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THE CONTRIBUTION OF NEO-THOMISTIC THOUGHT TO ROMAN


CATHOLIC SOCIAL ECONOMY
Stefano Solari University of Padua1

ABSTRACT
The Neo-Thomistic Catholic philosophy developed around the middle of the XIX
century after the first steps of Roman Catholic social economy. The latter, although
providing precious insights on pauperism, did not succeed to achieve a unitary view
of economic issues. Neo-Thomistic thought represented an attempt to integrate
Christian anthropology with new sciences and establish a coherent view of society
inclusive of economics. The philosophy of St. Thomas Aquinas was the fundamental
work used to establish a connection between metaphysics, psychology and
epistemology, constituting an integrated system of thinking. In this paper we will
analyze the main authors responsible for this change in order to highlight the
connection between ethics, the philosophy of law and the scientific epistemology at
the heart of this system of thought which was stipulated a third way, differing with
both liberalism and socialism.

JEL CLASSIFICATION CODES:


A12 (Relation of Economics to Other Disciplines)
B59 (Current Heterodox Approaches –Other)

KEY WORDS:
Neo-Thomism, Social Economy, Economic Epistemology, Practical Science,
Economic Order.

INTRODUCTION
Roman Catholic social economy is one of the three main branches of social
economy and it first developed in France at the beginning of the XIX century (Nitsch,
1990). In its first phases it maintained the feature of a (heterogeneous) movement
which promoted a political debate in journals and produced some noteworthy works
in economics (De Coux, 1832-36; Villeneuve-Bargemont, 1834). Although these first
phases received the official disapproval of Pope Gregory XVI, they were followed by
an intense and widespread social praxis of organizing labor associations and by
theoretical reflections vis-à-vis pauperism.
About the middle of the XIX century, a group of Jesuits developed a new
synthesis of Thomistic philosophy with the aim of fashioning a renewed unity of
thought able to express a coherent system of thinking including economics. That
system had to be able to deal with the problem of pauperism and to supply a unitary
framework for Catholics to interpret social-economic issues. This philosophy became
the official position of Leo XIII and of the Church for a century. It also gave a further

1
I have to thank Amalia Mirante, Edward O’ Boyle and Daniele Corrado, the latter for help with
intricate issues on philosophy of law. A first edition of this paper was presented at the IX AISPE
conference, June 2006.

American Review of Political Economy, Vol. 5, No.2 (Pages 39-58)


December 2007
40 American Review of Political Economy

impetus to economic research leading to the work of Pesch, 2 Toniolo and many
others. Although it was able to legitimate a new view of the social question, it failed
to achieve a unitary view of Catholic thinkers on state intervention. While quite
influential in terms of policy-making, it remained a heterodox approach in academia.
In this paper we will firstly analyze the politico-economic conditions which gave
rise to this current of thought and explain why it was born in France. Secondly, we
will characterize Neo−Thomistic philosophy itself and indicate the contribution it
made to Roman Catholic social economy in terms of methodology. The novelties will
be analyzed through the works of the first group of Jesuits and of some of the first
generation of followers (Pesch, Toniolo, Antoine, Brants). Finally we briefly identify
the unresolved problems and the reasons for little success in academia.

THE AVENIR MOVEMENT AND THE EMERGENCE OF THE SOCIAL QUESTION


The first development of Roman Catholic social economy took place in France
after the restoration of monarchy. It is difficult to find texts in political economy
directly referring to Catholicism before this period. The reason for the sudden
flourishing of a Christian view of political economy in that country consists in a
number of factors. Firstly, after the turmoil of the revolution the Church en- countered
certain obstacles in finding a new role in the political system of this country.
Secondly, Catholic scholars directly related a set of contemporary processes: the
revolution, the unbalanced industrialization and the diffusion of liberalism – including
political economy which was perceived as firmly embedded in the bourgeois
ideology. The social question was therefore a consequence of the costly effects of
politico-economic theories of liberalism. de Villeneuve-Bargemont (1834:22) affirms
that pauperism, the permanent and widespread misery of laborers, was due to the
dissemination of the British forms of industrial society and political economy in the
continent.3 French revolution was regarded as an effect of enlightenment and we can
find explicit accusations of freemasonry as the culprit in the dissemination of liberal
ideas. Lamennais (1839) characterized the effects of industrialization as a new
slavery and accused the legislation of constantly favoring capital over labor reducing
the latter to a position of abject dependency.
There are many reasons for the impoverishment and immiseration of the French
working class. Périn (1880), for one, attributed this degradation to the abolition of
associative institutions by the Le Chapelier law (1791). That, in conformity to
liberalism, abolished all manner of corporative order and congregations of producers,
with a particular emphasis on labor associations. That probably made
industrialization effects more severe by limiting the bargaining power of workers, and
this point is more precisely discussed by the second generation of Catholic
economists.
Lamennais (1782-1854) was the main exponent of that Catholic political
movement. Together with Montalembert (1810-1870) he founded the Avenir where a

2
Fellner identified Pesch as a Neo-Thomist. The Jesuit Matteo Liberatore expressed the first work
(1889) genuinely Neo-Thomist as he was one of the main philosophers of this school. However, also
Ketteler based his writings on principles derived from Aquinas.
3
Villeneuve-Bargemont (1834:22) «le véritable paupérisme, c’ est-à-dire la détresse générale,
permanente et progressive, des populations ouvrières a pris naissance en Angleterre, et c’
est par elle
qu’il a étéinoculéau reste de l’Europe».
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 41

number of scholars discussed the political and economic situation of France and the
role of Catholicism. 4 This movement has been characterized as democratic
humanitarianism and it attempted to establish a political alliance between aristocracy
and proletarians by changing the role of the Church. An alternative contribution came
from Catholics inspired by socialist ideas of Saint-Simon and Fourier.5
There was considerable heterogeneity in terms of theoretical positions inside the
Church about the way of interpreting and evaluating the new situation. After the first
rigid anti-modernist reaction (e.g. Gregory VI, Mirari Vos, 1832 and Singulari Nos,
1834 — where the work of Lamennais Paroles d’ un Croyant was explicitly
denounced), the church found itself in a difficult position, risking losing contact with
the evolution of civil society. The problem was what Masnovo (1935) called the ‘ pre-
Thomistic crisis’of the Church.

