It has been far too long since I was at college to remember all of the theories and philosophical underpinnings of communism and socialism. But all the theoretical stuff aside, and “on the ground”, as the surveyors say, I am not sure I see a lot of difference between them except in degree.
Both hold that the state is an essential intervenor in the economic affairs of men, if anything like economic parity, even relatively speaking, is to be achieved. Both tend to see economic disparity as evil (in a secular sense of “evil”) in itself.
In practice, however, it does not appear to me that either has ever gotten it done. No matter what, there is always a class that has all the power and the lion’s share of the resources. In the old Soviet Union, they called it the “nomenklatura”. In “true” communist states, the privileged class gains economic privilege by ruling. In “pure” capitalist states, the privileged class gains economic privilege by owning. Modern Socialism, in practice, tends to have some of both both. So does modern Capitalism. But there is always a “nomenklatura”, or privileged class.
It has seemed to me that the real issue, and perhaps the only (hazy) dividing line between Capitalism as it really is and Socialism as it really is, is the situation of the middle class. Those societies that think of themselves as “Capitalist” tend to tax the middle class less and expect it to provide for itself in most things. In those societies that think of themselves as “Socialist”, the middle class is more heavily taxed and expects the government to provide more. It does seem that in Socialist societies, a relatively greater portion of the middle class is part of the government, whereas in Capitalist societies, a relatively greater portion of the middle class is in the production end of things.
Believing as I do that neither true, theoretical Capitalism nor true theoretical Socialism really exists, it seems to me that the question is simply the degree to which the state is “hands on” or “hands off” the economic lives of people who produce.
“Rerum Novarum” was written a long time ago, but its themes recur in later encyclicals. Pope Leo XIII expressed not so much his belief that either Socialism or Capitalism is bad per se, as his belief that peoples’ lives should be as independent as possible. Thus, he opposed dependence on either the state or corporate entities. He firmly believed that the truly needy; those who could not help themselves, should be assured a decent life by a combination of state help and charity. He also felt that those who could work should have their efforts enhanced by the widest practical individual/family ownership of productive assets. In his day, that meant land or shop ownership. In our own, productive assets could be land or shop ownership, but are more often other things.
Viscerally, I am attracted to the notions of Leo XIII, Pius XII and JPII, all of whom said essentially the same thing. People such as G.K. Chesterton, C.S. Lewis and Hillaire Belloc expressed it in the politics and economics of their own times. But it must be recognized that it’s much more complicated in the economies of today. Still, it seems clear to me that the principles are still sound. I do not find high taxation resulting in extreme difficulty in acquiring widespread individual wealth an attractive situation. Nor do I find total wage dependency and consumerism attractive.
It does strike me as odd that Catholics, on here and otherwise, tend to argue on the far ends of both Capitalism and Socialism, seeming not to realize that neither really exists, while the social encyclicals go largely ignored. Possibly someone has written wisely on how the approaches of the Popes might be applied in a modern economy. Perhaps I’m too provincial, but I have not seen such a work if one exists.
I will say that the change from “defined benefit” to “defined contribution” retirement plans seems to me a step in the right direction. That’s a shift from dependence on the corporation to independent ownership of productive wealth. Risking the wrath of the left, I will say that the partial privatization of Social Security would have been another. That would have been a shift from dependence on the state, again to independent ownership of productive wealth.
Perhaps someday someone will write the truly Catholic book on economics, and perhaps someday there will be a truly Catholic approach to it.