Tue, Feb 26, 2013 - Page 9 News List

China resurrects forsaken Catholic ideology in economic policy

By Randall Morck and Bernard Yeung

By the 1960s, most Latin American countries were avowedly corporatist dictatorships, while Lebanon’s Falangist Party gave voice to its Maronite Catholics.

Corporatism spread beyond Christendom to Turkey under former Turkish president Mustafa Kemal Ataturk and, using aliases to hide its Catholic provenance, to other Arab countries. Elite Catholic schools taught corporatism to independence leaders in French, Spanish and Portuguese colonies.

The prominence of corporatism in Catholic education is remarkable. In their book Young Trudeau, Max Nemni, Monique Nemni and William Johnson quote from former Canadian prime minister Pierre Trudeau’s 1930s notes on corporatism from a class at the elite Jesuit academy where he studied: “The democratic principle has contributed to the undermining of civilization by impeding the development of the elite.”

“Liberalism leads to excesses: to unemployment, anarchy. The ideal is corporatism, which does not separate people into parties, but unites their interests,” Trudeau wrote.

Today, Catholic and Islamic countries, as well as former French, Spanish and Portuguese colonies — all of which tend to have corporatist institutional residues — also correlate with depressed living standards. That is not surprising: corporatist institutions plausibly retard development. Sanctified hierarchies stifle initiative.

Pius XI thought that “the leadership and teaching guidance of the Church … in this field also precluded abuse of authority.”

It seems to have evaded him that unchecked power might be more spiritually demeaning than competition. Corporatist subsidiarity lets the top of the hierarchy determine its own powers, while banishing competition and lauding private property generates inequality and inefficiency simultaneously.

As these failings grew manifest, the Church backpedaled in the 1960s and former Pope John Paul II finally repudiated corporatism. Today, few Catholics even know about the doctrine.

However, interwar corporatism has been resurrected. Forsaking socialism, China did not adopt capitalism, but kept the Chinese Communist Party atop a self-legitimized hierarchy.

True, China’s central planners no longer set wages, prices, interest rates and quotas, but party cadres, not market forces, control the economy’s commanding heights. Industry ministries oversee vertical swathes of firms. State-controlled banks allocate capital. State-owned enterprises, or their subsidiaries, dominate key markets, as in interwar Italy. A subsidiarity principle even grants senior cadres discretion in delegating powers to underlings. How odd of former Chinese leader Mao Zedong’s (毛澤東) heirs, however accidentally, to resurrect this forsaken Catholic ideology.

China’s rapid growth has rescued multitudes from abject poverty and quasi-corporatist arrangements are clearly better than Mao’s Great Leap Forward and the Cultural Revolution. However, that is faint praise. Corporatism elsewhere begat vast inequalities, corruption and dictatorships that eventually proved unsustainable.

The saga of corporatism cautions economists against dismissing ethical concerns about markets. However, it also warns theologians that economics contains real truths, however unattractive. Finally, it counsels Chinese technocrats against dogma-driven economic policies.

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