Over on Rorate Caeli there is a fascinating and truly important article by Dr Thomas Pink on the question of religious liberty. Please read it.
Just to give you a taste, rather than substitute for reading the article (which is not terribly long) in full Dr Pink explains that the debate about religious liberty since Vatican II has been based largely on a misunderstanding. Most liberals and Traditionalists seem to agree that before Vatican II the doctrine or policy of the Church was based on the idea that states had the right and sometimes the duty to suppress the outward manifestation of religious error (this would include for example stopping evangelisation by Protestant sects, not allowing public processions by Satanists, policies which were uncontroversial in Catholic countries up to the 1960s). They saw this as encapsulated in many pre-Vatican II documents.
The Vatican II document Dignitatis Humanae says that the role of the state is the 'natural end of man': justice and peace. So the state has no right to get involved in religious questions.
So both liberals and traditionalists further agreed that there had been a change; the question was whether it was a change of policy, or whether the old documents had dogmatic authority. If the latter was the case, then Vatican II was in error.
What Dr Pink points out that a more careful reading of the pre-Vatican II documents reveals that they never said that the state had a right to limit religious liberty. They did say that the Church has the right, over baptised Christians, to hold them to their baptismal obligations (and to protect them from attack by non-baptised zealots), using coercion. An equally careful reading of Dignitatis Humanae reveals that this proposition is not denied there.
What was happening in Catholic states up to the 1960s is that the State was acting on behalf of the Church: the state was not exercising its own rights. The State was both an instrument of the Church, and also leaders of the State were themselves baptized Christians and members of the Church, and were acting in that capacity.
It is true that Dignitatis Humanae recommends a new policy: a policy in which the Church's use of coercion (directly, or through the State) is very limited. But it is not abolished: the Church still uses temporal penalties against those who deny the Faith, under the 1983 Code of Canon Law, such as depriving heretical teachers in Catholic insitutions of their jobs.
In short, the liberals who denied that coercion can ever be used in defence of the Faith are wrong: in fact this position is infallibly ruled out by the Council of Trent. They are also wrong that Vatican II supports them. But their error has been entrenched by the mis-statement of the doctrine by Traditionalists: it is not a question of the teaching of the Church on the State, but the teaching on the Church herself, which is at issue.
This point is completely missed by, for example, Michael Davies' 'The Second Vatican Council on Religious Liberty', which is an admirably detailed and clear explanation of the debate as Traditionalists have usually understood it. Davies ends his book saying that there is a problem which can only be resolved by a further, and authoritative, act of the Magisterium. This impasse now looks at though it was based on a misreading of the key texts - not just by Davies, but by pretty well everyone, on both sides of the debate.
Dr Pink is to be congratulated on coming up with a solution to the apparantly insoluble problem of Vatican II vs. Trent, Lateran IV and a string of papal documents. This solution ought to be helpful not only to the SSPX in their doctrinal discussions with the Vatican, but to all faithful Catholics who have struggled to read Dignitatis Humanae in the light of Tradition: with the hermeneutic of continuity. Let me give the last word to that document:
Indeed, since people's demand for religious liberty in carrying out their duty to worship God concerns freedom from compulsion in civil society, it leaves intact the traditional catholic teaching on the moral obligation of individuals and societies towards the true religion and the one Church of Christ.
More very interesting commentary can be found on The Sensible Bond.