The “Great Reset”, corporatism, Pelagianism, and counterfeit subsidiarity

It appears that the push for President Biden’s Build Back Better (BBB) program is halted with the failure to pass it in Congress and the war in Ukraine taking center stage. However, the rollout of Build a Better America program in his State of the Union address does not mean that the momentum for BBB is gone. The reason is that it is part of the Great Reset movement. The Great Reset is based on certain philosophical and theological principles, and there is no indication that Biden changed his position on these tenets nor is there evidence that support for the Reset is waning.

The Great Reset

The Great Reset was announced in 2020 by the World Economic Forum. In his June 3^rd, 2020 article, “Now is the Time for a ‘Great Reset‘”, WEF founder Klaus Schwab argues that to “achieve a better outcome, the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions.” He then makes an astonishing connection between COVID-19 and his agenda, stating that there are “many reasons to pursue a Great Reset, but the most urgent is COVID-19.” Schwab reiterates this point in his book, COVID-19: The Great Reset:

[T]he possibilities for change and the resulting new order are now unlimited and only bound by our imagination, for better or for worse. … You get the point: we should take advantage of this unprecedented opportunity to reimagine our world, in a bid to make it a better and more resilient one as it emerges on the other side of this crisis. (pp. 16-17)

John Kerry confirmed that the White House is committed to this plan at the Nov. 17, 2020 WEF meeting (starts at 27 min mark). Likewise, Biden’s Press Secretary Jen Psaki echoed Schwab’s words in her Oct. 12, 2021 press conference when she stated, “The President wants to make fundamental change in our economy, and he feels coming out of the pandemic is exactly the time to do that.” She then listed off a policy agenda that has nothing to do with the pandemic.

This same tactic was used by Canadian Prime Minister Justin Trudeau, a Great Reset enthusiast. In his Sept 23, 2020 speech, he first discussed the pandemic and then segued into policies unrelated to COVID. Several days later he addressed the United Nations, where he again stated that the response to the virus must entail broad social and economic changes. More recently, he used the truckers’ backlash against the COVID vaccine mandates to suppress free speech and property rights to bank accounts. It wasn’t until Canadian banks complained of massive withdrawals that Trudeau rescinded the Emergencies Act.

The phrase “Build Back Better” is frequently used by the WEF and is tied to the Great Reset. In fact, an April 3, 2020 article by the WEF is entitled, “How to build back better after COVID-19”. Justin Trudeau explicitly uses the phrase in connection with the Reset in a Sept. 29, 2020 UN videoconference. (A longer version of the clip can we seen here.)

What is the Great Reset? It is not easy to answer because there seems to be no single WEF source that coherently pulls all its elements together. Even politicians who wish to implement it are coy about the details. However, scattered among the WEF’s publications are scattered descriptions of different aspects of it.

In “Now is the Time for a ‘Great Reset’”, Schwab writes that the three main goals are to “steer the market toward fairer outcomes”, “ensure that investments advance shared goals, such as equality and sustainability”, and “harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges.” On the surface, these look like laudable goals.

Schwab even uses terms that sound Catholic-like such as the common good and subsidiarity. However, he is proposing a non-Catholic form of corporatism mixed with Pelagianism and Marxism.

Corporatism

Corporatism is a term that has multiple definitions and it has gotten a bad reputation from twentieth-century fascism. At the most basic level, it sees the human body (“corpus” in Latin) as a metaphor for society. All the organs work together for the health of the entire person. St. Paul uses this metaphor to describe the Church (Rom 12:4-8; 1 Cor 12:12-26; Eph 4:11-16). The Catechism of the Catholic Church evokes this language when it defines a society as “a group of persons bound together organically by a principle of unity that goes beyond each one of them.” (CCC 1880, emphasis added). Pope Pius XI applies this imagery in the context of the labor market (Quadragesimo Anno [QA] 90; Divini Redemptoris [DR] 51).

In Catholic corporatism, associations of people with common interests are given legal recognition. These corporations protect human dignity by giving them a voice as they negotiate with other groups. The goal of the interaction is to support the common good and human flourishing. An example would be a federation of workers’ groups meeting with a federation of employers’ groups to set wages, instead of leaving wages solely to supply and demand (DR 54; see also QA 82-85). The worker associations of Catholic social teaching are different from unions. Union-management collective bargaining is a power play between the two sides, each of which tries to get the best deal for their constituencies. In Catholic corporatism the groups attempt to do the best for both sides, balancing the interests of all involved.

