IPC White Paper: Reclaiming Capitalism Through Principles of Distributive Justice

By Frank L. Cocozzelli, IPC Associate Director

The Issue

Is it possible to support a market-based economic model while being a progressive Christian? The answer is yes, because economics is as moral or immoral as anything else.

Addressing matters of morality and the marketplace is a rich tradition that stands at the center of how Americans have resolved -- and sought to prevent -- the problems wrought by reckless profit-driven factions. Indeed, significant portions of New Deal economics coming out of the Great Depression were influenced by the then-ascendant Social Gospel of mainline Protestantism; Catholic notions of Distributive Justice; and religious Jewish intellectuals inspired by the tradition of tikkun olam –making the world whole.

It is important for religious progressives therefore, to reconnect with our tradition and accomplishments in the arena of economic justice: in order to rebut the neoconservative argument that economics is inherently amoral, and to contend with the economic challenges of our time, that are in many ways analogous to those of the 1930s.

Accordingly, this White Paper argues for two main ideas: capitalism based upon reciprocity between contribution and benefits received, and legislation to curb and deflect the destructive effects of arbitrary economic power. To do this we draw upon the works of 20th century economist (and Catholic priest) Monsignor John A. Ryan who emphasized six canons of Distributive Justice; and on the post World War II writings of Protestant theologian Reinhold Niebuhr.

The principle of reciprocity espoused by Monsignor Ryan makes allowances for creativity, risk, productivity and special talents as well as a living wage. Ryan’s contribution addresses monetary questions that require a sturdy government to enable fairness both in the distribution of profit and each individual’s contribution to the common good. Niebuhr’s approach is more institutional in nature; calling for a system that deflects and curbs the deleterious effects of greed – all too often the harbinger of the abuses of arbitrary power -- provides one of the most realistic methods of ensuring a more just form of capitalism.

Contemporary liberal, as distinct from Marxist or libertarian versions of economics, offers the best path to economic security for the greatest number of people. This is because liberal economics presumes that government works to prevent non-meritorious inequity -- by which we mean wealth that is acquired either by either bad behavior (i.e., embezzlement, insider trader coupled with stock manipulation, fraud, environmental crimes) or accumulated without providing less powerful contributors their just share of the profit. This is accomplished by several means, but primarily by “deflecting” arbitrary economic power through the defensive ownership of property by which we mean the increased ability of the many to be able to acquire private property through the meritorious distribution of profit to workers. There is dignity in labor. And it is through earned profit – not by the tenuous reliance upon credit – that a sound capitalist system exists.

The just distribution of profit is buttressed by legislation that respects workers’ rights (unionization and collective bargaining) and a fair, progressive form of taxation; the last by taxing passive income at a higher rate than earned income (save certain exceptions such as retirement accounts for the middle and working class).

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