What Does the Church Say About…

The Catholic Church makes moral judgments about social structures and economic theories “when the fundamental rights of the person or the salvation of souls requires it.”¹ Thus, over the centuries and in modern times the Church has presented to humanity its experience and Gospel-based wisdom on various economic and social theories, including:

Communism and Socialism

The Church “has rejected the totalitarian and atheistic ideologies” of both these economic models, as “regulating the economy solely by centralized planning perverts the basis of social bonds.”² Further, a “system that subordinates the basic rights of individuals and of groups to the collective organization of production is contrary to human dignity.”³

Capitalism and Free Markets

The Church’s social doctrine “appreciates the secure advantages that the mechanisms of the free market offer,”⁴ with Pope St. John Paul II writing, “the free market is the most efficient instrument for utilizing resources and effectively responding to needs.”⁵

At the same time, the Church warns that regulating the economy “solely by the law of the marketplace fails social justice.”⁶ With regards to capitalism, the Church offers supportwhen it “recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector,” but cautions against a “system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality.”⁷

The Responsibility of the State

The Catechism teaches that the “principal task” of the state is to secure the guarantees of “individual freedom and private property, as well as a stable currency and efficient public services.”⁸ Church teaching holds that the state should “create situations favourable to the free exercise of economic activity”⁹ and that “the fundamental task of the State in economic matters is that of determining an appropriate juridical framework for regulating economic affairs.”¹⁰

Business Owners and Profits

Those responsible for business enterprises are “responsible to society for the economic and ecological effects of their operations” and carry an “obligation to consider the good of persons and not only the increase of profits.”¹¹ Regarding profits, the Church teaches that “the individual profit of an economic enterprise, although legitimate, must never become the sole objective.”¹²

Just Wages

The Church proclaims that a just wage is a legitimate fruit of work.¹³ Further, the Church teaches that wages should “be such that man may be furnished the means to cultivate worthily his own material, social, cultural, and spiritual life and that of his dependents,” and that a just wage “must not be below the level of subsistence.”¹⁴ Those who refuse to pay or withhold just wages from workers can be a “grave injustice,” and that in determining fair pay, “both the needs and the contributions of each person must be taken into account.”¹⁵

Social Security Contributions

The Catechism says it is “unjust” to refuse payment of “social security contributions required by legitimate authority.”¹⁶

Rich Nations

They have a “grave moral responsibility toward those which are unable to ensure the means of their development by themselves or have been prevented from doing so by tragic historical events.”¹⁷ Direct aid can be an appropriate response to “immediate, extraordinary needs” but “does not suffice to repair the grave damage resulting from destitution or to provide a lasting solution to a country’s needs.”¹⁸