Put differently, the free market does some things very well. It brought countless people out of poverty and contributes to human flourishing. However, market failure also exists and vocational groups are a non-governmental countervailing force against market failure. Catholic corporatism is a counterbalance to liberalism’s exaggerated focus on self-interest and devaluation of solidarity.

Quadragesimo Anno is very explicit that these organizations are to respect the principle of subsidiarity and human freedom. They are organized by function (such as by occupation) and membership is voluntary. Pope Pius emphasizes that “[p]eople are quite free not only to found such associations, which are a matter of private order and private right, but also in respect to them ‘freely to adopt the organization and the rules which they judge most appropriate to achieve their purpose.’”(QA 87). These organizations are built from the bottom up.

The danger of corporatism imposed from the top is that it is easy for it to degenerate into state control over the economy, with the ensuing loss of freedoms and rights as was experienced in the twentieth century.

Schwab calls his version of corporatism “stakeholder capitalism”. As explained in the January 2021 Davos Agenda:

That is the core of stakeholder capitalism: it is a form of capitalism in which companies do not only optimize short-term profits for shareholders, but seek long term value creation, by taking into account the needs of all their stakeholders, and society at large.

Stakeholder capitalism vs. subsidiarity

Stakeholder capitalism differs from shareholder capitalism. In the latter, corporate businesses are owned by stockholders who exercise their ownership rights by voting for the board of directors. Schwab proposes a governance system which sees stakeholders as groups performing certain functions. They are “social and/or legal organizations” that have “specific objectives that make them distinct organisms in the first place” (Note the biological metaphor, Stakeholder Capitalism, p. 178). These stakeholders are the planet (i.e., the natural environment), companies, governments, civil society (non-governmental organizations or NGOs, unions, universities, etc.), and international and supranational organizations (Stakeholder Capitalism, p. 178). Owners give up their ownership rights as they are relegated to become one of many stakeholders.

Schwab makes the point that, “no one stakeholder can become or remain overly dominant” (Stakeholder Capitalism, p. 173). Control shifts to institutions which may not have any oversight or a system of checks and balances such as governments, NGOs, and United Nations agencies. The question of whether the planet is a person with the rights of a stakeholder, as opposed to the Catholic view that we are stewards of it on behalf of God, is another matter which will not be addressed here. (For the Church’s teaching see the Message of His Holiness Pope John Paul II for the Celebration of the World Day of Peace, Jan 1, 1990.)

Stakeholder capitalism is contrary to the Catholic ethos. For example, Schwab applies the concept of subsidiarity, but not as Catholics understand it. In Stakeholder Capitalism, he writes that subsidiarity “asserts that decisions should be taken at the most granular level possible, closest to where they will have their most noticeable effects” (p. 181). This sounds vaguely similar to Pope Pius XI’s point that, “[j]ust as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do.” (QA 79).

However, Pius XI continues with the sentence: “For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them.” “Subsidium” means “aid” or “support”, so higher level organizations support the functioning of lower-level organizations. In the case of the labor market, the government facilitates and encourages worker and employer associations to negotiate a wage but does not interfere in the negotiations unless necessary. Schwab inverts the order. In the example he provides of climate action, the decisions are made at the international level and then cascaded down to the national and subnational levels.

In other words, the lower levels don’t decide what to do or what is in their best interest to do but are limited to choosing how to implement the decisions communicated from above (Stakeholder Capitalism, pp 181-182). This is a counterfeit subsidiarity because lower levels support the goals of higher levels, reversing the literal meaning of the word.

Another way that Schwabian subsidiarity diverges from Catholic teaching is in who makes decisions within the organization. In Catholic thought, for example, workers in a particular occupation would have an organized way on which they can deliberate, thereby exercising virtue and character as they work toward the common good. The focus of subsidiarity is the person, and not the promotion of an ideology, because its goal is the development of the individual. It is a guarantee of “appropriate methods for making citizens more responsible in actively ‘being a part’ of the political and social reality of their country.” (Compendium of the Social Doctrine of the Church 188). As Pope Benedict XVI puts it, “Subsidiarity respects personal dignity by recognizing in the person a subject who is always capable of giving something to others.” (Caritas in Veritate, 57).

Schwab would take personal freedom away and insert outside stakeholders into a private decision-making process. Supranational and national governments, agencies, NGOs, and others would have a voice in the deliberations. In contrast, true subsidiarity “protects people from abuses by higher-level social authority and calls on these same authorities to help individuals and intermediate groups to fulfil their duties.” (Compendium 187). In the Catholic view, the government is not a stakeholder in business decisions, but plays a supporting role of “directing, watching, urging, restraining, as occasion requires and necessity demands” (QA 80). Furthermore, by making government a stakeholder, Schwab implies that it has its own interests distinct from that of civil society.

