Samuel Gregg on the new “white paper” from the Pont. Con. for Justice and Peace

From National Review Online comes a piece by the eminent Samuel Gregg, a fine scholar with his head screwed on in the correct direction. He gives some reactions to the new “white paper” as I call it from the Pontifical Council for Justice and Peace. Mr. Gregg is research director at the Acton Institute. He has authored several books including On Ordered Liberty, his prize-winning The Commercial Society and Wilhelm Röpke’s Political Economy, and his 2012 forthcoming Becoming Europe: Economic Decline, Culture, and America’s Future.  Also, see Economic Thinking for the Theologically Minded.

Be sure to check out the comments at National Review.

My emphases and comments.

Catholics, Finance, and the Perils of Conventional Wisdom
October 24, 2011 12:22 P.M.
By Samuel Gregg

Despite the Catholic Left’s excited hyperventilating that the document released today [Which is our first clue that the “white paper” is bad.  And I call it a “white paper”, since it doesn’t form a part of the Holy Father’s Magisterium.] by the Pontifical Council for Justice and Peace (PCJP) would put the Church “to the left of Nancy Pelosi” on economic issues, more careful reading of “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority” soon indicates that it reflects rather conventional contemporary economic thinking. [The phrase “damning with faint praise” comes to mind…] Unfortunately, given the uselessness of much present-day economics, that’s not likely to make it especially helpful in thinking through some of our present financial challenges.

Doctrinally speaking, there’s nothing new to be found in this text. As PCJP officials will themselves tell you, it’s not within this curial body’s competence to make doctrinal statements that bind Catholic consciences. [Did you all get that?  This “white paper” is not a document of the Church’s Magisterium.] Moreover, the notion that an increasingly integrated world economy requires some type of authority able to make decisions about what the Church calls “the universal common good” has long been a staple of Catholic social teaching. Such references to a global world authority have always been accompanied by an emphasis on the idea of subsidiarity, and the present document is no exception to that rule. This principle maintains that any higher level of government should assist lower forms of political authority and civil-society associations “only when” (as this PCJP text states) “individual, social or financial actors are intrinsically deficient in capacity, or cannot manage by themselves to do what is required of them.”

But putting aside doctrinal questions, this text also makes claims of a more strictly economic nature. Given that these generally fall squarely into the area of prudential judgment for Catholics, it’s quite legitimate for Catholics to discuss and debate some of this document’s claims. So here are just a few questions worth asking.

[1] First, the text makes a legitimate point about the effects of a disjunction between the financial sector and the rest of the economy. It fails, however, to note that one major reason for this disjunction has been the dissolution of any tie between money and an external object of value that regulates the quantity of money and credit in circulation in the “real” economy.  [For example, there is no “gold standard”.]

Between the late 1870s and 1914, such a linkage existed in the form of the classic gold standard. This gave the world remarkable monetary stability and low inflation without any centralized authority. You needn’t be a Ron Paul disciple to recognize that fiat money’s rise is at least partly responsible for the monetary crises this document correctly laments.

[2] Second, 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. [NB:] 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. [There are various ways to participate in and be responsible for the sin of another person.  You can see how some things that liberals like to call “structural” sins have their grounding in the choices of individuals.]

[3] 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).

Given these facts, [Quaeritur…] how could governments provide the aforementioned public funds when they are already so heavily in debt and already tottering under the weight of existing fiscal obligations? By raising taxes? Even Bill Clinton thinks that’s not a great idea in an economic slowdown. Indeed, the basic demands of commutative justice indicate that governments need to meet their current obligations to existing creditors before they can even consider contributing to further bailouts.

[4] Fourth, the document calls for the creation of some type of world central bank. Yet its authors seem unaware that much of the blame for our present economic mess is squarely attributable to central banks. Here one need only note that the Federal Reserve’s easy-money policies from 2000 onwards played an indispensable role in creating America’s housing-market bubble, the development of questionable securities products, and the subsequent 2008 meltdown.

