The Economic Religion of Michael Novak
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The Economic Religion of Michael Novak: Wealth Creation vs. the Gospel, as in Using Catholicism to Prop up Neoconservatism

by Mark and Louise Zwick

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http://www.cjd.org/paper/wealth.html

There has been tremendous interest in the March April 1999 issue of the Houston Catholic Worker on Pope John Paul II's condemnation of neoliberalism in Ecclesia in America, not to mention those who were so excited to discover the document itself in all its richness.

Most of our readers understood clearly that neoliberalism, the current economic system hurting the people of Latin America so badly (as well as Eastern Europe, Africa and much of Asia) was condemned. But many asked again, what is the exact connection between the Catholic thinkers we mentioned as representative of this neoliberalism? Is neoliberalism really the same as neoconservatism? Some neo-conservatives have been trying to disassociate themselves from the word.

Advocate of Condemned Economics Helps Dedicate Catholic Business Center

Recently, Michael Novak came to help dedicate the Business Ethics program of our local Catholic university.

One Catholic Worker sarcastically remarked that having Michael Novak, along with heads of oil companies and investment firms, dedicate a Catholic business ethics department and explain ethical business practices is like inviting Hugh Hefner to dedicate an institute on the sacrament of marriage.

Another CW wondered about whether this comment might be uncharitable. The conclusion was that the truth of the reailty in our world obligated us to speak in truth and solidarity with the cry of the millions of poor people who suffer so much from neoconservative/neoliberal policies, representatives of whom arrive daily at Casa Juan Diego.

Corporate Governance

The conference in which Michael Novak helped to dedicate the new Business Ethics Center at the University of St. Thomas was called "On Corporate Governance." Novak published a small book with this title in 1997, funded by the Pfizer Corporation and published by the American Enterprise Institute. It is available in its entirety on the Internet.

In what in the preface he calls a theology of the corporation, Novak combatively takes on those who want to "humanize" the corporation, that "tiny minority of publicly owned firms" which "produce more than half of America's economic output." We read this supposed theology and ethics of corporate governance from cover to cover. It was impossible to find even the slightest echo of the Gospel or of the great teachings of the Popes of the last century in the book.

Here Novak mocks what he calls the former socialists and even plain "progressives" who want to "lasso" the corporation, "break its spirit," "tame the business corporation, make it sit up and dance, perhaps do tricks to music."

He has special condemnation for environmentalists and those concerned with children's rights and mentions that some corporate leaders are still being "rolled, played for patsies" by these people.

Never in On Corporate Governance: the Corporation as It Ought to Be does Novak mention the problem of slave labor of children throughout the Third World in the factories of these corporations or the problems of environmental destruction. Perhaps he did not realize that Pope John Paul II, in whose name he so often speaks, has insisted more than any Pope before him on the need to protect creation (Centesimus Annus 37ff.), that it is inadmissible that a privileged minority waste resources destined for all.

In Novak's chapter on "Appeasement," his business ethics becomes clear. While it may be wrong for a CEO to be concerned about environment and children, it is explicitly "wrong today for executives to conceive of their job narrowly, merely in its business aspects, without paying attention to its political setting, and even more so, to its setting in the world of ideas." Above all, executives must never give in to pressure and respond in "appeasement" as the sad CEO did, who actually agreed to broaden "stock-option participation to unite the investment interests of workers with those of the corporation, open up paths of decentralized entrepreneurship for employees (p. 27-28).

Novak's presentation of the "The Corporation as it Ought to Be" might have been a textbook on economics written by Machiavelli. He goes to great lengths to explain why there should have been no checks and balances on the power of a CEO. Power is what he most needs to do his job and power he must have: "Executives must be allowed to execute…They must be propelled to step forward to create wealth."

The Green Worm of Envy

Whereas the older version has it that the poor are lazy, Novak claims that they are "envious" of the successful. He writes, "Envy never speaks its own name; rather, it hides behind such names as equality, fairness, and even (alas) social justice." (Thomas Rourke, A Conscience as Large as the World: Yves Simon versus the Catholic Neoconservatives, Rowman and Littlefield, 1997, p. 242).

In response to those who wonder about the terrible economic discrepancies in our society and in our world, Novak responds in On Corporate Governance in the same way that he does in several other books-he brings out the "green worm of envy." Here he comes again with that phrase: "Envy never travels under its own name; it prefers prettier names, good names to which it has no right: "justice," "fairness," and the like." (p. 25)

The immigrants who come to us each day, casualties of Novak's economic policies, are not envious. They are in despair.

