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The International Imperialism of Money

Pius XI’s social encyclical was published in 1931 marking the 40th anniversary of the Rerum novarum. It is a realistic and still pertinent analysis of the doom-laden dominion of finance over production

by Lorenzo Cappelletti

Workers in line in 1929 in New York <BR>[© Hulton-Deutsch Collection/Corbis]

Workers in line in 1929 in New York
[© Hulton-Deutsch Collection/Corbis]

“This is also a time of great concern that there is a neo-capitalism made only of money and which ignores industrial and agricultural production factors’, the Editor of 30DAYS told the Italian bishops’ daily, Avvenire, on September 12 as clouds of dust and rubble shrouded New York. The same concern was evident in the opening lines of an extensive article written on that same occasion for 30DAYS by Professor Angelo Caloia, President of the Vatican bank, Institute for Religious Works (IOR) (30DAYS, No. 11 2001): “There is the problem of financial transactions that use money to make more money but no real contribution to the economy ... The good workability of the global economy must be considered more important than granting excessive freedom to a few hundred able (financial) international dealers”. In his editorial in the December 16 edition of the newspaper he founded, Rome’s la Repubblica, Eugenio Scalfari also seemed to adopt this theme (and the Argentinian economy had not yet crashed): “The economy has become finance and finance has globalized the economy … Money is more than mobile, shifting in a flash from one country to another, from one continent to another at the speed of light”. From different shores and at different times, then, we have the same apparent analysis of the times that this globalized world and its economy are living in.
No one, it seems to us, and most notably in the ecclesiastical world, has thought to quote or thought that it might be appropriate to quote from the encyclical, Quadragesimo anno, on this point, even though an opportunity presented itself in 2001, this document’s own 70th anniversary. Perhaps its origins are considered illegitimate, in that it was written at the height of Italy’s two decades of Fascism. Or perhaps the 70th anniversary of Quadragesimo anno – and the 110th of Rerum novarum – are no longer deemed worth celebrating in any particular way. Perhaps new documents in this field might make for an inflationary stock. As regards the allegedly dubious nature of its origins, one must make a distinction, however, between the somewhat liberal ideas and by no means servile pens of the German and French Jesuits who gave life to Quadragesimo anno, and its adoption by regimes which were not as open-minded, such as Portugal’s under Salazar and Austria’s under Dollfuss.
Our aim nevertheless is not to object to a 70-year-old’s relegation to oblivion, not to give it boastful voice, or a stage on which to present itself rather too spritely and spotless as often happens in autobiographies. Through the testimonies of scholars of the text, it is our intention to highlight its manifestly realistic look at the doom-laden dominion of economic power over the political variety, the doom-laden dominion of finance over production and other areas, a look of benefit to us in our understanding of our own times, heightening our awareness of things that, too often in the ecclesial sphere, we develop more in terms of philosophical and theological anthropology than by observing human realities.

The Encyclical’s Three Parts
The first thing to concede is that the Quadragesimo anno was not just any encyclical. The specific commentaries on it and the manuals, too, suggest that, if a social Christian doctrine exists, it is owing not so much to the Rerum novarum as to the Quadragesimo anno. Edoardo Benvenuto describes it in one interesting work as “unique in the history of the Pontifical Magisterium in the social field”. He writes that it constitutes the “organic foundation of a doctrine”. Like it or not, he adds, “this is the doctrina socialis Ecclesiae, no longer prophecy by rebuke, warning and the expression of hopes as had previously been the case, but linear and logical, with premises, theories and annexes” (Il lieto annunzio ai poveri, Edb, Bologna 1997, page 124, The Glad Tidings for the Poor ). He goes on perceptively to explain (cf ibidem, pages 103-111) that the Quadragesimo anno is freely designed to be a renewal of Leo XIII’s Magisterium, to be in perfect continuity with this latter, which it elogizes in its entire first part (Numbers 1-40).
The underlying themes and categories of the doctrine contained in the Quadragesimo anno are outlined in the second part (Numbers 41-98) – ownership, capital, labor and wages. It goes on to consider institutional reform necessary and places new stress on the subsidiarity principle as a basis for it along with that other principle of social justice which should be the inspiration for all economic life. This part closes with two pages (Numbers 91-96) which became famous and not only because they were written by the Pope in Italian in a rare case of personal Papal penmanship, as Father Oswald von Nell-Breuning, the encyclical’s principal editor, wrote in his memoirs published in 1971 in Humanitas. The fame of this passage is owing above all to its acknowledgement, despite a degree of criticism, of the advantages of the corporate system just then introduced by the Fascist regime. As often happens when the ecclesiastical authorities intervene directly in re politica or oeconomica, the Pope intended one thing and achieved another. This captatio benevolentiae (on the advantages of Italy’s corporate system) did not serve to placate then Italian dictator Benito Mussolini who saw the encyclical as so highly critical of him that, as Nell-Breuning again writes, he turned on Catholic organizations in his wrath.
In addition to its stress on institutional reform, the encyclical asserts that, if a more adeguate social order is to be established, then social morals must also change and this is the theme of the third and last part (Numbers 99-149) which, in addition, takes its title from the socio-economic changes which were brought about since the time of Leo XIII. The focus of the analysis, then, is reform of social morals but, significantly it seems to us, the encyclical warns against making a hasty diagnosis of the new socio-economic scenario prior to formulating remedies.

