Part of my ongoing investigation on neotraditional economics, updated regularly here:

Joe Hargrave:

” It is possible to combine regulated markets and even command economies with private property, and social forms of ownership with free markets. It is the latter model that is best aligned with both Catholic social teaching as well as sound economics.

In his encyclical Laborem Exercens, Pope John Paul II rejected the idea that “private ownership of the means of production” should remain an “untouchable dogma” of economic life. He also rejects a mere conversion of private property into state property and the creation of a command economy. His vision of an alternative is captured in the following lines:

Merely converting the means of production into State property in the collectivist system is by no means equivalent to “socializing” that property. We can speak of socializing only when the subject character of society is ensured, that is to say, when on the basis of his work each person is fully entitled to consider himself a part-owner of the great workbench at which he is working with every one else… the members of each body would be looked upon and treated as persons and encouraged to take an active part in the life of the body.

There is little said here about markets – in fact, the word “market” does not appear even once throughout the entire encyclical. Thus the “socializing” of the economy is evidently a task that can take place without excessive and ultimately harmful interference in the market. Instead, it can come about through the proliferation of organizations wherein the “subject character of society is ensured,” where “each person is fully entitled to consider himself a part-owner” of his place of work, and where the members are “encouraged to take an active part in the life of the body.” These are the underlying principles of workers’ cooperatives.

One example of the cooperative principle in action is the Mondragón, a cluster of cooperatives in the Basque region of Spain. It can’t be mere coincidence that this organization, which is the largest and most successful cooperative in the world, was founded by a Catholic priest by the name of José María Arizmendiarrieta. To me it suggests that there is something in the Catholic view of society and justice that is naturally hospitable to the idea of the workers’ cooperative.

While Pope Leo XIII may have been condemning an onerous form of state socialism in Rerum Novarum, he also argued that ownership of property should be diffused as widely as possible for just these reasons.

He wrote,

If working people can be encouraged to look forward to obtaining a share in the land, the consequence will be that the gulf between vast wealth and sheer poverty will be bridged over, and the respective classes will be brought nearer to one another. A further consequence will result in the great abundance of the fruits of the earth. Men always work harder and more readily when they work on that which belongs to them; nay, they learn to love the very soil that yields in response to the labor of their hands, not only food to eat, but an abundance of good things for themselves and those that are dear to them.

What Leo recognizes as true for agriculture is also true for modern industries and services.”