ROMAN CATHOLIC SOCIAL ECONOMY BEFORE NEO-THOMISM


The exponents of Roman Catholic social economy regarded political economy as
ideologically biased. However, they considered this discipline as extremely important
and tried to work on it. In these first works we can find many interesting and
anticipatory insights. However, we can single out at least two kinds of problems: a)
the incoherent theorization (they often adopt the framework of theories they
criticize); b) being normative in character (Nitsch, 1990). The fragmentation of
political views importantly affects theory.
The main theoretical thrust of this group of social economists is to oppose an
ethical view of society to the individualist and materialist perspective of liberal
political economy. However, there is no coherent theorization deriving from the
inclusion of ethics into the economic analysis and the role of ethics will be differently
declined. We can say that the political element, the social engagement and the
critique of liberalism are much clearer than the advancement of a new positive
theory. Lamennais, besides his articles in L’ Avenir, produced a couple of important
booklets on the labor problems (1839; 1848). The main theoretical framework is
inspired by Smith’ s contractual view of wages, advanced in terms of a conflict-based
view of labor relations. De Coux (1832; 1836), similarly to De Villeneuve-Bargemont
(1834), tends to adopt Malthus’population principles as a general tendency. He
importantly affirms that social aspects have priority over the economic and he
justifies property as work embodied in goods. On the other hand, in De Coux (1836)
we find the view of economic crisis as described by Sismondi. We also find
interesting views on when competition becomes deleterious in a situation of excess
of production capacity. Moreover, we can find complaints on factory closures which
anticipate Veblen’ s thereon in the U.S. eighty years later.
Pellegrino Rossi in his Cours d’ Economie Politique and many secular-positive
social economists acknowledged the inseparability of economics from ethics. That,
however, is also a point in common with other secular economists exemplified by
Romagnosi (1840) and/or Minghetti (1868) who did not agree to ignore ethical
considerations in economic theorizing. On the other hand, Catholic scholars as Droz

4
The best account of this period can be found in Durouselle (1951) Vidler (1961) and Bieler (1981).
5
They mainly contributed to the journal Ere Nouvelle: Buchez (1796-1865), Lacordaire (1802-1861),
Ozanam (1813-1853) who also founded the SociétéSaint-Vincent de Paul. See Durouselle (1951).
42 American Review of Political Economy

(1829) in Economie Politique ou Principe de la Science des Richesses simply see


ethics as a moral obligation for entrepreneurs to assure reasonable wages.
The second set of problems, the diversity of political views, importantly affects the
theorization of economic processes and the way to ameliorate the social problems.
The first works of Lamennais –in the ultramontane period –as well as the position of
de Bonald and de Villeneuve-Bargemont can be regarded as traditionalist and
conservative. They focus on the difficulty of the Bourgeois order relative to the
ancien régime where religion and its moral order also granted an economic
equilibrium. It is therefore mainly focused on the problem of a social and moral order.
The second phase of Lamennais and the works of De Coux and of Droz as well
can be regarded as democratic humanitarianism and represent the
acknowledgement of and an active search for a possible political alliance between
the new aristocracy, a renewed church and the working class. They elaborated a
‘moral critique’of bourgeois society and ruled out more precise analysis of the
structural factors affecting the wealth of the working class. This group remains
nonetheless rather cautious about the role of the state.
On the other hand, the group of the Société Saint-Vincent de Paul (notably
Buchez and Ozanam) were more directly affected by the initial socialist doctrines of
Saint-Simon, although they converted to active Catholicism. They envisaged a
possibility of more radical changes and of a direct intervention of the state into the
economy. The legacy of this group appears important in the subsequent group led by
La Tour-du-Pin and in the very definition of social justice.
Finally, we must consider such conservative and liberal scholars as Donoso
Cortes and de Maistre who paid little attention to social problems, but still considered
religion crucial for sustaining the bourgeois order (and not for correcting its
imbalances). They accused the bourgeois system of thinking of eroding the sacred
and eliminating the sense of sacrifice. Rosmini and Bastiat instead represent the
liberal-bourgeois wing of the Catholics. They conceived of a role for ethics in
enforcing the correction of business malpractices, but mainly supported liberal
individualism and utilitarianism.
As a consequence, the most important achievement of this first phase of Roman
Catholic social economy is the ‘ epistemological’critique of liberalism. In particular,
de Villeneuve-Bargemont (1834) perceived a conflict between ‘ spiritualism’and
‘sensualism’(i.e., materialistic utilitarianism). However, it was Donoso Cortes (1851)
in his Essays on Catholicism, Liberalism and Socialism who went further by
proposing the first genuine idea of a third way. 6 In fact he clearly advanced an
intellectual strategy opposed to both liberalism and socialism, a whole set of
coherent and integrated theoretical resolutions ranging from eschatological issues to
practical matters (later best developed by Pesch). He also stressed another
important epistemological difference between the Catholic and the liberal and
socialist views of the way to obtain economic change: the former seek to change the
situation by modifying man from the inside; the latter, by changing external
institutions through the medium of political revolutions.
After these initiatives, the theoretical and political work took on new life
throughout Europe by way of the development of circles, associations and active

6
There is no specific economic analysis in this author, but this is a relevant point relatively to the
theoretical strategy followed by Catholics.
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 43

experiments.7 Special attention must be paid to the pioneering work of Frédéric Le


Play (1854; 1874) who engaged in a systematic inquiry into the conditions of the
working class in Europe and Archbishop Wilhelm von Ketteler who was probably the
most active both in theorization and in concrete initiatives to stimulate the birth of
labor associations. 8 However, also in this second phase of the development of
Roman Catholic social economy we can distinguish two basic groups: the school of
Angers (the ‘ conservative or school of liberty’
) and the school of Lièges (the ‘
group of
reformers’or ‘ school of authority’
). The former included such scholars as Claudio
Jannet, Charles Périn and Frédéric Le Play. 9 They favoured a liberal-paternalistic
society and sought a limited role for the state, viz. the ‘ protection of rights and
repression of abuses’ . They preferred freedom of association as a way of
ameliorating social problems. The latter (reformers) 10 found in positive law and
consequently in the state an opportunity to reform the economy.11 However, both
schools mainly welcomed intermediate institutions (corporations, vocational
associations and trade unions) and bottom-up initiatives as the most incisive solution
to the social question.12
This was the main background of Roman Catholic social economy in the middle
of the XIX century when Neo-Thomism spread and began to indulge itself in the
study of the economy. A new generation of Jesuits felt the need for a new coherent
position, including the development of a novel relationship between Christian
anthropology and the emerging sciences. The philosophy of St. Thomas Aquinas
was used to achieve collaboration between metaphysics, psychology and
epistemology. Despite metaphysics holding a central position, the integration of an
anthropological view of man, the specific epistemology (in the sense of theory of
knowledge) and the centrality of politics as a social science constitute a remarkably
coherent enterprise, a kind of scientific paradigm in social sciences. The projected
result was a comprehensive system of thinking, directly opposed to positivism, which
integrated and developed the tradition of social economy in a new direction.
The Jesuit Luigi (Prospero) Taparelli d’ Azeglio was a central figure in the
diffusion of new scholasticism, deeply affecting also the view of Leo XIII.13 He co-
founded the review Civiltà Cattolica where he contributed to the development of a
synergistic interaction between philosophical studies and reflections on practical
issues. In his Saggio Teoretico di Diritto Naturale Appoggiato sul Fatto (1845) and
Principii Teorici(1854), he developed the fundamental framework derived from

7
Besides scholars, many people joined action and theory as Leon Harmel, a Catholic entrepreneur
who wrote the Manuel d’ une Corporation Chrétienne out of his experiments of patronage in the
factories in Val-des-Bois.
8
He faced the rising appeal of Lassalle’ s‘ scientific socialism’to the working class.
9
Frédéric Le Play’ s Les Ouvriers Européens (1854) and La Réforme Sociale: Déduite de
l'Observation Comparée des Peuples Européens (1874) are the precursors of contemporary
positivistic ‘
in-the-field (sociological) studies’and normativistic social-reform programmes.
10
These included Harmel, de La-Tour-du-Pin, the Bishops Manning and Bagshawe, von Ketteler,
Hertling and, later, Pesch, Ratzinger, Cathrein, Vogelsang, Ludwig von Liechtenstein and all the Neo-
Thomists we are examining.
11
This opened the door to the notion of welfare state even if it is mainly seen as a regulatory state –
to use a contemporary definition.
12
A detailed description of all schools can be found in Antoine (1901).
13
Taparelli had been his professor of philosophy. He also laid down the first blueprint of Rerum
Novarum. However we should not forget other Neo-Thomists as Sanseverino and Talamo.
44 American Review of Political Economy

Aquinas and centred on classical natural right. This was followed by the main
encyclicals of Leo XIII: after the Inscrutabili Dei Consilio of 1878 illustrated the
contemporary evils in society, the Aeterni Patris of 1879 exposed the basic Neo-
Thomistic principles and, finally, Rerum Novarum of 1891 proposed the doctrine of
solidarism in the realm of social economy.14

THE UNITY OF SCIENCE AND ETHICS: THE PIVOTAL ROLE OF CLASSICAL


NATURAL LAW
The Christian view of society as a hierarchy of values embracing all interests and
human activities was already endangered by the emancipation of national states
from the beginning of the modern age. As we have seen, in the XIX century, the
marginalisation of religion by science and by political and economic liberalism
constituted a new challenge. Neo-Thomism had the mission of reinventing a role for
the Church by supplying a whole set of coordinated eschatological, moral, political
and economic answers to nascent issues such as pauperism.
The main intent, which is evident in any of the works of New-Scholasticism, was
to provide an alternative philosophy to the spread of individualism and utilitarianism,
equally able to support scientific thought. The principles of political economy
naturally follow from such foundations. Correctly, they believed that science is
always grounded in philosophy, which determines the direction of scientific theorizing
in many ways. This is (aggressively) remarked by Liberatore (1889c:5) by saying that
«The first scholars who wrote of political economy had their minds offended by
sensist philosophy of their times; and if philosophy, as a root of other sciences, is evil
it infects them all».15 He opens (1889c:11) towards scientific method by saying that
when science studies contingent phenomena, always first seeks out the regularities
they display. The way of conceiving such a perspective is nonetheless determined
by the philosophical background assumed. Toniolo later (1907) developed this point,
saying that we have three kinds of philosophical entries into political economy, to wit:
Firstly, general theoretical philosophy (metaphysics) affects the concept of order in
society, the way distinctions between the different real orders are made and the
relevant relationships perceived between facts and orders; secondly, special
theoretical philosophy affects the idea of utility defining the form of human nature;
lastly, practical philosophy enters political economy through ethics and law, where it
both determines the extent of the field of inquiry (delimiting what is under
investigation), and evaluates the legitimization and limits of economic laws. Neo-
Thomism clearly chose the New-Scholasticism together with its practical science and
natural law as providers of a set of basic and coherent philosophical grounds to
develop the social sciences.
However, up to the first half of the XIX century, Catholic philosophy also suffered
from an unclear theorization of right resulting from the new political situation.
Reformed culture expressed the notion of natural right (Grotius, Puffendorf, Wolff)
which helped the modern separation between religion and political power. The
Catholic Church contested the separation of morality from the law found in such

14
Misner (1991) is the best reference for understanding what produced Rerum Novarum.
15
«I primi che scrissero di Economia politica avevano la mente offesa dalla filosofia sensista del loro
tempo; e la filosofia, come radice delle altre scienze, se è maligna, le infetta tutte» (Liberatore,
1889c:5)
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 45

theories, which is the central point of all this intellectual effort. Taparelli (1840)
recognized this problem and developed the concept of (classical) natural law,
opposed to the enlightenment version, where the law is not separated from morality.
Natural law is therefore the cornerstone of the whole scientific edifice16, and Taparelli
(1840:25) defines it as «the morals proceeding from natural principles which
demonstrates how man should use the faculty of will». 17 A system of definitions
follows which interprets the whole human action based on a complex view of the
person clearly shaped by humanism. Motives of human action and freedom as well
as duty 18 and honesty in social interaction (conformity to natural order) 19 are
developed as a set of principles by which to understand any behavior.20
This is consequentially integrated with a theory of ‘ social being’ . Society is
21
interpreted as a concordant cooperation of men, a harmonious tendency to a
common end (1840:33). Communication and the ability to agree to a common good
is a central point in this perspective. The actor is the political man, able to discover
and to keep the just measure (the Aristotelian mesotés) in human interaction.
Political interaction is not totally separable from economic behavior 22 and
consequently this becomes an opposite view compared to the utilitarian in which
outcome is driven by self-interest alone (individualist political economy). Taparelli
also formulates a duty of sociability and cooperation according to the natural order.
However, society remains a means (against idealist thought),23 not an end. The law
is «the moral force, according to reason, binding the ones to the will of others»
(1840:35).24
The interaction of ethics and science through natural law was a crucial point of
this system of thinking which involved the solution of a number of interconnected
problems:
 defining the vision of science and its relationship with faith and ethics and, in
particular, how to integrate ethics (metaphysics) and science;25

16
Taparelli was the forerunner. Talamo (1878) further developed this perspective and had a more
direct influence on Aeterni Patris encyclica in 1879 which definitely stated these principles.
17
«la morale che dai principii naturali procede a dimostrare come debba adoperarsi dall’ uomo la
facoltàdi volere».
18
Obligation drives freedom of behavior. This has to do with honesty. Duty is totally lacking in
contemporary economics which explains human action from only one of the many dimensions of
man’ s motives.
19
Virtue is to maintain the right measure, a classical concept.
20
This is not different from Personalism and Charles Périn (1861) already developed this view in
economics stressing the concept of Human Dignity, although in a way not coherent with the view of
the economy which was mainly derived from Mills (methodologically a positivist).
21
Also defined as “communication of good between intelligent beings”.
22
Morals makes institutions and action inseparable as an ethical unity.
23
Taparelli’ s natural right is, obviously, a form of idealism. With idealism we therefore refer to more
radical views such as those (Hegel, Fichte...) which have affected Othmar Spann Universalism.
24
Later, Cathrein defined natural law as «the light of reason inherent in us by nature, so that we know
what to do and what to avoid; in other words the knowledge given to us by the creator by means of
nature –that in acting we must observe the order corresponding to our nature»(1911:412).
25
In our opinion, other currents of thought (Marxism or institutionalism) have run into difficulties due to
failure to provide an ethics, a metaphysical ground for human behaviour. See the difficulties of Rawls
or Putnam (2004) in attempts to legitimate an individualist progressive non-materialist ethics.
46 American Review of Political Economy

 how to integrate sciences among themselves (according to the ethical view of


man);
 how to determine the degree of normative power of science for human
behavior vs. the same role held by ethics (a crucial outcome of previous
points).

The vision of science is again referring to Aristotle. Disciplines are defined by the
object of study and this helps to integrate science with ethics.26 It also implies that
economics cannot be identified by method (as later accepted by marginalists), it is
simply the study of the economy (the science of means). Moreover, it is art and
science at the same time: a practical science. 27 Art, according to Aquinas, – the
Aristotelian recta ratio factibilium or habitus cum ratione factivus – develops rational
rules on how to make things, based on empirical findings and experience without
posing the problem of supreme principles.28 The criterion to decide if a science is
speculative or practical is given by the object of study. Truth in itself leads to
speculative studies. If the ultimate end is to discover the best ways of acting,
concerning man and his behavior, then political economy is a moral science and is
practical.29 The practical approach was to be confirmed in each work of the second
generation of Thomists such as Antoine (1896), Brants (1896), Toniolo (1898/1913),
Pesch (1905) and many others.
No general laws of human behavior are expected to exist. Man is characterized
by freedom and regularities of behavior are mainly self-imposed by morals and by
rules evolved in the polity. As a consequence, the study of rules and institutions
which frame human cooperation are part of the study of man. Politics is therefore the
general field of study, encompassing economics, which studies a more specific
subset of phenomena, at the same time framed by and functional to politics.
Economics concerns ‘ a’social good, not ‘ the’social good. Respect for rights, safety,
peace, cultural development and honesty of behavior – and the many factors
required for good human life – are other social goods which are not subordinate to
wealth. Political economy cannot be said to be ‘ political’if it does not submit itself to
political ends developed out of ethical ends. In this, Neo-Thomistic thought sharply
separated material from immaterial ends.30 The reason is that ends are desirable in
themselves and in absolute terms, while means (wealth) are desirable for what they
help to produce and in proportion to this. The more ‘ true ends’are achieved, the
better, but an excess of means in relation to the ends to be achieved is considered a

26
See Crespo (1998; 2004) on this issue.
27
«Intellectus practicus est motivus, non quasi exsequens motum, sed quasi dirigens ad motum; quod
a a
convenit ei secundum modum suae apprehensionis» (Thomas Acquinas Summa Theologiae 1 e 2
q. XC a.1).
28
Practical wisdom (phronesis) is the knowledge characterizing practical sciences. See Crespo
(2004); Rangone and Solari (2007).
29
This is obviously at odds with Positivism or Enlightenment in general. Menger and many
economists systematically confused the practical science approach to economics with economic
policy (or public finances). See Rangone and Solari (2006).
30
It would be a mistake, wrote Liberatore (Liberatore, 1889c:43) to include immaterial ends in the
same category of goods because their marginal utility is not decreasing.
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 47

