When Pope Leo XIII issued Rerum Novarum in May 1891, he was not drafting a pious ornament to nineteenth-century economic debate. He was making a decisive intervention in the struggle between two destructive forces that were devouring the social order of Europe: the growing menace of socialism on the one hand, and on the other, the suffocating dominance of corporate and landed oligarchies whose power rested not on the competitive virtues of a free market but on privileges granted and enforced by the State.

Many modern Catholics have absorbed the idea that the encyclical is a simple defence of capitalism in its modern, corporate form. But to read it attentively—especially in light of the theological tradition of Augustine and Aquinas on which it rests—is to see that Rerum Novarum is in fact a sustained rejection of the two-headed monster of collectivist statism and state-privileged monopoly capitalism. It defends private property, but not privilege; it upholds the dignity of labour, but not the power of those who treat labourers as disposable instruments; and it insists on a State limited by natural law, a guardian but not a master, an umpire but not a proprietor.

The encyclical’s starting point is the declaration that the human person precedes the State, both in the order of creation and in the order of justice: homo republica antiquior est (“man is older than the State,” para. 13). This is not a rhetorical flourish but an anthropological and theological statement. Man, made in the image of God, has a dignity that no political order can either confer or remove. Augustine, in De Civitate Dei (XIX, 15), reminds us that human society begins in the natural bonds of family and neighbourliness, long before kings and magistrates: political authority is a post-lapsarian necessity, not a primordial constituent of human identity. Aquinas takes this further in the Summa Theologiae (I-II, q. 95, a. 2), insisting that human law derives its legitimacy from its conformity to natural law. A law that contradicts the moral order is, in Aquinas’s phrase, magis est iniquitas quam lex (“is more an injustice than a law”), and to the extent that it is enforced, it does not bind in conscience. When Leo XIII insists that man is older than the State, he is re-asserting this tradition: the rights to life, property, association, and the fruits of one’s labour are not State-created concessions but God-given endowments, and the State’s role is to protect them, not to regulate them out of existence or grant them selectively to its favourites.

It is in this context that the Pope’s defence of private property must be understood. He writes in paragraph 9: Itaque qui operam suam locat, id facit ut necessaria ad victum acquirat (“When the worker places his energy and his labour at the disposal of another, he does so for the purpose of getting the means necessary for livelihood”). Here Leo is making two related points: first, that labour is directed to the sustenance of life, and second, that the natural outcome of labour is the acquisition of property. This is wholly consonant with Aquinas’s teaching in the Summa (II-II, q. 66, a. 2), where he argues that while the use of goods should be common—meaning oriented toward the good of all—the ownership of goods should be private, because individuals can manage their own property more efficiently and responsibly than a collective can. But the same Aquinas also insists that to seize another’s goods by unjust law, or to keep them when they are needed by the poor, is a form of theft. If property is justified as the means by which a man fulfils his duty to provide for himself and his family, then it is perverted when it becomes a lever for reducing others to dependency.

Here lies the reason why Catholic teaching is, in principle, hostile to the vast enterprises that depend upon State privilege for their existence. A corporation that grows large by honest service, on equal terms with its competitors, is one thing. But a corporation whose market share is preserved by protective tariffs, by regulatory barriers designed to crush small rivals, by direct subsidies, or by the artificial shield of limited liability against just claims, is a creature of law in the pejorative sense: an instrument of privilegium, not a participant in free exchange. Such entities embody what Augustine condemns in De Civitate Dei (IV, 4) when he likens kingdoms without justice to “great robberies” (magna latrocinia). They convert the State from a guardian into an accomplice, using its coercive power to do what they could not accomplish in honest competition.

Leo XIII knew this pattern well, even if the modern jargon of “corporate welfare” did not exist in his day. The industrial capitalism of the late nineteenth century was thick with railway monopolies granted land and rights-of-way by governments, with banking cartels sustained by legal tender laws and charter restrictions, with manufacturers shielded from foreign competition by protective duties that raised prices for all. Against such an order, the Pope sets not socialism, which he rightly saw as a project for absorbing all property into the State, but a decentralised economy of self-supporting households, independent tradesmen, and voluntary associations. He praises the “collegia artificum” (guilds of craftsmen, para. 69) as examples of how workers, free to organise themselves without State interference, can secure mutual aid, training, and standards of work. Ius naturae est ut homo societates privatas constituat (“It is a right of nature for man to form private societies,” para. 72), and to suppress or absorb such societies is to do violence to the natural order.

Aquinas, in Summa Theologiae (I-II, q. 95, a. 4), affirms that human beings, being social animals, naturally form associations to achieve common purposes. Augustine, in De Civitate Dei (XIX, 13), defines a people as “an assemblage of reasonable beings bound together by a common agreement as to the objects of their love.” In both cases, the implication is that the health of a society depends on the freedom of these intermediate bodies—families, guilds, cooperatives, parishes—to pursue their own ends. When the State, acting in concert with privileged corporate powers, destroys or absorbs them, it hollows out the social order, leaving only the isolated individual and the monopolistic power bloc. In such conditions, “economic freedom” becomes a hollow phrase, for the individual’s only “choice” is between servitude to a handful of State-sheltered employers or destitution.

The dignity of labour, as Rerum Novarum insists in paragraph 31, is not to be found in the wage slip alone: Opus… non est homini dedecus, sed honor (“Gainful occupations are not a mark of shame to man, but rather of respect”). This dignity is most fully realised when the worker is free to direct his labour toward his own ends, whether by self-employment, by cooperative association, or by work for another under conditions that respect his humanity. Aquinas (II-II, q. 187, a. 3) sees labour as a participation in God’s own creative activity; Augustine warns against the vice of treating one’s fellow as a mere instrument for one’s own gain. In the world of the State-privileged monopoly, this warning is ignored: men become “human resources,” to be shuffled, cut, or outsourced in pursuit of quarterly targets, with the law standing ready to protect the prerogatives of the few who command such enterprises.

