A Really Invisible Hand
Thomas A. Droleskey
Exemplifying the points made yesterday in
Lost in the Trees Without A King to Lead Them, Alan Greenspan, the all-powerful Chairman of the Board of Governors of the unconstitutional Federal Reserve System from August 11, 1987, to January 31, 2006, expressed "shock" while testifying before United States House of Representatives' Committee of Government Oversight and Reform, which is chaired by the odious pro-abort named United States Representative Henry A. Waxman, D-California, that
that he “'made a mistake' in trusting that free markets could regulate themselves without government oversight:"
Facing a firing line of questions from Washington lawmakers, Alan Greenspan, the former Federal Reserve chairman once considered the infallible maestro of the financial system, admitted on Thursday that he “made a mistake” in trusting that free markets could regulate themselves without government oversight.
fervent proponent of deregulation during his 18-year tenure at the Fed’s helm, Mr. Greenspan has faced mounting criticism this year for having refused to consider cracking down on credit derivatives, an unchecked market whose excesses partially led to the current financial crisis.
Although he defended the use of derivatives in general, Mr. Greenspan, who left office in 2006, told members of the House Committee of Government Oversight and Reform that he was “partially” wrong in not having tried to regulate the market for credit default swaps.
But in a tense exchange with Representative Henry Waxman, the California Democrat who is chairman of the committee, Mr. Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.
Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”
Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.
“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.” (Greenspan Concedes Error on Regulation.)
Ah, yes, another quintessential naturalism, a man who denies the Sacred Divinity of Our Blessed Lord and Saviour Jesus Christ, has demonstrated his complete and utter intellectual bankruptcy in failing to understand that each of the problems of the world, bar none, is caused by Original Sin and our own Actual Sins. Greenspan said that he had a "found a flaw" in the free market system, and that he "was distressed by that fact." As my estranged only (and younger, by two years, eighteen days) brother, who holds a doctorate in veterinary microbiology, was wont to say in his youth when we lived together in our parents' homes in Great Neck and Oyster Bay Cove, New York, "Do tell."
Alan Greenspan has found a "flaw" in the free market system that has "distressed" him. Excuse me, Dr. Greenspan, the "fatal flaw" is called fallen human nature unreformed by a fervent cooperation with the Sanctifying Grace won for us by the shedding of every single drop of Our Blessed Lord and Saviour Jesus Christ's Most Precious Blood on the wood of the Holy Cross and that flows into our hearts and souls through the loving hands of Our Lady, the Mediatrix of All Graces.
Men must fall into an abyss of woe and corruption when they do not believe in the Sacred Divinity of the Second Person of the Blessed Trinity made Man in His Most Blessed Mother's Virginal and Immaculate Womb by the power of God the Holy Ghost and when they do not have belief in, access to and cooperation with Sanctifying Grace. Economic systems based on the ability of "markets" to regulate themselves according to "invisible" market forces and the "self-interest" of those who have invested capital in various projects are based on the lie that there is an "invisible hand" to guide the markets. Such an "invisible hand" is truly invisible as it does not exist. It is but a figment of the imagination of Adam Smith and other apologists for the "self regulatory" nature of the "free market. There is no such thing as an "invisible hand."
Pope Leo XIII, writing at the very beginning of Rerum Novarum, May 15, 1891, explained how the "new things" of Modernity had invaded the precincts of economics, resulting in crushing conditions for workers. He rejected the false foundations of Calvinist capitalism while at the same time rejecting categorically the "alternative" of Socialism and its attack upon the Natural Law right of private property. Pope Leo understood that it is the right conduct of men in due submission to the laws of God and in cooperation with Sanctifying Grace that are at the foundation of a justly ordered economic system:
That the spirit of revolutionary change, which has long been disturbing the nations of the world, should have passed beyond the sphere of politics and made its influence felt in the cognate sphere of practical economics is not surprising. The elements of the conflict now raging are unmistakable, in the vast expansion of industrial pursuits and the marvelous discoveries of science; in the changed relations between masters and workmen; in the enormous fortunes of some few individuals, and the utter poverty of the masses; in the increased self-reliance and closer mutual combination of the working classes; as also, finally, in the prevailing moral degeneracy. The momentous gravity of the state of things now obtaining fills every mind with painful apprehension; wise men are discussing it; practical men are proposing schemes; popular meetings, legislatures, and rulers of nations are all busied with it -- actually there is no question which has taken a deeper hold on the public mind.