nonsense.31 The fundamental principles of morals and right circumscribe economy


inside its rational ends, providing some principles to understand laws and to solve
problems. «Political economy is the science of public wealth, concerning its honest
ordering as a means of common well being»32 (Liberatore 1989c:22). It concerns the
order assumed by the production, distribution and consumption of wealth. That order
is not referred to the individual or family otherwise we would not call it ‘political’
; it
should be oriented to the whole social system (including the state).
Utilitarianism, in order to study society with the means of natural science,
mistakenly simplifies human nature. In particular, it neglects the ‘ good’part of our
nature, the part oriented to collaboration with others for achieving common ends. It
therefore lacks any anthropology nor can it be complemented by anthropology. Neo-
Thomism expressed a conception of the order of society in harmony with the nature
of man and the ends of the community, which cannot be given by the free market
alone. Obviously, this view assumes that the moral order is exogenous33 and not
relative (contrary to German historicism) or non-influential. Wealth is a means34 and
one of the main concerns of political economy is the achievement of a correct
distribution of wealth.
Fellner (1961:5;22) correctly places Neo-Thomism in both the deductive and the
inductive kind of theories. On the one hand, the broad view of society derived from
natural law is deductive; on the other, the general socio-economic theorization is
mostly inductive. In fact, the adoption of ‘ practical science’
, actually, determines a
complex interaction between experience and assumptions (Rangone and Solari,
2007). The consequence is that all economic theory maintains a hermeneutic
approach:35 the study of the economy is not nomological; axioms are external to the
economic field and economic principles are derived by mediation between
exogenous ethical principles (which help evaluating what is good) and the concrete
historical context of the society.36 Therefore, the normative power of economics is
weak and subordinated to external principles of justice.

THE ECONOMIC INSIGHTS OF THE PHILOSOPHERS


We can distinguish between the direct economic production by Jesuits or other
Churchmen who elaborated Neo-Thomistic philosophy (Taparelli, Liberatore,
Ketteler) and the economic work of the plurality of scholars – from de LaTour-du-Pin
to Périn – who contributed to the debates which led to the evolution in the Catholic

31
This coincides with the Aristotelian opinion expressed in the Nicomachean Ethics (1999, book 1/5):
«The life of money-making is one undertaken under compulsion, and wealth is evidently not the good
we are seeking: for it is merely useful and for the sake of something else».
32
«la scienza della pubblica ricchezza, quanto al suo onesto ordinamento come mezzo di comune
benessere».
33
This obviously poses a number of problems which we cannot discuss here.
34
Liberatore (1889c) specifies that wealth is intended as material goods. In his view, immaterial goods
do not follow economic principles at all.
35
Liberatore (1879:41ff.) argued, interpreting St. Thomas, that ideas are not what we know, but that
by which we know.
36
Moreover, the whole ‘ system of systems’imposes an integration of different scientific disciplines,
one to the other, a coherence which does not exist in positive science –and in particular in economics
relatively to other humanities.
48 American Review of Political Economy

view of society.37 Then we can single out a number of scholars who conformed to
Rerum Novarum and further developed its insights. We may cite Pesch, Brants,
Toniolo, Voegelsang, Antoine and the philosopher Hertling. A third generation of
scholars is represented by Vito, von Nell-Breuning, Briefs and Müller who worked in
the XX century.38 We may include Ketteler in the former group given his constant
reference to Aquinas in his reflections which have affected the further development
of the social view of this current of thought.
We focus on the interesting economic work proposed by philosophers who were
also protagonists of the development of the whole system of thinking. The economic
thought expressed by the Neo-Thomistic scholars is in general rooted in classical
theory and oriented to the study of the institutional framework assuring a good
relationship between production and distribution. As for economic historicism, the
focus is on the unfolding of economic order relatively to ethical principles. The main
problem is achieving harmony in an organically conceived society.
Taparelli wrote a few articles on political economy (1857a,b). 39 In them, he
criticized the lack of coherence of the first studies in social economy. In his view,
scholars like Pellegrino Rossi, inspired by Catholic principles, did not propose a
coherent set of definitions and principles to contrast the individualist and utilitarian
school. He criticizes the first Italian economists Genovesi, Filangeri, Galiani,
Beccaria and Verri for their works in political economy which he said are affected by
a philosophy too much influenced by Voltaire: «the study of the economists rivalled
with the unreligiousness of the encyclopedists»40 (Taparelli, 1857a:547). He also
criticized the lack of a precise definition of and agreement on what economic science
is.
Political economy has a dual nature, joining a physical and moral aspect.
Consequently, Taparelli proposed his definition of political economy: «a science
which, investigating the laws of production of wealth and its natural diffusion in
society, teaches the governor the way to obtain a distribution according to equity and
that suffices for all needs».41 Social economy is not political science, it is a branch of
it. Political economy would not be ‘ economic’if it did not concern material interests; it
would not be ‘ social’or ‘
political’if it did not understand them in relation to the order
of society. Individual economy, or domestic economy, may be a specific sub-sector.
However, in the pursuit of individual interests, households may benefit or harm each
other and the whole of society; the coordination of these interests towards a common
good is the task of our practical science. The government is seen as a regulator of
the use of resources to help people achieve their common good in conformity with
the laws of justice and honesty. Economic studies may also help discover how
individuals may harm each other without realizing it (both damager and damaged)
(Taparelli, 1857a:554). This is due to what we would nowadays understand as

37
See Talmy (1963), De Gasperi (1931) Pecorari (1977) and Misner (1991).
38
The latter two, emigrating to the US, in 1941, founded the Catholic Economic Association, which in
1970 became the ASE. See O’ Boyle (2005) for details.
39
There are more articles on economic subjects, in particular Taparelli (1852) on corporations.
40
«lo studio degli economisti gareggiòcon la miscredenza degli enciclopedisti».
41
«una scienza che investigando le leggi, secondo le quali le ricchezze si producono e si diffondono
naturalmente nel corpo sociale, insegna al governante il modo di far sìche si distribuiscano secondo
equitàe bastino ad ogni bisogno»
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 49

