As we have seen in chapter six, Reformed sociology teaches that the doctrine of sphere sovereignty alone presents us with a proper insight into the connection willed by God between man and his social structures, since the individual is not allowed by this doctrine to be absorbed by any temporal bond. God alone is the absolute sovereign of the bodies and consciences of men, and He demands that we obey Him against all earthly authorities, whether civil or ecclesiastical, whenever they claim absolute power, especially the power to control men's thinking on questions of conscience. No bearer of authority on earth is the highest power from which other forms of social authority are derived. Sovereignty belongs only to God, while He delegates limited authority only to the various social spheres, so that these must be understood as coordinately rather than subordinately related.

This scriptural sociological pluralism means that every social unit or group has its own God ordained sphere of work to perform, which it must be allowed to carry out without interference by another social institution. The state may, of course, insist that the family, school, or labor union live up to its social responsibilities. But only as a last resort may the state interfere and take over some other sphere's responsibilities and discharge them itself. Thus, for example, the state must never interfere with family life, since the husband's authority over his wife and children is not derived from the state but from Christ himself (Eph. 5:23). Likewise, we must recognize that the church is not the state. There is scarcely anyone today who advocates that it should become one. But just as truly, the principle of sphere sovereignty requires that we also recognize the principial structural difference between the school and the state, and between a labor union and the government.

There is a close parallel between compulsory trade unionism and the public school which is suggested by public tax revenue. In each case the apostate humanists claim that both school and union are agencies of the government. The school they see as the proper function of the state, to be used by the state to "brainwash" its citizens for its military, economic, and political purposes. Such people have failed to see that the public school has a character all its own, distinct from either the state or the church. While both church and state have legitimate interests in the school, as is true in turn of the church and school regarding the state, in no sense should the law of the state do violence to the functioning of the school according to its true nature. Parents have a God given right to educate their children in terms of the perspective of their own life-and-world view. When the government infringes upon this God given right, then the door is opened to totalitarianism.

Failure to understand the sovereignty of the various spheres of society and to recognize the specific tasks of the various associations and communities of society inevitably leads to all kinds of inequalities and injustices. In no case has this has been more true than in the violent intervention by the state in the operation of the modern economy.

1.  The Role of Government in the Operation of the Economy⤒🔗

How big should the government become? What part, if any, should it play in the operation of the modern economy? How much should it tax and spend of the people's money? In answer to these questions there are today four major schools of thought – (1) the Roman Catholic, (2) the laissez faire school of nonintervention, (3) the collectivistic school of violent intervention, and (4) the Reformational school.

The influential school of laissez faire English liberals during the nineteenth century taught that the primary function of the state was merely to set up and enforce certain "rules of the game" under which private enterprise could then be counted upon to get goods efficiently produced and distributed. To the question, "Why should the government intervene at all in business affairs?" Adam Smith had one answer: because the benefits of enlightened self-seeking can be obtained only if competition channels these efforts to the com­mon good. Seldom do merchants gather together, he wrote, that their talk does not turn to means of getting higher prices for their produce. Without competition among sellers, more consumer spending may mean high profits and not more products. It is the job of the government, representing all the people, to see to it that such competition prevails It was in the name of competition that Adam Smith argued in The Wealth of Nations for a relaxation of the paternalism of the Mercantilist State and for the abolition of the corn bounty and trading companies such as the East India Company and the Hudson Bay Company privileged by law. Smith believed that the automatic regulation of industry by reference to market price alone rather than by the whims of impersonal government bureau­crats would increase the nation's wealth. Fiscal regulations had cramped private enterprise and brought about evil consequences which were no part of the national intention, as patently in his generation as war-time price controls did in our century.

The great laissez faire economists such as Smith, Ricardo, Mill, Marshall, and Jevons did not dispute the need in a free enterprise society for some rules of fair play in economic life as in personal behavior. Without common consent to eliminate fraud, to respect property ownership, and to honor contractual promises, business dealings would be carried on under a great handicap. They agreed that it is the function of government to establish and to enforce these basic rules and laws against murder, theft, arson, and fraud to enable men to live securely together. Among Adam Smith's disciples "laissez faire" never meant that the government should do nothing, but rather that it should leave economic affairs alone within a framework of basic moral and legal rules of the game. For economic individualism that government governs best which governs least, as far as the day to day operations of the market are concerned. As Rushdoony says: "Laissez faire was set in the context of a Deistic natural law faith, but, more basically, it was a recognition of God's absolute laws, His sphere laws for economics. Gresham's law is operative today, as it has been from the beginning of history."¹

At the other extreme, Communists and Socialists argue that all productive resources of society should be owned by the government, and that the production and distribution of goods and services should be handled by the state by means of "planning." Human society must be governed by specific planning so that it can develop without the disturbance of depression and unemployment. If the planners have their way nothing will be left to chance, to improvisation, and individual initiative. For collectivists society must be treated as a scientific problem. It can then be analyzed, and from this analysis a prognosis of the future can be drawn. On such a basis a scientific plan will then be introduced assuring human welfare and security and equality for everyone. In The Society of the Future, H. Van Riessen points out that such planning will, of course, require the control both of society as a whole and of the individuals composing it in such a way that the plan will not be disturbed. Personal individuality will eventually have to be more or less determined by the planners, if their plans are not to be disrupted. Thus wages, prices, rents, social security, production quota, choice of job, migration, birth rate, and even recreation will all have to be directed from the top if planning is to succeed.

Planning envisions much wider perspectives than merely managing the currency and setting production quotas, for it cannot hope to succeed if confined simply to economic life. The population, for example, will have to be induced psychologically to accept the plan. It will therefore become necessary to include the spiritual aspects of life in the planning process in order to convince the people that they should fully support the plan. It is therefore inevitable that education and the public control of all the media of modern communication will have to be included within the powers of the planners. Even the churches will have to fall into line with the wishes of the planners and adjust their programs to it if they wish to survive in a collectivistic society. In his profound and frightening study of The Technological Society, Jacques Ellul says:

When a society becomes increasingly totalitarian, it creates more and more difficulties of adaptation and requires its citizens to be conformist in the same degree. Thus this technique (of social adaptation) becomes all the more necessary. I have no doubt that it makes men happy in a milieu which would normally make them unhappy, if they had not been worked on, molded and formed for just that milieu. What looks like the apex of humanism is in fact the pinnacle of human submission; children are educated to become precisely what society expects of them. They must have social consciences that allow them to strive for the same ends as society sets for itself. Clearly, when modern youth are fully educated in the new psychopedagogic technique, many social and political difficulties will disappear. Any form of government or social transformation becomes possible with individuals who have experienced this never-ending process of adaptation. The key word of the new human techniques is, therefore, adaptation.

The new pedagogical methods correspond exactly to the role assigned to education in modern technical society. The Napoleonic conception that the Lycees (schools) must furnish administrators for the state and managers for the economy, in conformity with social needs and tendencies, has become world-wide in its extent. According to this conception, education no longer has a humanist end or any value in itself; it has only one goal, to create technicians.²

Collectivism in short is the mobilization of society for unitary action in accordance with the demands of modern technique. The human mind will be made to conform to the much more advanced brain of the machine. Man will sacrifice his freedom in order to increase his material security. Every aspect of life will become technized and politicized, even love and marriage will become functions of planning and technical control.

According to Dr. John Platt, a bio-physicist at the University of Michigan and director of the university's Mental Health Research Institute, population will be managed by mass produced contraceptive agents in foodstuffs. He told the annual conference of the American Institute of Planners in 1967 that such a technique might control the population explosion twenty to thirty years sooner than present available methods.³ Couples wishing to have a baby would have to obtain permission to buy drugs to offset the contraceptive drug in the food. He said that the technique was beyond reach technically as well as politically at the moment. But the process, once perfected, could be as simple as putting vitamin D in milk or adding iodine to salt. Other scientists in California have advocated treating the nation's water supply with similar drugs.

At present, thank God, these planning techniques have not yet been put into practice in the English-speaking world as some of them have been in Communist lands. In his textbook on Economics, G. L. Bach points out that "Today, the United States stands as one of a minority of the world's nations with a basically private enterprise, capitalist economy. Communism is the economic pattern for far more of the world's population than is the private enterprise system we know. The U.S.S.R. and China alone account for over a billion people, one of every three human beings alive."⁴ Nevertheless these same collectivistic tendencies are advancing in the free part of the world, since collectivism appears to so many of our liberals and apostate humanists as a remedy for elements in our societies which everyone agrees are impediments to full freedom, e.g., depressions, unemployment, poverty in the midst of plenty.

It is vital that we all realize before it is too late that collectivism and freedom are real alternatives – if we choose one we cannot have the other. And collectivism can be imposed upon a gullible electorate with an appearance of not destroying continuity with our historic traditions of limited government and the rule of law, only if enough Americans, Britons, and Canadians lose or forget their love of personal freedom under God. Today as never before in our history the price of our liberties is eternal vigilance. Although most Christians may reject the totalitarian end of the road planning, the more they champion planning or socialism as the cure of all society's present ills, as many "liberal" churchmen have been doing in America and Britain and Canada for a generation, the less possibility they will leave themselves and others for a final resistance to and escape from all the bitter consequences.

At present many American Christians seem to have adopted a middle position between economic individualism and collectivism. They believe in the virtues of a free, private enterprise economy, yet make no stand principally against the growing power of the Federal Government. The growth in government expenditures at all levels – federal, state, and local – has been fantastic, reaching $243 billion in 1967. Of this vast amount, defense spending and social security welfare payments accounted for about two thirds of all federal, state, and local government spending.

From a Reformational point of view, what should the public sector do? Who should pay the taxes, and who receive the benefits?

Economic individualists such as Murray Rothbard in Man, Economy and the State argue that "each man, in pursuing his own self-interest furthers the interest of everyone else," and that continued violent intervention by the state in the private sector will bring the nation down in ruins.⁵ Rothbard can make such a claim because he looks at the function of government from the point of view of the individual whom he thinks of as sovereign in this universe. Such a sovereign individual must be allowed his full freedom to exercise his "natural" rights, especially his rights to private property. By such civil rights laissez faire individualists therefore mean the freedom to acquire property or to sell it or to make contracts with regard to it. In this context of natural law social theory, equality is thought of in terms of each member of society having equal rights to property regardless of whether one's property is large or small. Such a view is derived from the teachings of John Locke, the philosophical progenitor of the old liberalism.

Locke began his social theory with the inalienable rights of each man to his life, liberty, and property. Thus Locke declared that "the great and chief end … of men uniting into commonwealths, and putting themselves under government, is the preservation of their property." He defined a man's property as "his life, liberty and estate," – in other words, himself and his natural rights as a whole, not only his property in its ordinary sense. According to Locke, by nature all men are "free, equal and independent," and no man can be "subjected to the political power of another without his own consent."⁶ Any number of men may agree together to incorporate themselves into a body politic, but in Locke's view of the social contract men do not give up all their rights. They surrender only so much of their natural liberty as is necessary for the preservation of society; they give up the right they had in the state of nature of individually judging and punishing, but they retain the remainder of their rights under the protection of the government they have agreed to establish. The state is thus in principle a limited state. Man's natural rights could not be surrendered even by the social contract. Thus, from the beginning, Locke limited the content of the social contract by not giving it any other purpose than the peaceful enjoyment of natural civil rights in a civil state. The individuals brought to the ruler nothing else than their natural competence to defend their natural rights through self-direction against attack by others. Thus, Locke laid the basis for the constitutional state of the old liberalism. The state is a limited company for the organized maintenance of individual freedom and rights of property and life.

Another assumption of contemporary economic individualists such as Rothbard and L. von Mises is that of the natural identity of interests between men. In his work, The Structure of Social Action, Talcott Parsons points out that "This is the device by which it has been possible for utilitarian thought, with few exceptions, for two hundred years to evade the Hobbesian problem of order."⁷ Both Rothbard and von Mises assume as a basic postulate of their thought that the market processes of capitalism do a better job of expressing people's desires on how the productive resources of society should be used in each case than any government can possibly do. It is the people's desires rather than the planners' wishes which should carry the most weight.

The allocation of resources through the private economy, according to W. H. Hutt, occurs primarily in response to consumers' money demands for goods and services. He calls this "consumers' sovereignty." By means of each dollar the consumer spends he votes for whatever goods or services he wants produced. In this way he exercises his economic democratic rights.⁸

Economic collectivists such as J. K. Galbraith prefer "citizens' sovereignty" to such "consumers' sovereignty," since in the market place, voting for resource allocation is on a one-dollar-one-vote basis, whereas in the public sector, in a democratic country, it is on a one-person-one-vote basis. Thus, in the private sector the rich man has many more votes than the poor man. In the public sector a democratic system attempts to give each citizen equal voting power, regardless of whether he is rich or poor.

In The Affluent Society,⁹ Galbraith argues that the prevailing laissez faire individualist distrust of the governmental process has led to a serious under-allocation of resources to the public sector (leaving national defense aside). In the world's richest economy, we allocate less than 15 percent of our net national product (about $100 billion out of about $700 billion in 1967) to satisfying all non-defense collective wants through governmental services.

Galbraith maintains that the American economy is so rich we can readily afford more and better public services, that we need them badly, and that indeed the alternative is generally wasteful civilian consumption just to keep our economic system going. Yearly model changes on automobiles, plush night clubs, and mink coats are symbols of conspicuous consumption, meeting demands developed if not created by advertising. Yet America's public services are barely adequate. Half the nation's most able youths still do not go to college. The great cities are marred by slums and their streets jammed. The police forces and local governments are often peopled by incompetent individuals, so poorly paid as to be constant targets for graft. All this, Galbraith argues, reflects a basic social unbalance in the affluent American economy.

It is obvious from this brief summary of his thesis that Galbraith looks at the function of government from the point of view of society as a whole rather than of the individual. He stresses equality rather than freedom as the fundamental social value to be pursued. Equality is understood by Galbraith and other collectivists as the right of all citizens to a fair share in the goods and services of the economic system.

From the Reformational perspective the point to be noted is that the economic collectivist no less than the economic individualist are basically united by their common immanence humanist standpoint. Both approach the problem of the role of government in the economy in the light of their apostate humanist presuppositions about man in society. But whereas the collectivist absolutizes the com­munity, the individualist deifies the sovereign single individual. The socialist looks to the government to integrate people's economic activities, the capitalist looks to the price system and the free market to do so. One stresses freedom, the other equality.

The difference in fundamental presuppositions between individualist and collectivist is reflected in the difference in emphasis each ascribes to the role of government in the economy. In the case of laissez faire individualism the government's function is determined by the ground-motive of freedom, in the case of the socialist collectivist the function of the state is determined by the ground-motive of science, and the ideal of the freedom of the community receiving expression in the scientific distribution of all available resources of the society to everyone equally. The collectivist looks to the govern­ment to create order in the economic relationships within society. The individualist expects the natural identity of interests and competition to provide the integrating factor required. The laissez faire school thinks that the freedom of the individual must be the criterion of the state's intervention in the economic process always coming to a halt at the point where the individual's freedoms and civil rights are being infringed upon. The collectivist thinks that the public interest must take precedence over the private interest and that the good of the whole body politic must come before the good of the individual.

A solution to this liberal-socialist dilemma concerning the role of the state in the operation of the economy is not possible until we first discover the structure of the state and the particular place of the authority of the state within this individuality structure.

According to the scriptural principle of sphere sovereignty it is only in terms of God's ultimate sovereignty that the function of the state can be properly understood. The state is ordained by God to maintain the external public legal relations between the social spheres. For this reason neither individualism nor collectivism is acceptable to the consistent Christian who recognizes only God's sovereignty in this world and rejects any claim to sovereignty on the part of the individual or of the collectivity as idolatry. The Christian considers that the choice between individualism and collectivism is the product of the apostate humanist's attempt to understand society apart from God's creation ordinances for it. Immanence (this worldly) thought is unable to resolve the contradictions in­herent in this dilemma because of its false starting point. Only God's Word reveals that man is created as an individual person and as a member of society and that both are responsible to God. The role of the state in the operation of the economy can be understood only within the scriptural conception of society as a whole and of the individuality structures laid down at creation. As Maarten Vrieze says, "Economic theory cannot say a word about the standpoints of socialism and of classical liberalism or about the role of government in the national economy unless it recognizes the norm principles which are driven into a specific positivation direction by each of these movements."

What then is the structure of the state? What role has God assigned for it to play in the operation of the economy?

According to Dooyeweerd, the state is grounded in history and rests upon the historical formation of power. The state does rick arise in history until in the process of cultural differentiation, "the power of the sword" is separated from the undifferentiated organiza­tion of primitive society and is concentrated in a government.¹⁰

To recognize the foundational function of the state, it is not enough to say that it rests upon the historical formation of power, since the same can be said of other structures such as the church, the business enterprise, or the labor union. Historical power is a modal concept which can be predicated of a number of social structures of individuality. The typical foundational function of the state is to be found in the internal monopolistic organization of the power of the sword over a given geographical and cultural area.

From this definition of its basis it is evident that the state exists by the grace of God on account of human sinfulness, so that together with its coercive power the state is a characteristic institution of God's common, temporal conserving grace. The Roman Catholic view, which grounds the state in the sphere of the natural, does not do justice to the terrible fact of sin. In both Old and New Testaments, the organized power of the sword is emphatically related to man's fall (Rom. 13:1-13; 1 Pet. 2:13; Rev. 13:10; 1 Sam. 12:17-25; 24:7, 11; 26:9-11; 2 Sam. 1:14-16). The governmental authority thus exists because of human sinfulness and is not the result of any social contract between individuals in a distant mythical past.

The fact that the state is based on the power of the sword must not be interpreted naturalistically, since the foundational function is but a part of the state's structural principle, in which power is nor­matively related to the state's leading function, which is justice. The qualifying or end function of the state is jural and the state is typically qualified as a juridical relationship. We may define the state as a public legal community of government and subjects on the historical basis of a monopolistic organization of power within a given geographical area. Such a definition places the state's "might" in direct coherence with "right."

The leading function in the structure of the state must be characterized by this integration of justice, otherwise it lapses into a tyranny. A mere power-state which disavows justice as its leading function is nothing else but a band of thugs. On the other hand, the state cannot continue to exist if law and justice are separated from their historical basis in power.

The state is ordained by God to maintain the public legal relations between all the other sovereign spheres of society. The state is the legal integrating factor of society. Does this mean that the Reformational view of the state is a totalitarian one? The answer is in the negative, because this integration does not make the other associations and communities within society intrinsic parts of the state, as in Roman Catholic social theory, but a public legal community arises, whose purposes are limited by its leading function of justice.

In the territorial legal community of the body politic all the specifically qualified juridical interests should be harmonized in the sense of a truly public legal retribution against lawbreakers and integrated into the public interest. The term "public interest" must never be used as a slogan for any sort of political program designed to collectivize society, but must always be juridically qualified, since its use may never warrant an encroachment upon the internal sphere sovereignty of the nonpolitical societal relationships such as family, school, church, and industry.

We must see this "public interest" in the context of all God's holy ordinances and "offices." Only then can the limitation of what the public interest constitutes be balanced successfully against the private interest. For the limits of both the public and the private interest can be found only in the divine institution of the various offices of human life. In each of these offices God maintains His sovereignty and authority in a particular way that is appropriate to each office.

In each office man is to recognize the sovereignty of God according to the order and authority that God gave for that office. The authority of each office-bearer is qualified by the structure of each particular social relationship involved. Thus the authority of the father over his children is different from the authority of the employer over his employee or of the church eldership over the individ­ual church member. In the state we find a peculiar situation in this respect. While in all other social relationships the authority of the office-bearer is qualified by and stands under the control of the func­tion peculiar to that relationship, e.g., the family authority under the control of moral love, and the authority of the local church under the aspect of faith, in the structure of the state the authority finds its qualification in justice itself. The father exercises his authority in the family and this means ethical justice. But the office-bearers in the state exercise their authority in accordance with the requirements of justice. Thus the specific divinely imposed task of the govern­ment is to establish the legal framework for all the other spheres. It is from this typical leading function of the structure of the state that we discover an insight into the extent and limits of the state. The state's task is to maintain the public order of justice in which individuals and the societal relationships in which they find themselves and fulfill their vocation are publicly protected and respected in their various authorities. The state's duty is to regulate, according to the criterion of the legal public interest, every citizen's and every social sphere's external relations to all the other spheres, so that individuals and social institutions may flourish and grow in peace (1 Tim. 2:1-3). The "public" interest here being understood more in the sense of carrying out God's justice for the various realms of society rather than in any socialist sense of the welfare state. The state is not the whole of which all the other spheres are only its subservient parts.

For this good reason Dooyeweerd teaches that the modal moment of the juridical aspect of the state is judgment, the well-balanced harmonization of a multiplicity of interests. The public law of the state must therefore seek to maintain harmonious relationships between all the interests within its territory. No single interest within the borders of the state can be ignored. This harmonizing process consists in the weighing of the various interests of society against each other in the scales of justice so that each receives its just and proper due, based upon a recognition of the sphere-sovereignty of the various social spheres.

As such the state must never interfere in the internal law of the family, church, university, labor union, or business enterprise. The government's task is to regulate, according to the criterion of the public legal interest, every social sphere's external relations to the other spheres. The internal law of these social spheres is beyond the state's jurisdiction. The authority of the government ceases where that of another divine "office" begins.

However, all these social spheres have an external as well as an internal juridical function. A church, for example, is affected by a noisy factory, so that the latter is rightly prevented by law from interfering with public worship on the Lord's Day. The government must try to harmonize such external legal interests, but it must also respect the internal sovereignty of the other social relationships and promote justice as a whole by utilizing public law in order to balance the external legal relations of all societal relationships. According to its own nature the state touches on every social sphere but always in its own typical public legal manner.

By means of their principle of subsidiarity Roman Catholics are able to maintain the idea of private enterprise, because their social theory does give the first responsibility to the lower organs of society such as family and industry for the sake of realizing their own special purpose and the fulfillment of their own vital tasks.

At the same time the Roman Catholic principle of intervention requires that the state possesses the right to supervise the activity of the lower organs of society, to regulate the indispensable contributions of the lower organs toward society as a whole, and to intervene against violations of the public welfare committed by lower organs of society.

Such a claim of the right of the state to intervene is based upon the principle of hierarchy and its philosophic hierocratic (priestly) view of society in terms of the higher and lower organs of society of which the state is considered to be the highest and the all-embracing whole, subject in its turn to the Roman Catholic hierarchy.

The great value of the doctrine of subsidiarity lies in the fact that it enables Roman Catholics to lay stress upon the "autonomy" of the lower organs of society before the activity of the higher ones step in. Thus the principle of subsidiarity, like the principle of sphere sovereignty, acts as a bulwark against socialist or collectivist totalitarianism. It does so by developing the arrangement of society from the "bottom up" and not from the "top down," so that the authorities ultimately must leave the task of "arrangement" as much as possible to the private individuals and lower organs of society.

The great defect of the Roman Catholic principle of subsidiarity lies in the fact that there is no intrinsic limiting principle for the intervention of the higher organ (the state) in the lower organs (e.g., family and industry). Thus there is no real principial safeguard against dictatorship. The principle of subsidiarity still ultimately looks upon industry and family life as parts of the greater whole which is the state, whereas the principle of sphere sovereignty alone of all social theories maintains that such spheres are irreducible to any other sphere.

2.  The Reformed Critique of Catholic Solidarism and Syndicalism←⤒🔗

Judged by the principle of sphere sovereignty the Roman Catholic economic policy of solidarism or industry-wide organization along the corporate lines suggested by Pope Pius XI in Quadragesimo Anno must be rejected. Writing of this tendency towards the horizontal organization of industry in Western Europe, H. Dooyeweerd says:

The increase of collective bargaining stimulated the idea that employers and labourers should try and find new horizontal forms of organized cooperation. The aim was to give expression to their solidarity in taking to heart the common interests in the different branches of industrial life and to strengthen the communal bonds between employers and labourers in the separate industrial undertakings.

It was especially the Christian conception of social solidarity which inspired this idea, frankly in opposition to the Marxian dogma of class struggle. In different countries it has exercised a salutary influence upon the integrating tendencies in modern industrial societal relationships. Nevertheless, it must be granted that this movement of Christian solidarism had not completely emancipated itself from the universalistic-romantic view of human society, current in the so-called Christian-historical trend of thought of the Restoration. Especially the conception of an entire branch of industry as a "natural community," which was considered as an autonomous and "organical" part of the "national whole," revealed an after effect of this romantic view, which could eventually be synthesized with the Aristotelian view of society.

It was overlooked that a branch of industry necessarily displays a correlation between organizational-communal and intercommunal or interindividual relationships, and that the latter can never be transformed into the former. It was further overlooked that a national community can never encompass the internal industrial relationships, notwithstanding their enkaptical intertwinement with national life.

This universalist (collectivist) misconception resulted in the erroneous idea that a public legal organization of industrial life was to be considered as a natural development of the true inner nature of the different branches of industry, as "natural communities." From an organic view of society, it was concluded that the horizontal organizations of these industrial branches could lay claim to a public legal competence on their own account by virtue of an "historical right," consequently a com­petence not derived from the legislator. Here we meet with the appeal to the medieval guilds, whose public legal autonomy preceded the rise of the modern State as a res publica…

This "organic view" was readily accepted by the movement of Christian solidarism both in its Roman Catholic and Protestant trends. In the Netherlands the Protestant Christian league of trade unions interpreted the principle of sphere sovereignty of industrial life in this sense. But in this way this principle was completely misunderstood since it was viewed apart from its structural foundation in the temporal order of reality. It was overlooked that medieval political autonomy, so long as it was viewed as a subjective right of the guilds, only suited to an undifferentiated society and that a public legal authority is never to be derived from the inner nature of a private organization of industrial life in its different branches. Here, too, it appears that a collectivist denaturization of the genuine Christian idea of social solidarity necessarily leads to an eradication of the structural principles of the different types of societal relationships.

A public legal organization of industrial life, as it was introduced in the Netherlands by the Public Industrial Organization Act of 1950, can as such never belong to the inner sphere sovereignty of industry and agriculture as economically qualified sectors of the societal process of production. Within a state's territory any public legal authority exercised by organs composed of representatives of organizations of employers and trade unions, is derived from the legislator. A public legal organization means an organization of the industrial and agricultural branches which is typically qualified by the leading juridical function of the state. The organs of such an organization may have a delegated autonomy, whose limits are completely dependent on the public interest in the previously defined sense. But any confusion of this auton­omy with the inner sphere sovereignty of the economically qualified private industrial and agricultural relations must lead either to a deformation of public legal authority, or to an absorption of free industrial and agricultural life by the political sphere of the state.¹¹

For this reason P.B.O. and other industry-wide organizations must never be allowed to become avenues of centralized planning by the state for the internal life of industry and the labor unions. Again, such industry-wide horizontal organizations as P.B.O. must not be al­lowed to become means by which industry and the trade unions realize their own private economic interests by means of the sword power of the state. If they are allowed to do so, there is a grave danger that some form of syndicalist guild socialism may yet develop in modern society.

The two great, mutually exclusive, contemporary opponents of a free society as we have known it are collectivism and syndicalism. Both recommend the integration of society by means of the erection and maintenance of monopolies; neither finds any virtue in the diffusion of power. But they must be considered mutually exclusive opponents of a free society because the monopoly favored by syndicalism would make both a collective and a free society impossible.

In a certain sense syndicalism is an even greater threat to our liberties than socialism in its Western versions. Syndicalism and the so-called corporate state of Roman Catholicism would not only destroy our historic Anglo-American-Canadian freedoms; but they would also destroy any kind of orderly existence. Syndicalism rejects both the concentration of overwhelming power in the government and the wide dispersion of power which is the basis of freedom. Syndicalism is a contrivance by means of which society is disposed for a perpetual civil war in which the parties are the organized self-interest of functional minorities and a weak central government, and for which the community as a whole pays the bill in monopoly prices and disorder. The great concentrations of power in a syndicalist society such as that advocated by Tannenbaum are the sellers of labor organized in functional monopoly associations. All monopolies are prejudicial to freedom, but there is good reason for supposing that a management-labor monopoly along the lines suggested by Tannenbaum would be most dangerous of all, and that a society in the grip of such a monopoly would enjoy less freedom than any other sort of society. The consumers would certainly suffer as the syndicalist industrial groupings fixed prices to suit their convenience rather than the general public.

As we have already seen, the secular trade union monopolies have shown themselves more capable even than big business of attaining really great power, economic, political, and even military. Their appetite for power has proved insatiable, and producing nothing they encounter none of the productional diseconomies of undue size. Once grown large, they are exceedingly difficult to dissipate and impossible to control. Appearing to spring from the lawful exercise of the right of voluntary association, they enjoy popular support however scandalous their behavior. Business monopolies, on the other hand, are less dangerous than labor monopolies because they are less powerful. They are precariously held together, they are unpopular, and they are highly sensitive to legal control. Taken separately, there is no question which of the two kinds of monopoly is the more subversive of freedom. But, in addition to its greater power, the trade union monopoly is dangerous, because it demands big business monopoly as its complement. There is what Simons calls in his Economic Policy for a Free Society "an alarming identity of interest" between the two kinds of monopoly; "each tends to foster and to strengthen the other, fighting together to maximize joint extractions from the public while also fighting each other over the division of the spoils."¹²

Indeed, the supposed conflict of capital and labor (the struggle over the division of earnings) has become in Western Europe and North America merely a sham fight (often costing the public more than the participants), concealing the substantial conflict between the producer (business and labor, both organized monopolistically) and the consumer. Such syndicalism therefore has some claim to be considered the main adversary of freedom and of the Reformed principle of sphere sovereignty.

The Reformed sociologist admits the right of the government to assist industry but not to direct its day to day activities. Thus, he would welcome government legislation to assist depressed areas. In such a case the state is merely carrying out its public legal integrating function by weighing the interests of all the factions in the nation so that it may arrive at a just balance.¹³

Industry-wide organizations such as P.B.O. can really function only as organs of the public legal coordination and integration between the state and industry. It must be recognized that all such industry wide organizations are really governmental organs and not organs of industry, and therefore the decision of such nationwide industrial councils must be subject to public legal norms and not to economic norms.

In practice the socialist attempt to make use of P.B.O. in Holland as an instrument of centralized state planning of the economy has failed because in the years since P.B.O. was established, in 1950, industry has developed along its own lines in accordance with its own sphere sovereignty.

Dooyeweerd teaches that the principle of sphere sovereignty needs to be applied dynamically to meet the changing needs of modern society. But should not be rejected in favor of a so-called guided economy and planning if we wish to retain our freedoms. For, although the state functions necessarily in every modal aspect, including the economic one, its leading function is the juridical and legal; and all its economic activity must be in accordance with its purpose as public legal community. He writes:

The entire development of modern Western political and economic life has resulted in abandoning the old liberal policy of "laissez-faire, laissez passer."¹⁴

In itself this thought of ordering is congenial. But it may bring on all the dangers of the totalitarian idea of the absolutist state, if it is not subject to the control of the structural principle of the body politic. The economic integration of the State's population within its territory by means of a political ordering of non-political economic industrial life should remain under the leading of the juridical idea of public interest. The structure of the State necessarily requires this typical leading so that the internal sphere sovereignty of the economically qualified societal structures will be safeguarded.¹⁴

The state should properly take cognizance of economic and business life by providing public legal protection in its commerce and business enterprises. As H. Van Riessen puts it:

The protection and development of this sphere affects demands and conditions valid for other spheres. The state may properly develop and maintain national conditions favorable to an equitable commercial life, e.g., the guarantee of the value of its currency. The state exceeds its function when it interferes in economic life by determining individual conditions affecting credit that properly belong to the individual decision of the enterprise concerned. The digging of canals and public power projects, such as the Boulder Dam concern national conditions affecting the economic life but also have a broader reach. For the digging of canals and the reclamation and cultivation of inundated territory, e.g., are not limited solely to economic life; they enable life in all its rich variety of facets and relationships.¹⁵

Neither Dooyeweerd nor Van Riessen advocates the return to laissez faire conditions. Instead they think of the relation between the state and economic life analogously. The state ought not to regulate and direct economic life in such a way that it places its own authority above the authorities proper to the economic sphere. At the same time they are convinced of the necessity of the government developing and maintaining favorable national and local conditions in which the economic sphere may properly flourish. In borderline cases of distress, emergency, or injustice, they believe the state ought to act protectively to put matters right.

