Regulation and 'the Right Ordering of Economic Life': WHAT LIBERTARIANS CAN LEARN FROM CATHOLIC SOCIAL DOCTRINE.

AuthorSlade, Stephanie

SINCE THE FIRST papal encyclical on modern economic questions, RerumNovarum, was promulgated in 1891, Catholic pontiffs have had harsh words for "unbridled capitalism" and "philosophical liberalism." In Quadragesimo Anno (1931), Pope Pius XI wrote that "the right ordering of economic life cannot be left to a free competition of forces. For from this source, as from a poisoned spring, have originated and spread all the errors of individualist economic teaching." In Octogesima Adveniens (1971), Pope Paul VI argued that "structures" should be set up "in which the rhythm of progress would be regulated with a view to greater justice."

The upshot--that a capitalist system cannot be trusted automatically to produce what the Church views as morally acceptable outcomes--may seem to require Christians to support a robust central government. If society is to be oriented to the common good, surely some person or body needs to have enough power to do the orienting. What, besides the state, can regulate the market?

But when Pope John Paul II gave an audience to the board of the European Automobile Manufacturers Association in 2001, he offered a different, orthogonal answer: "As presidents of the major automobile companies of Europe," he told them, "you have important responsibilities, not only in guiding the growth of your own industry, but also in ensuring the right development of an increasingly globalized economy. The process of globalization, while opening up new possibilities for progress, poses urgent questions regarding the very nature and purpose of economic activity. It calls for ethical discernment aimed at protecting the environment and promoting the full human development of millions of men and women."

The Church's surprising lesson for partisans of big government is that the best tools for correctly ordering economic life are found in the choices of individual market actors. Because those choices are based not only on their preferences but also on their convictions, people's moral sensibilities--the extent to which they believe they have ethical obligations to each other--have a powerful and unavoidable effect on the shape of the economy. Contrary to what you might expect, Catholic social teaching suggests that this, not public policy, performs the first and most important regulatory function in a free society.

THE POPES OF the last century have been clear that when they speak out against unregulated liberal capitalism, they're referring to...

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