The State. Regarding the state’s activity in the economic field there are mainly two principles that will be treated more in depth later on. The first is the subsidiarity principle, which affirms that the state should not interfere when private actors are exerting their economic freedom within a legal framework. According to this principle public 24 Compendium, 349. institutions should be a subsidium, namely a helping hand when private institutions or individuals are not able to satisfy their necessities alone. Second, there is what social teaching calls the solidarity principle. The state has to intervene directly, according to social thought’s solidarity principle, when public institutions have to protect the weakest economic actors, preventing situations such as private monopolies or oligarchies. To be efficient, these principles need to be applied with a certain balance. If the state were to leave full autonomy to private subjects, in a lax application of the principle of subsidiarity, a sort of local egoism could be implemented. There is the risk that private actors without any institutional regulations will try to dominate public institutions and forget the end of the common good. While, on the other side, a too intense application of the solidarity principle can easily degenerate into a state focused too much on public assistance. Namely a state in which services and goods that could be easily and better offered by private agents are monopolized by state’s activity. The state, in other words, should act respectfully of private interests with, at the same time, a vigilant consideration about the economic destiny of all the actors involved, particularly the disadvantaged ones. In this regard, the Compendium proposes a difficult balance between, on one side, encouraging private initiatives through institutional structures and, on the other side, an effective, balanced and rational intervention directed to the always present end of the general well-being of people.25 Keeping in mind the inter-connected activity of these two principles, we have now to say that the state’s role, according to social thought, is also accomplished when it simply furnishes those determinant guarantees, as stability in monetary exchange and efficient public services, without which it would be impossible even to think of an economic environment. More concretely, according to social thought, the state’s role in the economic field: […] is that of determining an appropriate juridical framework for regulating economic affairs, in order to safeguard ‘the prerequisites of a free economy, which presumes a certain equality between the parties, such that one party would not be so powerful as practically to reduce the other to subservience’ (Centesimus, 15). Economic activity, above all in a free market context, cannot be conducted in an institutional, juridical or political vacuum. ‘On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency and efficient public services’ (Centesimus, 48; see Catechism, 2431). […] There exist certain sectors in which the market, making use of the mechanisms at its disposal, is not able to guarantee an equitable distribution of the goods and services that are essential for the human growth of citizens. In such cases the complementarities of State and market are needed more than ever. 26 It is interesting to notice how in this passage it is written that a ‘certain equality between the parties’ is ‘prerequisite of a free economy’. When economic actors are not encountering any juridical barrier there is a concrete risk that someone else could 25 See Compendium, 351, 354. In the worst case: ‘ […] the State becomes detrimental to society: a direct intervention that is too extensive ends up depriving citizens of responsibility and creates excessive growth in public agencies guided more by bureaucratic logic than by the goal of satisfying the needs of the person (see Centesimus, 48)’. Compendium, 354. 26 Compendium, 352 – 353. be practically crushed. And, in social teaching’s view, the measures adopted by the state to prevent such things should not be seen as a limitation of freedom for someone, but as a protection of the weakest. In the Roman Catholic Church’s economic teaching, equality and freedom are two core terms for understanding the interaction between state and market. The focal point in social thought is that a proper and fair regulation by the state would not mean less freedom in the market environment. We rather we should find a market functioning alongside the state in co-operation. This view is due to the fact that social teaching sees the end of an economic setting not in the market’s success in allocating goods, nor in the state’s ability in tracking economic transactions, but in the well- being of people. In this sense the state guarantees a legal framework to the market in which economic actors can freely operate. Moreover, the state is seen as the institutional actor that guarantees for all the economic actors certain things, for instance private property and public services. Social teaching sees the market and the state as two elements that balance each other within the same economic setting.
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