From Just Price to General Equilibrium: Catholic Social Teaching, Modern Value Theory, and the Problem of the Just Wage

This paper traces the historical evolution of value theory from Augustine and Aquinas through the marginalist revolution and modern general equilibrium analysis. It argues that while Catholic Social Teaching (CST) offers enduring moral insights into justice, labor, finance, and economic life, its primary role is not to provide a rival technical theory of price formation but to evaluate economic outcomes in light of human dignity, solidarity, and the common good. The paper examines how modern economics developed increasingly formal analytical explanations of value, coordination, and allocation under scarcity, culminating in the general equilibrium tradition associated with Pareto, Arrow, McKenzie, and Debreu. At the same time, it argues that CST remains indispensable as a form of practical moral reasoning and political economy concerned with the ethical purposes toward which economic systems should be directed. The just wage, for example, functions not as an alternative equilibrium theory but as a moral boundary condition specifying outcomes beneath which human dignity is violated. The paper concludes by proposing a constructive division of labor between economics and theology: economics explains the mechanisms through which markets coordinate activity, while CST evaluates whether those outcomes remain consistent with justice and human flourishing. Properly understood, the two traditions are not competing systems of thought but complementary forms of inquiry addressing distinct dimensions of economic life.