The Problem

The problem with Michael Novak and fellow neoconservatives George Weigel, Fr. John Neuhaus and Fr. Robert Sirico is this: They use Catholicism as window dressing to promote an economic system based solely on self-interest, a system that has nothing to do with the Gospel or Catholic social teaching. They replace the heart of Catholicism with Adam Smith and Max Weber (virtue comes to society only through self-interest; the Gospel is a private affair).

These men have spent the last twenty years promoting the neoliberal approach to economics that is condemned by John Paul II in Ecclesia in America.

Their attempts to separate themselves from the neoliberal tragedy in the Third World fly in the face of the facts. Michael Novak, for example, along with the others, traveled extensively to Latin America and Eastern Europe during these years promoting this ideology in the name of the Church. Those who created this devastating economic reality must take some responsibility for what they have wrought.

A Little History

At the time when there was a great struggle over making the world free for democracy and capitalism, as opposed to Communism, Pope John Paul II played an important role. It was a terrific struggle. Catholic neoconservatives also tried to play some role in this struggle. Michael Novak worked with the administrations of several presidents, including Carter, Ford and Reagan.

While this worldwide struggle for freedom and democracy was going on, a revolution in capitalist economics was also going on. Capitalism in the United States has taken several forms over the last two centuries. The economic brutality of some of the robber barons of the nineteenth century, where workers were treated like chattel, was softened by a necessary reaction to the crisis of the Great Depression of the '30's. The U. S. government then took a stronger role in economics for the protection of the weak. There was even discussion of such radical ideas as that everyone might have a job. This did not happen. (James K. Galbraith, Created Unequal: the Crisis in American Pay, The Free Press, 1998).

With later crises in inflation, a model called neoconservatism developed which was a change from the laisssez-faire capitalism of the 19th century. The new model is not laissez-faire-do whatever you want as a capitalist in perfect freedom-but government-protected economics for big business. It doesn't work so well for small business. This model promises that the wealth of the few will trickle down to the poor.

Somehow, neoconservatives say, anyone who suggests other nuances in capitalism, for the benefit of the poor and the weak, is a socialist or Communist.

The authors of this article, like Dorothy Day and Peter Maurin, do not favor "big government," but do favor a more just economic system.

In order to popularize this economics, Catholic neocon-servatives advocated it in the name of John Paul II, even though their inspiration came instead from Adam Smith. They began to speak of wealth creation as a participation in the work of the Creator, as a participation in the eternal life of God (Michael Novak, Este hemisferio de libertad [This Hemisphere of Liberty], p. 61).

The theme of creativity as a participation in the creation of God comes from John Paul II, it is true. However in the Pope's writings there are always three qualifiers which are missing from the neoconservative's comments: 1) The Holy Father insists that this creativity must be related in every case and each step of the way to the eternal plan of the Father. (See David L. Schindler, Heart of the World, Center of the Church), Eerdman's 1996) 2) Each papal document emphasizes that this creativity is for all workers, not just CEO's and that labor has priority over capital in creative work 3) this idea is related to the paschal mystery in Christ (See John Paul II's Encyclical Laborem Exercens).

The level to which this concept, presented outside its Christian context, has been misunderstood, is reflected in the quotes of Guy Kawasaki, former "chief evangelist" for Apple Computer, who writes a column in Forbes magazine. He describes the role of a CEO as one who can "create like a god, command like a king, and work like a slave."

What is Neoliberalism?

A review of Catholic neoconservatives' economic writings reveal several key points upon which they insist:

Profit-making and wealth creation are the essence of democracy. Neoconservative (neoliberal) economics requires democracy and democracy requires neoconservative economics. Milton Friedman, of the University of Chicago, not a Catholic, but closely associated with Michael Novak in the development of economics in Latin America, redefines democracy. He has gone so far as to say that any government that pursues antimarket policies is being undemocratic, even if the people support the government's policies. (See his Capitalism and Freedom).

Government protection of the weak and vulnerable must be replaced with government protection of corporations. Government must nurture market economics rather than schools, families and medical care and food for local people. This is the best way to promote economic growth.

The common good is redefined to mean only the private good of individuals based on self-interest, which someday may trickle down to the poor. According to Novak, in our complex world, it is impossible to know what the common good might be; therefore the solution is to work for one's own self-interest and someday that will help everyone. (See Michael Novak, Free Persons and the Common Good, 1989).

New Theology, New Religion?

