Nearly three years ago Dennis C. Blair, President Barack Obama’s director of national security, garnered headlines as well as ridicule in some quarters when he reported to Congress that the most serious threat to the United States and to world peace was not terrorism, or Iran, or the rise of China, but the economic crisis.
Blair warned that the global nature of the economic crisis threatened both the military readiness of our allies and their ability to meet our shared humanitarian obligations. Noting that the crisis originated on Wall Street and in U.S. banks, Blair worried about a backlash against the United States, and especially against its promotion of increasingly unregulated financial and commercial markets, a policy usually referred to as economic neoliberalism. The Vatican, as it turns out, appears to agree with much of this assessment.
Last month the Vatican’s Pontifical Council for Justice and Peace released the document “Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority.” Admittedly, neither its title nor the document itself, at least in its unofficial translation, trips lightly off the tongue. According to its authors, the aim of the statement is to contribute to a broader discussion about the perils created by the new global economy. The operations of the international economic system, the council argues, must be made accountable to legitimate democratic and political institutions, which in turn must be guided by sound ethical principles. The document does not pull punches when characterizing the reason for economic turmoil: “The crisis has revealed behaviors like selfishness, collective greed, and the hoarding of goods on a great scale. No one can be content with seeing man live like ‘a wolf to his fellow man.’”
Predictable howls of outrage were heard from certain Catholic commentators eager to obfuscate the church’s rejection of economic neoliberalism. Yet those familiar with Catholic teaching could hardly be surprised by the council’s description of the failures of such an approach to political economy or by its recommendations for bringing greater stability and a more equitable distribution of wealth to the global system. Among other things, the document calls for a tax on financial transactions to create a reserve fund to assist poorer countries, a recapitalization of banks with public funds but accompanied by greater public oversight, and transparency in so-called shadow financial markets such as securitized loans and hedge funds. Some have found an echo, if not an endorsement, of the Occupy Wall Street protests in the statement, and not without reason. “If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political, and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid,” the document warns.
The most controversial aspect of the council’s statement is a call for the creation of a “world political authority” that would have the power to regulate financial and economic activity in the increasingly interconnected and interdependent global economy. Expanding on an idea embraced by Benedict XVI’s Caritas in veritate, the document envisions this agency emerging from already established institutions of supranational cooperation such as the International Monetary Fund and the United Nations. The proposal is tentative and quite vague, although the Catholic Church’s history of championing such organizations, especially the UN, can hardly be questioned.
Whether the creation of such an institution is likely in the foreseeable future, or even desirable, are fair questions. Nothing in the document suggests that Catholics must agree with the pontifical council’s highly technical and prudential judgments. The very idea of a “world political authority” raises as many concerns about potential corruption and the concentration and abuse of power as it does hopes for a more cooperative and democratic economic system. Many will bristle at the document’s hortatory tone and abstract idealism. Some will insist that this sort of regulation is best accomplished at the regional and national level whenever possible. These are useful criticisms. At the same time it would be a mistake to ignore the fact that power is increasingly concentrated in the hands of financial and corporate interests that are largely beyond the reach of established political and legal authority. That unprecedented state of affairs is a significant source of economic uncertainty. The stability of the international community as well as the global economy are being held hostage to the caprice of the markets, warns the pontifical council. What is to be done? Writing in this issue on the American bishops’ 1986 pastoral letter Economic Justice for All, David J. O’Brien reminds us that the ethical principles that guide economic behavior should be the same principles that guide us in every other aspect of our lives. When the church calls us back to those duties, it is doing its job.
November 1, 2011
Related: Economic Indicator, by E. J. Dionne Jr.