There has been much press about what the Pontifical Council’s for Justice and Peace document’s “Reform of the international financial system with a view toward a general public Authority” has to say. People on the left are touting it as a moral success for their political views: the Vatican, for once, is leftist. The right is mixed. Some downplay its authority, some are reservedly approving of it, some dismiss it completely.
What frustrates me is how the Americans have, again, become rather polarized about the document. Instead of having the intellectual humility to listen to what it says, they simply either immediately approve or disapprove because it does or does not jive with their own political bend.
So I thought it would be important to offer a brief reflection on the document, ending with a small commentary about the media’s response to it and the moral authority it holds for Catholics. I also encourage people to read the document, which can be found here.
Here is the first bit of text I found helpful:
Since the 1990s, we have seen that money and credit instruments worldwide have grown more rapidly than revenue, even adjusting for current prices.
This is not an economic statement, but a moral one. It is a statement about the moral bankruptcy of creating more credit than there is money. It allows for a culture that becomes crazed with debt without having the means to pay it back. Obviously, credit is important, it is what people need to buy a house, a car, and some other necessities of life. So it is not a moral statement about credit itself, but rather about the excess of credit. We have seen the negative effects of this in the recent recession that has been plaguing the West. We, as a culture, have become morally bankrupt, and our economic bankruptcy is but a sign of a deeper moral issue. The following comment a bit further down re-iterates what I just stated:
The speculative bubble in real estate and the recent financial crisis have the very same origin in the excessive amount of money and the plethora of financial instruments globally.
The document continues a bit further on:
A liberalist approach, unsympathetic towards public intervention in the markets, chose to allow an important international financial institution to fall into bankruptcy, on the assumption that this would contain the crisis and its effects. Unfortunately, this spawned a widespread lack of confidence and a sudden change in attitudes. Various public interventions of enormous scope (more than 20% of gross national product) were urgently requested in order to stem the negative effects that could have overwhelmed the entire international financial system.
The above is not a moral statement, it is an economic judgment. I must admit, it is rather vague at that. First, the document uses the term “liberal” in the classical sense, which is more akin to the North American term “conservative”. Many commentators have decried statements like this, stating it lacks proper economic principles and is an unfair judgment on a situation that is more complex than simple non-interventionism. I would agree with these critics. While summation is important, making sweeping negative judgments is unfair to the situation itself, which is far more complex. This is a moral statement, to an extent. But it is based on bad facts. It decriest the unwillingness to help – read moral statement. But the basis for the moral statement is an economic situation that did not exist. Interventionism did happen, and it created worse problems. People are confused by the above statement, myself included.
I have realized that this post is going to be much longer than I expected. I will make this, then, into a series of posts. Please continue to read and please comment so as to engage and debate this important topic.