Pope Benedict says the global financial crisis reveals the folly of believing the market can regulate itself.

Pope Benedict says the global financial crisis reveals the folly of believing the market can regulate itself.

December 12, 2011

A few minutes after landing in Africa last month, Pope Benedict delivered a stern warning against the "unconditional surrender to the law of the market or that of finance" in Africa and throughout the global economic system.

His words were immediately seized upon by those wondering where the pope stood on a recent Vatican document that proposed the creation of a world political authority to regulate financial markets and rein in the "inequalities and distortions of capitalist development."

In short, it seemed the pope was speaking the same language as the document's authors.

In his own document unveiled during the Nov. 18-20 trip to Benin, the pope asked all members of the Church to "work and speak out in favour of an economy that cares for the poor and is resolutely opposed to an unjust order which, under the pretext of reducing poverty, has often helped to aggravate it."

He specifically denounced business groups that exploit African resources and leave local populations impoverished.

All of this seemed to echo the tone of the 41-page text on global financial reform released in late October by the Pontifical Council for Justice and Peace.

Such admonitions, however, are nothing new for Pope Benedict. Those who have paid attention in recent years know that the pope has consistently taken a wary and critical view of the global economic system and the disparities it has generated.

Above all, he has taken aim at the patterns of consumption that seem to be built into the structures of modern capitalism. He has done so repeatedly, in language that leaves no doubt about where he stands.

In 2007, for example, he deplored materialistic ideologies that tell people: "Take everything we can get in this brief moment of life. Consumerism, selfishness and entertainment alone are worthwhile. This is life. This is how we must live.


"And once again, it seems absurd, impossible, to oppose this dominant mindset with all its media and propagandist power."

The same year, addressing Catholic economic experts, the pope said economic models based on "irresponsible consumption of natural and environmental resources" were jeopardizing the well-being of present and future generations.

He has warned that "the consumer race and consequent waste" not only threaten supplies of resources but also tend to generate a spiritual vacuum among people in well-off countries. He views consumerism as an ideology, and he said in 2010 that the prevailing models of consumption and production are clearly unsustainable.


Visiting Brazil in 2007, the pope critiqued the false promises of Marxism and capitalism. Marxism, he said, has left a sad heritage of economic and spiritual destruction.

Then he added: "And we can also see the same thing happening in the West, where the distance between rich and poor is growing constantly, and giving rise to a worrying degradation of personal dignity through drugs, alcohol and deceptive illusions of happiness."

Visiting a homeless shelter in 2010, the pope described the global economic system as a world in which "the logic of profit and the search for self-interest seems to prevail."

That was a key point in his 2009 encyclical, Caritas in Veritate (Charity in Truth), which said financial speculation for "short-term profit" was a cause of global financial insecurity.


Last July, the pope said world hunger was also a consequence of the current economic model: "How can we be silent about the fact that even food has become the object of speculation or is tied to the course of a financial market that, lacking definite rules and poor in moral principles, appears anchored to the sole objective of profit?"

The document by the justice and peace council was more specific than papal pronouncements in proposing concrete measures to correct economic imbalances, and that's where it drew the most criticism.

In particular, its call for a "central world bank" to regulate monetary exchanges was seen by some as violating the Church's teaching about subsidiarity - the principle that a central authority should perform only those tasks which cannot be performed effectively at a more local level.

Writing about economic and social justice in his document on Africa, Pope Benedict reiterated that principle and cited the Compendium of the Social Doctrine of the Church: "In accordance with the principle of subsidiarity, neither the state nor any larger society should substitute itself for the initiative and responsibility of individuals and intermediary bodies."


But Pope Benedict also has expressed his view that current modes of regulating the financial system have failed, and that new structures and institutions may be needed.

Addressing the Pontifical Academy of Social Science in 2010, the pope argued that the market is not a self-calibrating mechanism and that oversight may have to take new forms.

"The worldwide financial breakdown has, as we know, demonstrated the fragility of the present economic system and the institutions linked to it.

"It has also shown the error of the assumption that the market is capable of regulating itself, apart from public intervention and the support of internalized moral standards."

The current crisis, he added, "obliges us to re-plan our journey, to set ourselves new rules and to discover new forms of commitment."

Pope Benedict's language on economics is very much in keeping with Blessed John Paul II, who warned of an "idolatry of the market" and said there was a "social mortgage" on private property, which must serve the common good.