Can the State Save Us From AI?

Like any innovative technology, artificial intelligence is perfectly capable of improving people’s lives, writes Leo XIV in his first encyclical, “Magnifica Humanitas.” At the same time, he warns against the dangers of private power over technology and, in the name of human dignity, advocates state guidance and control of these “new forms of property.” According to the Pope, these include “patents, algorithms, digital platforms, technological infrastructure and data.” They should be managed “as a common or shared good, in a spirit of participation.” Anything else contradicts “the universal destination of goods,” a central principle of Catholic social teaching, to which the encyclical repeatedly refers. 

Leo XIV sees himself as the successor to his namesake Leo XIII, who wrote the first social encyclical “Rerum Novarum” (1891), in response to the defenselessness of the masses of factory workers, who demanded worker protection legislation. The state has the duty to guarantee all its citizens security and protection against harm to life and limb. If it excluded industrial workers from this, according to Leo XIII, it violated distributive justice. However, the Pope at the time did not question the capitalist economic system based on private property. 

On the contrary: “Rerum Novarum” condemned socialism and defended private property against both the popular mob and the redistributing state. Drawing on the English philosopher John Locke, “Rerum Novarum” argued that private property is precisely how natural resources are used for the benefit of all. As Locke states in his Second Treatise on Government, God “hath given the World to men in common.” But he “hath also given them reason” to make the earth productive through labor. Through labor, according to Locke and Leo XIII, property is created. The consequence of this is a surplus beyond the producer’s consumption needs through which everyone is made better off. The fact that the goods of this world are destined for the benefit of all does not contradict private property; rather, it establishes its fundamental economic significance for the common good. 

The principle of the universal destination of goods goes back to the ancient Stoic doctrine of an alleged original community of goods. The later Stoics used it as an argument against private property. Following in their wake, several Church Fathers of Christian antiquity discredited property as a consequence of the Fall and wealth as theft from the poor. According to Ambrose of Milan, whoever gives alms to the poor only returns what belongs to them. Under the conditions of the ancient zero-sum economy, such a thought was by no means absurd. 

In the High Middle Ages, however, a profit-oriented economy developed based on trade and the investment of large capital, which primarily increased urban prosperity. A banking system that branched out across Europe emerged. Theologians and philosophers, primarily from the Dominican and Franciscan orders, and later also Jesuits, began to understand that money does not merely serve consumption purposes, but as soon as it is invested for productive purposes, it is “capital,” and thus the cause of value creation and economic growth. Consequently, these pioneers of modern economic thought began to develop the contractual instruments to bypass the Church’s ban on interest, which stood in the way of the capitalist economic form. According to Joseph Schumpeter, they were precursors to Adam Smith. Within the Church, however, they are largely forgotten today. Only the ancient Church Fathers are ever quoted. 

It is also forgotten that the Catholic social teaching inaugurated by “Rerum Novarum” owes the principle of the universal destination of goods not to the Church Fathers, but to John Locke. And that its teaching on property, which, not coincidentally, was formulated for the first time in an authoritative magisterial way in the context of the Industrial Revolution, is inspired precisely by the liberal English philosopher. The Church remained faithful to this teaching for a long time. For later emphases on the common good aspect of property, recourse was taken to Thomas Aquinas, who had stressed that owners are merely administrators of their possessions and should therefore willingly share with others in emergencies; indeed, in extreme need, when it is a matter of life or death, “all things are common.” Yet these are ethical principles that do not restrict the right to private property, but rather impose moral obligations on the owner regarding its use. 

This view only changed fundamentally with Pope Francis, who, with explicit anti-capitalist intent and in an abrupt departure from the teaching of his predecessors in his encyclical “Fratelli tutti” (2020), suddenly elevated the principle of the universal destination of goods to a “a natural and inherent right that takes priority over others,” while degrading the right to private property to a merely “secondary,” “derived natural right.” By elevating a mere moral principle to a right, indeed to a “primary right” of the collective, property is now politically and legally subordinated to collective power of disposal and thus ultimately to the arbitrariness of state power and politics. 

In the wake of his immediate predecessor’s thinking, which leans towards a vague and politically dangerous collectivism, Leo XIV now apparently sees the state as the guarantor of a humane use and further development of AI and the technologies based on it. The justification for this is: “In the past, it was largely up to the State to guide and direct innovation.” By contrast to the past, however, today “the main drivers of development are private, often transnational, parties that are endowed with resources and the capacity to intervene that surpass those of many Governments.” This is new and dangerous. 

This portrayal is both historically and factually flawed. The wealth-creating power of the capitalist market economy has always relied on private capital accumulation, which naturally led to a massive concentration of private, including “transnational,” control over new technologies. Modern mass prosperity was caused by a combination of technological innovation, an increasing division of labor, mass production, and the resulting economies of scale, as well as competition on free, cross-border markets. The state took care of the legal framework, sometimes also funded basic research, and sometimes it pursued industrial policy, mostly with little long-term success. 

Due to his distrust of private power over highly developed technologies, Leo XIV now calls to “disarm AI,“ “freeing it from the mentality of ‘armed’ competition, which today is not limited simply to the military context, but is also an economic and cognitive phenomenon,” and to hand over “control over platforms, infrastructure, data and computing power” to the state in order “to utilize them on the basis of a fundamental principle.” In addition to fiscal measures and state industrial policy, this planning would also have to ensure that innovation is guided from the outset to reduce inequality. The socialization of AI under the direction and steering of the state would therefore also have to fulfill a socio-political agenda. 

What is irritating about this derivation of concrete political concepts of action from moral postulates is the absence of any reference to the dangers of state concentration of power. In contrast to private sector actors, the state possesses a monopoly on the use of force. As a monopolist, it is not exposed to competition and, even as a democratic state, can enforce behavior. If it were to regard AI as a “shared“ or “common” good, as the encyclical demands, it could—precisely by invoking its democratic legitimacy—become a surveillance state and thus irrevocably lose its liberality. 

Given such dangers, and the uncertainty regarding the future development of AI, which is also underscored by Pope Leo, maximum diversity and decentralization of AI platforms would be highly desirable. What would be important is precisely the strengthening of competition and consumer sovereignty through powerful local LLMs prevailing on the market, over which users have control. Abusive uses of AI or those dangerous to public order can be prosecuted under criminal law, requiring clear rules for liability. It is better to prohibit specific practices defined based on rule-of-law principles than to hand over the design of entire technology sectors to the state, and thus to politics. 

The latter could lead to large and powerful AI corporations attempting through lobbying—and with ethical arguments—to influence such regulation in their interest. Through “regulatory capture,” large AI corporations would then use the lever of the state’s monopoly on force to distort competition in their favor, to keep potential new competitors away from their own turf by raising barriers to market entry, or even to sneakily obtain an implicit state guarantee in the event of lacking profitability. In this case, the recommendations of Magnifica Humanitas would probably achieve exactly the opposite of what was actually intended.

This piece originally appeared in the German publicantion, Neue Zürcher Zeitung under the title "Wo der Papst Irrt" July 21, 2026.

Martin Rhonheimer is the founding president of the Austrian Institute of Economics and Social Philosophy in Vienna. Until 2020, he taught ethics and political philosophy at the Pontifical University of the Holy Cross in Rome. He lives in Vienna.