Calls for a global central bank aren’t new. Keynes argued for such an organization 75 years ago. But why, given national central banks’ evident failures, should anyone suppose that a global central bank wouldn’t fall prey to the same errors? The folly of a centralized supranational body like the European Central Bank setting a one-size-fits-all interest-rate for economies as different as Greece and Germany should now be evident to everyone who doesn’t live in the fantasy world inhabited by EU bureaucrats. Indeed, it is simply impossible for any one individual or organization to know what is the optimal interest-rate for every country in the EU, let alone the world.

Plenty of other critiques could — and no doubt will — be made of some of the economic claims advanced in this PCJP document. As if in anticipation of this criticism, the document states, “We should not be afraid to propose new ideas.” That is most certainly true. [NB] 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.

A very helpful intro to the “white paper”.

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26 Responses to Samuel Gregg on the new “white paper” from the Pont. Con. for Justice and Peace

  1. Pingback: Pope Benedict Calls For “Central World Bank” … Only He Didn’t. Here’s Why. | CatholicVote.org

  2. tcreek says:

    I here paraphrase Justice Robert Bork.

    The Church does not have a monopoly on truth about our obligations to the poor, the rights of undocumented workers, the real meaning of pluralism, or our international responsibilities. Catholic bishops have held forth in an uninformed manner not only about economics but about nuclear weaponry. These are matters of prudential judgment and the Church should not attempt to foreclose discussion as if correct answers are known only to the clergy.

    These are not matters of concern only to Catholics. The opinions expressed in this “white paper” from the Pontifical Council for Justice and Peace are to be regretted, because spiritual authority, though it should not, tends to be confused with secular prudential thought.

  3. There is no need for a global authority to regulate markets. What there is a need for is for the individuals who participate in the markets — i.e., everybody — to repent and believe in the Gospel, and order their lives accordingly. The markets will then take care of themselves.

    Whoever came out with this idea is like a man standing on a whale, fishing for minnows. The Church has the solution to economic problems, and has always had it: “Seek ye first the Kingdom of God and His justice, and all these things shall be added unto you.”

  4. Supertradmum says:

    This white paper has been written before, by Robert Cox and the Neo-Gramscians (Remember Gramsci?) A sample:” Building upon the Gramscian notion of hegemony, Cox contends that in order to become truly hegemonic, a state would have to establish and protect a world order
    which is universal in conception. In other words, this would not be an order in which a
    dominant state exploits others, but an order which will be perceived by -at least the
    major- subordinate states as compatible with their interests. A world-hegemony entails
    a social structure, an economic structure and a political structure; and it emerges as a
    result of a widely appreciated sense of supremacy in the inter-state system, global
    political economy, as well as social and ecological systems (Cox, 1996b, 136).
    International organizations are the primary mechanisms in this framework through
    which universal norms of a world-hegemony are clearly expressed. Cox cites five
    major characteristics of international institutions expressing their hegemonic role of
    stabilizing and perpetuating a particular global order: First, international institutions embody the rules which facilitate the expansion of
    dominant economic and social forces, but at the same time permit adjustments to be
    made by subordinate interests with minimum pain. Second, international institutions
    and rules are generally initiated by the particular state which establishes the
    hegemony. At the very least, they must have that states’ support that will try to secure
    the international hierarchy of powers through influencing the decision-making
    processes directly or indirectly. Third, international institutions ideologically legitimate
    the norms of the existing world order. They reflect orientations favorable to the
    dominant social forces; thereby defining policy guidelines and supporting certain
    practices at the national level. Fourth, international institutions recruit and co-opt elite
    talent from peripheral countries in a manner called “transformismo” by Cox.
    Outstanding personalities from the periphery are recruited to the central
    organizational hierarchies in order to allow them to internalize and transfer elements of
    modernization into their local settings” And more, “Mainly building upon the Neo-Gramscian framework drawn by Cox, O’Brien examined the comparative institutional transformation trajectories of the World Bank,IMF and WTO as they responded to demands of the global movements defending the rights of women, labor and environmental issues (ibid. 16). He contended that increasing activities of various groups of civil society operating internationally and transnationally has began to challenge an exclusively state-centered notion of
    multilateralism by quoting Cox’s definition of new or complex multilateralism: “It is an
    attempt to reconstitute civil societies and political authorities on a global scale, building
    global governance from the bottom up” (Cox, 1997, xxvii) http://ejeps.fatih.edu.tr/docs/articles/107.pdf
    How these radicals were allowed to publish this white paper is a scandal as they or he is in the same line of thinking as Marx, Lenin, Gramsci, Alinksy….all in the same boat, with this philosophy :” … the Bank embodies the rules, which facilitate the expansion of dominant social forces, i.e., economic expansion and neoliberal macroeconomic management/development paradigm” which is exactly what we are seeing set-out in this Vatican paper.

