After the failure of communism, should capitalism be the goal for Eastern Europe and the Third World? The answer is complex. If capitalism means a "market" or "free" economy that recognizes the role of business, the market, and private property, as well as free human creativity, then the answer is "yes." If it means a system in which economic, religious, and ethical freedom are denied, then the answer is "no." Marxism failed, but marginalization and exploitation remain, especially in the Third World, just as alienation does in the more advanced countries.

The Hundredth Year (Donders), #42

 

[Church teaching on the right to private property], as it was then stated and as it is still taught by the church, diverges radically from the program of collectivism as proclaimed by Marxism and put into practice in various countries in the decades following the time of Leo XIII's encyclical. At the same time it differs from the program of capitalism practiced by liberalism and by the political systems inspired by it. In the latter case, the difference consists in the way the right to ownership or property is understood. 

Christian tradition has never upheld this right as absolute and untouchable. On the contrary, it has always understood this right within the broader context of the right common to all to use the goods of the whole of creation: The right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone.

On Human Work, #64

 

In every social situation of this type, there is a confusion or even a reversal of the order laid down from the beginning by the words of the Book of Genesis: Man is treated as an instrument of production, whereas he--alone, independent of the work he does--ought to be treated as the effective subject of work and its true maker and creator. Precisely this reversal of order, whatever the program or name under which it occurs, should rightly be called "capitalism"--in the sense more fully explained below. 

Everybody knows that capitalism has a definite historical meaning as a system, an economic and social system, opposed to "socialism" or "communism." But in light of the analysis of the fundamental reality of the whole economic process--first and foremost of the production structure that work is--it should be recognized that the error of early capitalism can be repeated wherever people are treated on the same level as the whole complex of the material means of production, as an instrument and not in accordance with the true dignity of their work -- that is to say, where the person is not treated as subject and maker, and for this very reason as the true purpose of the whole process of production.

On Human Work, #30

 

But it is unfortunate that on these new conditions of society a system has been constructed which considers profit as the key motive for economic progress, competition as the supreme law of economics, and private ownership of the means of production as an absolute right that has no limits and carries no corresponding social obligation. This unchecked liberalism leads to dictatorship rightly denounced by Pius XI as producing "the international imperialism of money".[26] One cannot condemn such abuses too strongly by solemnly recalling once again that the economy is at the service of man.

On the Development of Peoples, #26

 

Individual initiative alone and the mere free play of competition could never assure successful development. One must avoid the risk of increasing still more the wealth of the rich and the dominion of the strong, whilst leaving the poor in their misery and adding to the servitude of the oppressed.

On the Development of Peoples, #33

 

First, one may not take as the ultimate criteria in economic life the interests of individuals or organized groups, nor unregulated competition, nor excessive power on the part of the wealthy, nor the vain honor of the nation or its desire for domination, nor anything of this sort. Rather, it is necessary that economic undertaking be governed by justice and charity as the principal laws of social life.

Mother and Teacher, #38,39

 

The Church's teaching opposes collectivist and statist economic approaches. But it also rejects the notion that a free market

automatically produces justice.

Economic Justice for All, #115

 

We therefore consider it our duty to reaffirm that the remuneration of work is not something that can be left to the laws of the marketplace; nor should it be a decision left to the will of the more powerful. It must be determined in accordance with justice and equity; which means that workers must be paid a wage which allows them to live a truly human life and to fulfill their family obligations in a worthy manner.

Mother and Teacher, #71

 

Just as the unity of human society cannot be founded on an opposition of classes, so also the right ordering of economic life cannot be left to a free competition of forces. For from this source, as from a poisoned spring, have originated and spread all the errors of individualist economic teaching. Destroying through forgetfulness or ignorance the social and moral character of economic life, it held that economic life must be considered and treated as altogether free from and independent of public authority, because in the market, i.e., in the free struggle of competitors, it would have a principle of self direction which governs it much more perfectly than would the intervention of any created intellect. But free competition, while justified and certainly useful provided it is kept within certain limits, clearly cannot direct economic life...

The Fortieth Year, #88

 

Unlimited competition utilizing the modern means of publicity incessantly launches new products and tries to attract the consumer, while earlier industrial installations which are still capable of functioning become useless. While very large areas of the population are unable to satisfy their primary needs, superfluous needs are ingeniously created. It can thus rightly be asked, if in spite of all his conquests, man is not turning back against nature, is he not now becoming the slave of the objects which he makes.

A Call to Action, #9

 

In other words, the rule of free trade, taken by itself, is no longer able to govern international relations. Its advantages are certainly evident when the parties involved are not affected by any excessive inequalities of economic power: it is an incentive to progress and a reward for effort. That is why industrially developed countries see in it a law of justice. But the situation is no longer the same when economic conditions differ too widely from country to country: prices which are " freely n set in the market can produce unfair results. One must recognize that it is the fundamental principle of liberalism, as the rule for commercial exchange, which is questioned here.

On the Development of Peoples, #58

 

Completing the unfinished business of the American experiment will call for new forms of cooperation and partnership among those whose daily work is the source of the prosperity and justice of the nation. The United States prides itself on both its competitive sense of initiative and its spirit of teamwork. Today a greater spirit of partnership and teamwork is needed; competition alone will not do the job. It has too many negative consequences for family life, the economically vulnerable, and the environment. Only a renewed commitment by all to the common good can deal creatively with the realities of international interdependence and economic dislocations in the domestic economy. The virtues of good citizenship require a lively sense of participation in the commonwealth and of having obligations as well as rights within it. The nation's economic health depends on strengthening these virtues among all its people, and on the development of institutional arrangements supportive of these virtues.

Economic Justice for All, #296

 

Competition, to be sure, is not to be excluded from commerce, but it must be kept within those limits which make it just and fair and therefore worthy of man.

On the Development of Peoples, #61

 

Bureaucratic socialism, technocratic capitalism and authoritarian democracy are showing how difficult it is to solve the great human problem of living together in justice and equality. How in fact could they escape the materialism, egoism or constraint which inevitably go with them? This is the source of a protest which is springing up more or less everywhere, as a sign of a deep-seated sickness, ...

A Call to Action, #37