From the Labor Question to the Murderous Economy: Catholic Approach to Economic Policy

Abstract

From his election, it was clear that Pope Francis advocated for the poor and the protection of creation. However, both areas are linked to ethical aspects of the economy. This paper demonstrates that although new aspects of Catholic economic ethics emerged with Pope Francis, they show a continuity with the Church’s social doctrine. Pope Francis is under fire from two directions. He is under attack from both economically minded conservatives and liberals. This paradox is interesting since these areas indicate Pope Francis’ teaching is partly static and dynamic. It is here that the dichotomy of continuity and progression is most visible. The Catholic Church theologically reflected on economics and then gradually in a transdisciplinary perspective. In this paper, we examine both methodologically and substantively the static elements of the Church’s teaching on the economy. We point to the slow but firm critical articulation of the Church’s opposition to the ethics of the capitalist economy. A qualitative method was used for the research, so primary and secondary Church documents and the theological and economic literature were applied. These were compared, opinions were contrasted, and a conclusion was drawn to justify the hypothesis.

1. Introduction

The Catholic Church’s social doctrine emerged in response to the Industrial and Civil Revolutions and to the economic policies and mechanisms of the 19th century. Catholic theology had previously assessed economic issues, but it did so more as an integral part of theological debate. This was not in depth or methodologically capable of offering a meaningful assessment of the modern market economy and the related concepts (capital, credit, banking, economic cycles, etc.). This paper reflects on the Catholic Church’s assessment of official economic policies and the theories of theologians and Catholic economists. It describes the processes that have taken place over the last two centuries, ultimately leading to the election of a Roman Pontiff to the seat of St. Peter who criticizes capitalist economic policy more sharply than his predecessors and whose understanding of the Western economy can be summed up as “this economy kills”.

Our working hypothesis is that although new aspects of Catholic economic ethics emerged with Pope Francis, they have continuity with the Church’s social teaching. This is evident from the fact that Pope Francis is attacked by conservatives and liberals alike. This paradox is interesting since these areas indicate Pope Francis’ teaching is partly static and dynamic. In support of this hypothesis, we will use the statements of the Church’s official declarations and the opinions of leading authors. We consider particularly significant in this respect the work of Rocco Buttiglione, Rodrigo Guerra Lopez, Massimo Borghesi, and Guzmán Carriquiry, who have dealt with the social ethics of the Pope (Lee 2019).

This paper seeks to demonstrate that Catholic economic ethics may be the missing link in the areas that economic policy has not addressed. In this case, however, we must also consider the basic principles that Pope Francis put forward in his Apostolic Constitution Veritatis Gaudium. The Pope calls on theologians to engage in meaningful dialogue with other social sciences. The Pope expects Catholic universities to set up transdisciplinary institutes of the social sciences, including economics (Francis 2017). These institutes should research to promote dialogue between theologians and other professionals while respecting the competencies of each discipline. The Church has come a long way from rejecting economic policy through dialogue to the foregoing statement, “This economy kills”. This does not mean the current Pope has closed the discourse between the Church and the market economy. We anticipate that this paper will use the terms capitalist and socialist economic policy or any other terms that are their synonyms in a general sense. Still, we will only elaborate on those as required by certain statements of the Church or a professional criticism of either trend.

2. Dialogue Between Faith and Science (Economics)

To understand Pope Francis’s criticism of capitalism, we must see the dialogue between economic models and the Church, theology, and several church reflections. Church leaders do not use the methodology of economic policy, but their work reflects some elements of it. Specifically, each of them has sought an answer to the question of what objectives and means a well-functioning economic policy should have, but most importantly, in what ways the government is responsible for controlling the market. The latter is closely linked to social justice and the fair distribution of wealth. The areas of economic policy, such as budgetary, monetary, and currency policy, are explicitly and systematically less elaborated in the documents and reactions of the Holy See. By contrast, areas that affect people’s daily lives more, such as legal institutions, employment, industry, and, in particular, agriculture, health, or economic policy in the broad sense, have been looked at more closely (De Riedmatten 1970; Kobler 1985; Curran 2004; Prélot 1975; Justenhoven 2012). The Pope denounces current economic policy by adopting an ethical approach, sometimes in combination with theology, to individual segments of economic policy. It is worth noting that the capitalist economic models the Pope has criticized are not uniform. Specific models of capitalist economy differ markedly even from each other (Hope and Soskice 2016). Such meticulous classifications of economic science are not made in the Church’s statements. Indeed, similarly to his predecessors, the Pope seldom uses the term capitalist. Instead, it can be concluded that his critique focuses on the mainstream economy and consumer society as a way of life and a phenomenon of the times (Buttiglione 1991; Schlag 2017).

However, the Church has not condemned everything that belonged to economic mechanisms. Leo XIII, whose epoch-making encyclical Rerum Novarum gave rise to a systematic thinking of the Church’s social doctrine, did not formally condemn capitalism (Cordes 2012). This initial attitude of acceptance later gradually changed with Pius XI and Pius XII calling capitalism an egotistical economic model. According to Robert Edwin Herzstein, the reason for Pius XI’s more critical view is the crises caused by the modern market economy (Herzstein 1967). John XXIII has already called for reforming the entire system. Due to the influence of the Second Vatican Council (1962–1965), which envisaged broad cooperation between society and the Church, Paul VI no longer rebuked one or the other of the then-dominant economic policy trends. Instead, following the principle of subsidiarity,1 he argued that local Churches should be given a more significant role in evaluating socialist and capitalist economic policies. So, it is at the local level where the operation of any economic policy can be meaningfully assessed (Kammer 2022).

