By Alden Abbott
Pope Leo XIV’s encyclical, Magnifica Humanitas, thoughtfully addresses one of the great anxieties of our time: whether artificial intelligence, data platforms, robotics, and global capital will serve the human person or reduce us to a disposable input. Its concern for workers, the poor, families, and the marginalized is recognizably Catholic. The economy exists for man, not man for the economy.
On that point, Catholics should readily agree.
But good moral ends do not guarantee sound economic means. The encyclical criticizes the market economy for allowing profit, technological efficiency, and concentrated ownership to sideline solidarity. It warns that automation can displace workers, that data can become an instrument of control, and that the gains from innovation may accrue to a narrow elite.
It therefore calls for greater public oversight, redistributive taxation, social criteria for innovation, worker protections, and regulation of AI and data so that economic life is made more inclusive from the outset rather than corrected after the fact.
The moral concern is serious. Yet the political instinct is less compelling. Historian Thomas E. Woods, in The Church and the Market, draws a distinction that Catholic social thought urgently needs: the Church speaks with authority on moral principles, but technical economic analysis is a matter of prudence, evidence, and reason.
A pope may rightly condemn indifference toward the poor; it does not follow that wage controls, industrial planning, redistributive schemes, or technological regulation will actually help them.
- Markets are often caricatured as cold machines for rewarding greed. At their best, they are systems of social cooperation.
- Prices convey information that no official can fully possess. Profits and losses discipline production by showing whether resources are being used to serve real human wants.
- Competition limits power more effectively than many regulations, because it gives customers, workers, and entrepreneurs alternatives.
When property rights, contracts, sound money, and the rule of law are secure, markets draw dispersed knowledge and talent into productive service.
This matters, especially for labor. Wages are not simply the result of employer benevolence or oppression. Over time, wages rise when workers become more productive, when capital per worker increases, when firms compete for labor, and when people are free to move, learn, start businesses, and negotiate with multiple potential employers.
Policies that make hiring more costly or innovation more risky may protect some visible jobs today, but they also prevent the creation of better jobs tomorrow.
Automation offers a clear example. A robot or an AI system may replace a particular task. That loss is concrete and painful. But productivity gains also lower prices, improve quality, create new businesses, and free labor for uses no planner could have specified in advance.
The poor are often the first to benefit from cheaper essentials: food, energy, transportation, health tools, education, communication, and financial services. When regulation slows innovation in the name of protecting workers, it may instead preserve stagnation and deprive low-income families of the benefits innovation makes possible.
The same caution applies to rules on AI and data. Some legislation is necessary: fraud, coercion, theft, privacy violations, and genuine abuses must be punished. But heavy, vague, or premature AI regulation can entrench the very corporate power Catholics fear.
Large firms can hire compliance departments and lobbyists. Smaller firms, universities, charities, parishes, and startups cannot. A regulatory regime designed to humanize technology could hand the field to the largest, most established players while excluding the new entrants most likely to challenge them.
A heavier tax burden poses a parallel problem. The encyclical urges those with greater resources to bear a larger share of the social burden. That may sound like simple justice. But taxes do more than transfer money; they change incentives. They can reduce investment, entrepreneurship, risk-taking, and innovation.
Over time, lower capital formation translates into lower productivity and weaker wage growth. The burden may be formally placed on the wealthiest sectors, but workers and consumers often pay part of the price through fewer opportunities and higher prices.
Nor should Catholics assume government is a neutral guardian above self-interest. Public-choice economics reminds us that politicians, regulators, bureaucrats, and interest groups also respond to incentives. Subsidies are captured. Regulations are shaped by incumbent firms. Public programs become vehicles for clientelism. Agencies seek larger budgets and broader authority.
The state can do necessary things, but it is not exempt from Original Sin. Concentrated public power can be as dangerous as concentrated private power, and it is often harder to escape.
Catholic social teaching already contains the principle that should discipline these policy debates: subsidiarity. Higher authorities must not absorb the responsibilities of individuals, families, churches, local associations, and free communities. Solidarity without subsidiarity becomes centralized management. Subsidiarity without solidarity becomes indifference.
The challenge is to help the poor enter productive life, not merely to redistribute after politics has decided who deserves what.
An alternative Catholic economic agenda would emphasize removing barriers to work, enterprise, property, education, family stability, and local association. It would welcome innovation while demanding legal accountability for concrete harms. It would favor competition over privilege, entrepreneurship over dependency, and civil society over bureaucracy. It would trust charity and local knowledge where they outperform distant command.
Magnifica Humanitas does well to ask whether technology serves human dignity. But prudence requires asking whether the proposed interventions will actually serve the poor and workers, or whether they will unintentionally harm them.
Medieval and late-scholastic Catholic thinkers understood much about exchange, price, money, and property. The Vatican should recover that heritage. When encyclicals address economic policy, they should consult market economics carefully, lest well-intentioned recommendations undermine the very justice they aim to promote.
About the Author
Alden Abbott is a senior research fellow at the Mercatus Center at George Mason University, where he focuses on competition policy issues. Before joining Mercatus, Mr. Abbott served as general counsel of the Federal Trade Commission (FTC) from 2018 to early 2021, where he represented the Commission in court and provided legal advice to its commissioners. Before working at the FTC, Mr. Abbott worked at the Heritage Foundation and at BlackBerry Ltd. He also served as an adjunct professor at the Antonin Scalia Law School at George Mason University from 1991 to 2018. Mr. Abbott holds a law degree from Harvard Law School and a master’s degree in economics from Georgetown University.