Skip to content
Catholic Online Logo

By Andrew M. Greenwell, Esq.

2/21/2012 (2 years ago)

Catholic Online (www.catholic.org)

It is free persons who make a free market possible

The free market must operate within certain moral, institutional, and legal norms, or else it becomes something other than a free market.  The free market is not an autonomous, free-for-all area exempt from moral law or from the hand of positive law. The market must always be protected and kept free, and it must be safeguarded from those who would seek to use it wrongly, whether by fraud, manipulation, abuse of economic power, or monopolization.  It operates within the Rule of Law.

Highlights

By Andrew M. Greenwell, Esq.

Catholic Online (www.catholic.org)

2/21/2012 (2 years ago)

Published in Living Faith

Keywords: Freedom, market economy, enterprise, capitalism, Catholic social teaching, market economy, Andrew greenwell


CORPUS CHRISTI, TX (Catholic Online) - The social doctrine of the Catholic Church undeniably puts great emphasis on the free market as a valuable, indeed "irreplaceable" economic and social institution. (Compendium, No. 349) Drawing largely from John Paul II's encyclical Centesimus annus, the Compendium of the Social Doctrine of the Church is bullish on the free market and supports it as the best general means to assure proper allocation of scarce economic resources, of achieving economic efficiency, and of benefiting the common good.

The free market is an institution of social importance because of its capacity to guarantee effective results in the production of goods and services.  Historically, it has shown itself able to initiate and sustain economic development over long periods.  There are good reasons to hold that, in many circumstances, "the free market is the most efficient instrument for utilizing resources and effectively responding to needs." 

The Church's social doctrine appreciates the secure advantages that the mechanisms of the free market offer, making it possible as they do to utilize resources better and facilitating the exchange of products.  These mechanisms "above all . . . give central place to the person's desires and preferences, which, in a contract, meet the desires and preferences of another person."  (Compendium, No. 347) (quoting  Centesimus annus, 34, 40).

The Compendium continues: "A truly competitive market is an effective instrument for attaining important objectives of justice: moderating the excessive profits of individual businesses, responding to consumers' demands, bringing about a more efficient use and conservation of resources, rewarding entrepreneurship and innovation, making information available so that it is really possible to compare and purchase products in an atmosphere of healthy competition." (Compendium, No. 347)

The free market, then, is generally the best means to achieve a number of desirable economic and social ends, and is justified as an institution to be promoted precisely because of these ends it achieves so efficiently.  When the free market carries out these functions "it becomes a service to the common good and to integral human development."  The free market, in fact, is precisely valued and judged because of the ends it achieves," and it is the market's social utility--and not the market itself independent of its ends since it is but an instrumental good--that justify it.  The free market is a means to an end, in particular, the means to the promotion of the common good, where it finds its value and justification. (Compendium, No. 348)

For the same reason, therefore, the free market is only justified to the extent that it achieves these ends, as the "free market cannot be judged apart from the ends that it seeks to accomplish and from the values that it transmits on a societal level." (Compendium, No. 348)

For all its value, the free market ought not to be confused with a lawless or moral-less market.  Nor should the free market be thought as all encompassing, so that all human goods are thought as commodities.  We shall review briefly these two limits on the free market.

The free market must operate within certain moral, institutional, and legal norms, or else it becomes something other than a free market.  The free market is not an autonomous, free-for-all area exempt from moral law or from the hand of positive law. The market must always be protected and kept free, and it must be safeguarded from those who would seek to use it wrongly, whether by fraud, manipulation, abuse of economic power, or monopolization.  It operates within the Rule of Law.

