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Last November the Orange County (CA) Register and Hillsdale College’s Shavano Institute co-sponsored a conference entitled “Faith and the Free Market”. The following is adapted from Fr. Robert Sirico’s speech by the same name.

That socialism is at a critical juncture is evident by the numerous recent conferences, monographs, books and articles attempting to assess the significance of the unscrambling of the Communist omelet in Eastern Europe and the legitimacy of replacing it with an economic system organized around the principle of the right to ownership of private property.

My thesis is that there is no necessary contradiction between a society that is free and one that is virtuous; more precisely, it is my contention that economic liberty is necessary for a free society, even while it is not sufficient for a good one. These assertions collide with socialism, and any theology predicated on it.

As important as it is for us to turn our attention to the consequences of ideas and their presuppositions on the Third World, the attempt to focus an effective critique of the theology of liberation is somewhat like trying to nail mercury to a wall. The moment that you think you’ve got it, it slips out from underneath your grasp and scatters in a dozen different directions.

To do justice to liberation theology then, it is essential to recognize the different shades of meaning and nuance expressed in the writings of its various proponents.

While it may be true to say that liberation theology taken as a whole is not necessarily Marxist, (although one critic who thinks liberation theology is not sufficiently Marxist begrudgingly concedes that “...Marxism peeps through liberation theology to varying degrees.”),1 it would be equally true to observe that it certainly has a distinct penchant for socialism-perhaps not the materialist variety, maybe not even the determinist variety, but surely the economic variety.

By this I mean that when liberation theology opts for a social system, it invariably opts for a social structure wherein the means of production are, to quote one leading liberation theologian, Juan Luis Segundo, “removed from individuals and handed over to higher institutions,” namely, the State. And this alone is sufficient to doom liberation theology as dangerous, regressive, and deleterious to the very people it purports to liberate.

In a technical sense liberation theology as a theological endeavor is not inextricably linked to any specific social analysis as such. That there is a move away from Marxism is evident and can be seen in the works of no less a liberationist as Gustavo Gutierrez. One need only compare the original edition of A Theology of Liberation (the book that started it all) with its second edition (the 15th anniversary edition) to see this shift. The notion of class struggle as it appeared in the first edition of A Theology of Liberation is much closer to Marx’s theory than that expressed in the second edition. In a footnote in the first edition Gutierrez offers an extended quotation from Marx with which he appears to be in agreement. In the revised edition Gutierrez both shortens the quotation, excising the more deterministic passages, and qualifies what he believes constitutes a Christian understanding of class struggle. While Gutierrez elects to prescind from the specific debate over economic determinism presupposed in Marx’s understanding of the class struggle, he now distances himself and liberation theology from such an approach in asserting that “it is enough to say that the determinist approach based on economic factors is completely alien to the kind of social analysis that supplies a framework for the theology of liberation.”2

I affirm this shift and encourage its continuance. Defenders of liberation theology may point to these concessions as evidence of a maturing theology in development. Perhaps that is the case. If so, I encourage it to mature even further and to reject socialism altogether, for as the saying goes, ‘If you’re not a socialist when you’re young you haven’t any heart, but if you remain a socialist when you’re old, you haven’t any brains.’ Liberation theology would do better to develop into some kind of libertarian theology. Such a development would present theological problems of its own, but at least its economic presuppositions would be sound.

Socialism, you see, does not work. The reason for this was pointed out in a 1920 essay by the renowned Austrian economist Ludwig von Mises. Mises demonstrated that socialism doesn’t work, not because of this or that mistake, but because it inherently cannot work. And it cannot work because the public ownership of the means of production prevents economic calculation, which is essential for economic productivity. 3

This, of course, brings us to the most shaky of the sands upon which liberation theology rests: its inability to account for the conditions necessary for the production of wealth. All liberation theology and its elder cousin, socialism, ever speak of is the re-distribution of wealth, never its production.

Read the liberationist corpus. Throughout you will see an unvarying twofold assumption: a) that the dominant economic arrangements of Latin America are free-market, by which they mean that the means of production are held in private hands, and b) that such private ownership is oppressive.

A representative assumption is seen in the book Church, Charism and Power: Liberation Theology and the Institutional Church, by Franciscan Father Leonardo Boff. He says,

“It is easy to see that the present capitalist, elitist society was not made for [the workers]; nothing is for their use: not laws, nor the courts nor the political machinery nor the mass media.”4

I contend that the Latin American economy, in general, is currently much more socialist than free-market; the heavy governmental controls preventing entrepreneurs from entering into the market along with stifling bureaucracies distort, rather than advance, free trade. The overall political arrangements throughout Latin America insure that those who control the monopoly of force in a given locality are able to utilize their coercive strength to maintain land holdings which were unjustly acquired in the first place.

These oligarchies, which either are coterminous with the government or control it, prevent competition as when they dictate the terms by which outside businesses set up operations in a country. To be sure, existing corporations are tempted to accept and seek such favorable arrangements for their profit. It is precisely this short-sighted and contradictory tendency on the part of business people which prompted Adam Smith himself to strongly condemn the offer of governmental monopolies and protectionist guarantees to merchants. 5

Is it any wonder that those living under such oppressive social conditions decry the infringement on their freedom and dignity that these arrangements represent? But the outcry against the oppression is in reality an outcry against a form of feudalism, not again the results of a free market.

