Contemporary Issue: Free Markets


Freemarket

Catholic Social Teaching informs us that the free market economy is an  

"important source of wealth in modern society" (CA, 32)

Of the economic systems currently available, free market economies have the best potential for promoting human development.

"In this way, the role of disciplined and creative human work and, as an essential part of that work, initiative and entrepreneurial ability becomes increasingly evident and decisive.70 This process, which throws practical light on a truth about the person which Christianity has constantly affirmed, should be viewed carefully and favourably." (CA, 32)
"Certainly the mechanisms of the market offer secure advantages: they help to utilize resources better; they promote the exchange of products; above all they give central place to the person's desires and preferences, which, in a contract, meet the desires and preferences of another person." (CA, 40)
"The modern business economy has positive aspects. Its basis is human freedom exercised in the economic field, just as it is exercised in many other fields." (CA, 32)
"It would appear that, on the level of individual nations and of international relations, the free market is the most efficient instrument for utilizing resources and effectively responding to needs." (CA, 34)

With the fall of the Soviet Union transpiring during his papacy, Pope Saint John Paul II was careful not to exhort the general assumption that Capitalism is the outright 'panacea' for civil and economic progress, especially with regards to developing nations:

"Returning now to the initial question: can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

The answer is obviously complex. If by "capitalism" is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a "business economy", "market economy" or simply "free economy". But if by "capitalism" is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative." (CA, 42)

Nevertheless, the validity of the free market system ultimately hinges upon its service of society and the human person, as our Holy Fathers have emphasized in their Social Encyclicals:

"...business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference." (CIV, 40)
"Ownership of the means of production... is just and legitimate if it serves useful work. It becomes illegitimate, however, when it is not utilized or when it serves to impede the work of others, in an effort to gain a profit which is not the result of the overall expansion of work and the wealth of society, but rather is the result of curbing them or of illicit exploitation, speculation or the breaking of solidarity among working people.87 Ownership of this kind has no justification, and represents an abuse in the sight of God and man." (CA, 43)

Is the Church’s Support of a Free Economy unequivocal?

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Why Does the Church support “Free Markets”?

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Related Thoughts on Free Markets

Fina7-23-2017statement_final-image
Centesimus Annus Pro Pontifice Foundation 2017 Statement "Constructing Alternatives to Promote Human Dignity" "I urgently appeal, then, for a new dialogue about how we are shaping the future of our planet. We need a conversation that includes everyone, since the environment challenge we are undergoing, and its human roots, concern and affect us all. (Pope Francis: Laudato si,14) Taken from "Quote - Centesimus Annus Pro Pontifice Foundation 2017 Statement"
Cst_101
I invite you to look around at the new things which surround us and in which we find ourselves… (Saint John Paul II, Centesimus Annus, 1991) Taken from "Catholic Social Teaching 101"
CST places economic freedom parallel to political freedom. It recognizes that free enterprise, rightly understood and implemented, is currently the best available vehicle for systemically caring for the physical needs of the poor, and true global economy is the key way to create lasting development and, thereby, peace. Taken from "Democracy and Free Market Economies"

Related Events on Free Markets

Sun
6 days
Course
Certificate Course in Catholic Social Teaching

When:
Sunday, October 29, 2017 at 3:00pm

Where:
Washington Retreat House

Related Speakers / Panelists / Authors on: Free Markets

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Just a Thought
Just_wage
Over 120 years ago, Pope Leo XIII introduced the idea of a “just” wage in his encyclical, Rerum Novarum.  He defined the just wage as an amount needed to support a thrifty and upright worker plus his family, and prescribed that it must be sufficient enough to allow the worker to save and acquire property of his own.  Read more