Anyone looking for an engaging overview of what modern Catholic social teaching (CST) has to say about economic matters will find it in Anthony Annett’s book Cathonomics: How Catholic Tradition Can Create a More Just Economy. Yet Cathonomics is much more than a summary of CST, and Annett is not a mere economic pundit. Armed with a doctorate in economics from Columbia University and years of service at the International Monetary Fund, the author draws the inspiration for his book from the teachings of Pope Francis. His goal is to demonstrate how Catholic anthropological and philosophical principles are superior to those assumed by modern economics, with significant practical implications.
Annett does not assume his readers are familiar with the Catholic faith tradition, and he builds his case accordingly. He begins by reviewing CST’s origins, tracing the ideas to the Old and New Testaments, the early Church Fathers, and the ancient Greek philosophical tradition, particularly Aristotle’s virtue ethics. This culminates in a review of Thomas Aquinas’ teachings on ethics and law and their application to fundamental economic concepts such as wealth, interest, and private property. Aquinas’ ideas infuse CST, and Annett notes that unlike homo economicus of modern economics, Aquinas sees “our needs as limited, [and therefore] our desire for natural wealth should also be finite” (p. 24).
Following this historical background, Annett proceeds to outline modern CST, highlighting the key points of papal social encyclicals and listing 10 principles running through them: “(1) the common good, (2) integral human development, (3) integral ecology, (4) solidarity, (5) subsidiarity, (6) reciprocity and gratuitousness, (7) the universal destination of goods, (8) the preferential option for the poor, (9) Catholic notions of rights and duties, and (10) Catholic notions of justice” (p. 42).
This helpful summary sets the stage for the book’s major contrast: the differing assumptions underlying CST and neoclassical economics. The anthropological, teleological, and sociological contrasts are stark indeed. Annett thoroughly critiques the utility-maximizing basis of modern economics, illustrating its apparent deficiencies. The self-interested, rational man assumed by neoclassical economics, he asserts, is refuted by the outcomes of experimental economics. Additionally, Annett invokes evolutionary biology, neuroscience, and other disciplines to critique the claims of neoclassical economics. But Annett is not simply critiquing neoclassical economics; he is trying to demonstrate that its very roots are erroneous. Just as Pope John Paul II argued that the chief error of socialism is anthropological, Annett insists that modern economics reduces man to “a cold and calculating machine of maximization” with “Pernicious Effects” (pp. 91–92).
Consider this example. Annett lambasts economic calculation for quantifying the value of human life, which “clearly cheapens and degrades it. But, believe it or not, governments use these kinds of calculations when doing cost-benefit analyses … so the whole activity is corrupted” (p. 97). But is neoclassical economics and its tools of analysis inherently corrupting? Or are the tools themselves useful, albeit insufficient, methods of analysis? By its nature, the discipline of economics is concerned with tradeoffs. As such, economic techniques can be used to evaluate the costs and benefits of pandemic lockdowns or various highway speed limits, all without devaluing human life in the process.
Insofar as Annett endeavors “to deploy ancient wisdom in the service of contemporary economic problems” (p. xvi), he undermines his goal by constructing too many strawmen, which distracts the reader from the positive elements CST brings to bear on modern economic problems. So, for example, in addition to condemning the use of economic techniques to quantify the value of human life, Annett claims that neoclassical economics embraces property rights absolutism and has “really nothing to say about the environment” (p. 77), and that “market incentives can undermine integral human development by inhibiting virtue” (p. 95). Such overstatements are typical throughout Cathonomics.
Having contrasted neoclassical economics with CST, Annett then builds an argument against its ideological companion: free market economics. He caricatures free markets as “magic” while invoking the goodness of the welfare state without serious consideration of how intermediary institutions of civil society can bridge gaps between market and state. He applauds the tremendous reduction in global poverty with little acknowledgment of how free markets propel innovation. Indeed, it appears Annett takes markets for granted. Curiously, he attributes environmental degradation primarily to markets, yet any examination of history readily reveals that collectivist societies have been far harsher on the environment than those with secure property rights and the rule of law. Thankfully, Annett condemns the widespread corruption that has accompanied globalization but simultaneously conflates crony capitalism with a neoliberalism rooted in neoclassical economics.
Although Annett summarizes CST’s critique of two extreme forms of social order—collectivism (e.g., socialism) and liberalism (e.g., libertarianism)—he acknowledges that his ammunition is largely aimed at libertarianism and its “neoliberal policy prescriptions,” because he considers the other extreme to be “largely dead and gone.” Although socialism may not be as widespread as it once was, today’s challenge is not so much libertarianism gone awry as it is cronyism, rent-seeking behavior, and reduced competition—hardly economic phenomena promoted by neoliberalism. In any case, Annett proposes “that the twin principles of solidarity and subsidiarity provide a more powerful and fruitful way to assess the role of government in the economy than what is offered by neoclassical economics” (p. 151).
“Everything Must Have a Price”
It is certainly the case that inequality has risen in most of the developed world over the past several decades, and Annett provides a solid rationale for why rising inequality matters both from a sociological and economic standpoint. In some cases, his proposed remedies are spot on (strengthening competition and pursuing antitrust measures while reducing cronyism and subsidies to the largest businesses and banks). But his list of 15 policy proposals largely invoke the heavy intervention of the state and echo the standard redistribution playbook, offering little creativity over and against private, civil society–based approaches to a more equitable distribution of the earth’s resources.
Taking his cue from Pope Francis’ encyclical Laudato si’, Annett addresses the environment. Here the case is made that climate change is a severe problem and that neoclassical economics, with its “extractivist vision” of the environment, is ill equipped to address it (p. 217). Specifically, Annett is concerned “that economists across the ideological spectrum tend to rally around carbon pricing because they believe everything must have a price, people respond to incentives, and the market can work its magic. There’s no concept of ecological virtue” (p. 237). Unfortunately, Annett seems to attribute to economic method more than it claims for itself. Prices convey critical information about tradeoffs (maintaining a pristine environment comes at a cost, after all), but the techniques of neoclassical economics are not intended to serve as the sole approach to making decisions. Furthermore, despite Annett’s accusation that “everything must have a price” (p. 237), neoclassical economics does not preclude alternative modes of rationing. But one thing is certain: In a world of scarcity, rationing is unavoidable and every choice has an opportunity cost.
In his penultimate chapter, Annett elaborates further on the two principles of subsidiarity and solidarity as they specifically apply to the challenges of globalization. He argues for a globalization infused with the principles of CST, and in the process makes a case for promoting the UN’s Sustainable Development Goals, implementing global capital controls, and providing sovereign debt relief. He acknowledges that there are no easy answers to these and other complex issues like immigration. But he makes one thing perfectly clear: Modern economics needs to be circumscribed by an ethical framework, and Catholic social teaching provides such a framework for approaching global challenges. Annett concludes his book with 10 specific proposals for moving toward a “virtue economy,” each of which serves as an ideal to pursue.
Cathonomics invokes Catholic social teaching as a corrective to deficiencies found in modern neoclassical economics and provides insightful analyses of economic injustices manifested in the world today. But its one-sided and tendentious approach detracts from its ultimate objective. A more accurate subtitle for the book would have been Why Neoliberalism Is Disastrous. Although Catholic social teaching is undoubtedly in tension with some neoliberal ideas, CST also condemns collectivist and coercive conceptions of economic order. Had Annett spent more time critiquing socialism, cronyism, and other distortions of political economy, the result would have been a more balanced summary of CST, leaving the reader with a more accurate understanding of How Catholic Tradition Can Create a More Just Economy.