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SEC Commissioner Hester Peirce on stakeholder capitalism

SEC Commissioner Pierce:

Companies add value to society by seeking to be profitable for their shareholders.  To do so, they make things people need.  In the process, they enrich their workers, business partners, and communities.

By shifting their focus to stakeholders rather than investors, CEOs may be attempting to distance themselves from their fiduciary duties to shareholders—fiduciary duties that are underpinned by moral principles.  Former Chief Justice of the Delaware Supreme Court Myron Steele argues that the morality imbued in Delaware corporate law’s fiduciary duties “holds corporate actors to a higher standard, discourages distasteful or unsavory conduct in blind pursuit of individual interests, and reflects the manner in which those same actors might interact in other, similar, but non-business contexts.”[46]  No such higher standard of conduct applies to the relationships between stakeholders and corporate officers and directors, so it is not surprising that those relationships are being used to justify certain business decisions.

Shibusawa [Eiichi, who is known as “the father of Japanese capitalism,"] again serves as an example of a better way.  He devoted his own time and resources to philanthropy.  He was an early supporter of one of Japan’s first institutions dedicated to the care of orphans, the elderly, and the disabled.[47]  He helped found the Japanese Red Cross, several of Japan’s leading educational institutions (including at least two institutions of higher education for women), and hospitals.[48]  He was known for never turning down a request for a meeting from an entrepreneur or a younger corporate manager and mentored hundreds of younger businessmen.[49]  It is wonderful when people earn money and spend it for good causes, but shareholders and corporate executives should earn the money first and only then give it away.  True, this is the harder road, as it requires each of us as individuals to give of our own time and resources and to give sacrificially, rather than letting shareholders foot the bill, but none of our great moral teachers ever said the path to virtue was an easy one.

Reopening Universities: Catholic Social Teaching, Universities & COVID-19

Recommended viewing (HT: Haskell Murray):

Bainbridge on Bishop on Bebchuk on Stakeholder Capitalism

Keith Paul Bishop writes:

Harvard Law School Professor Lucian Bebchuk is an eminent scholar of corporate governance with whom I often disagree.  He, for example, favors SEC rules requiring public companies to disclose their political spending.  See Lucian Bebchuk & Robert Jackson, Shining the Light On Corporate Political Spending, 101 Georgetown L. J. 923-967 (2013).  I do not. Id. (citing my opposition to SEC rulemaking).  I was therefore pleased to see that I agree with many of his conclusions about stakeholder capitalism.

Ditto. Bishop continues:

Stakeholder capitalism is the idea that the shareholder primacy paradigm for corporate governance should be supplanted by a commitment to serving other constituencies, such as customers, employees, and society in general.  This notion is not new, several states have had so-called "other constituencies" statutes on the books for many years, but Delaware (the home of most publicly traded corporations) does not.  (Interestingly, the original purpose of these statutes was to insulate management from hostile takeovers.)  More recently, states, including California and Delaware, have enacted laws allowing for the incorporation of businesses with explicit social or public benefit purposes.  

In a forthcoming article, Professor Bebchuk and Roberto Tallarita examine the current enthusiasm for so-called stakeholder capitalism.  After taking a hard look at stakeholderism and its proponents' claims, the authors conclude that stakeholderism "would impose substantial costs on stakeholders and society, as well as on shareholders".  Some may be surprised that they believe that corporate leaders and their advisors support stakeholderism at least in part because they seek to obtain "insulation from hedge fund activists and institutional investors".  Based on their analysis, they counsel "If stakeholder interests are to be taken seriously, stakeholderism should be rejected."  The entire article is available here. 

I've got an article in the works on corporate purpose, in which I also endorse their analysis.

We get another question on turning Catholic belief into public policy

My earlier post on the the Gospel of Life prompted a second friend to pose this question:

But the question is on what grounds a Roman Catholic believes his or her position on, say, contraception must be implemented in public policy. I don't eat pork or shellfish, and don't eat milk and meat together, or unkosher meat, but I can't imagine making a law forbidding someone else from doing it. Now, to some extent, that is a difference between Judaism and Catholicism: the bright side of Jewish particularism is that we don't think that everyone has to be Jewish (we aren't sadists, after all). I would never in the world demand that someone use an IUD; I can't imagine conversely that someone be denied the right to use one, either.

 

So is there any place under which a Catholic would say, "this is my belief, but I would not insist that this be implemented as public policy"? Where do Catholics draw that line?

Another very fair question.

The Doctrinal Note on Some Questions Regarding the Participation of Catholics in Political Life acknowledges that, as to many issues, "a plurality of morally acceptable policies and solutions arises. It is not the Church’s task to set forth specific political solutions – and even less to propose a single solution as the acceptable one – to temporal questions that God has left to the free and responsible judgment of each person." (§3) It further recognizes that "there can generally be a plurality of political parties in which Catholics may exercise – especially through legislative assemblies – their right and duty to contribute to the public life of their country. This arises because of the contingent nature of certain choices regarding the ordering of society, the variety of strategies available for accomplishing or guaranteeing the same fundamental value, the possibility of different interpretations of the basic principles of political theory, and the technical complexity of many political problems." (Ibid)

The Note reminds us that Saint Pope John Paul II warned many times of the dangers which follow from confusion between the religious and political spheres. “Extremely sensitive situations arise when a specifically religious norm becomes or tends to become the law of a state without due consideration for the distinction between the domains proper to religion and to political society. In practice, the identification of religious law with civil law can stifle religious freedom, even going so far as to restrict or deny other inalienable human rights.” (§6)

Accordingly, setting aside the claims of Catholic Integralists, “the Church’s Magisterium does not wish to exercise political power or eliminate the freedom of opinion of Catholics regarding contingent questions. Instead, it intends – as is its proper function – to instruct and illuminate the consciences of the faithful, particularly those involved in political life, so that their actions may always serve the integral promotion of the human person and the common good.” (§6)

With respect to the vast majority of political disputes, the ordinary Magisterium at most expresses “a prudential judgment on a matter about which different conclusions are permissible.”[1] In these situations, as Saint John Paul II has stated, the “church has no models to present.” (Centesimus Annus § 43)

But there are limits: In a relatively small number of cases, the “magisterium proposes something as binding on the consciences of all Catholics.”[2]

"When political activity comes up against moral principles that do not admit of exception, compromise or derogation, the Catholic commitment becomes more evident and laden with responsibility. In the face of fundamental and inalienable ethical demands, Christians must recognize that what is at stake is the essence of the moral law, which concerns the integral good of the human person." (§4) In these (few) cases, the Church does believe that the civil law ought to accord with moral law. Hence, speaking of the duties of lawmakers, the Note explains that: “For them, as for every Catholic, it is impossible to promote such laws or to vote for them.” (Ibid.)

Even in those areas, however, the Church is pragmatic: “As John Paul II has taught in his Encyclical Letter Evangelium vitae regarding the situation in which it is not possible to overturn or completely repeal a law allowing abortion which is already in force or coming up for a vote, «an elected official, whose absolute personal opposition to procured abortion was well known, could licitly support proposals aimed at limiting the harm done by such a law and at lessening its negative consequences at the level of general opinion and public morality.” (§4)

In thinking about all of this, it often strikes me that, with few exceptions, such as abortion, murder, suicide, euthanasia, the death penalty, and so on, the Church mainly gives broad guidance rather than detailed policies.

If it thus seems as though the Church is unwilling to draw a bright line answer to my friend’s question, perhaps it is because the Church must navigate between Scylla and Charybdis. As prominent Vatican observer John Allen wrote:

On the one hand, it's fully legitimate to expect someone who calls him or herself “Catholic” to take the faith seriously in terms of public choices. At the same time, moral calculations in prudential circumstances are not the direct competence of Church authorities. It is a maddening dilemma: to one side lies the danger of clericalism, to the other assimilation of fecklessness. How to strike the right balance is perhaps the most pressing question facing the American church with regard to its engagement in public life.[3]

In any event, these are topics on which far smarter folks than I have written a small mountain of books and scholarly articles. I urge you to go forth and explore.

Roman Catholicism, Religious Assent, and Private Reason: The Case of the Gospel of Life

Longtime regular readers have probably figured out that I am pro-life. Over on Facebook, I posted something expressing a certain amount of dissatisfaction with Chief Justice Roberts' recent decision in June Medical Services v. Russo, the SCOTUS's latest pronouncement on abortion.

This prompted a friend to post the following reply:

Putting abortion to one side for a moment, do you favor things that would reduce the number of unwanted pregnancies? And what exactly? Do you favor free or subsidized contraception? Sex education broadly available to kids? Free or subsidized health care for pregnant moms, and free or subsidized help for young families? More adoptions? Put simply, while we all struggle to find agreement on abortion, are there other things we can do to collectively address your heartfelt objections? I do not agree with you, but I do not want to ignore your heartfelt view. What other policies can I support that you would view as helping here?

These are great questions, fairly asked, and deserve a fair answer. Such an answer, of course, requires more room than the usual Facebook reply. Hence, this blog post.

At least insofar as the question about contraception is concerned, I would respectfully suggest that its phrasing is problematic. I am, as you know, a Roman Catholic who tries (but all too often fails) to adhere to the faith. A core tenet of Roman Catholicism is the doctrine of religious assent:

Divine assistance is also given to the successors of the apostles, teaching in communion with the successor of Peter, and, in a particular way, to the bishop of Rome, pastor of the whole Church, when, without arriving at an infallible definition and without pronouncing in a "definitive manner," they propose in the exercise of the ordinary Magisterium a teaching that leads to better understanding of Revelation in matters of faith and morals. To this ordinary teaching the faithful "are to adhere to it with religious assent"which, though distinct from the assent of faith, is nonetheless an extension of it. (Catechism § 892.)

In his encyclical Evangelium Vitae, Saint Pope John Paul II affirmed that "direct abortion ... always constitutes a grave moral disorder." He specifically stated that this teaching is part of "the Church's Tradition and taught by the ordinary and universal Magisterium." (§ 62) In addition, JPII confirmed that "despite their differences of nature and moral gravity, contraception and abortion are often closely connected, as fruits of the same tree." (§ 13) In so doing, he disappointed those who hoped he would overturn or at least modify the ban on contraception set out in Pope Paul VI's encyclical Humanae Vitae (§ 14).

Although neither encyclical possesses the degree of infallibility Vatican I attributed to papal definitions, both possess the infallibility which Vatican II attributed to the teaching of the "ordinary and universal magisterium." (See Sullivan). As such, both command religious assent.

So what does that mean? The Dogmatic Constitution on the Church (Lumen Gentium) teaches that religious assent requires we acknowledge the teachings "with reverence" and "sincerely" adhere thereto. Despite the arguments of some Cafeteria Catholics I can't see any way around my obligation to adhere to the Church's position on contraception.