    More from Cox “Although I am not a Marxist, I believe much is to be learned from Marxist thinking. Marxist ideas on the tension between capital and labor, and the attempts to institutionalize these relations on state-level and the international level in order to advance material interests, helped me understand the world in a distinct way. I have identified my approach as ‘historical materialism’, yet I have linked it not so much with Marx as with Giambattista Vico (download his main work The New Science here, pdf), the 18th-century critic of Descartes and the north European Enlightenment who lived in Naples .and later with the 20th century Italian Communist leader Antonio Gramsci.”

  5. wmeyer says:

    It is interesting (and a cause for sorrow) to note that the Church, which created the field of economics, has turned so far from the reality of the subject. There is plenty in modern economics that is right. Read Hazlett, Mises, Reisman, Friedman, Rothbard. Most particularly, read Sowell’s Basic Economics. Familiarity with that easily read volume ought to be a voting qualification.

    The government has perfected the art of achieving the worst imaginable outcome in legislation. The key to fixing things is subsidiarity, a key teaching of the Church. Get the pols out of it, as they only dove in for the sake of power. Lord Acton had it right, in his observation on the damaging effects of power.

  6. PaulD says:

    EWTN aired a Sam Gregg speech last night on Christian anthropology, which was originally given at the “Love and Life in the Divine Plan” conference at Aquinas College in Nashville in February. It airs again Tuesday at noon Central time, and in the wee hours on Thursday.

    Aquinas College EWTN airing

  7. MikeM says:

    Unless the unofficial translation put up by Vatican Radio is just woefully deficient, this document is one of the most muddled texts I’ve ever come across. It’s a collection of one sentence facts and opinions tossed together outside of any coherent rational framework.

    To the extent that I can draw any conclusions about the document, I think that it has an underlying theoretical flaw about social systems in general (including the economy). It says that “No one can be content with seeing man live like ‘a wolf to his fellow man,’ according to the concept expounded by Hobbes.” That’s all true and good to the extent that it means that individual men should not seek to exploit others for their own gain, but it seems that the document’s authors have taken it to mean that we should build all of our political and economic systems around the idea that men will put the common good above their personal good if only we would charge them to do so. Humans are fallen beings. On the whole, we have an unfortunate but strong tendency to put ourselves first and to ignore the wellbeing of others. If we want to construct systems to ensure global peace and prosperity, we can’t simply pretend men are angels. Furthermore, we have to recognize that even within the realm of ethical activity, people have primary responsibilities to look out for their own families, communities, nations, etc., and that even in a world filled with only the best men, we cannot expect all conflicts to work themselves out perfectly.

    To the extent possible, we need to channel people’s self-interest so that their pursuit of their own welfare builds, rather than tears down, the common good. This is why fair and well regulated markets are so beneficial. It’s also why so many clear-thinking and well-intentioned people seek to rely on a balance of power and peace through strength to steer the world away from wars (ideas which the document also seems to dismiss).

    Then, where systems cannot direct man’s self-interest towards the common good, we need proper authorities to restrain us, within a system that restrains those authorities as well, since history has proven all to clearly that benevolent rulers are few and far between.