Novak seems to believe that we have to abandon Catholicism as we know it. He actually says in The Spirit of Democratic Capitalism (published by the American Enterprise Institute), that "Democratic capitalism calls forth not only a new theology, but a new type of religion" (p. 69). This new religion, as defined by neoconservatives, emphasizes wealth creation, which they say the Catholic Church has neglected for so long. George Weigel seems to try to turn the Gospel upside down in his chapter, "Camels and Needles, Talents and Treasure: American Catholicism and the Capitalist Ethics," in Peter Berger, ed., The Capitalist Spirit: Toward a Religious Ethic of Wealth Creation, (ICS Press, 1990. He demands to know what the leadership of the Church are doing "that could be construed as a moral, theological, and spiritual legitimation of efforts to create wealth."

The authors of this article prefer the religion of the Gospels and the Tradition of the Church founded by Jesus himself.

As one of our poor immigrant guests, an older man named Bonifacio who can hardly hear, expressed it the other day when people from some "new" religions tried to proselytize him: "I don't want anything to do with a religion started by a gringo. I believe in the Church started by the Lord Jesus Christ. (We recommend Bonifacio, a good worker, to a parish who might need a responsible custodian).

Novak's "new religion" is really quite different from John Paul II's Ecclesia in America: Encounter with the Living Jesus Christ: Conversion, Communion and Solidarity as the basis for all of life instead of wealth creation (January 1999).

Novak may have been successful in his evangelization of people who see the Kingdom as made up of people getting wealthy, (even though he always qualifies his neoconservatism as being just short of the Reign of God, not the fullness).

It is true that wealth has been created and accumulated since Novak and company began presenting these economics in the name of John Paul II. The U.N. Development Program found that the assets of the world's 358 billionaires exceeded the combined income of countries with 45% of the world's people

The economic system where all the monies go to a few and where almost everything is controlled by "anonymous" capital (banks, foundations, university endowments, etc., rather than persons) may properly be labelled "Marie Antoniette" capitalism: Let them create wealth! (Jeff Gates, The Ownership Solution Addison Wesley, 1998, p. 23).

What has resulted from the policies of neoconservatism/neo
liberalism is not the workings of the absolutely free hand of the market, not absolute liberty, but a global market protected by governments and international institutions like the World Trade Organization, the World Bank and the International Monetary Fund, who control Third World economies with an iron hand.

When a tiny fraction of citizens (1/4 of 1% of the people) make almost the sum total of political contributions, one cannot expect the poor worker to be favored over the corporation.

What is Capitalism?

Perhaps some of our readers thought that capitalism meant a system of markets, private property and profit for your business. That is absolutely not capitalism, says Novak.

Novak makes it clear in several of his books that "to have a system of markets, private property and profit" does not constitute capitalism. These "minimum characteristics are common to all traditional precapitalistic economies." (Este hemisferio de libertad, p. 108-109). He goes on to make other various conditions for the existence of capitalism which favor neoliberal policies, the kinds of policies which have created the enormous multinational con-glomerates which control our world today and have put so many small firms out of business, especially in the Third World.

Big Government Foes seek Government Protection

His recommendations are phrased in acceptable language, but when one looks at the results of these recommendations, they have a different meaning. Novak cites three necessary conditions for the existence of neoconservative capitalism: "Capitalism begins when the right to personal economic activity is protected and nurtured, when economic activities are liberated from state opppression, and when the cause of wealth, the creativity of the imagination and the mind of each citizen can count on the freedom to which it has a right" (Este hemisferio de libertad, p. 108-109).

Since these recommendations are coupled with insistence on privatization, removing all government care for the poor or for children, one wonders of whose freedom and whose protection we are speaking.

Neoconservative/neoliberal capitalism is not the capitalism of the Mareks, the Cordúas, the Linbecks, or the Strakes in Houston, or of Zwicks' Department stores, for that matter.

Fortuitous Donation

Michael Novak's book, Este hemisferio de libertad (This Hemisphere of Liberty), published in Mexico by Diana in 1994, was donated to Casa Juan Diego with several bags of clothing. We noticed as we read it in Spanish that in chapter one he said it was especially revised for Catholic Latin America.

Este hemisferio de libertad provides many examples of what Novak himself describes as a new articulation of morality, one which had been lacking in Catholic teaching. Quoting Adam Smith and David Hume, (not Catholics, but thinkers from the Scottish Enlightenment in the eighteenth century), he teaches that self-interest and self-wealth-creation are the methods by which virtue is brought into society, order is brought into economics, into the whole of life, even in its moral and cultural aspects. On page 101 he expresses his formula: "Pues sí, the pursuit of riches represents a fundamental improvement in human understanding of the way to virtue."… "Hume, Smith and others perceived correctly that wealth is a useful way to open to all…the way to virtue."
For a Christian it is shocking to hear that self-interest and wealth creation must be the basis not only of our economic life, but even our moral and cultural life.

A New Moral Guide?

