A Vatican document that calls for the gradual creation of a world political authority with broad powers to regulate financial markets and rein in the “inequalities and distortions of capitalist development” was welcomed by many Catholic progressives as timely and relevant and dismissed by Catholic conservatives as misinformed and without magisterial authority.
Released on Oct. 24, “Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority,” argues that the current global financial crisis has revealed “selfishness, collective greed and the hoarding of goods on a great scale” and suggests the creation of a supranational authority that might place the common good at the center of international economic activity. Regulatory controls, “imperfect though they may be,” that may exist at the national and regional level, it argues, have not been replicated at the international level, sometimes to devastating effect on the world’s most vulnerable people.
The document, from the Pontifical Council for Justice and Peace, places the primary blame for the current global economic crisis on “an economic liberalism that spurns rules and controls,” relying solely on the laws of the market and “individual utility” that “does not always favor the common good.” It calls for more effective management of financial shadow markets of the real economy that are largely uncontrolled today.
Introducing the text, Federico Lombardi, S.J., the Vatican spokesperson, emphasized that it is “not an expression of papal magisterium” but is an “authoritative note of a Vatican agency.” The Justice and Peace office’s document made a point of quoting from the teachings of several popes, however, including those of Pope Benedict XVI, who in his encyclical “Charity in Truth” (“Caritas in Veritate,” 2009) said there was “an urgent need of a true world political authority” that could give poorer nations a bigger voice in financial decision-making. It also cited Blessed John Paul II’s warning in 1991 of the risk of an “idolatry of the market” in the wake of the failure of European communism. Today this warning “needs to be heeded without delay,” the document said.
The document also proposes taxation on financial transactions. The revenue raised could create a “world reserve fund” to support the economies of countries hit by crisis. It calls for recapitalization of banks with public funds that make lending conditional on “virtuous” behavior aimed at developing the real economy.
Cardinal Peter Turkson, council president, said the office hoped the statement might prove useful in prodding new thinking at the G20 meeting, which convened in Cannes on Nov. 3. During a press conference in Rome, however, the broadside against some of the contemporary dysfunctions of global capitalism was quickly connected to the growing Occupy Wall Street movement. Cardinal Turkson acknowledged some similarities in “basic sentiment” between the aims of protesters and that of Catholic social teaching and the new document on global finance reform.
“If people can hold their government to account, why can we not hold other institutions in society to accountability if they are not achieving or not helping us live peacefully or well,” Cardinal Turkson said. “The Vatican is not behind any of these movements, but the basic inspirations can be the same,” he said.
He added, “The people on Wall Street need to sit down and go through a process of discernment and see whether their role managing the finances of the world is actually serving the interests of humanity and the common good.”