Pelagianism and Marxism

In the WEF article, “COVID-19: The 4 building blocks of the Great Reset” (Aug, 11, 2020), Hilary Sutcliffe lays out the theological anthropology of the Reset. She approvingly discusses research that “our current outlook is based on fundamentally wrong assumptions and that dramatic transformation is possible with a change of mindset.” She asserts that “our view of the world was simply made up. … But if we made it up once, we can make it up again, and there are plenty of people out there with great new ideas to work with if we started to take them seriously.”

Inequality, for example, is simply a byproduct of believing in the wrong ideology. Furthermore, she claims that research shows that,

we are in reality hardwired to be kind, cooperative and caring. But we run our countries, civic institutions, companies, schools, often even our families based on this deeply negative and incorrect assumption about human behaviour.

This view is Pelagian (see CCC 406 and pp. 222-223 in Dr. Ludwig Orr’s classic tome, “Fundamentals of Catholic Dogma”). This heresy denies original sin, attributes the world’s problems to bad examples, and asserts that the human being can perfect himself without God’s grace. The Great Reset is based on the same idea found in many self-help books that positive thinking will make all problems go away. The WEF then takes Pelagianism one step further and advocates for structural change to bring about economic equality. This is introducing Marxism into the Reset.

Economic equality is against the natural law. Pope Leo XIII made the commonsense observation that

it is impossible to reduce civil society to one dead level. Socialists may in that intent do their utmost, but all striving against nature is in vain. There naturally exist among mankind manifold differences of the most important kind; people differ in capacity, skill, health, strength; and unequal fortune is a necessary result of unequal condition. (Rerum Novarum 17)

The Catholic proposal

Klaus Schwab is correct that private decisions have implications for the common good and that growing interdependence has increased the prevalence of these spillover effects. He is also right that an overemphasis on short-term profit can create perverse incentives. His conviction that a decision maker should consider the effects of the action on stakeholders is in accord with the Golden Rule. However, forcing the Great Reset’s corporatism upon the world is not the answer.

The Great Reset, in the quest for its version of justice, ignores the true nature of the human person. The Catechism states, “Social justice can be obtained only in respecting the transcendent dignity of man.” Furthermore, government cannot fix social problems unilaterally because “[n]o legislation could by itself do away with the fears, prejudices, and attitudes of pride and selfishness which obstruct the establishment of truly fraternal societies. Such behavior will cease only through the charity that finds in every man a “neighbor,” a brother.” (CCC 1929-1931). In the words of Pope Pius, “What We have taught about the reconstruction and perfection of social order can surely in no wise be brought to realization without reform of morality, the very record of history clearly shows.” (QA 97) His words ring true today:

All experts in social problems are seeking eagerly a structure so fashioned in accordance with the norms of reason that it can lead economic life back to sound and right order. But this order, which We Ourselves ardently long for and with all Our efforts promote, will be wholly defective and incomplete unless all the activities of men harmoniously unite to imitate and attain, in so far as it lies within human strength, the marvelous unity of the Divine plan. (QA 136)

Pius XI also warned us about a top-down approach. When corporatism was perverted in Mussolini’s Italy, he wrote:

… We are compelled to say that to Our certain knowledge there are not wanting some who fear that the State, instead of confining itself as it ought to the furnishing of necessary and adequate assistance, is substituting itself for free activity; that the new syndical and corporative order savors too much of an involved and political system of administration; and that (in spite of those more general advantages mentioned above, which are of course fully admitted) it rather serves particular political ends than leads to the reconstruction and promotion of a better social order. (QA 95)

The Great Reset denies an organization its autonomy because members do not have the freedom to deliberate as to their best interest without outside influences. This politicizes private decision making and can easily transform the government’s representatives to be like a Soviet political officer.

The momentum for the Great Reset is not going away. First, the belief system that gives impetus to it is still strong. The Pelagian-inspired plan of reprograming beliefs to reject both revealed truth and natural law is still being practiced, as evidenced by policies such as the administration’s push to redefine the family. Second, there is no reason to think that the Schwabian tactic of not letting a good crisis go to waste has changed. Over the past few years, the crisis was COVID. Now, the threat of the escalation of the war in Ukraine can provide a justification to see another push to implement the Great Reset. In the war of ideas, Catholic social teaching offers an antidote to the Reset.