Novak, with his inimitable style, is more seductive than Salome in drawing people to accept what might be called a capitalism with the gloves off. He puts this in prayer form in Business as a Calling, published in 1996 by The Free Press as a vade mecum for Catholic business people.

Novak's writing is so smooth, that at first glance one does not notice that Business as a Calling is totally divorced from Catholic social teaching and the Gospel. The problem with this book is that it allows CEO's to think they are doing the right thing when they are not. In the same way, Este hemisferio de libertad allows Latin American people in power to garner wealth in the name of economic development.

Novak's writings give per-mission to put wealth creation before concerns for the worker and do not address unfair trading practices, especially in the Third World, but also in the United States. The practices of a company like Walmart, for example, to move into an area, lower prices until the small business are put out of business and then raise them again, represents unfair trading practices. Transnational companies take advantage of small ones in poor countries, squeezing them out.

How odd that Novak does not make reference to Catholic social teaching on these topics. He had only to look to Laborem Exercens, No. 79, to find where John Paul II states so clearly that "The highly industrialized countries, and even more the businesses that direct on a large scale the means of industrial production (the companies referred to as multinational or transnational), fix the highest possible prices for their products, while trying at the same time to fix the lowest possible prices for raw materials or semimanufactured goods. This is one of the causes of an ever increasing disproportion between national incomes."

Misunderstanding Dorothy Day

In the April 1999 issue of First Things Michael Novak passes off Dorothy Day as being hopelessly "eschatological," which means, in his own words, "that the world is sinful, broken, even adversarial" and that Dorothy chose to light within it "the fire of the love of God while having as little to do with the things of this world as she could (p. 23).

It is rather incredible that Novak puts Dorothy Day in the class of those who do not believe in being active in the world, but rather believe in "pie in the sky when you die," so often attributed to Christians by Communists.

It is impossible to split Dorothy into eschatological (concern for final things) and away from the incarnational (transforming the world with the Gospel). Dorothy was both. She believed totally in heaven and totally in transforming society and she did not believe in separating the two.

There was no dualism in Dorothy. She always said, "It is only what we do in and through Christ that is of lasting value." She meant this for every facet of life.

Dorothy is different from Michael Novak in that she believed in taking Jesus to the marketplace, New Testament and Catholic social teaching in hand.

Michael Novak writes that one has to leave all religious values at home in the closet because it is "inappropriate" to bring religion to the marketplace in a pluralistic society. (The Spirit of Democratic Capitalism, p. 67). Instead of the Bible Novak approaches society with Adam Smith's The Wealth of Nations and Max Weber's The Protestant Ethic and the Spirit of Capitalism in hand, evangelizing by the promotion of enlightened self-interest.

In Novak's scenario, the world will not be saved by love or beauty, but by privatizing religion and enhancing people's ability to possess more material things; no holds barred.

The authors discovered in Este hemisferio de libertad that Novak, unlike Dorothy, states the belief that the eschatological and incarnational expressions of Christianity are "polar opposites" and that it thus is not possible to operate in a unity of faith and everyday life, especially in economics.

This has left Novak in the untenable position of supporting corporations and an economic system which use slave labor. He would never say that he supports slave labor; however, as a matter of fact, the corporations he defends use slave labor.

Real World of Slave Wages

People were quite surprised a couple of years ago to discover that Kathy Gifford's clothing line was made by slave wages. The world was appalled that Gifford, almost a household name (and her football husband's name, too), was making money off her clothing line from clothes made by slave labor. People in Latin America were paid a pittance to make that clothing, for which she received a sizeable profit.

At the same time people learned that the Gap store was selling shirts made in Latin America (El Salvador) for around $25.00. Again, the world was enraged because a teenage girl was paid $.16 to make the shirt.

Young workers in maquiladoras have no freedom, no opportunity to exercise creativity, are not allowed to speak or to go to the bathroom, let alone use their inventiveness and other God-given gifts.

The great American way responds to slave wages by simply saying that you must buy your clothing from other stores: Sears, J.C. Penny, Walmart, etc., etc., that don't use slave wages. But then it was discovered that this clothing was made by slave wages, also-in fact, it appears that most clothing purchased anywhere is made by slaves.

This creates quite a dilemma: How can we buy clothes? Or worse yet, how can Catholic business people sell clothing without participating in slavery? That would certainly be immoral. Would pastors refuse the Eucharist to those who have stock in slave labor companies?

Our first orientation to slave wages began some years ago as immigrants told us their reason for coming to the United States. They had been working in Honduras in First World (Europe, U.S.A., Korea) factories and were paid $.37 cents an hour- about $14.00 per week, ironically, what the average manufacturing job paid per hour in the United States.

