Dear Friends of Istituto Acton ,

The month of May was a very busy one for us in Rome . We held a study day at the Pontifical University Antonianum on the contribution of Christianity to representative (meaning, generally, liberal democratic) government . Then we went to Krakow for the third conference in our series on poverty, entrepreneurship and integral human development – this one on culture and the transition from communism to capitalism – and ended with a co-sponsored event on the Christian personalism of Dietrich von Hildebrand at the Pontifical University of the Holy Cross.

We also hosted a small discussion group with American entrepreneur Robert Luddy on the diverging economic models of Asia and Europe and where the U.S. one is heading, attended a lecture by Nobel-laureate economist Amartya Sen on sustainable development, and met with some participants of a Centesimus Annus Pro Pontifice Foundation congress, to whom Pope Benedict spoke about the priority of politics over finance and ethics over both .

The backdrop for all these events is, of course, the debt crisis currently affecting Greece and increasingly threatening the entire euro-zone project. The dismal economic news coming out of Europe has everyone looking for answers as to what needs to be done to recover economic growth and prosperity ethically. My main concern is that in our zeal to “reintroduce” morality into our public life, we forget some central economic truths, namely:

• economic freedom, meaning a regime of low taxes, low regulation, secure property rights and the rule of law, is the surest way to prosperity and the end of absolute poverty;
• government regulation and central planning of the economy did not prevent the financial crisis and will not be able to do so in the future, no matter how “wise” the planners are, because economic transactions are too numerous and varied for anyone to predict, much less control, with any efficacy while still respecting human freedom and dignity;
• the efficient and productive allocation of scarce resources is a good and necessary function that should not discarded or neglected because of the crisis;
• any “limits” to economic growth and efficiency will necessarily result in greater material poverty for some, most probably those on the economic margins of society.

The recognition of these truths still leaves plenty of space for prudential and varied economic policies because there is no single model that will always prove to be the best. Devising these policies is a difficult but not impossible task and will require those who take economics seriously to remain engaged.

We hope you enjoy this month's articles and please feel free to share your opinions about these and other Acton materials with us.

Kishore Jayabalan
Director