Catholic Social Thought and New Institutional Economics: An Assessment of Their Affinities and Areas of Potential Convergence

• Author: Paul Dragos Aligica,Eileen Norcross
• DOI: http://doi.org/10.1111/ajes.12352
• Published date: 01 September 2020
• Date: 01 September 2020

Catholic Social Thought and New

Institutional Economics: An Assessment of

Their Affinities and Areas of

Potential Convergence

By EilEEn norcross* and Paul Dragos aligica†

abstract. The potential link between Catholic social teaching (CST)

and the theoretical developments associated with new institutional

economics (NIE) are explored. The emphasis is on the contributions of

two Nobel Prize winners in economics—Douglass C. North and Elinor

Ostrom—and on the work of political scientist Vincent Ostrom. By

adjusting the neoclassical presumptions dominating modern economic

theory to include culture, ideas, and religious beliefs in the analysis

of economic behavior, the economic and social theorizing developed

by these scholars advances a framework that has significant affinities

with CST’s foundational critique of economic concepts and theories

and with its normative position regarding the nature and functioning

of social and economic systems.

Introduction

The contribution of Catholic social teaching (CST) on the moral

dimension of economic and social orders has two areas of emphasis.

First, CST’s focus is the economic and social order and its relationship

to the person. More precisely, CST is concerned with the economic

system and its capacity to adequately meet the needs of individu-

als and communities while performing according to a set of norma-

tive (or moral-theological) criteria. CST’s discussion about the market

economy, capitalism, economic policies, and their associated institu-

tional arrangements and performance, are defining features of the first

American Journal of Economics and Sociology, Vol. 79, No. 4 (September, 2020).

DOI: 10.1111/ajes.12352

© 2020 American Journal of Economics and Sociology, Inc.

*Vice President for Policy Research, Mercatus Center, George Mason University. Email:

enorcross@mercatus.gmu.edu

†University of Bucharest; Mercatus Center, George Mason University. Email:

pdragos@mercatus.gmu.edu

1242 The American Journal of Economics and Sociology

focus. Second, CST has also developed a critique of the application of

economic ideas that are at variance with CST’s vision. The attention

given to economic thought by CST is fully justified. CST is at the core

of the analysis of economic systems and policies and the assessment

of their legitimacy and performance.

In exploring the relationship between CST and economic thought,

it is important to keep in mind that they belong to different categories

of thought. Our argument is predicated on the observation by John

Paul II (1991: 43) that CST is not an economic theory and should not

be conceived as a substitute or alternative to economic theorizing:

The Church has no models to present; models that are real and truly effec-

tive can only arise within the framework of different historical situations,

through the efforts of all those who responsibly confront concrete prob-

lems in all their social, economic, political and cultural aspects, as these

interact with one another.

CST’s critique of economic claims regarding market economics can

be seen as part of a dialogue that questions how such claims are for-

mulated, as they have emerged from the modern neoclassical model,

with its narrow conception of homo economicus. Human persons and

human social ecologies must be understood within the richer and

more anthropologically realistic context provided by theology and

philosophy and by Imago Dei, a view of the human person as cre-

ated in the image of God (Clark 2019a: 411–412). Seen in this light,

CST’s critique of how economic claims are formulated or discussed is,

in part, a rejection of philosophical materialism. The objects of this

critique include:

• the mistaken reduction of the human person to an object or a

purely physical being,

• the ideology of “economism,” which places undue emphasis

on economic factors while discounting the values, actions, and

motives of human beings in society, and

• the failure to recognize that the values that guide human action

in society will be reflected in the economy, and the social order

that emerges.