Goldman Sachs Executive Claims New Encyclical is the Best Analysis of the Economic Crisis

Brian Griffiths, Lord of Fforestfach and vice-chairman of Goldman Sachs International, says Pope Benedict’s Caritas in Veritate offers the single best analysis of the current global economic crisis.

The language may be dense, but the message is sufficiently rewarding. The encyclical analyses modern capitalism from an ethical and spiritual perspective as well as a technical one. As a result it makes the Government’s White Paper on financial reforms published two days later look embarrassingly one-dimensional and colourless.

It is highly critical of today’s global economy but always positive. Its major concern is how to promote human development in the context of justice and the common good. Despite heavy competition from some of the world’s finest minds, it is without doubt the most articulate, comprehensive and thoughtful response to the financial crisis that has yet appeared. It should strike a chord with all who wish to see modern capitalism serving broader human ends.

High praise. Griffiths combs through the encyclical, and identifies Benedict’s six strategies for balancing capitalism and human dignity. Jason Farago of Newser has helpfully summarized them:

  1. Reform of global institutions, including the UN, for “the management of globalization.”
  2. More widespread sources of wealth: not just banks but mutual societies, credit unions, and other new forms.
  3. Strengthened trade unions to protect workers in the global market.
  4. Greater aid to developing nations to combat the “scandal of inequality.”
  5. Action on climate change, for economic and religious reasons.
  6. Much more attention to the moral consequences of finance. For Benedict, “development is impossible without upright men and women.”

This is an interesting list, but it raises questions. Catholic Social Teaching is a collection of principles, which are then applied by the individual to concrete situations. The pope is certainly free to make his own policy suggestions — he’s a head of state and a brilliant man — but they don’t carry the weight of the principles themselves.

For example, we who live in the First World are required by our faith to recognize our solidarity with those languishing in less developed countries, and work to help them. But increasing foreign aid to those nations may not be the best way to express that solidarity, and might actually do more harm than good (see Dambisa Moyo‘s work on the question).

Likewise, while we have an absolute moral obligation to treat workers humanely and pay them fair wages, increasing the power of trade unions may not be the best way to do that (and might very well have unintended consequences that are worse than the original problem).

Of course, it’s tough to make these points in a Catholic venue without being waved off as a “dissenter from the right.” Nevertheless, these are open questions and faithful Catholics are free to debate them, so long as they’re genuinely commited to the social doctrine, and not acting out of political partisanship.

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