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Free and fair markets and the Church's social doctrine
Peter Westmore's final comment on 'The Church and Globalisation' (February AD2000) referred to 'a greed-based economic doctrine'. Although a catchy phrase is it an accurate description?
I raise this question because of a concern about maintaining the credibility of the Church's social doctrine which I believe is undermined by these types of generalisations. For instance, ideologically-tinged language allows contemporary commentators to dismiss the Church's teaching on economic doctrine as outdated 19th century corporatism.
The difficulty I have with characterising any economic doctrine as greed-based per se is that it lacks precision and fails to identify the real operating mechanisms that produce income inequality. Further, it could imply that the principle of subsidiarity is based on greed, thus raising an internal contradiction in the Church's social teaching.
With regard to my first point, in my view the key to income inequality is the lack of fair markets. Liberal capitalism works best when the markets are not only free - thereby open to competition including via international trade - but when they are also fair.
Fundamentally, this fairness boils down to ensuring that no buyers or sellers in a market are able to manipulate prices to their advantage. Therefore, the role of government is to ensure that competition in markets is fair. Advocates who focus on the issue of fairness, not by positively picking winners, but by appropriately regulating markets to prevent price manipulation, will I believe be more successful in reducing income inequality.
Turning to my second point, the principle of subsidiarity proposes that activities more appropriately undertaken at the lower levels of social organisation, such as the person, family, or local community, OUGHT to be undertaken at that level, and not be taken over by larger organisations or by government.
The economic doctrine that best corresponds with the principle of subsidiarity is liberal capitalism. This is because in such a system decision-making on what is in a person's best interest generally occurs at the lowest levels in the marketplace. The principle of subsidiarity and liberal capitalism could be characterised as the recognition of the importance of self-interest in human affairs. However, there is a big difference between the self-interest which underpins freedom and initiative, and greed.
If generalisations such as 'greed-based economic doctrine' are thrown at economic systems that reflect the principle of subsidiarity then in reality the generalisation is attacking the principle itself and contradicting Church doctrine. Such self- contradiction is the quickest way to lose credibility and therefore is best avoided.
Reprinted from AD2000 Vol 20 No 3 (April 2007), p. 15
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