It is here that Leo’s teaching on the just wage becomes central. In paragraph 63, he declares: Est igitur iuris naturalis… ut merces non sit minor quam quae frugi et recte morato operario vitam sustentet (“There is a dictate of natural justice… that the wage shall not be less than enough to support a worker who is thrifty and upright”). The point is not that the State should fix wages by decree, but that justice itself demands a level of remuneration sufficient to allow the worker to maintain his household in dignity and, ideally, to accumulate savings. These savings are the seed of independence: they make it possible for a labourer to acquire a plot of land, to start a small shop, to enter a partnership. In a society dominated by privileged giants, this upward path is deliberately obstructed. The privileged few prefer a permanent class of dependent wage-earners, easily disciplined by the threat of dismissal and with no realistic alternative to submitting.

Taxation, too, is treated by Leo with suspicion when it becomes an instrument of expropriation rather than a contribution to the common good. In paragraph 67, he warns against onera publica nimis gravia (“crushing taxes of every kind”), which sap private wealth and discourage the virtues of thrift and enterprise. Aquinas (I-II, q. 96, a. 4) condemns laws that impose burdensome obligations without necessity, and Augustine sees in excessive taxation the hallmark of rulers who govern for their own enrichment rather than for justice. In the modern mixed economy, where taxes raised from the many are channelled into subsidies and guaranteed contracts for the few, the injustice is doubled: the taxpayer is not only deprived of his own resources, but made to finance the system that keeps him subordinate.

Underlying all these particular teachings is a theological anthropology that refuses to reduce man to an economic unit. Augustine’s diagnosis of the libido dominandi—the lust to dominate—applies as much to economic as to political life. The great temptation of those who hold wealth and power is to view their fellow men as means rather than ends, as inputs to be optimised. Aquinas, in his treatment of commutative justice (II-II, q. 77), is explicit that to take advantage of another’s necessity to extract more than a fair return is a sin against the natural law. This is why Catholic social teaching, from Leo XIII onwards, consistently refuses to sanctify the corporate behemoth simply because it is “private” rather than “public.” Size and power, when sustained by privilege, become instruments of oppression, no less than the bureaucratic ministries of the socialist state.

If we read Rerum Novarum without the distorting lens of Cold War polemic, what emerges is a vision of economic life that is neither laissez-faire in the modern corporate sense nor statist in the socialist sense. It is an order of widely distributed property, of many centres of initiative, of a State that protects but does not command, and of associations that mediate between the individual and the State. It is an order in which the chief enemies of liberty are not only the collectivist ideologue but also the billionaire whose fortunes depend on grants, both direct and indirect, of privilege by the State. It is precisely because Catholic teaching sees human beings as bearers of inalienable dignity that it resists any system—whether draped in the red flag of socialism or the balance sheets of a privileged monopoly—that treats them as mere “resources” to be allocated by those who hold power.

This, too, explains why the tradition is so clear on the duty of charity and the use of wealth. Aquinas’s famous distinction (II-II, q. 66, a. 2) between ownership and use—between the right to hold goods and the obligation to use them for the common good—is not a loophole for State redistribution, but a moral standard for the conscience of the owner. Augustine, in De Doctrina Christiana (I, 22), frames the use of temporal goods as a means to the enjoyment of God and the service of neighbour. A property regime that fosters ownership among many, and keeps the great concentrations of wealth subject to the disciplines of competition and morality, is one that aligns with this teaching. A regime that, by State action, entrenches a few in command of the economy and excludes the many from ownership is not.

In our own time, the relevance of Leo XIII’s teaching is obvious. We live in economies where the forms of capitalism have been retained but the substance hollowed out: markets in name, but in practice dominated by a nexus of government and corporate power; competition in rhetoric, but in reality a game for those who can pay for access and influence. The same moral principles that led Leo to reject socialism oblige us to reject this corporatist order. The goal is not to level all differences of wealth, but to ensure that wealth is obtained and held by right, not by privilege; that property is widely held; that the worker has a path to independence; and that the State remembers it exists to serve persons, not to manage them.

When Augustine warned that without justice the State is but a great robbery, and when Aquinas insisted that unjust laws are not binding in conscience, they were laying the groundwork for a critique that applies as much to modern economic arrangements as to the politics of their own times. Rerum Novarum is their heir in this respect: a document that, if taken seriously, would lead us to dismantle the legal structures that sustain state-privileged monopolies, to free associations from State control, to protect the family from bureaucratic intrusion, and to make the economy once again a field in which human beings can act as responsible agents, not as units of labour power. Anything less is not Catholic social teaching, but its betrayal.

Bibliography

Aquinas, Thomas. Summa Theologiae. Latin text from the Leonine Edition; English translation by the Fathers of the English Dominican Province.
Augustine of Hippo. De Civitate Dei [The City of God]. Trans. Henry Bettenson. London: Penguin, 1984.
Augustine of Hippo. De Doctrina Christiana. Trans. R.P.H. Green. Oxford: Clarendon Press, 1995.
Leo XIII. Rerum Novarum. 15 May 1891. Latin text from the Vatican; English translation from the Vatican English archive.
Gregory XVI. In Supremo Apostolatus. 3 December 1839.
Pius IX. Quanto Conficiamur Moerore. 10 August 1863.
Holy Bible. Greek New Testament from Nestle–Aland 28th ed.; Latin Vulgate; English translations from the Douay–Rheims and King James Version.
Amos. Liber Amos in Biblia Sacra Vulgata.
Amos. Book of Amos in the Revised Standard Version.

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