By the way, let me touch on an issue that often comes up at this point. Some critics of the doctrine of religious assent, especially as applied to issues involving the Gospel of Life, contend that it treats Catholics as unthinking automatons marching to the dictates of the Church hierarchy. The relationship between individual reason and religious assent is extremely complex. It is worth pointing out, however, that the church encourages lay initiative “especially when the matter involves discovering or inventing the means for permeating social, political, and economic realities with the demands of Christian doctrine and life.” (Catechism § 899) The Church also acknowledges that:

In the work of teaching and applying Christian morality, the Church needs the dedication of pastors, the knowledge of theologians, and the contribution of all Christians and men of good will. Faith and the practice of the Gospel provide each person with an experience of life "in Christ," who enlightens him and makes him able to evaluate the divine and human realities according to the Spirit of God.Thus the Holy Spirit can use the humblest to enlighten the learned and those in the highest positions. (Catechism § 2038) 

Hence, it is the task of Catholic intellectuals to exercise critical reflective judgment with respect to society, the Church, and the relationship between the two. An an active and critical role for the laity seems especially important with respect to economic life, as to which JPII emphasized that “church has no models to present." (Centesimus Annus § 43) I note in passing that this is why my scholarship is increasingly focused on using Catholic social teaching to critique corporate law.

But I digress.

As for my friend's other proposals, they all strike me as reasonable and desirable. The Gospel of Life teaches that we have to respect life from its beginning at conception to its end at natural death. Hence, my problem with the American political duopoly is that too many Republicans appear to care about life only until birth and that too many Democrats appear to only care about life after birth. In contrast, a polity founded on Catholic social thought would recognize that the "starting point for a correct and constructive relationship between the family and society is the recognition of the subjectivity and the social priority of the family. Their intimate relationship requires that 'society should never fail in its fundamental task of respecting and fostering the family.'" (Compendium § 252)

Accordingly, I am in substantial agreement with the platform of the American Solidarity Party:

• Federal and state governments must enact constitutional and legal measures establishing the right to life from conception until natural death. These measures specifically include a constitutional amendment clarifying that there is no right to abortion, as well as laws that prohibit or restrict abortion. Because human life begins at conception, the intentional destruction of human embryos in any context must end.
• Federal, state, and local governments must end taxpayer funding of organizations that provide, promote, or facilitate abortions, and of health-care plans that include abortion coverage. Such funding should be redirected to organizations that promote healthy pregnancies and prenatal care.
• Federal and state governments must end capital punishment in light of its disproportionate use against those with fewer legal resources, the impossibility of reversal, and the existence of alternative ways to ensure protection for the rest of society.
• We support efforts to help prevent the tragedy of suicide, including universal access to affordable mental-health care and the destigmatization of mental illness. Assisted suicide and euthanasia are a violation of disability rights, medical ethics, and human dignity, and must be prohibited in every state.
• Federal and state governments should collaborate to guarantee universal healthcare by diverse means, including single-payer initiatives, direct subsidization of provider networks, subsidized education for medical professionals willing to work in rural areas, support for cost-sharing programs and mutual aid societies, home care grants, simplified regulation, and the easing of restrictions on the importation of prescription drugs.
• Health policy must include protections for those with preexisting, chronic, and terminal conditions. We must include those who have no means to save for an emergency, people at every stage of life from prenatal care to hospice care, and people who find themselves in need of medical assistance while away from their home network.

Does that answer the question?

The Business Roundtable and Corporate Purpose

My remarks at the AALS panel:

We are convened to discuss “Rising Tensions Among Corporate Stakeholders.” Really?

The call that brings us together informs us that “Tensions among corporate stakeholders are rising. Managers and shareholders continue to battle for primacy as power tilts toward shareholders with the ongoing rise of institutional investors. … Amazon's dust-up in New York City shows the influence of communities and the resurgence of popular movements. Exxon's recent experience over climate change illustrates the power of environmental concerns even for investors in traditional energy companies” Really?

I see something very different happening. The corporate social responsibility debate continues, but some key players have switched sides.

Investors—including the big three of Blackrock, Vanguard, and State Street—increasingly at least purport to care about ESG issues.

And this fall, The Business Roundtable—a center of corporate C-suite elitism—purportedly switched sides, as well.

What’s going on?

As we all know, a couple of months ago, the BRT released a statement on the purpose of the corporation in which it made a major break from its longstanding position. Starting in 1997, the BRT had issued a series of statements positing that corporations exist principally to serve their shareholders. In its recent statement, however, the BRT announced that going forward its members would recognize that “we share a fundamental commitment to all of our stakeholders.” The 181 signing CEOs committed themselves to leading “their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.”

The BRT statement was met with enthusiastic praise in some quarters, condemnation in others, and skepticism in still others. Much of the commentary, however, failed to correctly assess either the effect of the statement or the reasons the BRT felt moved to issue it.

In most cases, the BRT statement likely will prove no more than an irrelevant and innocuous platitude, which may make some people feel a bit better about the role big corporations play in our lives, but which will not affect corporate decision making. Most business decisions, after all, do not directly oppose the interests of stakeholders and shareholders. To the contrary, most business decisions are potentially win-win scenarios. The proverbial rising tide usually does lift all boats.

This is true even of decisions that in the short-run seem to favor stakeholders at the expense of shareholders. Providing health benefits for employees may increase expenses and reduce profits in the short term, for example, but often leads to greater productivity in the long term. Focusing on environmental sustainability can be a useful means of engaging with customers and thereby building brand reputation. Indeed, companies such as Walmart and Coca-Cola have used sustainability in their messaging with success.

Occasionally, however, a business faces a true zero-sum decision. It cannot make both stakeholders and shareholders better off either in the short- or in the long-run. In such a case, would we really expect the signers of the BRT statement to put stakeholders interests ahead of shareholders?

Obviously, the BRT has no power to change the law and the law remains clearly contrary to the BRT’s new commitments. One hundred years ago, in Dodge v. Ford Motors, the Michigan Supreme Court held that: “A business corporation is organized and carried on primarily for the profit of the stockholders.”[1] Much more recently, in eBay v. Newmark, the Delaware Chancery Court likewise held that directors of a company incorporated in Delaware—as are most BRT companies—are obliged to “promote the value of the corporation for the benefit of its stockholders.”[2] The court therefore held that “a business strategy that openly eschews stockholder wealth maximization” was inconsistent with the directors’ fiduciary duties to the company’s shareholders.

In a 2015 Wake Forest Law Review article, former Chief Justice of the Delaware Supreme Court Leo Strine—arguably the leading corporate law jurist of our era—took what he called a “clear-eyed look at the law of corporations in Delaware,” on the basis of which he concluded “that, within the limits of their discretion, directors must make stockholder welfare their sole end, and that other interests may be taken into consideration only as a means of promoting stockholder welfare.”

He therefore rejected arguments by various academics that Delaware law allowed executives and directors to make tradeoffs between shareholder and stakeholder interests, stating that “Dodge v. Ford and eBay are hornbook law.” Anyone who argues to the contrary, he said, was pretending. Let’s pause to savor that word: “pretending.”

To be sure, the business judgment rule usually insulates directors from liability for decisions that depart from a short-term focus on maximizing shareholder wealth. But the prudential judgment that courts generally should defer to board of director business decisions does not change the legal obligation of the board and in appropriate cases officers and directors can be held liable for putting stakeholder interests ahead of those of shareholders.

Whether the BRT likes it or not, its statement doesn’t change that rule.

Just as the BRT statement does not change the signers’ legal duties, it does not change the governance structures that constrain their freedom to act as they see fit.

CEOs are appointed by the board of directors. Boards of directors are elected by the shareholders. Until recent decades, of course, none of that mattered very much. Boards of directors passively rubberstamped the wishes of imperial CEOs. As a result, the predecessors of the CEOs who signed the BRT statement had broad discretion to make decisions that put the interests of stakeholders ahead of those of shareholders.

That world no longer exists. In response to new obligations imposed by state and federal laws, boards of directors have become more independent and less willing to acquiesce in a CEO’s wishes. At the same time, share ownership has shifted from individual retail investors to institutions. Some of those institutions—especially activist hedge funds and some pension funds—have made corporate governance activism a central part of their business model. Such investors are constantly on the lookout for managers who are failing to maximize shareholder value and are willing to pressure their boards for change.

Granted, governance activism by shareholders is somewhat offset by social justice activism by ESG-oriented investors. Even so, managers and boards that put stakeholder interests ahead of (or even on a par with) shareholder interests are likely to face proxy contests and other forms of activism from activist hedge funds and their allies. Managers and directors who too often shortchange shareholder value in the name of social responsibility may well find themselves on the losing end of such contests.

Given that nether the legal rules nor the governance environment in which the BRT’s members must operate were changed by the new statement, what purpose was served by issuing the statement? What are the signers up to?

1. Some of the signatories are themselves social justice warriors. Oligarchs like Salesforce.com CEO Marc Benioff, for example, promote “social activism among American chief executives.”
2. The BRT leaders are responding to perceived consumer and labor demand.In particular, millennials apparently prefer to work for and purchase from companies that are perceived as socially and environmentally responsible. Accordingly, there is an increasingly widely held view in the business community that to attract Millennial and Generation Z workers and customers, companies must project an image as social justice activists. Nike’s embrace of Colin Kaepernick is but the most obvious example of this phenomenon, but even such heartland companies as Walmart are embracing socially progressive stances, despite the risk of alienating their Red State customer base.
3. The BRT may be trying to head off regulation by progressive politicians. As Wall Street Journal columnist David Benoit has observed, “Democratic presidential candidate Elizabeth Warren has argued that the primacy of shareholder returns has worsened economic inequality, enriching wealthy investors at the expense of workers.” With the mainstream of the Democratic Party seemingly moving in Warren’s direction on business and finance issues, the BRT’s members may have hoped that a voluntary—and perhaps intentionally ambiguous—embrace of corporate social responsibility platitudes would help them fend off more intrusive regulation in the event of a Democratic presidential victory in 2020.
4. 4. The BRT may be responding to pressure from a few very powerful investors, especially the big three institutional investors. Institutional investors long have offered funds that focus on corporations perceived as socially responsible, which generally has been understood to mean companies pursuing progressive goals. As I noted at the outset, however, a growing number of major institutional investors, however, have embraced social activism in support of progressive goals with respect to all of the funds they manage. But this simply pushes the question further up the corporate finance food chain, since it fails to explain why investment fund managers like Fink are pursuing that agenda.
5. Some BRT members may crave a return to the days of imperial CEOS. This is the flip side of #3. Aside from a brief period in the 1980s, when the hostile takeover was viable, CEOs were virtual emperors for most of the last 100+ years. Over the last decade or two, however, shareholder activists have grown in number and power. Unlike the gadflies of old, the new activists—mainly hedge funds—have been all about shareholder return. We have seen repeated cases where hedge fund activism has forced out CEOs (and entire boards), resulted in massive changes in corporate strategy, and even led to companies being broken up.

