Two days after the anniversary of Leo XIII’s Rerum Novarum (1891), two dicasteries of the Roman Curia—the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development—published a new document titled Oeconomicae et pecuniariae quaestiones: Considerations for an ethical discernment on certain aspects of the current economic-financial system. Its thirty-four paragraphs go from general moral principles to practical proposals for reforming the international financial system.
Addressed “to all men and women of good will,” the document presents an analysis of the financial system in light of the crisis that began in 2007. The key message of the document is that the financial industry is incapable of governing itself adequately; “appropriate regulation” will require government intervention. As it is, the system is unsafe. It aggravates inequality and thrives on the exploitation of the weak and the poor. The document even calls the financial products known as derivatives “a ticking time bomb ready sooner or later to explode, poisoning the health of the markets.”
Oeconomicae et pecuniariae quaestiones begins by reasserting the Catholic view of society as a network of relationships “between individuals but also ‘macro-relationships, social, economic and political ones’” (par. 2). It insists on the importance of “liberty, truth, justice, and solidarity” in an economic-financial system that often appears to function in an ethical void where the only imperative is to maximize profits.
The document recognizes that the current system has produced a great deal of wealth, while pointing out how poorly distributed this wealth is, most of it going to a small minority of investors. It treats the financial crisis of ten years ago as a wasted opportunity “to rethink the obsolete criteria that continue to govern the world” (par. 5). The economy needs freedom of initiative, but that freedom “creates centers of power that incline today toward oligarchy” (par. 12). There is no way to correct this tendency without more regulation: “it is clear that markets, as powerful propellers of the economy, are not capable of governing themselves” (par. 13). That leaves politics, but political leaders cannot regulate the economy without a long-term vision of the common good: “political and economic-financial powers must remain distant and autonomous and at the same time directed, beyond all proximate harms, towards the realization of a good that is basically common, and not reserved only for a few privileged persons” (par. 21). The document criticizes openly the “massive deregulation” of the financial markets, and calls for a “supranational co-ordination among diverse structures of local financial systems” (par. 19) and “a stable, clear and effective coordination among various national regulatory authorities” (par. 21).