In his continued misrepresentation of papal teaching, RCIA4 turns on Rerum Novarum in his haste to discredit the free market.
.
Hi Abu!
You gave a great outline of the context within which* Rerum Novarum* was writen and promulgated.
I now would like to demonstrate to you and others the extreme difficulties which can emanate from an interpretation of that document as has been done by RCIA4.
In Australia in 1907 a High Court Judge delivered what is now referred to as
The Harvester Judgement. It was delivered by
Justice Henry Bourne Higgins,m who, despite being an astute and leaned Judge, passed into infamy because he, unwitingly at the time, pitted Labour against capital for nearly 80 years.
I linked to a Wikipedia article on the Harvester Judgement, but, of course, the issue goes much deeper than that article explains. The article does point out, however, that Justice Higgins based his descision on Pope Leo’s
Rerum Novarum in attepmting to establish what was a “fair and just wage”, or, as it became known in Australia, a “Basic Wage”. He arrived at a figure that supposedly would support a man with an avergae sized family.
It all sounds fair and reasonable. However, what is necessary as being “just and fair” for one set of circumstances is not necessarily “just and fair” for another set of circumstances. For example, how can a pre-dertermined “average wage” be “just and fair” for a family of, say, four, and yet be expected to be “just and fair” for a family of ten? And how can it be “just and fair” that one enterprise must pay what someone determines as being “just and fair” when it may not even be able to afford what someone determines is “just and fair”. What the determination did, was to institutionalise unfairness and great injustice.
The capacity to pay for enterpises is as varied as the number of enterprises and what is “just and fair” for workers is as varied as the number of household circumstances!
The system put into place gave great power to trade unions and they used that power to coerce greater and higher rates of pay from employers, regardless of capacity to pay.
Trade Unionism in Australia ran rampant until it was curbed in the 1980s. Businesses went broke because a centralised wage fixing system forced them to pay a predetermined wage rate, regardless of capacity to pay.
The result became an inflexible labour market and a permanent pool of unemployed, who were either unskiolled, or young and not worth the “just and fair” wage as determined by a centralised wage fixing system.
Poe Leo’s encyclical was an appeal to charity. However, that appeal did not take into account the various economic circumstances that wage earners and producers find themselves in from time to time. It did not take into account the elasticity of supply and demand and gave no flexibility for enterpise bargaining when it was desperately needed by industry. The result was stagnant economic efficiency, poor allocation of resources and a loss of market signals for labor and industry both and great industrial unrest for many years.
More here.
The salutory lesson for all is that free markets serve both labor and capital better than any centralised control system. The proof is writ large in Australia’s economic development since the centralised wage fixing system was put aside.
In fact it hails the importance of private ownership:thumbsup: