Many hailed the collapse of socialism as a triumph of capitalism. With this “victory,” capitalism was viewed as the better system. John Paul had always had problems with capitalism and could not give it carte blanche approval. There was a “kernel of truth” in socialism concerning the injustices found in capitalism. The injustice that occurs against labor, against workers, occurs because of the tension that exists between labor and capital. The capitalist view was that labor was just another commodity of production, like the raw materials of wood, stone, metal and the like. The underlying subject of labor, the human person, is denied his dignity and humanity. “Man is treated as an instrument of production, whereas he – he alone, independent of the work he does – ought to be treated as the effective subject of work and its true maker and creator.” (LE 7) This view of the worker as a commodity results in the worker being treated in a humiliating way as the pursuit of maximizing profits would result in the “lowest possible wages” and a disregard for safety considerations, both of which were rights of workers (LE 11).
John Paul taught that capital is a gift from God in that the resources needed to develop and form capital are naturally occurring. However, it remains the worker who does the shaping of capital (into tools, etc). The Church has always taught “the principle of the priority of labor over capital.” Capital exists to serve the worker, not the worker to serve capital. (LE 12)
While there are problems with capitalism, John Paul did not advocate its elimination, nor did he advocate some third way between capitalism and socialism. Further, he did not try to provide some specific mode of economic system. That would be left to the different societies. (CA 43) Rather, he provided the Church’s “social teaching as an indispensible and ideal orientation, which…recognizes the positive value of the market and enterprise, but which…points out that these need to be oriented towards the common good.” (CA 43) His view for the correct form of capitalism is “an economic system that recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector,” while avoiding a “system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in it totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious.” (CA 42) Free enterprise is needed, but there must be restraints on free enterprise so that the dignity of the human person is recognized and maintained. He suggests the “joint ownership of the means of work, sharing by the workers in the management and/or profits of business.” (LE 14) This way, the subjectivity of the person as worker would be maintained, since he would have a right to decide the working conditions. The state and other organizations, such as trade unions, would be responsible for restraining capital, to ensure the dignity of the worker.