By embracing stakeholderism, the BRT leaders may hope to restore a measure of freedom.

Indeed, to my mind this is the basic problem with CSR. Suppose Acme's board of directors is considering closing an obsolete plant. The board is advised that closing the plant will cost many long-time workers their job and be devastating for the local community. On the other hand, the board's advisors confirm that closing the existing plant will benefit Acme's shareholders, new employees hired to work at a more modern plant to which the work previously performed at the old plant will be transferred, and the local communities around the modern plant. Assume that the latter groups cannot gain except at the former groups' expense. By what standard should the board make the decision?

Shareholder wealth maximization provides a clear answer: close the plant. Once the directors are allowed to deviate from shareholder wealth maximization, however, they must inevitably turn to indeterminate balancing standards. Such standards deprive directors of the critical ability to determine ex ante whether their behavior comports with the law's demands, raising the transaction costs of corporate governance.

Worse yet, absent the clear standard provided by the shareholder wealth maximization norm, managers and directors will be tempted to allow their personal self-interest to dominate their decision making. If the CEO’s interests favor keeping the plant open, the plant likely will stay open, with the decision being justified by reference to the impact of a closing on the plant's workers and the local community. In contrast, if the CEO’s interests are served by closing the plant, the plant will likely close, with the decision being justified by concern for the firm's shareholders, creditors, and other benefited constituencies.

Some BRT leaders probably would be quite content to see that kind of freedom restored to the C-suite.

In sum, the BRT statement changes nothing. Neither the law nor the governance system in which the BRT’s members must function has changed. Shareholder wealth maximization remains the law. And anyone who says otherwise is, to again quote Leo Strine, pretending.

Christianity and Corporate Purpose

I've posted a new article to SSRN: Christianity and Corporate Purpose (December 1, 2019): https://ssrn.com/abstract=3496850

This essay is a chapter in a forthcoming book on law and Christianity. It compares and contrasts the law governing corporate purpose with the pertinent Christian teachings from Scripture and Tradition, with a special focus on catholic social thought.

Keywords: Corporate law, corporate purpose, corporate social responsibility, religion, Catholicism, Christianity, Catholic social thought

Four Answers to "Why did the Business Roundtable Release its Statement on Corporate Purpose?"

A friend sent along this email in response to the Business Roundtable Statement on Corporate Purpose:

Several possibilities occur to me, but only two seem truly persuasive:

1. The BRT leaders are responding to perceived consumer and labor demand. In particular, millennials apparently prefer to work for and purchase from companies that are perceived as socially and environmentally responsible. “To attract promising young employees in many parts of America and to woo today’s customers, the argument goes, companies must project a corporate ethos that goes beyond profit.” Even Walmart is embracing socially progressive stances, despite the risk of “alienating its core customers, who often live in more conservative-leaning rural and suburban communities.” Social media clearly has been in a factor in this development, as it has given tech-savvy activists unprecedented ability to mobilize pressure on recalcitrant corporations.

But this raises new questions. First, why have so many millennials embraced corporate social activism? Second, why are corporations catering to their preferences as opposed to those of the Yeomanry?

Finally, thought leadership on this issue has been provided by the Clerisy, which has embraced using corporate social activism to drive progressive causes. Progressive corporate law professors, to cite an obvious example, have long advocated corporate social responsibility. More generally, progressive lawyers and activists have joined forces to advance social goals through corporate law reform and internal corporate governance battles. Again, however, the question of why the Clerisy has done so remains unanswered.

2.Some may be responding to pressure from investors, especially the big three institutional investors. Institutional investors long have offered funds that focus on corporations perceived as socially responsible, which generally has been understood to mean companies pursuing progressive goals. A growing number of major institutional investors, however, have embraced social activism in support of progressive goals with respect to all of the funds they manage. BlackRock, for example, encourages companies to pursue excellence in environmental and social, as well as governance, areas. BlackRock CEO Laurence Fink sent a letter in 2018 to CEOs of the firm’s portfolio companies, in which he posited that companies need to be responsive to stakeholders, including consumers and communities, as well as investors, and pursue environmental, social, and governance goals to achieve “sustainable growth.” But this simply pushes the question further up the corporate finance food chain, since it fails to explain why investment fund managers like Fink are pursuing that agenda.

3. Some may crave a return to the days of imperial CEOS. This is sort of the flip side of #2. Aside from a brief period in the 1980s, when the hostile takeover was viable, CEOs were virtual emperors for most of the last 100+ years. Over the last decade or two, however, shareholder activists have grown in number and power. Unlike the gadflies of old, the new activists--mainly hedge funds--have been all about shareholder return. We have seen repeated cases where hedge fund activism has forced out CEOs (and entire boards), resulted in massive changes in corporate strategy, and even led to companies being broken up.

By embracing stakeholderism, the BRT leaders may hope to restore a measure of freedom. Recall the Bainbridge Hypothetical:

Suppose Acme's board of directors is considering closing an obsolete plant. The board is advised that closing the plant will cost many long-time workers their job and be devastating for the local community. On the other hand, the board's advisors confirm that closing the existing plant will benefit Acme's shareholders, new employees hired to work at a more modern plant to which the work previously performed at the old plant will be transferred, and the local communities around the modern plant. Assume that the latter groups cannot gain except at the former groups' expense. By what standard should the board make the decision?

Shareholder wealth maximization provides a clear answer -- close the plant. Once the directors are allowed to deviate from shareholder wealth maximization, however, they must inevitably turn to indeterminate balancing standards. Such standards deprive directors of the critical ability to determine ex ante whether their behavior comports with the law's demands, raising the transaction costs of corporate governance.

Worse yet, absent the clear standard provided by the shareholder wealth maximization norm, the board of directors will be tempted to allow their personal self-interest to dominate their decision making. Put another way, directors who are allowed to consider everybody's interests end up being accountable to no one.

In the plant closing example, if the board's interests favor keeping the plant open, we can expect the board to at least lean in that direction. The plant likely will stay open, with the decision being justified by reference to the impact of a closing on the plant's workers and the local community. In contrast, if the board of directors' interests are served by closing the plant, the plant will likely close, with the decision being justified by concern for the firm's shareholders, creditors, and other benefited constituencies.

Some BRT leaders probably would be quite content to see that kind of freedom restored to the C-suite.

4. Some of the signatories are themselves social justice warriors. Oligarchs like Salesforce.com CEO Marc Benioff, for example, promote “social activism among American chief executives.” As the Wall Street Journal reported:

Mr. Benioff is among CEOs of companies, including Apple Inc., Bank of America Corp., Walt Disney Co. , Intel Corp. and International Business Machines Corp. , that have begun pressuring lawmakers on social issues, often with a warning: Change laws or risk losing business. … What sets apart the new activist CEOs is how they use their names and corporate muscle to campaign directly against specific laws governing social issues, often on short notice, sometimes by threatening to withhold business.

This is a point made in my article Corporate Purpose in a Populist Era, which is available at SSRN: https://ssrn.com/abstract=3237107.

The values of the elites (the Oligarchs and Clerisy, as Kotkin calls them), on the one hand, and those of non-elites, on the other, have been diverging for several decades. In his 1995 classic The Revolt of the Elites, Christopher Lasch identified the emergent split between what he called the New Elites and the rest of society. Lasch identified several trends that have accelerated in subsequent years. First, he argued, American elites had become increasingly global, rejecting nationalism and patriotism, and refusing to be tied to places or people. Today we refer to those elites, as well as their global counterparts and those who aspire to join them, as Davos Man:

January is when the World Economic Forum (WEF) holds its annual conference at a Swiss mountain resort to “improve the state of the world.” More than a business meeting for 2,500-plus globetrotting academics, executives, politicians, and lobbyists, it is a tribal celebration for leaders who worship a holy trinity of ideas: capitalism, globalization, and innovation. In a 2004 essay, Samuel Huntington, who popularized the term “Davos Man,” described this breed of humans as “view[ing] national boundaries as obstacles that thankfully are vanishing.” (And, yes, more than 80 percent of attendees at the WEF conference are male.)

As The Economist’s Schumpeter columnist observed in 2013, “[o]rdinary folk trust Davos Man no more than they would a lobbyist for the Worldwide Federation of Weasels.” This distrust took on considerable political weight in the 2016 Presidential campaign, as the populists who voted for Trump recognized that a minority comprised of “people from ‘anywhere’” ruled the majority of people who came from “somewhere.”

The first group … holds “achieved” identities based on educational and professional success. Anywheres value social and geographical mobility. The second group is characterised [sic] by identities rooted in a place, and its members value family, authority and nationality.

Whereas Anywheres, whose portable identities are well-suited to the global economy, have largely benefited from cultural and economic openness in the West, he argues, the Somewheres have been left behind—economically, but mainly in terms of respect for the things they hold dear. The Anywheres look down on them, provoking a backlash.

The disdain in which elites now hold non-elites was another critical emergent trend Lasch identified. As Christopher Lasch explained, “the new elites, the professional classes in particular, regard the masses with mingled scorn and apprehension.” Many of Lasch’s new elites dismissed the masses’ values as “mindless patriotism, religious fundamentalism, racism, homophobia, and retrograde views of women.”

Middle Americans, as they appear to the makers of educated opinion, are hopelessly shabby, unfashionable, and provincial, ill informed about changes in taste or intellectual trends, addicted to trashy novels of romance and adventure, and stupefied by prolonged exposure to television. They are at once absurd and vaguely menacing—not because they wish to overthrow the old order but precisely because their defense of it seems so deeply irrational [to the new elites] ….

This tension was perhaps nowhere more pronounced than with respect to religion. When Lasch wrote over two decades ago, he opined that “[a] skeptical, iconoclastic state of mind is one of the distinguishing characteristics of the knowledge classes. ... The elites’ attitude to religion ranges from indifference to active hostility.”

If anything, today’s elites have become even more hostile to religious values. As Samuel Gregg observes, the Davos Man’s moral creed is “a mélange of social liberalism, environmentalism, and a new order of a borderless world. Religion is … considered the refuge of fanatics and anyone stupid enough to be skeptical of gender ideology and techno-utopianism.”

In contrast, modern right-wing populists are highly religious. According to a 2011 Pew Research Center analysis, for example, Tea Party members were “much more likely than registered voters as a whole to say that their religion is the most important factor in determining their opinions on … social issues.” Likewise, a subsequent Pew analysis found that “white born-again or evangelical Christians and white Catholics … strongly supported Donald Trump ….”

