An Economic Revolution?
When the global financial crisis of 2008 hit, the politicians’ promise was that economic policy would change for the better, that the bankers and speculators whose machinations created the crisis would be held to account.
People queue to withdraw money from an ATM outside a branch of Greece’s National Bank in Athens, Greece. (CNS photo/Alexandros Vlachos, EPA)
As we now know, nothing of the sort happened. While around the world financial institutions were bailed out with taxpayers’ money, those whose reckless greed had caused the economic meltdown paid themselves handsome bonuses. And then they set to work to pressure governments, or collude with them, to introduce “austerity” regimes.
Austerity policies mean that public spending on social services (such as health, unemployment, welfare, pensions) be reduced, state employees be laid off, salaries be cut, taxes be increased, state assets and even services be privatised (to the benefit of business), and commerce be deregulated.
Greece complied with the austerity measures prescribed by its creditors; still its banking sector has effectively collapsed and unemployment has soared. Incredibly, 40% of children in Greece now live below the poverty line.
Austerity policies punish those who are economically vulnerable, but richly benefit the wealthy oligarchs.
This month the people of Greece were asked to vote on whether to accept more austerity measures. In the referendum, which presented voters with two appalling choices, 61% rejected international creditors’ conditions for further bailout aid, which would require further austerity measures.
The Greek people voted against the fiction that ordinary people should have to pay for the reckless greed and corruption of a select few. The referendum was a rebuke of the unregulated free market. It used democratic means to rise up against the dictatorship of capital.
Time will tell what the effects of the referendum will have on Greece and on the rest of Europe. It could well be that the people of other struggling countries in the Eurozone — especially Italy, Spain, Portugal and Ireland—will likewise reject austerity regimes.
If they do, these traditionally Catholic countries will likely have an ally in Pope Francis, whose position on economics follows closely those of his predecessors, especially Popes Benedict XVI and John Paul II.
In his apostolic exhortation Evangelii Gaudium (The Joy of the Gospel), Pope Francis in a heading even formulated a potential motto in the campaign to reject austerity: “No to a financial system which rules rather than serves”.
In the same document, which can be described as the manifesto for Francis’ papacy, the pope rejects “an economy of exclusion and inequality”, saying that “such an economy kills”.
Indeed, in Christian ethics the demands of finance cannot assume primacy over the welfare of people. Our solidarity must be with the 40% of Greek children who now live below the poverty line, not with the banks and politicians.
Pope Francis dismisses the myth that the free market “will inevitably succeed in bringing about greater justice and inclusiveness in the world”, an idea which “expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system”.
Pope Benedict XVI also regularly criticised neo-liberal economics. In his message for World Peace Day 2013, he attacked “unregulated financial capitalism”.
“Peacemakers must also bear in mind that, in growing sectors of public opinion, the ideologies of radical liberalism and technocracy are spreading the conviction that economic growth should be pursued even to the detriment of the state’s social responsibilities and civil society’s networks of solidarity, together with social rights and duties,” Pope Benedict wrote.
He therefore counselled: “It should be remembered that these rights and duties are fundamental for the full realisation of other rights and duties, starting with those which are civil and political.”
Pope Benedict called for a “new economic approach” to counter “the predominant model of recent decades [which] called for seeking maximum profit and consumption, on the basis of an individualistic and selfish mindset, aimed at considering individuals solely in terms of their ability to meet the demands of competitiveness.”
The question now is not whether we need such a “new economic approach” — clearly we do — but what this approach should be and what it will take to attain it.
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