Skip to content
Catholic Online Logo

By Andrew M. Greenwell, Esq.

2/21/2012 (3 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 (3 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'


Copywriter 2015 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for July 2015
Universal:
That political responsibility may be lived at all levels as a high form of charity.
Evangelization: That, amid social inequalities, Latin American Christians may bear witness to love for the poor and contribute to a more fraternal society.



Comments


More Living Faith

No school days for working children

Image of

By Tony Magliano

It's that time again when adults take off to celebrate Labor Day, and kids head back to the adventures a new school year. But for millions of children worldwide the adventures of a new school year remain but a dream. Sadly, these children will never learn to read or ... continue reading


Catholic lawmakers asked by Pope to rally for pro-life, immigrants and persecuted Christians Watch

Image of The Holy Father was presented with a document by lawmakers outlining their commitment to promoting life in their respective nations, especially in areas of abortion, Christian persecution, and migration.

By Ann Schneible, CNA/EWTN News

On Sunday, Pope Francis urged Catholic legislators to be protectors of human life, calling them to "be strong" against a throwaway culture marked by Christian persecution, and the rejection of the unborn and migrants. Vatican City (CNA/EWTN News) - The pontiff ... continue reading


Will Pope Francis' visit end in disaster? Residents say organizers don't have their act together Watch

Image of Mayor Nutter unveils the 'I'll Be There' campaign to encourage shop owners to stay open during the papal visit.

By Catholic Online (NEWS CONSORTIUM)

Philadelphia residents are stressing over the upcoming Papal visit, and for good reason. Preparations for the visit appear ad hoc and are being poorly communicated to the community, according to locals. LOA ANGELES, CA (Catholic Online) - Will Pope Francis' visit to ... continue reading


Bishop Melki, executed after he refused to convert to Islam in 1915 has been beatified Watch

Image of Pope Francis earlier this month confirmed Bishop Melki's beatification saying he was killed in hatred.

By Catholic Online (NEWS CONSORTIUM)

Martyred during the Assyrian Genocide in 1915, Bishop Melki is on the road towards sainthood with his beatification this past weekend. Killed in Gazarta during the sayfo, or "putting to the sword" of Syrians in 1915, he was killed after he refused to convert to ... continue reading


For the first time we can see how BEAUTIFUL the 'real' Saint Rose was. Scientists have reconstruct her likeness Watch

Image of According to the news site Peru Catolico, the researchers said the reconstruction shows she was

By CNA/EWTN News

The face of the first saint of the New World may be better known than ever; thanks to a team of scientists, that has analyzed the skull of Saint Rose of Lima. Lima, Peru (CNA/EWTN News) - Scientists from the University of Saint Martin de Porres in Peru and the ... continue reading


Quest for God is modern world's biggest challenge, Pope Emeritus Benedict XVI says Watch

Image of The Ratzinger Schuelerkreis will gather Sept. 28-30 to discuss the theme set them by their former professor.

By Andrea Gagliarducci, CNA/EWTN News

Benedict XVI considers the quest for God to be contemporary society's foremost challenge, according to one of the emeritus Pope's former students, who has organized the annual meeting of Ratzinger's students to discuss that very topic. Vatican City (CNA/EWTN ... continue reading


Changing your HEART, not just behavior is a vital part of conversion process, Pope Francis says Watch

Image of

By Elise Harris, CNA/EWTN News

In his Sunday Angelus address Pope Francis said that merely obeying the rules isn't enough to make us holy, but that if we truly want to serve God our conversion has to be deeper, changing the heart. Vatican City (CNA/EWTN News) - "It's not exterior things which ... continue reading


Pilgrimage with Pope Francis - THIRD STATION - St. Joachim, patron of fathers

Image of St. Joachim, pray for us!

By Catholic Online (NEWS CONSORTIUM)

Welcome to the third station on our virtual pilgrimage to Philadelphia with Pope Francis ahead of the World Meeting of Families. Let us pray! About St. JoachimBy tradition Joachim and Anne are considered to be the names of the parents of Mary, the Mother of God. After ... continue reading


Priest to lead pilgrims on 104 mile walk to see Pope Francis in Philly - Here's how you too can make a pilgrimage Watch

Image of Pilgrims in Scotland make a Good Friday trek burdened with crosses. Many Catholics around the world still make pilgrimages, even if they are the work of just a day.

By Catholic Online (NEWS CONSORTIUM)

An intrepid group of about 20 pilgrims will be making the 104 mile walk from Baltimore to Philadelphia to attend Mass with Pope Francis. LOS ANGELES, CA (Catholic Online) - "Remember, our Lord walked to all of his appointments," Fr. John J. Lombardi told Catholic ... continue reading


Atheists force portrait of Jesus out of Kansas public school Watch

Image of The portrait of Jesus that has been on display at the school since the 1950s.

By Nikky Andres (NEWS CONSORTIUM)

Local residents in Chanute, Kansas expressed anger after the atheist group Freedom From Religion Foundation successfully filed a petition for the removal of a portrait of Jesus Christ, which had been hanging for over 60 years in a Kansas public school.   ... 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, Colossians 1:1-8
1 From Paul, by the will of God an apostle of Christ ... Read More

Gospel, Luke 4:38-44
38 Leaving the synagogue he went to Simon's house. ... Read More

Saint of the Day

Saint of the Day for September 2nd, 2015 Image

St. Ingrid of Sweden
September 2: Born in Sknninge, Sweden, in the 13th century, St. Ingrid lived ... 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