Catholicism vs. Libertarianism and Neoliberalism

Libertarianism and neoliberalism are different. Libertarianism is predicated on self-ownership and its highest value is freedom. Neoliberalism is predicated on free market competition and its highest value is efficiency. Both are condemned by Catholic social teaching.

Libertarianism has its roots in the philosophy of John Locke, which says that a person is entitled to what she produces when mixed with her own labor (given that she owns herself and her labor). It prizes economic freedom above all else. Libertarian theorist Robert Nozick saw a role for the government in providing for a common defense, but little else. In its extreme form, libertarianism regards taxation and economic regulation as forms of oppression and violence. It is a utopian vision - Nozick envisioned a collection of voluntary communities each choosing their own ends, with no form of outside coercion.

Neoliberalism, on the other hand, comes out of neoclassical economics and by extension the utilitarian tradition. It argues that the general welfare is maximized when economic efficiency is prioritized. This gives rise to high economic growth, which trickles down to benefit everyone, and is best achieved by free market competition. Like libertarianism, it sees a strictly limited role for government. It allows the government to do things the private sector cannot - such as providing public goods - and sometimes to deliver a minimum threshold of material sufficiency. But on the whole, it calls for deregulation, privatization, low taxes, a sparse welfare state, free movement of capital, and a flexible labor market (which goes against unions and minimum wages).

While Catholic social teaching criticizes both, the criticisms are different. The condemnation of libertarianism is more anthropological - it is not in accord with who we are as human beings - while the condemnation of neoliberalism is more practical - it leads to bad outcomes.

In its essence, libertarianism posits that human beings are autonomous individuals. Catholic social teaching, on the other hand, sees human beings as relational persons - as Meghan Clark puts it, imago Dei implies imago Trinitatis. In other words, we mirror the inner life of the Trinity, which is pure relationality. We become fully human only in relation to others. This has echoes in Aristotle’s view of human beings as inherently social, but takes it to a higher moral plane. Libertarianism denies all of this. There is absolute autonomy and no relationality that is not freely chosen.

It should come as no surprise that libertarianism is opposed to the common good. In fact, it challenges both words - “common” and “good.” For libertarians, “common” entails “coercion” and insisting that something be “good” undermines the freedom to choose. Pope Francis himself put this best:

Thus libertarian individualism denies the validity of the common good because on the one hand it supposes that the very idea of “common” implies the constriction of at least some individuals, and the other that the notion of “good” deprives freedom of its essence.

In Catholic social teaching (echoing Aquinas), property has a twofold character - private ownership and common use. It is the latter that gives rise to the universal destination of goods, the notion that each person “should regard the external things that he legitimately possesses not only as his own but also as common in the sense that they should be able to benefit not only him but also others.” It is for this reason that Pope John Paul II claimed that private property came with a “social mortgage” and Pope Francis called the right to private property a “secondary natural right.” All of this is anathema to libertarianism.

Writing back on 1931, in Quadragesimo Anno, Pope Pius XI reflected on this twofold character of property, condemning extremes on each side - libertarianism and collectivism. He calls these the “twin rocks of shipwreck.” Here is how he puts it:

Accordingly, twin rocks of shipwreck must be carefully avoided. For, as one is wrecked upon, or comes close to, what is known as "individualism" by denying or minimizing the social and public character of the right of property, so by rejecting or minimizing the private and individual character of this same right, one inevitably runs into "collectivism" or at least closely approaches its tenets.

In this telling, collectivism elevates common use while suppressing private ownership, while libertarianism elevates private ownership while suppressing common use.

We can perhaps go further. Catholic social teaching recognizes basic rights, but sees duties attached to these rights. Collectivism emphasizes duties while suppressing rights, while libertarianism emphasizes rights while ignoring duties. Catholic social teaching also recognizes different types of justice, including commutative justice (the justice between individuals) and distributive justice (what the community owes the individual). Again, collectivism prizes distributive justice while libertarianism sees only commutative justice. Both are rocks of shipwreck.

In this same encyclical, Pope Pius also condemns the notion that free market competition should govern economic life - this can perhaps be seen as a nascent criticism of what would eventually be called neoliberalism. Here is Pius again:

[T]he 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 - a truth which the outcome of the application in practice of the tenets of this evil individualistic spirit has more than sufficiently demonstrated. Therefore, it is most necessary that economic life be again subjected to and governed by a true and effective directing principle.

This is a strong condemnation of laissez-faire economics, which - like libertarianism - is predicated on a radical form of individualism and self-interest.

This theme reverberates throughout Catholic social teaching. It was taken up by Pope Francis in Evangelii Gaudium, Laudato Si’ and Fratelli Tutti, where he condemns free market ideology - what he calls the “deified market” or the “magical conception of the market.” Contra Adam Smith, he rejects the notion that self-interest serves the common good, seeing only a “seedbed for collective selfishness.” For Pope Francis, the problem is not just anthropological - it is practical. This mode of economic thinking leads to vast amounts of exclusion and inequality, and to a throwaway culture. Twice he condemns the trickle-down faith of neoliberalism. Here he is in Evangelii Gaudium:

In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.

And again in Fratelli Tutti:

The marketplace, by itself, cannot resolve every problem, however much we are asked to believe this dogma of neoliberal faith. Whatever the challenge, this impoverished and repetitive school of thought always offers the same recipes. Neoliberalism simply reproduces itself by resorting to the magic theories of “spillover” or “trickle” – without using the name – as the only solution to societal problems. There is little appreciation of the fact that the alleged “spillover” does not resolve the inequality that gives rise to new forms of violence threatening the fabric of society.

To sum up: it is clear from Catholic social teaching that it is not really possible to be Catholic and libertarian. Libertarianism denies the reality of who we are as human beings, cancels the universal destination of goods, shrinks notions of justice, sunders rights from duties, and promotes an erroneous conception of freedom. What about neoliberalism? The indictment here is more practical - it rewards the privileged and the powerful, while sending the poor away empty. Once again, it fails the universal destination of goods test. Once again, it crimps justice and solidarity. Or, in the words of Pope Francis: such an economy kills.