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particularly illustrative example of the agency’s pattern of foot-dragging and extraordinary interpretation of scientific data.

What saves

Saving Our Environment from Washington

from relegation to the private libraries of libertarians and academics is the well-supported and all-around better alternative it offers. Schoenbrod calls for the return of environmental regulation to elected officials preferably at the state and local levels, allowing the use of local knowledge and imposing accountability on legislators for the harms (and benefits) their policies induce.

The proposition is unlikely to fully satisfy many libertarians. But having criticised Congress for setting impracticable standards, Schoenbrod is not interested in idealistic but unachievable goals. One of Schoenbrod’s most consistent and noteworthy points is that ideal and unqualified ‘solutions’ are inaccessible luxuries, the belief in which has already proven a costly venture. Scientists aren’t unbiased or able to extricate concrete and definite conclusions; politics will always be political. But instead of delivering the reader to a sort of fatalism, Schoenbrod presents a mechanism that is more conscious of constitutional boundaries and would imbue competition into environmental policy, forcing governments to seek out a more efficient means of protecting the environment.

Saving Our Environment from Washington

does offer plenty of ammunition for environmental sceptics, but it seems likely to penetrate the convictions of sceptical environmentalists in no small part because it does not read like an opus against government, environmentalism or their intersection. Schoenbrod refuses to be pulled to either extreme, rejecting the notion that the relationship between freedom and sound environmental policies is a zero-sum game. He’s an environmental advocate who once ‘regarded questions of the constitutionality of the EPA’s power as the last refuge of polluters’ but for whom experience has shown that ‘those constitutional ideals are the safest road to the public interest, including the public’s deeply felt interest in a clean earth’. He shows genuine concern for the environment and individual rights:

Saving Our Environment from Washington

does justice to both.

Yelena Shagall

Mathematics and Political Science Major

University of Illinois-Chicago

Yelena.Shagall@gmail.com

T H E C H U R C H A N D T H E M A R K E T : A C A T H O L I C D E F E N S E O F T H E

F R E E E C O N O M Y

Thomas E. Woods Jr.

Lanham, MD: Lexington Books, 239pp.,

ISBN: 0 7391 1036 5, £14.99 (pb), 2005

C O M P E N D I U M O F T H E S O C I A L D O C T R I N E O F

T H E C H U R C H

Pontifical Council for Justice and Peace

London: Burns & Oates, 448pp., ISBN: 0 86012

354 5, £25.00 (hb)/£12.99 (pb), 2005

Woods’s book,

The Church and the Market

, should be required reading for any university or seminary course in social sciences that is supposed to be grounded in Catholic social teaching. He puts his economic case with such rigour and lucidity that there is probably no other text that is more effective in supporting a discussion of the application of the Church’s social teaching to specific economic issues. Those who disagree with Woods’s analysis will be able to think more clearly about the issues he addresses after they have read the book than they would have done before – even if they still disagree.

Woods is highly critical of the Chicago School of economists and some may regard his criticisms as too harsh. His approach is grounded in Austrian economics, and in an understanding of natural law and of human reason. His conclusions about economics and Catholic social teaching are therefore soundly based for those coming from a Christian perspective. A key starting point for Woods is that free will in the economic sphere is not just an ‘added extra’ for Christians. If we believe in free will, then we must believe in free will with regard to economic choices.

In a series of chapters on specific economic topics, Woods, in a style reminiscent of Bastiat, illustrating every technical point with a specific example of its operation in economic life, shows how some of Catholic teaching in the economic sphere, and much sloppy interpretation of Catholic teaching, is simply not compatible

with certain economic laws. For example, he argues that, if employers are required to pay a ‘living wage’ when economic conditions lead to productivity being too low to support the set wage, we will simply have unemployment. Any number of papal encyclicals is incapable of changing this basic relationship between real wages and unemployment. We see this in continental Europe of course, where vulnerable groups (the young, the old and the inexperienced) are wholly excluded from the labour market as a result of well-intended labour market regulation. There may be some policy actions that can be taken to help such people, but requiring employers to pay higher wages is not one such action.

It could be argued that Woods’s criticisms of Catholic teaching on this and other issues covered in the book are too severe. Papal encyclicals are perhaps more enthusiastic about the market than he gives credit for. Often the pleas to improve the conditions of the poor make it clear that it is a matter for personal, prudential judgment, informed by good economics, as to how this should be done. However, Woods’s general point is well taken. Those who speak with the authority of the Church on economic matters (at the level of Bishops’ Conferences or in Catholic universities, for example) sometimes speak as if they believe that they can suspend basic economic realities – which of course would mean suspending human nature itself. It is also true that, in many Papal documents, insufficient attention has been given to the undesirable side effects of interventionist policies – though collectivism is strongly criticised.

There are excellent chapters on money and banking, foreign aid, and the welfare state and the family. The discussions of free banking and the problems of fractional reserve banking are extremely interesting and Woods’s discussion of usury is masterly. The chapter on the welfare state and the family is perhaps weaker than the others: this chapter uses more empirical evidence and relies less on the use of reason, but some of the issues are picked up again in the chapter on distributism. Nevertheless, the former chapter contains some very useful ‘stylised facts’ that will certainly challenge those who believe that the common good is promoted by raising the burden of taxation on working families and using the money for impersonal state welfare projects. The chapter critiquing the distributist approach, beloved of some conservative Catholics of the past, in fact ranges wider looking at the Roosevelt ‘New Deal’ and policy

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towards monopolies and cartels. Given that most market economists would accept Aquinas’s view that the ‘just price’ is the market price, except in the presence of monopoly, Woods’s study of the actual, as opposed to the commonly supposed, impact of monopolies and cartels is important.

