Most economists would have us believe that the free market is the best form of social organization. Each individual is the best judge of his or her own needs and should be free to negotiate every economic transaction with minimal public regulation or interference. People are rational and knowledgeable; they are capable of calculating costs and benefits with relatively little error, maximizing their well-being. A just wage or price is the one that the market dictates. Economic growth entails economic inequality. Greed, for lack of a better word, is good. Governments serve society best by doing least.

Then there’s Anthony Annett. In Cathonomics – How Catholic Tradition Can Create a More Just Economy, he sets out to show that the world doesn’t work that way. And the way the world DOES work is much closer to the principles of Catholic Social Teaching than libertarian free market ideals.

Annett, who spent two decades at the International Monetary Fund, must have heard the case for small government and free markets hundreds of times as IMF economists demanded developing countries adopt neoliberal reforms as the price of a bailout. Today he’s in more congenial environs as a senior adviser for the Sustainable Development Solutions Network.

In his book, published last year by Georgetown University Press, Annett begins by reviewing the roots of Catholic Social Teaching in Scripture and the encyclicals before comparing its assumptions with those of neoclassical economics. “Homo Economicus,” the rational utility-maximizing individual that powers economic models, is found to be less than universal, to say the least. Annett argues that Catholic Social Teaching – which suggests that sometimes solidarity must take precedence over competition, that there are limits to accumulating goods, that individuals ought to defer to the common good – is a better fit for the world we live in.

Annett gives only limited attention to labor unions. He notes that “Catholic social teaching also strongly supports the rights of workers to form and join unions and to bargain collectively, one of the strongest and most consistent elements of its labor market ethics (165),” and goes on to cite Pope John Paul II, Benedict XVI and Francis on the topic of labor unions. But it’s clear that his heart is with the developing world. Annett devotes much of his effort to identifying parallels between Catholic Social Thought and the UN Sustainable Development Goals.

Thanks to Pope Francis and Laudato Si, Catholic Social Teaching today is also heavily focused on environmental protection in general and global warming in particular. Annett picks up this theme as well. No other topic better illustrates the dangers of free-market fundamentalism. After all, for two centuries firms have been collecting profits from their activities while “externalizing” the costs of global warming by pumping carbon dioxide into the atmosphere.

“My basic contention is that neoliberalism inculcates and amplifies the wrong values. It is time to try something different,” Annett concludes (284). He’s not wrong.

4 replies
  1. L. John Miller
    L. John Miller says:

    How we all do our best is always the issue isn’t. Although I agree in concept with all that is said and felt here I always stumble on the how.
    How do I create a just family business, larger company, or Govt when original sin is present.
    Some workers are brilliant, others habitually do not show up. I need to constantly improve my business for the good of my customers and to insure we succeed. And I must do it before another competitor does.
    So w all these ‘naturals’ in play how to inculcate fair into the mix shall require a whole new decision matrix.
    Apparently that is where the gig economy is taking us.
    It’s tough to organize around a company who’s future is constantly and continually under attack ( Tesla VS UAW )

  2. Christopher Fleming
    Christopher Fleming says:

    Though I have not read Annett’s book, I agree with the concepts outlined in thi review. The “Free market” is not a healthy economic concept, and does not exsist in reality. Currently governments that propound the benefits of the “Free market” use their power to amass wealth into the hands of the few at the expense of communities. If the metric is economic growth, a community based model would lead to faster, more even and stable growth. The question is, how do we realize this?

  3. Robert Rebman
    Robert Rebman says:

    Thank you for sharing this review. It is a perspective that has been discussed for a number of years, but people really don’t seem to want to take action to change – either as consumers or business leaders. Consumers have been told in many ways that the solution is to get ahead materially and life will be better. However, chasing the materialistic goals further fuels environmental degradation and sweatshop conditions without providing real satisfaction. Referencing Kavanaugh, Following Christ in a Consumer Society (2006). From the business leadership side we have Vocation of the Business Leader. People would rather not think about these issues – so we need to keep talking and repeating. Thank you for posting!

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