Now is the Time for Solidarist Economics
Economics for the common good: beyond Socialism and Capitalism.
Political Economy
For far too long, the mainstream political culture has presented economics as a false dichotomous choice between socialism and capitalism. A line is then drawn between these two systems, and a “spectrum” is presented: you either lean towards socialism, or you lean towards capitalism.
This is a false dichotomy and a false spectrum.
What is Economics?
Economics comes from the Greek word, “οἰκονομία” referring directly to the management of the household. As such, the proper method of understanding economics is to begin at the household with the family:
Man is born into this world as his own self – yet immediately dependent on his mother for nourishment and his father for protection and provision. From the very beginning, it is evident that the nature of man is inherently social. Thus, the family emerges as the most basic vital unit of society. Man does not cease to be himself – a rational person capable of thinking and acting with reason – yet he is never only himself. He is a social and rational creature.
To ameliorate the conditions of himself and his family, man engages with other families and persons. This is what is meant by economizing. As families unite in pursuit of material welfare and order, they form communities, and ultimately the State - whose purpose is to uphold the common good of all persons and families of the nation.
Therefore - true to its Greek roots - economics can be said to be the management of a household at different levels:
Microeconomics at the family level (the household of persons; a natural society);
Macroeconomics at the level of the nation (the household of families united) to which the State (a juridical society) is tasked with ensuring the material welfare thereof.
I argue that Solidarism is the best approach for analyzing the pressing economic issues of our time.
But what is Solidarism?
Solidarism
Solidarism - as created and articulated by economist Father Heinrich Pesch, S.J., - is not a mere middle-ground or capitulation to some form of centrist compromise between socialism and capitalism. Rather, it is the recognition that humans are social creatures bound together out of a need for the securement of their material welfare: a clear rejection of atomistic capitalism and collectivist socialism.
Solidarism is premised on three principles:
1.) Human dignity
2.) Subsidiarity
3.) Solidarity
These three principles are deeply rooted in Catholic Social Teaching, yet grounded in natural law and reason: allowing all access to them.
1.) Human Dignity
A man does not receive his intrinsic worth from his value to society as a comrade or his ability to optimize processes.
Man - being crafted in the image and likeness of God - has inherent dignity which is bestowed by the Lord and is worth more than all the material in the universe.
Thus, man does not exist to serve the economy. Rather, the economy exists to serve man.
2.) Subsidiarity
Subsidiarity is the principle that higher levels of society should not assume control of the functioning of lower levels of society. Instead, higher levels should support the lower ones only when necessary for the provisioning of the common good.
For example: the federal government should not assume control of a local school system when the local school board is fully capable of governing it.
3.) Solidarity
Recognizing both human dignity and subsidiarity, solidarity calls all persons throughout society to unite and cooperate for the common good. Workers and employers, labor and management, stand not as enemies but as partners.
Historically, this arrangement was found in traditions such as guilds and industrial councils which brought together labor/trade unions with the industrialists to coordinate working conditions, wages, and production to achieve economic well-being that benefits all.
Solidarism seeks to revive this cooperative spirit.
Ethics
Take any undergraduate economics course beyond the introductory level, and you are bound to find something quite bizarre: ethical questions are often treated as if they could be resolved using technical mainstream economic tools alone.
Need kidney transplants? No problem: create a market and let equilibrium determine who gets a kidney and who doesn’t.
Unfortunately, this way of thinking remains common in academia, but it is a fundamental error. Economics as a discipline is subordinate to ethics: not the other way around. An economist can never dictate what is and what is not ethical solely using economic tools.
This is what Solidarism principally understands: ethics is superior to economics, and it must be respected as such.
Overall
Now is the time to approach economics through the lens of Solidarism: re-introducing ethics and realism into our economic analyses.
This Substack aims to do just that: explain economic reality from my perspective as a Catholic Solidarist.
Who am I?
First and foremost - I am a fellow beloved son of God who has blessed me with all that I have materially and spiritually.
As it relates to this post: I am a trained economist with bachelor’s and master’s degrees in economics from the University of Florida specializing in econometrics, micro- and macro-economic theory and applications, and cost-benefit analysis.
Additionally, I have studied - and encourage you to as well - Father Heinrich Pesch’s Ethics and the National Economy as well as Papal Encyclicals such as Rerum Novarum, Quadragesimo Anno, and Centesimus Annus.
Why subscribe?
Have you been fed up with failed economic predictions from some of the most “elite” economists or media outlets?
Are you upset that our economic system is somehow the greatest on paper yet there are thousands homeless?
Are you looking for analyses on world events that follow non-mainstream perspectives?
And most importantly - do you believe that the family is the most important unit of the economy?
If so, I invite you to join my Substack community.