Listen to the Pope, not the bewildered and misguided Pontifical Council for Justice in Peace
I refuse to mince words.
The Vatican’s Pontifical Council for Justice and Peace (which, incidentally, has no role in the Magisterium of the Church and no binding authority over the consciences of Catholics) has released a document rife with radical internal contradictions and ignorance. Futhermore, it tramples on the fundamental Catholic Social Teaching of subsidiarity.
What is subsidiarity?
Subsidiarity is the belief that decisions should be made as locally as possible. The reason for this is best expressed by Catholic historian Lord Acton: “Power tends to corrupt and absolute power corrupts absolutely.” Concentrating power in the hands of politicians and bankers is a departure from subsidiarity condemned by Catholic Social Teaching.
Few institutions wield as much unchecked power as the US Federal Reserve, whose chairman has the responsibility of managing monetary policy for the entire nation and — as the result of the fact that all the world’s currencies are based on the dollar — the world monetary system. Since all economic transactions depend on monetary policy, it is not an exaggeration to say that Chairman Ben Bernanke wields some authority over every transaction on the globe. It is safe to consider this radical anti-subsidiarity.
Before World War I, monetary policy was entrusted to individual citizens. A basic cycle of inflation and deflation would occur that would ensure long-term price stability. Population would increase, causing deflation. Gold miners would rush to mine in order to take advantage of the large profit margins that are part and parcel of gold deflation. They would flood the market with gold. This would cause inflation that would cause the gold miners to stop mining. However, people would continue to have babies and the cyclical process would start all over again. This ancient process gave individuals the ability to manage their financial affairs knowing that, over the long-term, the value of money would remain stable. There was no need for people to wonder if Ben Bernanke or anyone else would make decisions to jeopardize their hard-earned dollars or the economy.
Prior to World War I, the US operated on the classical gold standard, which trusted the market and individuals with the monetary authority in this country. Since then, we have progressively abandoned the gold standard until Richard Nixon scrapped it in 1971. Since that time, Congress has operated with a virtual limitless credit card. Trade deficits, federal deficits, inflation, and government power all grew exponentially. Jobs fled overseas. Ongoing low interest rate policies created bubbles that exploded in the financial meltdown.
Fortunately for the country, the American people are waking up and demanding increased subsidiarity. In a Rasmussen poll last week, by a 44% to 28% margin, likely American general election voters support moving back to the gold standard. When informed that it reduced the power of bankers and politicans, voters supported it 57% to 19%.
Unfortunately, the out-of-touch Pontifical Council for Justice and Peace offered the un-Catholic and wacky analysis that we need to centralize power even more:
“In fact, one can see an emerging requirement for a body that will carry out the functions of a kind of ‘central world bank’ that regulates the flow and system of monetary exchanges similar to the national central banks. The underlying logic of peace, coordination and common vision which led to the Bretton Woods Agreements needs to be dusted off in order to provide adequate answers to the current questions. On the regional level, this process could begin by strengthening the existing institutions, such as the European Central Bank. However, this would require not only a reflection on the economic and financial level, but also and first of all on the political level, so as to create the set of public institutions that will guarantee the unity and consistency of the common decisions.”
Where to start?
Fortunately, the Pontifical Council of Justice and Peace was kind enough to include a refutation of their own dangerous idea in this selfsame contradictory document:
“As we read in Caritas in Veritate [a papal encyclical with real weight to the consciences of Catholics], ‘The governance of globalization must be marked by subsidiarity, articulated into several layers and involving different levels that can work together.’ Only in this way can the danger of a central Authority’s bureaucratic isolation be avoided, which would otherwise risk being delegitimized by an excessive distance from the realities on which it is based and easily fall prey to paternalistic, technocratic or hegemonic temptations.”
That pretty much sums it up. So stop dreaming up schemes that violate subsidiarity.
And follow the advice of the one section of your own document where you actually quote a Papal Encyclical.