What is Capitalism? Pope John Paul II has the answer.

Pope John Paul II
Cover of Pope John Paul II

“If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy’, ‘market economy’ or simply ‘free economy’. But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative”

John Paul II, Encyclical Letter Centesimus Annus, 42: AAS 83 (1991), 845-846

Which one is morally “good?”

One the Church appreciates. One is Ayn Rand. Your choice.

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3 Replies to “What is Capitalism? Pope John Paul II has the answer.”

  1. Although the word “capitalist” appears only a couple of decades after Adam Smith – the supposed father of capitalism – laid down the tenants for free trade, the term “capitalism” doesn’t appear in print until about a century later. In other words, “capitalism is a product of the 19th century rather than the 18th century. Moreover, while Karl Marx pejoratively popularized the word in his treatise Das Kapital, he wasn’t the first to use it.

    Modern and post-modern arguments favoring capitalism tend to run off the rails for two reasons. One is because very few proponents of capitalism have ever read Adam Smith. The other is that NOWHERE (and take that literally) does Smith write about a corporate business model such as that which emerged in the United States during the Robber Baron era.

    To be sure, corporations – as well as stocks and the stock market – had been around for well over a century by the time Smith composed Wealth of Nations. Yet, corporations were only able to gain their current cult status as de facto gods of wealth and power, not to mention being gifted with eternal life, because of a nefarious headnote inserted into a late 19th century tax case that landed on the Supreme Court clerk’s desk! That headnote – which should have had no licit standing – gained legal currency because, either intentionally or unintentionally, the 14th Amendment failed to distinguish between natural and artificial persons.

    Like most major philosophers commonly studied in academia – including Jesus – Adam Smith was an agrarian. Therefore, when Smith writes about competition, his examples are agricultural. Put another way, he’s talking about farmers growing tomatoes and selling them at a local market rather than agribusiness interests shipping veggies via a salad bowl express. Smith champions private ownership of lands because, based on his practical observations, they are better kept and more productive than farms owned by the king and his cronies.

    In many ways, American agribusiness operations are not all that different from the old Soviet era collective farms. Nor is Walmart’s marketing strategy all that far removed from the commie’s command economy model.

    Meanwhile, among the principal difficulties of corporate capitalism is falling into the same trap that bedeviled mercantilism. Among them are the cronyism, instabilities arising from concentrations of wealth and power at the top, military interventions for economic gain, monopolies, resource rape, surplus labor, and wage slavery. Given a free rein, diehard capitalists will bleed the country dry.

    Beyond the implications of rampant greed, the real danger for the United States in the current trend of capitalism morphing into mercantilism is a loss of prosperity and, thus, power through destruction of the middle class. This happened to both the Dutch and the British. Now, it has all but happened in America. At the same time, politically, the country is on track to create a situation similar to that which replaced the Roman Republic with an emperor.

      1. I’ve been using the mercantilism as a synonym for crony capitalism since Halliburton began defending no-bid contracts a little over a decade ago. Just substitute the corporate boardroom or country club for the 18th century royal court and it all makes perfect sense.
        Even more disturbing, having become practiced in subverting routine governance for over a century, corporations are uniquely positioned to fill the power vacuum that will be created when the United States collapses in much the same way that the Catholic Church’s bureaucracy was able to control the Western regions of fallen Roman Empire. Although the Catholic Church is fond of taking credit for standing in the gap and presumably averting chaos, the fact remains that there is a reason why those millennia of human history following the collapse of Rome are still known as the Dark Ages!

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