For both Reformed sociologists the government is properly exercising its function of integrating justice and the public interest when it upholds the wage rate and protects collective agreements about conditions of work. Similarly they favor governmental protection of the frequently powerless employees from economic exploitation by gigantic combines, cartels, and monopolies. This involves the regulation of labor conditions, which are, in any case, a matter of social concern and they should not therefore be controlled by impersonal rationalistic economic considerations of profit alone. Both men favor social legislation, e.g., minimum wage laws, since it is part of the state's integrating function to prohibit gross social inequalities.¹⁶

For the same reason they believe that all monopolies or near monopolies are impediments to the free development of the economic sphere of society as well as to individual liberty. They have no illusions about monopolies. As Christian sociologists they know that no individual, no group, association, or union can be entrusted with too much power, and that it is mere foolishness to complain when absolute power is abused. It exists to be abused. And so they would encourage the growth of arrangements which will discourage its existence. In other words, they recognize that the only way of organizing the enterprise of getting a living so that it does not curtail men's freedom is by the establishment and maintenance of effective competition. Since monopolies are often the creation of the state, they do not think it beyond the capacity of society to build upon its already substantial tradition of creating and maintaining competition by law. But they also recognize that any confusion between the task of making competition effective and the task of organizing the enterprise of getting a living and satisfying human needs will prove fatal to freedom. For to replace by political con­trol the integration of activity which competition provides is at once to create an even greater monopoly and to destroy the diffusion of power inseparable from freedom.

Dooyeweerd and Van Riessen are insistent that the structural boundaries between the authority of the employer and of the government must be maintained, for industrial life according to its own peculiar nature is not a part of the function of government. The application of the principle of centralized planning on the part of the government must necessarily regulate industrial life as part of the life of the state.

Dooyeweerd holds that industrial life is the result of a process of economic differentiation during the course of history, by means of which it has come to develop its own inner nature and its own principles. This is the principle of free economic enterprise qualified by capital and labor, which must not be absorbed by the state if society is to develop in freedom as God has ordained. For this independent function of free enterprise is inseparably related to the principles of risk and mutual competition. And the profits earned are wholly justified when we consider the services which free enterprise offers to human society. According to Dooyeweerd and the Reformed economists of the Free University such as De Kooy and De Roos, the only efficiency to be considered is the most economical way of supplying the things men desire to purchase. The formal circumstance in which this may be at its maximum is where enterprise is effectively competitive, for here the entrepreneur is merely the intermediary between consumers of goods and sellers of services. Of course there is always the danger of the abuse of the profit motive, but this is not the primary feature of free enterprise, and it may be curbed. The regulation of the profit motive or the regulation of prices by the government must not, however, involve the removal of the business entrepreneur from our society, since freedom of business enterprise depends upon spiritual liberty and responsibility. As soon as industry becomes a branch of the state as under communism, then this freedom comes to depend upon the centralized planning of the government experts, and thus would entail a usurpation of power by the state. Moreover, citizens have a God given right not to be economically directed and controlled by the government.¹⁷ It is ironical to say the least, that while such centralized planning is increasing in Western societies, the Communists are being forced to revert to free enterprise. T. P. van der Kooy thus points out:

An extremely important phenomenon, to which I want to call attention, is the contemporary tendency to reform the methods of the planning of production in the Soviet Union and its satellites. The present discussion among economists in those countries – in which the labor value theory seems to be subjected to a thorough revision, and the economic function of the profit motive is given attention – plays an important role in this tendency … Is it per­haps not possible that in a country, where historic materialism is adhered to, a change in the economic system demanded by an economic necessity may not also bring about over a period of time a change in ideology?¹⁸

According to Reformed economics a government may not incorporate the internal legal life of industry or commerce, even if a program of guided economy aims at decentralization. For then the agreements between enterprises and businesses based on private law, in respect to prices and production, would have to disappear to make room for a determination of prices based on public legal rules. In such a state-controlled system there would no longer be any room left for the principle of risk and free economic enterprise. The responsibility for the development of economic life would then rest upon public administrative organs, which these could efficiently exercise only if they came to enjoy a complete totalitarian control of the national and even the international market and the regulation of all the means of production, distribution, and consumption. While recognizing a need for a stringent control of certain features of modern big business and of international cartels and business combines, and that the public interest may demand that private capital gains and deadly monopolies should be curbed, Dooyeweerd and the Reformed school of economists do not believe that it would be possible to fit the internal life of industry and commerce into the strait jacket of a centralized public law without eventually enslaving the whole population and arresting further economic growth.

3.  The Reformed Conception of the Business Enterprise←⤒🔗

Having established the right of the private business enterprise to develop along its own lines without constant intervention by the state, it is at the same time vital to point out that in the Reformed view the business enterprise must behave responsibly first towards God then to its own workers, shareholders, and the consumers. The Christian employer no less than the Christian worker are equally called to live by God's creation norms for the economic sphere, and by means of their industry to glorify God and serve their neighbors. For this reason we must reject H. F. R. Catherwood's moralizing approach to this subject in his chapter on "The Christian as an Employer" in the book The Christian in Industrial Society. He writes:

The Christian should aim to be the sort of person who inspires a high standard of behaviour, but he should combine this with a sympathetic nature so that those who get into a mess can come to him more easily…

On the job, the Christian will want to keep as high a moral standard as he can. Christian doctrine makes it perfectly clear that there are certain rules of conduct in our relations to each other which help those relations. The Christian employer, personnel officer or welfare officer will try to see, so far as possible, that within the factory gates those rules are kept and that employees while on duty are sober, moral and responsible in their behaviour to each other.¹⁹

Of course no Christian could object to this statement of the conduct required by the Christian employer, but it does not get down to the basic problems facing modern management and workers. For such Protestant pietists no less than for Roman Catholics, the problems facing modern industry are moral ones. Everything else will solve itself when this big question has been solved. That industry and labor involve primarily a proper recognition of the places of the management and the workers within the framework of the business enterprise is simply not seen. The principle of sphere sovereignty and the principle of the balance of authority and freedom are essential in understanding the structure of the economic sphere.

First it must be clearly understood that the economic aspect of reality or law-sphere is one peculiar to itself, and it must not become absorbed by either church or state. What then constitutes the modal moment of the economic sphere? What distinguishes it from all other aspects of reality? The answer is the demand to save. Thus to act economically means to obtain a maximum of useful effect with a minimum of effort. The modal moment of the economic sphere thus consists in the saving of calculated values. Stated more simply, it consists in the thrifty use of resources and it has been defined as the science of scarcity. As Dooyeweerd explains:

The foundational scientific meaning of the word "economy" is the sparing or frugal mode of administering scarce goods, implying an alternative choice of their destination with regard to the satisfaction of different human needs…

Economy demands the balancing of needs according to a plan, and the distribution of the scarce means at our disposal according to such a plan. In this fundamental sense the term is used in the science of economics.²⁰

For this reason management may be defined as a free private association of employers qualified by the economic function. As such management is called in the first place to produce goods or services as efficiently as possible and to make the most use of limited resources.

By contrast the workers in a given business enterprise are morally and socially qualified. But against the doctrines of economic individualism the economic and the social are not to be separated. Thus, every worker has a right to a just wage, decent conditions of work, vacations, and an old age pension.

However, order has to be maintained and affairs must be regulated so that some are called to "manage" and others to work. Hence, in economic life management and labor need each other. Apostate capitalists failed to recognize this community of interest between managers and owners and their workers, and as a result they tended to reduce their workers to mere factors in the process of production and to economic chattels. Quite rightly the workers reacted against this depersonalization as an outrage to their humanity and as an affront to their human dignity. Emil Brunner points out that this apostate capitalist attitude towards the workers arose out of the individualistic conception of property. He writes in Justice and the Social Order:

It is the standpoint which has been called the "master in the house" view of property, and it is shared by many, though fortunately no longer by the majority, of employers in Switzerland. The working class is right to revolt against it; but not right when it condemns and attacks every employer and capitalist as ipso facto one who shares that view. Employers and capitalists are right in de­fending themselves against such an assumption; they are not right in inferring an unqualified right of disposition from their property in the means of production. For this "master in the house" standpoint infringes on the order of economic life as an organic whole, which is the order laid down in the creation. It is first and foremost the employer who should realize that he, the master, is the servant … It is true that industry needs competent and responsible leadership. It is true that economic democracy in any formal sense would be the ruin of industry; it is true that the organic union of all in the economic community does not mean "equal rights of self-determination" for all, but, like the family, implies a certain hierarchy of competence and responsibility. But that hierarchy does not abolish a coresponsibility on the part of the worker proportional to his capacity and output. By paying the workers their contractural wage, the employer has not fulfilled his duty to them, for work is not a commodity that can be bought, but a service whereby a communal relationship is established.

The idea of a community of labour and organization is a necessary inference from the Christian view of the relationship established by labour. Where there is a just order of labour, employer and worker do not confront each other as exploiter and exploited, but as members of a labour community in which the welfare of the one is the welfare of the other. Properly understood the welfare of the "firm" is the welfare of the workers, and vice versa.²¹

According to the Reformed view, there must be recognized a just balance between the authority of the management and freedom on the part of the workers as men and women called to fulfill their task of service of Almighty God in industry and farming. When this balance is distorted it is no wonder that one side begins to eye the other with suspicion and hatred. When the laborer is but a part of the machinery of production, instead of production being geared to the worker, it is no wonder that work becomes a curse for him. If the workers join together in the "closed shop" and take it upon themselves to decide who shall be "hired" and who "fired," the relationship between management and worker becomes even worse. When workers take upon themselves the function of management, the efficient ordering of the business enterprise collapses into anarchy.

