Why Libertarians Are Wrong About Subsidiarity

I find it rather annoying when libertarian Catholic friends of mine get so excited when I say that I know about subsidiarity. It is kind of insulting when they jump on the opportunity to tell me that their economic/political system is the one that upholds subsidiarity the best. Libertarians like to talk about subsidiarity because they think that it automatically and necessarily means small government which they have a pre-conceived ideological dedication to. An ideology that has its roots firmly planted in the enlightenment, not in Catholicism. So they take it, distort it, and thus try to jam the square peg of libertarianism into the round hole of Catholicism. They distort it because they take the definition and they interpret it with two of their previously held (and held higher I might add) ideologies, which are: Capitalism, as understood in the Austrian/Chicago schools of economics, is the best economic system (or is consistent with Catholic Social Teaching), and government is intrinsically bad and has no role in civil society. Here I will refute the first assumption by showing that when we remove the first assumption and replace it with Catholic teaching, we get a very different interpretation of subsidiarity. I will use regulation of business as a helpful example and context for this discussion.Let us use a quote from David A. Bosnich with the Acton Institute as our libertarian reference point.

“One of the key principles of Catholic social thought is known as the principle of subsidiarity. This tenet holds that nothing should be done by a larger and more complex organization which can be done as well by a smaller and simpler organization. In other words, any activity which can be performed by a more decentralized entity should be. This principle is a bulwark of limited government and personal freedom. It conflicts with the passion for centralization and bureaucracy characteristic of the Welfare State.”

The problem with his assessment here is the “bulwark of limited government” phrase. Although he isn’t far off with his brief definition of subsidiarity, he makes a logical leap to then say that this automatically and necessarily means limited government, as they understand it. Subsidiarity alone does not demand such a leap, it would require the two assumptions I suggested above.But before furthering the critique, let us use the Popes to lay out a full definition of subsidiarity:

“As history abundantly proves, it is true that on account of changed conditions many things which were done by small associations in former times cannot be done now save by large associations. Still, that most weighty principle, which cannot be set aside or changed, remains fixed and unshaken in social philosophy: 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.”[note]Pius XI, Quadragesimo Anno, no. 79.[/note]

Lets expand our definition of subsidiarity a little bit more with the words of Pope John Paul II:

"The principle of subsidiarity must be respected: a community of a higher order should not interfere with the life of a community of a lower order, taking over its functions... in case of need it should, rather, support the smaller community and help to coordinate its activity with activities in the rest of society for the sake of the common good."[note]Centesimus Annus, no. 48.[/note]

The first passage from Pope Pius XI lays out subsidiarity and describes how its violation is a grave evil. This definition is pretty close to David’s in that they both affirm that a higher order cannot take from a lower order what that lower order can do effectively. However, his limited understanding of subsidiarity begins to fall apart when we look at the rest of Pius XI’s quote and when we introduce Pope John Paul II.If we look at the first sentence of the passage, even at that time (1931) the pope acknowledged that higher orders were justly taking over functions once filled by lower orders and that this was necessary. This acknowledgement is very important because it begins to show that it is possible for higher orders to operate when need be. This openness for higher orders to operate transitions us well into Pope John Paul II’s contribution to the definition. In his passage, he outlines how a higher order should operate when it acts. He says that when a higher order operates, it should do so in such a way so as to support the lower community and help to coordinate its activities, rather than take over its operations.This careful look at the definition of subsidiarity begins to expose the key point where David’s logical leap breaks down. It breaks down at the question of need. The Papal definition of subsidiarity clearly shows that when in need, the higher orders can operate and do so in such a way so as to support the lower orders. Therefore, to be more specific, the federal government very well could take action if it needed to. The federal government is not inherently bad. Subsidiarity is not the bulwark of limited government, necessarily. It is a principle that guides all levels of government to operate appropriately and in right order, so as to promote the common good. It is important to note here, that I do not intend to support how our federal government operates, far from it, however, I defend the right for it to act, and to act in a subsidiarian way when need be. I reject the idea that it should be stripped down to a government of libertarian paradise (national defense and contract/property protection, period.)When you assume that business should never be regulated, it is easy to assume that federal government is way too big and usurps low level authorities. They would say: “Leave business and the economic realm up to individuals and businesses (being smaller orders) and get rid of the government regulation (higher order)”. Simply put, there is no need. However, when we eliminate this assumption and replace it with questions we arrive at a different way of looking at subsidiarity. Questions: Does the government have a role in the economic sphere? What does the church teach about free market capitalism? Now we find a much different answer. Lets look at JPII on this issue (and you can read a lot more about this on the DR website and in all the social encyclicals. I would suggest Quadragesimo Anno).(The context here is he is discussing the role of the state in operation of the economy)