Today’s elites thus hold non-elites in at least as much disdain as did the elites of Lasch’s period. The Clerisy, in particular, scarcely bothers to conceal its disdain for the traditional middle and working classes. This disdain manifests itself in a variety of ways, perhaps most notably through the increasing separation between the working class and the elites. 

 

Andrew Ross Sorkin plus Jamie Gamble equals a mass dump of uninformed silliness re corporate "sociopaths"

Sorkin:

Jamie Gamble spent most of his career as a partner at the law firm Simpson Thacher & Bartlett, which counts virtually every major company in the United States — including Facebook, General Motors, Google and JPMorgan Chase — among its clients. ...

Mr. Gamble has had an epiphany since retiring nearly a decade ago that is so damning of his former life that it is likely to give his ex-partners a case of agita.

He has concluded that corporate executives — the people who hired him and that his firm sought to protect — “are legally obligated to act like sociopaths.” ...

in the world of corporate lawyers — and the board governance experts among whom it is quietly getting attention — Mr. Gamble’s essay may be a watershed.

First, there is nothing here--nada, zilch, zip--that is new or novel. Coming up with the same bad ideas as thousands of other equally misguided folks hardly counts as an epiphany or as something that will keep any of us who work in corporate governance up nights.

For example, people have been calling corporations "sociopaths" for a long time. See, e.g., Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (Free Press 2004) (arguing that the psychological definition of a sociopath applies to the corporation). But this argument is patently absurd. The corporation is a legal fiction. To paraphrase the first Baron Thurlow, who observed that the corporation has neither a soul to be damned nor a body to be kicked, the corporation has neither a mind to be psychoanalyzed not a brain to be diseased. Corporations are run by people, so if "they" act like sociopaths, it must be because they are run by sociopaths. It is estimated that psychopaths make up at most 1% of the population, so are we to believe they are disproportionately located in corporate C-suites?

Second, both Gamble and Sorkin grossly misstate the law. Sorkin writes:

It may be an oversimplification, but if they veer from seeking profits in the name of other stakeholders, shareholders may have a legal case against them.

That is not an oversimplification; it is a gross oversimplification. Absent proof that the directors were engaged in a breach of the duty of loyalty or certain takeover situations, the business judgment rule would preclude courts from reviewing director decisions. To be sure, that is not the purpose of the business judgment rule, but that is its effect. (For a discussion of the relationship between the business judgment rule and the shareholder wealth maximization, see this post.)

But Sorkin and Gamble don't just want directors to have discretion to consider long-term consequences of their actions. They want to force directors to consider the interests of all corporate stakeholders in all corporate decisions. Had Sorkin consulted the NY Times' own archives, however, he would have found my essay explaining why that would be a terrible idea:

There are many reasons why the law requires corporate directors and managers to pursue long-term, sustainable shareholder wealth maximization in preference to the interests of other stakeholders or society at large, but the most basic one is that managers who are responsible for everyone are responsible to no one.

Suppose the board of directors of a company is considering closing an obsolete plant. The closing will harm the plant’s workers and the local community, but it will benefit shareholders, creditors and new employees (and their surrounding community) at a more modern plant to which the work is transferred. Let's further assume that the latter groups (the shareholders, creditors and new employees) cannot gain except at the former employees' expense.

By what standard should the board make the decision to close or keep the obsolete plant? Shareholder wealth maximization provides a clear answer — close the plant.

If directors were allowed to deviate from shareholder wealth maximization, they would inevitably turn to indeterminate balancing standards, which provide no accountability. As a result, directors could be tempted to pursue their own self-interest. If closing the plant would benefit directors, they could point to shareholder interests to justify their decision. But if, on the other hand, keeping it open would benefit directors, they could just as easily point to concerns for employees.

...

Accordingly, corporate law has been skeptical about corporate social responsibility claims, due to the concern that director discretion — when purportedly directed toward social responsibility concerns — could just be used to camouflage self-interest.

One wonders why Sorkin and Gamble are so enthusiastic about insulating managerial and director self-ineterst?

One also wonders why Sorkin and Gamble are so enthusiastic about mandating these ideas when people can opt into benefit corporations? A benefit corporation would have most of the legal structures Gamble proposes, so why not just let private ordering have an opportunity to work?

Some thoughts on Catholic social thought, shareholder primacy versus stakeholder theory, and the problem of prioritization

One problem for any system of business ethics is how to make choices among competing interests in zero-sum situations, in which any decision will leave some stakeholders worse off. How does one prioritize the interests of the many different stakeholders in a large corporation? It might be objected that Catholic social thought gives managers too little guidance as to how to do so, because—like all stakeholder theories—it does not provide “the kind of systemic, prescriptive, prioritizing guidance that is so crisply present in shareholder wealth-maximization theory.” Lee A. Tavis, "Modern Contract Theory and the Purpose of the Firm," in Rethinking the Purpose of Business: Interdisciplinary Essays from the Catholic Social Tradition, ed. S. A. Cortright and Michael J. Naughton (Notre Dame, IN: University of Notre Dame Press, 2002), 215, 221.

In fact, however, Catholic social thought offers two straightforward principles for prioritizing among stakeholders; namely, the preferential option for the poor and the special position of workers within the firm. “The principle of the universal destination of goods requires that the poor, the marginalized and in all cases those whose living conditions interfere with their proper growth should be the focus of particular concern.” Compendium of the Social Doctrine of the Church (Washington, D.C.: United States Conference of Catholic Bishops, 2005), 182. Likewise, the Church teaches that “[I]t is essential that within a business the legitimate pursuit of profit should be in harmony with the irrenounceable protection of the dignity of the people who work at different levels in the same company.” Ibid., 340. Those “workers constitute ‘the firm's most valuable asset’ and the decisive factor of production.” Ibid., 344.

By itself, of course, this point does not disprove the validity of shareholder primacy as a normative guide for corporate decision making, it simply eliminates one argument against Catholic social thought’s wider perspective.

Catholic social thought versus big business

Over the last year, I've spent a lot of time reading populists like the Southern Agrarians and Catholic social thought. It strikes me that both share a preference for an economy comprised mainly of small communities of yeoman farmers and artisans that would be more familiar to fans of J.R.R. Tolkien’s The Shire than most modern developed nation workers. Case in point:

It is certainly true that it is difficult to describe the large public corporation as a community of shared values. Such corporations in fact resemble the nanny state—a large, impersonal bureaucracy with the power to terrorize, but no ability to nurture.

But so what?

Must every human institution "foster human development"?

Perhaps the large corporation has a different role to play in an ordered society. Most people belong to a host of communities with the potential to inculcate virtue and other communal values: churches, schools, fraternal organizations, and the like. While it may be unrealistic to think of a large multinational corporation as constituting such a community, it is perfectly plausible to think of the corporation as an intermediary institution standing between the individual and Leviathan. In other words, while virtuous citizens are developed by smaller institutions with roots in the local community, the corporation still can act as a vital countervailing force against the state. Only the large corporation has the power to withstand assaults from the modern state, which allows it to serve as a focus of resistance to the state.

CST and the Law Seminar: Notes and Questions on Centesimus Annus and the Law

Our seminar on Catholic Social Thought and the Law began by reading Pope Leo XIII’s 1891 encyclical Rerum Novarum(notes here).

In 1991, Saint Pope John Paul II (JPII) issued Centesimus Annus(literally “hundredth year”) to commemorate the centennial of Rerum Novarum.

This week we tackled Centesimus Annus.

Context

The historical context of Centesimus Annus is quite significant. It was promulgated by the first non-Italian Pope in over 400 years. It was written by a Pole who had lived under both Nazism and Communism and, moreover, who was widely regarded as having been influentialin inspiring the revolutions of 1989 that brought down the Berlin Wall and restored democracy to eastern Europe. As Centesimus Annus was being written, moreover, the Soviet Union—the first and long most important Communist state—was crumbling and, it briefly seemed, evolving towards a liberal democratic state. Democratic capitalism seemed to be triumphant. The concerns about issues such as socialism and class struggle that had preoccupied Leo XIII thus seemed to have gone by the wayside.

Accordingly, JPII invites the reader not only to reflect on the meaning and legacy of Rerum Novarum but also to consider “the ‘new things’ which surround us and in which we find ourselves caught up, very different from the ‘new things’ which characterized the final decade of the last century.” (3)

JPII begins by describing a process by which labor had been commodified, which began with the Industrial Revolution and accelerated throughout the 19^thCentury. By 1891, this process had produced an endemic conflict between capital and labor, which in turn had inspired such developments as revolutionary socialism.

Interestingly for us as lawyers, JPII several times emphasizes the failure of the law to mediate the conflict between capital and labor:

“… the prevailing political theory of the time sought to promote total economic freedom by appropriate laws, or, conversely, by a deliberate lack of any intervention.” (§ 4)

“Pope [Leo XIII] and the Church with him were confronted, as was the civil community, by a society which was torn by a conflict all the more harsh and inhumane because it knew no rule or regulation.” (§ 5)

Recurring Themes

Given that Centesimus Annus was intended to provide a cohesive summation of the century-long development of CST, we see a number of themes that have recurred throughout the course.  It will be useful to reflect on how these themes have evolved and, as a result of that evolution, how Centesimus Annus both restates but also revises the positions staked out in Rerum Novarum.

