Prudential Questions About the Vatican’s Call for New International Authority Over Financial Institutions and Policy

FPR readers will be interested in the Vatican’s new call for international authority over the financial institutions and policy. I understand the Pope’s beef with many contemporary capitalists and financial wizards. However, I wonder whether this call for international authority can even pass a basic prudence-test. Given the historic tendencies for monied interests to acquire significant influence over political authorities, there is very little guarantee that similar financial opportunists will not commandeer and “occupy” the levers of the new international authority that the papacy now calls for. This is what ultimately happened in America when economic control shifted from more local-levels to the national level. Big business just found a way to make their new more powerful national regulator their “own,” and regional attempts (e.g., the Granger Movement) to regulate business at the state level were overpowered by big business’ new friend, the Federal Government. Will not the same thing happen at the global level?

h/t: Drudge Report

14 comments on this post.
  1. Jeremy Beer:

    Talk about too big to fail. Sheesh…

    Well, it’s good to know that our work here at FPR isn’t exactly done.

  2. Marchmaine:

    Technically, the Pontifical Council for Justice and Peace.

    Rather a difference than a statement from one of the Congregations.

    Still, enough to make me google Cardinal Peter Kodwo Appiah TURKSON…

  3. Stephen P:

    This exposes some of the concerns I have about the concept of subsidiarity. It seems like this council could make a compelling case that “lower-level” institutions have failed to perform their job well in regulating the financial market. Under subsidiarity logic, that would recommend delegating it to some higher power. Now, those who subscribe to subsidiarity but are opposed to this recommendation would be on fine ground to point out that there’s no reason to think a “higher” institution would do a better job. But still, both opinions are consistent with subsidiarity. Maybe it isn’t as amenable to localism as a lot of FPR folks think.

  4. Marchmaine:

    The Pontifical Councils were created in the late 60′s and variously updated through the 70′s and 80′s. Go to justpax.it and read their charter; any organization that enumerates “raise awareness of xyz” as one of its core missions is, by definition, a non-factor.

    As much as I’d like to hope for ideological consistency from “The Vatican” the fact is that much of the Curia is not concerned with Leo XIII and subsidiarity. Among many Catholics with ties to Rome, reform of the Curia is considered _the_ key mission of the next (younger) Pontiff.

    There’s a story here, but its not the exciting World Domination story that folks are talking about… it is a much more pedestrian story of bureaucratic drift.

    If we couldn’t take over the world with the initial Jesuits who had access to power and the smartest, most dedicated men in the world… you have nothing to fear from a Pontifical Council.

  5. John Gorentz:

    “I believe in the holy catholic bank, the communion of lenders, the forgiveness of debts…”

  6. richard:

    Martchmaine,
    As a committed Protestant who favors Distributism, I found this announcement very disturbing. I appreciated your explanation that coming from the Vatican is not necessarily coming straight from the Pope’s mouth.

    I guess I can put my orange sash back in the closet for a while ;-)

  7. Marchmaine:

    Richard, no worries… we keep the real plans locked away until the time is right.

    However, not to alarm you over-much, but the Pope _did_ say much the same in “Caritas in veritate.” And to Richard’s point above, subsidiarity is a two-way view of the world; and it is a perfectly fair question to wonder what happens when subsidiary institutions like Corporations shed their natural bonds (i.e. State Charters) and operate in a vague and largely un- or semi-governed space of “Globalism.”

    For reasons that I suspect are largely technocratic and academic (the primary modus vivendi of a Pontifical Council) they seem to lean towards that kind of approach and all that entails: more experts, technocrats and delegated power. But a culture shift (not forthcoming, mind you) could just as easily see a call to (re-)sub-ordinate corporations. Imagine the hue and cry: Pope demands break-up of Exxon-Mobil! Pope hates free market! Pope interferes with internal laws of States! It’s hard to be the Pope.

  8. Dwight Lindley:

    Even with all the exclamation points, I’m not sure I understand what Marchmaine’s view of subsidiarity is in the end, though I am sure his claim about the present pontifical councils not giving a huey about subsidiarity is ridiculous. The language of subsidiarity and solidarity comes up in just about every major document from the Council on Justice and Peace, and the major social encyclicals of the last two popes have been packed with it as well. It takes quite a bit of cynicism indeed to dismiss it all with dainty flourish of the hand, as only thinly veiled 70s rubbish.

    As to PDH’s initial question, I’m not sure *not* doing anything would put us in any better situation than the one we’re in right now. If we’re taking subsidiarity seriously at all (pace Stephen, et al.), then it seems like economic regulation would have to be bumped pretty high up the ladder of scale in today’s economy. Mega-corporations already inhibit our efforts at living fruitful local lives. Doing nothing about that for fear of more of the same doesn’t seem like the best plan.

    All that said, I recognize I’m a good-for-nothing dilettante in these matters, and I’d like to be corrected by someone who knows better.

