In this episode of The Open Door, panelists Jim Hanink, Valerie Niemeyer, and Christopher Zehnder discuss Catholic social thought and economics. That means taking a long, hard look at capitalism in practice and the dominance of corporations. We’ll explore the nature of usury and what’s at issue in a fair wage. We’ll consider the State as a political community and the family as the cornerstone of social justice. We’ll talk about personal responsibility as the foundation of a just social order. Our welcome guests are Thomas Storck, the editor of Money, Markets, and Morals (En Route Books, 2024) and its Australian contributors Dr. Donald Boland and Dr. Garrick Small, as well as the American distributist thinkers John Médaille and David Cooney. Among the questions we’ll address to this panel are the following. Please feel free to suggest your own!
- Is Catholic social teaching a dimension of moral theology?
- How should we define capitalism? How can it become a threat to justice?
- What is the origin of the modern corporation? Is there any way to challenge its power?
- Can you compare and contrast for us, say, the Bank of America, on the one hand, and, on the other hand, a publicly owned bank or a credit union? What dangers does the former pose?
- Just what is usury? Why is it wrong? Can you give examples of usurious practices
- What is the distinction between a market wage and a fair wage? Where does a minimum wage guarantee fit in?
- What is the basis of ownership? Do we own our bodies and our lives?
- Should we think of the State as the political community of the highest degree?
- Does the current economic order recognize the family as the first unit of a just society? What would a “family politics” look like?
- In what ways might we practice personal responsibility in today’s profoundly complex economic order? Is personal responsibility compatible with stock ownership?
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Transcript
Episode Transcript
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You're listening to WCAT radio, yourhome for authentic Catholic programming. Welcome to
the Open Door. Jim Hannink herewith fellow panelists Valery Niemeyer and Christopher Zender.
Today we discuss Catholic social thought andeconomics. That means taking a long,
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hard look at capitalism as practiced andthe dominance of corporations as dominating.
We'll explore the nature of usury andwhat's that issue in a fair wage.
We'll consider the state as a politicalcommunity, and the family is the cornerstone
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of social justice. We'll want totalk about personal responsibility as the foundation of
the social order. Our welcome guests, and we have a number today,
are Thomas Stork, the editor ofMoney, Markets and Morals this year from
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Enroot Books. And it's Australian contributorsdoctor Donald Moland and doctor Derrick Small,
as well as the American distributors thinkersJohn Miday and David Cooney. Let's begin
as we all as do in prayer. Come, Holy Spirit, Fill the
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hearts of your faithful, and kindlein them the fire of your love.
Send forth your spirit, and theyshall be created, and you shall renew
the face of the earth. Letus pray, Oh God, who have
taught the hearts of the faithful,by the light of the Holy Spirit,
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granted in the same spirit we maybe truly wise and never rejoice in His
consolation through Christ, our Lord.Since the panel is dealing with a panel,
we'll try to do so in anorderly fashion. I'll begin and I'll
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ask Thomas Stork, the editor ofthe volume in question, to answer the
first question, but others can answerthat in a different way. And then
when we go to the second question, well, I'll ask Christopher Zender to
ask that question, and anyone canjoin in raise a hand. And when
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we come to the third question,I'll ask Valerie DeMier to ask that question.
And if you think we have preparedquestions, well, of course we
have prepared questions. We'd run offthe road within a minute if we didn't
have prepared questions. However, thepreparation is an odd libbytum sort of thing.
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Are free to come and go andlinger, and we don't countenance vaping.
But if some people are trying toinsist on vaping, will will allow
for it. So I'll begin withthe first question. And this is basic
and I think a whole lot ofpeople don't ever consider it, uh,
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Catholic social teaching. That's basic moraltheology, isn't it. Yes, it's
it's moral theology as dealing with ourinteraction with others, especially when it comes
to the economy. And you candefine Catholicists teaching in a couple of ways,
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you can, and Pious Eleventh inhis person cyclical your Oconnoll talked about
it, and he gave a broaddefinition having to do with the whole question
of celtlics and the state. Butusually when we talk about it, we're
dealing with the narrower question of theeconomy, and that's what the book is
about, and that's what we usuallymeaningly say. But but the the moral
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law does not cease to operate.Obviously when it becomes a matter of uh
action by more than one person.It's not somehow nearly individualistic moral law.
But as soon as we joined withothers are getting some kind of a combination,
somehow the moral ceases to have anyvalidity. So that's that's why we
could say, yes, ethics teachingis a part of moral theology as as
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regards our interactions, especially in theeconomy. We're talking about all right,
now you you weren't waving at donwelcome Don, you weren't waving it up
your hand add to this question,go ahead, Yeah, I would like
to have that in. In away, social justice is a redundancy because
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all justice deals with justice deals withyour relations with the world, so all
justices social justice. The term wasn'tintroduced until eighteen forty one by Father Taparelli,
and it was adopted in nineteen thirtyone, eighteen thirty one adopted yet
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eighteen forty one adopted in nineteen thirtyone by Pious the eleventh and he used
it nine times in his encyclical andthat's when it became part of Catholic social
teaching. But it only became weonly needed a social justice because justice had
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been privatized, okay, by moderneconomics and by modern moral theories. So
before that, the term wouldn't havemade any sense at all. Okay,
before the modern era. Well,let me have remember different kinds of justice.
There is communicative justice, distributive justice, legal justice, and very often
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social is considered to be But socialjustice is just the application of those three
kinds of justice to institutions. Well, my understanding was that social justice is
actually legal justice or legal justice considereda certain aspector or a portion of legal
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justice. Well, I would alsoinclude distributive justice and certainly commutative justice in
social justice, because both of thosehave social aspects. Or certainly distributive justice,
which is the just wage is partof distributive justice, and exchanges certainly
as a social element. Yeah.Well, in Divinia read of Tourists whyet.
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Eleven makes the distinction that the workersdo a living ways in communicative justice,
and then he goes on to say, therefore social justice there's a duty
to organize the economy and the institutionsof the economy such that the payment of
the ecomodative due wage is possible.So he's making a decisions between the commodative
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justice do and then social justice wouldmake possible the carrying out the ecommodated justice
at any rate. I believe thatTom and John would agree with me that
we distinguish in order to unite.We distinguish an order to unite. And
Christopher, yeah, maybe I'd begood at this point because I think any
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of those who might be listening tous or to ask ourselves, what do
we mean by communicative justice and distributivejustice. And even before we ask the
question I want to ask someone ishow do we define capitalism? It's probably
good to lay down those definitions becauseI think the questions that we we address
capitalis we are going to have tobring in those distinctions again. So someone
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would like to lay down those definitions, I think it'd be a good thing.
Well. I started at distributive justice, the distributions from a group to
the members of a group. Acommutative justice deals with exchanges between members of
the group, and legal justice dealswith what members of the group oh to
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oh to the group. So thestandard of justice for distributive justice is contribution
merit. So how much did youcontribute to the group, and what is
the merit of your contribution? Commutativejustice deals with exchanges, and the rule
of justice is that the exchanges shouldbe equal, whereas legal justice the rule
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is what is necessary for good orderand nothing more. So there's kind of
a triang Distributive justice distributes to membersof the group. Commutative justice is exchanges
between members of the group, andlegal justice is what the group members oh
to the group. Okay, sothe community of justice would need more strictly
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mathematical, I mean arithmetic, yes, very arithmetic, whereas distributed justice be
more proportional exactly, yes, yes, And so it's not simply even,
but distributed justice it's not simply whendoes the person contribute to the group,
which is part of it, Butit's also what is o to one simply
in virtue of being a member ofthe group. So yeah, yeah,
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okay, I think that's that's that'simportant to understand, because again, like
I said, virginaling with definitions likethis very often very unclear to people who
may be listening to us, Andso that proceeds the next point unless someone's
actually said, but to see thenext point capitalism? What is capitalism?
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How do we define capitalism? It'sI sometimes think that capitalism is about as
clear a term nowadays as socialism orfascism, right, we use, people
use these terms, and I oftentimesthey find when I speak to people who
say they're pro capitalists, oftentimes they'renot quite as appropriate, that they don't
mean the same thing by capitalism asI would mean. So maybe we could
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by anybody here to give a definitionwhat is capitalism? And it's I understand
that there are various different ways ofexpressing it. I've seen that in various
different writers as to what this is. Essence, Yeah, there are there
are clear that up many different definitions. But I'd like to if I may,
I'd like to read one that Ilike to use. I think it's
an authordinated one, namely from bothlast elevens from what it is, well,
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I know number one hundred and hecalls it that economic system in which
were provided by different people capital andlabor greatly needed for production. In other
words, the keenone of capitalism,as biases saying here, is that you
have one class that owns the meansof production, and they hire other people
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to work for them, and there'snecessarily a separation between ownership and work.
And that's what I always mean bycapitalism, although I realized that that's not
what everybody means. And I thinkyou can add to that. What John
Paul the second says is that's it'sthat asserts the priority of capital over labor,
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and that capital is regarded as thechief contributor to production, but in
fact there is no capital without labor. No, don did I see you?
And that's anybody you've read Insident's definitionof capitalism that I remember it.
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I'm sure we've read it, butdo we remember it. I don't.
I don't have it before me,but I think it's in these What's Wrong
with the World Book, And hedefines it as that system where the most
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of the property is owned by afew, and the majority, by such
necessity, is required to work formoney at the history of those who have
it? Who who? He definesin terms of property that those that there
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are there's a few who own mostof the property or control it, and
the majority are required, because oftheir lack of property generally to work for
hire. It's fairly close to whatThomas said about it. But then he
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suggested that the name was inappropriate.Of course, it suggested that most people
were capitalists in a capitalist system,and he said, well, most people
are are not capitalists, that they'reproletarians. They lack property generally, most
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of them are in debt anyway thetime most of their lives paying off debts,
so that they hardly have any propertyto speak of. So he suggested
the proper name for the system wasproletarianism. H M hmmm. I think
that's a more accurate term, certainlymore descriptive of the majority of people.
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Yes, yes, yes, it'sthe inevitable result of Now that's when you
when you have one class controlling themeans of production, is going to be
that Yes, that's the point,or I would say more that it's it
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is the inevitable result when, ascapitalists, did you decide that that economics
is no longer subject to ethics,because then that's when it's going to happen.
If if if that's That's been mycontention for quite a long time,
is that you know, capitalism couldbe done in a just way, or
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at least a more just way,if you could get capitalists to all agree
that capitalism itself as a system issubject to ethics and the principles of ethics.
Now, most of them will say, of course you should act ethnically,
but they'll also argue that capitalism isa completely separate system. Yeah,
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I just to add to that,that's the result of considering economics as a
pure physical science. Yes, whichwas nineteenth century. That was the achievement
of the nineteenth century to divorce economicsand ethics. Where before that, from
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the days of Aristotle until Adam Smith, you always had a political, ethical
economy, and this divorce of thispure scientism in economics creates this divorce.
Well, ethics aren't an issue.It's just supply and demand charts, that's
all. You know, what whatdo ethics have to do with that?
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But I don't think I would disagreewith you, David to some extent in
that, even if you've got capitaliststo agree to that, the tendency and
capitalism since state, since you havea separation of ownership and work, the
tendency is always toward regarding your laboras merely a cost item, and you
want to reduce that cost as muchas possible. So it's kind of working
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against the nature. It's like saying, oh, we can put up pictures
center folds and Playboy and just don'tlook at them, just avoid your eyes.