1. The Church’s right and duty to speak to social conditions. In this regard, consider especially § 43. If the Church has “no models to present,” what is the function of the social teaching?
   1. Note also the discussion in § 54 of the relationship between the Church’s social mission and its spiritual mission.
   2. I liked one of my student’s answers to this question: “the Church’s job is advocate for the rights of humans—most specifically the dignity of all endowed by God—and to hold out the teaching of Christ as law which must be followed by the governments of the world in whatever more particularized form they take.”
2. The Church’s “theory of the State.” How does JPII’s theory of the state differ from that of Leo XIII? What type of government does Leo XIII appear to believe is best? What types does JPII seem to think is best?
   1. In § 47, JPII raises a concern that democracies “seem at times to have lost the ability to make decisions aimed at the common good.” Is that true of American democracy today and, if so, how do we regain the ability to do so?
   2. Sadly, I think one of my students speaks for many: “Frankly I have as of late been feeling apathetic and untrusting of both sides of the aisle, pretty much all forms of media, and anything I can’t verify with my own eyes. (Which is very little).”
3. The importance of human dignity, especially with respect to workers.
   1. One of my students asked; “Is the argument because we look like God and his son embodied a human then we must have dignity?”
      1. Let’s define what we mean by human dignity. I think the Compendium § 133 captures it:
         1. “In no case, therefore, is the human person to be manipulated for ends that are foreign to his own development”
         2. “The person cannot be a means for carrying out economic, social or political projects”
      2. Kant’s second formulation of the categorical imperative also speaks to this point:
         1. “Act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end.”
      3. CST teaches that humanity is “the only creature willed by God for itself.” Humans have been endowed with unique human capacities. “These capacities are, in turn, typically understood to be exercised by acting morally, that is, to act in line with a morality that concerns what one does to oneself, to other humans, or to God.” (Cite)
   2. If human dignity is not something with which we are endowed by a Creator, what is the source and basis of it?
4. The right of private property.
5. Human rights more broadly. What is striking about the discussion (§§ 6-9) is the relative weighting given property rights versus the rights of workers.
6. The importance of work and the temptations of wealth. But note how the Church’s understanding of wealth and work evolved from the essentially agrarian vision that underlies Rerum Novarum to the industrialized vision that informs Centesimus Annus. (E.g., §§ 31-32)

CST, Capitalism, Socialism, and Culture

The morality of capitalism has been a recurring theme in CST. Michael Novak connects the historical context of Centesimus Annus to that debate by observing that:

By section 42, the Holy Father considers the consequences of that collapse and asks, “After the collapse of socialism, should we recommend capitalism to the bishops of the rest of the world?” Here again, the Holy Father says, “That depends on what you mean by capitalism,” and he makes a very astute separation between the political, the economic, and the moral/cultural components of the free society. He offers a unified vision of how the three relate to one another. He then proceeds to make a cultural critique of the existing order, and reveals an ecology of the free society–a moral ecology–which I think opens up the battle ground of the future.

What is that unified vision?

In § 12, JPII opines that:

… the fundamental error of socialism is anthropological in nature. Socialism considers the individual person simply as an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socio-economic mechanism. Socialism likewise maintains that the good of the individual can be realized without reference to his free choice, to the unique and exclusive responsibility which he exercises in the face of good or evil. Man is thus reduced to a series of social relationships, and the concept of the person as the autonomous subject of moral decision disappears, the very subject whose decisions build the social order. From this mistaken conception of the person there arise both a distortion of law, which defines the sphere of the exercise of freedom, and an opposition to private property. A person who is deprived of something he can call "his own", and of the possibility of earning a living through his own initiative, comes to depend on the social machine and on those who control it. This makes it much more difficult for him to recognize his dignity as a person, and hinders progress towards the building up of an authentic human community.

How might US democratic socialists such as Bernie Sanders or Alexandria Ocasio-Cortez respond to that critique?

JPII also observes (§ 14):

Quadragesimo anno… stated that "if the class struggle abstains from enmities and mutual hatred, it gradually changes into an honest discussion of differences founded on a desire for justice".

Can CST contribute to changing American politics into “an honest discussion of differences founded on a desire for justice"?

Subsidiarity and Solidarity

JPII posits that the state must simultaneously embrace the principles of subsidiarity and solidarity. (E.g., §§ 15-16) How do those principles relate to law and policy?

Legal Applications

Corporate Social Responsibility

Compare and contrast this famous passage from Dodge v. Ford Motor Co., 170 N.W. 668, 684 (Mich. 1919):

A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes.

with § 35 of Centesimus Annus:

The Church acknowledges the legitimate role of profit as an indication that a business is functioning well. When a firm makes a profit, this means that productive factors have been properly employed and corresponding human needs have been duly satisfied. But profitability is not the only indicator of a firm's condition. It is possible for the financial accounts to be in order, and yet for the people — who make up the firm's most valuable asset — to be humiliated and their dignity offended. Besides being morally inadmissible, this will eventually have negative repercussions on the firm's economic efficiency. In fact, the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society. Profit is a regulator of the life of a business, but it is not the only one; other human and moral factors must also be considered which, in the long term, are at least equally important for the life of a business.

Can these views be reconciled?

Blue Laws

In McGowan v. Maryland, 366 U.S. 420 (1961), the U.S. Supreme Court upheld “the constitutional validity of Maryland criminal statutes, commonly known as Sunday Closing Laws or Sunday Blue Laws.” The Court explained that:

Starting in 1650, the Plymouth Colony proscribed servile work, unnecessary travelling, sports, and the sale of alcoholic beverages on the Lord's day and enacted laws concerning church attendance. The Massachusetts Bay Colony and the Connecticut and New Haven Colonies enacted similar prohibitions, some even earlier in the seventeenth century. The religious orientation of the colonial statutes was equally apparent. …

But, despite the strongly religious origin of these laws, beginning before the eighteenth century, nonreligious arguments for Sunday closing began to be heard more distinctly and the statutes began to lose some of their totally religious flavor. …

The proponents of Sunday closing legislation are no longer exclusively representatives of religious interests. Recent New Jersey Sunday legislation was supported by labor groups and trade associations …; modern English Sunday legislation was promoted by the National Federation of Grocers and supported by the National Chamber of Trade, the Drapers' Chamber of Trade, and the National Union of Shop Assistants. …

Throughout this century and longer, both the federal and state governments have oriented their activities very largely toward improvement of the health, safety, recreation and general well-being of our citizens. Numerous laws affecting public health, safety factors in industry, laws affecting hours and conditions of labor of women and children, week-end diversion at parks and beaches, and cultural activities of various kinds, now point the way toward the good life for all. Sunday Closing Laws, like those before us, have become part and parcel of this great governmental concern wholly apart from their original purposes or connotations. The present purpose and effect of most of them is to provide a uniform day of rest for all citizens; the fact that this day is Sunday, a day of particular significance for the dominant Christian sects, does not bar the State from achieving its secular goals. To say that the States cannot prescribe Sunday as a day of rest for these purposes solely because centuries ago such laws had their genesis in religion would give a constitutional interpretation of hostility to the public welfare rather than one of mere separation of church and State.

Businesses and consumers have criticized blue laws as infringements on their economic rights. Likewise, certain religious groups that observe a different Sabbath than Sunday have objected to blue laws as an infringement on their religious rights.

Using JPII’s analysis of workers’ rights as a basis, discuss whether workers should have a statutory right to at least one day a week of rest. Should we include law firm associates among the workers having such a right? That may seem like a facetious question, but take a moment to consider seriously whether the discussion of work at, for example, § 32 speaks to what your impending careers as lawyers. 

The Preferential Option for the Poor

What is the preferential option for the poor? (§ 11) What role does JPII assign the state in promoting it? How does JPII think the state should empower the poor? To what extent does the right of property (see Part IV) limit the state’s ability to advance the preferential option for the poor?

Consider the relevance of the preferential option and the right to property to current legal debates such as tax policy.

Slate magazine reports that:

One of Sen. Elizabeth Warren’s first proposals upon joining the 2020 presidential field was a wealth tax. Warren would impose an annual tax of 2 percent on family assets in excess of $50 million, which would increase to 3 percent for assets above $1 billion. Overall, this tax would hit 75,000 families in the country, who make up 0.01 percent of the population but hold 10 percent of the nation’s wealth.

Vox reports that:

In an interview that aired Sunday on 60 Minutes, America’s most widely covered new House member Alexandria Ocasio-Cortez (D-NY) floated the idea of a top marginal income tax rate as high as 70 percent as part of a plan to finance a “Green New Deal” that would aim to drastically curb America’s carbon dioxide emissions.

You are legislative counsel to a Catholic member of Congress. She asks for your advice as to whether CST as articulated by JPII suggests that she should support or oppose these proposals.

War

JPII write in § 52:

I myself, on the occasion of the recent tragic war in the Persian Gulf, repeated the cry: "Never again war!". No, never again war, which destroys the lives of innocent people, teaches how to kill, throws into upheaval even the lives of those who do the killing and leaves behind a trail of resentment and hatred, thus making it all the more difficult to find a just solution of the very problems which provoked the war.

Which calls to my mind this scene from Gandhi. How do you think JPII would answer the question of whether you can stop someone like Hitler without resorting to state violence?

CST and the Law: Reading Part II of Gaudium et spes (The Pastoral Constitution on the Church in the Modern World)

In the next session of my Catholic Social Thought and the Law seminar, we will be reading Gaudium et spes(literally “joy and hope,” but formally referred to as The Pastoral Constitution on the Church in the Modern World). GS was one of the four “constitutions” promulgated in Vatican II. As a pastoral document, it presents Catholic social thought that builds on the earlier documents but also adds a more explicitly theological and scriptural basis for CST.

Reading Gaudium et spes: Part II

Part II of Gaudium et spesturns from big questions of human nature and so on to five specific issues of contemporary (early 1960s) concern:

1. Marriage and the family
2. The state of the culture
3. The economy
4. Politics
5. Peace

The Culture

Some random thoughts while reading the chapter on culture:

Section 56 poses a series of questions, including:

What is to be done to prevent the increased exchanges between cultures, which should lead to a true and fruitful dialogue between groups and nations, from disturbing the life of communities, from destroying the wisdom received from ancestors, or from placing in danger the character proper to each people?

Some would argue, of course, that Christian missionaries have done much to diminish indigenous cultures around the world. On the other hand, however, does political correctness really demand that we treat all cultures as equal? Are there not some cultures whose foundational precepts offend universal values? (Of course, here I am committing what some would regard as the error of believing that universal values exist.)

Section 57 speaks to an issue that has become even more pronounced in our time:

… today's progress in science and technology can foster a certain exclusive emphasis on observable data, and an agnosticism about everything else. For the methods of investigation which these sciences use can be wrongly considered as the supreme rule of seeking the whole truth. … Indeed the danger is present that man, confiding too much in the discoveries of today, may think that he is sufficient unto himself and no longer seek the higher things.

Is that not a precise statement of the attitude so many hold today, especially among the younger “Nones”? Bishop Robert Barron has been flagging on this problem for a long time, writing for example that:

It is sadly becoming axiomatic among many that religious faith is incompatible with a scientific worldview. As philosophy at the university level has degenerated into deconstruction, relativism, and nihilism, and as literary study has devolved into political correctness, trigger warnings, and the uncovering of microaggressions, the hard physical sciences remain, in the minds of many, the sole reliable bearers of truth about the world. And many have bought the critique that religion is, at best, a primitive and outmoded version of science. Read Daniel Dennett, Stephen Hawking, Sam Harris, Lawrence Krauss, and Richard Dawkins if you want the details. I can testify from direct engagement with the contemporary culture that the disciples of these figures are thick on the ground—and these devotees have not been hugged into atheism; they have been argued into it. We have to argue them back to our position.

