The third classic principle is the principle of subsidiarity, which can be called the free associational principle or principle of civil society. Although it vision of a richly textured and multi-layered human society reaches back to Medieval Christian experience, this principle first appeared in papal teaching in Pope Pius XI's 1931 encyclical, Quadragesimo Anno, which marked the 40th anniversary of Rerum Novarum. The principle of subsidiarity which is an extension and development of the traditional Catholic claim that the state exists to service society, teaches us that decision-making in society should be left at the lowest possible level (i.e. the level closest to those most affected by the decision), commensurate with the common good. Classic American federalism-- in which local and state governments handle many aspects of public policy, while the national government exercises certainly strictly defined functions-- is one empirical example of the principle of subsidiarity at work. Articulated under the lengthening shadow of the totalitarian project in the first third of the 20th century, the principle of subsidiarity remains today as a counter-statist principle in Catholic social thinking. It directs us to look first to private sector solutions, or to a private sector/public sector mix of solutions, rather than to the state, in dealing with education, health care, and social welfare.
--George Weigel, "The Free and Virtuous Society", in Against the Grain: Christianity and Democracy, War and Peace, 2008