Yeah, I do, I do. I do agree with you there,
As I said I ultimately it couldbe more just, but I don't
think would ever be a completely justsystem. You know, you could make
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it better than it is, butI don't think it would resolve all the
problems. Well, as far asone person comment that it would be like
if you're going to compare it toPlayboy, like reading Playboy with your wife
turning the pages. Well, Idon't think that's very edifying. So sometime
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logic teacher, sensitive to Christopher Zender'ssuggestion that we really work on definitions,
let me first to ask doctor Smallif he wants to get a word in
edgewise here. Otherwise I'm going todo a little bit of a riff from
the logician side of things, I'dlike to broaden. I guess the way
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we're looking at it. I thinkone of the contributions of Adam Smith,
as much as he didn't make muchby way of a positive contribution, was
at least to map out the problemof distribution between the factors of production as
land, labor, and capital.Often forget the limitations on what capital is
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when we're talking about what capitalism means. Capital is always some prior product,
a tool. Land suffers from theproblem of the understanding of property rights,
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which Saint Thomas devoted quite a lotof attention to, and we often forget
that when we're talking about questions ofcapitalism. If we look at the distributed
the problem of distributive justice as theallocations between land, labor, and capital.
If we begin the observation that commutativejustice is seldom practiced, which gives
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us some sort of an excess backto the factors of production, land,
labor, and capital. It meansit's always an excess of residue. And
so the capitalist would like to say, I will pay land as little as
I can in order to run mybusiness, and I'll take the rest.
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I'll pay labor as little as possible, and I'll take the rest. Marx,
Prouden and Co. Came along andsaid, no, no, we
don't want that. We don't wanta capitalist to take the excess. We're
going to take it for the workers. And that hasn't worked out terribly well.
As much as it was probably nota bad idea, the reality in
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our culture pretty much through the modernera is that we've lived in an era
of absolute private property, which SaintThomas also had trouble with, and so
did Aristotle. Absolute private property isan abomination. The capitalist thinks that's natural.
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Aristotle didn't either, did Saint Thomas. The socialists, proud Marx,
Co. Rejected in favor of theof labor. We've got this this argument
over private property that's in there.Henry George came along and he wasn't a
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Catholic social theorist, but a lotof Catholics subscribe to his thinking. And
he looks to Rikada and said thatland takes the residue the excess. Capitalism
is when the capitalist, the ownerof capital, takes the excess. The
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problem with ethics is that ethics isalways about self restraint. Whether it's you
and your wife leering over Playboy orwe're back to that. Yeah, it's
always about self restraint. Self restraintis when workers follow the advice of St.
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John the Baptist and give a fairday's work for fair day's pay.
Self restraint is when the capitalist doesn'tovercharge his clients, is his customers,
and doesn't underpay his factors of production, principally his workers. And self restraint
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is also when the landowner is humbleenough to realize that you get a return
for what he actually puts in,rather earning some speculative profit. And so
we live in a world where we'rejust arguing over who takes the residue.
The capitalist will say, I'll takethe residue, thank you very much,
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because I'm so important to make allthis happen. The laborer, following the
socialist says, I'll take the riskof you because I'm actually doing the work
and the land. And I says, well, naturally and with the foibles
of human nature. Oh, Ihave it anyway, And you chaps can
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just go and argue to the housecontent. But I'm going to end up
the wealthiest in the game. Well, a lot of cards, A lot
of cards have been dealt in thisdiscussion, and doctor Small, you have
certainly added a number of them.Let me go back before we go back
to Christopher, let me go backto the logician's riff, a little bit
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of a prehandle to it. Thispast week in Trieste, the Holy Father
said that democracy is not doing sowell, and then he went on to
speak democracy. But what he actuallydid and speaking about democracy, was to
give a persuasive or perhaps aspirational definitionof democracy. And logicians, even an
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infomologic, want to distinguish between definitionsthat are lexical. Those are definitions that
report all word is mostly used holidays, lexical and persuasive. How a definition
is used to persuade somebody or otherto have a certain view about that which
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is being fine. And then reallythe gold standard is a genus species definition
which is as Aristotelian as we canget. And the idea there is we
define something in terms of identifying thegenus to which it belongs and what differentiates
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it from other members of that genus. Now, all of this is deeply
complicated, and this is all ofthe riff far as I'm concerned. Many
many people today don't think that thereare any essences, so you can't give
an essential definition. However, that'senough of that. So Christopher, where
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should we continue this? I haveto maybe wrap this one up. I
remember Amentory fon Fani I defined thecapitalism as an economic system, which is
where all goods are subordinated to thematerial goods, to the material good of
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profit and so or economic production.That is what he said, so that
he even said that the Soviet Unionwas the perfection of the capitalist order.
And I thought that was interesting becausewhat we're talking about, right, some
of things we're discussing is that whenwe talk about the relationship between the owner
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of the capitalist and his workers,we're not talking about something in itself which
is perverse. There's nothing wrong forsomeone to own a business and to hire
people that work from There's nothing wrongin markets. I would think right,
So what makes capitalism perverse is somethingelse. It's it's the imbalance. It
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would be right to say it's animbalance, or is it? Is it
a like a momentary fund finding setof false orientation, false determination of what
is the ultimate good of society?Well, I think you have to distinguish
and the advantages that are quoted playsto live and goes on and says the
system in itself is not intrinsically wrong. And what he means by that is
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David was getting out before when he'sthat capitalism could in theory of rigously,
but I would maintain that, oh, that it's nearly impossible to happen because
of of of all human nature.And so when we have power, we
have to abuse that power. Andcapitalists control the economy, they're have to
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abuse that. And as I said, regard labor as if cost item to
be reduced as much as possible,which is why I'm a distributor, because
I'd like to eliminate the distinction betweenthe the owner worker and make the owner
worker and worker owner. So thatto me is the Yeah, it could
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outgrate and the paper could out rideusly, but the examples of it are
few and far between. I thinkyou can that, Valery. Why don't
you push us forward here, becausewe're going to dwell on each of these
questions at great length unless we havean external external costs come into play.
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All right, Well, if there'ssomething that just has to be said,
you can add it into one ofthe later parts of our conversation. But
I don't know who wants to takethis, but the corporation. The advent
of the corporation, I understand,marked a major shift in what is economics?
And so would somebody explain kind ofwhat what is the origin of the
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corporation? Why is a corp?Why is there power? How how does
the corporation have power in a uniqueway? And and is there a way
to kind of confront or bring balanceto that power that you know of?
How how can we contend with that? Well, I think that that might
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be doctor Small's turf. Well,the corporation is a legal so this history
comes from law, not from economics, and its origin I believe came from
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the early capitalists order where the fewwe were the lords of the land and
of the realm, sort of aristocracywho could own most of the property and
would have what In the Middle Ages, of course it was serfs who did
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the work, who were the laborers. That system changed in the modern era,
but not basically because the the workers, the serfs really were beginning to
have a little bit of land oftheir own which they could work on the
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manner. But they were gradually drivenoff that those pieces of land and became
property less. Of course, thesystem of agriculture changes, and there was
quite a ship from the medieval systemof distribution, which was imperfect, but
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it was beginning to have some beneficialeffect in that the yeomen that were called
really it's a word that means workersof the land. The man of the
land is a geoman, that's Englishbecomes young man, and he was not
an owner, but he had somerights to made to have his own property
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a land, and live off that. And then tom of that, there
was a system of common lands thathe the poor could have access to to
eat out a better existence that way. But both those systems changed. The
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only and lost his strips of landwhen they were amalgamated into the lords overall
estate, and then the common landswere enclosed. There was a whole period
when legal enclosure, which locked outthe poor from that from that source of
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living as were so they were theserfs were were certainly servile, but they
became more helpless with the change.And the shift then was connected with the
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advances in technology and manufacturing, andit became possible with new inventions to mass
produce things. That meant that theprevious yeoman and poor had to go into
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urban areas, become factory workers andmake a wage. So that was the
shift to the wage worker from themedieval system of surf and in one way
it was a freeing of the worker. He was no longer tied to the
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land, but he had no tieat all except to the wage that he
could make, and he became whateventually ended up in the late nineteenth century
in Poblia the thirtieth description as ina condition little better than slavery. The
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yogis slavery. So he was politicallyfree, but economically dependent, and in
a way much much more cruelly dependentthan before. Because there was no personal
relationship between the worker and the employer, as there was between the lord of
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the manor and these serfs, theywere sort of halfway between a family relationship
and a slave relationship. That thatsort of personal connection was lost, and
the new system, the capitalist system, is very impersonal. The laborer competes
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with his other laborers for a viceto work for the person who has the
capital, and that can get very, very extremely oppressive at times that it
did in the nineteenth century. Andand that spite the socialist revolution. Socialism
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is didn't come before capitalism. It'sa reaction to capitalism. And it's it's
got the features of totalitarianism, whichh in a way are in the capitalist
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system already. That is a power, an excessive power over the majority to
keep them down as were. Andthat's that's what that's the description I think
Justine gives. It's a technical definition, is not a moral definition. It's
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proposes a moral lack of justice.But it's it's not a it's it's an
economic relationship in terms of property andlabor or capital and neighbor. Land comes
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into it indirectly in it's so faras you can't work or use your capital
except on land, so the landas a certain control over what happens.
But the land and the old systemof the medieval system was land based.
Really there was the landlord, thelord of the land, who were running
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the show that has become now.And the other thing that's missing is really
what is in the title of thebook is money. Money is regarded as
capital now it's it's it's to dowith the system of exchange, so that
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that it's a complication in the definitionof capital. And I've dealt with them
various aspects. Somebody didn't mind mybooks. Now when you mentioned that magic
word money, I think of howI wish I had some money in the
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bank. And well, the closestbank right around the corner is something called
the Bank of America. I don'tknow if there's a Bank of Australia,
but there's the Bank of America.And what's about a time my erstwhile Kondom
employer, instead of a bank therebecause they weren't giving out much in the
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way of money, had a creditunion. And I guess some people have
some money in a credit union.And then we have a very active member
of the American Solidarity part which you'veall heard of, of course, support
who helps to manage a public bank, a public bank, French fellow John
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Norm Schweinard. At any right,maybe some of you folks could help us
distinguish between the bank of America.Your friendly or more friendly, isn't it?
Credit Union? And what we maybewish there were a lot more of
public banks. Well, Jim,before we do that, would you like
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if I said something in regard toValerie's questions about the origin of corporations,
Yeah, go ahead, please come. Well, I'll just be trying to
be brief. I can't speak toany other country. But in the United
States before the roughly the Civil War, corporations were generally small things, charted
by state legislatures do specific things,for example, operate a bridge or operators
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steamboat between two ports, and theyhad a kind of a monopoly. But
they were restricted both as to whatthey could do and as to how long
your charter would last, which wemight or might not be renewed by the
legislature. Starting with the Fourteenth Amendment, which was designed to benefit the freed
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slaves, the corporations took a hugepower brand and they started to call it.
