On Reconstruction of the Social Order

Pius XI, Encyclical Letter on Reconstruction of the Social Order: Quadragesimo Anno (1931).

Commemorating the fortieth anniversary of Rerum Novarum, this encyclical is most significant for the development of the principle of subsidiarity:
"This is a fundamental principle of social philosophy, unshaken and unchangeable. . . Just as it is wrong to withdraw from the individual and commit to a community what private enterprise and industry can accomplish, so too it is an injustice, a grave evil and a disturbance of right order, for a larger and higher association to arrogate to itself functions which can be performed efficiently by smaller and lower societies. Of its very nature the true aim of all social activity should be to help members of the
social body, but never to destroy or absorb them."
In addition, Pope Pius XI builds on Rerum Novarum’s foundations:
Pius XI's teaching in this encyclical can be summed up under two heads. First he taught what the supreme criterion in economic matters ought not to be. It must not be the special interests of individuals or groups, nor unregulated competition, economic despotism, national prestige or imperialism, nor any other aim of this sort. On the contrary, all forms of economic enterprise must be governed by the principles of social justice and charity.
The second point which We consider basic in the encyclical is his teaching that man's aim must be to achieve in social justice a national and international juridical order, with its network of public and private institutions, in which all economic activity can be conducted not merely for private gain but also in the interests of the common good.
John XXIII, Encyclical Letter Christianity and Social Progress: Mater et Magistra ¶¶38-40 (1961).

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