In the photographs that marked the lingering memory of the Great Depression, there was the scene of anxious depositors, massed outside a bank, desperate to retrieve their savings from a bank on the brink of failing. There were also photos of farmers massed to resist the agents of the law, who were trying to foreclose on their farms. With all the inventiveness of artists, it struck me as odd, in retrospect, that no artist had sought to represent on canvass, or in a montage, a scene that would connect these two events and the two embattled crowds: One could have imagined a scene in which the depositors of the banks were marching on the farmers, determined to get back, in repayment, the savings that had been converted, by the banks, into loans to farmers. Cicero caught the connection when he remarked on the passion to cancel debts: What is the meaning, he asked, of an “abolition of debts, except that you buy a farm with my money; that you have the farm, and I have not my money.”
In 1934, that liberal paragon, Justice Louis Brandeis wrote for the Court in striking down a statute that sought to prevent the foreclosure of farms, in effect, by dispossessing the creditors. (Louisville Bank v. Radford) Even during a time of high stress, the liberal political class at the time recognized the injury that would be done by undoing the obligation of contracts. Not only was there an injustice to the people who had put their own savings at risk. There was also the danger that investors trashed in that way would have no incentive any longer to hazard their money in loans to people of modest means.
The Great Depression: a bank failure in progress
That sense of the connectedness of things seems to have been lost on the political class of the Left in our own time. And my own sense of what has been driving the anger of people in this election year is an awareness, taking hold, that the political class has truly lost that recognition of the things that connect us across lines of class and income; that they have a truncated view of the economy – and therefore of the world. The administration would undo the contractual obligations of Chrysler, circumvent the laws of bankruptcy, and give preference to the auto unions over the bondholders. And there seemed to be little sense of the damage being done to ordinary people who had pensions and savings at stake in those bonds. Political language is often overheated, but there is nothing overstated in the sense now abroad that this election offers a genuine crisis, a moment of judgment and turning. But apart from the arguments now familiar, I’d suggest that what has been notably missing from the political class of the Left is what a Catholic teaching might have supplied in overcoming that partisan and truncated view of “the economy.”
Leo XIII: respecting the rights of workers and owners
Americans at the Founding took their primer on the rights of property from John Locke in the Second Treatise on Civil Government:
A man would have a claim to the fruits of the labor done with his own hands – but not of course if someone else owned those hands. The claim to property began with the rejection of slavery and the affirmation of the natural freedom of human beings, those distinctly moral beings who could understand the rightful and wrongful uses of their property. But it is curious that so much attention has been given to John Locke and not to the filling out of the argument offered by Leo XIII. The encyclical Rerum Novarum (1891) is usually marked for its concern for working men and women in the industrial age. And yet, strangely overlooked has been the pope’s fuller understanding that natural rights are involved on the side of owners as well, and that certain attempts to inject the power of the state in the name of equity will simply enlarge the powers of the state and do nothing to improve the condition of working people. As Leo XIII put it, “when a man lives sparingly, saves money,” and acquires a business, that business is “only his wages under another form.” And so, as he said, the socialists:
In the name now overcoming inequality, the Left has engineered an extension of the powers of the government: There would be a national takeover of medical care, meaning the political management of medicine, with its usual attendants of price controls and rationing. And there would be further controls over banking and credit, all pointing to a world in which investment would hinge ever more on political connections, not on the power to persuade investors weighing the risk of their own money. It all rather bespeaks a political class who have made politics their vocation; a political class with little experience in business, or in the world that most of us inhabit.