To "safeguard the prerequisites of a free economy" and the benefits of a free market, the State has the "fundamental task" of "determining an appropriate" legal and juridical framework "for regulating economic affairs."  This includes assuring "individual freedom and private property, as well as a stable currency and efficient public services." (Compendium, No. 352)

Importantly, the State's role in assuring freedom of markets must not be one where it tries to "direct economic and social policies" and "become abusively involved in the various market activities," and become "authoritarian--or worse, totalitarian" in its supervisory and regulatory role.  Wherever State power becomes involved, however, such actions "must be consistent with the principle of subsidiarity." (Compendium, No. 351)

In some extraordinary cases, where the market has clearly failed or does not obtain for whatever reason (e.g., a natural disaster, an economic depression, or some other aberration), the State--again consistent with the principle of subsidiarity--may have a role in "stimulating those [business] activities where they are lacking," by "supporting them in moments of crisis," or by intervention when "monopolies create delays or obstacles to development." In "exceptional circumstances," and for limited time, even "exercise a substitute function." (Compendium, No. 351)

Though there are times government intervention is required, there is a great danger to economic freedom that is posed by an overly-interventionist State, since invariably the prescriptions of the State end up being guided by "bureaucratic logic" and governed by burgeoning "public agencies."  Therefore, any State or public intervention "must be carried out with equity, rationality, and effectiveness, and without replacing the action of individuals, which would be contrary to their right to the free exercise of economic initiative." (Compendium, No. 354)

In general, the free market and the governing bodies of the State ought not to be viewed as competitors seeking to occupy the same realm, but as cooperators in the same aim:

"It is necessary for the market and the State to act in concert, one with the other, and to complement each other mutually.  In fact, the free market can have a beneficial influence on the general public only when the State is organized in such a manner that it defines and gives direction to economic development, promoting the observation of fair and transparent rules, and making direct interventions--only for the length of time strictly necessary--when the market is not able to obtain the desired efficiency and when it is a question of putting the principle of redistribution into effect.  There exist certain sectors in which the market, making use of the mechanisms at its disposal, is not able to guarantee an equitable distribution of the goods and services that are essential for the human growth of its citizens. In such cases the complementarities of State and market are needed more than ever."  (Compendium, No. 353)

Finally, there are some human goods that simply are not commodities to be traded as if they were pork bellies. Well does the Church state that there are goods that "'by their nature are not and cannot be mere commodities,' goods that cannot be bought and sold according to the rule of the 'exchange of equivalents' and the logic of contracts which are typical of the market." (Compendium, No. 349) (quoting Centesimus annus, 40)  These include "collective goods and goods meant for common utilization." (Compendium, No. 356)  Marriage contracts, orphans, human corpses or organs, the freedom of religion or free speech ought not to be traded as if they were consumer goods.

-----

Andrew M. Greenwell is an attorney licensed to practice law in Texas, practicing in Corpus Christi, Texas.  He is married with three children.  He maintains a blog entirely devoted to the natural law called Lex Christianorum.  You can contact Andrew at agreenwell@harris-greenwell.com.

---


Pope Francis: end world hunger through 'Prayer and Action'


© 2014 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for January 2015
General Intention:
That those from diverse religious traditions and all people of good will may work together for peace.
Missionary Intention: That in this year dedicated to consecrated life, religious men and women may rediscover the joy of following Christ and strive to serve the poor with zeal.



Comments


More Living Faith

Andrew M. Greenwell: Jesus is the Heart and the Marvel of the Gospel Watch

Image of Since the incarnation of the Word, the

By Andrew M. Greenwell

If pursued, and pursued rightly (that is, without moral or intellectual prejudice), metaphysics leads us to a threshold, a threshold we might call the limina fidei, the threshold of faith.  Reason takes us to a place where we know God--that He is.  But ... continue reading


Who Are My Mother and Brothers? We are the Family of Jesus Watch

Image of

By Deacon Keith Fournier

Through our Baptism, we are invited into the very family of God. When we choose to respond to grace and live in obedience to the will and the Word of God; we enter into an eternal relationship with God the Father, Son and Holy Spirit. We actually become a part of ... continue reading


St Francis DeSales Challenges Us to Live a Life of True Devotion Watch

Image of Today in our Liturgical calendar in the Latin Rite of the Catholic Church, we remember St Francis DeSales (1567-1610). The Saints are all given as examples to emulate. They are our companions on the journey, men and women like us who responded to God's invitation to become like Jesus. They pray for us because we are joined with them in the eternal communion of love. They also put legs on the Gospel, showing us what holiness looks like.