They said that they were persons underthe fourteenth Amendment, which eventually the
Supreme Court recognized, and they beganthey achieved rights to perpetuity. Instead of
being charged for a certain number ofviewers, they were forever. They achieved
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rights to do anything they wanted insteadof just operate one particular thing. They
achieved rights to own another corporation likea holding company. And basically they slowly
gradually achieved the prominence that they havein our economy today. But it's been
a lot In fact that Citizens ofthe United Caates, which was in the
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last twenty years, was one ofthe latest programs on the part of corporations,
UH to to have all the rightsbut few of the liabilities of natural
persons. So as really, asas Don said, it was a legal,
legal fact, not an economic fact. Uh. They manipulated the economic
the legal process. And so acorporation, if you do something wrong,
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you might go to prison. Ifa corporation does something wrong, well probably
at most it will be fined andthey won't actually get officers and directors won't
actually go to prison as well asa limited liability. I mean, it
would have to be a very verygross criminal act for them to actually go
to jail. So corporation is essentiallya collective group of people investing, and
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that they none of them carry theliability of the risks individually. It's this
kind of group holding and they don'tthey aren't responsible in the same way an
individual is in terms of the law. That's that's exactly. The essence is
that the corporation divorces ownership and responsibility. So if you own property, if
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you own a car and it itrams into somebody's house, you are liable
for whatever the damages are. Ifthe corporate, the corporate corporation and the
owners of the corporation have no liabilitywhatsoever. Yon may be losing the value
of their shares, but they haveno So that's the whole meaning of limited
liability corporations. So ownership, management, and use are all separated. And
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what this enables. What this enablesis is the rise of a managerial class.
Because the funny thing about capitalism isthat, for the most part,
most capitalists don't have very much power. The power is all in the hands
of a professional managerial class. Uh. And so that's where the real elite
(39:58):
comes from, uh as the managersof the property. Not that, not
that, not the owners that mostowners don't even know what the hell they
own because they own it through afund or something like that. So ownership
vers I know exactly. Yes,I think you're to be careful to factor
(40:23):
into that analysis. The portions manypeople might own a microscopic share in a
corporation, but in the concentration ofwealth that's been happening over the same era
means that there is a very smallnumber, of very small percentage of the
(40:43):
population that actually do have influence.And you're right, managerial class exercises a
parent power influence. But that concentrationof wealth I think is key to understanding
capitalism. All right, let's pivotback here, but we could bring the
(41:06):
threats of the conversation, uh intoplay. Should we maybe speculate that most
bankers are almost as bankrupt as Iam? Should we speculate that most bankers
are are wondering why they have tofollow the orders they have from their managers.
(41:29):
How, let's take banks as atesting ground for what we've said so
far about capitalism, about corporate ownership. Uh yeah, what about banks?
I would start off I would startoff by by because the bank versus credit
(41:51):
union versus personal bank question segues rightoff the topic of corporation, because the
banks are the corporations that have thatmanagerial class that controlled everything. Whereas you
know, at least historically credit unionswere worker based institutions within a particular industry
(42:19):
or even within a particular company,that they would collectively pool their economic resources
and through that support each other.So I know there are other people in
the panel who could certainly go moreinto depth in a better answer than I
am. But to me, that'skind of the segue directly from the corporation
(42:40):
question into the banks versus the otheroptions questions. I think you're right at
the banks are probably well obviously thefinancial institutions. The corporations are also primarily
financial institutions. They're not really interestedin the products they produce or the services
(43:04):
they provide. They're interested in maximizingtheir shareholders wealth, maximizing profit. That's
purely financed. And one of thecuriosities when you get closer and closer to
finance is that in finance, you'renot interested in production, in goods and
serving human needs and all the otherthings economists talk about. You're interested in
(43:27):
maximizing your financial returns, your profit, and so the banks do that.
That's why Heindrich Pesh the Jesuit therewas largely inspiration for prodigest. Maenna defined
capitalism as state sponsored usury, andusury is really one of the key issues
(43:52):
behind all of this. Yeah,I think the usury doesn't get nearly enough
at ten because finance is such afundamental aspect of any production. Of production
is a process in time. There'salways a gap between the planting and the
(44:12):
harvest, between the raw material andthe finished product. So all production has
to be financed. That is goingto give finance a key power in the
system. But when finance gets morethan it contributed, then you have usury,
(44:34):
and usury gathers more and more wealthinto fewer and fewer hands, okay,
and capitalism is always going to followthe course of usury okay, because
the finance function is so critical toany production, okay, any production,
but it doesn't get nearly the attention, either the economic attention or the moral
(44:58):
attention, the political attention that itdeserves. In fact, we don't even
like to use the term usery today. Yeah. One thing that most people
don't realize is that the vast majorityof our money supply is created by the
private banking system, created as debt, which then is required to be paid
(45:22):
back to the banks with interest,which interest is one hundred percent usery,
and it's it's people think of themoney supply is the paper money that I
have with my wallet, or maybethe old Fort Knox or whatever. But
no, that's just the mescal partof their money supply. Most of the
money supplies created by banks and createdas debt. And probably this isn't a
(45:46):
good time to go into this indetail how that works. But I've tried
to explain it to people's another Ifound people have a hard time asking that
point. Well. Henry for hewas once said that if people understood the
process of creating money, there wouldbe a revolution before breakfast. Uh he
(46:09):
was wrong, because if you tellpeople how money is created, they won't
revolt. They simply won't believe you. They can't believe that. They wouldn't
believe that I'm trying the process bybuying some stock. Christopher, you were
presenting us with a benign, ordinarysort of capitalism, so surely there'd be
(46:32):
nothing wrong with I wonder could wego back to the sort of image that
you had in mind. Was therea thing there that involved usury or were
you thinking of something that would notbe usorious? Perhaps uxorious, but not
usorius. I wasn't actually thinking ofthe finance aspect of that discussing it might
(47:00):
be helpful. I know, Iknow this is tedious of me, but
it might be helpful if we justfind usury, because again, those people
who are be listening to us don'tuse use the term, or they think
usury is just successive interest, butit's not the success of this interest.
What is usury? Well, ifany interest charge them alone simply by virtue
(47:24):
of its being alone, no matterwhat the purpose of the loans for whether
it's for the body, yacht orwhether it's start a business. If I
charge somebody interests purely on the basisof that they're loaning me money, I'm
wanted them money rather, then that'susually I think I have a little difficulty
(47:47):
with that because in so far asanybody contributes capital to some venture, they
have a right to return on thatcapital that they create. So that's in
itself not the problem. It's theproblem is when they won, they don't
really contribute anything but a legal right. That is, the bank's just create
(48:10):
money. They do not lend outmoney. If I lend Thomas Stark,
you know, one thousand dollars tostart a business, Thomas needs to pay
me back to one thousand dollars andto let me participate in whatever the profits
of that business are. But ifI just invent the money, well that's
(48:32):
not the same thing, okay asme taking money having less money and you
having more. So in that sense, all interested from a bank loan is
certainly dubious. The bank is entitledto some return. For one, the
business of making the loan and therisk that you won't pay back and things,
(48:57):
and the cost of servicing the loan, all of that, the bink
is entitled to something. Well,I agree with that, and I think
the main issue there is the sourceof the return. Because, like what
you said, when you know youloan money to Thomas and you have you
are entitled to a share of theprofit. That's right, But the way
(49:20):
we do our loans in our currentcapitalist society, that's not how it is.
The return you get is based offthe money that was loaned to you,
and it's an interest charge against money. So even if Thomas doesn't get
any profit, you still do.Because your return as the lender is not
(49:44):
based on the success of the business. You don't have the same risk that
he has. You're protected from riskbecause he owes you interest based on the
money loaned, and that's really wherethe issue is and usually by my understanding,
No, that's exactly what I wastrying to say. So, John,
(50:06):
if you if you own your moneyfor my business venture, and you
have it and you kind of buya share in it, yes you're entitled
to a return on that. Buton the other hand, if the business
fails, which if I were runningit it probably would, then you would
you would not get anything back.But these data is simply because if the
(50:27):
business fails, you still expect toget your money back. That's usury.
Yeah, I think we're just maybesaying the same thing, say different ways
the US for way of understanding this, we're really coming close to including explicitly
the element of risk. Most ofthe twentieth century in the finance area has
(50:51):
been devoted to justifying explaining the riskfree element of of an interest loan,
of a money loan, and they'salthough claiming that they're still taking a risk.
Well, the relative scale of therisk is is negligible. If I
(51:13):
borrow money from the bank to buya house. They only see their risk
starting when I'm not able to payall my principal and accumulated interest back to
them, which is long way downthe track. Especially if the bank only
lends me fifty eight percent of thevalue, they're very well protected. Whereas
if I'm using that property for abusiness, farm or whatever, the risk
(51:40):
is really no proportion. Let meinterjeck this, Valerie, will you join
me in asking these gentlemen, theseworthy gentlemen, since we only have three
minutes left, if they'd be willingto stay with us for another fifteen minutes?
(52:06):
What do you think, gentlemen?I'm available for as long as you're
running this because I can say,well, well, val since Valerie,
since it's Valerie asking, I'll stayYeah, Jim, Jim had to ask.
Jim had asked, I wouldn't havehave done that. No, all
right, where the go, Valerie, b NHO b NHL. Now,
(52:32):
since we have an extension of fifteenminutes, I don't think we'd want more.
But since we have the fifteen minutes, would you asked the next question?
So we hear a lot about wageissues, minimum wage, just wage,
(52:52):
market wage, help us make senseof you know, kind of these
categories of and how they relate,maket wage, adjust wage and what was
the third one that I just saidthat's what we get. That's what we
get. Okay, well, Ithink the best definition I've ever heard of
(53:17):
a market wage I have to givecredit to Thomas because that's where I got
it from, is that it's it'sthe lowest wage that they can get away
with paying. That's that's the marketwage. And what in my examination of
that definition, I came to realizethat the market that you're competing in isn't
(53:42):
just your industry in your area oreven your country. The market you're actually
competing with is essentially the entire world. So if there's someplace else in the
world, even in a communist country, that's offering a wage low enough that
they can earn a greater profit makingit there and shipping it here, then
(54:07):
that determines what the market wage isthat you have to compete with. The
minimum wage is an attempt at rectifyingthis that is noble but imperfect because it's
usually implemented at a state level,and it doesn't take into account the different
(54:30):
costs of living in different areas.Even within the one state, you can
establish a minimum wage that would leavea person destitute in a metropolis, but
have them living in the lap ofluxury in a more rural area, whereas
(54:52):
the church is teaching on a justwage really takes into account the locality of
where you're living and says that ajust wage is that if if you were
a person who is working full time, you should earn enough to be able
to support your fame. And that'snot the basis set David. If you
(55:15):
as long as you have mobility ofcapital, as you were saying yourself,
you're competing against the whole world.If you pay workers in the rural area
less than they do in the metropolitanevery vice versa, then that's an incentive
for the for the corporation to movetheir their production to the lower weight area,
(55:38):
which is not a bad thing.Well, we got if we got
some more business and you know,uh, moved some from New York and
Philadelphia out to Butte and Des Moines, that would not be such a bad
thing. Well, in my opinion, what it ends up doing is that
it incentivized the corporations to place theirbusiness in the large metropolitan areas because the
(56:05):
people are more dependent on them there. It's actually okahead, sorry, there's
actually an anomaly there that the citiesshould be the most efficient places to keep
people, and so they should bethe places where people are wealthiest. But
(56:34):
that tends to mitigated by the costof real estate. It costs about the
same to ship a canabeans to somerural town as it does to put it
in the middle of New York.And it's more efficient to take a truckload
of kansa beans to New York thana handful to some little town. But
(57:00):
the cost of rent sort of comparison, and that is an extra level of
complexity that has often ignored these sortof comparisons. Yes, and I think
it's ignored because land disappeared as aseparate category in economics at the start of
(57:22):
the twentieth century. So there usedto be land, labor, and capital,
and that's how people thought about economicsin the twentieth century. It was
just capital and labor, and landdisappeared into the capital fund, when of
course that's nonsense. It has anentirely different mathematics. But I also want
(57:42):
to point out, and I thinkit's very important that low wages are just
bad economics because each firm's wage billis every other firm's demand curve. Okay,
so the wages that Thomas pays toChristopher is the money that Christopher can
(58:04):
use to buy goods from David andJohn. You know, so low wages
necessitates government intervention into the economy too, because the government is forced is forced
to become the consumer of last resort. Okay, so the government has to
buy battleships and welfare and big bureaucraciesbecause nobody else can has enough to absorb
(58:30):
all the output. So low wagesand big government sort of go together,
otherwise the whole system collapses. AndGary pointed out looded a minute ago to
Heinrich Pesh the Jesuit economists, andhe had a very very interesting theory about
(58:51):
wages, namely that since the laborof one person is generally if he has
right tools and amount of land,it's generally enough to support not only himself
but several other people. When aperson is not paid that that that indicates
of miss some kind of uh lackof battles of mismanagement between those who control
(59:15):
the payment and the actual worker,which is again one of the reasons that
capitalism is a social evil, becauseyou have levels of complexity that contribute to
this, whereas when you have auh, a distributis to economy or something
approaching to that, then the levelsof complexity are not there, and the
(59:37):
and the relationship between the ability ofa worker to generate income and income that
he receives is much much clearer andmuch more direct. So if y'all owned
a company or if you you know, there's probably listeners that own a small
business, like, how do theywhat's your what's your recommendation to them in
(01:00:00):
terms of how to provide a justwage considering all the complexities, you know,
well you have thoughts for them.But yeah, in a way,
yes, I actually eleventh was wellaware, and he said that in the
capitalist economy, employers were often ina bind because their competitors were not paying
(01:00:22):
just wages, and if they wantedto compete with them or even stay in
business, not necessarily increased their markets. Here we're just stay in business.
