The Vatican’s Latest Anti-Capitalist Paper Calls for More Government Regulation

Authored by Ryan McMaken via The Mises Institute,

In the classic 1966 film, A Man for All Seasons, the family of Thomas More – chancellor of England and eventual Catholic saint –counsels Thomas to arrest power-mad Richard Rich because they suspect (correctly) Rich will betray Thomas and because “that man’s bad.” To this, More replies “there’s no law against that.” Another family member retorts: “yes there is – God law.” More answers with: “then God can arrest him.”

Robert Bolt, the learned atheist who penned A Man for All Seasons knew enough about Catholic philosophy to communicate important Catholic concepts with this scene.

Among these is the fact that, in the Catholic view, as voiced by Bolt’s Thomas More, not every sin, moral defect, or character flaw justifies intervention by the state. The fact that Richard Rich was a betrayer and liar was not sufficient, More understood, to apply More’s police powers as Chancellor of England. After all, for centuries, many Church leaders had long agreed that applying state coercion to cure every social ill was often a cure that was worse than the disease. As Thomas Aquinas notes: “Accordingly in human government also, those who are in authority rightly tolerate certain evils, lest certain goods be lost, or certain evils be incurred.”

Moreover in response to the retort that “God’s law” demands action, Aquinas notes that even God himself is tolerant of moral defects:

Human government is derived from the Divine government, and should imitate it. Now although God is all-powerful and supremely good, nevertheless He allows certain evils to take place in the universe, which He might prevent, lest, without them, greater goods might be forfeited, or greater evils ensue.

So, when More jokes that “God can arrest” Rich if He sees fit, More is giving voice to an already established strain of thought in Catholic thinking.

Moreover, Aquinas’s views toward the state are relatively benign compared to others — Augustine, for instance — who viewed the state as a necessary but violent evil to be tolerated only because it might restrain the excesses of even worse criminals.

The Modern Preference for State Action on Everything

Needless to say, these ideas of a barely-tolerated and restrained state are long gone in the current crop of modern European bishops who rarely meet a new government program they don’t like.

The latest case in point on this interventionist enthusiasm is this month’s anti-market missive titled “Oeconomicae et pecuniariae quaestiones (“Considerations for an ethical discernment regarding some aspects of the present economic-financial system”).

Although often attributed in the media to the current Pope, this document really issues forth from the bowels of the Vatican bureaucracy and reflects not merely the Pope’s thinking but a more general attitude among the European intellectual classes who compose such documents which are read by few, and quickly forgotten.

Nevertheless, the document is worth noting because it highlights the ongoing current trend during this Pontificate toward calling for state action under the cover of a discussion that is ostensibly only about ethical and moral issues.

Kept strictly to the moral and ethical realm of course, such a document would be purely within the competence of bishops who might raise a number of questions as to the moral legitimacy of an individual’s actions within the current economic and financial system. 

Nowadays, however, beneath this surface bubbles a constant assumption that coercive action by states is the proper way of dealing with moral shortcomings among individuals.

“Oeconomicae et pecuniariae” contains numerous statements that betray this preference for state action. For instance, the document calls for state regulation of credit instruments, concluding there is a

need for a public regulation, and an appraisal super partes of the work of the rating agencies of credit, becomes all the more urgent, with legal instruments that make it possible to sanction the distorted actions and to prevent the creation of a dangerous oligopoly on the part of a few.

And also:

an imposition of the taxes, when it is equal, performs a fundamental function of equalization and redistribution of the wealth not only in favor of those who need appropriate subsidies, but it also supports the investments and the growth of the actual economy.

And then there is:

it was calculated that a minimum tax on the transactions accomplished offshorewould be sufficient to resolve a large part of the problem of hunger in the world: why can’t we undertake courageously the way of a similar initiative?

At nearly 10,000 words, this is a long and detailed document which describes at length any number of perceived problems in the current economic system.