    The PCJP is right to call men to an ethic of solidarity, but when the G20, or any governmental body, sits down to draft new policies, they can’t do so assuming that such an ethic has already taken hold.

    That said, its policy proposals are a mixed bag of suggestions taken mostly from the prevailing neo-liberal establishment. The press is making the supposed call for global government into the controversial part of the document, but I think it should be pretty obvious to everyone that our global financial system needs to be restructured. It was built around the Bretton Woods system and that system is no more. Whether the IMF needs to be strengthened or scrapped is a topic worthy of debate, but that something should be done to rebuild the safeguards on the global economy seems pretty clear. Of course, Gregg’s proposal of reverting back to the gold standard is a legitimate option…but it seems like it’s an option that fits within the Vatican’s call for a new global system rather than one that stands against it. We DO live in an increasingly globalized world, that is something that our leaders have to grapple with, and the economic turmoil of the past decade does show that we really don’t address that adequately.

  8. Peggy R says:

    tcreek, I fear that Robert Bork never made it to “Justice”–rather famously, he was destroyed by the American Left.

    Miss Anita Moore, OP. I agree that the sin is greed, not the market “system.” Many don’t want to hear that even on some other Catholic blogs.

  9. Supertradmum says:

    Decided to read a few of the papers by Leonardo Becchetti, as he introduced and may have written the document. First of all, the professor and here is his very impressive cv (http://www.ceistorvergata.it/public/files/mesci/CV-ENG-Becchetti-2008.pdf)
    is in the “school” of ethics, sociology and economics and even the Grameen Bank scheme, and the whole idea of microcredit, created by Mohammed Yunus, who won the Nobel Peace Prize in 2006. This type of economics centers on lending to the poor so that they can get into small businesses, something we all could agree upon here. The banking system connected with microcredit must be based on ethics. Apparently, this has worked in Bangladesh, hence the Nobel Prize. The man seems to be a visionary and also has strong ethical articles on fair trade, etc. However, this was on his blog:
    “The paradox now is that all countries that are now emerging high-growth (China, India, Brazil, Asian economies) all forms of control on movements of financial capital in the short while we have become a free port with no rules of finance all the devastating consequences of the case. The platform should include three or four simple proposals giving strength to the forward-looking components of the international institutions that are fighting for their implementation (Dodd-Frank legislation in the U.S., the committee’s proposals in the United Kingdom Vickers, Barroso proposed transaction tax). The proposals are: significant reduction in the leverage of the banking banks too big to fail, to ban banks to trade on his own with customer deposits (Volcker rule), regulation of OTC markets and all financial transactions tax, giving strong support to the Franco-German proposal and the EU. And ‘from this point of view must overcome the resistance of the English who say that the tax can not be applied if not worldwide. ” I, for one, would not agree with the stance as written. His blog is very interesting and he is quite easy to read in translation, or if your Italian is good enough. http://felicita-sostenibile.blogautore.repubblica.it/

    As this tidbit shows, Becchetti follows or at least agrees with, the main ideas of Paul Volcker, whose fiscal policies have been followed by several presidents, including the present one. His “rule” is behind the Dodd-Frank Bill. I see a confusion here, based on an idea that microcredit success can somehow be controlled by a world banking system. This to me is contradictory and ignores the idea of national identities with regard to finances. The man is obviously an economic genius, and some of his papers reveal a propensity to write and work on the psychology of wealth and poverty. However, his economic models are all based on research and data, not merely theory. I think the problem is that the “white paper” is attempting to do something too big, and too encompassing, falling therefore, into the trap of trusting democracy and the rationality of people too much. This is , of course, the sign of a “liberal”, the Jeffersonian as opposed to the Hamiltonian democrat. On the global level, this simply will not work. de Tocqueville cautioned us on this. As I wrote earlier, there is a certain amount of naivete and a denial of Original Sin, as well as the contradiction of placing microcredit ideals in a macroeconomic environment. I want to read more of Becchetti, as he is interesting, and if you are mathematically inclined, his data is amazing.

