This article is an edited excerpt from the forthcoming book, The Political Economy of Distributism: Property, Liberty, and the Common Good (Catholic University of America Press, June 2023, 228 pages).

Across the ideological spectrum, there is a growing consensus that political and economic institutions no longer serve the public interest. Many believe rising inequality and dwindling employment opportunities have hollowed out the middle class. Senator Marco Rubio decried these trends in a much-discussed speech on “common-good capitalism.” Drawing on Catholic social teaching, Rubio castigated the excesses of both laissez-faire capitalism and authoritarian socialism. Instead, he sought to re-moralize private enterprise by focusing on human dignity and social solidarity. It is an intriguing idea. But what does it mean for America’s political-economic model?

The quest for common-good capitalism is part of a larger project to discover the foundations of personal and social flourishing. Scholars and public intellectuals involved in this pursuit, especially those who prioritize the common good, tend to be of a conservative-traditionalist persuasion. It is no secret that American conservatives have become increasingly skeptical of free enterprise. Searchers for common-good capitalism believe that capitalism, if left to itself, will not advance the common good. Many conservatives argue we need creative reforms oriented toward the common good to save capitalism from itself.

Common-good capitalists often draw upon Catholic social teaching. Many social-philosophical concepts are difficult to define precisely, yet nonetheless are vital for analyzing society. The common good is such a concept. One of the strengths of Catholic social teaching is that it concretizes the common good. Papal encyclicals provide much-needed clarity, and the Catechism of the Catholic Church contains an important overview.

Common-good capitalism must be viewed against the backdrop of decades-long conversations about social and political renewal. Focusing excessively on the capitalism part of common-good capitalism, without appreciating the larger context, can inadvertently lead to a kind of material determinism that is wholly at odds with permanent human truths.

This is not merely another debate about how to govern liberal market economies. We fail to treat common-good capitalism with the seriousness it deserves if we categorize it as another form of regulated capitalism. The means may be similar—for example, public policy implemented by administrative bureaucracies—but the ends are quite different. In fact, they are so different that we evaluate these ends using a different moral vocabulary. We typically judge economic outcomes in terms of efficiency and distribution. What common-good capitalism requires is shifting the evaluative standards to the rights and duties that flow from human dignity.

Consider the settlement embraced by most Western democracies: the combination of the welfare state and the administrative state. To justify the social order to various stakeholders, governments regulate and redistribute. But this did not legitimize the economy in the eyes of those who depend on it for their livelihoods. Instead, it created an impenetrable web of ineffective and unaccountable bureaucracies, combined with enervating welfare programs. Technocratic regulations and transfer payments are thin gruel for those concerned with deeply entrenched social injustices. The result is a crisis of political legitimacy. As a result, conservative intellectuals are questioning, and in some cases outright repudiating, the post–Cold War consensus.

Common-good capitalism is not a middle ground between two equally unacceptable social systems. Neither hot nor cold, the regulative-redistributive state is unsatisfyingly lukewarm: Focused on material comfort and social pacification, bureaucratized capitalism targets second-order problems, while leaving the first-order problem of human dignity unaddressed. We must broaden our horizons to find institutional arrangements that can meet common-good capitalism’s standards.

John Neville Keynes, the father of John Maynard Keynes, usefully distinguished between the science of economics and the art of political economy. Expanding on his classification, we may say that the science of economics consists of the formal properties of purposive human action. Political economy, however, is broader. Unlike economics narrowly conceived, it does not shy away from prescription. James Buchanan, the 1986 Nobel laureate in economics, described political economy as “the study of what makes for a ‘good society.’”

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Understanding how the “rules of the game” channel individual behavior into social outcomes is essential for political economy. However, common-good capitalism goes further than descriptive institutional analysis. It is fundamentally an ethical project, because political economy always has a prescriptive dimension.

Informed by Catholic social teaching, common-good capitalism operates on a different level than scientific economics. In its broadest sense, common-good capitalism is both an invitation to inquiry and an agenda for reform, fitting with the best traditions of political economy. We know societies cannot remain politically free unless they are economically secure and independent. How to achieve these moral goods is common-good capitalism’s animating question.

To paraphrase Buchanan, the enduring lessons of political economy occupy the space “between predictive science and moral philosophy.” Economic science divorced from humanistic concerns makes for an anemic political economy. In contrast, a political economy infused with Catholic social teaching can offer a fruitful synthesis of scientific analysis and ethical vision. Getting the balance right is the first step on the long and uncertain, but nevertheless worthwhile, road to common-good capitalism.