STAFF NEWS & ANALYSIS
Pope Calls for Global Governance
By Staff News & Analysis - July 09, 2009

Pope Benedict XVI (pictured left with Henry Kissinger) has proposed a new world political authority "with real teeth", possibly in place of the United Nations, to enforce an ethical financial order and end the global financial crisis. Calling for more aid, a bigger role for trade unions and an economic system aimed at the common good as well as profit, the Pope said only a moral market could end the crisis and solve world poverty. The proposals were in his long-awaited encyclical – the second-highest level of papal teaching – released in Rome yesterday morning Australian time, before the G8 leaders gathered in Italy today to discuss the global crisis. The conviction that the economy must be autonomous and shielded from moral influences had led humanity to abuse the economic process in a destructive way, the Pope said in the encyclical Caritas in Veritate (Love in Truth). Such convictions had led to economic, social and political systems that "trample upon personal and social freedom" and could not deliver justice. His suggested political authority would manage globalization, revive economies, stop the crisis deepening, protect the environment and regulate worldwide migration. It would need to be universally recognized and given power to ensure compliance from all countries. – The Age

Dominant Social Theme: Humanity needs a higher moral authority.

Free-Market Analysis: This is a pretty substantive encyclical that the Pope has issued. But from what we can tell, it basically strips morality from the market and then calls for the two merge once again. His point is the idea that an "economy … shielded from moral influences [has] led humanity to abuse the economic process in a destructive way."

The Pope is a highly spiritual man as well as the Catholic Church's religious leader. But we find it puzzling that the Church interprets the market in this manner. The Church seems to accept, or at least co-exist with, various hypotheses supporting Darwinism. Why can't the Church co-exist with the market's Invisible Hand as well – which poses far fewer theological problems for the Church than Darwinism?

Adam Smith's Invisible Hand makes the emphatic point that enlightened self-interest is to everybody's advantage. But the Church seems to ignore this 300-year old argument entirely. In fact, the Church in this encyclical seems to conflate free-markets singularly with profits and then claims the rush for profits "tramples upon personal and social freedom." But is this really so?

There are some great truths in the Roman Catholic bible as delivered to the faithful by the Church. But this encyclical seems logically questionable. The Bible itself is first of all a religious and moral tract, but it is one that emphasizes personal responsibility within the ambit of God's word. There is not much, if one looks closely, that speaks to state action. Yet somehow this encyclical ends up promoting a "political authority that would manage globalization, revive economies, stop the crisis deepening, protect the environment and regulate worldwide migration. It would need to be universally recognized and given power to ensure compliance from all countries."

Where have we heard this before? Is it a coincidence that the encyclical has been released just as the G8 are meeting? In fact, the G8 and the G20 have already called for much that the Church itself calls for in this encyclical. It is as if the Church had decided to throw the full weight of its spiritual authority behind the sociopolitical and regulatory structures for which Western governments are campaigning. Here's another excerpt from the article, above:

Profit [is] useful only if it served as a means to a brighter future for all humanity. "Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty," he said. He said the current economic crisis was "clear proof" of what he branded as "pernicious effects of sin" in the economy. "The economy needs ethics in order to function correctly – not any ethics whatsoever, but an ethics which is people-centered," he said.

This is pretty strong stuff. Yes, free-markets generate profit but they do so by filling a market niche – which benefits everyone. Obviously profit is a goal but profit cannot be an "exclusive goal" in the sense that the customer cannot be ignored in a free market. Thus, profit cannot be produced by "improper means" nor does the product necessarily have the "common good" as its ultimate end. A market produces a product – and the product is specifically designed to provide a particular good. Finally, one may even question whether an economy needs a "people centered" ethics in order to function. It is questionable whether a car, a toothbrush, etc. would be much more or less successful if it were designed with a people-centered ethic. Sometimes a rose is just a rose.

After Thoughts

The encyclical seems to claim that the current economic crisis was created by a soulless pursuit of profit. But in fact, the economic crisis was created by central banking over-printing of money that led to a boom and then a bust. The encyclical doesn't mention banking at all, nor the business cycle. It seems to treat the economic crisis simply as a moral failure. This may be a spiritual interpretation of today's difficulties, but it is hard to apply to the real world if one understands the real mechanism of the failure. To the degree that the Church does not attempt to recognize the reality of what has occurred, the encyclical may be seen as less of a moral document and more as an effort to be a global political factor. If this is the Church's intent under the current Pope it seems disappointing.

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