  10. Supertradmum says:

    By the way, Becchetti has used games to gather data regarding people’s responses to economic problems and relationships. His data shows a high result of decisions not based on “Aristotelian” economics, by which he must mean economics as a practical science wherein economics is connected to a attaining a certain standard of living-the good life for the individual. Becchetti’s game data reveals people desiring relationships within the prudence of economics, not merely supply and demand. Quality of life and happiness in Becchetti’s studies is based on relationship and happiness, connected to civic life, not merely monetary well-being. I do not think that one should throw out the Aristotelian model because of a sociological or psychological samplings, no matter how large. That men and women are altruistic to a certain degree is a truism, but economic systems rarely last if based on such a premise. One must live in a bruderhof. His study, with others, on the differences of economic growth in Catholic as opposed to Protestant nations, and his reference to Weber’s thesis, which we all studied a long time ago if we had to take Economics 101, is laden with data which backs his theories of appealing to the common good, relational progress in economics, microcredit and regulations for the common good. Utopia and not particularly Catholic.

  11. AAJD says:

    I’m very glad that Fr. Z and S. Gregg have made clear the status of this document. It is frustrating beyond words to see every word uttered by “Rome” or “the Vatican” treated as some sacred pearl falling from august papal lips ad rei memoriam. There’s far too much coming out of “Rome” or “the Vatican” (especially from the Council for Justice and Peace, which is full of leftist busybodies–cf. their wholly absurd, and justly mocked, guidelines on how to drive a car) that has no business ever seeing the light of day. These are people with too much time on their hands, and too little serious work to do, and they should all be sacked and sent to minister to lepers or hear the confessions of nuns in remote mountain villages. It is extremely important that people attend to the “signature line” of documents like this–the first thing I read on this. It is not signed by the pope, and not approved in audience by him. It therefor has no more weight or authority than any old theologian popping off his mind about X, Y, or Z, and should be treated as such–pure theologoumenon, and nothing more.

  12. Joan A. says:

    I have been so upset all day over this White Paper, this clearly anti-USA piece of drivel that I have been physically ill. Like what is THIS supposed to mean? “not be afraid to propose new ideas, even if they might destabilise pre-existing balances of power that prevail over the weakest.”

    To work off some of the stress, I wrote to my Congressman and explained to him some Catholics and maybe even bishops, in their yearning for justice and helping the poor, might support this wacko idea, but they did not understand the implications.

    I wonder how many economists are in that Peace and Justice Council? These red-hats don’t know what they are talking about — or they do know, which is even scarier because it means they know what they are really proposing, the downfall of the United States.

    Well, I was afraid to log onto Fr. Z tonight. I thought, I know he will have that economics junk on there and if he supports it as the greatest thing since sliced bread and everyone bashes greedy “Wall Street” then I will simply have a full-blown nervous breakdown.

    Thankfully, the beacon of light that is Fr. Z’s blog and the usual feast of reason and flow of soul have prevailed in this little corner of the Catholic world. I will be able to sleep tonight. Thank you all.

  13. muckemdanno says:

    This document is perfectly consistent with Vatican 2 document “Gaudium et Spes” paragraphs 83-90, expecially paragraph 85.

    http://www.vatican.va/archive/hist_councils/ii_vatican_council/documents/vat-ii_cons_19651207_gaudium-et-spes_en.html

  14. Supertradmum says:

    muchemdano,

    Having read the above document several times, I fail to see a mention of One Bank or one controlling institution. Gaudium et Spes refers to changing institutions and regulations of plural institutions, but unless my translation is different, there is nothing there about a Global World Bank. I agree that the wording regarding “national” interests is odd, but when reading that in context, I assumed the authors were referring to the Soviet Bloc at the time. However, any political philosophy which is against nation states is communism, and as Gaudium et Spes is famous for vagueness, paragraph 85 could be taken as against nation states, which is worrying, of course. I have always read that paragraph in light of the Cold War.

  15. ivan_the_mad says:

    “You needn’t be a Ron Paul disciple to recognize that fiat money’s rise is at least partly responsible for the monetary crises this document correctly laments.”

