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Pope Pius XI
Quadragesimo Anno is an encyclical by Pope Pius XI, issued 15 May 1931, 40 years after Rerum Novarum (thus the name, Latin for 'in the fortieth year'). Unlike Leo, who addressed the condition of workers, Pius XI discusses the ethical implications of the social and economic order. Pius XI calls for the reconstruction of the social order based on the principle of solidarity and subsidiarity. He notes major dangers for human freedom and dignity, arising from unrestrained capitalism and totalitarian communism.
Changes since Rerum Novarum
Pope Pius XI issued his encyclical exactly forty years after Rerum Novarum. There were other papal statements of Leo XIII and the encyclical Singulari Quadam of Pope Pius X. Pius XI titled his Encyclical “About the social Order”. In the first part he reviews and applauds the encyclical of his predecessor. The Church can be credited with participating in the progress made and contributing to it. It developed a new social conscience. The welfare State has become a reality and the once powerless workers have unionized and form a powerful opposite to representatives of capitalism. 
But for Pope Pius, this did not solve the social problems that Leo XIII talked about. New problems developed including a degree of industrialization, which was unthinkable in 1891. Industrialization has become an undeniable fact, affecting not only the workers in factories but society as a whole.  The division of societies into opposing social classes increased, said the Pope. Both sides are highlighting differences and resulting social unrest is truly possible.
The Church has a role in discussing these issues. Social and economic issues are vital to her not from a technical point of view but in terms of moral and ethical issues involved. Ethical considerations include the nature of private property  concerning which, within the Catholic Church, several conflicting views had developed. Pope Pius XI proclaims private property to be essential for the development and freedom of the individual. Those who deny private property deny personal freedom and development. But, says Pius, private property has a social function as well. Private property loses its morality if it is not subordinated to the common good. Therefore governments have a right to pursue redistribution policies. In extreme cases, the Pope recognises that the State has a right to expropriate private property. 
Capital and Labour
A related issue, says Pius, is the relation between capital and labour and the determination of fair wages.  Pius develops the following ethical mandate: The Church considers it a perversion of industrial society, to have developed sharp opposite camps based on income. He welcomes all attempts to alleviate these cross differences. Three elements determine a fair wage: The worker's family responsibilities, the economic condition of the enterprise and the economy as a whole. The family has an innate right to development, but this is only possible within the framework of a functioning economy and sound enterprises. For this Pope Pius concludes that solidarity not conflict is a necessary condition, given the mutual interdependence of the parties involved. 
Industrialization, says Pius XI, resulted in less freedom at the individual and communal level, because numerous free social entities got absorbed by larger ones. A society of individuals became a mass and class society. People are much more interdependent than in ancient times and become egoistic or class-conscious in order to save some freedom for themselves. The pope demands more solidarity, especially between employers and employees through new forms of cooperation and communication. Pius draws a negative view of Capitalism, especially of the anonymous international finance markets.  He identifies here problems: dangers for small and medium-size enterprises who have insufficient access to capital markets and are squeezed or destroyed by the larger ones. He warns, that capital interests can become a danger for states, who would be reduced to be “chained slaves of individual interests” 
Regarding Communism and Socialism, Pope Pius noted increasing differences. He condemns communism but also the social conditions which nourish it. He demands that moderate socialism not only distance itself from totalitarian communism as a matter of convenience, but as a matter of principle, in light of the dignity of the human person.  Dignity and human freedom are ethical considerations, which cannot be solved from a hostile class confrontation. Ethics are based on religion and, declares the Pope, this is the realm where the Church meets industrial society.