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Markets and Morality

Policy implications of Catholic social teaching

Philip Booth
18 August 2016

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For British politics to be genuinely influenced by Catholic social teaching, several things would need to change. First, there is a long tradition in the social teaching of the Church in favour of family and civil society institutions resolving problems in economic life rather than the state. Indeed, the Compendium of the Social Doctrine of the Church states that government intervention in the economy should only last as long as the special circumstances that require it prevail.

What those special circumstances are and whether they are still with us in a particular domain are matters that can be vigorously debated. But some things are clear. In a policy world dominated by Catholic social teaching, parents, and not the state, would be in control of education. The state might help families obtain an education, but it would not be responsible for providing it except in limited circumstances.

Second, we would have a much less monolithic health service – indeed we would not have a “national” health service at all. The Church and other civil society groups would be in the vanguard of providing healthcare, as they are in Germany, in a way that was in accordance with the consciences of those who use the service. The same would be true in other social insurance areas. As the Church has repeatedly stated from Rerum Novarum onwards, the state should not take away the legitimate functions of society. And that is what happened in the post-war settlement, continuing a trend that started in the early 1900s. In 1910, there were nearly seven million members of registered friendly societies (excluding members of mutual insurance companies). The Manchester Unity of Oddfellows alone had over one million members.

Unfortunately, Friendly societies, trades unions and mutual associations had their welfare functions effectively nationalised. These organisations had provided unemployment and disability insurance as well as being fraternal organisations.

In many ways our modern welfare state is radically individualistic. It gives welfare recipients just enough to live on, providing mainly material help, so that people can be independent of wider family, charity and civil society organisations. And our tax and benefits system strongly discourages family formation. We are a long way from – and have moved no further towards – a family-friendly tax and benefits system.

Third, the principle of subsidiarity would dominate our political arrangements. Today, the UK is one of the world’s most centralised states. And, when devolution does happen, it normally involves a special deal between the government and local bureaucrats. This whole process should be rethought. Local government should be genuinely independent, it should raise its own revenue from a broad tax base and determine its own priorities.

There is little sign of movement on these important fronts. Even in social areas, things are now looking more difficult. Presumably, post-EU membership, we will have tighter immigration controls; and it seems unlikely that the new Secretary of State for Justice will be quite as keen on prison reform as her predecessor. As for Theresa May’s proposal for worker directors, this is best seen as yet more inappropriate regulation in corporate governance.

We should be realistic. Some things get better and some things get worse. But, what remains to be done is enormous compared with the progress that is likely to be made.

 

This article was first published in the Catholic Herald.

Philip Booth
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Academic and Research Director, IEA

Philip Booth is Senior Academic Fellow at the Institute of Economic Affairs. He is also Director of the Vinson Centre and Professor of Economics at the University of Buckingham and Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham. He also holds the position of (interim) Director of Catholic Mission at St. Mary’s having previously been Director of Research and Public Engagement and Dean of the Faculty of Education, Humanities and Social Sciences. From 2002-2016, Philip was Academic and Research Director (previously, Editorial and Programme Director) at the IEA. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. He is a Senior Research Fellow in the Centre for Federal Studies at the University of Kent and Adjunct Professor in the School of Law, University of Notre Dame, Australia. Previously, Philip Booth worked for the Bank of England as an adviser on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.


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