Ethics and the National Economy, by Heinrich Pesch

Ethics and the National Economy, by Heinrich Pesch

John Williamson

by Heinrich Pesch

(IHS Press, 184pp, 2003, $28.00. Available from AD Books)

Ethics and the National Economy, with English translation by Rupert Ederer) is a concise summary of Heinrich Pesch's social and economic system, Solidarism. First issued in 1918, part of its importance to Catholic social teaching is that it served as a bridge between Pope Leo XIII's Rerum Novarum and Pius XI's Quadragesimo Anno.

The most important fact to remember when considering Pesch's text and, indeed, his entire system of Solidarism, is the specific challenge which it poses to those who would "separate" ethics from a scientific account of economic systems.

Pesch articulates the reasons for his insistence that ethics is a science prior to, and more ultimate than, economics. As an economist and philosopher, he rightly insists that, rather than being of ancillary import, ethics - or the science of how man ought to act in order to achieve the human good - is the very soil from which any truly scientific consideration of economic activity ought to emerge.

Human association

It is ironic that so many libertarians accuse Pesch of "illegitimately" imposing Church-sanctioned moral norms upon the economic freedom of individuals, for what he does in this treatise is to uphold the freedom that expresses itself in our moral lives.

According to Pesch, man's social nature, requiring the actualisation of his capacities and the satisfaction of his genuine human needs, directs him to move beyond the life of the family and toward that more powerful and comprehensive human association, the State.

In Ethics, Pesch remarks that "the state is supposed to do for its members what they, by their own capabilities and by the capacities of lower-ranking societies within the state, cannot accomplish." Unlike the libertarian/liberal treatment of the State as an evil, even if a "necessary" one, Pesch writes: "The purpose of the state consists in providing, safeguarding and complementing the sum of those social conditions, institutions, and structures which alone provide and preserve for all members of the state the fuller capacity to secure and maintain their temporal welfare on their own and by using their own abilities."

This delineation of the proper status and powers of the State is part of Solidarism's complete rejection of any type of statism or totalitarianism. Rather than exalting the State as the object of all human hopes and endeavours, Solidarism insists that the authority of the State does not exist for its own sake, but rather, for the sake of political society; it exists to safeguard the rights of the community against private interests.

As Pesch explicitly states, it is Christian moral law, with the understanding of the nature of man that underlies it, which is the only thing that can nurture and develop the individual's true destiny that transcends the confines of the social and political life protected by the State.

In Chapter IV, titled "Work and the Worker," he proclaims that "man is the lord of the world!" This dominion of man, however, is only achieved by work, for "without continuous and persistent work, mankind could not sustain itself, and the largesse of our national environment with its materials could not function in the service of man."

Here Pesch makes a point that contradicts the idea that the right of private property is absolute. As he says, "the institution of private property was established by virtue of the law of nations as one of the natural rights and requisites of man, of families, and of political society in all nations which progressed to a higher level of culture. However, in the Christian view of things there is no such thing as an unconditional, free, absolute right of private property that does not involve also obligations."

Pesch's Solidarism provides us with a meaning for property. For him, and for the whole Catholic social teaching that he articulates, private ownership is not an end in itself. Neither does the right to private property trump all other human rights. It is by no means the highest right that man enjoys as he makes his way in the world of material goods.

On the contrary, two more basic and fundamental rights (the right to life and to the necessary means of subsistence) must be ensured.

A just price

Two critical issues are raised in Chapter VI of Ethics: the "just price", the most debated economic issue in the Middle Ages, and the "just wage".

In refuting the liberal capitalist doctrines on pricing, Pesch expresses the primary thesis of his text: "Behind supply there are suppliers, and behind demand there are demanders, causes which operate freely, human deliberation, human ambitions, human passions, and human power relation- ships. Therefore what is needed is the intervention of regulating factors and protection against speculative falsification, against artificial manipulation of the fluctuation of prices which makes it possible to earn vast amounts of money in a short time."

What contemporary liberals/ libertarians choose to ignore is that there is no business success in today's capitalist system without the leave of the bankers. One is only "free" if the bankers give you the loans and the credits, which will "allow" you to be successful. As Chesterton once said, "Utopia for whom?"

For those dreaming of when the world, and truly free men, will not have to beg "leave" of the bankers, Pesch gives cause and counsel.

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