PERSPECTIVE ON RELIGION : Blessings on Capitalism at Its Best : Pope John Paul II breaks crucial new ground by his challenging endorsement of what he terms the ‘free economy.’

C entesimus Annus, Pope John Paul II’s new social encyclical, is a watershed event in modern religious thought about freedom.

In its concerns for workers’ rights, for families and voluntary associations, and for religious liberty, and in its endorsement of democracy, the Pope develops classic themes of papal teaching about the modern economy and the modern state. But John Paul II also breaks crucial new ground by his forthright, if challenging, endorsement of what he terms the “free economy.”

In light of the revolution of 1989, the Pope asks, is capitalism “the victorious social system” toward which the new democracies of Central and Eastern Europe should aspire? And in light of the empirical evidence about development, is capitalism “the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?”

Some may argue that the Pope’s answer to these questions fudges the issue. But in fact his preferences are clear: “If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as human creativity in the economic sector, then the answer is certainly in the affirmative. But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.”

In other words, if by “capitalism” is meant what the West at its best means by “capitalism”--a tripartite system in which democratic politics and a vibrant culture discipline and temper the free-market economy--then that is the road the Pope urges the new democracies and the Third World to take, because this is the social system that is most likely to sustain a human freedom that is truly liberating.

Human freedom has been the key theme in the social teaching of the Polish-born Pope since his election in 1978. In Centesimus Annus, he extends and sharpens Catholic understandings of freedom by his emphasis on human capital. Economic development, the Pope argues, is not simply a matter of physical resources. “Organizing . . . a productive effort, planning its duration in time, making sure that it corresponds in a positive way to the demands which it must satisfy, and taking the necessary risks--all this too is a source of wealth in today’s society,” as are “initiative and entrepreneurial ability.” The good society, in sum, is one that unleashes human creativity and fosters “the possession of know-how, technology and skill.”

Centesimus Annus contains a sharp critique of the economic, political and social failures of “Real Socialism,” and the human and ecological degradation that was Marxism’s legacy in Central and Eastern Europe. Indeed, the Pope’s analysis of the revolution of 1989 as one in which a moral and cultural revolution preceded and made possible the political upheavals that overthrew “Real Socialism” is a useful corrective to Western analysts who insist on viewing the revolution as some sort of delayed modernization.

But his rejection of Marxism and his new stress on economic freedom as one essential component of the free society do not make John Paul II a libertarian. The answer to the excesses of Manchesterian liberalism (the entry-point for Leo XIII’s 1891 encyclical, Rerum Novarum, which Centesimus Annus, “The 100th Year,” commemorates) is what the Pope terms “a society of free work, of enterprise, and of participation.” Such a society, he insists, is “not directed against the market, but demands that the market be controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied.” But John Paul II, who knows totalitarianism in his bones, is no statist, either. One lesson of the Marxist failure, he argues, was that the state “could not directly ensure the right to work for all its citizens” unless it “controlled every aspect of economic life and restricted the free initiative of individuals.”

The whole thrust of the encyclical suggests that the Pope’s primary concerns for the future have to do with culture, and with the ability of a moral culture to shape the “free economy” so that individual initiative promotes the common good. Put another way, the structural arguments are settled: Human freedom requires a democratic polity and a free economy. The real arguments today have to do with culture, and with the cultural foundations of political and economic liberty.

On this cultural front, the Pope rightly cautions the West against the new alienation of a “consumerism” in which a grasping acquisitiveness becomes an end in itself. Concurrently, he warns against the temptations of the welfare state or “Social Assistance State,” which can deplete human initiative, lead to an “inordinate increase in public agencies . . . dominated . . . by bureaucratic ways of thinking” and impose “an enormous increase in spending.”

Centesimus Annus is emphatically not for Catholics only. In the recent style of papal encyclicals, it addresses itself to “all men and women of good will.” Freedom’s future will be more secure if the developed democracies, as well as the new democracies and the Third World, enter the conversation so boldly initiated by the man who may come to be known as the Pope of Freedom.