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 May 2015
Universal:
That, rejecting the culture of indifference, we may care for our neighbours who suffer, especially the sick and the poor.
Evangelization: That Mary's intercession may help Christians in secularized cultures be ready to proclaim Jesus.


Rosaries, Crosses, Prayer Cards and more... by Catholic Shopping .com


Comments


More Living Faith

Pope Francis admits to giving up TV in 1990 Watch

Image of While being in the eye of the international media, Pope Francis has little time for media. He's just too busy, and pledged not to watch TV after a pledge to the Virgin Mary in 1990.

By Catholic Online (NEWS CONSORTIUM)

While frequently in the media's eye, Pope Francis in fact has little time for the media. After making a promise to the Virgin Mary, the Pope claims that he has not watched TV since 1990. He did not even watch the matches of his football team San Lorenzo de ... continue reading


Pope Francis wants to be remembered as 'good guy who tried to do good' Watch

Image of

By Catholic Online (NEWS CONSORTIUM)

In his brief time as the leader of the Catholic Church, Pope Francis has done many remarkable things and has captured the world's attention. He came off as surprisingly humble in a recent interview with a fellow Argentinean journalist. Pope Francis says he ... continue reading


A Baltimorean's reflections on the Baltimore riots

Image of

By Tony Magliano

"The God of peace is never glorified by human violence," wrote the famous Trappist monk Thomas Merton. Whether it's on an individual, city, national, or international level, violence always dishonors God, and makes bad situations worse. The recent Baltimore City riots ... continue reading


Catholics worldwide vow to get the word out on Pope Francis' message on climate change Watch

Image of Environmental advocates, working with bishops, religious orders, Catholic universities, and lay movements hope that there will be a transformative impact in the fight against global warming.

By Catholic Online (NEWS CONSORTIUM)

Pope Francis will release his anticipated teaching document on the environment and climate change in the coming weeks. Over the past several years, more faith traditions have rallied behind environmental protection. Churches have begun to press ecological ... continue reading


The Church Needs to Be Baptized Afresh in the Holy Spirit Watch

Image of Do I still believe that the gifts of the Holy Spirit are available for ordinary Christians? You bet I do! I believe that Pentecost still happens. I KNOW it still happens. We can ALL know it still happens because we can experience its effects in our own lives. We should not be afraid of the Holy Spirit! In fact, we should regularly seek to be filled with more and more of the Spirit.

By Deacon Keith Fournier

We need to pray for a New Pentecost for the Church in this hour! We need more of the Holy Spirit for the New Evangelization of the Church - so that a renewed Church can engage in the missionary task of the Third Christian Millennium. We need to be baptized afresh ... continue reading


Brotherhood of the Belt: Struggle, Trouble and Failure in the Christian Life Watch

Image of The Martyrdom of Peter

By Deacon Keith Fournier

Peter's wrong choices were not the end of the story of Gods plan for his life. Peter's denial crippled Peter emotionally and spiritually. He lost his way. That was until he encountered the Risen Christ. There, in that encounter, he allowed the belt of ... continue reading


The Purpose of Pentecost is the Birth and Ongoing Mission of the Church

Image of The purpose of Pentecost is the birth - and continued rebirth - of the Church.

By Deacon Keith Fournier

The Church was empowered by the Holy Spirit to live differently in the midst of a world awaiting the fullness of redemption, to live as a new people to lead the world back to the Father, in and through the Son. Through their experience of the Holy Spirit the early ... continue reading


Top 5 Roman Catholic colleges in the United States Watch

Image of

By Atarah Haely (NEWS CONSORTIUM)

What constitutes being the best university is oftentimes subjective and usually in adherence to one's beliefs and practices. Choosing a college is one of the biggest decisions many people are making. Some opt for those that offer the best training in the fields of ... continue reading


Don't take your children 'hostage,' Pope tells separated couples Watch

Image of Christian communities, Pope Francis says

By Catholic Online (NEWS CONSORTIUM)

In discussing the role of parents educating their children, Pope Francis in his General Audience, advised separated couples to "never, never, never take the children hostage!" LOS ANGELES, CA (Catholic Online) - The Pope spoke on the role of parents in the ... continue reading


8 encouraging Bible verses to lift you up Watch

Image of

By Abigail James (NEWS CONSORTIUM)

Sometimes getting up in the morning can be the hardest thing you'll do all day. When life's worries press down on you and take your soul hostage, the most important thing you can do for yourself is turn to God. He will always be there for you, through the good times ... 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, Sirach 35:1-12
1 One who keeps the Law multiplies offerings; one who ... Read More

Psalm, Psalms 50:5-6, 7-8, 14, 23
5 'Gather to me my faithful, who sealed my covenant ... Read More

Gospel, Mark 10:28-31
28 Peter took this up. 'Look,' he said to him, 'we ... Read More

Saint of the Day

Saint of the Day for May 26th, 2015 Image

St. Philip Neri
May 26: If one had to choose one saint who showed the humorous side of ... 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