The immigrants responded that on this salary they could survive if they only bought food and had nothing for rent, or they could pay rent and have nothing to eat. Don't mention clothing or medication. A further irony: these immigrants to the United States were accused of being greedy people for migrating by the very same people who were creating wealth for themselves through paying slave wages.

Child Slavery

The most significant and undereported trend in the global market is the proliferation of child labor (Rourke, A Conscience as Large as the World, p. 186). As the multinational corporations expand through subcontracting arrangements, so does the enslavement of children. The Antislavery Society estimates that there are close to 200 million child laborers producing goods for the world economy. A recent study of Australian imports showed that sixty items from food products to clothing involved the use of child labor.

Frankly, the editors can't believe that there are three-year-olds working in sweat shops, but this is what the reports say.

Female Slaves

Many young women have become enslaved in the global market, assisting in the manufacturing of very respectable products. As the increasing separation between service and profit continued to expand, plants licensed by Nike, Inc., which makes tennis shoes, paid an average female worker in Indonesia approximately $0.82 per day in the 1990's. The shoes were made for less than $6.00 and sold for $75 to $135 in the United States. From its profits Nike paid Michael Jordan of basketball fame $20 million-more than the wages paid to all the young women whomade the shoes (Rourke, p. 187).

Some Catholics would say that the gap between the work provided and profit made is unconscionable. Michael Novak is not one of them.

We would say to Mr. Novak that wealth creation may be OK, but not on the backs of the poor.

Nineteenth Century Abuses Repeated

It is tragic that we don't have a new Charles Dickens to journal and dramatically describe the re-invention of the abuses of the 19th century. That century has returned with a vengeance: child labor, chimney sweeps, dangerous conditions and all. A new colonialism has arrived with conquistadores worse than the first. People believed that the progress of civilization through legislation had removed the devil of 19th century industrialism, but the devil has returnedwith seven more, worse than the first.

A historical example of abuse of workers which Michael Novak overtly endorses in that of Andrew Carnegie. In his book, Business as a Calling, he presents Andrew Carnegie not only as a model to follow, but borders on canonizing him. He even provides a lengthy explanation about Carnegie's involvement in the slaughter of workers at his Homestead Steel Plant. According to Novak, Carnegie repented.

Carnegie retired at age 66 with $480 million in the bank and went on to build 1,946 libraries in the United States (and 865 in other lands). Novak attacks unmercifully the clergy-"the good reverends"-who raised doubts about this whole process of wealth creation and who would deny people like Carnegie the "private opportunity to realize their calling."

Tens of thousands of workers in Carnegie's plants wished that he had discovered his calling earlier, especially when they were working for slave wages and at long hours.

Mark's seminary professor and author, Msgr. Anthony Furst, spoke of the work required for Carnegie to gain this wealth in order to realize what Novak calls his calling and vocation. He described his father's work in a Carnegie factory: "I never saw my father from Monday through Saturday. He was gone before I got up and we were in bed when he came home." It was not only that the hours were interminable and the wages miserable, but the effect on the family was tragic.

Novak claims that Carnegie didn't inherit this money, as he was born poor, and that he didn't rob banks to get rich. That is true. But he did rob the workers and stolen goods never belong to the one who steals.

It is too bad that Carnegie had not paid his men the living wage that was their due in justice rather than waiting to make restitution to society at a later date for monies that were not rightly his.


It is so hard to understand how Michael Novak can recommend such people as models. Perhaps a key to this understanding might be his inspiration by Max Weber. Novak's book, Business as a Calling, was inspired by Weber, who wrote of "Politics as a Vocation." The first major quote in Novak's book is taken from Weber (p. 17):

"The earning of money within the modern economic order is the result and expression of virtue and proficiency in a calling…. Now it is unmistakeable in the German, and more clearly in the English "calling," a religious conception, that of a task set by God…."

How strange that Novak would to go Weber for his definition of vocation instead of addressing his Catholic roots.

Like Smith, Weber saw a "calling" in terms of wealth creation. Sociologist Weber did not spend much time answering critics of his economics, critics who saw that wealth creation without regard for the workers would often be tainted by greed. Novak quotes his words from The Protestant Ethic and the Spirit of Capitalism, where he says, "The assertion that capitalism promotes greed" belongs in the kindergarten of sociological opinions." Apparently Novak does not take critics seriously either

In his work The Wise Man and the Politician Weber presents his famous distinction between the ethic of conscience and the ethic of responsibility. According to Weber, the ethic of conscience is that of the heroes, the prophets, the saints who orient their conduct to ethical norms which go beyond the call of duty. The ethic of responsibility is that of the politician who has the concern of gaining power and keeping it. All means lead to this end-power-making a conquest of it, exercising it, protecting it. It is enough for the politician to take responsibility for his decisions, without paying any attention to the moral standards to which prophets submit themselves. In his discussion of this seeking of power for the mass of men who couldn't possibly be heroes or saints, John Milbank contends that the Machiavellian assumptions of modern political theory and modern economics are intrinsic to the constitution of Weberian sociology (John Milbank, Theology and Social Theory, Blackwell Publishers, 1990.)