The most fundamental problem in this regard is scientism, the reduction of all knowledge to the scientific form. The smashing success of the physical sciences and their attendant technologies has, understandably enough, beguiled the young into thinking that the scientific method is the only legitimate route to truth and that anything lying outside its purview is nonsense or fantasy. As Cardinal George once observed, the effective disappearance of philosophy as a mediating discipline between science and religion has had a deleterious effect on epistemology in general. When philosophy was construed as a legitimate bearer of truth, people saw that a discipline could be nonscientific and yet altogether rational. Given the self-destruction of philosophy, religion seemed, a fortiori, relegated to the shadows of irrationality and superstition. Scientism is, in point of fact, a rather silly position to hold. It is operationally self-refuting: In no way can it be proven through the scientific method that the scientific method is the sole route of access to truth. Moreover, as I have frequently endeavored to show in my apologetic work, people readily, though without assenting to it consciously, accept drama, painting, literature, and philosophy as not only diverting but truth-bearing. Though they are anything but scientific texts, Hamlet, the Symposium, and The Waste Land teach truths about the world, destiny, and human psychology that could not be known in any other way.

Having said that, however, GS was an important statement by the Church of a (some would say new) commitment to intellectual freedom:

This Sacred Synod, therefore, recalling the teaching of the first Vatican Council, declares that there are "two orders of knowledge" which are distinct, namely faith and reason; and that the Church does not forbid that "the human arts and disciplines use their own principles and their proper method, each in its own domain"; therefore "acknowledging this just liberty," this Sacred Synod affirms the legitimate autonomy of human culture and especially of the sciences.

All this supposes that, within the limits of morality and the common utility, man can freely search for the truth, express his opinion and publish it; that he can practice any art he chooses; that finally, he can avail himself of true information concerning events of a public nature. (59)

The trial of Galileo Galilei inevitably springs to mind here. Pope John Paul II’s address of October 31, 1992, to the Pontifical Academy of Sciences did much to rehabilitate Galileo and to affirm the Church’s new openness to science:

… the new science with its methods and the freedom of research which they implied, obliged the theologians to examine their own criteria of scriptural interpretation. Most of them did not know how to do so.

Paradoxically, Galileo, a sincere believer, showed himself to be more perceptive in this regard than the theologians who opposed him. "If Scripture cannot err", he wrote to Benedetto Castelli, "certain of its interpreters and commentators can and do so in many ways." …

It is a duty for theologians to keep themselves regularly informed of scientific advances in order to examine if such be necessary, whether or not there are reasons for taking them into account in their reflection or for introducing changes in their teaching.

Socioeconomic Life

The Church had come a long way from Leo XIII’s Rerum Novarum, which seemed mainly concerned with class conflict, to GS’s emphasis on the moral and social costs of inequality. Of course, the world was a very different place:

The world in 1962-65 had changed dramatically since the pontificate of Leo XIII. Politically, the dominant characteristic of the century had been the two world wars and the cold war which was the backdrop for Vatican II.  The world of Leo XIII had been destroyed by World War I which swept away the German, Austro-Hungarian, Russian and Ottoman empires.  Within two decades after the Peace of Paris (1919) the cataclysmic conflict of World War II yielded the bipolar superpower competition with the danger of nuclear war an ever present reality for the next forty years.  Just as significant as the changing European order after 1945 was the process of decolonization and political independence of over one hundred new states across the southern hemisphere.  Economically, the post-war division of the world into market and centralized economies – the spheres of capitalism and socialism – reinforced the political division of East and West.

In GS, we see a more fully developed version of the Church’s via media as an alternative to both socialism and capitalism (again, compare Leo XIII’s preoccupation with socialism):

Growth is not to be left solely to a kind of mechanical course of the economic activity of individuals, nor to the authority of government. For this reason, doctrines which obstruct the necessary reforms under the guise of a false liberty, and those which subordinate the basic rights of individual persons and groups to the collective organization of production must be shown to be erroneous. (65)

Labor and Bringing Creation to Perfection

GS states plainly a conception of labor that is a central feature of CST and, candidly, one with which I have always struggled:

By his labor a man ordinarily supports himself and his family, is joined to his fellow men and serves them, and can exercise genuine charity and be a partner in the work of bringing divine creation to perfection. Indeed, we hold that through labor offered to God man is associated with the redemptive work of Jesus Christ, Who conferred an eminent dignity on labor when at Nazareth He worked with His own hands. (67)

Work is thus seen as a means by which we collaborate in God’s on-going act of creation.  The Creator hid untold riches and possibilities within His creation, which it is Man’s vocation to discover and develop through work.  Man’s capacity for creativity thus is one of the ways in which he was made in God’s image. This innate capacity, however, requires development. Accordingly, work is not only a process by which we collaborate in God’s creative transformation of the world, but also by which we ourselves are transformed into a more fully human person.  According to CST, this process of self-fulfillment is both a duty and a privilege.

In my personal view, however, Man may (and should) imitate God’s creative work, but Man does not share in God’s work as Creator. In the Genesis account, Creation was completed on the sixth day.  “That is exactly why God could call it good and rest” on the seventh day.[1]  Instead of being part of an on-going process of Creation, work was a direct result of the Fall: When exiled from Eden, Man was condemned to “painful toil.”[2]  Work thus was not intended to be intrinsically fulfilling, but simply a necessary means of survival.

I suspect that my perspective on work and creation is a relic of my Protestant upbringing. I suppose I shall have to (pardon the weak pun) work on it.

Private Property

Recall Leo XIII’s strong defense of private property in Rerum Novarum. Now consider this rather astonishing statement from GS:

If one is in extreme necessity, he has the right to procure for himself what he needs out of the riches of others. (69)

To be sure, GS goes on to give a (rather weak) defense of private property:

Private property or some ownership of external goods confers on everyone a sphere wholly necessary for the autonomy of the person and the family, and it should be regarded as an extension of human freedom. Lastly, since it adds incentives for carrying on one's function and charge, it constitutes one of the conditions for civil liberties. (71)

But surely it stretches the Catholic “both and” to the breaking point to simultaneously defend private property and seemingly endorse theft.

But perhaps we should read the former statement not as an endorsement of theft, but as a recognition of the necessity defense. As one legal scholar observes of the defense of necessity in American law:

The applicability of the necessity defense depends entirely on the nature of the offense committed and the circumstances that occasioned its commission. One who committed trespass or theft because she otherwise would have suffered the effects of hunger or exposure can argue, at least in theory, that her conduct was justified under the defense of necessity. By contrast, one who committed rape or murder or assault as a result of her impoverishment would almost invariably be unable to establish a defense of necessity, because her action (1) would not be effective in abating the danger she sought to avoid, and (2) even if it was (say, if she killed V to get the loaf of bread he was holding), the harm caused by the criminal act would be no less serious than that sought to be avoided.

In practice, even a starving or homeless person charged with theft or trespass will have a hard time establishing a necessity defense if the prosecution can show that: (1) she would not have suffered any serious injury if she had not committed the crime; (2) there were legal alternatives available to her, such as attending a soup kitchen or homeless shelter; or (3) she somehow bore responsibility for the impoverished situation in which she found herself. Presumably as a result of these stringent requirements, reported cases in which a defendant charged with theft or trespass was acquitted by virtue of the necessity defense are virtually nonexistent, at least in modern times.

Still, the defense exists in theory ….[3]

On the other hand, Judge Frank Easterbrook has cautioned:

Allowing a defense of necessity creates a risk that people may act precipitately, before the necessity is genuine. Thus if the law allows a starving mountaineer to break into a remote cabin as a last resort to obtain food--if, in other words, necessity is a defense to a charge of theft--it creates a risk that wanderers will break doors whenever they become hungry, even though starvation is far in the future.[4]

That risk is “addressed by the rule that the evil must be imminent and the means, well, necessary; the departure from the legal norm must be (as with self-defense) the very least that will avert the evil.”

I assume that the point the authors of GS were trying to make is that necessity can be seen as a moral justification for something—theft—that would otherwise be wrongful. As the Catechism explains:

The seventh commandment forbids theft, that is, usurping another's property against the reasonable will of the owner. There is no theft if consent can be presumed or if refusal is contrary to reason and the universal destination of goods. This is the case in obvious and urgent necessity when the only way to provide for immediate, essential needs (food, shelter, clothing ...) is to put at one's disposal and use the property of others. (2408)

In other words, extreme necessity wholly justifies taking another’s property to such an extent that the taking is no longer theft.

The Common Good

In section 73, Gaudium et Spesstates: “There is no better way to establish political life on a truly human basis than by fostering an inward sense of justice and kindliness, and of service to the common good ….” How does the Church define “the common good”?

… the common good embraces the sum of those conditions of the social life whereby men, families and associations more adequately and readily may attain their own perfection. (74)

The Catechism elaborates as follows:

First, the common good presupposes respect for the person as such. In the name of the common good, public authorities are bound to respect the fundamental and inalienable rights of the human person. Society should permit each of its members to fulfill his vocation. (1907)

Second, the common good requires the social well-being and development of the group itself. Development is the epitome of all social duties. Certainly, it is the proper function of authority to arbitrate, in the name of the common good, between various particular interests; but it should make accessible to each what is needed to lead a truly human life: food, clothing, health, work, education and culture, suitable information, the right to establish a family, and so on. (1908)

Finally, the common good requires peace, that is, the stability and security of a just order. It presupposes that authority should ensure by morally acceptable means the security of society and its members. (1909)

I like this analogy by David Cloutier:

… the common good is not the “aggregate good.” It is not a matter of adding up the individual goods of each person. It is something distinct from (though not separate from) any individual’s good. In teaching this, I often draw on the example of a sports team. Individual players have goods they seek, like being fit, scoring runs, and the like. And of course it benefits the whole when people accomplish their individual goods. But not always. This is because the individual goods do not somehow add up to the ultimate goal: winning. In team sports, winning is the common good – or perhaps one could further cite the good of ongoing competition and the integrity of the sport. Seeing that winning is the common good of the team illustrates that individual and common goods need not be seen as zero-sum. Part of one’s individual good is presumably winning, but it would be equally foolish to suggest that somehow a team could “win” if members did not pursue individual goods.

The importance of distinguishing the common good is above all illustrated in how we think about our connection to the others on the team. As the Compendium puts it, “the human person cannot find fulfillment in himself, that is, apart from the fact that he exists with others and for others.” There is no way to win by yourself. This means that if someone else on the team is struggling or frustrated, what do you do? You help. If they are performing well, what do you do? Congratulate them enthusiastically. Fundamentally, this approach defuses destructive competition, which refuses help and envies the success of others. If you are sad, I am sad. Even more crucially, it means that we do not look on other persons and society as simply means – as instruments for an ultimate goal that is solely ours.

Justice

Justice is closely related to the common good. It is defined as a moral virtue that directs one’s actions towards the common good.

