The Church and Capitalism: What Subsidiarity Tells Us

by BENJAMIN WIKER Wednesday, September 26, 2012 8:51 PM, National Catholic Register

Dr. Ben Wiker

As I noted in a previous post, there are some who take the Church’s rejection of socialism, collectivism, and communism, as if it were a blanket affirmation of pure capitalism. That is as misleading as thinking that the Church’s preferential option for the poor entails full political support of the welfare state.


Neither are correct, and both violate the Catholic principle of subsidiarity, which again states that “a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co-ordinate its activity with the activities of the rest of society, always with a view to the common good” (Catechism, 1883).
The first problem with capitalism, one that is too little noticed, is that it’s something so loosely-defined that either crying it up or decrying it is impossible (at least for the clear-thinking, deep-thinking Church). In order to judge capitalism, we’ve got to be much clearer about it. We’ll find that the principle of subsidiarity will help us gain the needed clarity.
Does capitalism mean the enshrining of the vice of avarice as if it were a virtue? The Church categorically rejects the use of an evil means to achieve an alleged good (economic development), and avarice is one of the seven deadly or “capital” sins (Catechism, 1866).
The Church cannot affirm an understanding of capitalism as fueled primarily by a capital sin (and that goes for the other six capital sins, pride, envy, wrath, lust, gluttony and sloth). As noted in Part 2 of this series, “Subsidiarity Defined,” the principle of subsidiarity protects the “moral space” of individuals and their families from governmental intervention, and the worst kind of ruin such a government could inflict would be to support an economic view that would be the ruin of morality itself.
But the Church does affirm private property as a good associated with capitalism. . It not only rejects communism and collectivism, but asserts, “The appropriation of property is legitimate for guaranteeing the freedom and dignity of persons and for helping each of them to meet his basic needs and the needs of those in his charge” (Catechism, 2402).
Private property helps fathers and mothers to fulfill their moral obligation of providing for their families.
Does capitalism mean championing the belief that the sole aim of government is the protection of private property, and that each person has an absolute right to do whatever he wants with his own property? The Church says No to both.
To the first, the Church declares that the “human person,” not the protection of private property and the promotion of its increase, “is and ought to be the principle, the subject and the end of all social institutions” (Catechism, 1881; see also 2426). To put it another way, state power is limited by human nature.
We are not homo economicus but homo sapiens, the creature defined by the love of wisdom, and hence ultimately the love of God the source of all wisdom. Society must be defined by what is truly definitive in human nature, our God-like capacity to know and love the truth.
Economic activity is important, but subordinate to what truly defines us. The principle of subsidiarity protects persons from being turned into consumers. Therefore, “Any system in which social relationships are determined entirely by economic factors is contrary to the nature of the human person and his acts” (Catechism, 2423).
To the second error, the notion that we have an absolute right to property, the Church maintains that “the ownership of any property makes its holder a steward of Providence, with the task of making it fruitful and communicating its benefits to others, first of all his family” (Catechism, 2404).
That does not mean that it is the government’s job to take his property and make it benefit others. In accordance with the principle of subsidiarity, the moral burden of using property for the benefit of others — and consequently, the moral punishment for failing to do so — both fall primarily on that individual’s shoulders.
That brings real seriousness to the question of what we do with our property. Jesus does not threaten those who fail to feed the hungry and clothe the naked with higher taxes, but with hell. So, while a modest use of the powers of taxation are proper to government, the redistribution of wealth is not. Furthermore, government intervention for those in need should supplement, not supplant, what can be done by families, local governments, private organizations, and the Church.
Does capitalism mean minimizing governmental interference in economic activity? “The principle of subsidiarity is opposed to all forms of collectivism. It sets limits for state intervention” (Catechism, 1885).
Again, providing for our families and showing charity toward our communities is our moral duty, and as the principle of subsidiarity states, the higher order should not deprive the lower order of its proper functions, including its proper economic functions. As many have found out, you can’t function very well if you’re bound, hand and foot, by an endless skein of government regulations, and on top of that, hobbled by excessive taxes.
But that doesn’t mean an affirmation of the “free market,” if by “free” one means either entirely freed of any and all oversight, or “free” of any moral concerns. This is a truth available even on the natural level.
As the great 20th-century economist Friedrich Hayek made clear, state oversight is often necessary to keep the marketplace free of corruption, price-fixing, crony capitalism and monopoly so that there actually is real competition in the marketplace, real freedom of individuals to engage in economic activity. But state oversight is different from heavy-handed, centralized economic planning.
The Church agrees, and declares that “Regulating the economy solely by centralized planning perverts the basis of social bonds,” but also that “regulating it solely by the law of the marketplace fails social justice.” Therefore the Church affirms “Reasonable regulation of the marketplace and economic initiatives.” (Catechism, 2425).
So, does the Church affirm capitalism? No, the Church affirms the principle of subsidiarity, and uses it to judge among the various meanings of capitalism put forth in the “marketplace of ideas.”

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