The bishops' folly.

THE LONG-AWAITED pastoral letter on "Catholic Social Teaching and the U.S. Economy" is a document remarkable for its Christian compassion for the poor and disadvantaged who exist at the margins of our affluent society. It calls us to a renewed commitment, in the name of Christ, to lifting up and healing those who are in need. But the letter is also remarkable for the gigantic leap it makes from the time-honored social teaching of the Church to the conclusion that our American economic system is in conflict with what the bishops believe to be morally acceptable. This leap is all the more remarkable in the light of human experience, which shows that economies dedicated to freedom, individual opportunity, and non-inflationary economic growth do far more to alleviate poverty and suffering than all the schemes of the social engineers and coommissars of history.

Whether the five bishops who participated in the drafting process consciously intended to embrace the economic program of the Left, one cannot say. What one can say is that the background of these five draftsmen is not the sort of background that would cause one to expect from them a high level of understanding of matters economic. The five have graduate degrees, respectively, in canon law, modern languages, philosophy, divinity, and piano. They have served the Church as parish priest, missionary, prison chaplain, philosophy teacher, and monk. The record shows that none has had any experience whatever in the workings of a modern economy. Throughout their adult lives their needs have been provided for, and their careers planned by, the Church.

As an active lay member of the Church whose life has been spent mainly in the world of business, I defer to the bishops' deeper knowledge of spiritual concerns and religious mysteries, canon law and Latin liturgies. But after studying their pastoral letter on the economy, I must say that I wish they had confined their assertions to the areas in which their knowledge and authority are unchallenged.

For many years the Catholic Church has had a well-defined body of social thought, built upon three sound and timeless principles. The first is the primacy of the individual human being, created in the image and likeness of God. The second is the idea of the social nature of man: Man exists not in isolation, but in communities of his fellows. Third is the principle of subsidiarity, which declares a presumption in favor of those human systems that are closest to the people and most susceptible to their influence and participation.

The five bishops pay homage, as they must, to these three key principles of Catholic social thought. Then they head off in a direction not ordained by anything in the Bible or the teachings of the Church, but urgently advocated by the secular socialist Left. To alleviate the evils of unemployment, the bishops advocate government job programs. To replace independent decision-making by millions of individuals, the bishops advocate government plannings. To correct the "morally unacceptable inequalities of income and wealth," the bishops demand aggressive government redistribution. As they do so, they offer a ritual protest against the perils of collectivism, against which the Church has many times inveighed; but one gets the feeling that their collective heart is not in it.

The key concept of the letter is what the bishops call the "preferential option for the poor." They are dismayed, as all just and humane men and women should be, by the spectacle of the poor suffering in the midst of affluence. They are incensed by the "marginalization" of the poor, the pushing of the poor to the far edges of the community's life and concern. They laud the self-realizing nature of work and lament the plight of the unemployed. The cause of these problems, they believe, is an economic system built upon selfishness and covetousness, which are sinful in the eyes of the Lord. That system--our system--is, so they believe, in conflict with the demands of morality and justice.

A society that would be just and humane should indeed be judged by the condition of its poor and disadvantaged. In their desire to bring about such a society, however, the bishops propose nothing less than a thorough politicization of the private economy. "Econoomic rights" are to be conferred upon everyone--by whom, and against whom enforceable, we know not. These rights are apparently not conferred in return for the acceptance of any obligation. "Economic democracy" is to be instituted, although it is never quite clear just what that implies. A "social mortgage" is to be imposed on private property. A vast and comprehensive system of national economic planning is to be established, to ensure that workers get a "just wage," the poor get enough welfare support, consumption is discouraged, the difference in incomes is reduced, unemployment is cut in half, and, above all, wealth is redistributed for the benefit of the poor. The letter is a clarion call for a new wave of social engineering that ignores how grievously such experiments have failed in the past, both here and abroad.

The scope--and one-sidedness--of this argument is breath-taking. While claiming to have undertaken "empirical analysis," the letter ignores the inflationary consequences and arbitrarily sets the correct maximum level of unemployment at 3 to 4 per cent. The letter lauds human solidarity, then speaks out uncritically for labor unions organized to do battle with the managerial class. It criticizes management for resisting unionization but makes no mention of labor violence, and declares for a "just wage" for workers while rejecting a "just price" for farm commodities.

