Capitalism ex cathedra. Sources of hope in tough economic times.

: Pope John Paul II's encyclical Centesimus Annus--written in honor of the centennial anniversary of Rerum Novarum, the first papal social encyclical--examines the present world socioeconomic situation in light of traditional Catholic social teaching. The pope warns the West not to be too quick to celebrate the demise of communism as a victory for capitalism. Capitalism has some good points, the pope acknowledges, but by themselves, market mechanisms do not ensure the just distribution of food and other goods that fulfill essential human needs. When capitalism relies on market forces alone, it creates a culture of consumerism that promotes selfishness and greed. Capitalism has been in flux for decades. After World War II, developed Western societies began moving toward "Keynesian capitalism," which subjects the mechanisms of the free market to public control. After Keynesian capitalism's apparent failure in the United States in the 1970s came the "monetarist" theory and a return to an earlier, liberal form of capitalism in which society relies on market mechanisms alone to revitalize the economy and regulate the production and distribution of goods. The monetarist policies of the 1980s turned out to be part of a global plan to reorganize the economy around the giant multinational corporations. This forced individual countries to compete for capital investment and led to unemployment and neglect of low-income people. Structural adjustment policies have been adopted by governments all over the world, in poor countries as well as developed. All are moving toward the form of capitalism that is repudiated by Catholic social teaching in general and Centesimus Annus in particular.