Therefore, venerable brethren, as on former occasions when it seemed opportune to refute false teaching, We have addressed you in the interests of the Church and of the common weal, and have issued letters bearing on political power, human liberty, the Christian constitution of the State, and like matters, so have We thought it expedient now to speak on the condition of the working classes. It is a subject on which We have already touched more than once, incidentally. But in the present letter, the responsibility of the apostolic office urges Us to treat the question of set purpose and in detail, in order that no misapprehension may exist as to the principles which truth and justice dictate for its settlement. The discussion is not easy, nor is it void of danger. It is no easy matter to define the relative rights and mutual duties of the rich and of the poor, of capital and of labor. And the danger lies in this, that crafty agitators are intent on making use of these differences of opinion to pervert men's judgments and to stir up the people to revolt.
In any case we clearly see, and on this there is general agreement, that some opportune remedy must be found quickly for the misery and wretchedness pressing so unjustly on the majority of the working class: for the ancient workingmen's guilds were abolished in the last century, and no other protective organization took their place. Public institutions and the laws set aside the ancient religion. Hence, by degrees it has come to pass that working men have been surrendered, isolated and helpless, to the hardheartedness of employers and the greed of unchecked competition. The mischief has been increased by rapacious usury, which, although more than once condemned by the Church, is nevertheless, under a different guise, but with like injustice, still practiced by covetous and grasping men. To this must be added that the hiring of labor and the conduct of trade are concentrated in the hands of comparatively few; so that a small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than that of slavery itself.
To remedy these wrongs the socialists, working on the poor man's envy of the rich, are striving to do away with private property, and contend that individual possessions should become the common property of all, to be administered by the State or by municipal bodies. They hold that by thus transferring property from private individuals to the community, the present mischievous state of things will be set to rights, inasmuch as each citizen will then get his fair share of whatever there is to enjoy. But their contentions are so clearly powerless to end the controversy that were they carried into effect the working man himself would be among the first to suffer. They are, moreover, emphatically unjust, for they would rob the lawful possessor, distort the functions of the State, and create utter confusion in the community.
The abuses associated with Calvinist capitalism, which are the result of fallen human nature uninformed by the Deposit of Faith and unreformed by Sanctifying Grace, are not to be repaired by mythical, "self-correcting" "market forces" or by Socialism. The capitalist system, which places an emphasis upon the expansion of wealth as the means to personal happiness and national prosperity, reduce men ultimately to the acquisitive level, concerned mostly, if not exclusively, with the securing of "wealth" in this life without any regard to the life that lasts forever. How many of those involved in the ongoing "credit crisis" caused by a combination of forces (among these being the reckless policies of quasi-government lenders--Fannie Mae, Freddie Mac and commercial lenders who encouraged and approved the issuance of subprime mortgages in a housing market that could not sustain itself) considered for a moment how any of their actions would be judged by Christ the King as the moment of their Particular Judgments? Most of these men and women were motivated only by greed and their desire to enjoy to excess more and more of this world's good no matter whose assets they put at risk in doing so.
Pope Pius XII, writing in his last encyclical letter, Ad Apostolorum Principis, June 29, 1958, explained that the Catholic Church does indeed have the right to lay down the principles that govern human conduct in the realm of economics:
Assuming false and unjust premises, they are not afraid to take a position which would confine within a narrow scope the supreme teaching authority of the Church, claiming that there are certain questions -- such as those which concern social and economic matters -- in which Catholics may ignore the teachings and the directives of this Apostolic See.
This opinion -- it seems entirely unnecessary to demonstrate its existence -- is utterly false and full of error because, as We declared a few years ago to a special meeting of Our Venerable Brethren in the episcopacy:
"The power of the Church is in no sense limited to so-called 'strictly religious matters'; but the whole matter of the natural law, its institution, interpretation and application, in so far as the moral aspect is concerned, are within its power.
"By God's appointment the observance of the natural law concerns the way by which man must strive toward his supernatural end. The Church shows the way and is the guide and guardian of men with respect to their supernatural end."
This truth had already been wisely explained by Our Predecessor St. Pius X in his Encyclical Letter Singulari quadam of September 24, 1912, in which he made this statement: "All actions of a Christian man so far as they are morally either good or bad -- that is, so far as they agree with or are contrary to the natural and divine law -- fall under the judgment and jurisdiction of the Church."
Moreover, even when those who arbitrarily set and defend these narrow limits profess a desire to obey the Roman Pontiff with regard to truths to be believed, and to observe what they call ecclesiastical directives, they proceed with such boldness that they refuse to obey the precise and definite prescriptions of the Holy See. They protest that these refer to political affairs because of a hidden meaning by the author, as if these prescriptions took their origin from some secret conspiracy against their own nation. (Pope Pius XII, Ad Apostolorum Principis, June 29, 1958.)