The letter takes the side of the poor and urges a vast expansion of government activity on their behalf. But it never even hints at numerous government practices that deny opportunity to the poor. After all, it is the government that forbids the poor to work at less than $3.35 an hour, even if they are not eligible for the demeaning alternative of welfare. It is the government that erects barriers to offering one's labor in a trade, by enforcing strict licensing standards to reduce competition with the privileged. It is the government that fixes prices on federal construction projects so that only the more privileged (and whiter) workers will be hired to do the work. The role of the government in systematically destroying the value of our currency and inflating the costs of the things the poor must buy goes unnoticed. Nowhere do the bishops suggest that the government is part of the problem, except in a few obviously half-hearted passages that echo earlier papal criticism of totalitarianism.

The bishops decide that the present distribution of wealth is morally unacceptable, but they never tell us how an acceptable level of wealth could be identified. We are exhorted to practice charity toward the poor, in the name of Christ, but in the next breath we are told that those who have any sort of wealth are greedy and covetous, and that their wealth must be confiscated by the state. It has always escaped me how one can practice Christian compassion to the poor merely by submitting to the demands of Caesar's tax gatherers to avoid going to Leavenworth.

We know well, from numerous empirical studies that the bishops' panel of expert witnesses neglected to bring to their attention, that it is almost always more to the advantage of "the poor" to accept welfare, food stamps, Medicaid, and public housing than it is to do entry-level work and pay Social Security and income taxes. So why work, and come out worse off? The bishops are indignant that anyone should ever accuse the able-bodied poor of not wanting to working. They laud the "self-realizing nature of honest work," but decry as inhumane any requirement that welfare recipients do work useful to their community in return for public benefits. They seem mired in the past of half a century ago, when it was believed by many that government redistribution of income and wealth would cure America's economic problems. After half a century of welfare spending, misguided social engineering, and government redistribution, that theory does not look so hopeful any more to anyone who (like Charles Murray in his new book, Losing Ground) is willing to examine the results.

As a practicing Roman Catholic, I especially regret the thrust of the bishops' letter that strongly implies that a free economic system cannot be compatible with Christian doctrine. The evidence, as I read it, is quite the contrary. It shows that only a free economic system supports dynamic production of wealth for the benefit of all. A free economic system, of all the economic systems tried by mankind in its history, gives the poor an opportunity to work, invest, prosper, and become rich. Not only that, but the moral values underlying a free economy also motivate the rich to bestow much of their wealth on works of charity and compassion to the needy. And those same moral values give legitimacy to the role of government in assisting those unable to obtain a decent standard of living through their own efforts.

In international matters, the bishops urge a major restructuring of the economic relations between the industrialized nations and the Third World. That the people of many Third World countries are in dire need is beyond dispute. So too is the proposition that the people of the wealthier countries have a moral obligation to help those who are less fortunate. That the bishops have hit upon a sound, experience-proven way of alleviating the problems of the Third World poor is open to serious question.

The bishops perceive that trade, finance, private investment, and foreign aid will be needed if the Third World masses are to improve their lot. The goal is to "empower people and give them a sense of their own worth, to help them improve the quality of their lives, and to ensure that the benefits of economic growth are shared equitably among them." U.S. policies toward the Third World countries should be built upon the "preferential option for the poor" that permeates the letter.

So far, so good. Then comes the identification of the villains who are holding the Third World in economic bondage. Chief among them is, not surprisingly, the United States Government, stingy, self-centered, paranoid, squandering on military assistance billions of dollars that could be used to improve the lives of the poor. Uncle Sam is painted as a miserable skinflint who has cut off the allowances of his starving children. The U.S. is blamed for refusing to go along with perfectly reasonable Third World proposals for converting our earned wealth to their unearned reward, all the while increasing the power of their usually illegitimate governments to stifle creative human activity--notably the creation of wealth--at all levels.

A chief item in this indictment is the Reagan Administration's cutbacks in funds subscribed to the International Development Association (IDA), the soft-loan window of the World Bank. The bishops assume, but never demonstrate, that World Bank and IDA lending results in benefits for the Third World poor.

