The big news today is the release of a document by the Pontifical Council for Justice and Peace with the wonky title, "Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority" (aka, TRTIFAMSITCOGPA).
I've given it a quick read, and need to read it again more carefully. However, I'll be the first to admit that economics, global public authorities, and the backmasked lyrics on Queen's "Another Bites The Dust" are not areas of expertise. Then again, Bishop Mario Toso S.D.B., secretary of the Pontifical Council for Justice and Peace, also admits that the Church's competence in the realm of economics must be kept in proper perspective (something not conveyed very well in many of the headlines about the document), as reported by News.va:
Bishop Toso explained that the aim of the note is "suggest possible paths to follow, in line with the most recent social Magisterium, for the implementation of financial and monetary policies ... that are effective and representative at a global level, and which seek the authentic human development of all individuals and peoples".
The Church does not wish to enter into the technical issues behind the current economic crisis, but remains within the ambit of her religious and ethical functions. Thus she highlights not just the moral causes of the crisis but, more specifically, the ideological causes. Old ideologies have been replaced by new ones, "neo-liberalist, neo-utilitarian, and technocratic which, by reducing the common good to economic, financial and technical questions, place the future of democratic institutions themselves at risk".
Thomas Peters of CatholicVote.org has written a very good post, "Pope Benedict Calls For “Central World Bank … Only He Didn’t. Here’s Why", about how the document is being presented in some quarters, and he rightly takes Fr. Thomas Reese, S.J., to task for trying to skew the place of the document within Magisterial teaching and seeking to highjack the document's actual contents:
In a scenario which will surely strike some as deja vu, the liberal jesuit Fr. Tom Reese previewed the contents of the document last week, in much the same way that the liberal Fr. Charles Curran* “previewed” Humanae Vitae for the mainstream media before the document was actually released (the pope overruled Fr. Curran’s claims that the Church would endorse contraception — but the media had already made up its mind and few bothered to actually read what the pope had to say). * I originally misstated that Fr. Curran was a Jesuit. He was ordained by the Diocese of Rocherster. Sorry for the error. ...
Notice that Fr. Reese does NOT correct the news anchor that this document comes from a vatican congregation — not the pope! Fr. Reese seems perfectly happy to help the mainstream media fundamentally misunderstand the authority of teaching this document enjoys. He claims that the pope has “more in common with the people at occupy wallstreet” than the tea party, even though he has to immediately walk back that claim when it is pointed out to him how violent (and anti-Catholic!) the Occupy Rome demonstrations were (as I blogged about last week). I think it’s no surprise that Fr. Reese spends so much time talking about the 60′s — that’s still his cultural frame of reference.
Read Peters' entire post on CatholicVote.org.
The document, of course, can be (and should be) read alongside Pope Benedict XVI's social encyclical, "Caritas in Veritate", and in light of the Church's growing body of social doctrine, especially as sythesized and articulated in the "Compendium of the Social Doctrine of the Church". That's a no brainer.
But, that said, the document raises a lot of questions. For instance, it refers to "the crisis" numerous times, but never really addresses the rubber-meets-the-road problem of massive debt (perhaps you've heard about the debt problems sweeping across Europe and now visiting the U.S.?). However, there is talk of new taxations and regulations, as if the massive growth of taxes and regulations over the past few decades in the West has had nothing to do with the present economic crisis. And the sense I get is that the document wants to express real concern about the massive control exerted by modern nation-states, but then suggests the best solution to this problem is to work toward the establishment of a a single, massive "world political authority." Yes, this general idea has been around for a while in Catholic social thought, as expressed by Bl. John XXIII and others. But in what world, exactly, does this really work?
Samuel Gregg, research director at the Acton Institute, puts some of these concerns into a more detailed and direct fashion in a NRO post, "Catholics, Finance, and the Perils of Conventional Wisdom", writing that
this document displays no recognition of the role played by moral hazard in generating the 2008 crisis or the need to prevent similar situations from arising in the future. Moral hazard describes those situations when people are effectively insulated from the possible negative consequences of their choices. This makes them more likely to take risks they wouldn’t otherwise take — especially with other people’s money. The higher the extent of the guarantee, the greater is the risk of moral hazard. It creates, as the financial journalist Martin Wolf writes, “an overwhelming incentive to privatize gains and socialize losses.”
If PCJP were cognizant of this fact, it might have hesitated before recommending we consider “forms of recapitalization of banks with public funds, making the support conditional on ‘virtuous’ behaviours aimed at developing the ‘real economy.’” Such a recapitalization would simply reinforce the message that Wall Street can always turn to taxpayers to bail them out when their latest impossible-to-understand financial scheme goes south. In terms of orthodox Catholic theology, it’s worth reminding ourselves that the one who creates an occasion of sin bears some indirect responsibility for the choices of the person tempted by this situation to do something very imprudent or simply wrong.
Third, given this text’s subject matter, it reflects one very strange omission. Nowhere does it contain a detailed discussion of the high levels of public debt and deficits in many developed economies, the clear-and-present danger they represent to the global financial system, and their negative impact upon the prospects for economic growth (i.e., what gets people out of poverty).
