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Vatican calls for global government to oversee markets

By on Friday, 28 October 2011

Cardinal Turkson presents the document (Photo: CNS)

Cardinal Turkson presents the document (Photo: CNS)

A Vatican department has called for the creation of a “global government” to keep the world’s financial markets in check.

The Pontifical Council for Justice and Peace released a 6,500-word document last week entitled “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority”.

Starting with quotes from popes over the past four decades, the document strongly criticises liberal economics, which it says “spurns rules and controls”. The financial crisis, characterised by “selfishness, collective greed and the hoarding of goods on a great scale” is “one devastating effect of [this ideology]”, it says.

It quotes Pope Paul VI, who “clearly and prophetically denounced the dangers of an economic development conceived in liberalist terms because of its harmful consequences for world equilibrium and peace”.

Citing Blessed John Paul II’s warning in 1991 of the risk of an “idolatry of the market” the authors of the report say that “a road must be taken that is in greater harmony with the dignity and transcendent vocation of the person and the human family”.

This road should be the gradual establishing of a “world political authority”, with broad powers to regulate financial markets and rein in the “inequalities and distortions of capitalist development”.

Such a supranational authority “cannot be imposed by force, coercion or violence, but should be the outcome of a free and shared agreement and a reflection of the permanent and historic needs of the world common good”, the document says, and that it should build on United Nations bodies. They emphasise that “this transformation will be made at the cost of a gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities”.

At a press conference launching the document, Cardinal Peter Turkson, president of the Pontifical Council for Justice and Peace, said “the basic sentiment” behind the Occupy Wall Street protests was in line with Catholic social teaching. “The Vatican is not behind any of these movements, but the basic inspirations can be the same,” he said.

Bishop Declan Lang, chairman of the Department of International Affairs of the Bishops’ Conference of England and Wales, said the document was “rooted in the Church’s deep concern for the global common good”. He said: “It is important the Church continues to engage with vital issues, such as the economic and financial crisis, affecting people around the world with the aim of encouraging a better future for all peoples.”

Cafod’s economist Christina Weller welcomed the document, saying: “As the G20 reverts to crisis mode and the woes of the eurozone elbow out pressing global issues of climate change, persisting global poverty, widening inequality and continued instability, the Vatican provides a timely reminder to world leaders of the need for greater vision, greater collaboration and real reforms if the world is to emerge stronger, better and wiser from the global economic crisis.”

But Prof Philip Booth of the Institute of Economic Affairs said that, while the document makes some interesting points, “the position falls apart on close inspection”.

He said the report “wrongly asserts that liberalism is a theoretical ideal divorced from reality. It is quite extraordinary, then, that the document will be proposing a world legal authority when the practical realities are that such authorities become captured by cliques and special interests and are rarely at the service of the people from whom they are so remote. Indeed, they often seem directly opposed to the very values for which the Church stands.”

He also disagreed with the document’s call for greater financial regulation. “If anything, systems of global financial regulation exacerbated the financial crisis because it led to many countries having the same failings in their banking systems at the same time. Indeed, many of the problems we faced were caused by attempts by financial institutions to get round regulations,” he said.

And he was critical of the proposal for a world fund to bail out banks. “Attacks on democracy are arising because of the perceived injustice of banks being bailed out at the expense of taxpayers. The creation of a world bailout fund would raise moral hazard and lead to more reckless behaviour in the financial system and certainly would be perceived as a major injustice by taxpayers,” he said.

Another Catholic economist, Prof Paul Dembinski, Director of the Observatoire de la Finance in Geneva, said he agreed with the document that “politics should be the checking power over the markets”, adding that “nation states have lost power to the markets”.

But Prof Dembinski said such a supra-national authority is “easily said but not so easily built”, considering the nationalistic preferences even within the European Union.

  • parasum

    Meddling idiots :(

  • Anonymous

    left to their own devices banks haven’t exactly done so well

  • Anonymous

    Just to confirm ‘liberal’ economics means ‘right-wing’ economics – ironically enough.

  • Wolfgang Munster Schnozle

    Its one thing to sensibly call for a global agreement regarding financial markets. Quite another to tacitly support a franco / german pact seeking to undermine another country!

  • realnewz

    Whats next alien invansion?

  • realnewz

    yea lets just do away with all laws and regulations because corp$ “people” are bound to manipulate the system.
    Only in bizarro world.