With Novak's emphasis on Weber, one can only surmise that he has adopted this dualism, rejecting the call of holiness for every Christian, even those who work in the world.

In Weber's schema those who try to live the Sermon on the Mount, Matthew 25 in discipleship are not living in the real world-this call is only for the few. Vatican II and Ecclesia in America disagree.

Bourgeois Revolution?

What the public did not know was that slave wages in maquiladoras (plants in Latin America which belong to the U.S. and other wealthy nations) were the fruit of what Michael Novak calls in Este hemisferio de libertad the "bourgeois revolution" (p. 99) which he did so much to promote and which he claims helps so many and is such a source of virtue. Novak calls his revolution the bourgeois revolution. These are his words.

With this bourgeois revolution a new colonialism has emerged as bad as the first.

One reason that slavery thrives is the absence of national laws in so many countries to protect them. The laws relating to services have been removed by those who recommended privatization and the protection of liberty for business. Other international institutions created to protect these transnational businesses are controlled by those who have the most wealth. Small countries are no longer able to protect their citizens (Rourke, p. 186).

Agent Provocateur

The authors were surprised in the early '90's to see on 60 Minutes the exposé of how the maquiladoras were promoted by the U.S. government throughout the '80's. Companies were given tax-free land and the right to operate with impunity throughout Latin America. This meant no help for the local community. U. S. AID promised assistance in blackballing all labor leaders, so there would be no trouble with wages. We heard them exhort companies: "You must come down and take advantage of these cheap wages and tax-free zones." The conditions of low (slave) wages and no-tax zones were tied to any financial aid.

We did not know at the time that Michael Novak operated almost like an agent provocateur of this "bourgeois" revolution in Latin America, which resulted in slave wages and the elimination of public services.

We had heard that he had traveled and spoken extensively all through the 1980's in Latin America and Eastern Europe, promoting the neoconservative economics which was given such encouragement by the Reagan administration, now adopted by the Clinton administration. We didn't know much detail about his role in convincing these governments to adopt what is now known as neoliberalism until we read Este hemisferio de libertad.

In this book, Novak himself describes the process. On page 15 he emphasizes the countless trips he made to Brazil, Argentina, Chile, Colombia, Peru, Guatemala, El Salvador, Panama and Mexico-how many conferences he gave, the interminable and animated discussions in which he participated and the articles he published in order to make his philosophical and theological case for the economics of wealth creation.

Unfortunately, the wealth creation he learned from Adam Smith and David Hume has benefitted the few and impoverished the majority in Latin America, as it has done in other countries where it has been implemented.

Novak rejoices in this 1994 Spanish-language edition of his book, revised for a Catholic audience, that he had begun to achieve his goal, that "the economic systems of Latin America had reoriented toward new and creative horizons" (p. 7). They were neoliberal horizons. One of his first wonderful examples is Chile, during the reign of Pinochet.

Neoconservatism Imposed

General Pinochet was unable to impose without the use of force the neoliberal economics Novak so celebrated having arrived in Chile. There was much controversy surrounding his following the advice of the "Chicago boys," young Chilean students of Milton Friedman who had attended the University of Chicago, turning the whole Chilean economy to this model. Many (even thousands) of those who opposed the plan presented by Friedman in the name of liberty, or were even suspected of opposition, suddenly "disappeared." This, in the name of liberty!

Native American groups in Chile like the Mapuche continue to battle the takeover and destruction of their ancestral lands by transnational corporations, e.g., electric utilities, which with privatization replaced the government. The government was hard on the Mapuche; the corporations, even worse.

Oil companies Contribute to Novak's Salary

One has to begin by realizing that a sizeable portion of Novak's salary at the American Enterprise Institute is paid by oil companies and foundations and companies opposed to environmental controls.

In this light his insistence on the "protection and nurturing of personal economic activity" takes on a different hue.

In this light one can see more readily why Novak does not voice objection to speculators who make millions or billions when whole national economies melt down, precisely through this speculation (See Mary Lavelle's article in the Houston Catholic Worker, May-June, 1998).

