July/August 2005

The Church and the Market: A Catholic Defense of the Free Economy.  By Thomas E. Woods Jr. . Lexington Books. 239 pages. $19.95.

Orthodox Catholics sometimes seem as eager to fight among themselves as they are to take on the enemies of the Faith. The appropriateness of capital punishment in contemporary society, the relative merits of the Tridentine versus a piously celebrated Novus Ordo Mass, and the usefulness of personalist philosophy as a vehicle for articulating Catholic morals are just a few matters of internecine controversy. Another is the compatibility of capitalism with Catholic social teaching, and the debate over this issue can get quite fierce. Traditional Catholics of the Chesterton-Belloc-Dorothy Day distributist persuasion hold a decidedly negative view of the free market. Thomas Woods has gained a reputation among tradition-minded Catholics for taking the opposite point of view, and his new book is a vigorously argued brief for the pro-capitalist side.

A common complaint made by Catholic critics of free-market economics is that it represents a crudely reductionist distortion of man, an “economism” (as Pope John Paul II called it) as incompatible with a genuinely Catholic conception of the social order as is Marxism. There are certainly defenders of the market who are guilty of this. But the members of the “Austrian school” of economics do not reduce all human action to the rationally self-interested behavior of homo economicus. And while it is no doubt the case that there are aspects of the Austrian school that are not compatible with Catholic thinking, this is bound to be true of any school of thought that develops outside the boundaries of the Church. It is Woods’s contention that the Austrian approach to free-market economics is uniquely conducive to a Catholic conception of a just social order.

The main gap in the book’s argument concerns not economics but moral philosophy and moral theology, particularly where Pope Leo XIII’s teaching on just wages in Rerum Novarum is concerned, which Woods seems to imply is a matter of prudential judgment rather than morals. Woods is right to hold that too many defenses of a just wage are long on pious moralizing and short on serious economic analysis (although Woods is not an economist). Still, the just wage cannot plausibly be relegated to the category of merely prudential teaching. It is clearly held by the popes to be a matter of justice, and in Leo’s teaching it is connected to the natural end for which a man labors, namely, to sustain himself and his family. It is crucial, therefore, to make clear exactly what the relationship is between a truly Catholic understanding of the rights to labor and freedom of contract on the one hand, and empirical economic questions on the other. Woods hasn’t quite pulled this off.

Having said that, it is clear that Catholic critics of capitalism have not made this relationship any clearer than Woods has. It is also evident that it is a prudential matter whether minimum wage laws are the best way in which to implement just wage teaching. If distributists are right to emphasize that social theory ought not to make a fetish of economic efficiency, Woods is also right to emphasize that there are serious practical difficulties inherent in any attempt to legislate wage levels. Catholic social theorists of all persuasions have a lot of work to do before any of them will have produced a detailed proposal for reforming existing capitalist societies that is sensitive to the demands of both justice and empirical reality.

- Edward Feser





Back to July/August 2005 Issue