And those Catholics, whether attracted to libertarianism or to some variant of Socialism, including Communism, who believe that they are exempt from the Catholic Church's social encyclical letters as the Church, according to their own dissenting "lights," do not bind them. They are most wrong, as Pope Pope Pius XI and Pope Pius XII noted conclusively:
Many believe in or claim that they believe in and hold fast to Catholic doctrine on such questions as social authority, the right of owning private property, on the relations between capital and labor, on the rights of the laboring man, on the relations between Church and State, religion and country, on the relations between the different social classes, on international relations, on the rights of the Holy See and the prerogatives of the Roman Pontiff and the Episcopate, on the social rights of Jesus Christ, Who is the Creator, Redeemer, and Lord not only of individuals but of nations. In spite of these protestations, they speak, write, and, what is more, act as if it were not necessary any longer to follow, or that they did not remain still in full force, the teachings and solemn pronouncements which may be found in so many documents of the Holy See, and particularly in those written by Leo XIII, Pius X, and Benedict XV.
There is a species of moral, legal, and social modernism which We condemn, no less decidedly than We condemn theological modernism.
It is necessary ever to keep in mind these teachings and pronouncements which We have made; it is no less necessary to reawaken that spirit of faith, of supernatural love, and of Christian discipline which alone can bring to these principles correct understanding, and can lead to their observance. This is particularly important in the case of youth, and especially those who aspire to the priesthood, so that in the almost universal confusion in which we live they at least, as the Apostle writes, will not be "tossed to and fro, and carried about with every wind of doctrine by the wickedness of men, by cunning craftiness, by which they lie in wait to deceive." (Ephesians iv, 14) (Pope Pius XI, Ubi Arcano Dei Consilio, December 23, 1922.)
Nor must it be thought that what is expounded in Encyclical Letters does not of itself demand consent, since in writing such Letters the Popes do not exercise the supreme power of their Teaching Authority. For these matters are taught with the ordinary teaching authority, of which it is true to say: "He who heareth you, heareth me"; and generally what is expounded and inculcated in Encyclical Letters already for other reasons appertains to Catholic doctrine. But if the Supreme Pontiffs in their official documents purposely pass judgment on a matter up to that time under dispute, it is obvious that that matter, according to the mind and will of the same Pontiffs, cannot be any longer considered a question open to discussion among theologians. (Pope Pius XII, Humani Generis, August 12, 1950.)
Alan Greenspan would not be "shocked" by a "flaw" in the free market system if he had read, understood and accepted the Social Teaching of the Catholic Church. Greed is one of the Seven Deadly (or Capital) Sins. The combination of Pride and Greed are what make it absolutely poisonous for the latter day captains of industry and banking, many of whom have souls that steeped in the ravages of Original Sin and have contempt for the true Faith as they fund abortion and contraception and perversity in the United States and around the world, to be placed in positions of unbridled economic power without any understanding of their accountability to God for their actions. Any economic system, be it Calvinist capitalism or the variant of Socialism, that denies the authority of the Catholic Church over men and their nations is bound to make men prisoners of materialism by various means (profit and usury in the capitalist system; state control over private property and most aspects of the economy in socialism).
Dr. George O'Brien, writing in An Essay on the Economic Effects of the Reformation (IHS Press, Norfolk, Virginia, 2003), explained this truth as follows:
The thesis we have endeavoured to present in this essay is, that the two great dominating schools of modern economic thought have a common origin. The capitalist school, which, basing its position on the unfettered right of the individual to do what he will with his own, demands the restriction of government interference in economic and social affairs within the narrowest possible limits, and the socialist school, which, basing its position on the complete subordination of the individual to society, demands the socialization of all the means of production, if not all of wealth, face each other today as the only two solutions of the social question; they are bitterly hostile towards each other, and mutually intolerant and each is at the same weakened and provoked by the other. In one respect, and in one respect only, are they identical--they can both be shown to be the result of the Protestant Reformation.