  • Mariano Barrientos

    What popes for the last 4 decades a 30 days pope that may have ben murdered, an other one for 30 some year that prepare te road so good to elect ratzinger, those are the popes of 4 decades please leave the church in any way or form away from the packets of the poor, remember that the pope is only infalible on things of faith he has no power on economy dont let your selfe be convincend by a organization that has comited so many errors

  • Parasum

    Neither has the Vatican Bank. For the Vatican, in the words of an earlier poster, “to tacitly support a Franco-German pact seeking to undermine another country” is monstrous. Nation-states have enough trouble running themselves, & the EUSSR is bust, so this rubbish about a global authority is madness as well as an attack on the rights of nations to govern themselves.

  • LocutusOP

    Utter rubbish.

    There is enough moral poverty as it is. Preach and preserve the gospel and stay out of the ‘miscellaneouses’.

    Without doubt this “note” (as they call it) will do more harm than good.

  • Anonymous

    What on earth is going on here? Has some hither-to unreported group called “Occupy Vatican” set up a tent encampment in St Peter’s? Surely some members of the “Pontifical Council for Justice and Peace” might have at least a smattering of economic knowledge, and know that in free markets, economies go through cycles of “boom” and “bust”. If they weren’t aware of this, perhaps the more theologically-minded council members might have referred them to Genesis 41:53-56. The problem is hardly new, nor is it one that is likely to go away soon.
    The current economic crisis in the West  - and it is quite specifically western-centric, hitting the UK, Europe and the US/Canada, but leaving most of Asia, Australasia and south America largely unaffected (the nations of Africa are another matter) – has several causes. Yes, the bankers were greedy and should be duly punished as such. But to wholly condemn Wall Street, the City of London et al for being greedy is akin to condemning sharks for having big teeth and a bigger appetite.
    Blame also attaches to those governments who had regulations to control banks, but with a nod and a wink, did not enforce them, and let the banks go on doing things that regulations were specifically designed to prevent them doing. The “subprime mortgage” crisis in the US that kicked off the present economic crisis was the invention of the US (Clinton) government, a piece of social engineering undertaken for – some would say – cynical reasons – to secure more votes, which bankers gladly – having received the nod and wink from the government gladly picked up and ran with. 
    The result was what P J O’Rourke succinctly called the horsesh–t roundabout: having taken on these largely toxic mortgages by people who were unlikely, if ever, to pay them off, the bankers did what the government allowed – indeed, encouraged – them to do: they packaged them up, put a fancy bow on them and sold them on. The recipients gladly took them, thinking, “Wow, this is a lot of horse sh-t, there must be a pony in here somewhere!” Alas there wasn’t. You notice how there’s a lot of brown, smelly stuff falling on the economy at the moment? That’s not ponies.
    So there was a systemic failure by governments to enforce the very rules they already had in place to control bankers’ wilder dreams of avarice. In the UK and the US (and Iceland, lest we forget an early casualty of this crisis) this failure was on a purely governmental basis: in Europe, there was the complicating factor of the eurozone, where wildly differing economies were yoked to a single ox being whipped in different directions by its various drivers, all of whom have their own idea of how best to plough a field.So, following this failure of Western Governments to implement their existing controls on bankers, through a mixture of spinelessness and electoral cynicism, and indeed encouraging them to partake fully of their avarice and fill their boots, what does the “Pontifical Council for Justice and Peace” propose? Even BIGGER government! Supranational government!! International government!!!
    Oddly enough, there was one government that thought the same thing might possibly work, but after trying to impose it across most of Asia and eastern Europe, it finally gave up the ghost in 1989. Perhaps as well as economists and theologians, the Pontifical Council for Justice and Peace might do with a few historians onboard. Or perhaps they don’t believe in free markets. 
    These universalist economic dreams are cheap to dream, but expensive to put into practice. The Catholic Church has survived through the centuries as a universal church because what it has to offer is a truth: cheap in its propagation, perhaps, but expensive in the spiritual terms of faith, hope and charity. At the end of it, there is perhaps grace in this life and eternal peace in the next. But it don’t offer no ponies, and with respect, neither should the Pontifical Council for Justice and Peace.

  • Mr Z

    Wasn’t it the Roman Papacy & emperors that from 538AD – 1798AD that controlled all the monitories values in the world, ruled with an iron fist, burning alive christians or anyone who opposed them at the stake, all in the name of religious freedom & world peace? We all love peace, but the God in scripture gave us freedom for a reason, even if that freedom is so often abused. The human race is flawed, and doesnt matter how much good intention one may have, where ever in history a small elite group of people have tried to take power it only leads to one thing…death & persecution.

  • Mr Z

    Ps – If you study Bible prophecy from the prospective of a Seventh-day Adventist, the Bible predicts that just before Christ returns that the Roman Papacy will try and unite the world. This will be followed by fierce persecution to all christians over the world, then Jesus will come. So whether you take this message from a religious, or a political prospective… the final result is still the same…disaster!