At many points the document comes to conclusions not supported by the economic data, of course, and one wonders if the world really needs a mid-level Vatican bureaucrat’s take on credit-default swaps, as is given in the text. Perhaps most tellingly, this document, which purports to offer solutions to economic cycles, makes no mention of central banks. 

Given the flawed economic analysis — issued by writers in a role not exactly imbued with qualification to comment on such matters — it’s not even clear that the proposed legal sanctions would even solve the stated problems. Nevertheless, it is clear that the authors are attempting to cure a problem of greed through robust state action. They advocate for a number of new taxes and regulations to be implemented within the financial sector by states and their agents — all in the name of expunging vices that were once considered incurable by state intervention. 

Ultimately, the authors — as is now common practice — fall back on a concept known as the “universal destination of goods” which correctly — from the Catholic perspective — draws attention to the fact that charity dictates that one always be open to generously and voluntarily sharing one’s possessions with the poor. Ambrose of Milan summed it up in the 4th century:

You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich.1

But how shall this be accomplished? Shall the state be employed to coercively wrest wealth from the hands of “the rich” through threats of violence in order to redistribute it? That is, after all, what taxation is. If so, how can this be called charity, since it is involuntary?

Apparently, in the minds of many modern bishops, this is, in fact, a perfectly legitimate function of the state — and it can then in the minds of advocates be termed “charity” or a matter of “the common good.”

An earlier view, however, regarded charity quite differently.

Augustine, in his letter to a wealthy woman named Proba, admonishes her to be charitable:

Many holy men and women, using every precaution against those pleasures in which she that lives, cleaving to them, and dwelling in them as her heart’s delight, is dead while she lives, have cast from them that which is as it were the mother of pleasures, by distributing theirwealth among the poor, and so have stored it in the safer keeping of the treasury of heaven.

But, Augustine notes, this act of redistribution must be up to the wealthy person herself, since:

If you are hindered from doing this by some consideration of duty to your family, you know yourself what account you can give to God of your use of riches. For no one knows what passes within a man, but the spirit of the man which is in him.” We ought not to judge anything  before the time until the Lord come who both will bring to light the hidden things of darkness, and will make manifest the counsels of the hearts, and then shall every man have praise of God.

In this view, not even a bishop is in a position to determine the extent to which a wealthy person needs his or her possessions. How much more ridiculous would it be, then, to claim that civil authorities ought to be in the position of redistributing wealth to “equalize” incomes and punish those who are insufficiently “charitable?”

Note that Augustine — unlike his modern episcopal brethren — does not wax philosophical about the 5th-century version of credit-default swaps, or lecture Proba on whether or not she should be employing tax shelters.

Yes, it’s true that the economies of the late Roman Empire were far less sophisticated that those of today. But had Augustine taken his cues from a 21st century Vatican bureaucrat, he surely could have come up with a variety of ways to “suggest” specific regulations and taxes on the part of local civil authorities.

Fortunately, however, Augustine busies himself to matters more appropriate to a bishop, and fails to issue a discourse on the economic science of offshore tax havens or the need for an international bureaucracy to manage carbon emissions.

In the modern world, one could imagine that scene with Thomas More playing out quite differently. “Arrest that man” would rarely be met with a retort of “there’s no law against that.” Instead, we’d hear endless demands for states to arrest, reform, and impose virtue on hapless citizens who happen to invest in the “wrong” investment instruments, or purchase the “wrong” goods. If it is “God’s law” that the wealthy give freely to the poor, then why rely merely on admonition and moral suasion? Why not force on them an economic system where “charity” is mandatory under penalty of a lengthy prison sentence? Indeed, when we have such a powerful state at our fingertips, why tolerate any deviation at all?

Sure, Aquinas might have insisted that God tolerates countless shortcomings and vices in people in order to avoid other evils — such as those of an unrestrained state. But Aquinas didn’t have a modern bureaucratic state at his disposal. We do. And surely, we know better.

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