A new market

by Editor · Published November 5, 2008 · Updated March 6, 2012

The experts are telling us that economics may never be the same again after the consequences of the recent collapse have played themselves out. If so, then the demise of unfettered capitalism will be no cause for sorrow.

Some observers are seeing a hopeful upside in the crisis, comparing it to a detoxification programme for global economics. However, the capitalist system needs not purification but transformation.

A world in which the market takes precedence over human and ecological deprivation, and in which the boundless greed for profit reigns supreme, banishes God. On religion, the difference between communists and capitalists is that the former are honest about sidelining God. That is not to claim that individual subscribers to the capitalist system are intrinsically godless. This would be as absurd as contending that socialists cannot be Christians. However, a system that has no option for the poor, a system that elevates profit and avarice above the welfare of God�s creation, by definition cannot include God. Pope Benedict put it most eloquently during last month�s Synod of Bishops when he called for a broader spirituality which discerns God in all people, and especially in the poor, who must therefore not be marginalised in the diffusion of resources.

The present crisis represents the failure of the free market. Unfettered capitalism, like communism and feudalism before it, benefits the few at the expense of the majority. Now is the time to restructure the world economy instead of detoxing and then reviving a flawed, brute system.

The Catholic Church has long been vocal in its reservations about capitalism. In his encyclical Sollicitudo rei socialis (1987), Pope John Paul II condemned the �all-consuming desire for profit and the thirst for power at any price with the intention of imposing one�s will upon others, which are opposed to the will of God and the good of neighbour�. Twenty years earlier, Pope Paul VI, in his encyclical Populorum progressio, outlined the Church�s social doctrine which puts at its centre the Christian obligation to the poor. In reference to the liberal free market system, Pope Paul counselled against the selfishness of profits: �Development cannot be limited to mere economic growth. In order to be authentic, it must be complete: integral, that is, it has to promote the good of every man and of the whole man.� The Church does not profess to offer a third way or an ideology, as John Paul II emphasised. But its understanding of the human condition should and must inform the economic evolution.

In recent weeks, the Church�s leaders have been forthright in presenting the Catholic social doctrine. Rightly, the Church apportioned blame for the crash � which is going to hurt those who never profited from the boom times more than those who caused it�to capricious bankers, speculators, financial managers and governments. In as far as the Church is offering an economic philosophy, it urges that that economic health and real development must be based on what the Italian economist Ettore Gotti Tedeschi in L�Osservatore Romano called �balanced demographic growth�.

No matter how much stock exhanges may fluctuate over the next months, it is clear that the free market has failed. In G8 countries such as the United States, Britain and Germany the financiers of the market had to be bailed out by the state � by the people.� Governments now have no cause to neglect their obligation to regulate economies, responsibly and transparently, for the common good. In that pursuit, these governments would be well advised to refer to the Catholic Church�s social justice teachings.