by Fred Kammer, SJ

In the month since the release of the Vatican document or “Note” on global financial systems,¹ responses have ranged from praise as “extraordinary”² [Professor Steve Schneck, Board Member of Catholics in Alliance for the Common Good] to effective dismissal as coming “from the lower echelons of the Roman Curia”³  [George Weigel of the Ethics and Public Policy Center]. 

First, a note on the source, then the document. The Pontifical Council was created at the behest of the Second Vatican Council "to stimulate the Catholic Community to foster progress in needy regions and social justice on the international scene" (Gaudium et Spes, No. 90). Pope Paul VI established the Pontifical Commission "Justitia et Pax" by a Motu Proprio dated January 6, 1967 (Catholicam Christi Ecclesiam); and ten years later he gave the Commission its definitive status with the Motu Proprio Justitiam et Pacem of December 10, 1976.  Pope John Paul II lifted its status from Commission to Pontifical Council and reconfirmed the general lines of its work as the Vatican teaching office on justice and peace.⁴

In light of the comments of Weigel and other conservatives who challenged the document’s status and content, Catholic New Service reporter John Thavis revealed on November 17, 2011 that “the council’s members and consultants had worked with the Secretariat of State throughout the drafting process” and that the Secretariat of State’s staff had “not only discussed the document’s approach but reviewed and ‘adjusted’ its content before publication.”⁵ Other than the Pope himself, it is hard to find an office higher up in the Vatican than its Secretariat of State.

Now we turn to the document. The content of the document is both traditional and novel. On the “traditional” side the “Note” reiterates at least four strong themes from the tradition of Catholic social teaching, citing a number of papal encyclicals and other Vatican documents. Among those themes are the following:

1. The dangers that are posed by an unfettered economic market to world equilibrium and peace. In Africa on November 18^th, the Holy Father warned once again of “the pitfalls which exist on the African continent and elsewhere, such as unconditional surrender to the law of the market or that of finance.” The Note is clear in reiterating the repeated Catholic teaching about the need for a strong ethical and legal framework to regulate “an economic liberalism that spurns rules and controls.”

2. The growing economic inequalities between and among individuals and nations. The Note acknowledges the positive aspects of globalization in that, between 1900 and 2000, “the world population increased almost fourfold and the wealth produced worldwide grew much more rapidly, resulting in a significant rise of average per capita income.” But it immediately adds, “At the same time, however, the distribution of wealth did not become fairer but in many cases worsened.”

3. The dangers inherent in an individualism and utilitarianism that undermine the common good. Here the Note emphasizes the error in thinking that “what is useful for the individual leads to the good of the community.”  While containing some truth, “individual utility—even where it is legitimate—does not always favor the common good.”

4. The need for a strong ethic of solidarity embracing the logic of the common good and the common dignity of all peoples.  The ethic of solidarity means “abandoning all forms of petty selfishness and embracing the logic of the global common good…” This requires a “keen sense of belonging to the human family which means sharing the common dignity of all human beings…”

The more novel parts of the Note are actually new emphases on other points in the tradition or more specificity to points made before by popes and others. Both Blessed John XXIII and Pope Benedict XVI expressed the need for a world political authority to deal with global issues.  The Note takes this more general idea forward by spelling out some specifics of a global world authority including reform of the international financial and monetary systems and their institutions and instruments: the need for a realistic structures involving both a world authority, world central bank, and regional authorities; the inadequacy of the International Monetary Fund; gradual creation and implementation of new structures over time; a free and shared agreement of nations to create such structures after a preliminary phase of consultation; respect for the traditional principle of subsidiarity through a world public authority that is at the service of global society and regional and national insitutions; and “for the reform process to proceed with the United Nations as its reference…” The Pontifical Council admitted that it would be a long road to the creation of any such world authority.

The Note also called upon readers to reflect on the appropriateness of taxation measures on financial transactions, the revenue from which would be “very useful in promoting global development and sustainability” and also could contribute to the creation of a world reserve fund “to support the economies of countries hit by crisis…” It also urged that recapitalization of banks with public funds be conditioned on “virtuous” behaviors aimed at developing the “real economy” (instead of financial transactions that produce no goods or services). Also in the world of banking, it recommended the separation of the “domains of ordinary credit and of Investment Banking…” Such separation could have helped greatly in the recent financial crises which toppled many banks in the U.S. and abroad.

As a final specific, the Council urged universities and other educational institutions to fill in the gap between ethical training and technical preparation to prepare future leaders “to discern the global public good and serve it in a constantly changing world.”

What comes through again and again in the document and in past decades of Catholic social teaching is the need for ethical and moral “boundaries” within which economic and financial markets should operate. In a press conference in August en route to the World Youth Day, Pope Benedict restated this fundamental principle in these words:

The economy does not function with a self-regulation of the market alone, but it needs an ethical reason if it is to function for man. And once again Pope John Paul II’s words in his first social Encyclical become apparent: man must be the centre of the economy and the economy cannot be measured according to the maxim of profit but rather according to the common good of all, that it implies responsibility for others and only really functions well if it functions humanly, with respect for others. And with the different dimensions: responsibility for one's own nation and not only for oneself; responsibility for the world — even a nation is not isolated, even Europe is not isolated but is responsible for the whole of humanity and must always think about economic problems in this key of responsibility for the other parts of the world too, for all who suffer, who thirst and hunger, who have no future. And so — a third dimension of this responsibility — is responsibility for the future.⁶

Such triple responsibility for one’s own nation, for the world, and for future generations has and will continue to distinguish Catholic thought from that of a free market ideology which is all too prominent today.