Hurricane response and recovery efforts are supported by Catholic Charities USA (CCUSA) Disaster fund. Visit catholicharitiesusa.org for more information.

×

Markets

The Church's teaching opposes collectivist and statist economic approaches. But it also rejects the notion that a free market automatically produces justice.

Economic Justice for All, U.S. Catholic Bishops, 1986 #115.

In any case we clearly see, and on this there is general agreement, that some opportune remedy must be found quickly for the misery and wretchedness pressing so unjustly on the majority of the working class: for the ancient workingmen’s guilds were abolished in the last century, and no other protective organization took their place. Public institutions and the laws set aside the ancient religion. Hence, by degrees it has come to pass that working men have been surrendered, isolated and helpless, to the hardheartedness of employers and the greed of unchecked competition.

Rerum Novarum (“On the Condition of Labor and the Working Classes”), Pope Leo XIII, 1891 #3.


 

[H]uman beings cannot be trusted with the immense opportunities for oppression and extortion that go with the possession of monopoly power. That the owners of public service monopolies should be restricted by law to a fair or average return on their actual investment, has long been a recognized principle of the courts, the legislatures, and public opinion. It is a principle which should be applied to competitive enterprises likewise, with the qualification that something more than the average rate of return should be allowed to men who exhibit exceptional efficiency. However, good public policy, as well as equity, demands that these exceptional businessmen share the fruits of their efficiency with the consumer in the form of lower prices.

Program of Social Reconstruction, U.S. Catholic Bishops, 1919 #38.


 

Just as the unity of human society cannot be founded on an opposition of classes, so also the right ordering of economic life cannot be left to a free competition of forces. For from this source, as from a poisoned spring, have originated and spread all the errors of individualist economic teaching. Destroying through forgetfulness or ignorance the social and moral character of economic life, it held that economic life must be considered and treated as altogether free from and independent of public authority, because in the market, i.e., in the free struggle of competitors, it would have a principle of self direction which governs it much more perfectly than would the intervention of any created intellect. But free competition, while justified and certainly useful provided it is kept within certain limits, clearly cannot direct economic life…

Quadragesimo Anno (“After Forty Years”), Pope Pius XI, 1931 #88.


 

Since the instability of economic life, and especially of its structure, exacts of those engaged in it most intense and unceasing effort, some have become so hardened to the stings of conscience as to hold that they are allowed, in any manner whatsoever, to increase their profits and use means, fair or foul, to protect their hard-won wealth against sudden changes of fortune. The easy gains that a market unrestricted by any law opens to everybody attracts large numbers to buying and selling goods, and they, their one aim being to make quick profits with the least expenditure of work, raise or lower prices by their uncontrolled business dealings so rapidly according to their own caprice and greed that they nullify the wisest forecasts of producers…Strict and watchful moral restraint enforced vigorously by governmental authority could have banished these enormous evils and even forestalled them; this restraint, however, has too often been sadly lacking.

Quadragesimo Anno (“After Forty Years”), Pope Pius XI, 1931 #132-133.


 

First, one may not take as the ultimate criteria in economic life the interests of individuals or organized groups, nor unregulated competition, nor excessive power on the part of the wealthy, nor the vain honor of the nation or its desire for domination, nor anything of this sort. Rather, it is necessary that economic undertaking be governed by justice and charity as the principal laws of social life

Mater et Magistra (“Mother and Teacher”), Pope John XXIII, 1961 #38, 39.


 

But it is unfortunate that on these new conditions of society a system has been constructed which considers profit as the key motive for economic progress, competition as the supreme law of economics, and private ownership of the means of production as an absolute right that has no limits and carries no corresponding social obligation. This unchecked liberalism leads to dictatorship rightly denounced by Pius XI as producing “the international imperialism of money”. One cannot condemn such abuses too strongly by solemnly recalling once again that the economy is at the service of man.

Populorum Progressio (“On the Development of Peoples”), Pope Paul VI, 1967 #26.


 

Individual initiative alone and the mere free play of competition could never assure successful development. One must avoid the risk of increasing still more the wealth of the rich and the dominion of the strong, whilst leaving the poor in their misery and adding to the servitude of the oppressed. Populorum Progressio (“On the Development of Peoples”), Pope Paul VI, 1967 #33.
In other words, the rule of free trade, taken by itself, is no longer able to govern international relations. Its advantages are certainly evident when the parties involved are not affected by any excessive inequalities of economic power: it is an incentive to progress and a reward for effort. That is why industrially developed countries see in it a law of justice. But the situation is no longer the same when economic conditions differ too widely from country to country: prices which are “freely set in the market can produce unfair results.” One must recognize that it is the fundamental principle of liberalism, as the rule for commercial exchange, which is questioned here.

Populorum Progressio (“On the Development of Peoples”), Pope Paul VI, 1967 #58.


 

Competition, to be sure, is not to be excluded from commerce, but it must be kept within those limits which make it just and fair and therefore worthy of man.

Populorum Progressio (“On the Development of Peoples”),Pope Paul VI, 1967 #61.


 

Unlimited competition utilizing the modern means of publicity incessantly launches new products and tries to attract the consumer, while earlier industrial installations which are still capable of functioning become useless. While very large areas of the population are unable to satisfy their primary needs, superfluous needs are ingeniously created. It can thus rightly be asked, if in spite of all his conquests, man is not turning back against nature, is he not now becoming the slave of the objects which he makes.

Octogesima Adveniens (“A Call to Action”), Pope Paul VI, 1971 #9.


