The Reckoning · Season 1

The Reckoning: Lesson Two

In this lesson, you’ll learn:

  • What has caused a rise in the desire for a socialistic economic structure in America
  • What the Church teaches about socialism

Read the Transcript

Hello and welcome to Part II of our series on The Reckoning; the coming battle between socialism and the practice of virtue in business.  In the prior session, we explored the current state of our culture in America and the state and perception of business therein.  This gives the proper and relevant context for considering the reckoning that is on the horizon.


With social justice tensions rising amidst a backdrop of relativism or no objective truth, and business viewed as part of the problem, I suggest to you that socialism is a response to something. But to what?  If we are to define the root cause problem, it’s wise to start here and not dismiss those with strong sentiments about systemic or structural injustices, though perhaps some might disbelieve their existence.


Here is what Fredrich Hayek, Austrian economist and Nobel Prize winner in economics, and staunch advocate of classical liberalism or markets free from intrusive government, had to say about the root cause of socialism.


I quote, “People don’t intend to trade away their most basic freedoms.  They just want more economic equality and more financial security.”


Is this not something we all desire?  Not surprisingly, falling short on this aspiration can be considered unjust.  I argue that socialism is a lagging indicator of or a response to injustice.

When citizens can’t find economic equity and financial security in and through business, they turn to the next best institutional option that offers a chance to attain both: the government or the State.


Additionally, Hayek resolved that social justice is an agreeable end to most everyone.

I quote, “The dispute about socialism has thus become a dispute about means and not about ends. Those who repudiate the means (of socialism), value the ends.”


Hayek further argues, “What is of concern here is not socialism’s moral basis, but its moral results.”


So, what does the Catholic or Universal Church have to say about socialism and the role of the State?

Saint John Paul II in his Encyclical Letter, Centisimus Annus, paragraph 48, says this, “. . . primary responsibility in the area (of overseeing and directing the exercise of human rights in the economic sector) belongs NOT to the State, but to individuals and to the various groups and associations which make up society.”


The secondary or supportive role of the State is further supported by the Catholic Social Teaching principle of subsidiarity – the idea that a higher-level entity should not interfere in a community of a lower-level entity; depriving the latter of its function.


In light of the principle of subsidiarity, any institutional substitution must not continue any longer than is absolutely necessary. What is your observed experience with the duration of government or State intervention under the guise of remedying injustice?


Let’s not make an attribution error here. Would not the State, absent trust that other lower-level entities would and could solve the problems of injustice, remain involved longer and deeper?  This is an insidious consequence of free market capitalism absent Christian virtue.


Let’s look at what some other Catholic sources have to say about socialism:

Samuel Gregg with The Acton Institute adds this about socialism, “Christians have concrete responsibilities to their neighbor.  Think the Great Commandment.  These responsibilities are not fulfilled by voting for expansive government welfare programs or even paying taxes that fund such activities.


Pope Pius XI in his Encyclical Letter Divini Redemptoris, paragraph 58, writes, “Socialism is intrinsically wrong, and no one desiring to further Christianity should collaborate with it in any way.”

In this case, it can be said that the cure is worse than the disease.


Pope Leo XIII in his Encyclical Letter Rerum Novarum, paragraph 15, does not mince words.  He shares, “It is clear that the main tenet of socialism, community of goods, must be utterly rejected, since it only injures those it would seem meant to benefit.”


And finally, Pope Emeritus, Benedict XVI states this about the role of the State . . .

“Love, or caritas, will always prove necessary, even in the most just society.  There is no ordering of the State so just that it can eliminate the need for the service of love.”


How should we translate our learnings so far?  You see, socialism can’t be the answer to the problem of social injustice.

So, if social injustice or inequity is a problem that most can agree exists, and socialism is summarily rejected as a solution to that problem, then what is the answer?

The key question then is this: “Can free markets or capitalism create the kind of social justice on which socialism fails to deliver?


As we seek to understand further this Church-informed and expected answer, it would be wise to study the father of free market economics, laissez-faire government, and his perspective on morality: Adam Smith, the author of An Inquiry into the Nature and Causes of the Wealth of Nations (more commonly known as his classic, The Wealth of Nations). I think you’ll be surprised by what he says!


Join us for the next session in this series of The Reckoning as we explore what I call Adam Smith’s folly.  I promise you, we will get to answers and solutions by the end of this series that will compel you to carry forward the flag of freedom in America with truth as its mast.  You play a heroic role in this work as a business leader.  Until then, blessings as you pursue that which is higher still, in and through your business.