The free market as a moral imperative

By Phil Lawler ( bio - articles - email ) | Nov 12, 2026

During Pope Leo’s visit to Argentina, a news headline flashed across my computer screen: “People come before the economy, Pope says.” That headline was inaccurate: a gross oversimplification of the Pope’s message. More than that, it was nonsensical. What is the economy, but the workings of countless thousands of people, doing what they think best to serve the material needs of themselves and their families? Wherever there are people, there is an economy; wherever there is an economy, there are people.

In 2019, Cardinal Peter Turkson attempted to explain the calls by Pope Francis for a “social economy,” assuring reporters that the Pontiff was not supporting socialism. A “social economy,” the cardinal said, is governed not be an “invisible hand” (a reference to the famous metaphor of Adam Smith), but by “the very visible hand of fraternity, solidarity, and the common good.” That phrase—“social economy”—again betrays a facile approach to the subject. Every economy, however primitive or sophisticated, is by its very nature nature a social arrangement. The marketplace is controlled by people who may or may not be motivated by “fraternity, solidarity, and the common good.” The challenge for policy-makers is to devise an economic system that encourages such virtuous motivations, and discourages greed and dishonesty.

In The Civilization of Commerce, Samuel Gregg makes the case that a free-market economy, of the sort described and applauded by Adam Smith, offers the best prospects for a civilization that is both productive and equitable: a civilization that provides the best opportunity for human flourishing. Along the way he pays homage to Smith and to other leading figures of the Scottish Enlightenment, which Gregg characterizes as “the greatest and most humane of enlightenments,” and to the foremost 20th-century champion of the free market, Friedrich Hayek.

People unfamiliar with economic thinking (including more than a few prominent Catholic prelates) are tempted to scoff at the notion that an “invisible hand” guides the economy. Anyone who has actually read Smith’s The Wealth of Nations, and/or his less famous Theory of Moral Sentiments, knows that Smith is not suggesting any sort of magical power. He recognizes the need for some restraints on rapacious commercial practices and, more important, the requirement that a humane economy must rely on the virtue of a humane society.

The market does not work automatically to settle human affairs. On the contrary, a successful free-market economy runs on the fuel supplied by individuals, each making his own prudential decisions, in a process so complex that no government could hope to replicate it, let alone improve upon it. Smith believed that a “great society” would emerge, not from the sort of government welfare programs that Lyndon Johnson advanced under that name, and not from the hazy “social economy” that Pope Francis envisioned, but from people quite literally minding their own business. Smith argued that “the great society of mankind [would be] best promoted by directing the principal attention of each individual to that particular portion of it, which was most within the sphere of his abilities and his understanding”

Edmund Burke, a friend of Smith (and in Gregg’s view almost an honorary member of the Scottish Enlightenment) accepted that understanding of economic affairs, and cautioned against the hubris of government officials who would tinker with it:

An ignorant man, who is not fool enough to meddle with his clock, is however sufficiently confident to think he can safely take to pieces, and put together at his pleasure, a moral machine of another guise, importance, and complexity, composed of far other wheels, and spring, and balances, and counteracting and cooperating powers.

Unfortunately, as Gregg observed: “The opposite of hubris—humility, is rarely founded among those trying to build heaven on earth based on scientific principles.”

One aspect of Hayek’s enormous achievement as an economic thinker was his explanation of how efforts to plan an economy invariably produce the result that hubris brought in ancient Greek dramas: tragedy. The good intentions of the tinkerers (assuming that their intentions are good) are lost amid the unforeseen consequences of their interventions, the distortions of the market that create problems worse than the ones they were designed to correct.

Yet Hayek, like Smith, is not concerned exclusively with economic affairs. He sees the free market as a means of promoting a better society: a civilization that encourages human development. Critics of the free-market approach, including Cardinal Turkson and Pope Francis, routinely fail to acknowledge the moral principles these champions of freedom promote. They too look toward a civilization that encourages fraternity and solidarity; indeed they see their work as a contribution to the advance of Christian culture.

In the speech that he delivered in 1974 as he was presented with the Nobel Prize, Hayek recalled that Catholic theorists of the past that recognized the dangers of interfering with the free operation of the market. He observed that “the Spanish schoolmen of the 16th century, who emphasized that what they called pretium mathematicum, the mathematical price, depended on so many particular circumstances that it could never be known to man but was known only to God.”

(I shudder to think that with the advent of AI, arrogant economists might claim that now we possess the ability to take into account all the complexities of the marketplace economy. They would be wrong. The market is never settled; people are making fresh new decisions every second. The collective wisdom of millions of economic actors cannot be digested by computers; not all learning can be reduced to bytes.)

Despite a popular misconception, Hayek and his intellectual allies are not defending “capitalism,” so much as they are promoting individual freedom. They are certainly not advancing the cause of the rich at the expense of the poor. In fact their work illustrates the dangers that arise when wealthy individuals or corporations seek to use their influence on government to rig the market in their own favor.

Hayek reminds us that market competition favors those of limited means, insofar as it drives down prices. (“The lowest costs at which a thing can be produced are exactly what we want competition to discover.”) In his more expansive moments he even observes that the lure of international trade, opening new markets and enabling different nations to find mutually advantageous relationships, can promote the cause of world peace. As the old adage teaches, “the flag follows trade.”

Hayek’s work (which is the main focus of Gregg’s book) combines acute economic analysis with a sweeping view of history and a deep respect for cultural and religious traditions. Religious leaders who view his insights as purely economic analysis, without noticing the moral implications of his work, are doing him—and themselves—a disservice.

In his encyclical Laborem Exercens, Pope John Paul II underlined the dignity of human labor, in all its myriad forms, as a participation in the creative work that is possible only for a creature made in the image and likeness of a Creator God. By his work—his participation in the economy—man can not only provide for his material needs but fulfills his creative potential. The champions of the free market believe that the most important function of any economic system is to unleash that creative potential. As Adam Smith put it:

Man was made for action, and to promote by the exertion of his faculties such changes in the external circumstances both of himself and others, as may seem most favorable to the happiness of all.