  9. John Médaille:

    I think everybody ought to take a deep breath here. From some of the comments here and across the web–especially the more ideologically committed regions of the web–you would think that the Church had called for one world gov’t, with the “Internationale” replacing the Sanctus in the liturgy. And you would think that it had been published by some random group of bureaucrats with little connection with Holy Mother Church. But in fact, the document is rooted in realism and in the concepts of subsidiarity and solidarity. As such, it should be welcomed on the Front Porch.

    The document is rooted in realism because such organizations already exist and must, in fact, exist. You cannot have the kind of huge flows we have without there being formal and informal agreements regulating these flows. So the question is never whether there should be such rule, but on what principles the rule should be exercised.

    It is rooted in subsidiarity because that principle doesn’t push all rule to the local level, but makes the local the focus of all aid (subsidium). The organs of international trade must be judged by the aid they give to the least rather than to the greatest. And that brings us to the principle of solidarity, which is no more than “what you did for the least of my brothers” raised to the level of a governing principle.

    And finally, while it is true that such statements do not have the full magisterial authority of, say, an encyclical, neither are they just the random opinions of a rump group of clerics. Rather, these are issued with the authority of the Vatican (more compelling for Catholic than for others) and have the implicit endorsement of the Pope. In this case, it is how the Vatican understands the concrete application of the principles embodied in Catholic Social Teaching as a whole and in Caritas in Veritate and Populorum Progression in particular.

    I think the document is more subject to critique on the grounds that its own critique of the organs of international regulation is rather more oblique than direct, and the WTO, for example, could use some direct criticism, as good all of the assumptions which underly the current dogmas of “free trade,” dogmas which are, at present, ensuring the subservience of non-western economies and peoples.

  10. Marchmaine:

    I’m no George Weigel fan and I originally criticized the haste with which he fisked “Caritas in veritatis.”

    But in light of subsequent discussions with clergy in Rome and others serving the Vatican in non-pastoral positions, I think Weigel was probably more right than wrong in his assessment of the workings behind the encyclical–which is probably the more interesting story here.

    http://www.nationalreview.com/articles/227839/i-caritas-veritate-i-gold-and-red/george-weigel

    I don’t see any cynicism in my posts… perhaps slightly flippant, but I take seriously Justice and Peace; they are, however, fundamentally Euro-liberals of a technocratic stripe. Not that there’s anything wrong with that.

  11. Nagle:

    Chesterton would not approve. Decentralize capital. Decentralize power.

  12. Dwight Lindley:

    George Weigel’s critique was as convenient as yours is, Marchmaine: each allows its adherents to avoid coming to terms with the history, language, and intentions tied up in these documents–along with all the responsibilities those entail–and all on the basis of shadowy sources “inside the Vatican” unknown to the rest of us.

  13. Gabriel Sanchez:

    John,

    I think you may be giving the World Trade Organization too much credit here. Like all international institutions, the WTO functions on the good graces of its membership, particularly those few powerful economies (for much of its history, the U.S. and EU, but now China should probably be included) which can most effectively avail themselves of the Organization’s dispute settlement machinery. In other words, it doesn’t act as an exogenous constraint on state behavior, nor does it wield the power or legitimacy to compel countries to undertake measures which are not in their (perceived) interests. States adopt the “package deal” of WTO agreements because they want to avail themselves of the “one stop shop” trade benefits the Organization has historically delivered. There may be concrete winners and losers within states because of these policies, but that’s a matter of internal policy choices, not the machinations of the WTO itself.

    Since 2000, the world has witnessed the steady decline of the WTO’s functionality. The eruption of bilateral and regional trade and development pacts have undermined the “universality” of the WTO system and created a great deal of fragmentation within international trade law. The dispute settlement system has degenerated into a forum for political gamesmanship (the Boeing/Airbus (a.k.a. U.S./EU) dispute being the most outrageous example at the moment) and there’s little empirical evidence that the emergence of a “WTO jurisprudence” has done much of anything with respect to guiding state behavior. Countries will still avail themselves of boldfaced protectionism when they believe it is in their interest or defect from their regulatory commitments with respect to safeguards, countervailing duties, and anti-dumping measures. Economists continue to enter the fray by pointing out how defective many of the WTO instruments are, but nothing is getting done about it. None of the “next horizon” agreements governing matters like antitrust and environmental protection have showed up. Why? Because global interests in these and many other areas are too variegated for a robust consensus to be reached. While I hate to sound like a pessimist, it’s entirely possible the WTO has already “peaked out” and that we’re more likely to see a return to a tangled web of conflicting trade relations.

  14. John Gorentz:

    John M wrote, “You cannot have the kind of huge flows we have without there being formal and informal agreements regulating these flows. So the question is never whether there should be such rule, but on what principles the rule should be exercised.”

    And I ask, the rule or the ruler?

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