The question as to who should bear responsibility in the business enterprise thus depends upon one's view of the nature of the business corporation. According to P. Borst there are two main conceptions:

1. The business enterprise is the exclusive property of an individual or corporation who has concluded agreements with a number of other people according to civil law. On this view industry is an object of ownership and the responsibility for the concern falls exclusively on the owner.
2. The business enterprise is not an object of ownership, but is itself a subject, an independent being; industry is normally formed out of the organizational relations of an independent body, usually a limited company. The employers and the workers are functionaries; the shareholders are not owners of the business, but "post-creditors" and as such bear no direct responsibility for policy.²²

Most views of the business enterprise fall between these two extremes. The choice we make between these two views will, Borst says, be decisive for the definition of responsibility in industry. If industry is no more than a part of the property of a particular person, then that person is responsible for what he does with his own property. Direct responsibility will rest exclusively with him.

If, in contrast, the business enterprise is a more or less independent institution that exists outside the legal person of the "owner," then we obtain a divided responsibility resting upon the different "functionaries in the concern": the manager, shareholders, workers. This responsibility exists towards the concern itself, towards the industry as a whole, and towards the consumers. Such a view of coresponsibility in industry, Borst suggests, has arisen out of the doctrine of the public trust which has long given legal standing to an organized group. The business enterprise from this standpoint is thus viewed as a trust not only for the interests of the shareholders, but also as an implied trust for the workers.

What will be the responsibility of the workers in this second type of business enterprise? To what extent should the workers participate in the economic affairs of the business enterprise?

Borst points out that we cannot answer this question until we first define exactly what is meant by "participation in management." He distinguishes three senses in the meaning of this phrase: (1) the right to be informed, to be told the facts, (2) the right to advise, and to be consulted, and (3) the right to decide jointly.

It is also necessary to distinguish three forms of joint-decision: (1) joint voting, that is, to share in making decisions, for example, where the shareholders, the management, and the workers each has one third of the voting power on all matters connected with the future policy making of the firm, (2) unanimity, that is, no decision can be made without the cooperation of all parties (a type of veto-right), and (3) right of appeal, that is, any party which cannot agree with the proposed course of action should have the right to appeal to an impartial body outside the firm to make the final decision, e.g., an arbitration board established by the government.

By what principle should the Reformed Christian be guided in answering the question whether labor should be given a share in the management of economic affairs? Borst answers by saying:

The ground for participation in management, that is for the responsibility of the workers, is association in a common task. The original royal function of man, laid upon him at the creation, wherein his likeness to God's image finds expression, that of being the lord of creation has been destroyed by sin. Work became a curse. One sees this in modern industry; the worker is estranged from his work, he has become a tool, he lacks all interest, he feels no more responsibility, he is a willing tool for massification. The worker no longer inquires after God, and no longer finds the way to his Creator.

In conflict with all this the Christian trade-unions strive again for the restoration of work as a blessing, and to restore the dignity of the worker created in God's image. New responsibility must be laid upon the worker; participation in management will restore to the worker the legal status which belongs to him in industry according to Christian principles. It will connect him again to his work and his fellows in the concern; it signifies a new community in the concern and in the work. The relationship between boss and men is not simply that the boss operates living instruments, but that both categories form a community of people with a common task, which thus gives to the worker certain obligations as well as rights … Given such participation in management the workers will work better and produce more … It will combat abuses which undermine the institution of private property and so prevent the state taking over all industry.²³

Borst is very careful to point out that shared responsibility does not necessarily mean equal responsibility. Management, shareholders, and workers have each their own responsibility, which is defined by the nature of their position and their function. He agrees that the business enterprise requires a hierarchically organized administration. There must be authority and leadership, just as on a ship or in the army. He therefore rejects any syndicalist or socialist ideas of worker control of industry. The Communists at first tried out such ideas and rejected them when they proved a fiasco, almost bringing down the Soviet economy in ruins.

He points out correctly that "political democracy is a different thing from social democracy" and that "relations in a business are totally different from those in a trade organization." The business enterprise must form a unity without any dispute for leadership. In the light of these structural principles Borst draws the following conclusions regarding the participation of workers in management:

1. The workers should be informed and consulted on all matters concerning the daily running of affairs. However, joint decisions in the daily running of affairs is not possible owing to the hierarchical character of industrial management.
2. The workers should also be kept informed regarding exceptional matters such as expansion, reorganization, amalgamation, closing down of the firm.
3. Joint voting leads to a tripartite system, whereby shareholders and management and labor share policy making among them. This is generally impossible and even detrimental.
4. Joint decisions in the sense of unanimity being required (the veto-right of the workers) are also undesirable since the workers are seldom well enough informed to make the right choice.
5. Workers should be given the right of appeal to an independent tribunal whenever their rights are ignored or their livelihood is threatened by gross mismanagement or when they are unjustly treated. By means of such an impartial court of appeal a way out is found whereby the worker does not usurp the employer's function and yet can obtain redress in all really grievous cases.
6. In the final analysis it is the attitudes which prevail between management and workers which are decisive. The question of responsibility in industry and the participation of workers in management is not decided by formal regulations and decisions. It is the attitude and the atmosphere or spiritual climate in which these principles are realized that is decisive. Such an attitude will be formed and nourished by one's view of the purpose of the business enterprise, which will in turn be determined by one's total view of the nature and purpose of human life.²⁴

It is therefore a basically religious problem with which modern industry is today faced. Unless both workers and managers are agreed that Jesus Christ alone is sovereign over industry and alone can empower men with His grace, love, and light, there does not seem to be much future for it. Without such a common allegiance to Christ, the Master Carpenter, American, British, and Canadian in­dustry must soon grind to a halt in a welter of strikes, recriminations, and mudslinging. It is not more government intervention that we need in modern industry, but more Christ intervention. He alone can provide modern industry with the dynamic to work without which it must soon retrograde as industry did in the later Roman and Byzantine Empire. It is not better personnel management and technical rationalization that industry needs today, but a new vision amongst both workers and employers of God's holy ordinances for work and of the true Christ-centered relations which should exist between the "bosses" and the workers.

The workers in post-Christian Western society are today being exposed to the temptations of an apostate humanist economic system which promises them an almost unlimited improvement of their material position but which, at the same time tends to make them slaves of big business or big government. What shall it profit the big corporations of the world to make fantastic profits if in the process the managers and the workers lose their souls?

Resistance to this demonic system is only possible if enough Christian workers and employers vigorously sponsor such structural changes in modern industry that our workers regain their dignity as, persons created in God's image and redeemed from the power and guilt of sin by the Lord Jesus Christ; bear for their part responsibility in the regulation of their firms' business life, and in so doing realize again the significance and purpose of their labor.

In opposition to the brutal depersonalization with which both and apostate capitalistic individualism and an apostate socialistic collectivism threaten our Western world no less than the Eastern and African worlds, all those who recognize Christ as their only Lord and Savior have the duty to show that the criticism of the Holy Gospel of God upon our apostate industrial and social order is far more radical than any Communist critique, and that a real recovery and reformation of the violated social and industrial relationships is not to be attained in any other way than by a return to God's structural norms and principles for the world of management, industry, and work.

These great directives for the proper conduct of industry have been broken by man's extravagance, dishonesty, greed, and exploitation of his fellow man. Instead of developing the economic sphere of life in accordance with God's creation norms, men have tried to become independent of God, and as a result there emerged that modern monstrosity known to mankind as homo oeconomicus, economic man, that is, the business man or worker with no religious or moral scruples who works solely, entirely, and completely for his own maximum profit, utterly disregarding the rights of his fellow men.

The laws governing the conduct of the economic law sphere are norms. The Reformational philosophy of man in society distinguishes between normative and a-normative spheres of reality (see chapter six, section (d) of this book and the chart of the cosmonomic idea in the appendix). By this we mean that the subjects of the numerical, spatial, physical, biological, and psychical law spheres have no option but to obey the correlative laws for their spheres. Thus a stone must fall down if thrown up into the air. From the analytical sphere onwards, however, the laws become norms or standards for human conduct. Although these norms have been laid down by God in principle in the structure of each sphere, they must be discovered, explicated, applied; that is, positivized. The laws of justice or love, for example, do not contain a precise formu­lation of their meaning in each concrete instance. By the same token these norms can be disobeyed and violated. As we have seen in our study of the economic development of society, the norms of the economic sphere have been constantly broken, for example, by men's extravagance, dishonesty, greed, and exploitation of their fel­low men. Instead of developing the economic sphere of life in accordance with God's creation norms, men have tried to become independent of God, and as a result there emerged homo economic, that is, economic man with no religious or moral scruples, who worked solely for his own maximum profit and gain, completely disregarding the rights of his fellow men. Of this apostate economic development Dooyeweerd writes:

The rationalized and absolutized idea of free interindividual relations dominated the entire industrial sector of Western society and gave it an extremely individualistic and merciless capitalistic form…

The process of unlimited one-sided technical rationalization in economically qualified industrial life sharpened the contrast between the interests of labor and capital to a real class-struggle. Labor was viewed apart from the human personality as a market ware … Family and the kinship-life of the workers were denatured by the encroachment of the impersonally rationalized industrial labor-relations…

Such individualistic tendencies in social development form an irreconcilable antithesis with the Christian idea of free inter-individual relations. The civitas terrena (city of earth) revealed itself in this individualistic process of disintegration, and Christianity was doomed to decay whenever it thought of making a truce, or concluding a peace-treaty with this kingdom of darkness.²⁵

Let these words of Dooyeweerd serve as a solemn warning to all Protestant Christians in the English-speaking world who have allowed the Church of Jesus Christ to become the kept woman of a godless, apostate, economic individualism. Let us all strive for a Christian economic system which will seek to realize God's creation norms for the business enterprise. Unless Christians take such action they can expect to undergo God's judgment along with the rest of the godless capitalists and labor unions, for God is not mocked (Gal. 6:7).

While it is desirable that Anglo-Saxon employers should themselves, of their own free will and in free agreement with the workers, make the modern business enterprise a true community interest; where they will not do so then the state should step in and restore justice to the economic system. It is imperative that the employers abandon the "master in the house" attitude and treat their workers as persons and as fellow brothers for whom Christ also died and behave as God's stewards and office bearers.