bounded rationality and externality, but the way of theorizing them is not based on
individualism.
As a consequence, Taparelli’ s view of the economy is mainly oriented to studying
governance forms and institutions. Social economy, he writes, has firstly to study the
needs of social man and the attitude of goods to satisfy them – in that it has to join
physical and moral approaches. Secondly, it has to cope with superior principles –
justice and equity – according to which men have to be governed. However,
economists should recognize how interest, like any other passion, tends constantly
to excess. The mistake of the utilitarian theorization of market is to believe that such
appetites could be regulated by their reciprocal contrast and balancing. Contrary to
this view, we should acknowledge the role of morals, conscience and authority, and
rely on the non-selfish side of our behavior and on natural social institutions.
However, individual morals alone cannot solve the problem of social order.
Institutions and authority must help it.
Accordingly, Taparelli (1857b), anticipating Adolph Wagner and Karl Polanyi,
proposed three «forces which we can say are producers and regulators of wealth:
interest which looks after the self; justice which equalises it to others; compassion
which attributes some preference to others» (1857b:19).42 The main task of social
economy – he continues – is to research the way a government can achieve the
ordered progression of public wealth by a suitable proportion of such three forces.
Therefore, the study of the economy is not the study of the market, it is the study of
motives for action and governance forms helping to control the achievement of
common good. He also expresses a concern for the individualization and
monetarization of society anticipating the same –very popular –view as Karl Polanyi
and Richard H. Tawney. Society driven by interest alone inevitably leads the rich to
exploit the poor (Taparelli, 1857b:22).
Although Taparelli did not express much in political economy, his notes were
exploited by Matteo Liberatore who in 1889 published a book which, at the time,
became a bestseller in political economy in Italy and was translated into other
languages.43 Despite its success, this book was born ‘ old’
, in fact marginalism rapidly
spread: Menger, Jevons and Walras published their milestones of neoclassical
economics in 1871, Pantaleoni introduced the same principles in Italy from 1883.44
Besides confirming the ‘ epistemology’of political economy as a practical science,
Liberatore (1889c) goes into some of the most controversial concepts of classical
political economy, first of all the concept of value. He endorses Smith’ s concept of
use-value. In fact, wealth is seen from a substantive point of view: it is defined as
what serves to satisfy the needs of man and therefore it is measured as the utility it
supplies. It is consequently wrong to identify wealth with exchange value. This
definition affects many of the consequent views expressed in the book. Moreover,
wealth is material and cannot be extended to immaterial goods. We cannot measure

42
«forze che possiamo dire produttrici e regolatrici della ricchezza: l’ interesse che pensa al Me, la
giustizia che lo pareggia agli altri, la pietàche dàagli altri una qualche preferenza».
43
Most of this book was published in the previous years as articles in Civiltà Cattolica. French
translation: Principes d’ Economie Politique, Oudin, Paris 1894. German edition: Grundsätze der
Volkswirtschafts, Verein Buch, Innsbruch 1891. Spanish edition: Principios de Economia Politica,
Gregorio del Amo, Madrid 1890. English edition: Principles of Political Economy, New York, Benziger
1891.
44
All explicitly reaffirmed the separation from ethics.
50 American Review of Political Economy

spiritual needs nor compare them to the material. The marginal utility of immaterial
goods in general is not decreasing.
The second relevant point concerns factors of production. There are two
producers of wealth: nature and labor. Capital makes no productive contribution, it is
simply saved wealth. It is considered as auxiliary and mainly relevant in terms of
property. This view of Liberatore anticipates some modern ‘ ecological economics’ .
The third relevant aspect is underlining of the role of the division of labor,
machinery and technical innovation. The substantive view of this author leads him to
emphasize the production side of economic processes. However, he also outlines
the shortcomings of the modern division of labor and mechanization of industry.
Above all, he cites the degradation of the intellectual faculty of workmen performing
repetitive tasks. The homogenization and substitutability of the workforce is a further
problem which causes pauperism.
The fourth point regards distribution. Firstly, Liberatore presents some arguments
in favor of private property.45 Property is a natural right, it does not derive from the
social contract. However, it is a secondary right or Jus Gentium which is not an
absolute right and derives from relative reasons, that is to say from consequences it
produces. However, he – as well as Ketteler (1864) – put forward a ‘ limited’property
right, referring to principles introduced by St. Thomas Aquinas. Man holds property in
usufruct and has the duty to maintain and use it to the benefit of the community.
Liberatore affirmed that «any property is a part of the common national wealth,
granted in usufruct to private individuals, in return for the services supplied to the
community» (Liberatore, 1889c). A second duty related to property is that of charity.
The right of appropriation was conceded according to an end (subsistence), not as
an absolute right. The rich have a moral obligation to give the superfluous to poor
people, contributing in this way to redistribution. The state may help this
redistribution in a subsidiary way by imposing progressive taxation: «Society can in
no way accept part of the population revelling in opulence while the other part
perishes in indigence»(Liberatore, 1889c:211).46
After this disquisition on property, Liberatore distinguishes between rent, profit
and salary. In contrast with Ricardo, he justifies rent as a remuneration of land
property, and land (nature) is one of the production forces. Here the theory is not so
clear as in other parts of the book because rent is not clearly distinguished from
profit (except that the latter is derived from monetary capital) and this is the
consequence of the use-value theory adopted. Profit, as a consequence of the good
use of wealth, is fully legitimate and destined to the entrepreneur and, in the form of
interest, to the owner of capital. Capital is seen as a substance or a force of nature
transformed by man’ s work and used in reproduction. Interest is justified as

45
Misner (1991) supports Sousberghe’ s criticism of Taparelli and Liberatore for using modern
arguments – derived from Locke – instead of precisely referring to the scholastic tradition of property
rights. We cannot discuss this topic here, however, Neo-Thomism contained several elements of
novelty and, in general, adopted the contemporary scientific language. We may also accept the
critique of Frank Night (1944) –directed against Jaques Maritain –saying that natural law served as a
defense of any existing order against any change (before the eighteenth century) and as an argument
for change in any direction and mainly against the state after.
46
«La società non può in modo alcuno patire che mentre una parte della popolazione gavazza
nell’opulenza, un’altra perisca nell’
inopia»
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 51

opportunity cost (Liberatore, 1889c:226-7). 47 The salary cannot be said to be the


‘price’of labor; it is the remuneration of labor according to a facio ut des kind of
exchange contract where the personality of the laborer is relevant. Labor is a human
action, not a thing, and cannot be considered separately from the quality of the actor
and from the respect due to the person. Consequently, he states that the natural
price of labor is that which can make a living for the worker and his family.
Free competition is said to be good for achieving efficiency in production but
harmful for distribution. True freedom is the faculty to use our own rights without
constraints. It is a misleading conception of freedom that is based on the
unhampered use of our own forces. It substitutes the idea of right originated from
reason with that of force; the latter leads to pecuniary despotism.
The main economic problem is identified in the fact that free market interaction
allows prices to fall in an excessive way. Market competition does not show the
stabilizing effect around a minimum optimal price. It often pushes prices too far
below optimal levels leading to misery and exploitation with destabilizing effects.

