A Better Economic Order
by
[Harpers, $2.50]
MONSIGNOR JOHN A. RYAN, who is Professor of Moral Theology and Industrial Ethics at the Catholic University of America, faces his problem of reconciling American industrial relations and economic and political problems to the Papal Bull, Quadragesimo Anna, rather differently from Father Coughlin. Both seek to lead the masses into still waters, to find a compromise between capitalism and socialism, to stave off the ‘revolution.’ Father Coughlin in his effort runs amuck and becomes a Fascist demagogue whom Lawrence Dennis can greet as a fellow pioneer in madness; Monsignor Ryan remains the scholar who delves deeply into the literature and the facts of his problem.
And that makes a review of his book heartbreaking. I read it only a day after I had finished reading International Economic Relations, more familiarly known as the Hutchins Report, which marshals all the facts which prove that Monsignor Ryan errs in his essential conclusions. And, curiously, Monsignor Ryan also states the data which prove him in error in his own book, but he discards everything except that which fits his basichypothesis: —
‘Obviously, the average worker would be interested in his work if our industrial system were reorganized in such a fashion that the majority were owners of the instruments of production. The most desirable and the democratic arrangement would be that in which the workers owned and carried on the industry in which they were engaged. They would be at once capitalists, business men, and laborers. This would be what is known as coöperative production, or productive cooperation. Unfortunately, such a reorganization of industry, or of any considerable part thereof, cannot be hoped for in the near future.’
Even though that cannot be accomplished immediately, it is Dr. Ryan’s goal. In a word, he holds with Upton Sinclair and the Epic group that a return to mediæval economy would be satisfactory, although difficult and even remote.
Meanwhile, Dr. Ryan accepts the entire New Deal, the thirty-hour week, the Wagner Bill; he evidences a clerical dislike for interest, and he acknowledges his hatred for Communism — and that again involves the reader in many intellectual difficulties, for it seems to be altogether obvious that, if Dr. Ryan’s proposals were accepted and used, no alternative would be available but to reorganize the United States either on a Fascist or on a Communist basis. This Dr. Ryan dreads; but his fear of mass revolution drives him into the arms of his enemies. He says:
‘For upwards of a half century, capitalism has been committing slow suicide because it has assumed that, no efforts need be made to put purchasing power into the hands of those who would use it in sufficient volume to take products off the market. Capitalism has assumed that adequate consumption would follow automatically upon unlimited production.
But this is exactly and obviously not so. Capitalism’s sole motivation is to raise the standard of living of a people so that they will be consumers of more goods. The American wage scale, the American hour scale, the social facade of this country — all are designed to put increasingly large sums of money into the hands of an increasingly large number of people. In this short review I am not allowed the space to deal with this subject adequately, but I should like to make this point: —
In the United States, the population per motor vehicle for 1933 (latest figures) was 5 1/4; the same figure for the world was 60; for China, 15,979; France, 22; Germany, 95; Italy, 119; Russia, 1578. I cite China in this list because it serves as an indicator of where we started on our rise from the standard of living in Elizabethan England. The types are almost identical.
Dr. Ryan says; ‘The government can accomplish a good deal in this direction by keeping at the lowest possible rate the interest that it pays on its securities, by issuing bonds that pay no interest at all and by requiring banks to reduce the rates paid on deposits and to lower discount rates. In so far as the government enters into necessary competition with private concerns in order to prevent unjust charges to the consumer in certain industries, it will likewise exert a beneficial influence toward reducing the general rate of interest. The activities of the Tennessee Valley Authority afford a good illustration.’
But how do you operate at low interest rates or with no interest within the capitalist system? Even Soviet Russia has to pay interest on her bonds. Exactly why would money go into productivity if there were no return? Taking the average return on capital even for 1929 as of the order of 4 to 5 per cent, how much less interest will attract capital?
In a word, Dr. Ryan would keep the profit system but make the profits very small. But who wants small profits? Once a ceiling is placed on profits, capital does not function. Mr. Roosevelt has discovered that within the past year. He has sought a capital market and has not found it because of his attitude toward profits and toward the capitalist system. Under Dr. Ryan’s plan of low or no interest, capital would become a useless, inactive, hidden hoard — as it is in China and India and other countries where fear governs productivity.
Dr. Ryan’s ideas have been dispelled by the unanimous decision of the Supreme Court in the NRA Case.
But that does not end either the advocacy of noncapitalistic measures in the United States or the search for a compromise between capitalism and Socialism, which can only lead to Fascism. Dr. Ryan, having sought a solution to our vexed economics, discovers that society is imperfect. But has not the Catholic Church ever recognized the imperfections of mankind?
GEORGE E. SOKOLSKY