"This does not mean, however, that the State has no competence in this domain, as was claimed by those who argued against any rules in the economic sphere. Rather, the State has a duty to sustain business activities by creating conditions which will ensure job opportunities, by stimulating those activities where they are lacking or by supporting them in moments of crisis. The State has the further right to intervene when particular monopolies create delays or obstacles to development. In addition to the tasks of harmonizing and guiding development, in exceptional circumstances the State can also exercise a substitute function, when social sectors or business systems are too weak or are just getting under way, and are not equal to the task at hand."[note]Ibid., no. 48.[/note]

Here JPII directly condones the involvement of government in the realm of economic activity to sustain and stimulate businesses, intervening in some way when monopolies form, and even exercise a “substitute function” (which in context seems to suggest a temporary government takeover). There is much more on this issue in the writings of the popes but I don’t have space here, so this will suffice. This passage alone shows that there is an openness for the government to operate in the economic realm, to some degree and in some situations, and that is all we need to show here. It is sufficient to disprove the assumption that government has no role in the economic realm which is what is held by libertarians.So now we can understand subsidiarity differently. It is not that businesses cannot or should not be regulated. It is that, in such circumstances that they need to be regulated (or be the recipient of some other government action) they should be regulated as closest to the business as possible. If a business is small and local, the local government can regulate it and it would be a grave evil for the federal government to regulate it directly. However, a local government cannot effectively regulate a business if the reaches of this business is beyond the jurisdiction of the city government. In such a case the state must step in. When the business operates nationally, the federal government must regulate it. When a business operates internationally, it could require an international level of regulation. And, in keeping with subsidiarity, we find this very thing argued for by Benedict XVI in Charity in Truth:

"This seems necessary in order to arrive at a political, juridical and economic order which can increase and give direction to international cooperation for the development of all peoples in solidarity. To manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration: for all this, there is urgent need of a true world political authority, as my predecessor Blessed John XXIII indicated some years ago. Such an authority would need to be regulated by law, to observe consistently the principles of subsidiarity and solidarity, to seek to establish the common good, and to make a commitment to securing authentic integral human development inspired by the values of charity in truth. Furthermore, such an authority would need to be universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights."[note]Charity in Truth, no. 67.[/note]

So here we have a Pope directly supporting an international organization with power for regulation AND he says that it must operate within the principles of subsidiarity. Clearly, and definitively, this shows that the subsidiarity = small government, equation is severally lacking in its depth and in a proper and complete Catholic understanding.To conclude, I do find it very interesting, that if the libertarian was willing to allow subsidiarity to be applied to economics specifically (and businesses in particular) then their desired small government would actually be more realistic. If libertarians were to support an economic system the promoted the wide distribution of property, an economy characterized by small local businesses and farms, then the government could be held more locally. An economy where most businesses are small could be much more easily regulated by smaller governing bodies. Furthermore, if libertarians were to support the existence of contemporary industry-wide guilds, once again, the regulatory function could be passed out of government’s hands all together and be passed on to a non-governmental civil organization. Such an arrangement could be done through the passing of a few laws by the state and then after that, all regulation could be done by non-governmental intermediary bodies, greatly simplifying governments interference with the economy and the size of government. I find it interesting that in fact it is Distributism, not capitalism, that would afford society the opportunity to have the size of government that they seek.