The Church views the free market system in a positive light. “The free market is an institution of social importance because of its capacity to guarantee effective results in the production of goods and services.

Historically, it has shown itself able to initiate and sustain economic development over long periods. There are good reasons to hold that, in many circumstances, the free market is the most efficient instrument for utilising resources and effectively responding to needs.”

The Church’s social doctrine appreciates the secure advantages that the mechanisms of the free market offer, making it possible as they do to utilise resources better and facilitating the exchange of products. These mechanisms “above all …give central place to the person’s desires and preferences, which, in a contract, meet the desires and preference of another person.”

“A truly competitive market is an effective instrument for attaining important objectives of justice: moderating the excessive profits of individual businesses, responding to consumers’ demands, bringing about a more efficient use and conservation of resources, rewarding entrepreneurship and innovation, making information available so that it is really possible to compare and purchase products in an atmosphere of healthy competition.”

“The free market cannot be judged apart from the ends that it seeks to accomplish and from the values that it transmits on a societal level. Indeed, the market cannot find in itself the principles for its legitimisation; it belongs to the consciences of individuals and to public responsibility to establish a just relationship between means and ends.

The individual profit of an economic enterprise, although legitimate, must never become the sole objective. Together with this objective there is another, equally fundamental but of a higher order: social usefulness, which must be brought about not in contrast to but in keeping with the logic of the market.

When the free market carries out the important functions mentioned above it becomes a service to the common good and to integral human development. The inversion of the relationship between means and ends, however, can make it degenerate into an inhuman and alienating institution, with uncontrollable repercussions.”

“The Church’s social doctrine, while recognising the market as an irreplaceable instrument for regulating the inner workings of the economic system, points out the need for it to be firmly rooted in its ethical objectives, which ensure and at the same time suitably circumscribe the space within which it can operate autonomously. 

The idea that the market alone can be entrusted with the task of supplying every category of goods cannot be shared, because such an idea is based on a reductionist vision of the person and society. 

Faced with the concrete risk of an ‘idolatry’ of the market, the Church’s social doctrine underlines its limits, which are easily seen – its proven inability to satisfy important human needs, which require goods that “by their nature are not and cannot be mere commodities,” goods that cannot be bought and sold according to the rule of the “exchange of equivalents” and the “logic of contracts, which are typical of the market.”

The availability of essential goods such as roads, military service and even health care may be compromised if left only to market forces. These goods are also important for improving the human condition.

“The market takes on a significant social function in contemporary society, therefore it is important to identify its most positive potentials and to create the conditions that allow them to be put concretely into effect. Market operators must be effectively free to compare, evaluate and choose from among various options. 

Freedom in the economic sector, however, must be regulated by appropriate legal norms so that it will be placed at the service of integral human freedom.  ‘Economic freedom is only one element of human freedom.

When it becomes autonomous, when man is seen more as a producer or consumer of goods than as a subject who produces and consumes in order to live, then economic freedom loses its necessary relationship to the human person and ends up by alienating and oppressing him.’”

Next week we look at the how the State can be involved. 

Interested in purchasing the Compendium of the Social Doctrine of the Church? Please contact the Catholic Commission for Social Justice, Archbishop’s House – 622-6680.