A typical scene of the Argentinian crisis, an assault on a truck carrying foodstuffs outside a Buenos Aires supermarket on 19 December 2001[© Associated Press/LaPresse]

A typical scene of the Argentinian crisis, an assault on a truck carrying foodstuffs outside a Buenos Aires supermarket on 19 December 2001[© Associated Press/LaPresse]

The Diagnosis
In presenting the text of the encyclical as soon as it was published, La Civiltà Cattolica (II, 507) wrote: “The whole merit of Pius XI’s new document lies in the diagnosis it makes of today’s economic regime with all the assurance of the tried and tested”. Nearly 40 years later, in changed times and climes and in new authors, this assessment proved to be unchanged: “One is impressed by all that is new and even audacious in the encyclical, which seems in many passages to be highly conscious of the problems of the time” (Roger Aubert, in the collective, Pio XI nel trentesimo della morte, page 245, Pius XI on the 30th Anniversary of his Death).
Our theme is this diagnosis and, most notably, the stress it places on the financial question because in some places, paradoxically, the encyclical’s diagnosis is more applicable today than its propositions. Not by chance did Paul VI, in his Easter 1967 encyclical, Populorum progressio, making explicit reference to the Quadragesimo anno, exclude its formulas and solutions noting only its diagnosis of “society’s new conditions”, upon which, he said, “it was unfortunate that ... a system has been constructed which ... leads to dictatorship rightly denounced by Pius XI as producing the ‘international imperialism of money’.”
The diagnostic passage of the third part does not only contain memorable phrasing such as the above but also draws some significant distinctions which ought to make for more caution in saying that the Quadragesimo anno condemns capitalism and socialism without appeal. This is especially so if it is taken literally. Father Nell-Breuning wrote that “in explaining a document of the Magisterium, it does not matter what the writer of the schema or the titular of the Magisterium were thinking at the time; what matters is what the verbal tenor implies according to general principles of interpretation”.
While socialism is condemned more than once in the encyclical, the text also tells us that, in its moderate form, socialism might be said to “incline toward and in a certain measure approach the truths which Christian tradition has always held sacred; for it cannot be denied that its demands at times come very near those that Christian reformers of society justly insist upon” (Number 113); and this to the extent that, in a highly readable work published in 1977 by Queriniana, Father Chenu wonders what ever motivated the subsequent great “severity (towards socialism), coming as it did after observation had been made of some considerable points in common” (La dottrina sociale della Chiesa, page 30, The Social Doctrine of the Church).
As far as the regimen capitalisticum is concerned, it is said “not to be condemned in itself” (Number 101), in that it is not “of its own nature vicious” (ibidem) but is deemed to hold certain advantages (cf Number 103) and even free competition is “justified and certainly useful provided it is kept within certain limits” (Number 88). The encyclical goes on to note, however, certain cases of degeneration into monopolies, the paradoxical though “natural” (natura sua) fruit of free competition when it becomes unlimited (Number 107), or “beyond all political control” as, we could well say without betraying his memory, Pius XI might have put it, the Pontiff who could be called “Pope of political charity” (cf his December 18, 1927 address to the Italian Catholic University Students’ Federation, FUCI). This unlimited freedom of competition, in fact, “lets only the strongest survive; and this is often the same as saying, those who fight the most violently, those who give least heed to their conscience” (Number 107).
One aspect of such degeneration is that the “dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit and rule the lending of money. Hence they regulate the flow, so to speak, of the lifeblood whereby the entire economic system lives and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will” (Number 106). “This is the most cogent passage of the entire encyclical”, writes Father Nell-Breuning at page 186 of his commentary published in 1932 in Cologne and which was to appear in several subsequent editions. But he immediately stresses that “one must not read into it what is not there. It highlights a situation which is condemned as faulty development … an error of the system afflicting today’s capitalistic economy and which, one hopes beyond hope, will come to be eliminated” (ibidem).
Thus the capitalist system is distinguished by its forms of degeneration. But when it says that financial capital is lifeblood to the capitalistic economy, the encyclical does not outlaw this on principle either. Given that the vital structures of the economy as an entity depend on the circulation of finance, what is being criticized here is the lack of any regulation of these flows. For the same reason, finance cannot be left in the arbitrary hands of the few.
In the final analysis, there is nothing much to add to that except that, today, computerization has rendered the lifeblood more virtual, its channelling much more rapid and the few who pump it around more invisibile. A therapy thus becomes more urgent.

