Those politicians who think the Dodd-Frank law went too far in attempting to reform Wall Street will likely need smelling salts after taking a look at a proposal for reforming the global financial system that was released by the Vatican on Monday. The proposal’s centerpiece is a call for the formation of a global political authority that would, among other things, possess broad powers to regulate financial markets. The reality of globalization, says the document, necessitates a “gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities.” The Vatican envisions this global authority playing a role not just in overseeing financial markets, but also disarmament and arms control, food security and peace efforts.
Calling into question the entire foundation of neo-liberal economics and proposing one world financial order? You never know what those radicals over at the Pontifical Council for Justice and Peace will come up with next.
The 41-page document, “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority,” (it’s no wordier than some of the signs at the protests) can be seen as a practical extension of Pope Benedict XVI’s 2009 encyclical Caritas in Veritate. In that document, Benedict argued that there is “an urgent need of a true world political authority” to address problems of economic inequality both within and between countries. Writing in the wake of the financial meltdown, Benedict identified the roots of the crisis as economic, financial, and also moral. It is not possible, he suggested, to pursue the common good while also glorifying the values of utilitarianism and individualism.
The writers of this new Vatican proposal also hammered the values of the financial world, writing that “the crisis has revealed behaviors like selfishness, collective greed and the hoarding of goods on a great scale.” At fault, they say, is “an economic liberalism that spurns rules and controls.” It’s a fierce denunciation of the free-market theology embraced by Republicans and Democrats alike, and likely to put more than a few Catholic politicians in the uncomfortable position of either ignoring or downplaying the Vatican’s position on financial reform. I’ve put in calls to Speaker Boehner and Paul Ryan’s offices, and will update if and when they respond with comment.
Concern about the consequences of unfettered capitalism is not new for the Vatican, nor is the institution’s belief in the need for global authorities. (The document cites the teachings of popes over the past 40 years on the need for global institutions that can look beyond national interests.) But this proposal has a very specific context. This past June, the Vatican hosted a summit on “Ethics for the Business World” that examined possible options for ethical oversight in the post-crisis financial world, and which included leaders from banking, manufacturing and financial sectors.
Officials at the Vatican timed the document’s release to precede the G-20 Summit in France that will happen the first week of November. Of course, the document’s release also comes amid the campaign for the GOP presidential nomination. I would dearly love to hear a question about the proposal posed in an upcoming debate. The language of a “world global authority” to which nations transfer part of their powers seems almost drawn from a list of Phrases That Freak Out The Tea Party. But if Republicans can spend two hours talking about 9-9-9 on national television, surely they can spare a few minutes for the Vatican’s proposed financial reforms.