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Catholic Social Teaching and the Market Economy IIEAEA CCatholicatholic SSocialocial TeachingTeaching 1 11/5/07/5/07 119:20:059:20:05 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 2 11/5/07/5/07 119:20:069:20:06 Catholic Social Teaching and the Market Economy PHILIP BOOTH with contributions from samuel gregg robert kennedy denis o’brien dennis o’keeffe anthony percy robert a. sirico thomas woods andrew yuengert The Institute of Economic Affairs IIEAEA CCatholicatholic SSocialocial TeachingTeaching 3 11/5/07/5/07 119:20:069:20:06 First published in Great Britain in 2007 by The Institute of Economic Affairs 2 Lord North Street Westminster London sw1p 3lb in association with Profi le Books Ltd The mission of the Institute of Economic Affairs is to improve public understanding of the fundamental institutions of a free society, by analysing and expounding the role of markets in solving economic and social problems. Copyright © The Institute of Economic Affairs 2007 The moral right of the authors has been asserted. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. A CIP catalogue record for this book is available from the British Library. Paperback ISBN 978 0 255 36581 9 Hardback ISBN 978 0 255 36609 0 Many IEA publications are translated into languages other than English or are reprinted. Permission to translate or to reprint should be sought from the Director General at the address above. Typeset in Stone by MacGuru Ltd [email protected] Printed and bound in Great Britain by Hobbs the Printers IIEAEA CCatholicatholic SSocialocial TeachingTeaching 4 11/5/07/5/07 119:20:069:20:06 CONTENTS The authors 11 Foreword by John Kennedy 15 Acknowledgements 18 List of tables and fi gures 19 Preface by Leonard P. Liggio 21 1 Introduction: understanding Catholic Social Teaching in the light of economic reasoning 27 Philip Booth Understanding policy issues in the light of Catholic Social Teaching 29 Challenges to theologians and Christian politicians 30 The scope of Catholic Social Teaching and the market economy 30 Fundamental messages 31 The main themes 38 References 42 Annexe: a note on referencing 42 PART ONE: ECONOMIC WELFARE AND THE ROLE OF THE STATE 2 Rethinking welfare, reviving charity: a Catholic alternative 47 Robert A. Sirico Introduction 47 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 5 11/5/07/5/07 119:20:069:20:06 The welfare issue 50 Bureaucracy does not help the poor 53 True Christian charity 56 Defi ning and dividing responsibilities: solidarity and subsidiarity 58 Conclusion 61 References 62 3 Aid, governance and development 63 Philip Booth Introduction 63 Catholic exhortations to the developed world to fi nance ‘aid’ 64 Catholic Social Teaching: making the case for aid 68 Aid in theory and practice 75 Catholic Social Teaching tempered by realism – is there a way forward? 83 References 89 4 The unanswered questions of the just wage 91 Thomas E. Woods, Jr The limits of the Church’s teaching authority 91 The minimum wage, the plight of the poor and Catholic conscience 96 The ‘market power’ argument 98 We cannot assume away the fact that it is the poor who will suffer from a minimum wage ... 100 Providing a living wage ... as soon as possible 103 Non-economic arguments and the just wage 104 Conclusion 108 References 109 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 6 11/5/07/5/07 119:20:069:20:06 5 Taxation and the size of the state 111 Philip Booth Introduction 111 Modern Catholic teaching on taxation and the role of the state: taxation for redistribution and welfare 112 Modern Catholic Social Teaching and the role of the state: the provision of legal institutions 122 Modern Catholic Social Teaching and the role of the state: the distinction between charity and taxation 123 Informing Catholic Social Teaching with economic theory: the burden of taxation 124 Informing Catholic Social Teaching with economic theory: public goods and externalities 133 Informing Catholic Social Teaching with economic theory: public choice economics 135 Conclusions: taxation and the role of the state 139 References 140 PART TWO: BUSINESS, THE CONSUMER AND CULTURE IN CHRISTIAN LIFE 6 Free markets and the culture of consumption 145 Andrew Yuengert Introduction 145 Papal encyclicals on consumerism 148 Consumerism and public policy 156 Conclusion 161 References 163 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 7 11/5/07/5/07 119:20:069:20:06 7 Business and the common good 164 Robert G. Kennedy Introduction 164 Catholic social thought and the good society 166 The person and the common good 170 Common goods and the common good 172 The contribution of business to the common good 178 What the Catholic social tradition has to learn from business and economics 182 Conclusion 189 References 189 8 The entrepreneur in the life of the Church and society 190 Anthony Percy Introduction 190 The entrepreneur 191 The entrepreneur and the Word of God 191 The entrepreneur in the Fathers of the Church 192 The entrepreneur and the virtue of magnifi cence 193 Social doctrine and the entrepreneur 194 The wisdom of Pope Pius XII 197 The Church is a ‘joy and hope’ 199 The Pope from Galilee – John Paul II 201 Conclusion 207 References 208 9 Education and the Catholic Church in England and Wales 210 Dennis O’Keeffe Introduction 210 Our depleted spiritual resources 213 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 8 11/5/07/5/07 119:20:069:20:06 The Compendium of the Catechism of the Catholic Church published by the Catholic Truth Society 215 Diffi culties: Catholic, educational, sociological and economic 217 What the Church does not talk about: Catholicism and tough social science 221 Markets versus centralised state control of resources 222 References 228 PART THREE: SUBSIDIARITY AND SOLIDARITY – THE ROLE OF THE INDIVIDUAL, THE COMMUNITY AND THE STATE 10 Subsidiarity and solidarity 233 Denis O’Brien Introduction 233 Leo XIII and Pius XI 234 John XXIII and John Paul II 237 The economic model 242 Lessons not learned – Gaudium et spes 244 The hierarchy of England and Wales 246 Conclusion 251 References 253 11 Catholicism and the case for limited government 254 Samuel Gregg Introduction 254 Freedom and the call to perfection 258 The state and the common good 263 Prudence, sin and love 265 Conclusion 271 References 271 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 9 11/5/07/5/07 119:20:069:20:06 Appendix: major Church documents to which the authors refer 274 About the IEA 276 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 1100 11/5/07/5/07 119:20:069:20:06 THE AUTHORS Philip Booth Philip Booth is Editorial and Programme Director at the Institute of Economic Affairs and Professor of Insurance and Risk Management at the Sir John Cass Business School. He has an undergraduate degree in economics from the University of Durham and a PhD in Finance. He is a Fellow of the Institute of Actuaries and of the Royal Statistical Society. Previously, Philip Booth worked for the Bank of England as an adviser on fi nancial stability issues. He has written widely, including a number of books, on investment, fi nance, social insurance and pensions, as well as on the relationship between Catholic Social Teaching and economics. He is editor of Economic Affairs and associate editor of the Annals of Actuarial Science and the British Actuarial Journal. Philip Booth is also a governor of his local Catholic secondary school, St Paul’s Catholic College, Burgess Hill. Samuel Gregg Samuel Gregg has written and spoken extensively on moral questions in law, medicine and fi nance. He has a Doctor of Philosophy degree in moral philosophy from Oxford University and has authored several books, including Morality, Law, and Public Policy (2000), On Ordered Liberty (2003), Ethics and Economics (1999), A Theory of Corruption (2004), Banking, Justice, and the Common Good (2005), and The Commer- cial Society (2007). He also publishes in journals such as Law and Invest- ment Management, Oxford Analytica, Journal des Economistes et des Etudes 11 IIEAEA CCatholicatholic SSocialocial TeachingTeaching 1111 11/5/07/5/07 119:20:079:20:07 catholic social teaching and the market economy Humaines, Economic Affairs, Evidence, Markets and Morality, and Policy, as well as newspapers including the Wall Street Journal Europe, the Wash- ington Times, the Australian Financial Review and Business Review Weekly. He is Director of Research at the Acton Institute, an Adjunct Professor at the Pontifi cal Lateran University, a consultant for Oxford Analytica Ltd, and general editor of the Lexington Book Series Studies in Ethics and Economics. He was elected a Fellow of the Royal Historical Society in 2001, and a Member of the Mont Pèlerin Society in 2004. Robert Kennedy Robert Kennedy is a full professor and chair of the Department of Catholic Studies at the University of St Thomas (St Paul, Minnesota) and co-director of the University’s Terrence J Murphy Institute for Catholic Thought, Law, and Public Policy. He also holds a joint appointment (as professor in the Department of Ethics and Business Law) in the College of Business, where he served as Chair of the Faculty in 2004/05. He received his PhD in medieval studies (with a concentration in philo- sophy and theology) from the University of Notre Dame, and also holds master’s degrees in biblical criticism and business administration. Denis O’Brien D. P. O’Brien was educated at Douai School and University College, London.
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