In-Depth Diagnosis
The interesting Numbers 130 and 132 are also part, to a degree, of the analysis offered by the Quadragesimo anno. Following on from Number 129 which asserts, quoting from the Rerum novarum, that it is a matter of “a return to Christian life and institutions”, the encyclical then says at Number 130: “The whole scheme of social and economic life is now such as to put in the way of vast numbers of mankind most serious obstacles which prevent them from caring for the one thing necessary: namely, their eternal salvation”. There is therefore no reproach, no augury and no plans laid in relation to anyone. The text simply tries to understand. It is interesting on this point that, in his description of the encyclical’s framework, Father Chenu stressed Pius XI’s satisfaction that an organization such as Catholic Action had shed, as Chenu said, its “type of ecclesiology, totalitarian in terms of internal management and Christian commitment in socio-economic life” (cf La dottrina sociale della Chiesa, page 21) and that it was also beginning to look with favor on “the return to a strategy that did not start at the top but which was based on the different and variable circumstances of life” (ibidem). The final part of the encyclical makes mention of this strategy (from Number 138 to the end).
Number 132 reflects the same realistic understanding when it says that disordered desires of the heart, or the thirst for wealth and material goods, are “the sad result of original sin”. And, secondly, this “human frailty” finds “far more numerous snares” in the modern economic system. For, drawing another distinction, it is not so much the modern economic system’s method of production that is regarded as an opportunity to sin as the “easy gains that a market unrestricted by any law opens to everybody (attracting) large numbers to buying and selling goods, and they, their one aim being to make quick profits with the least expenditure of work, raise or lower their prices by their uncontrolled business dealings so rapidly according to their own caprice and greed that they nullify the wisest forecasts of producers”. Here again the text establishes a hierarchy of blame to be shared between defective financial and production systems with the onus on the former. In successive paragraphs, moreover, it states: “Those who are engaged in producing goods ... are not forbidden to increase their fortune in a just and lawful manner; for it is only fair that he who renders service to the community and makes it richer should also, through the increased wealth of the community, be made richer himself according to his position, provided that all these things be sought with due respect for the laws of God and without impairing the rights of others and that they be employed in accordance with faith and right reason” (Number 136).
A further two points underscore the realism inherent in the Quadragesimo anno. Although they are set towards the end of this lengthy encyclical – a forerunner from this point of view, too, alas – they are not mere closing courtesies: far in advance of the age of the new evangelization and, therefore, still pertinent, the text speaks of a world “that in large part has almost fallen back into paganism” (Number 141). And it expresses the concern that, by trampling underfoot “no less the laws of nature than those of God” (Number 144), this new-and-yet-so-old order of things may overwhelm not so much the Church as metastorical body but many of its individual members: “The Church of Christ, built upon an unshakable rock, has nothing to fear for herself, as she knows for a certainty that the gates of hell shall never prevail against her. Rather, she knows full well, through the experience of many centuries, that she is wont to come forth from the most violent storms stronger than ever and adorned with new triumphs. Yet her maternal heart cannot but be moved by the countless evils with which so many thousands would be afflicted during storms of this kind, and above all by the consequent enormous injury to spiritual life which would work eternal ruin to so many souls redeemed by the Blood of Jesus Christ” (ibidem).

Paul VI in 1972 with workers [© Pepi Merisio]

Paul VI in 1972 with workers [© Pepi Merisio]

From Pius XI to Paul VI
We turn now to the opening lines of the second part in which, with great respect for the various fields’ independent powers to act, Pius XI declares himself justified in addressing the economy only where it pertains to morality and not in technical terms since these have their own principles and laws to be analyzed in the light of reason (cf Number 41). In reading this deductive part one realizes that here, too, at least as far as its premises are concerned, the encyclical’s intent is to avoid taking sides with one system or another. If Pius XI had held fully to that principle, if for just a moment, he had not relied on political intuition – something not necessarily required of the Magisterium – he might not have added two pages on Italy’s then corporate system and its appropriateness. “I am firmly convinced today that Pius XI had no understanding of the phenomenon of Fascism, that he did not possess the mental sociological and political categories in which to frame it”, wrote Father Nell-Breuning in 1971, underlining the “no”. In his Apostolic Letter, Octogesima adveniens, of 1971, Paul VI looked again at this principle and drew the conclusions. In the face of such widely varying situations, he said, “it is difficult for us to utter a unified message and put forward a solution which has universal validity. Such is not our ambition, nor is it our mission” (Number 4). It is the task of lay faithful, he went on, to analyze, to make the choices and commitments in the work of social, political and economic transformation. “The social teaching of the Church ... does not intervene to authenticate a given structure or to propose a ready-made model” (Number 42).
If, in these days of ours, we had paid more attention to the indications that come to us from the history of the Church’s social teaching, we might have thought twice before exalting the alleged ideals of certain economic and political turning-points which, in so short a time, have merely proven to underpin the proliferation of international crime.

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