On May 1st, 1991, Pope John Paul II issued his third social encyclical in the wake of the collapse of European communism. A decade later Centesimus Annus remains a remarkably insightful analysis of the human condition at the beginning of the 21st century and a distinctive proposal for constructing the free and virtuous society "after modernity".

As I suggested in Dublin in March during the inaugural Lismullin Lecture, Centesimus Annus by its very title looks back to Pope Leo XIII's Rerum Novarum, whose 1891 publication marked the beginning of modern Catholic social doctrine.

In its substance, though, Centesimus Annus looked ahead, as John Paul II so often does, to the third millennium of Christian history. Indeed, no other world leader has made so comprehensive and bold a proposal about the public dimension of the human future as the Pope did in Centesimus Annus.

In doing that, John Paul refocused the social doctrine of the church in a striking way. Like the 20th century itself, modern Catholic social thought from Leo XIII through Pope Paul VI was primarily concerned with questions of political and economic structure, with questions of system.

What was the best way to organise modern society politically? And what about economics? Should the market or the state be the primary engine of economic development and the primary organiser of economic activity?

Catholic social doctrine is neither an ideology nor a programme of political economy. It is an effort to think through the public implications of the church's conviction that human beings are made in the image of God, endowed with intelligence and free will and thus empowered to organise the goods (and restrain the evils) of this world so that politics, economics and culture all contribute to human flourishing.

Catholic social doctrine stands, not so much above the fray of the world's arguments about worldly business, as ahead of the fray. The church's public task is not to design polities or economies, but to set a moral horizon for reflection about the right-ordering of society, economy and culture.

In sketching that horizon, Catholic social doctrine from Leo XIII through Paul VI hinted that there might be a "Catholic third way" that stood "between" the capitalist and socialist alternatives, tempering the individualism of capitalism and the collectivism of socialism. Centesimus Annus decisively abandoned any such quest for a "third way." In his encyclical, John Paul II suggested that history (in the sense of human experience distilled through moral reflection and argument) had settled the structural questions.

If, under modern conditions, you want a political community that protects basic human rights while creating free public space for the pursuit of the common good - a polity in which men and women can exercise their God-given right to be self-governing and fulfil their God-given responsibility to order public life according to the moral truth about the human person - you choose democracy, not its totalitarian or authoritarian rivals.

If you want an economy that reflects the creativity of the human person, encourages the growth of entrepreneurship, creates wealth, distributes it widely and makes possible generous provision for those who need special care, you choose the market (or what the Pope prefers to call the "free economy") over its socialist rival.

The questions of system, according to Centesimus Annus, are settled. The most urgent questions on the public agenda for the 21st century are found in the third sector of the free society, the realm of culture. And culture means morality.

Democracies and free economies are not machines that can run by themselves. It's not simply a question of getting the institutions right, inserting the key into the ignition and turning on the machinery. It takes a certain kind of people to make democracy and the free economy serve genuinely humane ends. It takes a certain kind of people to live what we might call "freedom for excellence." In order for the free society to function properly, a vibrant public moral culture must discipline and direct the explosive energies of free politics and free economics.

Self-governance means governance from within: a free people must be internally governed by moral convictions that reinforce their commitment to the method of persuasion in politics, and that create barriers against the distortions and degradations that can result from a market that is morally, legally and politically unrestrained.

Thus the issue for the 21st century in the developed world is culture, not politics or economics. The Catholic Church throughout the world has just begun to internalise this dramatic redirection of its social doctrine. Every morning's headlines bear testimony - often disconcerting, and sometimes brutal - to the prophetic character of Centesimus Annus and the prophetic insight of John Paul II.

George Weigel is the author of the international bestseller, Witness to Hope: The Biography of Pope John Paul II (HarperCollins). He delivered the inaugural Lismullin Lecture on March 5th in Dublin