LABOUR AND CORPORATISM


Rerum Novarum’ s central point was the problem of pauperism and the ways of
achieving a redemptio proletariorum. The most important Neo-Thomistic work
preceding this encyclica is Ketteler (1864) Die Arbeiterfrage und das Christentum.48
In this work von Ketteler (Archbishop of Mainz) expressed a radical critique of
classical political economy and the free market principle which began a tradition of
radical Catholic positions in Germany which was to be continued by Heinrich Pesch,
up to von Nell-Breuning and Briefs and Müller.49 The work expresses a critique of the
market mechanism which tends to reduce wages beyond subsistence level, and of
the dominance of capital in the distribution of value added. Relatively to the latter he
also proposed an interpretation of ‘ limited’property rights, referring to principles
introduced by St. Thomas Aquinas, where private property is acknowledged but in a
limited way. Man holds property in usufruct and has the duty to maintain and use it to
the benefit of the community. On this ground Ketteler also attacks the theory of
distribution denying the unique destination of profits to capital. Property, however,
should not be suppressed, it has to be multiplied and diffused. Capital is seen as a
means for improving the efficiency of labor, which is considered the only factor of
production (besides nature). Therefore, a synergy between labor and capital is
supported, while conflict is not seen as a solution.50
The division of labor and innovation increases productivity but also displays
severely negative drawbacks. Liberatore (1889c) and Ketteler (1864) identified in
education and labor regulation a solution to these problems. Liberatore added
rotation of jobs in factories as a complementary solution internal to firms.51
47
Finance is seen as a problematic aspect of the economic system and regarded with suspicion due
to the redistributing role it can display. However no accurate analysis of this aspect is developed.
48
Anticipated by the more general work by Ketteler (1862) Freiheit, Autorität und Kirche: Erörterungen
über die grossen Probleme der Gegenwart.
49
See O’ Boyle (2005) on the story of the U.S. Jesuit tradition in economics.
50
After the first note in 1852, a corporative solution to the problem of proletarization was put forward
in Humanus Genus (1884) and then best defined in Rerum Novarum (1891).
51
Curiously this is one of the distinctive management strategies of large Japanese companies in the
late XX century to increase productivity.
52 American Review of Political Economy

For the same reason, Toniolo (1874) and Brants (1912) identified in small firms
the best form of industrial organization. In such firms labor and capital are coupled in
a collaborative way and no alienation occurs. Small firms reduce the problem of work
mobility – which destroys families – by bringing production near to demand.
Moreover, personal features of laborers and human relationships prevail over the
logic of capital. Consequently, political and moral aspects integrate economic
motives for desiring the resistance of this form of industrial organization.
The solutions to the problem of proletarization are seen in education,
associationism –from cooperation to self-help and trade unions –and in the diffusion
of property. Ketteler, like most Catholic thinkers of the XIX century, is against state
redistribution of wealth.52 However, like most Catholic scholars, he supports the role
of the state in the regulation of labor, and the protection of women and children. In
particular, the Fribourg Union promoted by Archbishop Marmillod made specific
proposals for the international agreement on labor rules. Liberatore (1889a,b)
endorsed this attempt to prevent competition on labor conditions – what today we
would call ‘ social dumping’or ‘ fiscal competition’
.
Free labor associations (best if vertical and including masters) are seen as
particularly important to frame the economic space and to limit negative
consequences of market unbalanced powers of weak individuals.53 Corporations are
medieval institutions which, it was thought, could be transferred to present times to
alleviate the problem of proletarization. They should be free and constituted by the
initiative of workers. In this way such intermediate bodies provide a specific structure
of incentives assuring collaborative relationships and regulating individual behavior
(Périn, 1880).

THE IDEA OF SOLIDARISM AS A THIRD WAY


As regards the second generation of scholars, we focus here on Giuseppe
Toniolo and Heinrich Pesch. 54 They built on these foundations keeping Rerum
Novarum as a reference and developed a specific framework of Roman Catholic
social economy. They also had the role of elaborating some of the distinctive
principles in this tradition, such as the notion of solidarism, and of proposing the idea
of a third way in economic policy different from both capitalism and socialism (Pesch,
1896; Toniolo, 1913).
This Catholic socio-economic displays many similarities with the German
Historical school because it mostly shares its theory of knowledge (derived from
practical science) and an attention to rules and institutions constituting the economic
(and moral) order. We can therefore classify it as a kind of institutionalism and as
such it was indirectly involved into the Methodenstreit together with historicism. The
positivistic ground of neoclassical theory clashed with Neo-Thomistic philosophy.

52
This position was to be reversed – up to a certain point – in von Nell-Breuning or Francesco Vito in
the middle of the XX century.
53
Ketteler exchanged some correspondence with Lassalle asking for advice in the constitution of
labor associations. He praised Lassalle’ s work in forming workers unions, but did not approve his idea
of state action to redistribute capital in favor of proletarian cooperatives.
54
Antoine, Costa-Rossetti and Brants are equally important, but we limit the analysis to these two
authors.
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 53

