Inequality and Catholic Social Teaching
Over the past few years, there has been a welcome renaissance in the economics of inequality. This stems from a huge rise in inequality over the past 30 years or so, especially marked in the US, but also in evidence elsewhere. This rise followed a sequence of policies that were geared to boost long-term growth and productivity – policies such as lower taxes, less progressivity in the tax code, curbing the power of unions, deregulating the financial sector. We know the outcomes by now – long-term productivity did not change, but inequality rose sharply. Another way of saying this is that the benefits of growth and productivity, instead of being shared widely as in the postwar period, instead accrued to the top echelons of society.
The consequences of this are clear. A more unequal economy is a more unstable economy, as we saw with the financial crisis and ensuing Great Recession. A more unequal society is a more unstable society, as we see with eroding trust, increasing division between people, and rising political dysfunction in places like the United States – factors which tear at the social fabric that binds society together. Fundamentally, more equal societies are associated with lower poverty and more opportunity. We have evidence that economic growth is stronger in more equal societies.
Some people would go much further. In a fascinating book called The Spirit Level, Richard Wilkinson and Kate Pickett blame inequality for a whole host of economic and social problems – high infant mortality, low life expectancy, criminality, the prison population, mental illness, unemployment, low social mobility, poor educational outcomes, obesity, malnutrition, teenage pregnancy, child well-being, illegal drug use, violence, economic insecurity, personal indebtedness and anxiety. Some say this goes too far, and perhaps it does, but clearly, as a society gets more unequal, it gets more unwell.
Fundamentally, it is hard to disagree with historian Tony Judt, who concluded that:
“Inequality is corrosive…it rots societies from within…it illustrates and exacerbates the loss of social cohesion…the pathology of the age and the greatest threat to the health of any democracy“.
We should also remember the words of John Maynard Keynes, who ended his magnum opus, The General Theory of Employment, Interest, and Money, with the following observation:
“The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes“.
That was a long time ago. Right now, inequality is back in fashion. But it never really went out of fashion in Catholic social teaching. This follows naturally from its emphasis on social harmony between the different classes, the importance of distributive justice and the universal destination of goods, and the role of the government in aligning private outcomes with the common good. It follows from the clear principles of solidarity, subsidiarity, and the preferential option for the poor.
I will let the teaching speak for itself:
Pope Pius XI:
“Therefore, the riches that economic-social developments constantly increase ought to be so distributed among individual persons and classes that the common advantage of all… one class is forbidden to exclude the other from sharing in the benefits…To each, therefore, must be given his own share of goods, and the distribution of created goods, which, as every discerning person knows, is laboring today under the gravest evils due to the huge disparity between the few exceedingly rich and the unnumbered propertyless, must be effectively called back to and brought into conformity with the norms of the common good, that is, social justice”.
Gaudium Et Spes:
“For excessive economic and social differences between the members of the one human family or population groups cause scandal, and militate against social justice, equity, the dignity of the human person, as well as social and international peace.”
Pope John XXIII:
“Economic progress must be accompanied by a corresponding social progress, so that all classes of citizens can participate in the increased productivity. The utmost vigilance and effort is needed to ensure that social inequalities, so far from increasing, are reduced to a minimum…”
“The economic prosperity of a nation is not so much its total assets in terms of wealth and property, as the equitable division and distribution of this wealth”
Pope Paul VI:
“We cannot proceed to increase the wealth and power of the rich while we entrench the needy in their poverty and add to the woes of the oppressed…Then there are the flagrant inequalities not merely in the enjoyment of possessions, but even more in the exercise of power“.
Pope John Paul II:
“One of the greatest injustices in the contemporary world consists precisely in this: that the ones who possess much are relatively few and those who possess almost nothing are many. It is the injustice of the poor distribution of the goods and services originally intended for all“.
Pope Benedict XVI:
“The world’s wealth is growing in absolute terms, but inequalities are on the increase…. The scandal of glaring inequalities continues…”
“The dignity of the individual and the demands of justice require, particularly today, that economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner, and that we continue to prioritize the goal of access to steady employment for everyone. .. Through the systemic increase of social inequality, both within a single country and between the populations of different countries, not only does social cohesion suffer, thereby placing democracy at risk, but so too does the economy, through the progressive erosion of “social capital”: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence”.
“Therefore, it must be borne in mind that grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution.”
So clearly, Catholic social teaching has a lot of say about inequality, and calls for a greater sharing of wealth across society and between societies. At the level of policy, this has many dimensions, including respect for collective bargaining rights, redistribution through social transfers and progressive taxation, and greater socialization of the means of production (worker ownership, profit-sharing, and worker role in management). Of course, it cannot imply collectivization of the means of production, which goes too far in the other direction. As always, Catholic social teaching is guided by prudence. There surely comes a point when policies push equality too far, in a way that harms human dignity and human freedom. But right now, the US is pushing sharply in the opposite direction, and this needs to be rectified. And here, Catholic social teaching has the answer. It has always had the answer.