Stockbroker in Mumbai, India, contemplates the global market crash last September. (CNS/Reuters)

President Barack Obama will sign into law today the $787-billion economic stimulus bill passed last week by Congress.

Debate continues about the merits of the legislation, in terms of whether it will adequately address the damage caused by the global credit crisis.

But here’s something that shouldn’t be a matter of debate: That the crisis has highlighted the truth of the distinction Pope John Paul II made between the necessary and beneficial economic contribution of a properly regulated market-based economy, and the evil effects caused by an economic system based on unrestrained, “capitalistic” greed.

Donald Boland of the Center of Thomistic Studies in Sydney, Australia, discusses these two forms of market-based economics — dubbed by some as “good capitalism” and “bad capitalism” — in this article, posted on the website of the Houston Catholic Worker.

Here’s an excerpt from the beginning of Boland’s article, which is titled “Chesterton and John Paul II on Capitalism”:

Confusingly, the word “Capitalism” is used both for an economic system that has an abnormal condition in regard to the distribution of wealth or property, and one where the distribution of wealth is not an issue. Both are systems that are based upon the institution of private property, in the one case in a condition that is normal, in the other abnormal.

The distinction between the two meanings of Capitalism is in fact made in the social encyclical (1991) Centesimus Annus ( para. 42 ). And the difference made there comes down to that between the normal and the abnormal. The encyclical is considering whether we can say that Capitalism is good or bad. “If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy,’ ‘market economy’ or simply ‘free economy.’”

“But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.”