    <3 Ron Paul

  16. Supertradmum says:

    Gregg as reported on the American Papist blog insists that this document is a call to subsidiarity. I do not see this, although it is referred to once. The concept of subsidiarity is much less complicated and much more “local” than this white paper indicates. I think Gregg is correct in saying that regulations and subsidiarity have been part of Catholic teaching for some time, but I think he is stretching the point in order for us not to be reading it as we are reading it- as a huge move to the left. Becchetti’s genius is marred by his blatant acceptance of the Volcker Rule and the Dodd-Frank Bill, mentioned in his blog. See link above. I am not, nor are most Catholics, against regulation, but I am against any body outside of a nation-state governance for and by the people, which decides fiscal policies without any policing other than self. This is not hard to understand and if Gregg thinks the liberal media is reading this wrong, I question his own reading of the text and any reading of the comments of the person who apparently wrote the white paper. This paper is a knee-jerk reaction to the Rome violence and not a well-thought out philosophically sound document.

  17. CM Collins says:

    Seems to me much ado about nothing. Or the usual purposeful misunderstanding and misreading of the Vatican for purposes of cheap shots, bashing, and ax grinding. We already have International Financial and Monetary Systems and, more or less, de facto and de jure Global Public Authorities. The problem seems to be that these authorities don’t seem to be significantly ordered by law or morality.

    My read of the document is that it is so qualified that those seeing it as a call for a ‘world bank’ strictly along the lines of the US Fed or Brussels have misread it. “In this process, the primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics – which is responsible for the common good – over the economy and finance.” How would that not be a paradigm shift in terms of how world international trade, finance, and monetary systems are ordered?

    Now some would say that such a cure would be worse than the disease; that since any human organization is susceptible to corruption, then such an organization would end up doing more harm than good; and that therefore the solution is for the national organizations to, congruent with subsidiarity, the rule of law, etc., to repent, re-order, and reform their own systems, i.e. we should be reforming down and away, abolishing or abandoning international bodies such as the UN.

    That’s a good point. But even if we were to do so, these international agreements, arrangements, and bodies should be wound-down in an orderly, and ethical way. And even after we wound them down, we still have a world that wants to conduct significant trade (and culture and science etc. etc.) on an international basis. So then we’d be back to square one, pace subsidiarity, talking about how to set up international systems.

  18. CM Collins says:

    Seems to me much ado about nothing. Or the usual purposeful misunderstanding and misreading of the Vatican for purposes of cheap shots, bashing, and ax grinding. We already have International Financial and Monetary Systems and, more or less, de facto and de jure Global Public Authorities. The problem seems to be that these authorities don’t seem to be significantly ordered by law or morality.

    My read of the document is that it is so qualified that those seeing it as a call for a ‘world bank’ strictly along the lines of the US Fed or Brussels have misread it. “In this process, the primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics – which is responsible for the common good – over the economy and finance.” How would that not be a paradigm shift in terms of how world international trade, finance, and monetary systems are ordered?

    Now some would say that such a cure would be worse than the disease; that since any human organization is susceptible to corruption, then such an organization would end up doing more harm than good; and that therefore the solution is for the national organizations to, congruent with subsidiarity, the rule of law, etc., to repent, re-order, and reform their own systems, i.e. we should be reforming down and away, abolishing or abandoning international bodies such as the UN.

    That’s a good point. But even if we were to do so, these international agreements, arrangements, and bodies should be wound-down in an orderly, and ethical way. And even after we wound them down, we still have a world that wants to conduct significant trade (and culture and science etc. etc.) on an international basis. So then we’d be back to square one, pace subsidiarity, talking about how to set up international systems.

  19. merrilljong says:

    This is why it would probably be a good idea to get rid of any Vatican dicastery, national-bishops’-conference office, or diocesan/parish department with the words “justice,” “peace,” or “justice and peace” in them. There’s something about those words that just can’t seem to help bringing out the arrogant, all-knowing, command-and-control dictatorial blowhard in all of us.