We have seen the direct connection which exists between these modern schools of economic thought and their common ancestor. Capitalism found its roots in the intensely individualistic spirit of Protestantism, in the spread of anti-authoritative ideas from the realm of religion into the realm of political and social thought, and, above all, in the distinctive Calvinist doctrine of a successful and prosperous career being the outward and visible sign by which the regenerated might be known. Socialism, on the other hand, derived encouragement from the violations of established and prescriptive rights of which the Reformation afforded so many examples, from the growth of heretical sects tainted with Communism, and from the overthrow of the orthodox doctrine on original sin, which opened the way to the idea of the perfectibility of man through institutions. But, apart from these direct influences, there were others, indirect, but equally important. Both these great schools of economic thought are characterized by exaggerations and excesses; the one lays too great stress on the importance of the individual, and other on the importance of the community; they are both departures, in opposite directions, from the correct mean of reconciliation and of individual liberty with social solidarity. These excesses and exaggerations are the result of the free play of private judgment unguided by authority, and could not have occurred if Europe had continued to recognize an infallible central authority in ethical affairs.
The science of economics is the science of men's relations with one another in the domain of acquiring and disposing of wealth, and is, therefore, like political science in another sphere, a branch of the science of ethics. In the Middle Ages, man's ethical conduct, like his religious conduct, was under the supervision and guidance of a single authority, which claimed at the same time the right to define and to enforce its teaching. The machinery for enforcing the observance of medieval ethical teaching was of a singularly effective kind; pressure was brought to bear upon the conscience of the individual through the medium of compulsory periodical consultations with a trained moral adviser, who was empowered to enforce obedience to his advice by the most potent spiritual sanctions. In this way, the whole conduct of man in relation to his neighbours was placed under the immediate guidance of the universally received ethical preceptor, and a common standard of action was ensured throughout the Christian world in the all the affairs of life. All economic transactions in particular were subject to the jealous scrutiny of the individual's spiritual director; and such matters as sales, loans, and so on, were considered reprehensible and punishable if not conducted in accordance with the Christian standards of commutative justice.
The whole of this elaborate system for the preservation of justice in the affairs of everyday life was shattered by the Reformation. The right of private judgment, which had first been asserted in matters of faith, rapidly spread into moral matters, and the attack on the dogmatic infallibility of the Church left Europe without an authority to which it could appeal on moral questions. The new Protestant churches were utterly unable to supply this want. The principle of private judgment on which they rested deprived them of any right to be listened to whenever they attempted to dictate moral precepts to their members, and henceforth the moral behaviour of the individual became a matter to be regulated by the promptings of his own conscience, or by such philosophical systems of ethics as he happened to approve. The secular state endeavoured to ensure that dishonesty amounting to actual theft or fraud should be kept in check, but this was a poor and ineffective substitute for the powerful weapon of the confessional. Authority having once broken down, it was but a single step from Protestantism to rationalism; and the way was opened to the development of all sorts of erroneous systems of morality.
Are you paying attention, Dr. Greenspan? There is no reason to be shocked. None at all. We are simply realizing the wicked consequences of the overthrow of the Social Reign of Christ the King wrought by the Protestant Revolt and the rise of Judeo-Masonry, which asserts that men can know social order and pursue virtue without submitting to the teaching authority and without relying upon the sanctifying offices of the Catholic Church. Here is the "flaw" that you have just "discovered," Dr. Greenspan. It is called naturalism, the reduction of all human activity to the merely natural level in the belief that supernatural realities are either impossible to know or understand and are thus irrelevant to our daily lives, including the conduct of a nation's economic system.
Pope Leo XIII said that public life was stained by crime in 1900 as a result of naturalism. It is even more so today.
We are told that society is quite able to help itself; that it can flourish without the assistance of Christianity, and attain its end by its own unaided efforts. Public administrators prefer a purely secular system of government. All traces of the religion of our forefathers are daily disappearing from political life and administration. What blindness! Once the idea of the authority of God as the Judge of right and wrong is forgotten, law must necessarily lose its primary authority and justice must perish: and these are the two most powerful and most necessary bonds of society. Similarly, once the hope and expectation of eternal happiness is taken away, temporal goods will be greedily sought after. Every man will strive to secure the largest share for himself. Hence arise envy, jealousy, hatred. The consequences are conspiracy, anarchy, nihilism. There is neither peace abroad nor security at home. Public life is stained with crime. (Pope Leo XIII, Tametsi Futura Prospicientibus, November 1, 1900.)
Any system of governance or economics not founded on the binding precepts of the Divine Positive Law and the Natural Law is bound to deteriorate over the course of time to one of lawless greed to such an extent that the only apparent "solution" to many observers will be more and more government regulation rather than the restoration of Christendom and the daily conversion of souls in cooperation of Sanctifying Grace. Men who believe themselves to be laws unto themselves and who want to be paid exorbitant bonuses for charging usurious rates of interest so as maximize the profits of their companies are not going to be restrained by a nonexistent "invisible" hand. Men can be restrained ultimately only by the fear of God as He has revealed Himself to us exclusively through the true Church that He founded upon the Rock of Peter, the Pope.