Gregg concludes his post by pointedly stating, "Unfortunately, many of its authors’ ideas reflect an uncritical assimilation of the views of many of the very same individuals and institutions that helped generate the world’s most serious economic crisis since the Great Depression. For a church with a long tradition of thinking seriously about finance centuries before anyone had ever heard of John Maynard Keynes or Friedrich Hayek, we can surely do better."
I tend to agree. And Mark Brumley, my boss and President of Ignatius Press, expressed similar thoughts in an e-mail sent to me earlier today:
Let's grant the desirability of the ideal behind all this--an international political/economic order that promotes the genuine universal common good by defending basic human rights, including participatory self-government, appropriate subsidarity, economic development, etc. (I say that's the ideal behind all this but of course not everyone advocating a World Authority would agree with that ideal.)
Between that ideal and the real world there is a chasm so large it boggles the mind anyone could read the newspapers and discuss a world political/economic authority without intending thereby either to be considering an abstract thesis in a political philosophy seminar or sketching out the plot of a science fiction Hollywood Blockbuster.
Set aside Iran or China. Ignore the problems with the EU or the US economy. Say nothing about Mexico or the rest of Latin America. Pretend like North Korea or Syria doesn't exist. Can anyone look at the situation of, say, the various internally and externally divided nations of Africa alone and seriously talk about World Government as a goal to be achieved in anything less than half a millennium--if that? That is, unless by a World Authority one means a Global Hegemon.'
And, unfortunately, many people are going to interpret the document (or what they learn about it in the media) as a call for some sort of imperial One World Government. Granted, that's not what the document intends and there's simply no way to present complex, nuanced teaching without being misunderstood by some or misrepresented by others. But, speaking for myself (and, again, based on a first impression), I don't see what practical and long-term good, exactly, this document can or will accomplish, especially when it fails to address some very basic, fundamental problems while muddying the waters with an abstract and wonkish approach that seems very far removed from the here-and-now real world.
UPDATE: Dr. Robert Moynihan, editor of Inside the Vatican magazine, writes:
The positive thing: this document, in keeping with all of the Church's social teaching, wishes to defend honesty, transparency, truthfulness and justice in financial dealings over against dishonesty, opacity false representations and injustice.
In this, the document is to be praised, and praised highly. We need honesty and truth-telling in a global economy that is seemingly careening toward a train wreck which will inevitably hurt the poor and weak most of all.
The negative thing: the global economy, and especially the global derivatives market, is big, enormous, in fact, so big, so opaque, so complex, that literally no one knows what the situation really is, or what measures to take to undo the financial detonator that seems ready soon to go off.
In this sense, the Vatican office's policy recommendations are inevitably insufficient.
No one knows what to do about this looming financial train wreck, not even the Vatican.
That said, there is no doubt that the virtues of honesty, truthfulness and fair-dealing must be at the center of any possible global solution, and we all will be well-served if thoughtful, honest, good and competent men and women can be placed in a position where they can help unravel this time-bomb before it detonates, or salvage what is left of our economy after it detonates.
And this is the essential, laudable meaning of the Vatican's suggestions in this document.
UPDATE: Fr. Z. rants (his word, not mine):
Some of my favorite points in the new “white paper” include the suggestion that there should be global monetary management and a “central world bank” to regulate it and that the United Nations should be involved. National banks have, after all, done such a good job that we should now make the effort transnational! And is this the same UN that had nations such as Saudi Arabia and, till recently, Libya on the their human rights commission? Wasn’t there a UN financial corruption investigation still going on? Is this the same UN that is pushing contraception pretty much in every poor country on earth? Was that a different UN?
Another high point in the new “white paper”: “These measures ought to be conceived of as some of the first steps in view of a public Authority with universal jurisdiction; as a first stage in a longer effort by the global community to steer its institutions towards achieving the common good.”
Read the entire post.
UPDATE: Geroge Weigel remarks at The Corner:
As for the document itself, no morally alert person objects to bringing discussions of global finance within the ambit of moral reasoning; that is an entirely worthy intention. Catholics (and others) are entirely free to disagree — as many already have, and vociferously — with the specific suggestions of the Justice and Peace document. Father Reese and other advocates of the Catholic Revolution That Never Was will likely try to brand those critics “dissidents,” which is more “rubbish, rubbish, rubbish.” That the specific recommendations of the document reflect what will seem to many an uncritical internationalism of a distinctly Euro-secular provenance is an interesting matter that will doubtless be discussed, vigorously, within the Catholic family for some time to come. So will the tension between more recent Catholic discussions of transnational and international political authority and the core Catholic social-ethical principle of subsidiarity, with its settled opposition to political and economic megastructures and concentrations of power.
Bottom line (so to speak): This brief document from the lower echelons of the Roman Curia no more aligns “the Vatican,” the Pope, or the Catholic Church with Occupy Wall Street than does the Nicene Creed. Those who suggest it does are either grossly ill-informed or tendentious to a point of irresponsibility.