Michael Novak (see the interview with Mr. Novak in this issue) correctly observes that in Latin America “even the conservatives are anti-capitalist. Between the traditionalist anti-liberals and the anti-liberal liberation theologians, there is nearly an anti-liberal concordance, at least on liberal economics if not on liberal democracy.”6 (Novak employs the word liberal here in its classical, not its contemporary, meaning).

Most instructive on this point is Hernando de Soto’s book, The Other Path: The Invisible Revolution, (a book being favorably received in Latin America, and which could provide an alternative approach to social analysis) wherein he traces one small company in Peru from inception to legalization. He discovers that it took 289 days (with extensive labor hours) and $1,231 of direct costs, bribes and lost earnings to register the company. This sum represented 32 times the minimum wage in Peru at the time.

As long as structures like these exist in Latin America the economic plight of the common person continues to stagnate. Such policies represent the antithesis of freedom and liberation, especially as applied to the freedom of people to engage in market activity. It is the coercive intrusion of government or government-like entities preventing easy entry into the market which hinders economic development. And it is these obstructive policies which ought to be condemned for having an adverse effect on the poor. What is bewildering is the complete absence of discussion along these lines in the writings of the liberation theologians.

By anathematizing the free market, liberation theologians abnegate the most progressive and concretely liberating ideals of the 19th century radicalism of which they only appear to be the intellectual descendants. In his fascinating book, National Economic Planning--What is Left?, Don Lavoie argues that the best of the progressive ideals of the left were co-opted by ideologies bent on centralized control. He sees, “two successive mutations in the development of the Left, when it was fundamentally transformed from a progressive, if sometimes seriously mistaken, revolutionary ideology into a combination of innocent victims, naive dupes and paid agents of the very forces of reaction it has been born to oppose. The problem is that the left has been co-opted into cloaking an essentially nonradical policy in radical garb.”7

Occasionally one sees these aspirations pop up in the liberationist writings as when they express a desire for people’s right to self-determination and liberation. In the documents of Puebla, inspired and embraced by nearly all liberation theologians, there is a vision of liberation transforming the human heart and arousing a moral conscience.

How strange it is, then, that the same people who repeatedly decry the concentration of the means of production in the hands of a few, cannot grasp how a freely operative market can prevent an elite group from controlling economic planning for a whole society. The Nobel laureate economist F. A. Hayek frames this question well when he says,

“Planning in the specific sense in which the term is used in contemporary controversy necessarily means central planning - direction of the whole economic system according to one unified plan. Competition, on the other hand, means decentralized planning by many separate persons. The half-way house between the two, about which many people talk, but few like when they see it, is the delegation of planning to privileged industries, or in other words, monopolies.”8

Think of what would happen to the social mission of the Church to clothe the naked and feed the hungry, etc.,if these functions were subsumed by the government. The Church would be left to become one more lobbying voice calling upon the government to provide for the poor, rather than Herself being the primary agent in ameliorating the misery of the poor. The Church in the United States, Protestant as well as Catholic, is coming perilously close to this even as we speak.

Moreover, when the Church becomes so closely identified with the state, how will the Church be viewed when the state in turn becomes oppressive? Ask the people in Romania or the Soviet Union. A close proximity of Church to state compromises the Church’s ability to critique the state.

A preferential option for the poor, which is an essential part of the Church’s mission, need not imply a preferential option for the state.

The nature of any state is coercive. For the Church to avoid repeating past mistakes She will have to resist the age- old temptation of becoming closely identified with the means of coercion. The danger in liberation theology is that it seeks to establish a situation where so often the most ruthless, best organized, and least moral clique stands a good chance of gaining control. ( I draw your attention to Nicaragua.) It is true that writers like Gutierrez and Segundo admit the danger in this regard, but neither offers any structural protection against such eventualities.

Does there remain any room for morality when the goals of the state’s coercive mechanism is its enforcement, thus replacing the moral call of the gospel to tend to the needs of the poor and the abandoned and to share our abundance with those who lack?

Christianity is its truest self when it has its seat in the heart of people who by virtue of their freely chosen commitment help to affect the world around them for the better. The darkest moments of Christianity have been when the Church has attempted to rule from the parliaments and capitals of the politicians rather than in the hearts of the faithful.


  1. Alistair McKee, Marx and the Failure of Liberation Theology, (Philadelphia, Pa.: Trinity Press Int., 1990); p. 229.
  2. Compare the 1973 edition, footnote 51, p.284 with the 1988 edition, footnote 51, p.249. It is noteworthy that the entire latter part of this twelfth chapter has been extensively rewritten to reflect the development of Gutierrez

Rev. Robert A. Sirico received his Master of Divinity degree from the Catholic University of America following undergraduate study at the University of Southern California and the University of London.  During his studies and early ministry, he experienced a growing concern over the lack of training religious studies students receive in fundamental economic principles, leaving them poorly equipped to understand and address today's social problems.  As a result of these concerns, Fr. Sirico co-founded the Acton Institute with Kris Alan Mauren in 1990.

As president of the Acton Institute, Fr. S