As Pope Pius XI noted in Quadragesimo Anno, May 15, 1931, issued on the fortieth anniversary of Rerum Novarum, the capitalist error of individualism cannot be "fixed" by the socialist error of collectivism. Men need the true Faith to guide them as they conduct their temporal affairs in light of their Last End:
But it is only the moral law which, just as it commands us to seek our supreme and last end in the whole scheme of our activity, so likewise commands us to seek directly in each kind of activity those purposes which we know that nature, or rather God the Author of nature, established for that kind of action, and in orderly relationship to subordinate such immediate purposes to our supreme and last end. If we faithfully observe this law, then it will follow that the particular purposes, both individual and social, that are sought in the economic field will fall in their proper place in the universal order of purposes, and We, in ascending through them, as it were by steps, shall attain the final end of all things, that is God, to Himself and to us, the supreme and inexhaustible Good. . . .
If Socialism, like all errors, contains some truth (which, moreover, the Supreme Pontiffs have never denied), it is based nevertheless on a theory of human society peculiar to itself and irreconcilable with true Christianity. Religious socialism, Christian socialism, are contradictory terms; no one can be at the same time a good Catholic and a true socialist.
Pope Pius XI reminded the world's bishops in Quadragesimo Anno of the simple, plain truth that Alan Greenspan and other naturalists refuse to accept as they wonder why an economic system built on falsehoods and outright thefts (both from the corporate and governmental sectors) of what belongs rightly to the people, their private property, has showed a supposedly heretofore unknown "flaw."
The world in which we live, the world that is shaped by the aftereffects of Protestantism and the continuing influences of Judeo-Masonry and all of the naturalistic ideologies and theories spawned thereby, is one that is in desperate need of hearing the prophetic voice of the Catholic Church in calling all men and their nations to return to Christ the King through the Immaculate Heart of Mary, who is Our Queen and Our Mother. Alas, the conciliarists no longer call men and their nations to conversion, content to wax delusionally about the "civilization of love" and a "healthy secularity" as the false foundations of the modern civil state with which it has reconciled itself are producing nothing but chaos, destruction and disarray in the United States of America and elsewhere in the world.
Neither the likes of Alan Greenspan or the conciliar revolutionaries can admit that the modern world has been shaped by the forces unleashed by Martin Luther and John Calvin and Thomas Cranmer and John Knox and John Wesley and John Locke and Adam Smith and David Ricardo and Thomas Hobbes and Immanuel Kant and Maximilian Robespierre and James Madison, who believed that the best way to guard against the "vice of factions" was to create the extended "commercial" republic. We must, however, listen to the sage analysis offered by Catholics about the shape of the modern world, which convinces men that they must be separated from their families for most of hours of the weeks and attempts to convince women that it unnatural for them to stay at home with their children, thereby maladjusting their children who want and need and deserve the loving attention of their mothers.
The late Father Vincent McNabb, O.P., writing in The Church and the Land, noted this exact phenomenon of the world created by the overthrow of the Social Reign of Christ the King:
(3) How many mothers (women?) go out to work?
Stated in terms of industrialism, the home is the most important factory in the Commonwealth. Other factories make commodities called (often by a courtesy title) boots, hose furniture, jam, margarine (the Lord preserve us!), Boxo, and the whole inferno of tinned beastliness whose name is legion. The home alone makes boys and girls, men and women, good men and women, good Englishmen and good Englishwomen. And without these human commodities of what use are even the finest "canned goods".
(4) How many children are in the average family?
Read (3) over again. You will see that this efficient factory called the Home is the more efficient the more commodities it can produce, and the better the finish it can give them. Now the best of all training in the three essential civic virtues of Poverty, Chastity, Obedience, is in the large family. Experto credite Roberto. Trust Bob, at his job.
(5) How many mothers suckle their offspring?
To appreciate this question, read 3 and 4 over again. Then read a second time. If you don't see the point at the second reading--consult a doctor. (Father Vincent McNabb, O.P., The Church and the Land, published originally in London in 1925, republished in 2003 by IHS Press, pp. 40-41. For you Sarah Health "I'm an intellectual" Palin fans out there in cyberspace, perhaps you should consult a doctor after reading Father McNabb's pungent Catholic commentary. Please, my friends, why extol a woman who gives her children pagan names and has "stopped" having children now, although she regrets not having been able to name a son "Zamboni"? This remains absolute insanity!)
