I’m heading to Notre Dame this morning, where I’ll spend the rest of this week. I’m on a layer in Chicago at the moment, sharing some scenes below and catching up on reading—specifically Marco Rubio’s speech on “common good capitalism” at the Catholic University of America this week.
“Free enterprise made America the most prosperous nation in human history,” [Sen. Rubio] said, “But that prosperity wasn’t just about businesses making a profit; it was also about the creation and availability of dignified work.”
Yes, one can see a certain secularization of Leo’s thought in such interpretations, perhaps inevitable in a politician’s thought. For Leo, rather, the goal of society is to make persons virtuous, to enable them to seek holiness easily and attain heaven.
Also, there seemed a persistent neglect of the role of virtue throughout Rubio’s speech. A student brought this up in the question-and-answer. “You say that people need dignified work so that they can support a family, but,” he asked, “don’t people need to be committed to each other in marriage first for there to be a family?” Rubio seemed unprepared to discuss the role of virtue, or better types of education for social unity. …
The main target of his attack, although not named, was the widely adopted “shareholder theory” of corporate management made famous by Milton Friedman. This is the normative claim that, as the shareholders of a business are its owners, and management serves owners, the sole goal of management should be to maximize shareholder value – then leave it up to the shareholders to use their profits, if they wish, for laudable social goals. The managers themselves should care for nothing other than increasing the share price. According to Rubio, this theory has kept companies from reinvesting profits in the workers, who helped create those profits, and in communities.
Rubio was famous (or infamous) for saying during his run for President that the nation needed fewer philosophers and more plumbers and welders. He now jokes that he would soften that assertion, as he has become more philosophical himself. But perhaps not philosophical enough. A serious shortcoming of his address was that it did not name or systematically refute the theories he was grappling with. He never mentioned Friedman or the theory of shareholder value. He did not say how his theory of “Common Good Capitalism” differed from so-called “stakeholder theory.” He did not even say what he meant by a “common good.”
The best refutation of Friedman’s principle is found in Catholic social thought under the heading, “the universal destination of goods.” The principle actually comes from Book II of Aristotle’s politics, and so one may cite it freely without the risk of being considered a theocrat. It states that in a good society property is owned privately, but that, as no property ultimately is solely one’s own, the use of that property should always be direct to the good of others and the common good. Friedman says rightly that a company’s managers have purely a fiduciary responsibility, and yet not solely to the owners. Similarly, the owners have a fiduciary responsibility as well, often to others, but ultimately to God. Thus, all the way up and down the line, form the lowliest worker to the owner with the highest net worth, the capital invested in the company must be regarded as for common benefit and used with that purpose in view. But, again, Rubio never identified this principle so essential to his policies.
And yet in a broader context these are small quibbles. Something is wrong in our society. We all know that. The worldwide movements of populism and nationalism show it. It’s more than prudent to turn to Catholic social thought for a diagnosis and for finding ways out. Each will do this in the manner appropriate to his state and expertise.