More acute analyses, such as those of Melvyn Krauss and P. T. Bauer, show the real results of such socialized lending. As Krauss puts it, "What the Third World poor need more than anything else is relief from domestic government policies that impoverish their economies. By trying to help the poor directly, the World Bank bails out offending governments by negating the costs of their ill-conceived policies." Indeed it does. But the bishops hurry on without coming to grips with this truly vexing problem. Should the affluent West continue to transfer the resources of its people to subsidize Third World governments whose policies hold little or no promise of achieving the goals set forth so eloquently in the bishops' letter? This question gets to the heart of a profound moral dilemma, but the bishops simply refuse to confront it. Can it be that the bishops hold the view that the transfer of resources away from the affluent is justified as a morally purifying act--even if coerced--regardless of how those resources are subsequently misused by those who receive them in the name of the poor and the helpless? Certainly if a domestic charity raised contributions in the name of the needy poor, and then stole or squandered the funds to its own advantage, condemnation would be universal. Should it be otherwise when the givers and receivers are governments?

Nor did the bishops carry their "empirical analysis" far enough to examine successful Third World economies, such as those of the Republic of China, South Korea, Singapore, Hong Kong, and even Malaysia. All of these formerly poor countries have risen up the wealth ladder, through a well-understood combination of principles entirely compatible with the traditional principles of Catholic social teaching and of the American economic system. Those principles include security of private ownership, preservation of public order, a pervasive ethic of work, a minimum of trade barriers and exchange controls on capital, reasonable requirements for foreign investment, and the use of foreign loans only to finance projects that promise a revenue stream from which the loans can be repaid.

The performance of these countries is not perfect, but it is good enough the the underlying policies ought to the seized upon by those who want to improve the lot of common peoople everywhere. The bishops have not done so, which leads one to believe that they have ignored examples of success in a sincere but misguided enthusiasm for the views of those dedicated to the tearing down of functioning economies in the name of equality of income and wealth. A cynic might say that the bishops think America has not accepted its fair share of the world's poverty, and want to see that justice is done. But the goal is not the redistribution of poverty. The goal must be, in a just and humane society, the creation of wealth in ways that allow more and more people to earn their share of it.

The bishops' blindness to the economic performance of Third World governments is particularly strange in light of the bishops' strong reiteration of the traditional Catholic social belief in subsidiarity. That is the principle that all human activity ought to be carried oon at the closest level to individual human beings that circumstances permit. In economics, the subsidiarity principle underlies traditional Catholic opposition to command economies of Left or Right. Well aware of this, the bishops take pains to oppose "a statist approach to economic policy," which results in "excessive concentration of power in the hands of government." But as the section on Third World development clearly shows, the bishops' objections to economic statism are perfunctory, not heartfelt.

The bishops' principles are right, but they are victims of a curious blindness that afflicts those who dread having their advanced liberalism confronted with real-world facts. They are simply unable to see that the major cause of poverty and misery in most Third World countries is not mean-spirited Uncle Sam, or bad Mr. Multinational, or greedy Mr. Bigbank, but the little clique of elitists in each country who view their national government either as a convenient source of private enrichment, or as a laboratory where hopelessly failed economic theories are tested once again on increasingly desperate workers and peasants. One thinks of Ethiopia, which, according to State Department estimates, has recently spent more than $150 million so that its rulers could celebrate the tenth anniversary of their bloody Marxist-Leninist revolution and their alliance with those wonderful, warm-hearted folks in the Kremlin. This, while tens of thousands of their people are dying of starvation and disease.

There is much that I, as a Catholic, applaud in the social teachings of the Church. Its principles are sound, including the preferential option for the poor that constitutes the centerpiece of the bishops' letter. What the bishops seem unable to perceive, however, is that there is really no fundamental conflict between the goals of the Church and the principles of a free and just economic system. The long-run hope of the poor, here and everywhere, is not welfare dependency and governmental control of their lives, but freedom and opportunity. To be sure, government must play a role in preventing the manipulation of any kind of economic system to the disadvantage of the poor; but the uncritical advocacy of ever more government intervention and redistribution of wealth is a step in the wrong direction. As the few free-market-oriented Third World countries are proving, the lot of the common children of God improves far more rapidly when government judiciously allows the people a fair chance to strive, create, succeed, and own. That, and not government redistribution of poverty in the name of justice, is the true preferential option for the poor.