Amintore Fanfani, who died in 1999 and had served as the Prime Minister of Italy, noted in Catholicism, Protestantism, and Capitalism, that it is only when men keep a view on their eternal destiny that they can be just stewards of the this of this world. The success of the above-named Protestant revolutionaries and naturalistic "philosophers" and "theorists" was made possible by the overthrow of he authority of the Catholic Church. Unrestrained self-seeking replaced the authority of the Catholic Church, a self-seeking that baffles the like of Alan Greenspan because no one has ever challenged him to convert to the true Faith and then to submit to Its Social Teaching as the foundation of the just social and economic order:
Those who have followed our argument cannot fail to conclude, as we do, that in the Middle Ages it was the international trade ventures that did most to favour the rise of the capitalist spirit. In light of these considerations, the conception of trade in St. Thomas, the champion of the Catholic social ideal, appears only logical, "For, "says St. Thomas, "the city that for its subsistence has need of much merchandise must necessarily submit to the presence of foreigners. Now relations with foreigners, as Aristotle says in his Politics, very often corrupt national customs: the foreigners who have been brought up under other laws and customs, in many cases act otherwise than is the use of the citizens, who, led by their example, imitate them and so bring disturbance into social life. Moreover, if the citizens themselves engage in commerce, they open the way to many vices. For since the aim of merchants is wholly one of gain, greed takes root in the heart of the citizens, by which everything, in the city, becomes venal, and, with the disappearance of good faith, the way is open to fraud; the general good is despised, and each man will seek his own particular advantage; the taste for virtue will be lost when the honour which is normally the reward of virtue is accorded to all. Hence, in such a city civil life cannot fail to grow corrupt."
When these words are understood, and we bear in mind the ideal of a Catholic society and the aspirations of capitalism, we can easily see why the friar noted a tendency to reason only in a "venal" manner and ("despising the general good") to seek only "particular advantage."
The characteristics of capitalism are precisely the following: the adoption of an economic criterion as criterion of order; failure to consider third persons; a quest for purely individual profit. Nor did Aquinas exaggerate when he saw in the merchant the greatest danger in "civil life," as he understood it. It is not by chance that the first capitalistic figures presented to us are merchants--Godric, later St. Godric, presented by Pirenne; the Mariano by Heynen; the Bardi, the Peruzzi, the Del Bene by Sapori; Datini by Bensa; the Fugger by Sreider. Nor is it by chance that though opinions differ as to whether capitalism sprang from land-owners or traders, all agree that even land-owners first showed themselves capitalistic in the quality of merchants. In mediaeval economic society the only individual who could easily and often find himself in a position to act otherwise than in conformity with pre-capitalistic ideals was the merchant. Having left his city, exposed to risks of every kind, free from such ties as the laws of country or the opinion of his acquaintances, surrounded by intriguing people who saw in him only someone to be cheated, he had to defend himself against the cheaters by cheating, against competitors by sharpening his wits to find new methods of competition, and against adverse circumstances by learning to overcome them. Although he may have been a God-fearing man, if it was urgent for him to take back to the warehouse at least the equivalent of what he had brought away, he was obligated to throw overboard something of his pre-capitalistic ideas, even if in paradaisal conditions they might have appealed to him.
In another part of the present work we have pointed out that in a pre-capitalistic society if a single individual breaks away from the norm, the others will be forced to follow his example if only in self-defence. Let the reader then consider the vast significance of encounters either with merchants of another religion, or with subtle, equivocal, and unscrupulous merchants, always ready to take advantage of any opportunity. Faced with these, men's faithfulness to their own ideals will have begun to waver; their consequent actions will have produced such remarkable results that we doubt whether their conviction of wrong-doing will have been reinforced. To reason in terms of utility means a tangible result; to reason in terms of Paradise means hope of a result of which the certainty vanishes if faith weakens. We must not forget how much the capitalistic ideal has the advantage in being concrete, and, remembering this, we can more easily understand how a profitable infraction of pre-capitalist normality would rather lead men to repeat such infractions than arouse in them such remorse as to lead them back to the old path. We hold it a very significant fact that among mediaeval merchants remorse led to notable conversion even when in no danger of death. It is enough to quote St. Godric, St. Francis, Blessed Colombini. It led also to death-bed restitutions, often complete, and which were the more wonderful the harder it had been for the dying man to scrape together his hoard, and the more reluctant he had been in his life to give a penny to anyone who had not earned it twice over. Such conversions, implying a return to pre-capitalistic modes of life, continue so long as there is faith, but when faith weakens there is no longer thought of reparation.