They were in a real mind becausetheir workers they were trying to pay adjust
wage and their workers the other peopleweren't. This is an demniate rate of
tourists now. Pace said that theyhave a duty, the employers have a
(01:00:45):
duty in social justice to work tochange the system so that in fact it
is possible to pay the ways doingcommendative justice. But unfortunately, at least
in the United States, I can'tmeet anywhere else. Business owners absolutely no
sense that they have any responsibility toensure justice in the economy, and most
(01:01:08):
it would be a matter of apersonal relationship with their employees. And in
that case, when they do havethe resources to page of just wage,
their duty down to do so,even if it cuts into their own profits,
because the most they have right toas a wage, and just like
(01:01:30):
your employees, well, let mepoint out, I mean, that's the
key issue is that it's really notup to the individual employer for the most
part, it's a systemic question.And that's why Quabria jay Z Mollano made
it a systemic issue. So theemployer doesn't always get to choose. Sometimes
he does, but mostly he doesn'tget to choose. And so systemic reform
(01:01:52):
is required. And what are thesystemic reforms will they have to be aimed
at balut seeing the power between employersand employees, because Adam Smith pointed out
that wages are a result of powernegotiations, and so long as one side
has all the power, there willnot be just wages. So things that
(01:02:17):
help to increase the power of laborare things like labor unions, guilds,
minimum wages. Imperfect as they are, all of these things increase the bargaining
power of labor, and where thepower between both sides is more or less
equal, probably the result will bea just wage. But as long as
(01:02:39):
there's an imbalance of power, therecan never be age. Now getting back
to excuse me, getting back tothe American Solidarity, which I know you're
all secretly thinking about. I wishI discussed more openly. I have a
yard sign and beautiful yard sign thatsays St. Ski AC American Solidarity Party,
(01:03:02):
pro life, pro family, andpro worker. We've talked some about
workers, we haven't spoken directly aboutlife. We should at least speak about
the family. We want to sayin Catholic social thought that the family is
the core unit of society. AndI don't know if anybody before, but
(01:03:29):
John Paul too definitely spoke of theneed for family politics. We don't have
much time left and I wanted toget that in, so whoever wants to
comment, please do Yeah. So, I think you make a good point.
We really live in two economies.Is one way of looking at it,
that we the you know, someonesort of goes down to breakfast a
(01:03:55):
schoolboy. He doesn't lay he's avisa card on the dining round table to
get breakfast. His parents give itto him, and as a result he
gives them a lot of things inreturn. There's a gift economy that is
core in the family, and there'sa notion of justice and purpose and proportionality.
(01:04:19):
You go outside the front door andyou're living in a contract economy,
where it's a taking economy, it'snot a giving economy. One of the
curiosities of the early social insectl callsnot so evident the later ones, was
that the answer you go to theback of aream navarum and you might be
(01:04:40):
looking for economic policy advice or something. It's evangelization, the same thing at
the end of pot just moano.And there is a almost an irony that
on one hand, what we callCatholic social thought is really an outline of
(01:05:01):
how creation works. Our human natureis meant to work socially. But the
irony is that in order to achieveit, you need the players, especially
those with power, whether they've gotunion power or money power or whatever it
(01:05:23):
is. Those in power to choosethe good rather than self interest. And
most of the capitalist era, thelast five hundred years roughly, has been
an attempt to justify greed as avirtue. And we see this all the
way through Greed is Good, probablythe most recent of an example of it.
(01:05:46):
And when Mason Gafney wrote about thecorruption of economic especially focusing on American
economic development of American economic thought,it had this chorus that the people that
were funding the economics professors were thepeople that have grown rich on capitalism.
So it provided a kind of formof moral justification, whereas the alternative is
(01:06:12):
with God first. And that's veryawkward because in our era, the Protestant
ethic which really was the genesis ofcapitalism and gave us the first idea that
we get to define our own moralorder, whereas humans have to exist within
the reality. And that's what Catholicsocial thought really attempts to expose. What
(01:06:36):
is the reality or what is thenecessity that we're working amongst a profound realization.
I wonder just to add to that, I mean, the use economy
and the exchange economy and the useeconomy of Astol was a gift economy almost
(01:07:01):
by necessity. But when we sawthis big transition of women from the home
sphere to the work sphere. Sowe saw this huge increase in GDP.
Okay, but it wasn't real becausethe only thing that was happening was that
(01:07:25):
so called women's work, if Iput it that way, was being monetized.
So when mama cooks meal for thefamily, GDP doesn't change. But
when mama takes the family out toMcDonald's, okay, GDP goes up,
but there was no real increase inoutput. It was the same number of
(01:07:46):
meals whether mama did it or thefry cook at McDonald's did it. So
and that's we had this huge,huge increase in GDP but no real increase
in out foot. So our wayof measuring the economy through GDP itself is
corrupt because it only measures the exchangeeconomy. It doesn't even recognize the existence
(01:08:12):
of the use economy. And thisisn't even really an issue of women having
economic earning potential because in the past, there used to be home industries that
wives and mothers could participate in andactually earn income for the family while simultaneously
taking care of the home, andcapitalism came in and used its economic power
(01:08:38):
to change legislation to illegalize a lotof those home businesses and basically say well,
you can produce cloth for your home, but you can't sell it,
And that is basically took away asignificant economic source for families in the past
(01:09:01):
and drove women out of the homeinto the factories making the same cloth that
they used to make at home,although cheaper because it was industrialized. And
that is another aspect. And thisis really just a whole shift of the
notion of how economy fits into homemanagement, which is actually the root meaning
(01:09:29):
of the term. You know,you know, economy used to be you
know, how you manage the financialneeds of the home, and it has
now become you know, how wemanage the financial success of the nation,
and how we define success has changedto simply mean how much we produce and
how much people how much corporations profitfrom it. I think that's illustrated in
(01:09:55):
history too, that the end ofthe fifteenth century, the average worker in
England was producing something like three anda half time is sort of needs his
consumption needs. You move forward throughthe sixteenth century, by the time you
(01:10:18):
get to the end of it,the average work in England was actually producing
less than his income needs, andthe standard of living was going down,
and that was happening all through thematuration of mercantile and industrial capitalism. The
GDP was increasing, but the standardof living for the vast majority of the
(01:10:40):
population you see, especially in England, was actually falling to the point where
my country was populated by convicts andtheir waters. Of course, the Englishmen,
an Irishmen and Scotsmen couldn't afford tofeed their families, and he had
the most economically successful country on Earth, well maybe apast from the United States,
(01:11:02):
but you know, through the yearof the British Empire, the great
majority of people were living abject poverty. It was I'm sad, that's the
problem from the modern misugous of privateindustry probaty. But GDP was going up.
(01:11:26):
So it's okay. Absolutely, we'vecome to the end of our extra
time, and I know that youwill all be invited back, and I
know that you all have a lotmore, but that'll require a full other
episode. And since we've had twohundred and eighty five episodes already on the
(01:11:50):
Open Door, you know that we'rea very episodic enterprise and that we will
be back. But now it's timeto end, and we end whatever we
speak about. Well, did yousee the message that Sebastian just said.
He said, plug the book,so we should mention the book. Could
(01:12:14):
you repeat that again? I'm notI'm not going to be distracted by that
follow up, but go ahead andrepeat it again in a little child,
I guess you'd go it saying plugthe book, So maybe we should just
mention it at the John's holding itup there. Okay, listen, listen.
Uh uh. I don't think that. I don't think that Sebastian is
(01:12:40):
motivated by capitalism. I think he'smotivated by a true love for the common
good. And then all right,mark it away, dude, mark it
away on that enterprise, on thatenterprise. Note in passing over in silence
(01:13:01):
that among many master's degrees that sBastion has, he's about to add one
in marketing. We're going to endwith the scripture for the day, and
actually, in honor of Australia,we're ending with the Gospel tomorrow. It's
(01:13:24):
the feast of Saint Benedict, whocertainly had economics and practice and economics that
greatly affected the whole of church lifeand greatly benefited the family. So the
reading for the Gospel for tomorrow isfrom Matthew. Jesus said to his apostles,
(01:13:47):
as you go make this proclamation.The Kingdom of Heaven is at hand.
You're the sick, raised the dead, cleansed the lepers, drive out
demons without cost. You have received, without cost you are to give.
(01:14:09):
Do not take gold or silver orcopper for your belts, no sack for
the journey, or a second orsandals. Stick. The laborer says.
Keep whatever town or village you enter, look for a worthy person in it.
Stay there until you leave. Asyou enter a house, you piece.
(01:14:33):
The house is worthy, let yourpiece come upon it. If not,
peace return to you. Whoever willnot receive you or listen to your
words, go outside that house ortown and shake the dust from your feet.
Amen, I say to you,it will be more tolerable for the
(01:14:53):
land of Sodom and Gomorrah on theday of judgment than for that Come Lord
Jesus, Come. Thanks so much, Doctor Bowens. Did you didn't get
your last words in? You'll haveto have the first words on our next
(01:15:15):
episode. Since you didn't get yourlast words in on this one I discussed
everybody to read question seventy seven ofthe second part of the second part of
the summer. That's a sibilant suggestion. Yeah, seventy eight is on usury.
(01:15:38):
All right. Now, there isthis item in the coinnas where he
says you can't buy what doesn't exist. And when I read that, I
thought about the commodity exchange market inbuying the pictures, buying futures and soybeans,
So it means exist. How manyseven explains all the wealth money?
(01:16:01):
Mike? All right, okay,you note, I'm gonna look it up.
All right, Thank you all,God's thanks, God's good friends.
Hello, God's beloved. I'm AnnabelMoseley, author, professor of theology and
host of then Sings My Soul andDestination Sainthood on WCAT Radio. I invite
(01:16:29):
you to listen in and find inspirationalong this sacred journey. We're traveling together
to make our lives a masterpiece andwith God's grace, become saints. Join
me Annabel Moseley for then Sings MySoul and Destination Sainthood on WCAT Radio.
God bless you. Remember You're neveralone. God is always with you.
