The AEI Press, 4720-A Boston Way, Lanham, MD 20706 1990 • 153 pages • $18.95 cloth
History should remember May Day 1991 as the day the Supreme Pontiff of the Catholic Church, the world’s oldest religious institution, issued an encyclical to herald the free market as the model for global economic development. Along with it, the Pope praised the role of profit, entrepreneurship, the division of labor, the price system as the means of resource allocation; and he condemned socialism as “impossible” and attacked the bureaucratizing and dehumanizing effects of welfarism.
The appearance of Centesimus Annus (The Hundredth Year) was a startling occasion for people who have watched the development of John Paul’s social thought. Some reports said that in preparing the document he was consulting with some top Western economists sympathetic to the free market—Jeffrey Sachs and Robert Lucas, for example—but no one expected a document that would please the likes of F. A. Hayek or Ludwig von Mises.
The issuance of the document must have been an especially exciting occasion for Michael Novak, holder of the George Frederick Jewett Chair in Religion and Public Policy at the American Enterprise Institute, and author of numerous works on theology and economics.
Novak has argued for years for the compatibility between Christianity and capitalism, and performed careful textual analysis of papal teaching to reinforce his point. Almost alone, he has kept the Catholic vision of a free economy alive during years when U.S. bishops expressed more skepticism of markets—and the disparities of wealth that always accompany them—than support for their productive capacities.
Novak’s recent book, This Hemisphere of Liberty, appeared only four months before Centesimus Annus. The nine essays herein, nicely compiled and never before published in this country, represent some of Novak’s best work. They are not directed toward an audience of academic scribblers, but rather to entire nations.
Most of the essays are taken from lectures delivered during the 1980s as Novak toured extensively in Brazil, Argentina, Chile, Colombia, Peru, Guatemala, E1 Salvador, Panama, and Mexico, presenting a sweeping vision of the liberty that should be their goal. And they are couched in language that should especially appeal to these audiences. For North Americans, the book serves as a terrific distillation of Novak’s most tested thoughts on economics and its relation to religion.
Latin America is a part of the “hemisphere of liberty,” Novak argues, a phrase introduced by Colombian historian German Arciniegas. And Novak urges Latin countries to claim that vision by restructuring their political, economic, and cultural institutions to make them more compatible with true human liberation.
In speaking about the right of private initiative and associated liberties, we never find Novak on the defensive against common criticism of markets. He recasts conventional arguments for capitalism in terms imbued with virtue and the coma mon good—decidedly not as a rhetorical trick, but as a coherent and Christian view of the social order.
In this vein, Novak’s most impressive chapter is “Structures of Virtue, Structures of Sin.” The social order that elevates liberty, he argues, does so not because it ignores the reality of sin, but rather because it is aware of sin’s pervasiveness.
“The task for a political philosophy that would seek genuine and effective human liberation . . . is not the task of building a system designed for angels or saints. The task is rather to build a system that will work for sinners.” This social order erects checks and balances to government power, insists on an understanding of liberty that is directed toward truth and the good, and channels self-interest into socially useful directions that allow for “universal economic creativity.”
Novak invokes Hernando de Soto’s remarkable work on the underground economy in Peru to show that economic development in the Third World must come from the bottom up. It is because of concern for the poor that Christ demands of us, he argues, that legal institutions must reflect the fight to exercise entrepreneurial creativity, and the economy must reward, not punish, this virtue. The weight of state intervention in Latin America is what makes the poor suffer, markets offer a liberation.
It is impossible to overlook the similarity in themes and language between the Pope’s encyclical and Novak’s work. One can fairly speculate that some of the passages of the encyclical are directly drawn from Novak, if not from this present work, then surely from Spirit of Democratic Capitalism or his excellent study Free Persons and the Common Good. Especially notable similarities are the emphasis on the human mind as the ultimate economic resource and the market as a means for promoting virtues like creativity, thrift, and honesty in the citizenry.
The Pope’s encyclical will turn new eyes toward the work of Michael Novak. Scholars may begin to rethink Novak’s work and understand why he has been right about this pope, and why he has the power to persuade the Vatican. When Novak included the Pope in the liberal tradition of Acton, Tocqueville, and Hayek, many conservatives (myself among them) thought he was stretching things a bit. The Pope’s pro-market statements seemed few and far between. But it tums out that Novak had a fine intuition about this pope, seeing in him what few others could.
Centesimus Annus is not only cause for celebration, but Novak should enjoy a great deal of personal satisfaction as well. The Pope’s encyclical represents a vindication of Novak’s work, of which there is no better representative and accessible volume than This Hemisphere of Liberty.
Mr. Tucker is a fellow of the Ludwig von Mises Institute.