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 July 2014
Sports:
That sports may always be occasions of human fraternity and growth.
Lay Missionaries: That the Holy Spirit may support the work of the laity who proclaim the Gospel in the poorest countries.



Comments


More Living Faith

Why do Catholics love the crucifix so much?

Image of The crucifix is an important part of our Catholic identity.

By Catholic Online (NEWS CONSORTIUM)

The crucifix is a quintessentially Catholic icon. Although other Christians fondly and proudly display the cross, it is the crucifix that is largely unique to the Catholics. Why is the symbol of the death of Christ so important to Catholics? LOS ANGELES, CA (Catholic ... continue reading


POPE: 'A man who is alone ends up bitter, not fruitful, and he gossips about others' Watch

Image of The pope told the priests that

By Catholic Online (NEWS CONSORTIUM)

"A man who is alone ends up bitter, not fruitful, and he gossips about others." Those are the words of the Pope, speaking out during a meeting with 123 priests working in the Diocese of Caserta along with 19 bishops from Italy's Campania region this past ... continue reading


UPROOTED: Largest displacement of worldwide religious communities reached last year Watch

Image of In the nation of Central African Republic, widespread lawlessness and violence between Christians and Muslims resulted in at least 700 deaths in Bangui in December -- alone.

By Catholic Online (NEWS CONSORTIUM)

The year of 2013 turned out to be a very grim year indeed for religious tolerance and diversity. Millions of Christians, Muslims, Hindus, and others representing a range of faiths were forced from their homes on account of their religious beliefs. LOS ANGELES, ... continue reading


Papal visit to US not confirmed, but archbishop confident

Image of Pope Francis coming to Philly next September!

By Catholic News Agency (News Consortium)

Lets all Pray that Pope Francis comes to visit us here in the United States of America. Philadelphia, PA  (CNA/EWTN) - Reports that Pope Francis will travel to the U.S. for the World Meeting of Families in 2015 remain unconfirmed by the Vatican; however, ... continue reading


Catholic should be a way of life, not just a Sunday thing

Image of Catholic means universal. It's time to apply that to how we live.

By Catholic Online (NEWS CONSORTIUM)

To know the way forward, we must look to the past. As the very first chapter Ecclesiastes tells us, "there is no new thing under the sun," meaning that everything we think of as new is actually old and whatever we can imagine has been imagined, and even tried by those ... continue reading


Let the Holy Spirit Teach us How to Become Prayer Watch

Image of St. Paul wrote to the early Christians in Greece, telling them to pray without ceasing. (1 Th. 5:16-19) They did not live lives of ease, in any sense of the word. They had families, occupations, bills, and yes, difficulties and struggles beyond what many of us could imagine. They also suffered greatly for their faith. Yet, he instructed them to Pray without ceasing. Did he really mean it? I believe that he did.

By Deacon Keith A Fournier

When the Spirit dwells in a person, from the moment in which that person has become prayer, he never leaves him. For the Spirit himself never ceases to pray in him. Whether the person is asleep or awake, prayer never from then on departs from his soul. Whether he ... continue reading


Pope Francis meets, blesses Sudanese woman condemned to death for faith Watch

Image of Meriam Ibrahim was sentenced to death for apostasy, but has since escaped her sentence and left Sudan.

By Catholic Online (NEWS CONSORTIUM)

Pope Francis has met and blessed the Sudanese woman who was recently condemned to death for her faith. Meriam Ibrahim was condemned to death in Sudan for the crime of apostasy. VATICAN CITY (Catholic Online) - Pope Francis has met and blessed Meriam Ibrahim at the ... continue reading


MIRACLE IN ENGLAND: God's face smiles over Norfolk, or is it Sean Connery or Karl Marx? Watch

Image of This image is suspected to show the face of God in clouds over Norfolk, however, it may also be the face of Karl Marx or Sean Connery.

By Catholic Online (NEWS CONSORTIUM)

The English have long thought themselves special, and a new photograph from Norfolk in England may just prove that God does indeed smile on the English. LOS ANGELES, CA (Catholic Online) - Amateur photographer Jeremy Fletcher took an image that shows a face in ... continue reading


Pope Francis to visit Mafia stronghold this weekend Watch

Image of Pope Francis' stance against organized crime is seen as remarkable; the Mafia and the Catholic Church have previously been seen by many as having

By Catholic Online (NEWS CONSORTIUM)

Incensed about the loss of innocent life in his immediate surroundings, Pope Francis plans to travel to the Mafia stronghold of Caserta, near Naples this weekend in an effort to set things right. The murder of three-year-old Nicola "Coco" Campolongo, a boy who ... continue reading


Pope expresses regret with exodus of Christians from Mosul Watch

Image of

By Elise Harris (CNA/EWTN News)

In his weekly Sunday Angelus address Pope Francis mourned the fleeing of the last Christians from the Iraqi city of Mosul, who were told by ISIS forces last week to either convert, pay the Jizya tax or leave. (CNA/EWTN News) - "They are persecuted; our brothers are ... 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, Jeremiah 15:10, 16-21
10 A disaster for me, mother, that you bore me to be ... Read More

Psalm, Psalms 59:2-3, 4, 10-11, 17, 18
2 rescue me from evil-doers, from men of violence ... Read More

Gospel, Matthew 13:44-46
44 'The kingdom of Heaven is like treasure hidden in ... Read More

Saint of the Day

Saint of the Day for July 30th, 2014 Image

St. Peter Chrysologus
July 30: St. Peter Chrysologus, Bishop and Doctor of the Church ... 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