By Deacon Keith Fournier

I say that devotion must be practiced in different ways by the nobleman and by the working man, by the servant and by the prince, by the widow, by the unmarried girl and by the married woman. But even this distinction is not sufficient; for the practice of ... continue reading


Hey Main Stream Media - Do Your Job! Media Bias on March for Life Watch

Image of The hundreds of thousands who gatherred in Washington, DC were virtually ignored by the mainstream media because they gave a voice to children in the womb intentionally killed by procured abortion

By Catherine Contreras

What do you get when over 500,000 people attend the March for Life in Washington DC? Yup. A biased main stream media barely covering it, again. OAKLAND, CA (Catholic Online) - On the 42nd Anniversary of Roe v Wade, the Supreme Court decision legalizing abortion in ... continue reading


Arlington Diocesan teachers provide English Language Learners with special support Watch

Image of Fourth-grade students work on personalized language arts activities at St. Thomas More Cathedral School in Arlington. (Christine Stoddard, The Arlington Catholic Herald)

By Christine Stoddard, The Arlington Catholic Herald

Step into Sarah Conrad's pre-kindergarten classroom at St. Thomas More Cathedral School in Arlington and you'll see the usual suspects: tiny furniture, storybooks, brightly colored posters and educational toys. But you'll also notice that laminated labels abound. ... continue reading


'Self righteousness is not going to change peoples' attitudes and save babies,' Cardinal says Watch

Image of Cardinal Sean O'Malley says that the abortion issue in the United States is a call for those of all faiths to action.

By Catholic Online (NEWS CONSORTIUM)

In delivering his homily at the March for Life vigil in Washington D.C., Cardinal Sean O'Malley said that indifference is the "greatest enemy" of the pro-life movement, adding that "to change people's hearts we must love them." Speaking at the Basilica of the ... continue reading


Eighth Annual Stand Up 4 Life Rally|Walk in Oakland, California! Watch

Image of Walk for Life in California

By Catherine Contreras

"If Black lives matter, they have to matter in the womb first. Because if Black lives don't matter in the womb, they don't matter anywhere else. So join us and help us speak up for those who cannot speak for themselves." - Walter B. Hoye II, Founder and President of ... continue reading


Papal Nuncio to Join Walk for Life West Coast! Watch

Image of Archbishop Carlo Maria Vigaṇ

By Catherine Contreras

The Walk for Life West Coast is honored to announce that Archbishop Carlo Maria ViganĂ², the Holy Father's Ambassador to the United States, will be attending the 11th Annual Walk for Life West Coast in San Francisco, on January 24, 2015. LOS ANGELES, CA (Catholic ... continue reading


Build a Culture of Life! A Rally Cry Was Heard In Los Angeles!

Image of Pro-lifers marched in One Life LA on January 17, 2015.

By Catherine Contreras

 A Rally Cry Was Heard in Los Angeles, California, "Build a Culture of Life! A Culture That Loves Life and That Defends Life!" The Mission of OneLifeLA is to unite communities and inspire positive action through an annual event that promotes the beauty and ... continue reading


Catholics fail to practice 'responsible parenthood' when they have too many children, Pope Francis says Watch

Image of

By Catholic Online (NEWS CONSORTIUM)

Pope Francis recently praised Blessed Paul VI for defending Catholic teaching against contraception. At the same time, "this does not mean a Christian must make children one after another," the Pope added. In fact, Catholics fail to practice "responsible ... continue reading


All Living Faith News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, Hebrews 10:1-10
1 So, since the Law contains no more than a ... Read More

Psalm, Psalms 40:2, 4, 7-8, 10, 11
2 He pulled me up from the seething chasm, from the ... Read More

Gospel, Mark 3:31-35
31 Now his mother and his brothers arrived and, ... Read More

Saint of the Day

Saint of the Day for January 27th, 2015 Image

St. Angela Merici
January 27: When she was 56, Angela Merici said "No" to the Pope. She was ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter