The World's Economic Woes and Catholic Social Doctrine

When the US economy tanked in late 2008 many blamed it on a failure of capitalism.  This, in spite of the fact that the crisis was caused in large part by the government forcing financial establishments to loan money to people who didn't have the ability to pay them back.  These institutions, left to themselves, would never have approved these loans to begin with.  It was all done in the name of fairness, but in the end it was a case of the government trying to fix a problem and only making it worse, and it's the American people who are now paying the price. 

Meanwhile, on the other side of the pond Ireland is the latest European country to suffer economic turmoil.  The government wants to raise taxes and cut services, and the people are protesting much like the Greeks did this past May.  The rest of the EU is contemplating a bailout of the once proud Celtic Tiger.  How can this be?  The Emerald Isle, along with the rest of Western Europe, has been a social democratic paradise since the end of WW-2, AKA the Big One; socialized medicine, subsidized housing, low cost public education through university, more paid vacation time than the Royal Family gets and pensions that would make the city council of of Bell, California blush have all been a part of the social contract since 1946.  What Ireland, and Europe in general, is facing is the reality that there is no free lunch.  The money to pay for all these social services has to come from somewhere, and that somewhere is the pockets of the taxpayers. Unless there is a thriving and growing middle class (entrepreneurial class, really) there won't be the tax base to support the cradle to grave entitlements that the people have become use to.  What I'm arguing is that the current economic problems we're facing do not represent a failure of capitalism, but rather that of the soft socialism practiced by the West, including the US, for so many decades.

As you can tell, I could be safely categorized as a fiscal conservative.  I've found that this can be a rather awkward position to take as a priest, because so many of my brothers in the cloth tend to be "liberal" fiscally while "conservative" on life and morality issues in general.  Just call me Attila, I guess, but I tend to be on the right side of the isle most of the time (the death penalty would be the big exception). Added to this is that I had to teach the Social Justice course at our high school the past three years.  It was frustrating because so many of the text books advocated the very soft socialism I describe above as the proper application of the Church's social doctrine.  I stopped using a text book after a while and read the original sources and put together my own notes, only using the text as filler.

So, am I saying that free market, laissez faire capitalism is in perfect alignment with the Gospel?  No, but the point is that no system is.  As Pope Benedict wrote in his first encyclical, Deus Caritas Est (God is Love), the Church offers Her social teaching as a guideline to help form consciences by light of reason and the natural law.  She is not trying impose a set of rules or a specific economic or political system on governments.  While Church and State are interconnected, they each have separate roles and the independence of each needs to be respected.

The point I'm laboring toward is that there is no one way of looking at the Church's social doctrine, and we need a bit of balance in interpreting it.  I tend to think that how you read the various documents depends on what your basic views are to begin with. The loudest voices today are from those who see a state solution to every problem, and I don't believe this fully represents the Church's mind (I certainly don't believe the state has had all the right answers in practice).  Good resources are hard to find but one web site that gives a free market take on economic issues from a Catholic standpoint is The Acton Institute for the Study of Religion and Liberty, and I invite you to take a look.