(01:16:59):
Thank you for listen listening to aproduction of WCAT Radio. Please join us
in our mission of evangelization, anddon't forget Love lifts up where knowledge takes flight.
You're listening to WCAT radio, yourhome for authentic Catholic programming. Welcome to
the Open Door. Jim Hannink herewith fellow panelists Valery Niemeyer and Christopher Zender.
Today we discuss Catholic social thought andeconomics. That means taking a long,
(00:24):
hard look at capitalism as practiced andthe dominance of corporations as dominating.
We'll explore the nature of usury andwhat's that issue in a fair wage.
We'll consider the state as a politicalcommunity, and the family is the cornerstone
(00:45):
of social justice. We'll want totalk about personal responsibility as the foundation of
the social order. Our welcome guests, and we have a number today,
are Thomas Stork, the editor ofMoney, Markets and Morals this year from
(01:07):
Enroot Books. And it's Australian contributorsdoctor Donald Moland and doctor Derrick Small,
as well as the American distributors thinkersJohn Miday and David Cooney. Let's begin
as we all as do in prayer. Come, Holy Spirit, Fill the
(01:29):
hearts of your faithful, and kindlein them the fire of your love.
Send forth your spirit, and theyshall be created, and you shall renew
the face of the earth. Letus pray, Oh God, who have
taught the hearts of the faithful,by the light of the Holy Spirit,
(01:49):
granted in the same spirit we maybe truly wise and never rejoice in His
consolation through Christ, our Lord.Since the panel is dealing with a panel,
we'll try to do so in anorderly fashion. I'll begin and I'll
(02:14):
ask Thomas Stork, the editor ofthe volume in question, to answer the
first question, but others can answerthat in a different way. And then
when we go to the second question, well, I'll ask Christopher Zender to
ask that question, and anyone canjoin in raise a hand. And when
(02:38):
we come to the third question,I'll ask Valerie DeMier to ask that question.
And if you think we have preparedquestions, well, of course we
have prepared questions. We'd run offthe road within a minute if we didn't
have prepared questions. However, thepreparation is an odd libbytum sort of thing.
(03:00):
Are free to come and go andlinger, and we don't countenance vaping.
But if some people are trying toinsist on vaping, will will allow
for it. So I'll begin withthe first question. And this is basic
and I think a whole lot ofpeople don't ever consider it, uh,
(03:22):
Catholic social teaching. That's basic moraltheology, isn't it. Yes, it's
it's moral theology as dealing with ourinteraction with others, especially when it comes
to the economy. And you candefine Catholicists teaching in a couple of ways,
(03:43):
you can, and Pious Eleventh inhis person cyclical your Oconnoll talked about
it, and he gave a broaddefinition having to do with the whole question
of celtlics and the state. Butusually when we talk about it, we're
dealing with the narrower question of theeconomy, and that's what the book is
about, and that's what we usuallymeaningly say. But but the the moral
(04:10):
law does not cease to operate.Obviously when it becomes a matter of uh
action by more than one person.It's not somehow nearly individualistic moral law.
But as soon as we joined withothers are getting some kind of a combination,
somehow the moral ceases to have anyvalidity. So that's that's why we
could say, yes, ethics teachingis a part of moral theology as as
(04:33):
regards our interactions, especially in theeconomy. We're talking about all right,
now you you weren't waving at donwelcome Don, you weren't waving it up
your hand add to this question,go ahead, Yeah, I would like
to have that in. In away, social justice is a redundancy because
(04:58):
all justice deals with justice deals withyour relations with the world, so all
justices social justice. The term wasn'tintroduced until eighteen forty one by Father Taparelli,
and it was adopted in nineteen thirtyone, eighteen thirty one adopted yet
(05:21):
eighteen forty one adopted in nineteen thirtyone by Pious the eleventh and he used
it nine times in his encyclical andthat's when it became part of Catholic social
teaching. But it only became weonly needed a social justice because justice had
(05:45):
been privatized, okay, by moderneconomics and by modern moral theories. So
before that, the term wouldn't havemade any sense at all. Okay,
before the modern era. Well,let me have remember different kinds of justice.
There is communicative justice, distributive justice, legal justice, and very often
(06:05):
social is considered to be But socialjustice is just the application of those three
kinds of justice to institutions. Well, my understanding was that social justice is
actually legal justice or legal justice considereda certain aspector or a portion of legal
(06:26):
justice. Well, I would alsoinclude distributive justice and certainly commutative justice in
social justice, because both of thosehave social aspects. Or certainly distributive justice,
which is the just wage is partof distributive justice, and exchanges certainly
as a social element. Yeah.Well, in Divinia read of Tourists whyet.
(06:48):
Eleven makes the distinction that the workersdo a living ways in communicative justice,
and then he goes on to say, therefore social justice there's a duty
to organize the economy and the institutionsof the economy such that the payment of
the ecomodative due wage is possible.So he's making a decisions between the commodative
(07:14):
justice do and then social justice wouldmake possible the carrying out the ecommodated justice
at any rate. I believe thatTom and John would agree with me that
we distinguish in order to unite.We distinguish an order to unite. And
Christopher, yeah, maybe I'd begood at this point because I think any
(07:42):
of those who might be listening tous or to ask ourselves, what do
we mean by communicative justice and distributivejustice. And even before we ask the
question I want to ask someone ishow do we define capitalism? It's probably
good to lay down those definitions becauseI think the questions that we we address
capitalis we are going to have tobring in those distinctions again. So someone
(08:03):
would like to lay down those definitions, I think it'd be a good thing.
Well. I started at distributive justice, the distributions from a group to
the members of a group. Acommutative justice deals with exchanges between members of
the group, and legal justice dealswith what members of the group oh to
(08:28):
oh to the group. So thestandard of justice for distributive justice is contribution
merit. So how much did youcontribute to the group, and what is
the merit of your contribution? Commutativejustice deals with exchanges, and the rule
of justice is that the exchanges shouldbe equal, whereas legal justice the rule
(08:54):
is what is necessary for good orderand nothing more. So there's kind of
a triang Distributive justice distributes to membersof the group. Commutative justice is exchanges
between members of the group, andlegal justice is what the group members oh
to the group. Okay, sothe community of justice would need more strictly
(09:22):
mathematical, I mean arithmetic, yes, very arithmetic, whereas distributed justice be
more proportional exactly, yes, yes, And so it's not simply even,
but distributed justice it's not simply whendoes the person contribute to the group,
which is part of it, Butit's also what is o to one simply
in virtue of being a member ofthe group. So yeah, yeah,
(09:46):
okay, I think that's that's that'simportant to understand, because again, like
I said, virginaling with definitions likethis very often very unclear to people who
may be listening to us, Andso that proceeds the next point unless someone's
actually said, but to see thenext point capitalism? What is capitalism?
(10:07):
How do we define capitalism? It'sI sometimes think that capitalism is about as
clear a term nowadays as socialism orfascism, right, we use, people
use these terms, and I oftentimesthey find when I speak to people who
say they're pro capitalists, oftentimes they'renot quite as appropriate, that they don't
mean the same thing by capitalism asI would mean. So maybe we could
(10:33):
by anybody here to give a definitionwhat is capitalism? And it's I understand
that there are various different ways ofexpressing it. I've seen that in various
different writers as to what this is. Essence, Yeah, there are there
are clear that up many different definitions. But I'd like to if I may,
I'd like to read one that Ilike to use. I think it's
an authordinated one, namely from bothlast elevens from what it is, well,
(10:54):
I know number one hundred and hecalls it that economic system in which
were provided by different people capital andlabor greatly needed for production. In other
words, the keenone of capitalism,as biases saying here, is that you
have one class that owns the meansof production, and they hire other people
(11:16):
to work for them, and there'snecessarily a separation between ownership and work.
And that's what I always mean bycapitalism, although I realized that that's not
what everybody means. And I thinkyou can add to that. What John
Paul the second says is that's it'sthat asserts the priority of capital over labor,
(11:39):
and that capital is regarded as thechief contributor to production, but in
fact there is no capital without labor. No, don did I see you?
And that's anybody you've read Insident's definitionof capitalism that I remember it.
(12:07):
I'm sure we've read it, butdo we remember it. I don't.
I don't have it before me,but I think it's in these What's Wrong
with the World Book, And hedefines it as that system where the most
(12:33):
of the property is owned by afew, and the majority, by such
necessity, is required to work formoney at the history of those who have
it? Who who? He definesin terms of property that those that there
(12:58):
are there's a few who own mostof the property or control it, and
the majority are required, because oftheir lack of property generally to work for
hire. It's fairly close to whatThomas said about it. But then he
(13:24):
suggested that the name was inappropriate.Of course, it suggested that most people
were capitalists in a capitalist system,and he said, well, most people
are are not capitalists, that they'reproletarians. They lack property generally, most
(13:45):
of them are in debt anyway thetime most of their lives paying off debts,
so that they hardly have any propertyto speak of. So he suggested
the proper name for the system wasproletarianism. H M hmmm. I think
that's a more accurate term, certainlymore descriptive of the majority of people.
(14:09):
Yes, yes, yes, it'sthe inevitable result of Now that's when you
when you have one class controlling themeans of production, is going to be
that Yes, that's the point,or I would say more that it's it
(14:31):
is the inevitable result when, ascapitalists, did you decide that that economics
is no longer subject to ethics,because then that's when it's going to happen.
If if if that's That's been mycontention for quite a long time,
is that you know, capitalism couldbe done in a just way, or
(14:56):
at least a more just way,if you could get capitalists to all agree
that capitalism itself as a system issubject to ethics and the principles of ethics.
Now, most of them will say, of course you should act ethnically,
but they'll also argue that capitalism isa completely separate system. Yeah,
(15:20):
I just to add to that,that's the result of considering economics as a
pure physical science. Yes, whichwas nineteenth century. That was the achievement
of the nineteenth century to divorce economicsand ethics. Where before that, from
(15:41):
the days of Aristotle until Adam Smith, you always had a political, ethical
economy, and this divorce of thispure scientism in economics creates this divorce.
Well, ethics aren't an issue.It's just supply and demand charts, that's
all. You know, what whatdo ethics have to do with that?
(16:04):
But I don't think I would disagreewith you, David to some extent in
that, even if you've got capitaliststo agree to that, the tendency and
capitalism since state, since you havea separation of ownership and work, the
tendency is always toward regarding your laboras merely a cost item, and you
want to reduce that cost as muchas possible. So it's kind of working
(16:27):
against the nature. It's like saying, oh, we can put up pictures
center folds and Playboy and just don'tlook at them, just avoid your eyes.
Yeah, I do, I do. I do agree with you there,
As I said I ultimately it couldbe more just, but I don't
think would ever be a completely justsystem. You know, you could make
(16:48):
it better than it is, butI don't think it would resolve all the
problems. Well, as far asone person comment that it would be like
if you're going to compare it toPlayboy, like reading Playboy with your wife
turning the pages. Well, Idon't think that's very edifying. So sometime
(17:14):
logic teacher, sensitive to Christopher Zender'ssuggestion that we really work on definitions,
let me first to ask doctor Smallif he wants to get a word in
edgewise here. Otherwise I'm going todo a little bit of a riff from
the logician side of things, I'dlike to broaden. I guess the way
(17:40):
we're looking at it. I thinkone of the contributions of Adam Smith,
as much as he didn't make muchby way of a positive contribution, was
at least to map out the problemof distribution between the factors of production as
land, labor, and capital.Often forget the limitations on what capital is
(18:04):
when we're talking about what capitalism means. Capital is always some prior product,
a tool. Land suffers from theproblem of the understanding of property rights,
(18:25):
which Saint Thomas devoted quite a lotof attention to, and we often forget
that when we're talking about questions ofcapitalism. If we look at the distributed
the problem of distributive justice as theallocations between land, labor, and capital.