    (I’m sort of a hypocrite: The proposed service arm, Militia Pacis Christi, of my proposed international charity, Militia Caritatis Dei, does have a word in there than can be translated as “peace”…but at least the word is rendered in a “dead” language, and it is immediately followed by the all-important Modifier which is not only world-redeeming but word-redeeming. … That’s my shame-faced excuse anyway.)

    Re this most recent credibility- and respect-destroying statement from the Vatican on the apparent need for a secular, non-Catholic “world government” or a “global financial authority”: Dietrich von Hildebrand, as usual, probably put it most succinctly, as when he wrote about the United Nations, in which the current Vatican global-secular-authoritarians seem to put such hope:

    “…Think of the lie of the United Nations, whose façade of justice and peace covers up the most infamous crimes.” [Yikes. There are those “justice-and-peace” words again. Are they – and not the love of money or the supposed “idolatry of the market” – the real root of all evil?]

    More fundamentally, Dietrich von Hildebrand recognized the disastrous inappropriateness of an increasingly “politicized” Church going from advising or warning the civil authorities on matters of general Catholic or natural-law principle, to making specific policy proposals which are beyond its competence and are, indeed, an abuse of its authority. (Pope John Paul II reminded us that the Church had no technical competence in the realm of “world economics,” and thus would not be proposing specific technical solutions. Maybe the current papacy wanted to remedy that professional “defect,” and so has recruited some people with the requisite competence, who are now pleased to share their expertise with us.)

    Von Hildebrand did not say that the Church “should not get involved in politics” (though he emphasized that that was only Her secondary task), but he said that when required to, Her involvement should be on matters of principle, on “moral and basic philosophical issues”:

    “The elimination of social injustice can to a great extent be brought about only by state laws, and this is something which lies neither in the power of the holy Church, nor of the individual. And besides, such a change of state laws does not belong to the specific mission of the holy Church. It belongs to the real mission of the Church to defend morality, to admonish men to it, to impose it upon every individual Christian, and this involves fighting the moral evil which everyone commits who commits a social injustice. The Church must oppose this injustice as a sin because, like all sins, it offends God and endangers the eternal salvation of the man who commits the sin. But it is only indirectly her task to obtain a more just order of things in the state.”

    “Of course, it is also a task of the Church, and a matter of social justice, to admonish the state to form its constitution according to the principles of justice. … And as soon as moral and basic philosophical issues come up, especially in the political sphere, the Church should intervene in the most effective way, admonishing and exhorting…”

    “It is an old error to say that the Church should not get involved in politics, that this is not her domain. Of course, this is not her immediate task, and her influence depends on many factors. But that does not change the fact that she must take a stand as soon as ultimate questions come up in politics. [Is the establishment of a world financial authority an “ultimate question” upon which the Church must take a stand?] During my fight against Nazism, I wrote in my newspaper, ‘Der Christliche Ständestaat': ‘The Church should not be politicized, but politics should be Catholicized.’ [The modern Church has given up on “Catholicizing” anything, including politics, including Catholics themselves. That would be rude; and “scandalously particular.” So maybe it’s logical that modern churchmen would choose the easier alternative of politicizing the Church. If you can’t beat ‘em, join ‘em!]”

    “It is definitely no part of the message of Christ that there is to be no more poverty, no more war, that the earth is to become a natural paradise. But a deep interest in the earthly welfare of our neighbor is a central duty of the Christian and an essential demand of the love of neighbor.”

    “It remains true, however, that the shift of emphasis [manifested in the Church’s modern] emphasizing of the natural improvement of the world at the expense of the glorification of God, of the sanctification and eternal beatitude of man, is a disastrous confusion.”

