TCS Daily

The Pope and Capitalism

By Tomasz Teluk - February 17, 2004 12:00 AM

Examine the works of Pope John Paul II and you'll find some of the strongest examples of support for a free-market economy by the Catholic Church since Leo XIII's Rerum Novarum in 1891.

The pontiff may or may not have seen Mel Gibson's new movie, but more and more philosophers suggest that he has read Human Action by Ludwig von Mises, and that this magnum opus by the Austrian economist probably influenced the Pope in certain fragments of his early book, The Acting Person. The Pope's criticism of so-called "bureaucratic governance" is akin to Mises' "bureaucracy." The Pope's "personalism" is philosophically very close to the Austrian School, and is based on the same Aristotelian and Thomist traditions.

Poland and the Solidarity movement became symbols of freedom during and after the fall of communism in 1989. Along with them, the Polish Pope's teachings have been a wind of change in Roman Catholic social thought. His encyclical Centesimus Annus and his book The Acting Person offer the best opportunities for the faithful to understand the human's role in society and the economy.

The collapse of communism was executed largely peacefully. The source of the socialist system's defeat was an inefficient economy. Society rejected Karl Marx's utopia. The Pope's encyclical, Centesimus Annus, written in 1991, emerged as an uncompromising rejection of collectivism, the worker alienation theory and the welfare-state.

John Paul II reminds us that property rights are natural rights. He also underlines the significance of the freedom of human action and freedom of people's economic activities. The Pope reveals to us the change in the global economy. Wealth is no longer tied only to land, natural resources or capital. Knowledge, technology and know-how are important elements of contemporary fortunes.

On the question of ethics, John Paul II indicates the social context of the entrepreneurialism. The individual, the entrepreneur, satisfies societal needs. Building on that, the free market is the most effective way to use society's resources. In Centesimus Annus, the Pope refers to it either as business economy, market economy or free economy. The free market, he writes, is the best way to promote the welfare of families. But the Pope also criticizes materialism and consumerism - alien values to Christianity. He argues that profit is not the only economic goal. Company growth is the primary indicator of good business conditions, he says, but the human individual should be the most important element in economic activity.

The Pope exhibits a great depth of economic understanding. Free-market capitalism offers the antidote to bankrupting socialism. Capitalism, to be fair, should be based on Christian ethics. John Paul II says that democracy has many faults: politicians more often work for themselves, not the people. He criticizes the conception of the welfare-state. Interventionism and bureaucracy deprive people of the responsibility for themselves, thus promoting over-regulation of the market. The welfare-state wastes human energy and creativity. Bureaucracy serves the bureaucrats, not the society.

What are the state's functions? The reader can easily detect that the pope's ideas are close to the classical liberal conception of the state. Economic activity could not be effective without institutions. The main goal of the state is to guarantee laws and to secure individual property rights and liberty. Commentators underline that John Paul II allows a certain amount of intervention by the state, but the dialogue about liberalism is revolutionary in Roman Catholic social thought.

Since John Paul II became Pope, Catholic social thought has developed through an increased focus on the human person as a free and creative individual. There is a better understanding that self-realization is possible in society and that the best environment in which to act freely is the liberal market economy. The only limitation of liberty is conscience or morality.


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