CORPUS CHRISTI, TX (Catholic Online) - There is a modern tendency to put a rift between economics and morality.  This was not always the case, as moral sentiments had traditionally been seen as a foundational part of the economic science and part of the formula in measuring the increase in the wealth of nations.  Economics was viewed as a moral science, as it still was with Adam Smith.  One should remember that Adam Smith, who wrote the Wealth of Nations, also wrote a book entitled The Theory of Moral Sentiments.

For a variety of reasons, all this has changed, and economics has been artificially separated from morals as a result.  Beginning with the 19th century, starting with such thinkers as David Ricardo (1772-1823) and John Stuart Mill (1806-1873) and in earnest in William Stanley Jevons (1835-1882) and Alfred Marshall (1842-1924), the science of economics was progressively divided and separated from morality. 

Economics came to be viewed as a stand-alone natural or physical science that was empirically based.  It was seen as something akin to physics or chemistry with their natural laws which have no regard for morality.  There is no right or wrong in the laws of thermodynamics.  Nor did these thinkers believe that there was right or wrong in the laws of economics.  The market was governed by rational self-interest, immutable physico-economic laws, and not morals.  Political economy became the science of economics.  Some have called this process the "scientification" of economics.

In her social doctrine, the Church insists that this separation of economics and morals is wrong and unwise.  She insists that the classical and traditional link between morals and economics not be forgotten. "The Church's social doctrine insists on the moral connotations of the economy." (Compendium, No. 330). 

While the Church recognizes that economics has "its own principles in its own sphere" which is separate from moral science, she also insists that it is "an error to say that the economic and moral orders are so distinct from and alien to each other that the former depends in no way on the latter." (Compendium, No. 330) (quoting Pius XI, Quadragesimo Anno, 23). "The necessary distinction between morality and the economy does not entail the separation of these two spheres, but, on the contrary, an important reciprocity." (Compendium, No. 331)

As the Compendium of the Social Doctrine of the Church puts it: "Just as in the area of morality one must take the reasons and requirements of economy into account, so too in the area of the economy one must be open to the demands of morality." (Compendium, No. 331)  Economics must obtain values elsewhere than from economics.  "[T]he purpose of the economy is not found in the economy itself, but rather in its being destined to humanity and society" since "man is the source, the center, and the purpose of all economic and social life." (Compendium, No. 331) (quoting Vatican II, Gaudium et spes, 63)

The Church insists that there is something greater than economics.  A "meta-economic order," one which is moral, exists outside of the market.  Merchants do not sell and buy morals, but must go elsewhere for them.  Christ puts it it memorable words: "Man does not live by bread alone." (Matt. 4:4, Luke 4:4)  This seems to be just plain common sense.  But it is remarkable how this common sense eludes so many modernly.

"The relation between morality and economics is necessary, indeed intrinsic," continues the Compendium of the Social Doctrine of the Church, "economic activity and moral behavior are intimately joined one to the other." (Compendium, No. 331)

The fact that morality and the economy are intertwined does not mean that economic efficiency is not important.  "The moral dimension of the economy shows that economy efficiency and the promotion of human development in solidarity are not two separate or alternative aims but one indivisible goal." (Compendium, No. 332).  The term "economic efficiency" means a situation where it is impossible to increase general welfare from the available resources.  In other words, any effort to make others better off will make others worse-off to the extent that the gains of one are offset by the losses of the other.

In fact, the Church recognizes that there is a moral duty to assuring "economic efficiency," as the "production of goods is a duty to be undertaken in an efficient manner, otherwise resources are wasted."  When the Church uses the words "economic efficiency," these clearly are a reference to the market economy or free economy.  And yet "economic efficiency" has its limits.  Economic efficiency cannot ...