Job creation and the right of economic initiative

| Jason Adkins | August 28, 2013 | 0 Comments

The last edition of this column highlighted the main themes of the U.S. bishops’ 2013 Labor Day statement. The bishops are particularly concerned about rising economic inequality and persistent unemployment.

The bishops urge job creation as a remedy to combat pov­erty and economic inequality.

As the U.S. bishops have said elsewhere, “The first line of attack against poverty must be to build and sustain a healthy economy that provides employment opportunities at just wages for all adults who are able to work.” (“Economic Justice for All,” No. 196.)

But what does the Church mean when it calls for expanded “employment opportunities,” and how can they be achieved?

Right to economic initiative

When the bishops speak of “employment opportunities” they do not mean only the opportunity to be a wage-earning employee, but also that a person’s right of economic initiative — self-employment, entrepreneurism, enterprise creation — is protected.

As the Compendium of the Social Doctrine of the Church states:

“The Church’s social doctrine considers the freedom of the person in economic matters a fundamental value and an inalienable right to be promoted and defended. Everyone has the right to economic initiative; everyone should make legitimate use of his talents to contribute to the abundance that will benefit all, and to harvest the just fruits of his labor. . . . Experience shows us that the denial of this right, or its limitation in the name of an alleged ‘equality’ of everyone in society, diminishes, or in practice absolutely destroys the spirit of initiative, that is to say the creative subjectivity of the citizen” (Nos. 336-37).

The private initiative of persons and associations is the principal way in which jobs are created. “The role of disciplined and creative human work and, as an essential part of that work, initiative and entrepreneurial ability [in fostering economic opportunity] becomes increasingly evident and decisive” (CSDC No. 337).

To this end, business leaders have a particular vocation and responsibility to serve the common good. (See “The Vocation of the Business Leader,” Pontifical Council for Justice and Peace, 2012.)

Unfortunately, however, individuals, firms, and small business seem to be facing new barriers every day as they try to exercise their right of economic initiative.

Barriers to entry

In Catholic teaching, the state has a role in directing the economic life of society so that commerce lifts up the poor, promotes participation in its productive endeavors, and serves the common good (CSDC No. 351-54). “The fundamental task of the State in economic matters is that of determining an appropriate juridical framework for regulating economic affairs, in order to safeguard the prerequisites of a free economy” (No. 352).

Though the state should not be overly intrusive in this task (CSDC No. 336), it can, for example, legislate to ensure fair wages for workers (Pope John Paul II, “Centesimus Annus,” Nos. 15, 35).

But regulation is not an unmitigated blessing. When the dignity of the human person is forgotten, a spirit of solidarity and community is lost, and greed becomes the controlling passion in economic life, crafty and powerful interests will use the state to reinforce the monopolistic and exploitative aspects of a market system. And rather than an instrument of the common good, the state becomes a pawn of special interests.

Regulation: Who benefits?

We have an economy that is at once over-regulated in some areas and under-regulated in others. In more and more industries, the regulatory landscape favors large, established enterprises (agriculture, energy, health care, insurance, financial services). Indeed, it is easier for large enterprises to absorb regulatory costs or be exempted from them altogether through the work of their government lobbyists.

Meanwhile, it is increasingly difficult to start a business, particularly at the local level and on a small scale. Bob Waldrop of the Oklahoma City Catholic Worker Community offers these examples that prevent those in poverty or those who are

in difficult economic circumstances from climbing out:

  • In most areas it’s illegal to sell along public right-of-ways (sidewalks, roads, rest stops on the highways and toll roads, etc.) Where legal, such high prices are charged for licenses, and bizarre requirements are enacted so as to make street vending illegal for all practical intents and purposes.
  • It’s illegal to practice small-scale itinerant trades without “proper licenses” which often have expensive prerequisites so that they function as barriers to market entry rather than protections for the public. These are trades like hair braiding, hair cutting, carpentry, plumbing, etc. The proliferation of coercive credentialing in general raises political barriers to finding and doing work and lowers compensation.
  • It’s often illegal for poor people to practice trades out of their houses.
  • Laws limit the number of garage sales people can have at their homes and restrict the ability to open a small sales or hospitality operation in a home.
  • Laws forbid people from making non-hazardous foods (like jams, pickles, and baked goods) at home and selling them to the public.
  • Poor people who own cars can’t drive people around and charge for the service. It would likely be illegal to use a van to establish a jitney service (a type of transit, common elsewhere, where a van or small bus drives a route but deviates around the route to pick up fares dispatched from a central location). Transportation has serious political barriers to market entry.
  • It’s generally illegal to teach people how to apply makeup without government licenses, which require expensive training.
  • It is generally illegal to grow vegetables in your backyard and then sell them in your front yard.

Again, larger businesses, even at the local level, benefit from certain forms of regulation because it suppresses competition. It is the same reason that many industries ask legislators to create licensing schemes — they often fence out competition.

But beyond mere aesthetics and theorizing, we have to ask ourselves who benefits from these regulations.

If we seek to increase access to employment and jobs, our communities must consider ways in which we prevent genuine economic initiative that is an expression of the dignity of the human person and his or her God-given creative abilities, and which is “decisive” for the economic well-being of society.

Adkins is executive director of the Minnesota Catholic Conference.

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Category: Faith in the Public Arena