Miserable History

Novak contends that the Catholic Church has missed the boat for 2,000 years, that it has neglected to develop a theology of wealth creation. It has refused in all these years since Christ died and rose to recognize that business itself is a "moral virtue," perhaps greater than any other. In fact, Novak writes that there was only misery in the world until 1800 when the ideas of the Scottish Enlightenment figures Adam Smith and David Hume began to be implemented:

"In 1800…almost everyone lived in poverty, suffered precarious health, was illiterate, and lived under tyranny. The average life expectancy was around eighteen years. In order to move from one city to another, the methods of transportation were very rough (as they had been in the time of Christ)…It was difficult to obtain glasses and, almost universally, teeth were in bad condition and dental care was almost unknown" (Este hemisferio, p. 105).

Still Miserable

Novak's description of the awfulness of life before 1800 fits almost exactly as a description of life in Central America today after his economic ideas have been implemented. The immigrant guests who come to Casa Juan Diego have terrible teeth; they often have no glasses and need them very much. They often have not had treatment for serious health problems. We are grateful to have volunteer dentists, doctors and eye doctors to assist them with these problems.

Trojan Horse of Neoconservatism/Neoliberalism

The Novak revolution has moved to the universities. Many faculty members, even in Catholic universities, are neocons, teaching economics condemned in Ecclesia in America. This is a factor missed by proponents of Ex Corde Ecclesiae.

Ex Corde Ecclesiae, a Vatican document to help Catholic universities discover and implement their Catholicity, has not been well received by presidents of Catholic universities.

Ex Corde Ecclesiae calls upon Catholic universities to collaborate with the local bishop, especially in the area of Catholic theology. This has been a point of discontent with presidents of major Catholic universities. Their universities, like so many other American universities have adopted the values of our culture that emphasize political correctness, leaving little space for commitment to the Gospels or Catholic teaching.

However, the greatest problem with Catholic universities has not been addressed. Few Catholics have ventured to criticize the dominance of neoconservative/neoliberal eco-nomics in Catholic universities.

If economics that follows a pattern of rejecting Catholic social teaching to the detriment of the poor is the dominant theory of economics in our major Catholic universities (and it is), then we have a problem much more grave than that of the bishop-theologian conflict.

This is the Trojan horse sneaking into the Catholic academic world, corrupting the innocence of our young Catholic intellectuals. The program at the University of St. Thomas in Houston was not such an unusual program. Many other Catholic universities, including the most famous, invite those indicted as harming so many poor to speak as experts.

Conclusion

The neoconservatives/neo-liberals present a utopian vision of the possibilities of their economics. Those who have benefitted from them would perhaps prefer not to notice the millions of suffering people in poor countries as a result of these policies. They may take Michael Novak as a guide and try to develop a new ethics, a new theology which no longer addresses questions like justice for workers, preferring to hide under the guise of problems of subcontractors.

Those who have perhaps been misled into believing that neoconservative economics is the full sum of John Paul II's teachings will find in Ecclesia in America, the Holy Father's report on the Synod of America which condemned these economics, a new breath of hope for all of America. Readers who have not been able to obtain a copy of the document could do so on the web here.

Houston Catholic Worker, Vol. 18, No. 3, May-June, 1999.


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#2
Quote: Most of our readers understood clearly that neoliberalism, the current economic system hurting the people of Latin America so badly (as well as Eastern Europe, Africa and much of Asia) was condemned. But many asked again, what is the exact connection between the Catholic thinkers we mentioned as representative of this neoliberalism? Is neoliberalism really the same as neoconservatism? Some neo-conservatives have been trying to disassociate themselves from the word.

Advocate of Condemned Economics Helps Dedicate Catholic Business Center

Recently, Michael Novak came to help dedicate the Business Ethics program of our local Catholic university.

One Catholic Worker sarcastically remarked that having Michael Novak, along with heads of oil companies and investment firms, dedicate a Catholic business ethics department and explain ethical business practices is like inviting Hugh Hefner to dedicate an institute on the sacrament of marriage.

This is complete nonsense from someone who obviously has zero experience in the Third World.  But that is not surprising considering the title of the paper "The Catholic Worker".  Clear communist propaganda even in the title.  It implies that the head of the oil company is NOT a worker.  I guess some people fall for these tricks because they are still being used.

I didn't finish the article after getting to the quote above.  It shows the author was an idiot.  The only somewhat capitalist country in all of Latin America is Chile, and it happens to be the most productive and equitable society.  The poorest is Cuba.  Actually, Chile is more capitalist than us with their social security system.  Their workers have a 100% chance of getting a retirement income.  My odds are 0%, at least from Social Security.