It is the waning of faith that explains the establishment of a capitalistic spirit in a Catholic world, but in a certain sense it is the establishment of the capitalistic spirit that brings about a waning of faith. The effect of the weakening of faith is that the material factors we have mentioned change from momentary circumstances to permanent ones. With the weakening of faith, remorse becomes rare; the "is" is no longer compared with the "should-be," and that which is accepted and exploited in accordance with its own standards; the world is judged by purely worldly criteria.
All the circumstances that, in the Middle Ages, led to a waning of faith explain the progressive establishment of the capitalistic spirit, for the pre-capitalistic spirit rests on facts that are not seen, but must be held by faith. Those faithful to it sacrifice a certain result for a result that is not guaranteed by faith; they eschew a certain mode of action in the certainty of losing riches, but believing that they will gain a future reward in heaven. Let man lose this belief, and nothing remains for him, rationally speaking, but to act in a capitalistic manner. If there are no longer religious ties uniting man to man, there will be a growing number of audacious men whose sole end, in the words of Villari, is to be ahead of their fellows. Such men existed before the modern era began, and of such men it has been said that they showed "a complete lack of scruples and contempt for every moral law."
Men were particularly encouraged to sharpen their wits to acquire wealth, and moral obstacles were removed by the fact that, by a subversion of ancient custom, the highest offices no longer fell to those summoned to them by law or custom, but to those who could win them either by their own or others' wit, by their own or others' material strength, or by their own ability and others' baseness. In each case the stair of ascent was provided by economic means, from the moment that economic difficulties made all feel the need of goods. The Emperor no longer sought homage but money, the Cities widened their domains more by gold than by arms. Bankers became masters of cities without striking a blow. Gold paved the way and opened the gates to the new tyrants. Even the man who, from lofty motives, had no need of money could not do without it, if he did not wish to cut a poor figure at banquets and ceremonies, or be behind hand in public largesse.
It is a vicious circle. A man seeks goods because he no longer believes in a faith that bounded his desires, and he no longer believes because he has experienced the pleasures of possession and influence. We need not enquire at what moment the former or the latter of these causes came into operation; we know that their working varied from country to country, from individual to individual, and that now a man might be tempted to discount morality by the attraction of goods, and now might be tempted to enrich himself because, he is no loner believed in divine penalties and rewards. And if in the case of an individual it would be hard to say which cause came first, it would be impossible in the case of society. We may take it for granted that in society as a whole both causes worked simultaneously, each stimulated by the other.
There were other phenomena that encouraged either acquisition action or incredulity. Leaving aside the less important and local ones, and confining ourselves to those of which the action was most general at the close of the pre-capitalistic period, we may say that the greatest contribution to the new economic spirit informing fifteenth-century men was brought by the humanist conception of life, of which the exponents, such as Alberti, took the most significant step towards the capitalist spirit by detaching their conception of wealth from its moral setting, and withdrawing the acquisition and use of goods from the influence of the rules and restrictions of religious morality. The advent of similar tendencies in the political field had the result that the State ceased to oppose the new mode of thought and life, and instead itself threw off the influence of Catholic ideals, often in order to exploit human vices, as we see in legislation on gambling. (Amintore Fanfani, Catholicism, Protestantism, and Capitalism, published originally by Sheed and Ward, 1935, republished in 2002 by IHS Press, pp. 135-138.)
Fanfani went on to note how Protestantism exploited this weakening of the Catholic Faith and built an entire economic system to suit its own heretical purposes:
Protestantism encouraged capitalism inasmuch as it denied the relation between earthly action and eternal recompense. From this point of view there is no real difference between the Lutheran and Calvinistic currents, for while it is true that Calvin linked salvation to arbitrary divine predestination, Luther made it depend on faith alone. Neither of the two connected it with works. Nevertheless, Calvin's statement was the more vigorous, and therefore better able to bear practical fruit in a capitalistic sense.
Such an assertion invalidates any supernatural morality, hence also the economic ethics of Catholicism, and opens the way to a thousand moral systems, all natural, all earthy, all based on principles inherent in human affairs. Protestantism by this principle did not act in a positive sense, as [Max] Weber believes, but in a negative sense, paving the way for the positive action of innumerable impulses, which--like the risks entailed by distant markets, in the pre-Reformation period, the price revolution at the time of the Reformation, and the industrial revolution in the period following--led man to direct his action by purely economic criteria. Catholicism acts in opposition to capitalism by seeking to restrain these impulses and to bring various spheres of life into harmony on an ideal plane. Protestantism acted in favor of capitalism, for its religious teaching paved the way for it. (Amintore Fanfani, Catholicism, Protestantism, and Capitalism, published originally by Sheed and Ward, 1935, republished in 2002 by IHS Press, p. 151.)