The observation of Jason A. Heron and Bharat Ranganathan is correct when they emphasize the slow shifting in the last three popes’ evaluation of capitalism (Heron and Ranganathan 2022, pp. 131–32). John Paul II witnessed the breakdown of the communist bloc and socialist economic policy.2 So, the Pope made some critical remarks, albeit he remained restrained. John Paul II’s encyclical Centesimus Annus was published after the fall of the socialist bloc. He speaks of two forms of capitalism. Its first form, as interpreted by the encyclical, “meant an economic system which 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” (n. 42). It is also evident from the encyclical that there is a form of capitalism that the Church cannot accept. It “is meant 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, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious” (n 42). However, the question arises of how we judge the difference between the two capitalisms. Is it possible to distinguish sharply between ’good and bad capitalism’, especially considering the complexity and changing concepts of the economic system? And if we conclude that there is good and bad capitalism, how can this be declared? (Schall 1993, p. 28).

George Reisman’s thousand-page book on capitalism highlights the vast varieties of free markets (Reisman 1998). However, Reisman’s book also offers some basic principles that created the capitalist market economy. The book’s philosophy is that capitalism is fundamentally a product of the free world, and thus, it seeks to ensure universal prosperity. Therefore, the Church tended to accept the capitalist economy as “the smaller evil”.

In this respect, Rocco Buttiglione’s analysis is crucial. He begins by pointing out the possibility that the free market can balance solidarity. It is an opportunity, not a necessity. There is a chance that a market economy model will emerge that rejects morality, religion, ethics, and law. According to the author, the reason for this is that capitalism’s superiority over socialism was to find in its better functioning its success, but not in its moral qualities.3 Indeed, the moral primacy of the free market lies in the fact that economic success is based on the decisions of free people. People who know that success depends not only on themselves but a supernatural force, God. However, a true free market can only be founded on free people’s freedom of contract and choice. This is the way to distinguish between the different branches of capitalism. In this sense, Buttiglione also distinguishes between spatial forms of capitalism. In the United States, capitalism is essentially a positive and respectable word. It means free enterprise, free initiative, and the right to shape our destiny through our efforts. In short, it is the foundation of American liberty (Buttiglione 2010). In Europe, we generally have a different understanding of the same word. Here, capitalism means rather the exploitation of the great masses by a magnate elite, who own the natural and historical resources and expropriate and impoverish the great masses of peasants and workers. The situation in Latin America is even darker: here, at least among intellectuals and a large part of the masses, capitalism is synonymous with social injustice. Therefore, there is no reason to be surprised if capitalism primarily taken into account in the first documents of Catholic social teaching is European continental-style monopoly capitalism (O’Mahony 2009; Spezzibottiani 1999). Consequently, the Church’s teaching focuses on distribution rather than production and emphasizes the ethical importance of work as such (production) and entrepreneurial activity (Buttiglione 2010).

Although criticisms of the capitalist economy, especially regarding environmental and social sustainability, were already expressed before 2008 (Ikerd 2005), the more severe criticisms only emerged later (Mitchell 2015). In the Church, optimism was increasingly replaced by a critical perspective (Heron and Ranganathan 2022, p. 131). John Paul II, in his encyclical Solicitudo rei socialis, declared that “the Church’s social doctrine is not a “third way” (…) rather, it constitutes a category of its own, (…) not of ideology, but of theology and particularly of moral theology” (n. 41). From a theological point of view, it must be accepted that theological thinking determines the economic foundations, not vice versa. At the same time, it was clear that a theological assessment of the economy required a knowledge of the logic of the economy itself. Without this, any observation can only be partially justified (Hittinger 2002). Despite this, the critique was based more on empirical perceptions of the shortcomings of the capitalist economy than on a comparison of theological and economic principles. Against this kind of position of the Church, Guy Sorman, citing several classic authors (such as Frédéric Bastiat), says it is easy to appeal to what we see (poverty, misery, social inequalities) (Sorman 2014). At the heart of these criticisms is that the Church, notably Pope Francis, only builds on bad experiences (McQuillan and Park 2017; McQuillan 2015), even though many examples can be cited in favor of the functioning of the market economy. In China and India, anti-market philosophies have pushed many millions into poverty. And since these countries have abandoned these approaches, it has become possible to rise out of poverty (Gurcharan 2000). In other words, from the opinions of these authors, we can conclude that the Church’s opposition to capitalism cannot be based on experience alone. There is a need for theological grounding and interdisciplinary dialogue.

This is essentially what the Church has always been doing: a dialogue of faith, reason, and the sciences (Knasas 2000).

However, in contrast to the criticisms against the Pope and the Church, it should be noted that the Church is not in an ideal situation. On the one hand, modern research is dominated by empirical experiences (Cobb 2022). It is not easy to appeal to abstract theological principles while the sciences are currently dominated by measurement and statistics. In the competition between the natural sciences and the humanities, the former has undoubtedly emerged victorious in terms of method. At the same time, every empirical investigation is based on a theoretical premise, just as the evaluation of the results, i.e., the question of what the results mean, is ultimately a philosophical–theological task. The starting point must always be experienced since experience provides us with an inherent richness of understanding that underpins both the natural and the human sciences. This is John Paul II’s great insight, and this is why he encourages dialogue. On the other hand, the broad public does not understand philosophical reasoning from a comparative point of view. For them, it is necessary to start from experience, which can be combined with common-sense theological perspectives. These are not academic deep drills. It is a second line, which it should be.

Instead, the question is whether there is enough interdisciplinary research to draw on experience and economic issues to provide answers at both levels (social and academic). Benedict XVI, who had a profound comprehension of the theology of the Church and especially of the dialogue between society and the Church, reflected on the problems of the capitalist economy on several levels. In his apostolic exhortations on regional issues, he describes the phenomena linked to the capitalist economic system. In both the apostolic post-synodal exhortations of Africae Munus (nr. 4., 24, 32, 79, 81) and Ecclesia in Medio Oriente (n. 30), the Pope criticizes the economic processes that have brought the regions to their present situation (Benedict XVI 2011, p. 87; Benedict XVI 2012). Africae Munus is particularly critical of the regional impact of the globalization of the economy. Thus, he highlights poverty, environmental damage, and unstable regions (n. 86). These documents do not directly criticize capitalism. Instead, they give a picture of the global effects of capitalism in poorer areas (Ilo 2014).

