World Economics & the Church, Part One

I’m reading what I consider the single best expression of the social teaching of the Church, the two volume work by Rodger Charles S.J., published in Great Britain in 1998, Christian Social Witness and Teaching: The Catholic Tradition from Genesis to Centesimus Annus (Volume 1) & (Volume 2) The Modern Social Teaching Contexts: Summaries: Analysis; and in Volume 2, I just read a section on the world economic crisis of 1929-1934, and the parallels to what we are now going through are astounding.

This will be the first of three parts excerpted from volume 2 of Fr. Charles’ book.

An excellent review of the full work is at the Acton Institute’s Journal of Markets & Morality, and the best place to find both volumes is either through Abe Books or through the publisher, Gracewing Publishing.

In the excerpt, substituting the United States for when Britain is mentioned and New York for London helps with the current parallels.

Here is the excerpt.

"3 The world economic recession 1929-34 and the Church

"(i) The course of the recession

"Fascism in Italy and Germany was a rising cause for concern in 1931, but the economic crisis loomed larger for most people, for there was hardly a household in the industrialized world untouched by it, while those in the less industrialized world who supplied raw materials for the industries and food for its people, were also badly hit. Central to the multiple causes of the problem was the shift of economic power away from Europe as a result of its expending its wealth in the recent fratricidal war. Before it, Europe’s, and especially Britain’s, trade and finance had done more than anything else to create a world economy. It was one which served the needs of British and European capitalism first of all, but it could not do that without developing sinews which helped as well as exploited, other nations. In particular, Britain’s need to invest and sell overseas, and the working of the gold standard in this context, expanded international trade and finance in a manner which, despite periodic slumps, had been consistently self-sustaining and it was on it that the international economy largely depended.

"But post-war, many of Europe’s industries were either unable or unwilling to adapt to compete on the same scale as before the war and therefore their trade declined. Meanwhile, paying for the war had drained much gold away to America, which was less dependent on international trade and investment and therefore not playing the same role as Europe had in stimulating the international monetary and trading systems. These were still very dependent on London which was looking forward to the return of ‘normality’, that was, to the pre-war status quo and the gold standard. It was a vain hope since the economic strengths and relationships on which that normality had depended were no more.

"On top of all this were the political dislocations resulting from the peace settlements that had undermined Europe economically and politically, and the imposition of reparations which did not help rebuild the long-term strengths of the system. It took some time for the full effects of these distortions to produce their full effects, and for much of the 1920’s it seemed as if the situation might redeem itself. There had been a boom 1919-20 and though this had given way to slump 1920-1, by the mid twenties the situation seemed set fair. In 1925 Britain had returned to the gold standard, with every major economic power except France following suit within the year, France joining them in 1927; in 1925 Stresemann of Germany and Briand of France had negotiated the Treaty of Locarno which promised peace and prosperity to Europe." (pp. 59-60)

(To be continued 12/23)