Right out of the gate I have to respond to a tendency among conservatives like myself to use words like 'statism', assuming the reader is familiar with the vocabulary we conservatives like to employ in our effort to articulate conservative values. In titling this post "The 'Idolatry of Statism' - Pope Francis and the Blind Spot of Roman Catholic Social Teaching," I am using the word 'statism' to describe a view which sees the State as the most significant unit of society. In this view the individual exists for the benefit of the state, rather than the other way around. Another way of putting this would be to distinguish between 'political society' (meaning governments and their respective bureaucracies) and 'civil society' (meaning those organic associations of individuals which form in communities - churches, mosques, temples, scouting troops, town councils, etc.). 'Statism', then, is a view which prefers 'political society' over 'civil society' and subordinates the individual to the needs of the State.
Pope Francis has provoked much discussion and debate with his Apostolic Exhortation 'Evangelii Gaudium'. This is as it should be, as this kind of document in Catholic tradition is not an expression of the formal 'teaching authority' claimed in Roman Catholic tradition - as is the case on other topics like contraception. In others words the 'pastoral opinions' of a siting Pope are not the same thing as official church doctrine.
In his Apostolic Exhortation, Francis coined the term 'the idolatry of money'. As is becoming clear in subsequent interviews, he is neither promoting Marxism nor condemning capitalism. He is, rather, promoting an examination of the conscience. He is asking that we consider whether money has replaced the individual and her dignity at the center of how we look at out life together as a community. He is pointing our attention to increasing income inequality and asking us to consider the underlying causes. He is asking us to think about how technology creates what he calls "new and often anonymous forms of power." There is, however, a blind spot in his Exhortation. It is one likely caused by European history and experience.
From the Church to the State to the Individual
With apologies for oversimplifying things somewhat, when Constantine made Catholicism the official religion of the Roman Empire we saw the development of a 'Churchist' society. The Church developed as the most significant unit of society and was the institutional embodiment of the community. The Reformation was eventually provoked by the corruption which resulted from this intersection of spiritual and political authority.
The Reformation then provoked the creation of competing religious loyalties. But the Church remained the most significant unit of society. If you lived in the 'Lutheran' parts of Germany, you were 'Lutheran'. And if you weren't, well, the Church would see to it you did not live in those parts of Germany. If you lived in the Roman Catholic parts of Germany, you were loyal to the Bishop of Rome. And if you weren't, well, you would be summarily run out of town (and that is putting it quite euphemistically).
This dynamic produced decades of religious wars in Europe, followed by the Treaty of Westphalia in 1498. The 'nation state' as we know it - largely following ethnic lines - along with the idea of 'international law', was born, and where the Church had been the most significant unit of society, the State now began to take its place; Europe went from being a 'Churchist' society to a 'Statist' society, and largely remains so today.
The American Founding Fathers, however, had what was then a radically different idea. They looked at this history and saw that a national identity formed around ethnicity and religion played to the worst aspects of human nature, and all but guaranteed social conflict. Reasoning that there were rights belonging to the individual person by her nature, they sought to form a national identity around these ideas rather than around ethnicity and religion. 'America' was born. But at the heart of the idea of America is the necessary conviction that the individual, not the Church and not the State, is the most significant unit of society.
The 'Idolatry of Statism': The Blind Spot of Roman Catholic Tradition
In his Apostolic Exhortation it seems Pope Francis assumes the benevolence of the State toward the poor. If we respond with good will to the Holy Father's exhortation to remember the poor - which I believe we should - we have to ask ourselves and the Pope a penetrating question: Who knows best what the actual needs of the poor are? Pope Francis - having worked among the poor his whole life - would likely agree that the people who are closest to them in their communities are most likely to best understand these needs. This is where the distinction between 'political society' and 'civil society' becomes very important. Europe's political orientation is toward 'political society', so when something is broken, nobody local and close to the problem has a sense of ownership towards it. If something is broken and nobody owns it, fixing it is always someone else's job.
In Europe that 'someone else' is the State. But again, the assumption is that the State has the best grasp of the true nature of the problem. If there is one subject about which the Church rightly claims a unique expertise, it is the human condition. An individual in civil society with a conscience formed by Christian tradition will always - ALWAYS - understand the needs of the poor among them better than a distant bureaucracy animated first by the need to maintain its claim on the budgetary decisions of political society. The question, though, is whether or not the individual attends both to his place in civil society and to the formation of his conscience. The Pope properly calls our attention to this matter. But if the problem of the poor is a problem for the State to solve, the formation of our conscience towards the poor is aborted. If the dictates of political society take precedence over the voice of the Holy Spirit spoken to the heart of the individual Christian, we have set the State up as our idol. And it is this 'Idolatry of Statism' which then produces the 'Idolatry of Money' about which Francis writes.
For a little over 40 years the industrialized world has been experimenting with money. In the case of the U.S. dollar, each unit used to be equivalent to a certain amount of gold or silver. The quantity of dollars circulating in the economy was thus limited by the amount of silver and gold held in reserve by the Treasury. During the Civil War, the dollar was taken off this 'bi-metallic' standard so dollars could be printed to pay war costs. After the war, the dollar was returned to what would be called the 'gold standard' (silver was dropped). With the money supply standing in for gold reserves held by the Treasury on behalf of the American people, it could be said that the money supply expressed the wealth of the nation.
This ended in 1971. After World War II, with the U.S. rebuilding Europe, the dollar became the strongest and most stable currency. This made goods imported from Europe very cheap. To a certain extent it was necessary that European manufacturers had customers for their goods, so American consumption patterns were part of how Europe was rebuilt. But when presented with the choice between using the strength of the dollar to repay debts or consume cheap imported products, we chose not only to not repay these debts, but to add to them by way of consumption all but completely divorced from a level of production necessary to support it. As consumption began to be divorced from production, dollars flowed out of the country and into the reserves of other nations. In the late 60's and early 70's, these countries began demanding these dollars be converted to gold. A 'run' on U.S. gold reserves forced President Nixon to 'close the gold window' and untie the dollar from gold.
It is difficult to overstate how significant this change was. Without the natural limits of gold held in reserve on behalf of the people, the money supply (in the form of credit) could be expanded at will - the will, of course, of politicians who have to run for office. This change is seen in the growth of private debt since the early 70's. The same expansion of credit to private individuals made possible by an unrestrained money supply also made it possible to extend public credit to governments. The steep rise in 'sovereign debt' (exemplified in the US by the US Treasury Bond) can also be traced to this 1971 decision.
None of this expansion of public and private debt would have been possible with a money supply tied to public reserves of things like gold and silver. With no limits to the money supply, politicians quickly figured out they could get elected by making promises which otherwise could not possibly have been kept. And the banking sector was quite happy to profit from making the loans to pay for these promises. It should be no surprise to see that the rise in income inequality began at the same time as the rise in public and private debt - immediately following the removal of the dollar from the gold standard in 1971. This is easy to understand: the people to which you owe money will always have more of it than you.
While the Pope is right to point our attention to the way today's economies direct resources to the enrichment of the few and the debasement of the poor, he may not yet have a fully formed sense of who the 'few' actually are. The Occupy Movement in the United States has taken to calling them the '1%', but have an equally poor sense of who exactly the 1% are. This is due to a failure to appreciate the link between debt and income inequality. Private debt is a function of an excess in the supply of money. Bank shareholders are loath to put up with high amounts of mere 'cash' on their bank's balance sheet. They insist it be lent out that the interest revenue might support the value of their bank stock holdings. This excess of credit in the housing market is what caused the most recent financial crises.
Public debt is similarly a function of an excess of credit extended to governments; the promises of elected officials are completely divorced from the economy's ability to create the wealth necessary to keep these promises. Credit replaces true wealth creation; it should be no surprise, then, to see the creditor becoming rich at a pace well ahead of everyone else. Were the money supply actually restricted by publicly held reserves of gold and silver, credit would have to again give way to true wealth creation. Our American form of government was originally conceived to secure an equal opportunity for all to do just that. Were the money supply actually restricted by publicly held reserves, banks would not be able to profit from funding outrageous political promises. And the politicians making them would be immediately outed as charlatans.
This, then, shows us that the 'few' - or to 'occupy' the language, the '1%' - are specifically the political and financial sectors. But it is not enough to identify the 'few' this way. The most significant reality existing in the blind spot of Roman Catholic tradition is the relationship between the political and financial class and our money. Again, when money is redeemable for publicly held reserves of gold and silver, the money supply expresses the wealth of the nation's people. When it isn't, the money supply gradually - at the same rate as the increase in public debt - becomes an expression of the wealth of the political and financial sectors. Income inequality rises, the 'few' are enriched and the poor are debased, just as the Pope has observed.
The Forming of our Christian Conscience
We need to come back to what I think is the main thrust of the Pope's Exhortation - attending to the formation of a distinctly Christian conscience towards our economics and how it affects the poor. But before we address our conscience to the 'Idolatry of Money' we must first address it to the 'Idolatry of Statism' - which is the blind spot of Roman Catholic social teaching. The growth of the State is fueled by the promises of elected officials, which can only be funded by debt made possible by an unrestricted money supply. The larger the State grows, the less likely it has the information necessary to efficiently and effectively address the needs of the poor. Compounding this is how the debt-fueled growth of the State causes more and more of a nation's wealth to be concentrated in the hands of those holding that debt - the banking sector.
There are two responses, the first a moral response and the second a political response, I believe follow from a well-formed Christian conscience:
First, the problem of the poor is not someone else's problem to solve. It is ours. But if we take ownership of it, we then must insist our political order be oriented away from 'political society' (meaning big government) and toward 'civil society" (meaning local community groups like our churches). A deeper sense of dignity for the poor will only follow a strengthened sense of community where they reside. That sense of community is discovered when individuals in the community together assume responsibilities for its problems. And that sense of responsibility follows a sense of ownership. Again, the problem of the poor is not someone else's - not the State's problem - to solve for us.
The argument for free markets and small government is not, then, as the Pope may view it. It is not an argument for unfettered capitalism. It is an insistence that the State not confiscate that sense of ownership we as individuals might otherwise nurture toward the problems of the poor. It is an insistence that we be free to nurture this sense of ownership, and the responsibility and community which follow... that we might then attend together to the dignity of the needy among us.
Secondly, the problem of the State confiscating our sense of ownership is practically a problem of the nation's money supply and how it has been hijacked by the political and financial sectors. The public debt necessary to fund the 'Idolatry of Statism' can only exist in an economy with an unrestricted money supply. If we are to tear down the 'Idolatry of Money' we must first tear down the 'Idolary of Statism' by returning our money supply to once again being a representation of the wealth of the nation's people rather than its bankers and politicians.