Historicism – despite its relativism – represented a more compatible analytical


framework (at least expressing an ‘ ethical economy’ ).
Both Pesch’ s and Toniolo’ s theory showed clear influences of the theoretical
system elaborated by Adolf Wagner, but it nonetheless unfolded in the direction of a
more genuinely practical economy. The concept of order is central in this analysis
oriented to the study of the relation between individual and social utility. Taparelli
argued that «the good of man on earth, the supreme and only good, is ORDER:
ORDER in the use of his individual faculties, the ORDER of social relations»55
(1854:257). Social economy, according to Toniolo, is the study of the social order of
wealth and it studies how the activity of people is originated and unfolds to produce
material well-being oriented to civilization. He is concerned with the complexity of
social problems following the Aristotelian tradition. He laid down some important
elements for the institutional analysis of the socio-economic system. He divided
some prime factors in man and population from the derivative factors such as
institutions. The social order is then interpreted as a system of relationships among
men.
Toniolo proposed (1907 vol. II) the concept of solidaristic order centered on social
conscience, that is to say, a communality of ideas, sentiments, aspirations, which
facilitate the building of institutions and consortia.56 Moral duty and civil traditions are
some actualizations of the same elements which structure the solidaristic order. The
role of such order is to harmonize individual and collective interests by an agreement
on rules and not by unhampered markets. Moreover, individual interests can be
defined only within the bounds of this order. Therefore, as for Pesch (1896; 1925
vol.1/2:225), solidarity is the principle of social and economic organisation, able to
find an equilibrium between sociality and individuality. Solidaristic order has a moral-
organic character because institutions relate individuals to the whole system. The
result is an organic view of society where institutions are free to evolve to cope with
changed culture and technology. This approach may appear close to American
institutionalism. However, it is clearly against any behaviourism and against any rule-
determined behaviour: intelligence is freedom (Liberatore). The rule is a way of
obtaining self-binding behaviour from free and autonomous persons.
Pesch clearly stated that liberalism, socialism and solidarism are founded on
different and incompatible metaphysical and anthropological presuppositions. They
confront each other on the economic ground, but with incomparable insights.
Solidarism means that each part of society is symbiotic to the others and their goals
are interdependent. Freedom is not the cause of order, on the contrary, order
produces freedom.57 Order and not liberty is the highest principle and best guarantee
for the rightly conceived freedom.
Social justice was a true innovation of Neo-Thomism. Taparelli advanced this
further kind of justice, beyond the known types of commutative and distributive
justice proposed by the Aristotelian interpretation of Aquinas. «Social Justice
consists of rightly measuring collisions of rights, and in assuring in fact what lively

55
«il bene dell’
uomo sulla terra, bene sommo, bene unico èl’ ORDINE: l’
ORDINE nell’ uso delle facoltà
sue individuali, l’
ORDINE delle relazioni sociali»
56
Donoso Cortes (1851:289) argued that solidarity is the common responsibility deriving from original
sin.
57
This is obviously a positive freedom.
54 American Review of Political Economy

right asks»(‘ lively’can be read as ‘ )(Taparelli, 1851:44).58 As a consequence,


natural’
justice directly enters economics but it is not defined inside it. Pesch further
developed this –potentially dangerous –idea by specifying that it refers to society as
such (Müller, 1952). Social justice «demands the performance of all duties and the
realization of all rights, the objective of which is the social weal». 59 It interprets
individuals as members of society and has to be integrated by a social philosophy to
express normative claims. This concept, however, remained rather ambiguous since
it was strictly dependent on natural law, compared to commutative and distributive
kinds of justice.60 In later works such as those by Antoine (1896) and Cathrein (1911)
we find the concept of ‘ legal justice’
, which confuses this notion.
This concept will remain highly controversial. The reason is that natural right has
difficulty to support this notion which lays out of the tradition of Aquinas, Suarez etc.
As a consequence, representatives of the liberal wing of Catholics as Périn did not
accept it, seeing in it a duplication of the commutative justice. The progressive wing
tended to push this concept on the side of distributive justice and to connect it with
positive legal justice. As a consequence this notion remained underdeveloped an
ambiguous (Nitsch, 2005).
The concept of subsidiarity however, tempered excessively progressive claims
supported by the notion of social justice. It has best been developed by von Nell-
Breuning (1954; 1957) and entered Quadragesimo Anno. However, this clearly is a
Thomistic principle and was anticipated in many aspects by all the cited scholars.
Actually, Liberatore and Taparelli insisted on the role of the state, especially in
regulating markets and not in directly providing services. However, intermediate
bodies and institutions deriving from free people initiative are seen as the best
solution to the organization of collective goods. On the other hand, the principle of
hierarchy and authority is not abandoned at all and progressive taxation is
legitimized (Taparelli, 1851). Therefore state power is not contrasted as a source of
remedy in the case of bottom-up collective action failure. But on this point Catholic
thought found some further divergence in practical views and this deserves more
specific study (Hertling, 1918).

CONCLUSION: SOCIAL ECONOMY AS PRACTICAL POLITICAL ECONOMY


Philosophy enters economics in many ways. Here we have analyzed how it has
supported the scientific approach to society and the economy by Roman Catholic
social economy. Neo-Thomism represented more than a simple philosophy, it
constituted an integrated system of thinking in which economic theorizing found its
organic role. It laid dawn alternative foundations to economics based on an
anthropological view of man and avoided perfect rationality by integrating pleasure
with duty and law. It mainly focused on the economic order, on the institutional
elements which connect production to distribution. We have argued how the
consequent concept of solidaristic order derives from the classical natural law

58
This theme was eventually developed by Francesco Vito (1933; 1935; 1936) who had to cope, on
the one hand, with a well- developed neoclassical theory and, on the other, with the idealistic
exuberance of fascist theorization which tended to over-extend the role of ethics transferring it to the
state.
59
Pesch cited by Müller (1952:490).
60
See Nitsch (2005) for a further interpretation of social justice.
Solari: Contribution of Neo-Thomistic Thought to Roman Catholic Social Economy 55

concept of inseparability of morals and institutions (even formal institutions). The aim
was to avoid mistaken views of both man and society common to liberal capitalism
and socialism.61 Its theory of knowledge is directly inspired with Aristotelian practical
science and as a consequence presents some similarities with institutionalism.
Contrary to the latter (based on pragmatism) it keeps some fixed points in Catholic
ethics as principles useful to a substantive evaluate economic situations. However, it
left unresolved the problem of social justice which was one of the distinctive
concepts it contributed to develop
This view of society and the economy deeply affected Christian democrat
politicians and the institutional reforms of many continental Europe countries after
the Second World War. It nonetheless was condemned to marginalization in the
academy due to the hegemony of positivistic interpretations of social science.

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CONTACT INFORMATION:
Stefano Solari
Associate Professor of Political Economy
Department of Economics
University of Padua,
Via del Santo, 33
35123 Padua (ITALY)
E-Mail: solari@giuri.unipd.it
Webpage: http://www.giuri.unipd.it/~solari/
Tel.+39.0422.513640

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