If we begin the observation that commutativejustice is seldom practiced, which gives
(18:52):
us some sort of an excess backto the factors of production, land,
labor, and capital. It meansit's always an excess of residue. And
so the capitalist would like to say, I will pay land as little as
I can in order to run mybusiness, and I'll take the rest.
(19:15):
I'll pay labor as little as possible, and I'll take the rest. Marx,
Prouden and Co. Came along andsaid, no, no, we
don't want that. We don't wanta capitalist to take the excess. We're
going to take it for the workers. And that hasn't worked out terribly well.
As much as it was probably nota bad idea, the reality in
(19:37):
our culture pretty much through the modernera is that we've lived in an era
of absolute private property, which SaintThomas also had trouble with, and so
did Aristotle. Absolute private property isan abomination. The capitalist thinks that's natural.
(20:00):
Aristotle didn't either, did Saint Thomas. The socialists, proud Marx,
Co. Rejected in favor of theof labor. We've got this this argument
over private property that's in there.Henry George came along and he wasn't a
(20:23):
Catholic social theorist, but a lotof Catholics subscribe to his thinking. And
he looks to Rikada and said thatland takes the residue the excess. Capitalism
is when the capitalist, the ownerof capital, takes the excess. The
(20:47):
problem with ethics is that ethics isalways about self restraint. Whether it's you
and your wife leering over Playboy orwe're back to that. Yeah, it's
always about self restraint. Self restraintis when workers follow the advice of St.
(21:08):
John the Baptist and give a fairday's work for fair day's pay.
Self restraint is when the capitalist doesn'tovercharge his clients, is his customers,
and doesn't underpay his factors of production, principally his workers. And self restraint
(21:30):
is also when the landowner is humbleenough to realize that you get a return
for what he actually puts in,rather earning some speculative profit. And so
we live in a world where we'rejust arguing over who takes the residue.
The capitalist will say, I'll takethe residue, thank you very much,
(21:52):
because I'm so important to make allthis happen. The laborer, following the
socialist says, I'll take the riskof you because I'm actually doing the work
and the land. And I says, well, naturally and with the foibles
of human nature. Oh, Ihave it anyway, And you chaps can
(22:14):
just go and argue to the housecontent. But I'm going to end up
the wealthiest in the game. Well, a lot of cards, A lot
of cards have been dealt in thisdiscussion, and doctor Small, you have
certainly added a number of them.Let me go back before we go back
to Christopher, let me go backto the logician's riff, a little bit
(22:37):
of a prehandle to it. Thispast week in Trieste, the Holy Father
said that democracy is not doing sowell, and then he went on to
speak democracy. But what he actuallydid and speaking about democracy, was to
give a persuasive or perhaps aspirational definitionof democracy. And logicians, even an
(23:07):
infomologic, want to distinguish between definitionsthat are lexical. Those are definitions that
report all word is mostly used holidays, lexical and persuasive. How a definition
is used to persuade somebody or otherto have a certain view about that which
(23:30):
is being fine. And then reallythe gold standard is a genus species definition
which is as Aristotelian as we canget. And the idea there is we
define something in terms of identifying thegenus to which it belongs and what differentiates
(23:51):
it from other members of that genus. Now, all of this is deeply
complicated, and this is all ofthe riff far as I'm concerned. Many
many people today don't think that thereare any essences, so you can't give
an essential definition. However, that'senough of that. So Christopher, where
(24:11):
should we continue this? I haveto maybe wrap this one up. I
remember Amentory fon Fani I defined thecapitalism as an economic system, which is
where all goods are subordinated to thematerial goods, to the material good of
(24:32):
profit and so or economic production.That is what he said, so that
he even said that the Soviet Unionwas the perfection of the capitalist order.
And I thought that was interesting becausewhat we're talking about, right, some
of things we're discussing is that whenwe talk about the relationship between the owner
(24:53):
of the capitalist and his workers,we're not talking about something in itself which
is perverse. There's nothing wrong forsomeone to own a business and to hire
people that work from There's nothing wrongin markets. I would think right,
So what makes capitalism perverse is somethingelse. It's it's the imbalance. It
(25:14):
would be right to say it's animbalance, or is it? Is it
a like a momentary fund finding setof false orientation, false determination of what
is the ultimate good of society?Well, I think you have to distinguish
and the advantages that are quoted playsto live and goes on and says the
system in itself is not intrinsically wrong. And what he means by that is
(25:37):
David was getting out before when he'sthat capitalism could in theory of rigously,
but I would maintain that, oh, that it's nearly impossible to happen because
of of of all human nature.And so when we have power, we
have to abuse that power. Andcapitalists control the economy, they're have to
(25:59):
abuse that. And as I said, regard labor as if cost item to
be reduced as much as possible,which is why I'm a distributor, because
I'd like to eliminate the distinction betweenthe the owner worker and make the owner
worker and worker owner. So thatto me is the Yeah, it could
(26:22):
outgrate and the paper could out rideusly, but the examples of it are
few and far between. I thinkyou can that, Valery. Why don't
you push us forward here, becausewe're going to dwell on each of these
questions at great length unless we havean external external costs come into play.
(26:42):
All right, Well, if there'ssomething that just has to be said,
you can add it into one ofthe later parts of our conversation. But
I don't know who wants to takethis, but the corporation. The advent
of the corporation, I understand,marked a major shift in what is economics?
And so would somebody explain kind ofwhat what is the origin of the
(27:03):
corporation? Why is a corp?Why is there power? How how does
the corporation have power in a uniqueway? And and is there a way
to kind of confront or bring balanceto that power that you know of?
How how can we contend with that? Well, I think that that might
(27:26):
be doctor Small's turf. Well,the corporation is a legal so this history
comes from law, not from economics, and its origin I believe came from
(27:51):
the early capitalists order where the fewwe were the lords of the land and
of the realm, sort of aristocracywho could own most of the property and
would have what In the Middle Ages, of course it was serfs who did
(28:15):
the work, who were the laborers. That system changed in the modern era,
but not basically because the the workers, the serfs really were beginning to
have a little bit of land oftheir own which they could work on the
(28:40):
manner. But they were gradually drivenoff that those pieces of land and became
property less. Of course, thesystem of agriculture changes, and there was
quite a ship from the medieval systemof distribution, which was imperfect, but
(29:07):
it was beginning to have some beneficialeffect in that the yeomen that were called
really it's a word that means workersof the land. The man of the
land is a geoman, that's Englishbecomes young man, and he was not
an owner, but he had somerights to made to have his own property
(29:36):
a land, and live off that. And then tom of that, there
was a system of common lands thathe the poor could have access to to
eat out a better existence that way. But both those systems changed. The
(29:57):
only and lost his strips of landwhen they were amalgamated into the lords overall
estate, and then the common landswere enclosed. There was a whole period
when legal enclosure, which locked outthe poor from that from that source of
(30:25):
living as were so they were theserfs were were certainly servile, but they
became more helpless with the change.And the shift then was connected with the
(30:48):
advances in technology and manufacturing, andit became possible with new inventions to mass
produce things. That meant that theprevious yeoman and poor had to go into
(31:10):
urban areas, become factory workers andmake a wage. So that was the
shift to the wage worker from themedieval system of surf and in one way
it was a freeing of the worker. He was no longer tied to the
(31:33):
land, but he had no tieat all except to the wage that he
could make, and he became whateventually ended up in the late nineteenth century
in Poblia the thirtieth description as ina condition little better than slavery. The
(32:00):
yogis slavery. So he was politicallyfree, but economically dependent, and in
a way much much more cruelly dependentthan before. Because there was no personal
relationship between the worker and the employer, as there was between the lord of
(32:21):
the manor and these serfs, theywere sort of halfway between a family relationship
and a slave relationship. That thatsort of personal connection was lost, and
the new system, the capitalist system, is very impersonal. The laborer competes
(32:46):
with his other laborers for a viceto work for the person who has the
capital, and that can get very, very extremely oppressive at times that it
did in the nineteenth century. Andand that spite the socialist revolution. Socialism
(33:10):
is didn't come before capitalism. It'sa reaction to capitalism. And it's it's
got the features of totalitarianism, whichh in a way are in the capitalist
(33:31):
system already. That is a power, an excessive power over the majority to
keep them down as were. Andthat's that's what that's the description I think
Justine gives. It's a technical definition, is not a moral definition. It's
(33:55):
proposes a moral lack of justice.But it's it's not a it's it's an
economic relationship in terms of property andlabor or capital and neighbor. Land comes
(34:16):
into it indirectly in it's so faras you can't work or use your capital
except on land, so the landas a certain control over what happens.
But the land and the old systemof the medieval system was land based.
Really there was the landlord, thelord of the land, who were running
(34:39):
the show that has become now.And the other thing that's missing is really
what is in the title of thebook is money. Money is regarded as
capital now it's it's it's to dowith the system of exchange, so that
(35:00):
that it's a complication in the definitionof capital. And I've dealt with them
various aspects. Somebody didn't mind mybooks. Now when you mentioned that magic
word money, I think of howI wish I had some money in the
(35:22):
bank. And well, the closestbank right around the corner is something called
the Bank of America. I don'tknow if there's a Bank of Australia,
but there's the Bank of America.And what's about a time my erstwhile Kondom
employer, instead of a bank therebecause they weren't giving out much in the
(35:45):
way of money, had a creditunion. And I guess some people have
some money in a credit union.And then we have a very active member
of the American Solidarity part which you'veall heard of, of course, support
who helps to manage a public bank, a public bank, French fellow John
(36:08):
Norm Schweinard. At any right,maybe some of you folks could help us
distinguish between the bank of America.Your friendly or more friendly, isn't it?
Credit Union? And what we maybewish there were a lot more of
public banks. Well, Jim,before we do that, would you like
(36:29):
if I said something in regard toValerie's questions about the origin of corporations,
Yeah, go ahead, please come. Well, I'll just be trying to
be brief. I can't speak toany other country. But in the United
States before the roughly the Civil War, corporations were generally small things, charted
by state legislatures do specific things,for example, operate a bridge or operators
(36:52):
steamboat between two ports, and theyhad a kind of a monopoly. But
they were restricted both as to whatthey could do and as to how long
your charter would last, which wemight or might not be renewed by the
legislature. Starting with the Fourteenth Amendment, which was designed to benefit the freed
(37:13):
slaves, the corporations took a hugepower brand and they started to call it.
They said that they were persons underthe fourteenth Amendment, which eventually the
Supreme Court recognized, and they beganthey achieved rights to perpetuity. Instead of
being charged for a certain number ofviewers, they were forever. They achieved
(37:35):
rights to do anything they wanted insteadof just operate one particular thing. They
achieved rights to own another corporation likea holding company. And basically they slowly
gradually achieved the prominence that they havein our economy today. But it's been
a lot In fact that Citizens ofthe United Caates, which was in the
(37:57):
last twenty years, was one ofthe latest programs on the part of corporations,
UH to to have all the rightsbut few of the liabilities of natural
persons. So as really, asas Don said, it was a legal,
legal fact, not an economic fact. Uh. They manipulated the economic
the legal process. And so acorporation, if you do something wrong,
(38:22):
you might go to prison. Ifa corporation does something wrong, well probably
at most it will be fined andthey won't actually get officers and directors won't
actually go to prison as well asa limited liability. I mean, it
would have to be a very verygross criminal act for them to actually go
to jail. So corporation is essentiallya collective group of people investing, and
(38:45):
that they none of them carry theliability of the risks individually. It's this
kind of group holding and they don'tthey aren't responsible in the same way an
individual is in terms of the law. That's that's exactly. The essence is
that the corporation divorces ownership and responsibility. So if you own property, if
(39:09):
you own a car and it itrams into somebody's house, you are liable
for whatever the damages are. Ifthe corporate, the corporate corporation and the
owners of the corporation have no liabilitywhatsoever. Yon may be losing the value
of their shares, but they haveno So that's the whole meaning of limited
liability corporations. So ownership, management, and use are all separated. And
(39:35):
what this enables. What this enablesis is the rise of a managerial class.