An underlying theme of Woods’s work is the belief that the market economy is the ‘preferential option for the poor’. He also believes that certain interventions in the economy proposed by those teaching with the authority of the Church are harmful. Woods is concerned that he can often be made to feel a less faithful Catholic by ‘sloppy thinkers’ who promote, in an intolerant manner, collectivist economics with the apparent authority of the Church. He is right to be concerned. And the Church does make it clear that many of the political and economic areas on which it offers teaching are matters for prudential, personal judgment and that the detail of its teaching in many of these areas is intended to be ‘provisional’. Those who teach with the Church’s authority and who are dismissive of the market economy whilst giving insufficient consideration to the rigour of Woods’s arguments (and, for that matter, the Church’s own teaching on these issues) should proceed with more humility.

The

Compendium of the Social Doctrine of the Church

is quite a different book. It attempts to combine the Catholic Church’s teaching on social and economic matters in one volume. Readers of this journal who listen to Catholic clerics who have not properly absorbed that teaching may be surprised, for example, to see that Catholic social teaching says that the state should support private schools to no lesser extent than it supports state schools and that to not do so ‘offends justice’ (para. 241).

Our masters in the European Union would learn much if they read about the principle of subsidiarity. Subsidiarity practised in the EU involves higher levels of government acting where lower levels of government cannot achieve a given goal – the goal normally being set by the higher level! In fact, subsidiarity should mean that higher levels of government must only act to assist lower levels (ultimately the family) achieve their own legitimate objectives: ‘the state [should] refrain from anything that would de facto restrict the existential space of the smaller essential cells of society. Their initiative, freedom and responsibility must not be supplanted’ (para. 186).

It would be wrong to claim the Church’s teaching for the free-market cause, though there is much wisdom in her comments on the

market. There are criticisms of outcomes of market economies too, though precisely how one addresses any perceived shortcomings, and whether it is through voluntary or government action, is a matter for judgment. One particular concern of the Church is with ‘inequality’. The dust-jacket of the British edition states that the ‘Church has built up a wide-ranging body of teaching on justice, equality and human rights’. It did not surprise me to read this. There is much on ‘equality’ in the Church’s social teaching. Whilst the word is used throughout the Compendium and throughout the social teaching with several different meanings, the Compendium does give the impression that the Church supports equality. This, of course, sits uneasily with support for the general principles of a market economy because differences in outcome are an inevitable, indeed desirable, outcome of free choice in a market economy. The Church has recognised this and there seems, therefore, to be some omitted aspects of this teaching in the Compendium (although para. 336 alludes to the fact that the pursuit of equality should not lead to the right to individual initiative being undermined but, for some reason, this is not indexed under ‘equality’ despite the word being used explicitly). An example of Church teaching that warns us about the pursuit of equality that does not appear in the Compendium appears in para. 15 of Rerum Novarum. This reminds us strongly that the use of taxation to promote equality, rather than for the provision of basic goods for the poor, can have dire consequences.

With reference to taxation, it is surprising to see just one paragraph (para. 355) on the subject that is indexed. And nowhere could I find the sentiments of Rerum Novarum, that ‘Socialists, therefore, by endeavouring to transfer the possessions of individuals to the community at large, strike at the interests of every wage earner, since they would deprive him of the liberty of disposing of his wages’ expressed. Nowhere, also, are the links between taxation and the erosion of property rights, taxation and the inhibition of the right to individual economic initiative or taxation and the welfare state (all of which the Church regards as seriously problematic) drawn. These are weaknesses in the context of using the Compendium to help us in the West understand policy issues better. Here the state takes around 50% of an individual’s income. Surely such a degree of taxation is significantly more than is needed for redistribution to help the poor meet basic needs and is in direct contravention of the principle of subsidiarity.

Any political economist can quote Catholic social teaching selectively for his own cause. However, taken as a whole, it is an impressive body of teaching which helps us understand how to approach economic problems in a world of human imperfection. This volume is a valuable addition to the Catechism. The beauty of the original documents, though, is that they are so straightforward to read and, of course, they are now available from the Vatican website. Users of the Compendium will gain much from the Compendium, but will also gain from following up the original sources which are all very well referenced.

Philip Booth

Editorial and Programme Director

Institute of Economic Affairs

pbooth@iea.org.uk

T H E C R E A T I O N A N D D E S T R U C T I O N O F

S O C I A L C A P I T A L

Gunnar Lind Haase Svendsen and Gert Tinggaard Svendsen

Cheltenham: Edward Elgar, 207pp.,

ISBN: 1 84376 616 7, £55.00 (hb) 2004

There has been increased interest in the study of ‘social capital’ in the past decade as many scholars have pinpointed its decline as a cause of many social ills. The term itself is a rather loosely defined topic meant to bridge together sociology and economics in an attempt to reduce the individualistic, atomistic conception of man utilised by many economists through much of the twentieth century. Svendsen and Svendsen in their book,

The Creation and Destruction of Social Capital

, continue with this development, yet at the same time fuse the ‘gap’ between these two disciplines by correlating social capital with economic performance and market processes. Indeed they recognise that ‘capital’ is part of the economic lexicon and therefore define social capital in this light. To them social capital is ‘a new production factor . . . [that] could be described as an institutionalised but non-material informal human exchange’ (p. 45). In essence, norms that build trust and assurance amongst actors help facilitate economic transactions and therefore constitute a form of capital.

The task Svendsen and Svendsen have set out to argue is indeed difficult. A common cry witnessed within all developed nations for

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