In a new book, Catholic Social Teaching and the Market Economy, nine Catholic scholars from the US, the UK and Australia, examine various fields of economic policy in the context of Catholic social teaching. Most of the authors take a line that, whilst in tune with the great encyclicals such as Rerum novarum and Centesimus annus, will be challenging to many Anglo-American Catholic commentators on political matters. It also challenges some local Bishops Conferences whose statements on policy matters have perhaps shown undue confidence in political structures to solve economic and social problems.
In exploring the teachings of Popes such as Leo XIII, John Paul II and, lately, Benedict XVI the authors show the error of assuming that welfare provision, and the redistribution of income by the political system, is a natural extension of the Christian obligation to share goods and provide welfare. John Paul II put it very lucidly in describing how, in his words, the welfare state, dubbed the social assistance state exhibited malfunctions and defects that arise because of the lack of understanding of the tasks proper to the state. Benedict XVI has written about, The State absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering personevery personneeds.
Christians should be concerned that, in most developed Western countries, the state takes and spends close to 50% of an average familys income. Despite this, despair and hopelessness do not seem to diminish and young families struggle on diminished net incomes. Perhaps this is because, as Popes John Paul and Benedict have said, the state is so remote from the people whose needs it is trying to meet. The state takes money from families in taxes that they could better spend themselves not least in providing charitable support for the less well off.
Opponents of the market economy often object that markets work on the basis of self interest. An incorrect and incoherent connection between self interest and selfishness is then often made. There is nothing intrinsically wrong with self interest. It is in my self interest to cycle to the station; it then becomes in the best interest of a shop to provide me with a cycle at a reasonable price. There is nothing selfish about this expression of demand or about its satisfaction. The market is a natural way, in harmony with human nature, of harnessing self interest to the common good.
Opponents of the market seem to switch off the assumption of self interest when they propose that economic resources should be allocated by the state. But self interest still operates here. Farmers campaign on the streets of France for resources to be allocated to them at the expense of farmers in the developing world; people in Britain campaign to keep their hospital open, often at the expense of resources for other hospitals. Self interest expressed through the political system quickly leads to conflict. Another way of putting this is to say that, where resources are not allocated through the market economy, they have to be allocated through the political market. Who gets what is then determined by which groups are the most articulate, which groups campaign the most and which groups can muster the most votes. Power is centralised and decisions taken away from families.
Whilst there are challenges that arise from a culture of materialism and consumerism, issues that are covered at length in this book, Christians should feel comfortable with the basis of a market economy. A market economy distributes resources by mutual agreement. Cooperation and peaceful coexistence are therefore at the heart of the culture of a market economy. The government, on the other hand, is the appropriate vehicle for providing collective goods such as defence and dispensing justice but, when it begins to distribute economic resources, it can only do so in a