America recently published an article by Stephanie Slade making “a libertarian case for the common good.” Slade argues that libertarianism provides a political philosophy that offers a vision of the common good both compatible with that found in Catholic social teaching and that emphasizes the importance of human freedom. She provides a portrait of libertarianism that is in some ways attractive from a Catholic perspective, but also fails to highlight some of the contrasts between the libertarian vision of society and Catholic social teaching. In this post I want to focus in particular on one claim made by Slade: that the dramatic decline in extreme poverty in the decades after the Second World War, and in particular in the years since 1990, offer evidence in support of libertarianism. Instead, I will argue that the documents of Catholic social teaching of the last fifty years or so provide a vision of economic life distinct from that of libertarianism and that better accounts for recent successes in combatting poverty.

General Observations

In terms of what she gets right, Slade emphasizes that libertarianism and Catholic social teaching share certain common themes. For example, she cites Pope John XXIII’s claim in his 1961 encyclical Mater et Magistra that “the individual is prior to society and society must be ordered to the good of the individual” (no. 109), noting its similarity to the libertarian principle that persons should be treated as ends rather than means. She also notes that Catholic social teaching closely links human dignity with the exercise of freedom, citing a passage of the Catechism of the Catholic Church to that effect. Although she does not do so, Slade could have also referred to a passage from John XXIII’s 1963 encyclical Pacem in Terris:

Man’s personal dignity requires besides that he enjoy freedom and be able to make up his own mind when he acts. In his association with his fellows, therefore, there is every reason why his recognition of rights, observance of duties, and many-sided collaboration with other men, should be primarily a matter of his own personal decision. Each man should act on his own initiative, conviction, and sense of responsibility, not under the constant pressure of external coercion or enticement. There is nothing human about a society that is welded together by force. Far from encouraging, as it should, the attainment of man’s progress and perfection, it is merely an obstacle to his freedom. (no. 34)

John’s preference for freedom over coercion is similar to Slade’s description of libertarianism as “a political philosophy that prefers voluntary, nonviolent human interactions over coercion.” Of course, in Pacem in Terris John calls on the state to perform functions in service to the common good far more substantial than those envisioned by libertarians, therefore necessitating some state coercion, but I think Slade rightly brings to the fore that Catholic critics of libertarianism who refer to “community” and “the common good” need to be more open about the degree to which they mean a community “welded together by force.”

Slade also makes a point that I have made elsewhere, that considering libertarianism as a “historical movement” (as opposed to a “philosophy”, to use a distinction found in Pacem in Terris nos. 159-60), Catholics share common ground with libertarians on a number of issues. Slade points to criminal justice reform, religious liberty, and immigration reform as examples. She rightly points out that both Catholics and libertarians ought to be morally disgusted by the separation and detention of immigrant children, “mass trials” in immigration courts, and reports of abuse in immigration detention centers. Likewise, as governments increasingly have access to stored data about our internet usage and communications and use tools such as GPS tracking and facial-recognition technologies to surveil citizens, it is important for Catholics to recognize that libertarians have been out front on what we must begin to see as issues of justice.

That being said, in her attempt to explain the compatibility between libertarianism and Catholic social teaching, Slade is somewhat slippery defining the common good. She cites the definition of the common good found in the Second Vatican Council’s Gaudium et Spes: “the sum of those conditions of social life which allow social groups and their individual members relatively thorough and ready access to their own fulfillment” (no. 26). Elsewhere, she asserts, however, that “maximizing the scope of freedom from government coercion creates the conditions for material progress and human flourishing.” Catholic social teaching understands the social conditions necessary for the common good more broadly than simply “maximizing freedom.” These conditions include public goods that empower individuals to participate in the life of society. Slade also disputes the accusation that libertarianism denies the importance of community; she may be right as far as it goes, but I suspect that Catholic social teaching offers a deeper notion of community than one would find in libertarianism. These philosophical disputes have been considered elsewhere, however, and in the rest of this post I want to examine a more concrete claim made by Slade, that the success in eliminating extreme poverty in the decades since the Second World War provides evidence in support of libertarianism.

Libertarianism and Economic Development

In her essay, Slade shares that, “I came to identify as a libertarian after studying economics in college. I was moved by the realization that market capitalism is the most efficient engine of economic growth the world has ever known.” She then points to the phenomenal growth in worldwide GDP since the dawn of the Industrial Revolution as evidence that “government regulation is more likely to interfere with this process than it is to correct flaws in the system.” She gives particular focus to the period immediately after the Second World War (the “post-war miracle” experienced by Western Europe and Japan) and to the period from 1990 to the present, in which extreme poverty has plummeted worldwide, particularly in India and China. But is it really true, as the economist Robert Whaples claims (as cited by Slade), that “In the systems where there are more economic freedoms, you see much more rapid economic growth”?

Slade is right that capitalism has been a phenomenal engine of growth, but she ignores that there are a variety of forms of capitalism, and that in many cases the most economically successful countries have not adopted libertarian-friendly economic policies, but rather have engaged in significant state intervention. The economist Ha-Joon Chang, for example, argues that those countries that have most successfully undergone economic development in the past two centuries have done so through a combination of market reforms and targeted state interventions. Indeed, Chang claims that it is only when these countries have gained a dominant economic position that they begin to promote more radical free-market policies. For example, Great Britain’s predominant economic position in the early nineteenth century did not come about as a result of free market policies, but rather as a result of tariffs and subsidies protecting domestic industrial manufacturing imposed early in the eighteenth century. Britain only became the champion of free trade when it began to fear competition from its rivals. Similarly, throughout the nineteenth century, the United States had some of the highest tariff rates among industrializing nations. It was only in the post-Second World War period, when the US had become the predominant economic powerhouse, that it helped establish the global free market institutions that continue to exist today.

Slade points to the post-war economic boom as evidence of the power of free markets, but the reality is more complex. Slade is certainly right that this period saw the establishment of global institutions such as the IMF, World Bank, and GATT that promoted free trade and free markets. But the countries of Western Europe and Japan also engaged in substantial state interventions to promote economic development. For example, may countries used state investments, subsidies, and tariffs to promote domestic industries that could compete with established American companies. It was also during this period that these countries created or expanded generous welfare states to ensure that the basic needs of the people were met. Improved health, education, and social insurance, while good in themselves, also helped promote economic productivity.

Slade likewise sees the reductions in extreme poverty worldwide in the past three decades as offering support to libertarianism, and she even opens her essay by describing a Students for Liberty conference erupting into cheers at the news that extreme poverty had fallen below 10 percent worldwide. As she notes, much of this reduction in poverty has taken place in China and India, and undoubtedly the dismantling of Maoist communism and the “licence Raj” in India through market reforms in the 1980s and 1990s is an important part of that story. Yet it is not the whole story; both countries have also relied on state investments and protective measures to nurture domestic industries aimed at exports. In the most recent edition of the Heritage Foundation’s Index of Economic Freedom, for example, China and India remain the 110th and 130th most free economies, respectively, so they are hardly libertarian utopias. Indeed, both countries could likely benefit from further market reforms, but to use the examples of China and India as evidence that the less government intervention the better would be like, after seeing the health benefits of eating more vegetables and cutting down on carbs, adopting an all-greens diet.

Both Chang and the Nobel Prize-winning economist Joseph Stiglitz have also noted that even aside from China and India, those developing nations that have bucked the free-market orthodoxies of the IMF and World Bank who have been most successful at economic development and combatting poverty, while those who have hewed to orthodoxy have struggled. And the report on global poverty Slade herself cites notes that one significant reason for the recent reductions in poverty is “investments in education, health, and social safety nets,” suggesting that strengthening the state plays an important role in economic and social development.

Catholic Social Teaching

The documents of Catholic social teaching promote a vision of the economy consistent with those policies that have best promoted economic development and poverty reduction. For example, although recognizing the benefits of economic integration, Pope Paul VI in his 1967 encyclical Populorum Progressio claims that free trade often serves to reinforce the unequal levels of development between countries. He argues that developing nations ought to be able to implement targeted policies aimed at developing domestic industries, even if this means engaging in state interventions in the economy. Likewise, in his 1991 encyclical Centesimus Annus, Pope John Paul II claims that the state can exercise a “substitute function” in the economy when certain economic sectors “are too weak or are just getting under way,” although this intervention must be “as brief as possible, so as to avoid removing permanently from society and business systems the functions which are properly theirs, and so as to avoid enlarging excessively the sphere of State intervention to the detriment of both economic and civil freedom” (no. 48). John Paul recognizes the value of the free market, but also sees it as a “juridical framework” in which all must be empowered to participate (no. 42), and the state also has a responsibility for protecting the “collective goods” and basic human needs necessary for human flourishing (no. 40). John Paul also promotes a form of welfare state that harmonizes the efforts of the state and “intermediate communities,” not relying solely on the state or private charity (no. 48).

Slade draws a contrast between the “program of aggressive public intervention favored by many on the left” and the libertarian path of “relying on private solutions to problems whenever possible.” It is clear, however, that the policies that successful nations have adopted to promote economic development and poverty reduction do not fit neatly into these two extremes, and neither do the tenets of Catholic social teaching. Slade points out that “the church has never tried to enumerate the precise conditions under which government institutions should take over” economic activity, but this does not mean that Catholic social teaching leaves wide open questions concerning the role of the state and the market. As I have argued elsewhere, Catholic social teaching promotes a communitarian vision of the economy that values the market, but that sees an important but limited role for the state in managing economic activity, and that also insists that “intermediate communities” must be protected from both the market and the state. I also believe that the empirical evidence of successful economic and social development better supports the vision of Catholic social teaching than that of libertarianism.