 

The Church’s teaching opposes collectivist and statist economic approaches. But it also rejects the notion that a free market automatically produces justice. Economic Justice for All, U.S. Catholic Bishops, 1986 #115.
Some people argue that an unfettered free-market economy… provides the greatest possible liberty, material welfare, and equity…Others argue that the capitalist system is inherently inequitable and therefore contradictory to the demands of Christian morality…Catholic social teaching has traditionally rejected these ideological extremes because they are likely to produce results contrary to human dignity and economic justice. Starting with the assumption that the economy has been created by human beings and can be changed by them, the Church works for improvement in a variety of economic and political contexts, but it is not the Church’s role to create or promote a specific new economic system. Rather, the Church must encourage all reforms that hold out hope of transforming our economic arrangements into a fuller systemic realization of the Christian moral vision.

Economic Justice for All, U.S. Catholic Bishops, 1986 #128-129.


 

The United States prides itself on both its competitive sense of initiative and its spirit of teamwork. Today a greater spirit of partnership and teamwork is needed; competition alone will not do the job. It has too many negative consequences for family life, the economically vulnerable, and the environment. Only a renewed commitment by all to the common good can deal creatively with the realities of international interdependence and economic dislocations in the domestic economy.

Economic Justice for All, U.S. Catholic Bishops, 1986 #296.


 

There are needs and common goods that cannot be satisfied by the market system. It is the task of the state and of all society to defend them. An idolatry of the market alone cannot do all that should be done.

Centesimus Annus (“The Hundredth Year,” Donders translation), Pope John Paul II, 1991 #40.


 

After the failure of communism, should capitalism be the goal for Eastern Europe and the Third World? The answer is complex. If capitalism means a “market” or “free” economy that recognizes the role of business, the market, and private property, as well as free human creativity, then the answer is “yes.” If it means a system in which economic, religious, and ethical freedom are denied, then the answer is “no.” Marxism failed, but marginalization and exploitation remain, especially in the Third World, just as alienation does in the more advanced countries.

Centesimus Annus (“The Hundredth Year,” Donders translation), Pope John Paul II, 1991 #42.


 

The global market has stimulated first and foremost, on the part of rich countries, a search for areas in which to outsource production at low cost with a view to reducing the prices of many goods, increasing purchasing…Consequently, the market has prompted new forms of competition between States as they seek to attract foreign businesses to set up production centres…These processes have led to a downsizing of social security systems as the price to be paid for seeking greater competitive advantage in the global market, with consequent grave danger for the rights of workers, for fundamental human rights and for the solidarity associated with the traditional forms of the social State.

Caritas in Veritate (“In Charity and Truth”), Pope Benedict XVI, 2009 #25.


 

The market is subject to the principles of so-called commutative justice, which regulates the relations of giving and receiving between parties to a transaction. But the social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. Without internal forms of solidarity and mutual trust, the market cannot completely fulfill its proper economic function.

Caritas in Veritate (“In Charity and Truth”), Pope Benedict XVI, 2009 #35.


 

Space also needs to be created within the market for economic activity carried out by subjects who freely choose to act according to principles other than those of pure profit, without sacrificing the production of economic value in the process. The many economic entities that draw their origin from religious and lay initiatives demonstrate that this is concretely possible.

Caritas in Veritate (“In Charity and Truth”), Pope Benedict XVI, 2009 #37.


 

Furthermore, there are those who fear the effects of competition through the importation of products — normally agricultural products — from economically poor countries. Nevertheless, it should be remembered that for such countries, the possibility of marketing their products is very often what guarantees their survival in both the short and long term. Just and equitable international trade in agricultural goods can be beneficial to everyone, both to suppliers and to customers.

Caritas in Veritate (“In Charity and Truth”), Pope Benedict XVI, 2009 #58.


 

In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.

Evangelii Gaudium (“The Joy of the Gospel”), Pope Francis, 2013 #54.


 

The thirst for power and possessions knows no limits. In this system [of absolute autonomy of the marketplace], which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.

Evangelii Gaudium (“The Joy of the Gospel”), Pope Francis, 2013 #56.


 

We can no longer trust in the unseen forces and the invisible hand of the market. Growth in justice requires more than economic growth, while presupposing such growth: it requires decisions, programmes, mechanisms and processes specifically geared to a better distribution of income, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality. I am far from proposing an irresponsible populism, but the economy can no longer turn to remedies that are a new poison, such as attempting to increase profits by reducing the work force and thereby adding to the ranks of the excluded.

Evangelii Gaudium (“The Joy of the Gospel”), Pope Francis, 2013 #204.


 

The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems, and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market growth. They…[show] no interest in more balanced levels of production, a better distribution of wealth, concern for the environment and the rights of future generations. Their behaviour shows that for them maximizing profits is enough. Yet by itself the market cannot guarantee integral human development and social inclusion.

Laudato Si’ (“Praised Be”), Pope Francis, 2015 #109.


 

The culture of relativism is the same disorder which drives one person to take advantage of another, to treat others as mere objects…It is also the mindset of those who say: Let us allow the invisible forces of the market to regulate the economy, and consider their impact on society and nature as collateral damage…This same “use and throw away” logic generates so much waste, because of the disordered desire to consume more than what is really necessary.

Laudato Si’ (“Praised Be”), Pope Francis, 2015 #123.


 

Here too, it should always be kept in mind that “environmental protection cannot be assured solely on the basis of financial calculations of costs and benefits. The environment is one of those goods that cannot be adequately safeguarded or promoted by market forces”. Once more, we need to reject a magical conception of the market, which would suggest that problems can be solved simply by an increase in the profits of companies or individuals. Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations? Where profits alone count, there can be no thinking about the rhythms of nature, its phases of decay and regeneration, or the complexity of ecosystems which may be gravely upset by human intervention.

Laudato Si’ (“Praised Be”), Pope Francis, 2015 #190.

Donate Now ENews