Roman Catholic Social Thought and Economic Theory: An Agenda for the Future

Abstract

The futures of both economic theory and Catholic Social Thought (CST) hold much promise. Recent developments in microeconomic theory and game theory demonstrate that in a world of interdependence and imperfect information, individual self-interest frequently results in socially irrational outcomes. As a result, cooperative behavior is needed to complement self-interested behavior to yield efficient economic outcomes. These developments are in harmony with the communitarian foundations of CST. Theologians could use this work to provide a stronger foundation for CST. Social economists could interpret and apply these developments in economic theory in ways that would show how CST can be important for economic policy. This article is a first attempt to look at some of the possibilities and to suggest future work for social economists. I. A Comparison of First Principles Possibly the most important difference between traditional micro economic theory and CST is that the former is based on an individualist conception of society and the latter on a communitarian vision. That difference is based, in turn, on different assumptions of how morally and factually independent or interdependent individuals are in society. If individual members of society are independent of each other, microeconomic theory argues that pursuit of self-interest can lead to the common good. However, if interdependencies are the rule, not the exception, market failures make it impossible to attain the common good without collective intervention. Public sponsorship of cooperation as a complement to market competition is a possible means to attain the common good. Catholic social thought ? from Pope Leo XIII's Rerum Novarum (NCCB, 1985) in 1891 to the U.S. Bishops' Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. Economy (NCBB, *0034-6764/91 /1201 -566/$ 1.50/0.