One of the sure signs that the Catholic Church has access to the fullness of truth in her teachings on faith and morals is that she is consistently attacked from both sides.  This is especially true when it comes to the basis of her economic teachings, private property.  The capitalists call her too socialistic and the socialists too capitalistic.  Because of this, snippets of her teachings are either mocked and co-opted, but mostly misunderstood.  As a foundation for justice, it is important then that we be able to understand and articulate her teachings.

The Primacy of the Universal Destination of Goods

When God made the earth, He gave mankind dominion over all its goods.  Everything in the material order is meant to be used by man.  These goods are meant for all men—each and every one—and thus each man has the right to secure for himself and his family what he needs to both survive and to thrive.  This principle, dubbed the Universal Destination of Goods, is part of the natural law and is prior to any right to private property.  As Pope St. John Paul II put it in an address in 1981 to the 21^st Session of the FAO Conference, “The primary destination of the resources of the earth to the common good demands that the necessities of life be provided for all human beings before individuals or groups appropriate for themselves the riches of nature or the products of human skill.”

Before linking this teaching to private property, it is important to point out that there is a corresponding duty attached to the Universal Destination of Goods.  No one can claim any superfluous property, that is more than he needs, until the existential needs of his neighbor are taken care of. This imposes an obligation to provide for the extreme necessity of others because you are truly returning to them what is rightfully theirs.

The socialist might be tempted to agree and applaud the Church’s teaching until he reads the fine print.  The obligation rests in giving (or even offering no resistance if they take) those things that constitute an existential need.  In short, the obligation is to give to those who are in a condition of absolute poverty.  Poverty, in the Christian worldview is a virtue.  But when the Church speaks of it in her social teaching, she usually attaches a modifier, such as absolute to it.  Absolute poverty is “a condition in which life is so limited by lack of food, malnutrition, illiteracy, high infant mortality, and low life expectancy as to be beneath any rational definition of human decency.  The persistence of such degrading poverty, and especially the lack of the absolutely basic minimum of food, is a scandal of the modern world, in which one finds enormous contrasts of income and standards of living between rich countries and countries that are materially poor” (Pope St. John Paul II, Address to the 21^st Session of the FAO Conference, 1981). 

The ”scandal of the modern world” is not so much that we have rich and poor or even that there is an inequality, but that the wealth of the world is concentrated in the hands of so few when there are so many who do not have what they need.  The poor have a prior claim on those goods they need for their survival and thus the rich have an obligation to give those goods to the materially poor.

Private Property in Context

Only after the most basic needs are met can we begin to discuss property, but the Right to Private Property, even if it is subordinate to the Universal Destination of Goods, is no less important.  Private property is integral to protecting the freedom of men.  When a man owns his own property, he does not depend upon others (usually in power) for his own well-being.  Not only that, but it also is a means of personal development.  When he is responsible for his own well-being and is free to exercise that responsibility on his own property, he also grows in virtue.  In short the man who owns his own property develops not just materially but also spiritually.   Summarizing the Church’s teaching, John Paul II said:

 “in Rerum Novarum, Leo XIII strongly affirmed the natural character of the right to private property, using various arguments against the socialism of his time.  This right, which is fundamental for the autonomy and development of the person, has always been defended by the Church up to our own day. At the same time, the Church teaches that the possession of material goods is not an absolute right, and that its limits are inscribed in its very nature as a human right.  While the Pope proclaimed the right to private ownership, he affirmed with equal clarity that the “use” of goods, while marked by freedom, is subordinated to their original common destination as created goods, as well as to the will of Jesus Christ as expressed in the Gospel.”

Pope St. John Paul II, Centesimus Annus, 30

In affirming the right to private property then, the Church teaches that this right is not absolute.  Property also has a social function that is not only governed by the Universal Destination of Goods, but also the moral law.  This means that a man is not free to use his property however he sees fit.  Not only can he not infringe on another’s right to private property but also must not impede another’s moral freedom.

Connection with the Just Wage

All that being said, increasing wealth is a good thing provided that it be done “in a just and lawful manner” (Pius XII, Quadragesimo Anno).  Those who through their wealth, provide wealth for others provide a service to the common good.  And thus “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” (ibid). 

But the Universal Destination of Goods also applies here as to how one governs their business.  Provided that an owner’s necessities are being taken care of, before taking more of the wealth created for himself, he must make sure that all of his workers too have enough to provide for themselves and their families.  A just wage then is not determined solely by supply and demand, but on the demands of the Universal Destination of Goods. 

The point is that, while the law of supply and demand might apply to material goods, it cannot be a means of determining wages.  The just wage is a recognition of the moral primacy of labor over capital.  Labor is indispensable to production and because it is done by human beings, must always respect the Universal Destination of Goods.  It is also not an argument for a minimum wage, but instead an argument for what is called a living wage.  This wage is individualized and thus employees doing the same job could actually get paid different amounts based upon their needs.  So antithetical to the modern mindset is this principle that Leo XIII in Rerum Novarum went to great lengths to explain it:

          “Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice…If a workman’s wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income. Nature itself would urge him to this.”

     Pope Leo XIII, Rerum Novarum, 45-46

    It becomes clear then why socialists and unbridled captialists both claim the Church’s teaching as their own and yet at the same time loathe it.  But the Church is always both/and and not either/or and this is no less true than in the field of economics.