The encyclical Caritas in veritate, meanwhile, is a direct critique (n. 41). The Pope sees the distortion of economic (and political) processes in their separation from love and justice (n. 2). The Pope continues to maintain that there is a chance for a discourse between justice and love and economic processes. In accordance with the spirit of the Council, he believed in the dialogue between the Church and society, encompassing economic issues (n. 41). In the time of Benedict XVI, there were already strong opinions that the dialogue between the Church and civil society was a dead end (Cahill 2010). In several works, but most notably in The Church, Pilgrim of Centuries, Thomas Molnár argues that the Church comes out of dialogue with civil society weakened (Molnár 1990); contemporary author Larry S. Chapp explores a similar theme in his book Confession of a Catholic Worker (Chapp 2023). Thus, even though many considered Pope Benedict XVI to be conservative, he was closer to the more secular approach of the Council in maintaining the possibility of dialogue with civil society and the economy (Pabst 2011, p. 23).

The most substantial criticism comes from Pope Francis, who attacks the market economy fundamentally. He does not always call the economy capitalist, but it can be concluded that he criticizes the free market. He takes the critique of the economy to a more emotional level. Some authors underline that this strong offensive can be understood from the liberation theology from which the Pope inspired himself. Donal Dorr points out the parallels between the Pope’s program speech, Evangelii Gaudium (Francis 2013), and liberation theology (Dorr 2014). There is no denying the impact of Latin American theology (Scannone 2020) on the Pope. However, the effect of liberation theology should not be overestimated. The Pope maintains the possibility of discourse with the economy at the academic and social levels (Doyle 2017).

Liberation theology (though a fragmented movement) did not want discourse. As was common in left-wing movements, it sought to transform the social order forcefully. This is not the case with the Pope. Although he has critical views, he considers dialogue with the capitalist economy and its representatives necessary (Werpehowski 2017).

Perhaps an important starting point for the dialogue is that economists are also aware of their contemporary problems. De Vroey and Pensiero point out that the critique of economics is as old as economics (De Vroey and Pensiero 2016). In other words, economics has its logical categories for evaluating how a given system works. Economics has its criteria, to name but a few: productivity, GDP, GNI, trade balance, etc. So, it cannot be said that economics is unaware of the problems of its time. Still, the causes of its failures are looking within the system, with fewer references to ethical considerations (Klein 2007). However, even if they refer to some aspects outside the system of economics, they do not consider the Christian ethical points. Gergely Tóth asserts in his work on Christian economics that economics is not only in a general but also in a moral crisis. He justifies his opinion using the public good and human dignity criteria. He states, “The world’s persisting and even growing inequality, poverty and misery reveal the drawbacks of capitalism”. (Tóth 2016) his perspective is different, not based on economics’ self-criticism and self-correction. They are fundamentally questioning the logic of the modern market economy from the point of view of Catholic doctrine (Anderson 2003).4

The Church, by its logic, points to global social problems to justify on moral grounds that the “distorted logic” that extends market and profit maximization to all areas of social interaction and lives under the spell of the magic trio of “growth, competitiveness, and efficiency” can no longer function (Anderson 2003, p. 73).

3. From the Beginning to Social Encyclicals

Catholic assessment of the free market and the economy developed gradually. Although it is usually taken to analyze economic policy from the time of social encyclicals, the Church, particularly theologians, expressed their views before social encyclicals on how the economy should function to comply with Christian and Catholic principles. With Leo XIII’s first social encyclical, the Catholic Church reached a new level. On the one hand, the encyclical Rerum novarum gives an official opinion on the main trends of economic policy at the highest level of the Church. On the other hand, not only is a single matter discussed but the issues related to economic policy are also developed systematically. This is true even if this elaboration is incomplete and not all areas are expressed in the same depth (Leo XIII 1891). Christian philosophers, and in a sense even Christian antiquity, addressed economic issues.

Given the importance of tradition in the Catholic Church, these opinions, which may have originated from Catholics revered as saints, were included, indirectly or directly, in the contemporary statements of the popes and the Holy See. Paul Oslington refers to Christian philosophers who influenced the ideology of economics (Oslington 2008). Oslington’s words suggest that Christian philosophy has fundamentally impacted European economic policies. However, while the rural feudal system essentially followed Christian philosophy, theology must maintain a permanent dialogue with a modern market economy. The main Christian proposition that the primary goal of the economy is to provide for people’s physical needs rather than continuous growth is a fundamental controversy between the approaches of the two areas. It is essential to see that these interpretations are narrowing. On the one hand, the feudal system may be partly a consequence of Christian economic philosophy, but the two cannot be identified. There are economic principles that follow from Christian theology, but these are implemented differently in different cultural contexts. On the other hand, the economic principles of Christianity are incomprehensible without the Eucharist. The Eucharistic feast, however, is not about satisfying material needs (John Paul II 2003).

The Central European economist Farkas Heller’s work also points out that the Church has set a good example in terms of economic mechanisms. The monastic orders “tried to educate people to cultivate land wisely” (Heller 1925). Also, they conveyed the philosophy that the economy is “a means of sustaining human existence” (Heller 1925). From this perspective, continuous growth, the alpha and omega of a modern economy, is difficult to interpret (Meadows et al. 2004).5 Without thoroughly analyzing the literature of the Old Christian era, it is worth mentioning Church Fathers who warned of the dangers of the economy as early as the 3rd century (Oslington 2013). Let us add, as Hennie Stander notes, that it is very difficult to talk about the economics of early Church Fathers because they did not use the terms of modern economic policy (Stander 2013); rather, they merely wished to illustrate the Church’s teaching in areas now classified as economic policy. These include slavery, the limits of enrichment, helping people experiencing poverty, the distribution of wealth, etc. (Leemans et al. 2011).

Stander’s and other secular authors’ opinions should be slightly corrected in that in the case of the Church Fathers, the dichotomy of poverty–riches can be interpreted more along theological lines, and we should highlight the doctrine of imitation Christi (Navarro 2008, p. 196). In our view, the theological idea of “imitating Christ” (Taveirne 2014) has spread to areas related to the economy. On the one hand, this meant that Jesus of Nazareth, the founder of Christianity, lived as a poor traveling preacher. The authoritative sacred scripts present him as a person who “thought he was rich for your sake, he became poor” (2 Corinth. 8:9). Poverty thus became a highly appreciated Christian aspect in the early Christian era. On the other hand, the true followers of Christ want to be like their master. They do not want to be rich but follow the poor Christ (González 1990, pp. 75–78). Furthermore, it is a major theological consideration that in the first three centuries, people were expecting the early return of Christ. Therefore, they did not give a strong focus on social issues, including the economy (Kovács and Rowland 2004). Origen recounted that Celsus, a pagan philosopher, considered Christians ignorant and uneducated individuals with little presence in politics and economics. One of the things that caused this to change was the new relationship between the empire and Christianity, which was most conspicuous in public and Church policy events such as the Council of Nicaea and the Edict of Milan. To better understand the assessment of economic issues and independent Catholic economic ethics, which had unfolded by the 20th century, it is necessary to analyze this period. In both West and East, the Church Fathers addressed the question of wealth and enrichment. Basil the Great devoted an entire book to correctly using material goods (Basil the Great 1931). After Christianity became recognized and then a state religion, the following of the poor Christ was no longer expected from the Christian crowd, whom Protestant church historian Adolf von Harnack says were mostly benevolent but by no means sacred (von Harnack 1920). Thus, the idea of poverty retreated to monastic communities. Quoting Heller, we have already alluded to the influence of monks in Western economic policy (Frank 2010; Gatz 2006; Holtz 2001; Metzger and Feuerstein-Praßer 2006).

Stefano Zamagni emphasizes something perhaps more significant than Heller’s opinion (Zamagni 2010). He refers to a dichotomy that nuances the Church’s economic policy, partly highlighting what survived into the era of social encyclicals: the Catholic Church has tried to reach a compromise despite its critical remarks. Zamagni points out that the Church contributed to the development of the modern market economy at least as much as 18th- and 19th-century economists. Zamangi emphasizes the key idea of St. Benedict’s rule: “Pray and work”. This laid the foundations not only for personal sanctity but also for work ethics, as work was not part of a good life in Greek and Roman societies. Although the “sanctification of work” by monks was a barrier to the use of secular things, this became a negligible aspect of secular economic policy.

In essence, Scholastics adopted this monastic idea. However, it must be seen that neither Thomas Aquinas, also called “the economist of balance”, nor other Scholastic authors dealt with economic issues alone. They were an integral part of theological discourse. Trade, exchange, or even credit are found in Summa Theologica, the summary theological work of St. Thomas (Lapidus 1994). For Thomas, economic issues can be built into a justice framework to give everyone what is due. This can be interpreted partly between individuals and partly between community and individual. The latter, distributive justice, would still be an essential area of government activity today. The question we shall be looking at later on, at the forefront of contemporary social encyclicals and the economic criticism of the current Pope, is whether the state is still capable of this or whether financial mechanisms have definitively overwhelmed structures built up in accordance with the principle of justice, be they public, ecclesiastical, or civil institutions. Daron Acemoglu indicates that economic processes have become complex—a collection of interdependent variables. It is complicated because of many factors, from the globalization of markets to high-speed technologies, the interconnectedness of financial markets, and the effect of institutions and policies on the economy. These interactions generate feedback loops, where decisions made in a particular sector or market can influence the whole planet. He adds that it is also complicated for policymakers because the economic models are perhaps not sufficiently adapted to account for the subtle dynamics driving today’s economies (Acemoglu 2009). At the same time, the government still faces the same fundamental challenge regarding redistribution, transfers, and institutions. Its task is to implement the principle of social justice, as formulated by the Scholastic method, even in the face of complicated economic processes, such as the modern market economy (Acemoglu 2009).

By the time of Scholasticism, Christian social ethics did not reject trade, economy, and market mechanisms but only placed them “in the framework of mutual justice” that theology can interpret (Lapidus 1994). Scholasticism lacked a significant portion of economic terminology, and the terms it used were impossible to interpret from the perspective of economic policy. For example, Thomas Aquinas refused to allow money to go out of circulation, raise capital, and generate interest. He viewed interest as immoral: “something that does not exist is sold”. Interest as the price of money opens the way to inequality and injustice (Aquinas 2017: Summa Theologiae II-II, q. 78, 1). In his work mentioned above, Zamagni points out that the Church was forced to clarify several concepts of economic policy before the age of social encyclicals (Zamagni 2010, p. 70). Leo X’s bull entitled Inter multiplices (1515), for example, includes a teaching on the interest levied by the bank Monte di Pietà, essentially expressing the legitimacy of the interest on loans. We see that the Church reconsidered its classical position more thoroughly with the emergence of the early forms and institutions of the market economy. However, until the era of social encyclicals, no systematic opinion was more aimed at dialogue or criticism of capitalist market economy models.

4. Reflections of Social Encyclicals on the Modern Market Economy

The encyclical Rerum Novarum was released in 1891. In this period, the Catholic Church began to adopt a systematic position on specific trends and concepts of economic policy. This did not mean no theologians had assessed market and economic developments before the encyclical. Also, several papal statements were made, although these cannot yet be called a comprehensive social doctrine. Social encyclicals outlined the approach to economic policy by the official forum of the Church. They confirmed that Catholic thinkers cannot take an utterly negative stance against modern economic policies. Before Leo XIII’s epoch-making statements, Catholic thinkers were harsher in their criticism of the contemporary market economy. This was not only a criticism of economic policy based on classical Thomist or Scholastic theology, as outlined above. In the age of Scholasticism, no serious professional debate was needed. In principle, no one disputed the Church’s statements on social issues. The Civil and Industrial revolutions gave rise to the transformation of European societies. As a result of the transformation, the European discourse no longer accepted the authoritarian Christian view of economics. Farkas Heller, who did not neglect the Christian perspective in his works on economics, argues that economics had become “a morally indifferent science” by the early 20th century (Heller 1945). Some of its representatives, such as Jean-Baptiste Say, took up a stark anti-Catholic or anti-religious position (Say 1993). Consequently, before Leo XIII’s encyclical, several Catholic authors subjected the new terminology of the market economy to a more thorough analysis along with its underlying meaning. At the same time, they mainly criticized the leading institutions of the new economic policy, such as capital or credit. In general, they were reformulating classical theological principles that were based on a critique of the operation of capital. In this context, market systems that made a profit simply by lending money without creating new value were fundamentally seen as sinful economic mechanisms. The American Catholic philosopher Michael Novak points out that until Leo XIII’s social encyclical, there was a lack of interest in understanding new economic policy theories and openness to dialogue (Novak 1987).

Significantly, Leo XIII accepted the modern economy as long as it served the common good. Leo XIII realized that the role of money had changed considerably in economic history. It was no longer just a mutually accepted means of exchange for tangible property but also, where appropriate, capital and, as such, the basis of investment (Mueller 1991). This was an important step on the Pope’s part, as the views of Catholic thinkers could not be reduced to criticizing the modern economy. They had to make a qualitative leap to understand some of the principles of economics (business, individual and community interest, market, capital, etc.). They had to place the concepts of economic policy in Christian philosophy. This was a complex linguistic process, as these terms were originally born in Christian discourse and acquired a secular meaning, now independent of theology (Cavanaugh 2024).

This is true even if each 19th-century author continued to draw negative conclusions in the face of the accelerated market economy. Leo XIII did not address the question of workers and social justice as a sharp criticism of capitalism. The Pope saw the 18th-century rise in atheist and leftist movements, which also had marked economic policies, as a greater threat. He saw the capitalist market economy as a dangerous trend, perhaps harmonizing with the common good. Leo XIII was not an economist but considered some areas of economic policy important. This is illustrated by the first line of that encyclical: “That the spirit of revolutionary change, which has long been disturbing the nations of the world, should have passed beyond the sphere of politics and made its influence felt in the cognate sphere of practical economics is not surprising”. Franz H. Mueller, in his paper analyzing the encyclical from a purely economic policy perspective, points out that if Leo XIII was interested in economic issues, he did not do so primarily by the methods of economics. He followed the old Catholic philosophers, and theological criteria informed his examination of economic matters (Mueller 1991, p. 502). Leo XIII, as we have indicated, was not the total enemy of the modern market economy. However, he condemned the aggressive form of market relations just as much as the monopolies that stifled competition. It seems from the encyclical, which launched a series of papal statements on Catholic social doctrine, that Leo XIII at least tolerated capitalist economic policies that unfolded and then became dominant. This moderate approach led to the establishment of schools within the Church, whose representatives argue for modern economic policy from a theological and economic perspective.

A study by Pedro Teixeira and António Almodovar (Teixeira and Almodovar 2013) introduces significant representatives and schools of 19th-century Catholic economic policy. However, the point is not that the authors named the individual eminent representatives and schools but that they presented the new trends of Catholic economic policy. They highlighted that Christian economic policy was not stuck with the Scholastic paradigms discussed, which thought that market profit and capital lending were criminal. Scholastics was a well-regulated theological system with a place for individual social questions. However, it was not able to offer orientation outside the system. The authors point to attempts (Villeneuve-Bargemont, Comte Charles de Coux) to use the means of Christian ethics in a modern market economy (Drolet 2003).

They expected the transposition of Christian principles into the economy to create an alternative economic model that could prevent economic overpower and the pooling of wealth on the one hand, as well as promote decent employment, decent wages, and workers’ rights (Coux 1832). As a professor at the Catholic University of Leuven, Comte Charles de Coux attempted to develop a method of transposing Catholic teaching into the economy without compromising market efficiency or the Christian value system. By the late 19th and early 20th centuries, this tendency had grown further with authors presented in the paper such as Charles Périn, Claudio Jannet, Gabriel d’Haussonville, Victor Brants, etc. The idea was to create an economic system centered around merciful love (Moon 1921; Zachar 2015). Implementing this principle in economic policy would entail recognizing the rights of workers and their dependents, compulsory minimum wages, social security, fixed working hours, and countless other fundamental rights. A significant step was the creation of communication channels through which the Church sought to convey its message about the economy to broad sections of society. At this point, the periodical La civiltà cattolica was created by the Jesuits. This has remained a forum for the Church’s professional material on the economy (La Civiltà Cattolica 2022). In Catholic universities, the relationship between the modern economy and the Church has become an increasingly important field of research. Thanks to outstanding theologians (Luigi Taparelli d’Azeglio, Matteo Liberatore, Valentino Steccanella), they lay the foundations for an economic policy based on Catholic principles (Ujházi 2024), which to this day represents a significant part of the Church’s social doctrine (Oslington 2013). In their quoted study, Teixeira and Almodovar noted that, in essence, this school still worked with the Neo-Scholastic method, which often criticized the modern market economy. This is supported by the Catholic thinker of the period, John J. Keane, who saw the essence of modern economic policy as “putting money-making animals into service” (Keane 1891).

5. Towards Pope Francis, the Economic Policy of the Popes of the 20th Century

Released in the era of significant economic development, Paul VI’s encyclical Populorum progressio thoroughly analyzes economic systems and the causes of poverty. Paul VI envisaged economic growth through integration into the global economy (Spinelli 1985, p. 161). He addressed a wide range of economic policy issues, including price volatility, price developments in agricultural export markets, and the influence of the major economic powers on the world economy. When releasing the encyclical in 1967, the Pope still believed that international institutions could provide a solution in the areas raised (Paul VI 1967a). The Council documents published with Paul VI’s authority also sought cooperation with international organizations on the economy (GS 86) and population growth (GS 88). Later, Paul VI was more restrained. He saw that technological progress not only did not help resolve economic inequalities but also that inequalities between poor and rich countries were widening (Paul VI 1971; Malo 2007).

John Paul II believed in the workability of economic systems much less. On 30 December 1987, on the 20th anniversary of Populorum progressio, he released the encyclical Sollicitudo rei socialis. As opposed to the optimism characterizing the first epoch of Paul VI, John Paul II already states in the introduction that “the hopes for development today appear very far from being realised” (John Paul II 1988, pp. 525–26). Indeed, in this respect, taking all factors into account, the world’s current situation is devastating for its people’s development (John Paul II 1988, p. 526). As Marie A. Conn points out, the Pope has increasingly emphasized the conversion of the economy and the concern for the poor (Conn 2014). This aspect was not unknown to previous popes, although indeed, after the Second World War, they turned with increased hope for peaceful cooperation of nations and progress.

On the eve of the dissolution of the bipolar world order, John Paul II identified several factors that threatened the well-being of communities way better than any economist, specifically, food security, i.e., food production and distribution, health and hygiene conditions (n. 14), housing, drinking water supply, employment, exploitation of women (n. 19), and waste and overproduction (n. 28). He covered indebtedness (n. 19), arms trafficking and terrorism (n. 24), and population growth (n. 25). But John Paul II gave national and international organizations a distinguished role in tackling economic problems. Shortly after the encyclical came out, Aloysius Fonseca published a comprehensive analysis that accounted for the specific challenges and the answers the “international community” could provide. He listed the relevant events in global politics where the Pope also had the opportunity to explain that economic problems can only be solved by international cooperation (Fonseca 1989). According to the Pope, international organizations aim to eliminate dichotomies (mostly in economic and related areas) that threaten peace (Fonseca 1989, pp. 13–14). In 1987, the Pope deemed the general situation “significantly worse”. Prophetically, he pointed to places that were at the forefront of economic policy after the Cold War. However, the Holy See is not only a mouthpiece listing those challenges. In each of these areas, a specialized agency was set up (typically by the UN) in the 1970s, with active involvement by a representative of the Holy See.6 The Pope’s concerns and recommendations, which highlighted greater international cooperation and the participation of international organizations, were disregarded. This is demonstrated by the refugee issue, which is becoming increasingly severe today, and the situation in economically backward or unstable regions.7 In her analytical review, Barbara Kraemer summarized the importance of the encyclical, calling it “an appeal to resolve international economic problems” (Kraemer 1998).

Shortly after the collapse of the communist bloc, the encyclical Centesimus annus was released. The text bears a certain ambiguity. On the one hand, it talks about economic achievements (John Paul II 1991, pp. 818–19). On the other hand, it reveals the shortcomings of economic balance and justice (No. 27). In the encyclical, the Pope notes that the overall balance of different development aids is not always positive and that “the United Nations has not yet succeeded in establishing, as alternatives to war, effective means for the resolution of international conflicts”. The Pope pointed out the structural and constant shortcomings of world economic organizations.

The current Pope is usually compared to Benedict XVI. He was as concerned with economic matters as the current Pope, linking environmental challenges to economic problems. During his brief papacy, he made several calls to “address the structural causes of the dysfunction of the world economy and to improve the models of development that are unable to ensure the protection of the environment” (Benedict XVI 2007, p. 73). In his book quoted above, Maciej Zieba extensively deals with Benedict’s economic policy. In his opinion, Benedict XVI precisely recognized that the Church’s social doctrine can only be adequate if certain elements are adapted to the new economic circumstances. The monograph of Zieba concludes with an analysis of Benedict XVI’s encyclical Caritas in veritate. Although the monograph was published when Jorge Mario Bergoglio was sitting in the papal chair (Zieba 2013, p. 16), the author expands the economic aspect of the Church’s social doctrine, mainly following in the footsteps of Benedict. He states that the tremendous economic shock of 2008 also reminded the Church of the need to pay more attention to the evaluation of economic processes and economic policy (Benedict XVI 2009; Shadle 2022; Strand 2017). According to the recently deceased Jesuit theologian Drew Christiansen, Pope Benedict’s work is an important stage in the Church’s economic policy stance. The Pope took seriously that the 2008 economic crisis required the Church to be more outspoken about the modern market economy (Christiansen 2010, pp. 4–6). In many ways, the current Pope follows his predecessor. However, Thomas Massaro’s observation that the current Pope not only wanted to give moral doctrine but wanted to make the Church as a whole an active participant in the process is very relevant (Massaro 2016). In our view, the most significant manifestation of this is the revision of the Holy See’s legislation. A number of dicasteries have been created with competence not only for the Church’s internal affairs, but also for social and societal issues (Francis 2022b).

The most prominent example is the Dicastery on Human Development, which has been granted the competence to analyze the economy from a Christian perspective (Francis 2022b). It discusses this in close connection with other security and social issues (Padányi and Ondrék 2020). Although the authors have debated the legal accuracy of the new legislation, they agree that it is a landmark change. The Pope no longer wants to give only moral teaching on social issues, including the economy. From Paul VI onwards, there have been pontifical institutions,8 pontifical councils that have dealt with social justice either in general (the Pontifical Council for Iustitia et pax) or in specific areas (Paul VI 1976). In the encyclical Populorum Progressio, he briefly refers to the new body as having “both a name and a programme of Justice and Peace” (Paul VI 1967b, p. 259). After ten years, Paul VI, in a motu proprio Iustitiam et pacem, designated the final place and powers of the body in the structure of the Holy See (Paul VI 1976). The Council was given the task of promoting peace, social justice, and human rights worldwide. The quality of its action is illustrated in the Compendium of the Social Doctrine of the Church (Pontifical Council for Justice and Peace 2004). In addition, organs of special competencies have been created. The Pontifical Council for the Pastoral Care of Migrants and Travellers was a body established specifically for the pastoral and humanitarian care of refugees (Poveda 1992). The Pontifical Council for Cor unum has played a significant role in coordinating the international charitable engagement of the Catholic Church. In addition to overseeing Caritas internationalis, it also directed the Fondazione Populorum Progressio, created in 1992, to be responsible for development projects in Latin America. Pope Francis eliminated these papal councils, which had competence in the field of poverty relief and thus in the ethics of the economy, and merged them into a unified dicastery. While the authors disagree on the canonical and theological correctness of the new legal framework, the reality is that the former second-tier councils have been transformed into a dominant organ with full executive power (Ghirlanda 2022; Arrieta 2022; Ambrose 2022). The most innovative contribution of Pope Francis can be considered to be the structural and legislative changes he has made to ensure that the Church’s teaching in the field of economics is more fully articulated and applied, both within the Church and in society at large.

6. Pope Francis: This Economy Kills

This Economy Kills is the title of a work summarizing Pope Francis’s views on economic policy (Tornielli and Galeazzi 2015). The title is expressive as it refers to numerous papal statements in which he talked about a new economy. Addressing an audience of young economists in Assisi, the Holy Father said there was a need for “an economy of friendship with the earth and an economy of peace”. He also added in Assisi that “we cannot speak of ecological conversion if we remain within the economic paradigm of the 20th century, which robbed natural resources and the earth” (Pope Francis 2022a). In his comparative study, Andrew M. Yuengert demonstrated the difference between the economic policies of Pope Francis and those of his predecessors. Yuengert believes that Francis follows the 125-year-old tradition of the Catholic Church in criticizing capitalist economic policies. John XXIII offered such a powerful critique in his encyclical Mater et magistra (1961). The Second Vatican Council also did this in several documents, but, as we have seen, Francis’s immediate predecessors also criticized mainstream economic policy. According to Yungert, Francis brought about a change by being the Pope, who was no longer just warning about the dangers of capitalist economic policy (Yuengert 2017). According to Francis, the concerns of his predecessors have become a reality. It is worth looking at Yungert’s methodology to see the questions that he answered to draw this far-reaching conclusion. In essence, the author, in identifying the big issues of economic policy, seeks to answer the questions of what the development of the market economy meant for the popes in the second half of the 20th century, what role they attributed to material goods, what role the individual agents should play in development, and how the government and international agents should regulate the markets. In particular, the author analyzes the work of Pope Francis’s immediate predecessors. He points out that these Church leaders have a recurring idea that the markets cannot be left unsupervised as they can put both human culture and political life at risk. By contrast, Pope Francis claims that the two biggest crises of this age, the world war fought in various stages and the ecological catastrophe, result from the modern market economy (Faller 2002). This also shows that Francis’s criticism of the economy is closely associated with the other two global social issues: the protection of peace and the created world (Mitchell 2015). Both have received great attention since the beginning of his pontificate. His encyclical Laudato si’ is the sharpest criticism of the consumption-based economy (nr. 222, 223). In the encyclical, the Pope explicitly references his predecessors’ views on the economy and the market without repeating their hopes. However, the document clearly shows the continuity or development between the Pope and his predecessors and his willingness to return to original theological principles related to the economy. Pope Francis quotes Paul VI, who says that “an ecological catastrophe is occurring as a result of the explosive development of industrial civilisation” and that “humanity’s behaviour must change radically and urgently”, and that the economy and development must be understood differently (n. 16). The term capitalism is not even used in the encyclical, but some of its statements clearly suggest that the Pope offers a criticism of the modern, mainstream economic policy, e.g., when claiming that “Technology linked to business interests is presented as the only way of solving these problems”. He goes on to say that “it proves incapable of seeing the mysterious network of relations between things and so sometimes solves one problem only to create others” (n. 20). Another eloquent criticism is found in the encyclical where the Pope explains that “many of those who possess economic or political power seem mostly to be concerned with masking the problems or concealing their symptoms. (…) Many of these symptoms indicate that such effects will continue to worsen if we continue with current models of production and consumption” (n. 26).

Similarly, in another part of the encyclical, he accuses the economy, commercial operators, and producers of having regard only for the achievement of immediate objectives (n. 32). The encyclical focuses on the economy and economic policy, which has great merit in incorporating the documents and resolutions of local churches, taking into account the principle of subsidiarity. This is particularly true in economically backward or more vulnerable regions such as Africa or South America. The encyclical met with great resonance from economists (Martins 2018; Guitián 2018; Tucker and Grim 2016; Lai and Tortajada 2021). However, some studies have not lacked critical reflection. For example, Lawrence J. McQuillan and Hayeon Carol Park claim that the criticism of Pope Francis ignores the fact that the capitalist market economy was the only economic model that succeeded in eradicating or at least drastically reducing extreme poverty (McQuillan and Park 2017). However, this view is disputed by other authors, although not in relation to the encyclical. They point out that modern economic policy has not eliminated poverty, and in recent years, the social gap has become even wider (Bhatt et al. 2020). Indeed, when the Pope evaluates economic policies, he never separates them from the question of poverty. In his opinion, even in the forefront of ecological disasters and wars, poverty caused by the economy can be found (Iersel 2020).

Thus, the primary goal of economic policy should be to address the root causes, with a particular focus on eradicating poverty (n. 109, n. 172). Support for this opinion is complicated because defining poverty or extreme poverty is highly dependent on the state or region in question, and it is also difficult to measure the income sharing of a country.9 Other critics of the Pope have suggested that Francis fundamentally misunderstands economic objectives as helping the poor is an obligation of ethics, not economic policy. The redistribution of wealth cannot be forced. Also, it is morally unacceptable to take away something from a person for which he or she has worked only to give it to others. Philip Booth argues that the Holy See’s new approach disregards the sanctity of private property, an important element in the Catholic concept. Booth claims that economic policy can only be called conscious if it is committed to sustainability and environmental protection and if private property continues to enjoy solid legal guarantees. After a while, the over-emphasis on redistribution shakes the foundations of legal guarantees for private property, which is the basis of modern economic policy based on responsibility (Booth 2017).

In our view, the Holy Father is not wrong. He speaks of the right balance between taxes paid and the redistribution of public services and wealth (Watkins 2022). Admittedly, this subject is not further elaborated on in the encyclical from an economic policy perspective, but that is not the job of this type of document (Hein 2013).10

It is also worth briefly pointing out that critics accuse the Pope of breaking the tradition during his pontificate, followed even by his predecessors, to bring economic and theological positions closer together. Our research suggests that this criticism, too, is only partially justified. The Pope is a person of dialogue, even though his position is stronger than his predecessors. Before the World Economic Forum, for example, he analyzed the tasks of the common good, the future generation, and the World Economic Forum. He would not be present in these forums if he did not want to engage in dialogue. However, it must be seen that, on the one hand, his predecessors made increasingly pronounced statements in the face of global economic difficulties. The Pope’s condemnation of international organizations is becoming more and more vehement. In his apostolic exhortation Laudate Deum, he now devotes a whole paragraph to The Weakness of International Politics (Francis 2023).

On the other hand, the wars mentioned above and environmental disasters during his papacy require a firmer position from the economic policy schools. Martin Schlag notes that the teaching of the Church has constant elements. These are theological doctrines that do not change. They are also a starting point for a discussion with social sciences. However, some elements are evolving, and that may be changed (Schlag 2017). It should be noted that mainstream economics or economic policy is not constant either, as it incorporates ideas even from the schools that criticize it (Williamson 2000). Why should it not consider the ideas of the Church, as did the medieval economy for centuries? According to economist Robert M. Whaples, the Pope’s toughest remark, “This economy kills”, does not mean that he has closed off the possibility of dialogue with the present representatives of the economy (Whaples 2017).11 In fact, according to his study, this is absolutely necessary as the two entities need to know each other’s views. The encyclical Laudato si’, which provides the most insightful analysis of contemporary economic policy trends, calls for dialogue 25 times, with particular emphasis on dialogue with economic science (Pope Francis 2015).

According to Samuel Gregg, this is particularly important as he believes that Francis relies on an economic model that has fundamentally failed (Gregg 2017, pp. 373–74). The Argentinian model was unable to meet the expectations of the modern market economy, and, as mentioned in the introduction above, the capitalist economic policies criticized by the popes differ markedly from each other. The Pope, at least according to Gregg, relies on a failed model. Undoubtedly, the Pope was influenced more by the economic conditions in South America.

Finally, it should be noted that the Catholic Church has been the subject of considerable criticism. It has ethical teachings on economics, but it has been found to have committed several abuses in its economic affairs of the Vatican. Pope Francis was aware of this, and with his Fidelis dispensator et prudens motu proprio of 24 February 2014, he established a new body, the Pontifical Secretariat for the Economy (Francis 2014). In the introduction, the Pope states that the task of a faithful and prudent steward is to manage with care the goods entrusted to him, both in the awareness of the Church’s evangelizing mission and with particular concern for those in need. At the level of the universal Church, the document not only affirms the supreme authority of the Roman Pontiff as trustee but also highlights the apostolic work as one of the specific objectives, indicating that the Pope’s supreme stewardship must be at the service of the common good and integral human development. The legislator stated that the infrastructure and material resources of the Church are not only for the benefit of the Church, but also for the benefit of the whole of humanity (Zalbidea 2014, pp. 221–25). The document reorganizing the functioning of the Holy See, Praedicate Evangelium, Apostolic Constitution, has a special chapter on the management of the temporal goods of the Holy See. The legislator introduced principles such as “human, material and financial resources are distributed in a reasonable manner and managed with prudence, efficiency and transparency” (Francis 2022a, art. 207. 3°). The same principles were applied to the Vatican Bank IOR regarding these investments (IOR 2018). In the latter, the Pope established ethical principles and implemented legislative changes. Francis has accurately identified the potential for significant damage to the credibility of the Church if its institution abuses the law (Santoro and Gravino 2023, pp. 12–16).

7. Conclusions

This paper sought to highlight the long path Catholic theology has followed in assessing the economy. From the reticent stance of the first centuries, we came to medieval economic ethics, essentially motivated by theological considerations. Based on significant economists, we pointed out that some features of modern economic policy are also based on the Christian concept of economy, including the state’s important economic policy objective, the redistribution of wealth, social sensitivity, and monastic work ethics, to name a few. The age of social encyclicals brought about a significant change. Since then, the Church has conducted systematic research into the fields of economic policy. From the first social encyclical, Rerum novarum, through the statements of key 20th-century popes, we illustrated how the Church gradually became open to establishing a dialogue with the economy. The current Pope has often expressed a harsh criticism of mainstream economic policy. It may seem that the Church has closed the dialogue with economic policy because, as the Pope said, “This economy is killing”. At the same time, it should be remembered that Pope Francis looks at the economy in the light of the protection of the created world and wars. In this context, economic policy should indeed be held liable. But the Pope is a man of dialogue. He emphasized the importance of interdisciplinary dialogue in his Veritatis Gaudium, which re-regulates ecclesiastical universities (Pope Francis 2017). This apostolic constitution foresees the broadest possible scholarly collaboration between theology and other sciences. Why should there not be an active dialogue between theology and economics and representatives of the sciences? Also, why could the dialogue between the representatives of the two orders not be made more active? As we have seen, the Pope has done precisely this in many international and economic forums—perhaps not without success.