Pope John Paul II’s 1981 encyclical Laborem Exercens (LE) contained an analysis of the “labor problem” in the current economic system and gave a specification of the solution.
In all cases of this sort, in every social situation of this type, there is a confusion or even a reversal of the order laid down from the beginning by the words of the Book of Genesis: man is treated as an instrument of production, whereas he-he alone, independently of the work he does-ought to be treated as the effective subject of work and its true maker and creator. (LE, sec. 8)
He continues by recalling a basic principle in Catholic Social Teaching.
In view of this situation we must first of all recall a principle that has always been taught by the Church: the principle of the priority of labour over capital. This principle directly concerns the process of production: in this process labour is always a primary efficient cause, while capital, the whole collection of means of production, remains a mere instrument or instrumental cause. This principle is an evident truth that emerges from the whole of man’s historical experience. (LE, sec. 12)
A labour system can be right, in the sense of being in conformity with the very essence of the issue, and in the sense of being intrinsically true and also morally legitimate, if in its very basis it overcomes the opposition between labour and capital through an effort at being shaped in accordance with the principle put forward above: the principle of the substantial and real priority of labour, of the subjectivity of human labour and its effective participation in the whole production process, independently of the nature of the services provided by the worker. (LE, sec. 13)
He goes on to reject the solution proposed by Socialism.
Therefore, while the position of “rigid” capitalism must undergo continual revision, in order to be reformed from the point of view of human rights, … it must be stated that, from the same point of view, these many deeply desired reforms cannot be achieved by an a priori elimination of private ownership of the means of production. For it must be noted that merely taking these means of production (capital) out of the hands of their private owners is not enough to ensure their satisfactory socialization. (LE, sec. 14)
In fact, true reform must go in the opposite direction: not eliminating private property, but extending it to every worker, insofar as that is practical. As the pontiff continues,
We can speak of socializing only when the subject character of society is ensured, that is to say, when on the basis of his work each person is fully entitled to consider himself a part-owner of the great workbench at which he is working with every one else. A way towards that goal could be found by associating labour with the ownership of capital, as far as possible, and by producing a wide range of intermediate bodies with economic, social and cultural purposes; they would be bodies enjoying real autonomy with regard to the public powers, pursuing their specific aims in honest collaboration with each other and in subordination to the demands of the common good, and they would be living communities both in form and in substance, in the sense that the members of each body would be looked upon and treated as persons and encouraged to take an active part in the life of the body. (LE, sec. 14)
The Institute for Economic Democracy would like to express our gratitude to John C. Médaille for compiling this compendium of quotations about worker ownership from Pope John Paul II’s encyclical Laborem Exercens.