While the income of a minority is increasing exponentially, that of the majority is crumbling.

– Pope Francis

We, as the Catholic Church, have to make our voice heard in this regard as you have already done successfully in other fields […] in defence of those excluded in our rich societies, mainly the poor and immigrants that have suffered from cuts in social benefits who therefore feel themselves excluded from social welfare. Please be assured of our support, as well as that of the Holy Father, regarding this important issue.

– Archbishop Menini, Apostolic Nuncio to Great Britain

Although the Catholic Church has traditionally taught that the clergy should restrain themselves when it comes to making particular judgements about matters to do with politics and economics, we frequently hear bishops, priests and the pope speak about economic issues. This is legitimate when statements relate to issues about fundamental human rights or matters to which pastors wish to bring the attention of their flock. However, they should tread carefully when it comes to making judgements about particular economic and political solutions to the problems that we all wish to address.

There are three common problems when issues to do with economics are raised by clergy:

1. Statements may be passed off as facts with the authority of the individual behind them when the statement is empirically false (either objectively false or false by any reasonable interpretation). The first quotation above is a good example of that. We live in a period in which there has been the most rapid reduction in poverty in the history of the planet.


2. A reductionist approach may well be taken which reasons along the following lines: ‘the Church is concerned about the poor, therefore any action that improves the position of the poor in the short term, must be right and justified by Catholic social teaching.’ The second quotation is a good example of this tendency.


3. Economic measures are proposed which would lead to problems that are worse than the disease that the measure is trying to cure (minimum wages and foreign aid are good examples here).

The second, and much expanded, second edition of Catholic Social Teaching and the Market Economy is intended to counter these intellectual tendencies. It shows that there is an important strand of Catholic social teaching that supports private property and a free economy and is highly critical of state-provided welfare financed by high taxes on the family. As Pope Pius XI said: ‘Wherefore the wise Pontiff [Pope Leo] declared that it is grossly unjust for a State to exhaust private wealth through the weight of imposts and taxes’ and, as Pope Leo XIII himself said in Rerum novarum: ‘True, if a family finds itself in exceeding distress, utterly deprived of the counsel of friends, and without any prospect of extricating itself, it is right that extreme necessity be met by public aid, since each family is a part of the commonwealth.’ This does not sound like a call for a state which spends 50 per cent of national income, the majority of which is on welfare.

Indeed, the appropriate role and limits of the state are clear: ‘In like manner, if within the precincts of the household there occur grave disturbance of mutual rights, public authority should intervene to force each party to yield to the other its proper due; for this is not to deprive citizens of their rights, but justly and properly to safeguard and strengthen them. But the rulers of the commonwealth must go no further; here, nature bids them stop.’ (My emphasis)

It is sometimes put to me – and other authors of this book – that we cherry pick quotations from papal encyclicals to suit our case. This is not true. One can certainly make a philosophical case from Catholic social teaching for other forms of economic organisation (for example, Christian democracy, distributism, some form of economic direction by the state in relation to programmes to help people back to work). These are the debates which Christian laity should be having. What is not acceptable, though, is to pretend that Catholic social teaching leads inevitably to the view that the state should be used to resolve the problems of poverty, low pay, misbehaviour in financial services industries, and so on and to speak as if any extension of action by the state in these fields is necessarily desirable according to Catholic social teaching.

Catholic Social Teaching and the Market Economy makes a strong case for limited intervention; that a free economy with a good institutional framework, rather than government aid, is the best way for poor countries to develop; that regulation has failed the financial sector; that solutions to environmental problems require secure property rights and functioning market economies; that ethical behaviour and not regulation is the key to a more robust market economy that serves the human person better; and that the state should not be spending nearly 50 per cent of families’ incomes.

Rerum novarum is often described as the workers’ encyclical and is often used to justify a state-mandated minimum wage without any hesitation or doubt. Any neutral reading of the document would struggle to justify such an approach. But, the same people tend to support a welfare state when alternative approaches to the provision of welfare are proposed so strongly in the landmark document: ‘And there are not wanting Catholics blessed with affluence, who have, as it were, cast in their lot with the wage-earners, and who have spent large sums in founding and widely spreading benefit and insurance societies, by means of which the working man may without difficulty acquire through his labor not only many present advantages, but also the certainty of honorable support in days to come…The State should watch over these societies of citizens banded together in accordance with their rights, but it should not thrust itself into their peculiar concerns and their organization, for things move and live by the spirit inspiring them, and may be killed by the rough grasp of a hand from without.’ It is not the authors of the IEA book who cherry pick.

So, the authors hope that Catholic Social Teaching and the Market Economy will be read with a generous spirit and will lead to more prudent judgements being made when Christians – and others – intervene in political and economic debates.