5.2.6 The ‘free economy’ and its ‘juridical framework’

Back to 5.2.5

Unit 5 Contents

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But what about state regulation of the economy – what does CST say on this?  We have not so far given attention to this, because of CST’s strong emphasis on the moral responsibilities of business people regardless of what government regulation requires.

This said, the question about government’s role has been raised by John Paul II’s point that the unacceptable form of capitalism is “not circumscribed within a strong juridical framework” (Centesimus Annus, #42).   He implies that such a legal framework is certainly needed.

The Compendium turns next to the issue of ‘institutions’, and the first section in the next reading sees the ‘free market’ as one kind of institution. The second is on ‘Action of the State’.  This is followed by two short sections, on the ‘Role of Intermediate Bodies’, i.e. those in the voluntary sector, and on ‘Savings and Consumer Goods’.  All these sections draw heavily on Centesimus Annus.  For the purpose of this unit, you should focus on the first two of them (i.e. up to #355).

As you read the first section, you will see that it refers repeatedly to ‘the free market’ in the singular.  You can form your own view about this, but it seems to me a bit odd to use the singular.  This is because, across the world, there are many markets, and while they are connected in many ways they don’t all have the same practices.  Markets are constrained by commitments and customs that vary across time and place, some of which have built up over a long period and mean that people do things very differently in different places.  Not all forms of market rely on monetary exchange to the same extent, some involving elements of barter and gift.  Nevertheless, this suggestion that use of the plural would be better is not especially significant for what the text says.

The topic of the second section on ‘Action of the State’ can be studied more fully in the other VPlater module, Living in a Just and Free Society.  Therefore we shall not give a lot of attention here to the question of the state’s role.  The most important thing to take in is that CST sees government’s role, not as just a negative one of minimizing obstacles to free economic transactions, which is neoliberalism’s position, but as necessitated positively by the goal of an economy that serves “integral human freedom” (#350).  Hence the state must “sustain business activities by creating conditions which will ensure job opportunities [and] by stimulating those activities where they are lacking” (#351).  The fundamental task of the state in economic matters is,

[to determine] an appropriate juridical framework for regulating economic affairs, in order to ‘safeguard the prerequisites of a free economy, which presumes a certain equality between the parties, such that one party would not be so powerful as practically to reduce the other to subservience’. (Compendium, #352, citing Centesimus Annus, #15)

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Reading (6pp)

Compendium, ##346-360 (Chap 7, part IV)

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Having now looked at most of the main elements of CST’s understanding of economic life, as these are set out in the Compendium, we are now in a position to put them together to see the overall vision that it presents.  We can then consider it critically.

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End of 5.2.6

Go to 5.2.7 Questions for discussion half way through unit

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