The late Dr. George O'Brien stressed the fact that there is only one institution that can reorder the world properly, and it is not an secular, naturalistic international organization or a secular, naturalistic political party:
There is one institution and one institution alone which is capable of supplying and enforcing the social ethic that is needed to revivify the world. It is an institution at once intra-national and international; an institution that can claim to pronounce infallibly on moral matters, and to enforce the observance of the its moral decrees by direct sanctions on the individual conscience of man; an institution which, while respecting and supporting the civil governments of nations, can claim to exist independently of them, and can insist that they shall not intrude upon the moral life or fetter the moral liberty of their citizens. Europe possessed such an institution in the Middle Ages; its dethronement was the unique achievement of the Reformation; and the injury inflicted by that dethronement has never since been repaired. (George O'Brien, An Essay on the Economic Effects of the Reformation, first published in 1923, republished by IHS press in 2003, p. 132.)
Alan Greenspan does not understand this. Barack Hussein Obama does not understand this. Joseph Robinette "We drove the Hezbollah out of Syria" Biden, Jr., does not understand this. John Sidney McCain III does not understand this. Sarah Heath "The Intellectual" Palin does not understand this. Bob Barr does not understand this. Chuck Baldwin does not understand this. Ron Paul does not understand this. No one in public life understands or accepts the fact that Catholicism is the one and only foundation of personal and social order. We, however, must understand and accept these truth, coming to realize once and for all that there is no naturalistic way out of a naturalistic mess. The only way out of this naturalistic mess is through the Sorrowful and Immaculate Heart of Mary.
Pope Saint Pius X, writing in Notre Charge Apostolique, August 15, 1910, condemned the nondenominational approach of The Sillon to "solve" social problems. Leaders of The Sillon were calling, in effect, for an Americanist-style form of pluralism to prevail in once Catholic France. Pope Saint Pius X would have none of it, explaining to the bishops of France (and to us through time) that we must be focused on only on reality, re-establishing the Catholic City:
This, nevertheless, is what they want to do with human society; they dream of changing its natural and traditional foundations; they dream of a Future City built on different principles, and they dare to proclaim these more fruitful and more beneficial than the principles upon which the present Christian City rests.
No, Venerable Brethren, We must repeat with the utmost energy in these times of social and intellectual anarchy when everyone takes it upon himself to teach as a teacher and lawmaker - the City cannot be built otherwise than as God has built it; society cannot be setup unless the Church lays the foundations and supervises the work; no, civilization is not something yet to be found, nor is the New City to be built on hazy notions; it has been in existence and still is: it is Christian civilization, it is the Catholic City. It has only to be set up and restored continually against the unremitting attacks of insane dreamers, rebels and miscreants. omnia instaurare in Christo.
Our Lady's loving hand is what we need to guide us to accept and to submit to the authentic teaching of the Catholic Church, preserved as it is at the present time by true bishops and true priests in the Catholic catacombs where no concessions are made to conciliarism or to the nonexistent legitimacy of its false shepherds. We need to feel her loving hand guide us as to give to the Most Sacred Heart of her Divine Son, Our Blessed Lord and Saviour Jesus Christ, through her own Sorrowful and Immaculate Heart all of our prayers and penances and sufferings and mortifications and humiliations of the present moment, starting with praying as many Rosaries each day as our states-in-life permit.
The anxieties of the present moment will pass. We are indeed the crossing of Our Lady's arms and in the folds of her mantle. We have nothing to fear as we pray and work in our homes enthroned to Most Sacred Heart of Jesus and her own Immaculate Heart for the day when her Fatima Message will be fulfilled and all heart everywhere will jubilant as every aspect of a nation's life, including economics, is shaped the exultant cry of:
Viva Cristo Rey! Vivat Christus Rex!
Isn't it time to pray a Rosary now?
Our Lady of the Rosary, pray for us!
Saint Joseph, Patron of Departing Souls, pray for us.
Saints Peter and Paul, pray for us.
Saint John the Baptist, pray for us.
Saint John the Evangelist, pray for us.
Saint Michael the Archangel, pray for us.
Saint Gabriel the Archangel, pray for us.
Saint Raphael the Archangel, pray for us.
Saints Joachim and Anne, pray for us.
Saints Caspar, Melchior, and Balthasar, pray for us.
See also: A Litany of Saints