On May 18, in St. Peter’s Square, the new Pope Leo XIV called for the Catholic Church to become a model of “unity, community, and fraternity within the world.” A central task of his pontificate will be addressing the social and economic crises of our time. But behind the rhetoric lies a defining question: Will he continue the Church’s recent drift toward globalist policies or will he return to the Church’s heritage of economic liberty, subsidiarity, and natural law?
Today, Catholic Social Teaching is a house divided. One tradition—the liberal-subsidiarity tradition, led by Pope Leo XIII—draws on natural law, individual liberty, and a healthy skepticism of state power. The other—the globalist-solidarity tradition, with the support of Pope St. John Paul II and the late Pope Francis—emphasizes international coordination, regulatory governance, and a deep suspicion of free markets.
In recent decades, the latter has come to dominate Church discourse. Yet this dominance comes at a cost. The globalist-solidarity approach uses central planning to achieve outcomes that only decentralized markets can deliver. In doing so, it supports policies that are economically unsound and self-defeating. If Pope Leo XIV truly wants to confront social and economic problems, he must revive the liberal-subsidiarity tradition.
Leo XIII’s Liberal Legacy
The liberal-subsidiarity tradition is rooted in the Church’s intellectual heritage. While the Catholic Church has long engaged with social issues, Catholic Social Teaching was formally defined in 1891 with Leo XIII’s encyclical Rerum Novarum—widely considered the founding document of modern Catholic Social Teaching and an important point of reference for the Catholic liberal tradition.
In Rerum Novarum, Leo XIII defends private property as a natural right “proven to belong to individual persons.” He emphasizes that property is not only just but necessary for human flourishing, the protection of the family, and the functioning of trade. Far from treating economic liberty as a threat to justice, Leo sees it as a precondition for social order.
The encyclical also limits the role of the state. It upholds subsidiarity—the principle that matters ought to be handled by the smallest, lowest, and least centralized competent authority. Leo teaches that the family “must necessarily have rights and duties peculiar to itself, which are quite independent of the State.” Individuals and families come before the state; they are not its creatures, but its foundation.
Further, Leo affirms spontaneous order. While he acknowledges that labor disputes will inevitably arise, he doesn’t call for heavy-handed state intervention. Instead, he entrusts intermediary bodies—such as the Church, unions, and voluntary associations—with the task of resolving disputes. The state is the last resort for justice.
Murray Rothbard called Rerum Novarum “fundamentally libertarian and pro-capitalist” because it defends the institutions—private property and the rule of law—on which a free economy depends. Leo XIII was not an economist, but he was deeply influenced by thinkers such as Luigi Taparelli and Wilhelm Emmanuel von Ketteler, who were well-versed in politics and liberal thought. Through them, Leo engaged with the classical liberal tradition.
From Liberty to Central Planning
Over the last 130 years, the Church has gradually drifted from the economic insights of Rerum Novarum. Today, much of Catholic Social Teaching favors interventionism, regulatory oversight, and central planning—often while a priori dismissing the arguments of classical liberalism. At the same time, Church leaders rightly reject the horrors of socialism. But the globalist-solidarity tradition has become economically incoherent, pursuing moral goals through means that are incompatible with sound economics and ultimately self-defeating.
Unlike Leo XIII, recent popes have largely disengaged from the logic of markets. Rothbard traces this change to Pope Pius XI in 1931. In Laudato Si’, for example, Pope Francis asserts that “the environment is one of those goods that cannot be adequately safeguarded or promoted by market forces.” He refers dismissively to the idea that order can emerge from voluntary action, calling it “magical thinking.” Rather than engaging with the science of human action, Francis portrays the market as a moral failure—a view more rooted in abstraction than analysis.
This disengagement has consequences. In Laborem Exercens, Pope St. John Paul II recommends the “socialization” of industries that fail to meet social needs. Implicit in this claim is a planning assumption: that a central authority can know what a just distribution of resources looks like and how to implement it. But this ignores the Austrian insight that no planner possesses the dispersed knowledge needed to coordinate millions of individual preferences. Central planning, however supposedly moral its intent, is destined to fail economically—and eventually, politically.
Pope Francis extends John Paul’s logic to the global level. In chapter 5 of Laudato Si’, he calls for supranational regulators empowered to eliminate fossil fuels and redistribute wealth worldwide to address climate change. These proposals assume not only economic feasibility but moral authority at a planetary scale, raising serious concerns about subsidiarity, accountability, and freedom.
To be clear, neither John Paul II nor Francis explicitly endorsed socialism. But by concentrating power in centralized agencies, both risk enabling the system they condemn. Their encyclicals outline a grim economic vision—one that, despite its moral intentions, prioritizes redistribution over growth and regulation over innovation. This perspective stems from a sincere desire to uphold justice and care for the vulnerable, yet it risks embracing policies that inadvertently constrain prosperity and cooperation. Free exchange, grounded in mutual benefit, remains a powerful engine of human dignity and solidarity.
Restoring the Liberal-Catholic Tradition
As it stands, Catholic Social Teaching—under the dominance of the globalist-solidarity tradition—cannot provide the model of “unity, community, and fraternity” that Pope Leo XIV envisions. Instead, its embrace of centralization risks further dividing the world and weakening the Church’s social witness.
Yet there is reason for hope. By choosing the name Leo, the new pope has signaled a desire to follow in the footsteps of Leo XIII, the architect of Rerum Novarum. To honor that legacy and address the socio-economic crises of our time, Pope Leo XIV should return to its principles: subsidiarity, private property, voluntary association, and liberty. Only then can the Church once again become what the world so desperately needs—a moral voice grounded in the truth of human action and a champion of both human freedom and human dignity.
