Catholic Economic Teaching
The recent controversy over Pope Francis’s economic views has raised the related issue of whether these views are consistent with the traditional Catholic economic teaching. While the answer is in the affirmative, the pope has decidedly added a new emphasis and a more urgent tone to this teaching.
Catholicism is, of course, primarily a set of timeless and universal moral and religious principles. However, it is also a dynamic institution mindful of the latest developments in the economy as well as the reflection of these developments in the contemporary economic thinking. Thus, while the papal encyclicals of 1891, 1931, 1961 and 1991 upheld the sanctity of private property and the efficiency of free markets, positions in line with those of other economists, they also called for the rights of workers to form unions and to bargain for living wages, which were less so. The encyclicals therefore reflected the readiness of Catholic Church to adjust her economic teaching to such momentous events as the Industrial Revolution, the Great Depression, and the rise and fall of the Soviet Union, while remaining true to her own moral principles.
Indeed, during the era of the classical economics in the 18th century, there was a broad agreement between the church and the economics profession on the necessity of integrating moral sentiments into economics. During the 19th century, however, when the modern neoclassical economics effectively purged morality from economics, differences began to appear. Inspired by advances in physical sciences, economists began to assert that economics was also a scientific discipline, devoted to rational resource allocation and devoid of any moral underpinnings. Thus, leaving its moral science status behind, economics became increasingly a more technical subject, dealing with the discovery of general rules of optimal behavior which were valid for all times and places. This trend, which has largely continued into our own time, has been mostly rejected by the church, which has insisted on an enlightened and moral economic system.
More specifically, while the church accepts the free market capitalism as a largely viable economic system which generally delivers the goods, she also recognizes that this system is subject to numerous defects and failures, resulting in economic instability, environmental damage, and inequitable distributions of income and wealth. Furthermore, the church is aware that addressing the shortcomings of the free market system often requires active government intervention in the economy. In particular, given the inadequacy of voluntary charitable contributions to address poverty, a failure clearly on display during the 19th century, governments are urged to assume more moral responsibility for social justice through taxation of the rich. In addition, as custodians of natural resources for future generations, governments are also asked to protect these resources through adequate regulation. In short, the church has remained skeptical about the moral foundations of unfettered capitalism and the relevance of the economic doctrines that try to justify its existence. Interestingly, even this moderate position of the church has come under attack from some libertarian economists, who deem any attempt to reform the capitalist system as naïve and counterproductive. Indeed, for many of these economists, any government intervention in the economy is but the first step on “the road to serfdom.”
The foregoing explains the recent uproar in some circles over the economic views of Pope Francis. After six years of global depression and rising mass poverty in the midst of selective private affluence, the pope has called for less reliance on mainstream economic ideas in favor of the views of some of the more liberal critics. Using extraordinarily harsh language, the pope has simply raised questions about the prevailing free market ideology, in which recessions are short and shallow, income and wealth gaps are steadily closing, poor nations are catching up with their richer neighbors, environment is sound and safe, and the captains of industry and finance are ethical and humane. In reality, as the pope has lamented, the rich are getting richer and greedier and the poor are still “waiting” for their fair shake.
Hassan Shirvani, Ph.D.
Professor Cullen Foundation Chair in Economics