The limited liability company is the backbone of Anglo-American‑Canadian industry and economy, and in the eyes of the Common Law the business enterprise has a corporate personality; that is, as George Goyder puts it in his important work, The Responsible Company, "the company is something distinct from the totality of its shareholding."²⁶ In practice the shareholders alone are considered to be the "company," and the directors who sacrifice their interest to any other consideration such as the workers' welfare are running considerable risks. Their position is secure provided they produce a profit that satisfies the shareholders. Of the duty of the directors to the community and the workers there is in the articles of association of the company no mention. It is of course true that in its trading operations certain obligations have to be met which in practice usually secures for them their most elementary rights. The wage must be paid and the Acts to protect public health and safety must be obeyed. But there is no trace of anything in the company's legal obligations which suggests that the workers are in any degree participators in the enterprise; no hint of any sort of a "natural industrial community." Anyone who thinks that such a legal basis for the limited liability company is capable of producing the right attitude in industrial relations is surely being a little optimistic. There is a great deal of truth in Goyder's assertion that "beneath the facade of central wage demands there is a profound but unformulated conviction that the present system is unjust and unnatural."²⁷ While not following Goyder all the way in his analysis of the exact nature of the injustice here in question, we would agree that it is being unreasonable to expect any sort of real cooperation between management and workers, as long as the elementary form of the business enterprise by its legal articles of incorporation as an association expresses so brutally the lopsidedness of modern Anglo-American-Canadian capitalism. The situation has been exacerbated by the increasing size of the average business corporation_; the remoteness of the legal owners from its operations leads to a weakening of what little responsibility they may still feel. On the other hand, this division between ownership and control could be beneficial if the legal framework obliged the directors and managers and shareholders to give due recognition to the rights of the workers and to allow them a measure of participation along the lines Borst has suggested. Where the professional managers accept the Christian charter for management they can exercise a wise leadership which secures the human rights of their employees. Unfortunately there is not a large enough number of such Christian managers in Anglo-American-Canadian industry who are even aware of such a Christian approach to their workers, and if their attention were drawn to it by legislation which they ignored at their peril they could he persuaded to give the matter the attention it deserves.

The problem of the responsible business enterprise has been carefully studied by George Goyder, whom we have already quoted above. He is himself an experienced industrialist, and so cannot be accused of impractical idealism. Goyder is, as the name of his book suggests, concerned with the totality of the responsibilities of the company – to the community as a whole as well as to the individual employed by him. Goyder has no regrets about being himself a capitalist. "The primacy of the profit motive in industry is not in question. It is generally agreed that survival is the first duty of any man of business and survival for the business man means profit."²⁸

He then writes:

Any reform of Company Law must be careful to safeguard the unity of the directors and their freedom of action … The problem is to make power responsible, not to hamper it or to subject it to detailed restrictions. There must be freedom to grow, freedom to lead, freedom to make mistakes. Leadership and initiative do not usually result from balance of power (between management and workers). They require the command of power, the giving and the acceptance of responsibility … I do, however, object to the attitude of certain management circles which finds it convenient to deny any connection between productivity and the social purpose of the enterprise … Industrial organization, as it grows bigger and more complex, must seek to redeem the worker's sense of participation by making the company itself capable of human attachment and loyalty … The task is to find a way of giving working men their associational rights and at the same time ensuring that the company remains efficient, while rendering to the community and the consumer what in justice belongs to them…

To this end, what is in question is the ultimacy and not the primacy of the profit motive … A person who makes money his final goal is rightly regarded as suffering from a diseased mind. Ordinary people value money for what it brings in amenities, in leisure or power, and men's motives are legion … But in industry and particularly in the large impersonal company that we have seen as being typical, profit is turned from a proximate or, primary goal into an ultimate one. This is to make industry a battlefield of irreconcilable interests. It is to falsify the purpose of industry and to take away its power to command the loyalty off men.²⁹

As a first step towards a healthier state of economic affairs Goyder suggests putting a "General Purposes Clause in the Memorandum of Association" of the bigger public companies, for in fact many firms, successful, profitable, and efficient, in England and in America, already possess such a clause, placed there by the initiative of a Christian management. The obligation should not, according to Goyder, be placed on the private, limited-liability company; this is probably wise – until at least by slow degrees the majority of the public companies have digested the change.

The clauses contained in the memorandum should, he suggests, cover the following:

1.  Making the company economically viable, providing adequately for its future and paying fair and reasonable dividends to its shareholders.
2. Providing goods and services of the highest quality and lowest price consistent with its responsibilities under (1) above and (3) below.
3. The interest of the employees, viz., providing the best possible conditions of employment for all those in the company, with reasonable opportunity for advancement and security of employment subject to (1) and (2) above.
4. That in all matters in which the company's activities affect the community it should act so far as possible in the same manner as a responsible citizen could reasonably be expected to act in the same circumstances.
   To make sure that firms carried out these provisions Goyder suggests that a social audit – taking place at intervals of three or five years – should be conducted by qualified outsiders having the duty of looking over the pricing policies of the company as they affect the consumer, the labor policies as affecting the workers, and finally, the community policies pursued by the firm.³⁰

4.  The Necessity for Christian Employers' Associations←⤒🔗

Unless some such reforms of the modern business enterprise are undertaken soon along these lines, the Western world may yet find Itself faced with the prospect of big business corporations and state controlled enterprises taking over the complete control from its duly elected governments and legislatures. Great corporations such as General Motors, Lockheed, Imperial Chemical Industries, Du Pont, Ford, and the rest are becoming equal in power to, if not in some respects above, the state. Those who work for them even in a minor capacity are more than mere employees. As William H. Whyte, Jr., showed in his disturbing book, The Organization Man,³¹ they are a new species of priesthood who do not merely work for their organizations, but "belong" to them as medieval monks once belonged body, soul, and spirit to their monasteries.

In his recent BBC lectures, now published as The New Industrial State,³² John K. Galbraith emphasizes what he believes to be the almost unassailable power of the "mature" corporations. The old-fashioned economic picture of the free play of the market and consumer sovereignty no longer applies to a world of giant corporations, in which people increasingly serve the convenience of organizations which were meant to serve them. Instead, the scale of modern or­ganizations, the complicated technologies involved, say, in producing a car, the long time scales needed to plan a product, and the vast sums of money involved in financing large scale production has led to a different state of affairs.

In this the managers of the giant corporations are largely free from control by their shareholders unless things go very badly wrong; retained profits make them largely independent of financial sanctions; sheer size enables them either to make their own parts and accessories or to exercise great pressure on their suppliers, and by and large they do not compete with each other on price. According to Galbraith, the great corporations have grown much larger than is necessary to enable them to produce efficiently or market successfully. Their growth beyond the points of their technical and marketing optima has occurred in order to enable them to plan effectively. By this he means that they must be large enough to prevent interference from rivals who might frustrate their plans and also to offset contingencies. In a sense these giant corporations have become autonomous plan­ning units, independent to a large extent of social control. The larger they grow the more effective their planning.

Various consequences are said to flow from all this. Not only is the day of the individual entrepreneur over, but even the directors of a modern big business corporation only nominally manage or direct operations. Galbraith repeatedly insists that the stockholders can exercise little influence on the conduct of a corporation unless they are prepared to exercise the ultimate sanction of selling out. This point was hammered home by Peter F. Drucker in The New Society in 1951 and by Adolf A. Berle in Power Without Property in 1960 (see note for this reference). ³³

In the Journal of Economic Studies (Aberdeen University), Summer No. 2, Vol. 1, 1966, Clive S. Beed of the University of Melbourne writes on "The Separation of Ownership from Control." In this important article Beed takes apart, with scholarly apparatus plus more than five pages of references, the hypothesis first advanced by Berle and Means in The Modern Corporation and Private Property (1932), which we have already discussed in chapter two of this book. Beed tries to prove that the popular Berle and Means thesis is, and was, widely wide of the mark; that the nineteenth century entrepreneur often had "sleeping partner" shareholders backing him and without control; that both majorities and minorities of shareholders in modern companies frequently change the managements (especially through dissatisfied institutional shareholders who step in); and that mergers, bigness, etc., far from being beyond competition and far from fixing prices and production and profits a priori, lead rather to intensified competition, price cutting, and losses due to failure to meet the market's requirements. Beed claims that Berle and Means have never statistically or with any other objective and scientific data been able to verify, or even quantify, their thirty-six-year-old hypothesis. Beed concludes on Berle's and Means's hypothesis about a growing separation of ownership of capital from its control:

"The issue of the total or partial separation of ownership from control is far from resolved, mainly because passive control may never exhibit itself in an active manner. That such exhibition is lacking does not disprove its existence, but quantification of it becomes impossible. Were the limitations of the Berle type method and results sufficiently in the minds of its users to preclude non-sequitur conclusions about reality, no argument need be made. Generally such is not the case and it has been the concern of this article to demonstrate the lack of adherence to the principles of the scientific method in the works of its chief exponent" (p. 40).

In the opinion of this writer, Beed's own arguments do not disprove the existence of a tendency operating in the modern economy towards a separation of ownership of capital from its control. Beed ignores the technological impetus toward the concentration of capital. As Jacques Ellul points out in The Technological Society, "Technical progress cannot do without the concentration of capital. An economy based on individual enterprise is not conceivable, barring an extraordinary technical regression. The necessary concentration of capital thus gives rise either to an economy of corporations or to a state economy. A concentration of enterprise corresponds to this concentration of capital. This fact can hardly be de­nied today, especially in view of the power of these enterprises … In the United States in 1939, 52 percent of all industrial capital was held by one tenth of one percent of the total number of enterprises; and in 1944, 62 percent of all workers were employed in two percent of American enterprises (Cape, London, 1965, p. 154).

Galbraith next points out that such concerns, in the way they conduct their affairs, have little in common with small and medium-sized undertakings. For one thing, whereas the latter are usually managed by the persons who own them, in the giant companies own­ership and control are divorced. Their shareholders can exert little control over the conduct of business. The formulation of policy and its execution are in the hands of a body of professional experts whom Galbraith terms the technocracy. In this respect the great private corporations bear a close resemblance to the public corporations or other forms of public enterprise. It is the sum of the specialists' particular judgments which now makes the policy and decides whether a product is feasible and whether it will sell. It follows that an economy dominated by such concerns is likely to operate very differently from the old-fashioned capitalistic economy. Whereas Adam Smith's "economic men" made individual decisions which they could carry out individually, Galbraith's technocrats merely drop their little pinch into the pot, making decisions which have to be carried out corporately. In this situation it will become increasingly difficult to fix responsibility.

According to Galbraith, the great business corporation in the expanding sector of the economy which it dominates has abolished "economic man" and the maximization of profit. Vertically organized, the giant corporation now controls its own supplies, and their price, and sells to the public what it decides the public will buy. In this new economy, the sovereignty of the consumer, as proclaimed and cherished by the classical economists, has become illusory, and the discipline of the market once exerted over producers has been virtually destroyed. It is futile, states Galbraith, to deplore these changes. They are inevitable concomitant of technical and commercial progress, however incompatible they may be with the kind of market described in the textbooks. So the economic theorist tries to avert his eyes from the changes, because to acknowledge them would oblige him to jettison most of his science.

