the right of providing for the substance of his body” (RN 7). Socialism reverses the organic order of priority (individual > family > community > government) and, in doing so, makes the State the master of its citizens rather than their servant.
Welfare and the Patron-Client Relationship
I said before that modern welfare programs stem not from socialism but Keynes’ demand theory of economics. Yet something of the danger inherent in socialism is also present in transfer-payment social assistance programs, even in Social Security (which is not a transfer-payment program). In fact, Pope St. John Paul II wrote against the “Social Assistance State” in his 1991 encyclical Centesimus Annus (On the Hundredth Anniversary of Rerum Novarum; see paras. 48.4-5). The danger in transfer payments is that they set up a patron-client relationship on which the participant becomes dependent — not out of Sloth so much as Despair.
As St. John Paul explained in Laborem Exercens (On Human Work), work is “something that corresponds to man’s dignity, that expresses this dignity and increases it. … [Through] work man not only transforms nature, adapting it to his own needs, but he also achieves fulfilment as a human being and indeed, in a sense, becomes ‘more a human being’” (LE 9.3). Also, economic activities are forms of social activity, as we now know so well. Poverty, unemployment, disability, homelessness, and other problems can isolate us, disconnecting us from the community. Throwing money at the problem does nothing to re-engage us.
The longer the disengagement, the harder it is to sustain hope and dignity. The difference between Despair and a black hole is that light easily enters a black hole.
The argument here isn’t that the government has no proper role in such problems, but rather that reliance on transfer payments is doing social assistance wrong. Local- and state-administered programs that work directly with the at-risk as whole persons, not merely consumers, would be a more effective application of Keynesian theory. (One such program is the Denver Supportive Housing Social Impact Bond, which is experimental but has shown positive results.) The federal government could assist through coordination, incentives, and subsidies, but would otherwise take a back seat. The federal government would thus avoid the patron-client iteration of socialism’s master-servant dynamic.
As for the American debate over the “essential public services” government can rightfully provide, that’s beyond my present scope. I’ll note, however, that the Constitutional Convention made the Constitution amendable precisely because they knew the government it framed wouldn’t suffice forever, that our needs would change with time and growth. We no longer live in the economic and technological context that surrounded 1787. At the same time, they left plenty of legislative and regulatory power to the states and local authorities so that we could resolve many problems at the lowest, most direct level of government needed.
However, one of the most disturbing things I’ve heard in politics is when, during a debate with Sen. John McCain in 2012, Former Pres. Barack Obama began several rhetorical lines with: “You belong to a government that ….” At that moment, every democratic American bone in my body began to scream, “No, Mr. President, we don’t belong to a government! The government belongs to us!” Ideas have consequences. “The people belong to the government” may not be where socialism begins, but it’s where socialism leads.
And that’s why the Church rejects socialism. We belong to God and each other, not to the State.