Because the funny thing about capitalism isthat, for the most part,
most capitalists don't have very much power. The power is all in the hands
of a professional managerial class. Uh. And so that's where the real elite
(39:58):
comes from, uh as the managersof the property. Not that, not
that, not the owners that mostowners don't even know what the hell they
own because they own it through afund or something like that. So ownership
vers I know exactly. Yes,I think you're to be careful to factor
(40:23):
into that analysis. The portions manypeople might own a microscopic share in a
corporation, but in the concentration ofwealth that's been happening over the same era
means that there is a very smallnumber, of very small percentage of the
(40:43):
population that actually do have influence.And you're right, managerial class exercises a
parent power influence. But that concentrationof wealth I think is key to understanding
capitalism. All right, let's pivotback here, but we could bring the
(41:06):
threats of the conversation, uh intoplay. Should we maybe speculate that most
bankers are almost as bankrupt as Iam? Should we speculate that most bankers
are are wondering why they have tofollow the orders they have from their managers.
(41:29):
How, let's take banks as atesting ground for what we've said so
far about capitalism, about corporate ownership. Uh yeah, what about banks?
I would start off I would startoff by by because the bank versus credit
(41:51):
union versus personal bank question segues rightoff the topic of corporation, because the
banks are the corporations that have thatmanagerial class that controlled everything. Whereas you
know, at least historically credit unionswere worker based institutions within a particular industry
(42:19):
or even within a particular company,that they would collectively pool their economic resources
and through that support each other.So I know there are other people in
the panel who could certainly go moreinto depth in a better answer than I
am. But to me, that'skind of the segue directly from the corporation
(42:40):
question into the banks versus the otheroptions questions. I think you're right at
the banks are probably well obviously thefinancial institutions. The corporations are also primarily
financial institutions. They're not really interestedin the products they produce or the services
(43:04):
they provide. They're interested in maximizingtheir shareholders wealth, maximizing profit. That's
purely financed. And one of thecuriosities when you get closer and closer to
finance is that in finance, you'renot interested in production, in goods and
serving human needs and all the otherthings economists talk about. You're interested in
(43:27):
maximizing your financial returns, your profit, and so the banks do that.
That's why Heindrich Pesh the Jesuit therewas largely inspiration for prodigest. Maenna defined
capitalism as state sponsored usury, andusury is really one of the key issues
(43:52):
behind all of this. Yeah,I think the usury doesn't get nearly enough
at ten because finance is such afundamental aspect of any production. Of production
is a process in time. There'salways a gap between the planting and the
(44:12):
harvest, between the raw material andthe finished product. So all production has
to be financed. That is goingto give finance a key power in the
system. But when finance gets morethan it contributed, then you have usury,
(44:34):
and usury gathers more and more wealthinto fewer and fewer hands, okay,
and capitalism is always going to followthe course of usury okay, because
the finance function is so critical toany production, okay, any production,
but it doesn't get nearly the attention, either the economic attention or the moral
(44:58):
attention, the political attention that itdeserves. In fact, we don't even
like to use the term usery today. Yeah. One thing that most people
don't realize is that the vast majorityof our money supply is created by the
private banking system, created as debt, which then is required to be paid
(45:22):
back to the banks with interest,which interest is one hundred percent usery,
and it's it's people think of themoney supply is the paper money that I
have with my wallet, or maybethe old Fort Knox or whatever. But
no, that's just the mescal partof their money supply. Most of the
money supplies created by banks and createdas debt. And probably this isn't a
(45:46):
good time to go into this indetail how that works. But I've tried
to explain it to people's another Ifound people have a hard time asking that
point. Well. Henry for hewas once said that if people understood the
process of creating money, there wouldbe a revolution before breakfast. Uh he
(46:09):
was wrong, because if you tellpeople how money is created, they won't
revolt. They simply won't believe you. They can't believe that. They wouldn't
believe that I'm trying the process bybuying some stock. Christopher, you were
presenting us with a benign, ordinarysort of capitalism, so surely there'd be
(46:32):
nothing wrong with I wonder could wego back to the sort of image that
you had in mind. Was therea thing there that involved usury or were
you thinking of something that would notbe usorious? Perhaps uxorious, but not
usorius. I wasn't actually thinking ofthe finance aspect of that discussing it might
(47:00):
be helpful. I know, Iknow this is tedious of me, but
it might be helpful if we justfind usury, because again, those people
who are be listening to us don'tuse use the term, or they think
usury is just successive interest, butit's not the success of this interest.
What is usury? Well, ifany interest charge them alone simply by virtue
(47:24):
of its being alone, no matterwhat the purpose of the loans for whether
it's for the body, yacht orwhether it's start a business. If I
charge somebody interests purely on the basisof that they're loaning me money, I'm
wanted them money rather, then that'susually I think I have a little difficulty
(47:47):
with that because in so far asanybody contributes capital to some venture, they
have a right to return on thatcapital that they create. So that's in
itself not the problem. It's theproblem is when they won, they don't
really contribute anything but a legal right. That is, the bank's just create
(48:10):
money. They do not lend outmoney. If I lend Thomas Stark,
you know, one thousand dollars tostart a business, Thomas needs to pay
me back to one thousand dollars andto let me participate in whatever the profits
of that business are. But ifI just invent the money, well that's
(48:32):
not the same thing, okay asme taking money having less money and you
having more. So in that sense, all interested from a bank loan is
certainly dubious. The bank is entitledto some return. For one, the
business of making the loan and therisk that you won't pay back and things,
(48:57):
and the cost of servicing the loan, all of that, the bink
is entitled to something. Well,I agree with that, and I think
the main issue there is the sourceof the return. Because, like what
you said, when you know youloan money to Thomas and you have you
are entitled to a share of theprofit. That's right, But the way
(49:20):
we do our loans in our currentcapitalist society, that's not how it is.
The return you get is based offthe money that was loaned to you,
and it's an interest charge against money. So even if Thomas doesn't get
any profit, you still do.Because your return as the lender is not
(49:44):
based on the success of the business. You don't have the same risk that
he has. You're protected from riskbecause he owes you interest based on the
money loaned, and that's really wherethe issue is and usually by my understanding,
No, that's exactly what I wastrying to say. So, John,
(50:06):
if you if you own your moneyfor my business venture, and you
have it and you kind of buya share in it, yes you're entitled
to a return on that. Buton the other hand, if the business
fails, which if I were runningit it probably would, then you would
you would not get anything back.But these data is simply because if the
(50:27):
business fails, you still expect toget your money back. That's usury.
Yeah, I think we're just maybesaying the same thing, say different ways
the US for way of understanding this, we're really coming close to including explicitly
the element of risk. Most ofthe twentieth century in the finance area has
(50:51):
been devoted to justifying explaining the riskfree element of of an interest loan,
of a money loan, and they'salthough claiming that they're still taking a risk.
Well, the relative scale of therisk is is negligible. If I
(51:13):
borrow money from the bank to buya house. They only see their risk
starting when I'm not able to payall my principal and accumulated interest back to
them, which is long way downthe track. Especially if the bank only
lends me fifty eight percent of thevalue, they're very well protected. Whereas
if I'm using that property for abusiness, farm or whatever, the risk
(51:40):
is really no proportion. Let meinterjeck this, Valerie, will you join
me in asking these gentlemen, theseworthy gentlemen, since we only have three
minutes left, if they'd be willingto stay with us for another fifteen minutes?
(52:06):
What do you think, gentlemen?I'm available for as long as you're
running this because I can say,well, well, val since Valerie,
since it's Valerie asking, I'll stayYeah, Jim, Jim had to ask.
Jim had asked, I wouldn't havehave done that. No, all
right, where the go, Valerie, b NHO b NHL. Now,
(52:32):
since we have an extension of fifteenminutes, I don't think we'd want more.
But since we have the fifteen minutes, would you asked the next question?
So we hear a lot about wageissues, minimum wage, just wage,
(52:52):
market wage, help us make senseof you know, kind of these
categories of and how they relate,maket wage, adjust wage and what was
the third one that I just saidthat's what we get. That's what we
get. Okay, well, Ithink the best definition I've ever heard of
(53:17):
a market wage I have to givecredit to Thomas because that's where I got
it from, is that it's it'sthe lowest wage that they can get away
with paying. That's that's the marketwage. And what in my examination of
that definition, I came to realizethat the market that you're competing in isn't
(53:42):
just your industry in your area oreven your country. The market you're actually
competing with is essentially the entire world. So if there's someplace else in the
world, even in a communist country, that's offering a wage low enough that
they can earn a greater profit makingit there and shipping it here, then
(54:07):
that determines what the market wage isthat you have to compete with. The
minimum wage is an attempt at rectifyingthis that is noble but imperfect because it's
usually implemented at a state level,and it doesn't take into account the different
(54:30):
costs of living in different areas.Even within the one state, you can
establish a minimum wage that would leavea person destitute in a metropolis, but
have them living in the lap ofluxury in a more rural area, whereas
(54:52):
the church is teaching on a justwage really takes into account the locality of
where you're living and says that ajust wage is that if if you were
a person who is working full time, you should earn enough to be able
to support your fame. And that'snot the basis set David. If you
(55:15):
as long as you have mobility ofcapital, as you were saying yourself,
you're competing against the whole world.If you pay workers in the rural area
less than they do in the metropolitanevery vice versa, then that's an incentive
for the for the corporation to movetheir their production to the lower weight area,
(55:38):
which is not a bad thing.Well, we got if we got
some more business and you know,uh, moved some from New York and
Philadelphia out to Butte and Des Moines, that would not be such a bad
thing. Well, in my opinion, what it ends up doing is that
it incentivized the corporations to place theirbusiness in the large metropolitan areas because the
(56:05):
people are more dependent on them there. It's actually okahead, sorry, there's
actually an anomaly there that the citiesshould be the most efficient places to keep
people, and so they should bethe places where people are wealthiest. But
(56:34):
that tends to mitigated by the costof real estate. It costs about the
same to ship a canabeans to somerural town as it does to put it
in the middle of New York.And it's more efficient to take a truckload
of kansa beans to New York thana handful to some little town. But
(57:00):
the cost of rent sort of comparison, and that is an extra level of
complexity that has often ignored these sortof comparisons. Yes, and I think
it's ignored because land disappeared as aseparate category in economics at the start of
(57:22):
the twentieth century. So there usedto be land, labor, and capital,
and that's how people thought about economicsin the twentieth century. It was
just capital and labor, and landdisappeared into the capital fund, when of
course that's nonsense. It has anentirely different mathematics. But I also want
(57:42):
to point out, and I thinkit's very important that low wages are just
bad economics because each firm's wage billis every other firm's demand curve. Okay,
so the wages that Thomas pays toChristopher is the money that Christopher can
(58:04):
use to buy goods from David andJohn. You know, so low wages
necessitates government intervention into the economy too, because the government is forced is forced
to become the consumer of last resort. Okay, so the government has to
buy battleships and welfare and big bureaucraciesbecause nobody else can has enough to absorb
(58:30):
all the output. So low wagesand big government sort of go together,
otherwise the whole system collapses. AndGary pointed out looded a minute ago to
Heinrich Pesh the Jesuit economists, andhe had a very very interesting theory about
(58:51):
wages, namely that since the laborof one person is generally if he has
right tools and amount of land,it's generally enough to support not only himself
but several other people. When aperson is not paid that that that indicates
of miss some kind of uh lackof battles of mismanagement between those who control
(59:15):
the payment and the actual worker,which is again one of the reasons that
capitalism is a social evil, becauseyou have levels of complexity that contribute to
this, whereas when you have auh, a distributis to economy or something
approaching to that, then the levelsof complexity are not there, and the
(59:37):
and the relationship between the ability ofa worker to generate income and income that
he receives is much much clearer andmuch more direct. So if y'all owned
a company or if you you know, there's probably listeners that own a small
business, like, how do theywhat's your what's your recommendation to them in
(01:00:00):
terms of how to provide a justwage considering all the complexities, you know,
well you have thoughts for them.But yeah, in a way,
yes, I actually eleventh was wellaware, and he said that in the
capitalist economy, employers were often ina bind because their competitors were not paying
(01:00:22):
just wages, and if they wantedto compete with them or even stay in
business, not necessarily increased their markets. Here we're just stay in business.
