This chapter offers a broad overview of the development of Catholic social thought on socialism and capitalism, together with novel interpretations of this tradition. Through a close engagement with magisterial documents, this chapter first provides an account of socialism as the founding heresy of the formal tradition of the social doctrine of the Church, aiming to distill the essence of the Church’s condemnation. It goes on to argue that capitalism is not a similar (but opposite) heresy since capitalism is not in essence an error about human nature and man's relation to created goods. The principles of right order are discussed in relation to capitalism, with the question of just wages receiving a prominent treatment. Finally, drawing on the "twin rocks" passage in Quadragesimo anno, the chapter provides a schema for thinking about the axis of philosophical mistakes related to socialism and capitalism. A brief treatment of private property in the final section is used to illustrate the common but faulty assimilation of individualism and collectivism to capitalism and socialism respectively. For the sake of tractability, this chapter focuses primarily on the development of the social magisterium in the Leonine era.

The common good (bonum commune) has, since antiquity, referred to the aim of social and political association, and was particularly prominent in medieval Christian political theology. Since St. John XXIII’s 1961 encyclical letter, Mater et magistra, ecclesiastical statements about social teaching have employed a formulation of the common good, usually in the version that appeared in the Second Vatican Council’s 1965 Pastoral Constitution for the Church in the Modern World, Gaudium et spes, as “the sum of those conditions of social life that allow social groups and their individual members relatively thorough and ready access to their own fulfillment.” This chapter discusses the origins and development of this formulation as well as the ways that it has been used in subsequent Catholic Social Teaching. While it has sometimes been interpreted as an “instrumental” account of the common good, the sources and uses of the notion suggest that it is the particularly modern political component of a fuller notion of the common good continuous with the tradition. In particular, the recent formulation is concerned to limit the power of the modern state and protect the dignity of the human person in the challenging conditions of political modernity.