Central to Galbraith's argument is his claim that the market as a guide to production has been replaced by planning by giant companies themselves or, where the task has exceeded their powers, by state planning. The entrepreneurs, who in the old days stood at the center of the economic process, have been replaced by groups of managerial and technical specialists who in collaboration control policy. The criterion that governs their policy is not the maximization of profits but the increased security of the companies and the continued expansion which enhances that security. The power of the groups in control of corporate undertakings is increased by the practice of "plowing in" profits, which relieves them of dependence on outside investors for new capital. Their power is further strengthened by their research establishments, which are the source of most additions to technical knowledge.

The dethronement of the sovereign consumer means, in Galbraith's opinion, that the productive activities of the giant corporations, who produce among them half the total of goods and services consumed in the United States, are no longer undertaken in response to de­mands that originate with him. By advertising and other means the consumer is persuaded to buy what is good for the company to produce. In denying the reality of consumer choice, Galbraith leans heavily upon the example of General Motors. As this truly gigantic concern produces more than half the automobiles sold in America, he insists that what it produces in any year is the fashion. The consumer is told to take it and like it.

In the large corporations prices are not set by the "higgling of the market," that is to say, by competition among several producers, but by each company itself with reference to the earnings at which it has chosen to aim in order to satisfy its ambitions for growth. The conditions of this monopoly or oligopoly which makes it possible for these giant corporations to fix their prices are deplored by economists still bemused by the supposed virtues of the free market. Yet, Galbraith argues, it is absurd for governments to attempt, by administrative or legal measures, to re-establish competition in place of this system of price fixing, since, in view of the heavy long-term investment required for modern industrial production, the risks inherent in competitive pricing, as in consumer sovereignty, are too heavy for the producer to bear.

All these tendencies have inevitably, according to Galbraith, been strengthened by the enlargement of the economic functions of the state. The modern state spends a high and ever-growing proportion of the national income. Collective demand by public bodies acting on the consumer's behalf has grown at the expense of individual demand.

The government itself, or its agencies, operates a growing section of the economy and in greater or less degree tries to regulate the rest. Since the great corporations in America need to plan ahead, while in the U.S.S.R. the state increasingly finds it does not pay to interfere too much with firms, Galbraith suggests that the industrial systems of communism and capitalism are growing increasingly similar. The public corporations of the Soviet Union today closely resemble the giant corporations of America in the actual way they operate. For instance, the members of boards controlling Soviet nationalized industries are subjected to as little supervision from the Soviet Supreme Council as the company directors from their "capitalist" shareholders. The conflict between modern private capitalism and a planned economy has indeed become a sham fight. It would therefore, argues Galbraith, be recognized for what it now is, were it not that the modern corporation has evolved historically from the old system of entrepreneurship with which, however, it now has little connection.

What conclusion should Christians reach about Galbraith's thesis? Before we can reach a decision it should be pointed out that G. C. Allen has published a powerful rejoinder against Galbraith's thesis in his Economic Fact and Fantasy.³⁴ Allen admits that "up to a point Galbraith's interpretation of industrial trends echoes that of many economists of this and earlier generations. Few would deny that the operation of the economy has been profoundly affected by the two factors he stresses, namely, the rise of the giant industrial company and the enlargement of the state's economic functions. But when he goes beyond this point in deploying his argument it is more difficult to agree with him."³⁵

Allen demonstrates with facts and figures, first, the importance to the modern economy of the vast number of small and medium-sized companies still making good profits, yet formed and managed entrepreneurially. "Even where large scale production has undoubted advantages, small and medium-sized firms often have a role to play in producing specialties … Some small firms at particular moments in history are enterprising newcomers on the way up. In a society where technology and demand are constantly changing, such firms find opportunities as innovators … Large scale businesses are not always infused with a pioneering spirit. Experience shows that such firms have often been sceptical of the possibilities of new products, so that it has been left to determined and imaginative entrepreneurs, starting in a small way, to launch new industries. The history of the early development of the motor car, the safety razor, and the jet engine testifies to this truth … Can it be doubted that if we had had to rely entirely on large established producers for innovations, industrial progress would have been largely retarded? Genius is not always easily accommodated in planned programmes of development. Large size is sometimes attended by rigidity."³⁶

In the second place, Allen reminds us that there is such a thing as leadership which can be vitally important whatever the size of the corporation. "The rise of large firms to their present stature," he points out, "can usually be attributed to one or to a very few men of remarkable business capacity. … That managerial responsibilities are widely diffused has not robbed the entrepreneurial function of its constructive part in industrial growth. Ultimately this function is discharged by individuals of exceptional talent and not by groups … Throughout the last 70 years most of the major industrial achievements have been associated with a few remarkable men. Consider the part of Kessler and Deterding in the evolution of Shell, of Sir Hugo Hirst and Sir Edward Holden in the development of GEC, of Royce and Johnson and later Lord Hives in the successive phases of Rolls-Royce's history, of William Morris in the birth and growth of what is now the British Motor Corporation."³⁷

In the third place, Allen points out that there is often competition between even big firms, which are by no means immune on occasion to market forces as their fluctuating profits records show. He writes: "Even when an industry is dominated by a single firm, its position is seldom unassailable for long, since, its markets are liable to attack from large firms hitherto engaged in other industries. Galbraith did not discuss this important possibility … The ambitions of the several giants may serve to provide consumers with alternative sources of supply … Modern technology has led to a rise in the size of firms, but it has also widened the area of competition both by cheapening communications and transport and by increasing the number of substitutes for existing products. The notion that the economic history of modern times shows a steady progression from highly competitive markets to monopoly is remote from the truth."³⁸

Finally Allen argues that the consumer's sovereignty has been strengthened rather than weakened by his increase in income. He writes: "As his income rises, the consumer finds himself able to choose among an ever-increasing variety of goods and services. His demand becomes less stable and predictable than in the days when he had barely enough to satisfy his basic needs. One might hold, therefore, that much of industry's investment in persuasion is directed toward off-setting the tendency for consumer demands to become increasingly fickle. It represents an effort to bring more order or stability into a market situation where producers are vulnerable in the sense that the alternative choices before consumers are being constantly enlarged … A glance at the industrial history of recent decades will show that, despite the exertions of established industries to strengthen their grasp over markets, changes in technology and demand have exerted devastating effects even on large and powerful producers. The old transport industries and the manufacturers who served them have fallen back before the advance of the motor car and the aircraft. The old textile producers have given place to the manufacturers of synthetic fibers … In the face of these vast changes in the structure of demand and production, it cannot be asserted that the consumer has been content passively to accept what producers have preferred to give him. Many of the changes occurred in spite of the entrenched positions of powerful, established firms."³⁹

In addition to Allen's arguments it can be pointed out that developing technology does not always work in favor of the giant firms, as Galbraith supposes. Why are Americans now able to shave with stainless steel razor blades? Because a small scale English firm got a toe hold in the United States and forced a near monopoly to do something it had resisted doing for years.

In a rather testy note on the Edsel affair, Galbraith insists that this case is so frequently quoted only because it is so rare and untypical. Yet this does not alter the fact the promotion of the Edsel auto­mobile was the most massive, expensive, and complex exercise in manipulating consumer choice ever undertaken in the history of American business, but it still proves a catastrophic failure. The consumers' resistance to the efforts of the "hidden persuaders" carried a lesson that was not lost on those whose business is to sell automobiles, not fancies. Consumers as well as corporations can become sophisticated.

The biggest concern, unless supported by the coercive power of the state, is always vulnerable to innovation. Even the state cannot protect a market. The size and monopoly position of the British General Post Office has not protected that institution from losing more than eighty percent of its customers for telegrams since the end of the Second World War.

Of course, it could be argued that Allen is talking mainly about the relatively undeveloped British economy, and Galbraith about the mature American one. Nevertheless this writer thinks that Allen has made some severe dents in Galbraith's argument. Like so many theses sweeping in their scope, it tends to sweep the inconvenient exceptions under the carpet.

Perhaps the best way is to regard Galbraith as a prophet, describing not precisely things as they are today but things as they are liable to become tomorrow.

In this role much that he says is illuminating. It is true as he says that there is increasing puzzlement over capitalism without control by the capitalists and socialism without control by society. While shareholders may not be able to control or change the new managerial elite running their property, in Britain (where the so-called "public sector" of the economy in 1967 took or controlled 50% of the national income) the boards of her innumerable state and public bodies, services, and agencies are under even less supervision of their owners (the British public) than any big or small enterprise's directors are by theirs. He does not note, still less emphasize, that much so-called "institutional investment" is indirectly (e.g., through investment trusts and clubs, unit trusts, pension funds, insurance companies, etc.) voluntary and involuntary individuals' saving and investment at one remove; and that in many cases the individuals concerned can, and do, back out if dissatisfied.

If Galbraith's description of affairs today should prove after all to be a description of the structure of business life fifty years from now, one can only hope that by then his repeated reminders that economic goals are not the only goals of society, and that the industrial system is only part of a balanced human life, will have been taken to heart. If not, then the prospect for human liberty and happiness does not seem to the writer particularly good.

Just as human freedom is threatened by the tendency of labor leaders to absolutize the labor union as the one "true society," so it would seem to be threatened by the increasing tendency of the leaders of big business to absolutize the giant corporation as the perfect pattern of economic production. A spokesman of this tendency, Peter F. Drucker, writes in The New Society as follows:

To Henry Ford the machine was the new and the important element of modern society. But in reality the new factor is not a mechanism but an institution; the modern large enterprise. In every industrial country the enterprise has emerged as the decisive, the representative, and the constitutive institution … The decisive character of the enterprise is displayed in its role in the economic process. The great majority of the people do not work for one of the large industrial enterprises. Yet their livelihood is directly dependent upon them … The enterprise determines economic policies and makes the economic decisions. A small number of big enterprises sets the wage pattern and establishes the "going wage" of the economy … It is the big enterprise which establishes the pattern of union-management relations. It is the big enterprise at which government control and government regulation of industry aim. Finally, the big enterprise establishes the social pattern of the plant community…

The large industrial enterprise is also the representative institution of an industrial society. It determines the individual's view of his society … It actually represents the new organising principle of an industrial society in the purest and clearest form … The enterprise is the mirror in which we look when we want to see ourselves.

The big enterprise is the true symbol of our social order. Its internal order and its internal problems are considered the distinctive order and the pressing problems of an industrial society even by those who are not apparently affected directly. It is also the place where the real principles of our social order become clearly visible. Above all, in the industrial enterprise alone can the problems of our industrial society be tackled. The structure that we shall build in the industrial enterprise, the solutions we shall find – or fail to find – for its problems will thus decide the structure and the solutions of industrial society altogether.

The enterprise exists in essentially the same form in every industrial society no matter how organised; it is thus the constitutive institution. The industrial enterprise arises from the needs of industrial life rather than from the beliefs or principles underlying political organisation.