They were in a real mind becausetheir workers they were trying to pay adjust
wage and their workers the other peopleweren't. This is an demniate rate of
tourists now. Pace said that theyhave a duty, the employers have a
(01:00:45):
duty in social justice to work tochange the system so that in fact it
is possible to pay the ways doingcommendative justice. But unfortunately, at least
in the United States, I can'tmeet anywhere else. Business owners absolutely no
sense that they have any responsibility toensure justice in the economy, and most
(01:01:08):
it would be a matter of apersonal relationship with their employees. And in
that case, when they do havethe resources to page of just wage,
their duty down to do so,even if it cuts into their own profits,
because the most they have right toas a wage, and just like
(01:01:30):
your employees, well, let mepoint out, I mean, that's the
key issue is that it's really notup to the individual employer for the most
part, it's a systemic question.And that's why Quabria jay Z Mollano made
it a systemic issue. So theemployer doesn't always get to choose. Sometimes
he does, but mostly he doesn'tget to choose. And so systemic reform
(01:01:52):
is required. And what are thesystemic reforms will they have to be aimed
at balut seeing the power between employersand employees, because Adam Smith pointed out
that wages are a result of powernegotiations, and so long as one side
has all the power, there willnot be just wages. So things that
(01:02:17):
help to increase the power of laborare things like labor unions, guilds,
minimum wages. Imperfect as they are, all of these things increase the bargaining
power of labor, and where thepower between both sides is more or less
equal, probably the result will bea just wage. But as long as
(01:02:39):
there's an imbalance of power, therecan never be age. Now getting back
to excuse me, getting back tothe American Solidarity, which I know you're
all secretly thinking about. I wishI discussed more openly. I have a
yard sign and beautiful yard sign thatsays St. Ski AC American Solidarity Party,
(01:03:02):
pro life, pro family, andpro worker. We've talked some about
workers, we haven't spoken directly aboutlife. We should at least speak about
the family. We want to sayin Catholic social thought that the family is
the core unit of society. AndI don't know if anybody before, but
(01:03:29):
John Paul too definitely spoke of theneed for family politics. We don't have
much time left and I wanted toget that in, so whoever wants to
comment, please do Yeah. So, I think you make a good point.
We really live in two economies.Is one way of looking at it,
that we the you know, someonesort of goes down to breakfast a
(01:03:55):
schoolboy. He doesn't lay he's avisa card on the dining round table to
get breakfast. His parents give itto him, and as a result he
gives them a lot of things inreturn. There's a gift economy that is
core in the family, and there'sa notion of justice and purpose and proportionality.
(01:04:19):
You go outside the front door andyou're living in a contract economy,
where it's a taking economy, it'snot a giving economy. One of the
curiosities of the early social insectl callsnot so evident the later ones, was
that the answer you go to theback of aream navarum and you might be
(01:04:40):
looking for economic policy advice or something. It's evangelization, the same thing at
the end of pot just moano.And there is a almost an irony that
on one hand, what we callCatholic social thought is really an outline of
(01:05:01):
how creation works. Our human natureis meant to work socially. But the
irony is that in order to achieveit, you need the players, especially
those with power, whether they've gotunion power or money power or whatever it
(01:05:23):
is. Those in power to choosethe good rather than self interest. And
most of the capitalist era, thelast five hundred years roughly, has been
an attempt to justify greed as avirtue. And we see this all the
way through Greed is Good, probablythe most recent of an example of it.
(01:05:46):
And when Mason Gafney wrote about thecorruption of economic especially focusing on American
economic development of American economic thought,it had this chorus that the people that
were funding the economics professors were thepeople that have grown rich on capitalism.
So it provided a kind of formof moral justification, whereas the alternative is
(01:06:12):
with God first. And that's veryawkward because in our era, the Protestant
ethic which really was the genesis ofcapitalism and gave us the first idea that
we get to define our own moralorder, whereas humans have to exist within
the reality. And that's what Catholicsocial thought really attempts to expose. What
(01:06:36):
is the reality or what is thenecessity that we're working amongst a profound realization.
I wonder just to add to that, I mean, the use economy
and the exchange economy and the useeconomy of Astol was a gift economy almost
(01:07:01):
by necessity. But when we sawthis big transition of women from the home
sphere to the work sphere. Sowe saw this huge increase in GDP.
Okay, but it wasn't real becausethe only thing that was happening was that
(01:07:25):
so called women's work, if Iput it that way, was being monetized.
So when mama cooks meal for thefamily, GDP doesn't change. But
when mama takes the family out toMcDonald's, okay, GDP goes up,
but there was no real increase inoutput. It was the same number of
(01:07:46):
meals whether mama did it or thefry cook at McDonald's did it. So
and that's we had this huge,huge increase in GDP but no real increase
in out foot. So our wayof measuring the economy through GDP itself is
corrupt because it only measures the exchangeeconomy. It doesn't even recognize the existence
(01:08:12):
of the use economy. And thisisn't even really an issue of women having
economic earning potential because in the past, there used to be home industries that
wives and mothers could participate in andactually earn income for the family while simultaneously
taking care of the home, andcapitalism came in and used its economic power
(01:08:38):
to change legislation to illegalize a lotof those home businesses and basically say well,
you can produce cloth for your home, but you can't sell it,
And that is basically took away asignificant economic source for families in the past
(01:09:01):
and drove women out of the homeinto the factories making the same cloth that
they used to make at home,although cheaper because it was industrialized. And
that is another aspect. And thisis really just a whole shift of the
notion of how economy fits into homemanagement, which is actually the root meaning
(01:09:29):
of the term. You know,you know, economy used to be you
know, how you manage the financialneeds of the home, and it has
now become you know, how wemanage the financial success of the nation,
and how we define success has changedto simply mean how much we produce and
how much people how much corporations profitfrom it. I think that's illustrated in
(01:09:55):
history too, that the end ofthe fifteenth century, the average worker in
England was producing something like three anda half time is sort of needs his
consumption needs. You move forward throughthe sixteenth century, by the time you
(01:10:18):
get to the end of it,the average work in England was actually producing
less than his income needs, andthe standard of living was going down,
and that was happening all through thematuration of mercantile and industrial capitalism. The
GDP was increasing, but the standardof living for the vast majority of the
(01:10:40):
population you see, especially in England, was actually falling to the point where
my country was populated by convicts andtheir waters. Of course, the Englishmen,
an Irishmen and Scotsmen couldn't afford tofeed their families, and he had
the most economically successful country on Earth, well maybe apast from the United States,
(01:11:02):
but you know, through the yearof the British Empire, the great
majority of people were living abject poverty. It was I'm sad, that's the
problem from the modern misugous of privateindustry probaty. But GDP was going up.
(01:11:26):
So it's okay. Absolutely, we'vecome to the end of our extra
time, and I know that youwill all be invited back, and I
know that you all have a lotmore, but that'll require a full other
episode. And since we've had twohundred and eighty five episodes already on the
(01:11:50):
Open Door, you know that we'rea very episodic enterprise and that we will
be back. But now it's timeto end, and we end whatever we
speak about. Well, did yousee the message that Sebastian just said.
He said, plug the book,so we should mention the book. Could
(01:12:14):
you repeat that again? I'm notI'm not going to be distracted by that
follow up, but go ahead andrepeat it again in a little child,
I guess you'd go it saying plugthe book, So maybe we should just
mention it at the John's holding itup there. Okay, listen, listen.
Uh uh. I don't think that. I don't think that Sebastian is
(01:12:40):
motivated by capitalism. I think he'smotivated by a true love for the common
good. And then all right,mark it away, dude, mark it
away on that enterprise, on thatenterprise. Note in passing over in silence
(01:13:01):
that among many master's degrees that sBastion has, he's about to add one
in marketing. We're going to endwith the scripture for the day, and
actually, in honor of Australia,we're ending with the Gospel tomorrow. It's
(01:13:24):
the feast of Saint Benedict, whocertainly had economics and practice and economics that
greatly affected the whole of church lifeand greatly benefited the family. So the
reading for the Gospel for tomorrow isfrom Matthew. Jesus said to his apostles,
(01:13:47):
as you go make this proclamation.The Kingdom of Heaven is at hand.
You're the sick, raised the dead, cleansed the lepers, drive out
demons without cost. You have received, without cost you are to give.
(01:14:09):
Do not take gold or silver orcopper for your belts, no sack for
the journey, or a second orsandals. Stick. The laborer says.
Keep whatever town or village you enter, look for a worthy person in it.
Stay there until you leave. Asyou enter a house, you piece.
(01:14:33):
The house is worthy, let yourpiece come upon it. If not,
peace return to you. Whoever willnot receive you or listen to your
words, go outside that house ortown and shake the dust from your feet.
Amen, I say to you,it will be more tolerable for the
(01:14:53):
land of Sodom and Gomorrah on theday of judgment than for that Come Lord
Jesus, Come. Thanks so much, Doctor Bowens. Did you didn't get
your last words in? You'll haveto have the first words on our next
(01:15:15):
episode. Since you didn't get yourlast words in on this one I discussed
everybody to read question seventy seven ofthe second part of the second part of
the summer. That's a sibilant suggestion. Yeah, seventy eight is on usury.
(01:15:38):
All right. Now, there isthis item in the coinnas where he
says you can't buy what doesn't exist. And when I read that, I
thought about the commodity exchange market inbuying the pictures, buying futures and soybeans,
So it means exist. How manyseven explains all the wealth money?
(01:16:01):
Mike? All right, okay,you note, I'm gonna look it up.
All right, Thank you all,God's thanks, God's good friends.
Hello, God's beloved. I'm AnnabelMoseley, author, professor of theology and
host of then Sings My Soul andDestination Sainthood on WCAT Radio. I invite
(01:16:29):
you to listen in and find inspirationalong this sacred journey. We're traveling together
to make our lives a masterpiece andwith God's grace, become saints. Join
me Annabel Moseley for then Sings MySoul and Destination Sainthood on WCAT Radio.
God bless you. Remember You're neveralone. God is always with you.
(01:16:59):
Thank you for listen listening to aproduction of WCAT Radio. Please join us
in our mission of evangelization, anddon't forget Love lifts up where knowledge takes flight.
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