Some of them recognize that work confers dignity, so they insist that we must get everyone working. While that is correct as far as it goes, it doesn't go far enough. Why does work confer dignity? Because the Judeo-Christian God is unique in being the God Who Works. Out of all the gods of the ancient, only Yahweh works in the clay of the earth, only He forms things out of nothing. Only He institutes a day of rest after His labors. He is the God Who Work. We are made in His image and likeness. Our work gives dignity to us precisely because our dignity is a splinter, a reflective shard of the divine dignity.
In the same way, God is rich and He gives freely of His riches to every person. The rain falls on the just and the unjust. But neither the just not the unjust can forcibly wrest the rain from the sky and redistribute it as they see fit. God gives freely from his own wealth, physical goods to care for physical needs, spiritual goods (grace) for spiritual needs. You will see why this matters later in the essay.
Economic conservatives understand that work confers dignity, but they don't understand why. Thus, these same economic conservatives tend to insist on two diametrically opposed ideas: everyone must have a job AND faith must be a private sphere practice, separated from the public sphere. What they don't realize is this: such a scheme doesn't result in dignity, it results in slavery.
If God is stripped from the public sphere, if we aren't allowed to place our public work into the context of a public faith, then our public work must, necessarily, be strictly utilitarian. And therein lies the problem. Talking about empowering the people is all nice and good, but by definition, 50% of the population has an IQ below 100. You can empower that half of the population all day long and twice on Sunday, and they still won't have anything meaningful, in a utilitarian sense, to contribute to society. All of their work skills have been taken over by machines. They are now superfluous. They have no dignity and work can never give them dignity because they can perform no physically useful work.
Well, take, for instance, suffering. In the Christian scheme, anyone who suffers is participating in the Cross of Christ. Jesus is the God Who Works. The Cross of Christ is the work that redeemed the world. Thus, every suffering person is materially contributing to the salvation of the world. Since everyone suffers at some time in their lives, no one can be considered unworthy of dignity, no one can ever be considered superfluous. In the Christian scheme, every person is important because every person can do meaningful work, even if that work is only to lie in a sickbed and endure the suffering that ultimately kills him. That work is important, meaningful, worthwhile, more important than the work of the doctors and nurses who try to save him.
But for utilitarians, it is not so. For utilitarians, the work of suffering is not considered work at all. It accomplishes no good, in fact, it is an evil that must be wiped out. The suffering of the man in the bed is useless suffering. The work of the doctors and nurses, if not successful in saving the man's life, is so much wasted effort. If we cannot end the suffering, then we should end the person who suffers, so as to wipe out the wasted effort and eliminate the unnecessary suffering. A person only has worth and dignity insofar as that person does not suffer. And, since everyone suffers, everyone is potentially a target for the ravening genocide of utilitarian society.
So, yes, the idea that work establishes dignity is the general point of Catholic teaching for millennia, and the concern enunciated by Pope Francis specifically since the beginning of his pontificate. But when he uses the word "work", he doesn't mean what utilitarians think he means.
The Pope understands that we live in a utilitarian age, where one's worth to society is largely measured by one's net worth. In such a society, income inequality is a huge concern. The lower a person's net worth, the less dignity that person has. Economic liberals resolve this by trying to give everyone an equal net worth (income redistribution). Economic conservatives resolve this by insisting that all people be given jobs, so they all have the potential to become rich (read "have dignity").
Both groups are fundamentally insane. Just as it is impossible to give everyone physically utilitarian work, so it is impossible to assign dignity by forcibly taking one person's wealth in order to reassign it to someone else. When we take someone's wealth, we also take away their ability to image the living God. God gives freely. He gives us resources so that we can also give freely, in imitation of Him. If our wealth is taken from us, so is our ability to imitate this aspect of God.
If we recognize that wealth is not a sign of dignity, then income inequality is actually not a problem at all. In 1800, everyone lived in the same box of low income and low health (see Hans Rosling's Youtube video, 200 Years in 4 Minutes). Now no one lives in that box. There was essentially no income inequality for most of human history, and for most of human history everyone died young and died poor. Now there is a lot of income inequality, but everyone dies old and - by comparison to 1800 - rich. The problem isn't income inequality, it is dignity inequality.
In the essentially religious endeavor of recognizing human dignity, work (defined as Catholics define it) has a role to play. When God is stripped from human existence, work (as anyone defines it) becomes utilitarian and can no longer be used as a gauge (see the IQ problem above).
If society won't allow religion in the marketplace, then we have to figure out some other way of recognizing the inherent worth and dignity of every human being. But, without religion in the marketplace, without a spiritual economy to balance the physical economy, monetary economics is never going to resolve the problem of dignity inequality. Not even close.
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