It grows increasingly true that the obligations of justice and love are fulfilled only if each person, contributing to the common good, according to his own abilities and the needs of others, also promotes and assists the public and private institutions dedicated to bettering the conditions of human life. Yet there are those who, while possessing grand and rather noble sentiments, nevertheless in reality live always as if they cared nothing for the needs of society. Many in various places even make light of social laws and precepts, and do not hesitate to resort to various frauds and deceptions in avoiding just taxes or other debts due to society. Others think little of certain norms of social life, for example those designed for the protection of health, or laws establishing speed limits; they do not even avert to the fact that by such indifference they imperil their own life and that of others. (30)

Equality

In this area also we see a sharp shift from Rerum Novarum. Whereas Leo XIII emphasized that human dignity was compatible with a highly stratified society in which the different social classes have different rights and powers, the Council moves towards a more egalitarian image of the just society:

Since all men possess a rational soul and are created in God's likeness, since they have the same nature and origin, have been redeemed by Christ and enjoy the same divine calling and destiny, the basic equality of all must receive increasingly greater recognition.

True, all men are not alike from the point of view of varying physical power and the diversity of intellectual and moral resources. Nevertheless, with respect to the fundamental rights of the person, every type of discrimination, whether social or cultural, whether based on sex, race, color, social condition, language or religion, is to be overcome and eradicated as contrary to God's intent. For in truth it must still be regretted that fundamental personal rights are still not being universally honored. Such is the case of a woman who is denied the right to choose a husband freely, to embrace a state of life or to acquire an education or cultural benefits equal to those recognized for men.

Therefore, although rightful differences exist between men, the equal dignity of persons demands that a more humane and just condition of life be brought about. For excessive economic and social differences between the members of the one human family or population groups cause scandal, and militate against social justice, equity, the dignity of the human person, as well as social and international peace. (29)

Is the equality for which the Church argues one of opportunity or of outcome?

Subsidiarity

In Quadragesimo Anno, Pope Pius XI laid out what is widely regarded as the best statement of the Catholic Social Thought principle known as “subsidiarity”:

Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them. (79)

GS section 75 therefore recognizes duties for both rulers and subjects:

Rulers must be careful not to hamper the development of family, social or cultural groups, nor that of intermediate bodies or organizations, and not to deprive them of opportunities for legitimate and constructive activity; they should willingly seek rather to promote the orderly pursuit of such activity. Citizens, for their part, either individually or collectively, must be careful not to attribute excessive power to public authority, not to make exaggerated and untimely demands upon it in their own interests, lessening in this way the responsible role of persons, families and social groups.

Patriotism and Nationalism

Patriotism and nationalism have been much in the news this fall (2018). The Church’s statement on that issue is classically “both and”:

Citizens must cultivate a generous and loyal spirit of patriotism, but without being narrow-minded. This means that they will always direct their attention to the good of the whole human family, united by the different ties which bind together races, people and nations. (75)

Peace and Nonviolence

Chapter 5 praises the peacemakers, while acknowledging that peacemaking is always an ongoing process:

… peace is never attained once and for all, but must be built up ceaselessly. Moreover, since the human will is unsteady and wounded by sin, the achievement of peace requires a constant mastering of passions and the vigilance of lawful authority. (78)

The Church praises those who use nonviolence to achieve peace and resolve disputes:

… all Christians are urgently summoned to do in love what the truth requires, and to join with all true peacemakers in pleading for peace and bringing it about.

Motivated by this same spirit, we cannot fail to praise those who renounce the use of violence in the vindication of their rights and who resort to methods of defense which are otherwise available to weaker parties too, provided this can be done without injury to the rights and duties of others or of the community itself. (78)

But the Church remains realistic that war is sometimes necessary and licit:

As long as the danger of war remains and there is no competent and sufficiently powerful authority at the international level, governments cannot be denied the right to legitimate defense once every means of peaceful settlement has been exhausted. State authorities and others who share public responsibility have the duty to conduct such grave matters soberly and to protect the welfare of the people entrusted to their care. But it is one thing to undertake military action for the just defense of the people, and something else again to seek the subjugation of other nations. Nor, by the same token, does the mere fact that war has unhappily begun mean that all is fair between the warring parties.

Those too who devote themselves to the military service of their country should regard themselves as the agents of security and freedom of peoples. As long as they fulfill this role properly, they are making a genuine contribution to the establishment of peace. (79)

Even, so the Church wishes all to work for peace:

It is our clear duty, therefore, to strain every muscle in working for the time when all war can be completely outlawed by international consent. This goal undoubtedly requires the establishment of some universal public authority acknowledged as such by all and endowed with the power to safeguard on the behalf of all, security, regard for justice, and respect for rights. (81)

Is that a realistic goal? Is a universal public authority more or less likely to protect liberty and justice than national authorities?

CST and the Law: Reading Part I of Gaudium et spes (The Pastoral Constitution on the Church in the Modern World)

In the next session of my Catholic Social Thought and the Law seminar, we will be reading Gaudium et spes(literally “joy and hope,” but formally referred to as The Pastoral Constitution on the Church in the Modern World). GS was one of the four “constitutions” promulgated in Vatican II. As a pastoral document, it presents Catholic social thought that builds on the earlier documents but also adds a more explicitly theological and scriptural basis for CST.

Basic Themes

GS is a dauntingly long document (68 pages exclusive of footnotes in our textbook). It touches on a remarkably wide range of issues, including:

They identified the family as a kind of school of deeper humanity. They lauded the increasing consciousness among people that they themselves are the authors and artisans of the culture of their community and declared that it is now possible to free most of humanity from the misery of ignorance. They bemoaned the fact that at the very time when the development of economic life could mitigate social inequalities, it is often made to embitter them; or, in some places, it even results in a decline of the social status of the underprivileged and in contempt for the poor. They cautioned that economic development must not be left to the judgment of a few. or of groups possessing too much economic power, or of the political community alone, or of certain more powerful nations. They recalled the command of the Church Fathers to Feed the man dying of hunger, because if you have not fed him, you have killed him and called for the support of individuals or peoples with the aid by which they may be able to help and develop themselves. They urged that investments must be directed toward procuring employment and sufficient income for the people both now and in the future.

Informing the Church’s pastoral response to these issues are three recurring themes: (1) human dignity, (2) the common good, and (3) the unity of the human race.

These themes reflect CST’s universal aspirations. Pope Paul VI had advocated that the Church engage in dialogue across four concentric circles:

The outer circle would include all human beings, including unbelievers, and the other three refer to believers in non-Christian religions, other Christians, and finally dialogue among Catholics themselves.

GS situates that dialogue relative to the Church’s primary function as set forth in the Great Commission:

Christ, to be sure, gave His Church no proper mission in the political, economic or social order. The purpose which He set before her is a religious one. But out of this religious mission itself come a function, a light and an energy which can serve to structure and consolidate the human community according to the divine law.

Put another way, CST is an authentic part of the Church’s prophetic witness to all mankind.

Methodologies

GS also reflects the two basic methodologies of CST. First, the trilogy of “see, judge, act.” Second, it speaks of “both and” rather than “either or.”

We see the latter, for example, in the discussion of human nature. Man is both a free individual and a social being. Hence, we are both individuals and members of a community. (32)

GS is perhaps the strongest affirmation of the liberty of the individual that we have seen so far in our examination of CST:

… there is a growing awareness of the exalted dignity proper to the human person, since he stands above all things, and his rights and duties are universal and inviolable. Therefore, there must be made available to all men everything necessary for leading a life truly human, such as food, clothing, and shelter; the right to choose a state of life freely and to found a family, the right to education, to employment, to a good reputation, to respect, to appropriate information, to activity in accord with the upright norm of one's own conscience, to protection of privacy and rightful freedom even in matters religious. (26)

One assumes this new emphasis was a product of the then quite recent experience with fascism and the ongoing threat of communism, both of which denied the liberty of the individual.  

Note, however, that the communitarian element of CST is present even here in the emphasis on positive rights. Unlike the libertarian conception of human freedom, which emphasizes negative rights, CST embraces the concept of man having rights that oblige society to provide certain goods and services to its members.

The both and of autonomy and community is reinforced just a few paragraphs later:

Profound and rapid changes make it more necessary that no one ignoring the trend of events or drugged by laziness, content himself with a merely individualistic morality. It grows increasingly true that the obligations of justice and love are fulfilled only if each person, contributing to the common good, according to his own abilities and the needs of others, also promotes and assists the public and private institutions dedicated to bettering the conditions of human life. Yet there are those who, while possessing grand and rather noble sentiments, nevertheless in reality live always as if they cared nothing for the needs of society. Many in various places even make light of social laws and precepts, and do not hesitate to resort to various frauds and deceptions in avoiding just taxes or other debts due to society. Others think little of certain norms of social life, for example those designed for the protection of health, or laws establishing speed limits; they do not even avert to the fact that by such indifference they imperil their own life and that of others. (4)

“You shall love the Lord, your God, with all your heart, with all your soul, and with all your mind. This is the greatest and the first commandment. The second is like it: You shall love your neighbor as yourself. The whole law and the prophets depend on these two commandments.” (Matthew 22:37-40)

Part I

GS is divided into two major parts. Part I is a deeply theological treatment of the human situation. It is expressly laying the groundwork for linking the various aspects of Catholic teaching on social justice to “their divine source” and to commend those values that “stem from endowments conferred by God on man.” (11)

Part I does so by treating at some length the theological grounding of four basic principles: (1) the dignity of the human person; (2) the community of mankind; (3) human activity throughout the world and (4) the mission of the Church in the modern world. As David Hollenbach points out, this Part stands in stark comparison with the papal encyclicals issued by all of the popes between Leo XIII and John XXIII. Those earlier documents “were almost exclusively framed in concepts and language of the natural law ethic.” (Himes at 373) They lacked “careful consideration of the biblical, Christological, eschatological, or ecclesiological basis of the Church’s role” in achieving social justice. (Id.) To be sure, as Hollenbach makes clear, the Church continues to speak to the universal community of mankind and so continues to rely on arguments from human experience, but in doing so the Church is also witnessing to its faith.

I take a personal interest in sections 22 and 24 of Part I. It is saidthat “Pope John Paul II … cited sections 22 and 24 of Gaudium et Spesmore often than he … cited any other Vatican II document.” As regular readers will recall, I came to Catholicism mainly because of my immense admiration for JPII and deep appreciation of his encyclicals on work and economics. So the sections he valued commanded my attention.

Section 22 deals with Christ as the second (and final) Adam.

As an innocent lamb He merited for us life by the free shedding of His own blood. In Him God reconciled us to Himself and among ourselves; from bondage to the devil and sin He delivered us, so that each one of us can say with the Apostle: The Son of God "loved me and gave Himself up for me" (Gal. 2:20). By suffering for us He not only provided us with an example for our imitation, He blazed a trail, and if we follow it, life and death are made holy and take on a new meaning.

