Papal Economics: The Catholic Church on Democratic Capitalism, From Rerum Nevarum to Caritas in Veritate by Maciej Zieba

Author:Maciej Zieba
Language: eng
Format: mobi
Tags: Business Culture, Ethics, Business & Money, Business Life
ISBN: 1933859970
Publisher: Intercollegiate Studies Institute
Published: 2014-04-08T06:00:00+00:00

(6) Material responsibility—that is to say, he who plans and decides is held responsible for the results, both negative and positive, of his actions;

(7) Stable economic policy, which means policy removed from current politics, to promote more rational decisions and innovations to minimize the unavoidable element of risk.

Reflecting Ordoliberal distrust of automatic market solutions,58 Eucken and his colleagues added some “regulating principles”:

(1) Intervention to prevent monopolies (for example, anticartel laws and agencies to ensure compliance with the rules of competition);

(2) Stabilization of the market (via monetary policies especially);

(3) Instruments of social correction, such as fiscal policies (mildly progressive taxes, social subventions, unemployment and welfare benefits) to counter market-led preferences for production of luxury goods at the expense of goods needed by the impoverished; tax policy to encourage widespread property ownership and stabilize the “social state”; mechanisms for dealing with social problems that generally fall outside the view of profit-driven participants in a market economy—for example, environmental protection and protection of work relations and conditions; opposition to correcting anomalies in the supply of available workers by forcing certain members of some members of society to enter the labor force (Ordoliberals especially opposed forcing women into the workforce); (e) a “quality of life” policy, supported by the financing of public schools, health care, and the transportation, tourism, and recreational infrastructure.

These theoretical precepts did not meet with much acceptance in postwar Germany. As German political scientist Dieter Grosser commented, this project must have seemed utopian to a German population immersed in poverty. But in 1949, Germany's impoverishment was not simply material; its social fabric had been torn apart by the experiences of totalitarianism, the Holocaust, and war. Gustav Stolper, an Austrian economist and journalist who had been a politician in the Weimar Republic, revisited Germany in the aftermath of World War II. His book about the postwar reality of Germany painted a bleak picture. In it he wrote, “The German nation is ruined. It is fatally weakened in its biological substance, in its cultural and technical environment, in its moral fibre.”59

At the time, most observers expected that the economic system would be repaired through nationalization and central planning. Such assumptions were justified by the great popularity (especially among laborers) of the Social Democratic Party (SPD), which was demanding the introduction of a socialist economy, and by the tenor of the Christian Democratic Union (CDU) convention in 1947, which called for the socialization of the coal and foundry industries and some elements of central planning. But Konrad Adenauer appreciated the Ordoliberals' values and chose Ludwig Erhard as his closest adviser. With Adenauer quickly rising in stature and consistently pushing Ordoliberal policies, freie oder soziale Marktwirtschaft became the CDU program after the 1949 convention.

A critical moment came when Erhard implemented—without the agreement of the occupying forces—a secretly prepared, radical monetary reform. The economic council of the CDU (Wirtschaftsrat) passed the reform by a vote of 50–37 after just over ten hours of discussion on Friday evening, June 18, 1948—and the measure was already in force on Sunday, June 20.

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