One symptom of the autonomy of the enterprise is the process known in America as the "divorce of control from ownership." With but few exceptions, all the very large enterprises in America are no longer controlled by the stockholders … Even in those few big corporations where ownership is still concentrated, the actual control is increasingly exercised by professional managements.

The enterprise is an autonomous institution. It does not derive its power and function from the motives, purposes or rights of its owners … It does not derive its structures, aims and pur­poses from the political or legal organisation of society. It has a "nature of its own and follows the law of its own being. Historically, the enterprise of today is the successor to the firm of yesterday. Legally, the enterprise is a creature of the State, and nothing but a legal fiction. In nature and function, however, the enterprise is sui generis.⁴⁰

In this passage Drucker has landed himself within the camp of the modern collectivists. Just as the medieval absolutization of the church institution resulted in papal totalitarianism, so Drucker's absolutization of the social institution of the business enterprise has resulted in his justification for this more modern yet no less deadly form of economic totalitarianism. Lacking an ordering principle in God's Word for his analysis of the place and function of big business in modern society, Drucker is forced by his pragmatic method to stay with the "facts" around him, but in doing so he has lost hold of the true facts because he lacks any norms or structural principles in terms of which to evaluate them correctly.

If it is true that the big business enterprise is indeed the decisive, representative, and constitutive institution of modern society, then no doubt its economic and social domination of the workers and consumers may be justified.

No Christian, however, worth his "salt" (Matt. 5:13) could possibly subscribe to such an interpretation of the "facts" since he believes that it is God's great structural principles or norms for human society and not any business executive's lust for power over his fellowmen which should be the decisive and constitutive factor in the organization of man's social and economic life.

God's Word teaches that no earthly institution can be allowed to become the whole of which the other social structures are only the parts. God alone is the absolute sovereign of the social organization-types to which he has delegated only partial authority necessary to carry out its function in society. No particular bearer of authority on earth can be thought of as the constitutive power from which all other forms of social organization or authority are derived. No institution, be it a church, the state, labor union, or big business enterprise must absorb the individual completely nor domi­nate society. Only God's Kingdom should thus absorb all of men's interests and it should not become identified with the sole interest and consideration of any one temporal social organization.

As we have shown in the previous chapter, a scriptural view of human society requires a respect for the sovereign sub-spheres of society. While social institutions are characterized by a relationship of authority and obedience, this authority over the individual is always limited, being defined by its own structural principle. Within human society, therefore, there is no institution such as the labor union or the big business enterprise which is the whole of which other institutions are only the parts. Judged by this biblical principle of sphere sovereignty or areas of authority, Drucker no less than Tannenbaum shows himself to be lacking a coherent view of man in society which balances authority and freedom, since he favors organizational relationships at the expense of individual relationships.

A coherent view of society will seek to find a balance between the needs and rights of the group as well as the needs and rights of the individual, between the rights of the producer and those of the consumer, between the rights of management and those of the workers, between the public legal interest and the private interest.

Drucker rightly recognizes the great role played by modern big business in providing society with the benefits of mass production. But unfortunately, like Tannenbaum he appears to be advocating a form of the corporate state of Fascism in which big business is given the legal right to dominate all other social institutions.

Such a totalitarian claim to direct human affairs must be firmly resisted from which ever quarter it comes, either labor union or big business, since God's Word teaches that God has entrusted such absolute power to Christ alone (Matt. 28:18). Since Christ alone is supreme, the authority exercised by men is limited. For this reason big business may not claim to exercise totalitarian authority over society any more than big government. As the Second Adam Christ alone possesses such absolute sovereignty over men.

Whenever earthly authority and power is divorced from its divine origin and placed in a purely secular context, it provides no safeguards against injustice and exploitation. Once men locate sovereignty in the will of one social institution they lose sight of the true ordering of human society, which then becomes distorted. No earthly authority is safe unless it recognizes and is rooted in and limited by the sovereignty of Christ. It is only Christ then who can protect the freedoms of persons against encroachment either by big labor union, big business enterprise, or big government. We can choose to be governed by God in the labor union, in the business enterprise, or in politics, or we can condemn ourselves to be ruled by tyrants in all three realms.

The time has surely come for Anglo-Saxon Christians, both Catholic and Reformed, to establish federations of Christian employers who will seek to make Anglo-Saxon business enterprises truly responsible organizations. Such Christian employers' organizations have been operating successfully in Western Europe for fifty years. Thus French Roman Catholic employers are organized today into the French Christian Employer's Center (C.F.P.C.); the Dutch Roman Catholic employers have formed the "General Association for Catholic Employers" (A.K.W.V.). The Belgian Roman Catholics have joined together to form a Belgian Federation of Catholic Employers (F.E.P.A.C.). The Protestant Christian employers of Holland have established the Christian Employer's Association (C.W.V.).⁴¹ (See Table Five of Appendix.)

What these Christian employers' movements understand by their function today is illustrated by an article with that title by A. C. J. Rottier which appeared in the Bulletin of the International Associa­tion of Roman Catholic Employers (U.N.I.A.P.A.C.), founded at Antwerp in 1924.

Not so long ago, says Rottier, the employer was thought of as an individual, as a dictator, and as concerned essentially with the direction of his firm. He might also have incidental attributes, such, for instance, as supplying capital or starting a firm. Within the firm his function was thought of primarily in economic terms and from the angle of profitability. Today his position has completely changed. Inside his firm the employer is expected to discharge a range of "so­cial" functions connected not merely with making profits but with the welfare of all engaged in the firm: selection, training, safety and health, a family wage, etc. Even more important, he has now to realize that the firm has become the most important unit in the social structure as a whole. He has therefore to think in terms of full employment and inflation, of the balance of payments, of national investment policy as well as the welfare of his own firm. And he has to recognize, fit in with, and play his very important part in shaping the norms of the society surrounding him. This requires that he become no longer a dictator but a constitutional leader, taking account of and in many respects formally bound by the views of others; notably of trade unions or the government. Constitutional leadership is not easy, since there are many interests to reconcile even within the firm – those not only of capital and workers, but also of technical and supervisory and managerial grades. Often interests have a different degree of pull at different levels. Thus P.B.O. gives a heavy weight to labor, whereas capital has a strong position under company law. A further complication is that the "employer" is often no longer one person. Managerial responsibility in a modern firm is spread over a group of officials, not concentrated in one man; and so, still more is the responsibility for making, notably through P.B.O. or employers' associations, management's contribution to the welfare of society as a whole. The employer today, in short, must be a man of wide views, a group leader rather than an individualist, capable of collaborating at many levels in an enterprise where many interests are concerned. And the employer's position has to be justified by his ability to reconcile and lead. He can claim no right to dictate. No doubt he is entitled to claim the degree of authority needed to carry out his duties, but this is always within and subject to the wider whole. And if he fails in his task, says Rottier, society will rightly call him to account:

Employers claim to play a leading part in economic life, or rather in both economic and social life. They must now either abandon this claim or accept all those obligations which this role of leadership implies.⁴²

Fogarty points out this Catholic approach:

This is essentially the same ideal as emerges from modern man­agement literature; the ideal of the manager as a professional man, who admits and understands his responsibility to every section of the community, and is skilled in extracting a coherent policy from all the maze of influences – the many "moral systems," in Chester Barnard's phrase – in which he is involved.⁴³

The difficulties at first encountered by the Christian Employer's Association in Holland (C.W.V.) are described by the Calvinist A. Borst in his pamphlet, "Hold the Fort!" which gives the Association's view of its aims and problems. Christian principles, says Borst, cannot have their full impact unless they are lived out in a visible community; one visible in each area of life. ⁴⁴

A Christian Businessmen's Associations has recently been formed in Ontario dedicated to the furtherance of the principles discussed in this chapter.

To give them effect re­quires organized power. It must be power organized specifically on the basis of God's absolute sovereignty over all. Not much good has come of the "little grains of salt" who have tried to add savor to the "neutral" organizations. There is a whole range of issues on which the Protestant employers' organizations differ from the "neutral" bodies, which, whether or not they contain Christian members, are in effect "liberal," i.e., independent of God's will and His creation norms. Examples are schemes for works councils, for making collective agreements legally binding, for insisting on proper qualifications for those who propose to set up small businesses, or for paying family allowances or discouraging the work of married women. On all these matters, and on schemes for industrial self-government, the Protestant employer's organizations are in favor, the "liberal" organizations against. The Protestant organizations have also a special role to play inside their church. Being specifically Reformed, they are well placed to keep the official Church informed about economic needs, and to collaborate with other Protestant social organizations – especially the trade unions and political parties – and so promote good will among Christians and reduce conflict. And the prestige of each Protestant group in its own field is increased through belonging to the Protestant social movement as a whole. In that sense the presence of the C.W.V. in its own field helps the work of other Protestant groups in theirs, just as their presence in their fields helps that of C.W.V.

But to define these principles of Protestant Social Action is one thing; to get them accepted and recognized is another. He points out that many Dutch Protestant employers before the last war were influenced by Barthian theology as well as sheer reaction and insisted, as so many Anglo-American-Canadian Christian business men still do, that business is business, with its own laws which can be observed as well by a neutral as by a Protestant organization. For such Protestants the business enterprise functions only in the Economics sphere.

Yet a little reflection must surely convince them that the business enterprise functions in all the aspects of God's creation. Thus the business enterprise has the following aspects amongst others: the mathematical, consisting of the unity of the firm in the plurality of its members as well as in its accounting procedures; the spatial aspect, since it is located at a definite place; the biological and physical, the psychical coming to expression in the esprit de corps of the workers; the logical, since a firm whose affairs were conducted illogically would soon go bankrupt; the historical, since the firm is founded in history; the lingual, expressed in the use of special business signs; the social, expressed in the firm's public relations with society as a whole; the economic; the aesthetic, expressed in the harmonious working together of all employees of the company; the juridical, expressed in the firm's use of commercial and company law; the moral, since a firm whose workers were not hard-working, honest, and loyal would suffer loss; and finally, the aspect of faith. The business enterprise no less than the Church as an institution functions in the faith-aspect of God's creation. Not only a Christian business but also a non-Christian business as well functions in the modality of faith. Unbelief as such or secularism is only another form of misdirected faith and a wrong employment of faith, the worship of the Almighty Dollar instead of Almighty God. The secular business enterprise seeks its final authority in a lie rather than in Christ. As such it invites the judgment of God upon itself. It will either serve and advance the cause of Christ, or it will be opposed to Christ. Let all Christian employers and managers and directors arise out of their slumbers and with God's help make the Lord Jesus Christ the managing director of their concerns. Then it will be said of them as it was said of Joseph of old: "The Lord was with Joseph and he prospered" (Gen. 39:2-4).