As one commentator observes, JPII invokes this passage to explain the profound question of human suffering:

Through Christ and in Christ, the riddles of sorrow and death grow meaningful. Apart from His Gospel, they overwhelm us.” … It is above all in suffering and death that the questions about life’s meaning arise, questions that only Christ can answer.

Section 22 also speaks to the eternal question of who shall be saved:

Pressing upon the Christian to be sure, are the need and the duty to battle against evil through manifold tribulations and even to suffer death. But, linked with the paschal mystery and patterned on the dying Christ, he will hasten forward to resurrection in the strength which comes from hope.

All this holds true not only for Christians, but for all men of good will in whose hearts grace works in an unseen way. For, since Christ died for all men, and since the ultimate vocation of man is in fact one, and divine, we ought to believe that the Holy Spirit in a manner known only to God offers to every man the possibility of being associated with this paschal mystery.

Paul McPartlan observes of this passage that:

The Spirit blows everywhere, calling everyone to salvation in Christ, as GS 22 explains. This passage maps a vital middle ground between two well-known extremes, respectively known as exclusivism and pluralism, the first of which says that unless a person expressly acknowledges Jesus Christ as their God and savior they cannot be saved, which seems to be hard on those who have never even heard the holy name of Jesus, while the second says that there are many paths to God and that the way of Christ is only one of them, which contradicts the Christian conviction that Christ is the one savior of the world.

The council carefully steered between those extremes, and said: “since Christ died for all, and since all ... are in fact called to one and the same destiny, which is divine, we must hold that the Holy Spirit offers to all the possibility of being made partners, in a way known to God, in the paschal mystery” (GS 22). Yes, there is only one way of salvation, namely through the paschal mystery of Jesus Christ, and the Church knows and celebrates that mystery regularly in its sacraments, as GS 22 says, incidentally echoing SC 6, but, in ways known only to God, every single human being is invited by the Spirit to participate in that same mystery and so to find salvation. It follows that only God can judge what the response of each one has been, but we might perhaps say that a certain likeness to Christ in terms of a life of love and self-sacrifice for others would be likely signs of a salvific response to the invitation of the Spirit, even if the person concerned had never even heard of Christ.

Turning to section 24, we come to the a restatement of the great teaching discussed above on love of neighbor.

God, Who has fatherly concern for everyone, has willed that all men should constitute one family and treat one another in a spirit of brotherhood. For having been created in the image of God, Who "from one man has created the whole human race and made them live all over the face of the earth" (Acts 17:26), all men are called to one and the same goal, namely God Himself.

For this reason, love for God and neighbor is the first and greatest commandment. Sacred Scripture, however, teaches us that the love of God cannot be separated from love of neighbor: "If there is any other commandment, it is summed up in this saying: Thou shalt love thy neighbor as thyself.... Love therefore is the fulfillment of the Law" (Rom. 13:9-10; cf. 1 John 4:20). To men growing daily more dependent on one another, and to a world becoming more unified every day, this truth proves to be of paramount importance.

Indeed, the Lord Jesus, when He prayed to the Father, "that all may be one. . . as we are one" (John 17:21-22) opened up vistas closed to human reason, for He implied a certain likeness between the union of the divine Persons, and the unity of God's sons in truth and charity. This likeness reveals that man, who is the only creature on earth which God willed for itself, cannot fully find himself except through a sincere gift of himself.

As noted above, the commandment to love one’s neighbor pervades CST. We shall return to it repeatedly. 

In closing, thinking about Section 24 inevitably called to mind a famous quote by C.S. Lewis about loving your neighbor:

You are told to love your neighbor as yourself. How do you love yourself? When I look into my own mind, I find that I do not love myself by thinking myself a dear old chap or having affectionate feelings. I do not think that I love myself because I am particularly good, but just because I am myself and quite apart from my character. I might detest something which I have done. Nevertheless, I do not cease to love myself. In other words, that definite distinction that Christians make between hating sin and loving the sinner is one that you have been making in your own case since you were born. You dislike what you have done, but you don't cease to love yourself. You may even think that you ought to be hanged. You may even think that you ought to go to the Police and own up and be hanged. Love is not affectionate feeling, but a steady wish for the loved person's ultimate good as far as it can be obtained.

Gaudium et spes on the Christian's Vocation: With Application to the Question "What does it Mean to be a Christian and a Lawyer" and my old Friend Bill Stuntz

My friend the late Bill Stuntz was one of the most faithful men I have ever had the privilege of knowing and also one of the greatest legal scholars of my generation (criminal law). Several times I heard him discuss with great insight the question of what it means to be a Christian and a lawyer (or law professor). In a brilliant book review essay, Bill observed that:

Christianizing the legal profession might have a much larger effect on law practice than on law. To see why, consider Jesus's occupation for most of his adult life: he made tables, or whatever it was that ancient Middle Eastern carpenters made.Were the tables he made distinctive? Did he use different wood or a different manufacturing process than other carpenters used? The likely answer is no--at least, the gospel accounts offer no reason to think otherwise.

Now change the question: focus less on the noun and more on the verb. Instead of asking whether Jesus's tables were different, ask whether he made the tables differently--whether his motivations and attitudes toward his work, the ways he treated his customers and his coworker, differed from the practices of other carpenters. The answer to that question is surely yes.

William J. Stuntz, Christian Legal Theory, 116 Harv. L. Rev. 1707, 1721–22 (2003).

That insight was called to mind by my preparation today for the next session of my Catholic Social Thought and the Law seminar. We will be reading Gaudium et spes (literally “joy and hope,” but formally referred to as The Pastoral Constitution on the Church in the Modern World).

They are mistaken who, knowing that we have here no abiding city but seek one which is to come, think that they may therefore shirk their earthly responsibilities. For they are forgetting that by the faith itself they are more obliged than ever to measure up to these duties, each according to his proper vocation. Nor, on the contrary, are they any less wide of the mark who think that religion consists in acts of worship alone and in the discharge of certain moral obligations, and who imagine they can plunge themselves into earthly affairs in such a way as to imply that these are altogether divorced from the religious life. This split between the faith which many profess and their daily lives deserves to be counted among the more serious errors of our age. Long since, the Prophets of the Old Testament fought vehemently against this scandal and even more so did Jesus Christ Himself in the New Testament threaten it with grave punishments. Therefore, let there be no false opposition between professional and social activities on the one part, and religious life on the other. The Christian who neglects his temporal duties, neglects his duties toward his neighbor and even God, and jeopardizes his eternal salvation. Christians should rather rejoice that, following the example of Christ Who worked as an artisan, they are free to give proper exercise to all their earthly activities and to their humane, domestic, professional, social and technical enterprises by gathering them into one vital synthesis with religious values, under whose supreme direction all things are harmonized unto God's glory.

Secular duties and activities belong properly although not exclusively to laymen. Therefore acting as citizens in the world, whether individually or socially, they will keep the laws proper to each discipline, and labor to equip themselves with a genuine expertise in their various fields. They will gladly work with men seeking the same goals. Acknowledging the demands of faith and endowed with its force, they will unhesitatingly devise new enterprises, where they are appropriate, and put them into action. Laymen should also know that it is generally the function of their well-formed Christian conscience to see that the divine law is inscribed in the life of the earthly city; from priests they may look for spiritual light and nourishment. Let the layman not imagine that his pastors are always such experts, that to every problem which arises, however complicated, they can readily give him a concrete solution, or even that such is their mission. Rather, enlightened by Christian wisdom and giving close attention to the teaching authority of the Church, let the layman take on his own distinctive role.

I wonder what Bill would make of that passage. I think he would agree with much of it. I once heard him say that Jesus doubtless took pleasure and an appropriate amount of pride in his work as a carpenter. He doubtless strived to master his vocation. Bill thus would certainly have agreed with the argument that we "should rather rejoice that, following the example of Christ Who worked as an artisan, [we] are free to give proper exercise to all their earthly activities and to [our] humane, domestic, professional, social and technical enterprises."

I wonder, however, if Bill would have agreed with the statement that "it is generally the function of [the laity's well-formed Christian conscience to see that the divine law is inscribed in the life of the earthly city." To no profession is the Church here speaking more directly that to our profession as lawyers. Yet, as I read Bill's work, he likely would be somewhat skeptical about the Church's statement:

People fear the claim that right answers exist--that God is God, that he is sovereign, that Christ's ownership of all time and space is total. Those are strong claims, and they are not readily susceptible to secular argument. The fear makes sense, though, only if another claim follows: that the speaker knows--really knows--what all the right answers are. The second claim does not follow from the first. The proposition that God's agenda governs (the idea for which Scalia was castigated) does not entail the proposition that Christians know what that agenda is. Indeed, for Christians the real implication is nearly the opposite. My conclusions are suspect because the reasoning that produces them is tainted by my sin. My faith makes me less confident about my views, legal and otherwise, not more so. (1726)

I assume Bill would have doubts about the extent to which we can discern "the divine law" well enough to inscribe it into positive human law. And I am confident that he would argue that, even if we could do so, immorality and illegality are not coextensive:

So the positive law can forbid only a small fraction of what the moral law forbids, if the moral law is seen in Christian terms. Jesus made this clear by defining murder as anger84 and adultery as lust.85 A decent society could aspire to punish all murder, but all anger? Perhaps, in some imaginable society (though certainly not ours), law enforcers could punish adultery while avoiding selective prosecution. But not lust. (1737)

...

The point is not that morals and law don't mix. They plainly do. Rather, the point is that when morals are contested--when the populace is divided about the relevant rights and wrongs--the side that gets its hands on the law's weapons often finds that those weapons backfire. Backlashes against this kind of legal moralism are not the exception in American history. They are the rule.

That pattern suggests that moralists should usually target the culture instead of the law. (1739-40)

...

Law may sometimes be an effective moral teacher, though I confess to having some doubts; I suspect that law follows the culture, not the other way around. Even if I am wrong, law surely teaches best when the relevant legal norms are enforced across the board, and when the moral precepts on which those legal norms rest are widely shared. In the spheres conservative Christians tend to emphasize most--reproduction, sexuality, physician-assisted suicide--the relevant morals are not widely shared. Where that is so, agnosticism--a poor moral stance, but often a wise legal posture--may be the law's best option. (1740)

I wonder whether there is something inherently Protestant about Bill's approach to the question. (Bill was an evangelical who attended Park Street Church in Boston, a large and historic Congregational church.) I ask that because Gaudium et spes rather clearly thinks that there is a discernible Christian view, if not always an immediately obvious Christian solution.

I wish Bill was still alive so I could ask him.