The regulation of economic life, whether through law or politics, has been a fixture of daily life from time immemorial. Formal regulation occurs through a variety of formal devices, the efficacy of which is argued about by legal scholars, economists, policymakers, legislators, and governments. Even expressions like “to regulate” or “to deregulate” carry a range of political and even moral connotations, depending on who is using the phrase and how they are deploying it.

It is no exaggeration to say that, now and in the past, many Christians have maintained very critical – if not hostile – views of the world of commerce. At the same time, there are Christians who have a positive view of business but nonetheless are skeptical about the market economy. Commerce can and has, after all, operated in conditions that are not reflective of a market economy, ranging from the heavily slave-based economies of the worlds of Greece and Rome to the mercantilist economies that characterized many European nation-states and their colonies from roughly the late fifteenth century until the late eighteenth century.

Of all post-Enlightenment social sciences, economics might be easily classified as having the least in common with natural law theory. To the extent, for example, that economics is concerned with matters such as utility maximisation, cost–benefit analysis or identifying unintended consequences of particular decisions, its goals differ from natural law theory’s central focus on individuals and communities (including the state) knowing and choosing the good through right reason. Typically, what is called ‘positive economics’ – famously defined by the British economist Lionel Robbins as ‘the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses’ (Robbins 1952: 16) – brackets off the type of normative questions with which natural law theory is concerned.

Those engaged in natural law reflection have, however, always brought their methods of reasoning to bear upon questions with significant economic components.

This chapter explores how Pius XI’s social encyclical Quadragesimo anno – “On the Reconstruction of the Social Order”– not only reiterated Leo XIII’s condemnation of socialism and his critique of aspects of capitalism, but also outlined a program for Catholics to follow in order to address the social and economic upheavals of the time in a lasting and far-reaching manner. It also analyzes the two primary contributions of Quadragesimo anno to Catholic social doctrine. The first concerns Pius XI’s articulation of two principles of Catholic social teaching: subsidiarity and social justice. The second contribution is the encyclical’s articulation of a very substantial prescription for fundamental social change. While the developments at the level of principle introduced by Quadragesimo anno have proved lasting and become a set fixture of Catholic social doctrine, we observe how the particular proposals associated by Pius XI with these principles– most notably, the development of vocational groups and the establishment of a type of corporatist social order– had, by the time of Saint John XXIII, been considerably relativized by the magisterium.