  20. Supertradmum says:

    Americans are way too complacent. I am sitting on the edge of the Mediterranean, watching the death of the financial institutions of Italy, Greece, Portugal and Spain. The euro-zone is unraveling very, very quickly. The euro will fall and the dollar will fall. I do not know about you, but I do not want a Global control over the finances of the world, jobs, distribution of goods, currency, etc. I do not want false representatives of Christ’s Church handing over the reigns of the Vatican Bank to an unpoliced, undemocratic oligarchy. I do not want the future to look like the novel I just started by Robert Hugh Benson, Lord of the World, which seems prophetic today.

    This document could not come at a worse time.

  21. wmeyer says:

    Supertradmum,

    Excellent, chilling book. I’ll say no more on that till you have finished it.

    No document which proposes a world bank can possibly be discussing subsidiarity. Else the lunatics are running the asylum.

  22. Supertradmum says:

    Why can’t people see that egotists, the narcissists, are in power too near the Chair of Peter? I am reminded of the reign of Pope St. Pius IX, when he declared himself a prisoner in the Vatican. Financially, this is going to happen soon, when the money leaves the banks and goes into this global financial institution beholding to no one. The truth is, the money is already gone, and the only ones who really have it, are the invisibles, who surface now and then at the non-elected groups in Brussels and Washington. If all the people who have euros in the bank accounts went and demanded the money today, only 20% would be available. People with very good, sincere intentions can be very, very stupid about the big picture. How did this lack of discernment get into the PCJP except by willful ignorance of concupiscence and Original Sin. Those who desire and work for utopias end up with Lenin, Stalin, Mao, and all the other materialists who supposedly wanted the Kingdom of God on earth. We are not created equal in talent or the ability to have riches; if this Vatican council was writing about the need for real charity, I would be much more convinced that these economists were listening to the Holy Spirit, rather than the Spirit of the Age. If the entire document was about subsidiarity, I would be making copies and distributing them to all (no pun intended). As it is, I am ashamed and trying to explain why this white paper got out of the circular filing cabinet. I can’t even vote these guys out, and the power they have is enormous, to do even greater harm. Take a moment and look at Becchett’s blog. I want my Church to have better economic advisers, thank you very much.

    But the real problem is that the good people in the pew are truly confused. A highly spiritual, excellent Catholic woman asked me today “What is wrong with a Central, Global Bank?” Have we learned nothing from the tyrannies of the last one-hundred-and-fifty years who took power away from the Church, in real terms, starting with Garibaldi, and his hatred of the Church, through the list of communists and Marxists above? The Church is a visible, physical, institution on Earth and as such, needs the goods of this world.

  23. Supertradmum says:

    sorry, typo on Becchetti’s name above, sorry

  24. Peggy R says:

    Supertradmum,

    I agree with you that we may not be realizing the severity of the effects of this document here in America. I am aware from news reports that the EU eurozone is collapsing as we speak. Aren’t these P&J guys embarrassed to propose another supra-national financial entity in the face of the collapse of the eurozone? The very argument against the P&J proposal is right in front of them, yet they do not see.

    The collapse of the eurozone will be good in the long run, but it will be painful to go through it.

  25. Marcus de Alameda says:

    Really good quotes from this thread that clearly hit home:
    * “I am not, nor are most Catholics, against regulation, but I am against any body outside of a nation-state governance for and by the people, which decides fiscal policies without any policing other than self.”
    * “So maybe it’s logical that modern churchmen would choose the easier alternative of politicizing the Church. If you can’t beat ‘em, join ‘em!”
    * “No document which proposes a world bank can possibly be discussing subsidiarity. Else the lunatics are running the asylum.”

  26. Ioannes Andreades says:

    Three points:
    1. Bears Stearn and Lehman Bro’s went down not because they thought that they would be bailed out but because arrogance and greed blinded them to the risks to which they had exposed themselves. I, like Henry Paulson, believe that moral hazard it real. Luckily, even he relized that it is not the end-all, be-all guiding principal of market regulation.
    2. If AIG couldn’t fully appreciate the risks of the financial markets, how will some global financial authority do a better job?
    3. What happens when the global financial authority is ignored by a nation’s banking system? What if the only way to get a nation to go along with this authority is military intevention? Will the PCPJ be in favor if this intervention?