Second, oil companies in Latin America are a source of good.  Workers at plants and fields run by Europeans and Americans get much higher salaries than their counterparts in the government run companies, and they also work in an order of magnitude safer environment and also a cleaner and environmentally conscience work site.  The state run companies treat their workers like crap.  Here's a true story that the Catholic Worker won't ever tell you.  In Venezuela, in the city of Jose the Americans and Europeans set up 4 upgraders (like a refinery).  Chavez has nationalized them and now PdVsa runs them.  However, the workers in Jose were getting paid THREE times the wages of workers in PdVsa.  So Chavez cut their wages to 1/3.  We live in a just world, since I am sure many people in Jose voted for Chavez.  Oh, and since PdVsa has taken over, production has crashed.

Now how does Chavez get elected?  He points to the rich Americans (envy, 10th commandment) and says they are stealing the wealth.  However he won't tell them that PdVsa is skimming 40% of the revenues.  Hmmm.  Where is that 40% of a large sum of money going???  Then there is Mexico.  What a wonderful place to live and work, brought to you by fascist and socialist policies and that example of efficiency, Pemex.  HaHaHaHaHa.

Real world examples, not someone's socialist theories developed while toking on the bong.
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#3
Here's another little bit of the puzzle. It is not so much Big Business that is guilty, it is more the expectations of the "market" as in the Wall Street Wizards. These anonymous market manipulators are the real cause of most of the economic troubles. They are at the root of the rise of oil prices. They print $, yet they will not lend it, and we worship them. Their idea is to accumulate all of the business, property, and means of production into the hands of the few. And the way they do it is to socially engineer these new ideas through their foundations. The idea that there is a level playing field is horse feathers. I was the recipient of their largess thrice. I understand that small guys like me need larger clients for survival, but the dynamic now is to eliminate us  and in fact any business large or small which does not fit their future model. The seeming disparity between what I'm saying and James 02 is the difference in the fields we work. James 02 designs and builds plants for processing oil, or beets or something, and I made semi-miniature machined parts. The Wall Street Wizards have deemed that my work should be in China, but the processing plants must be regional due to economic considerations for transport of the raw materials. My opinion is that Big Businesses need to be regulated like AT&T was and other monopolies once were. We need to get rid of fractional banking, the Federal Reserve, and this obscene leverage. We need to know the names of all the players, no more obscene leverage, and no more hiding behind cutouts for any of these culprits. The next bubble is starting and it is the carbon tax, and I predict if they inflate that one, when it bursts the whole shooting match is over.
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#4
Just to be clear, I am not an anarcho-capitalist and support anti-monopoly policies.  I am undecided on "free-trade".  I think if we outlawed corporate taxes, usury and fiat currency, many problems with free-trade would disappear.  I'll give you a parallel example.  Jack Welsch (spelling) of GE made a fortune in income and retirement.  It turns out that it was all a lie, and GE is basically bankrupt, having GE Financial getting huge government bailouts. 

So immediately the reflex is to "regulate" executive pay.  However, obviously Jack benefitted during a very inflationary time.  So if there was no inflation, and GE was growing at 2-3% per year, and paying a dividend in gold per year, boring but regular, would Jack have skimmed off so much loot?  I think common sense is enough to see that inflation was the problem.

Now since we are plagued by original sin, I would support regulations requiring the Chairman and CEO in publicly traded companies to be separate men.  That coupled with gold-back, non-usury money would probably eliminate the whole "executive compensation" issue.  And of course eliminating government "bail outs" (looting).

Which brings me to "free trade".  If we had real money and no usury, would we need protectionism?  I am truly undecided on this issue.  I would lean to a FAIR tax and a flat 10% tariff.  The FAIR tax would make business flock to the US to build factories.  Coupled with a flat 10% tarrif, and that would probably be sufficient.  If a business could not survive in a zero tax environment, with a 10% tariff on imports (plus shipping costs), it probably doesn't need to be doing business in the US.

One more thing, our huge regulatory burden, coupled with "punitive damages" (talk about Orwellian), also has a HUGE amount to do with businesses fleeing overseas.
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#5
James 02, I hear you clearly, and I understand. I'm not a socialist that hates business, either. What I was trying to get at is this. Regulations did not cause all this trouble but the allowing of certain men to hide behind the so-called principle of "free trade" did. I concur on the Fed., fractional banking and certain common sense rules on investing in markets, etc. It's the manipulation of markets that I am against. The fair tax and the tariff seem possible. If by regulatory burden you mean ISO and other nonsense, I'm in.
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#6
Dorothy Day and Peter Maurin were not communists.  As Charles Coulombe has pointed out, Maurin considered himself a "man of the Right."  European right, that is, where conservatism has not historically been defined as adherence to capitalism and free enterprise.
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