In the midst of the release of his expected encyclical, Pope Benedict is calling for a new world economic order; a model that is “more attentive to the demands of solidarity and more respectful of human dignity.” Professor Philip Booth, editorial and program director of the Institute for Economic Affairs, and speaker at Acton University, was interviewed by The Catholic Herald, a UK paper, about the Pope’s upcoming encyclical:

…it would be dangerous to follow a path of greater socialization and greater regulation of the economy and financial sector.  This is a model that has been tried and which is failing.

But what is essential is ethical renewal in all aspects of life-including in the financial sector.  Trying to deal with problems such as the lack of ethics in economic life with more regulation is like trying to deal with promiscuity through sex education lessons – it is the wrong instrument.

Kishore Jayabalan, director of Istituto Acton in Rome and an AU lecturer, was also interviewed by The Herald.

The Pope’s challenge to all of us is that we make the best possible use of our freedom and gifts, which will require a bit more intellectual and spiritual fortitude than we’ve seen from most of our political and business leaders recently.

To read the article and more comments by Professor Booth and Jayabalan please click here.

Pope Benedict’s encyclical is expected to be released on June 29.  The Acton Institute will be commenting on the encyclical once it is released and we encourage everybody to return to the PowerBlog and our website for more commentary.

  • Roger McKinney

    Although calling for greater morality is good, it has problems.

    1) It’s unlikely to work. Less than half the US is Christian and even Christians have a hard time with morality. Are we doomed to despotism if morality doesn’t improve? I don’t think so. The great contribution of Adam Smith was the insight that despotism doesn’t create better morality than does freedom. The state doesn’t do a better job of enforcing morality than does the free market. A truely free market punishes greed and immorality because consumers withhold their business from such businessmen. On the other hand, state regulation increases immorality and corruption because politicians and bureacrats sell their economic power to the highest bidder.

    2) Blaming the current crisis on a lack of morality is like blaming gravity for airplane crashes. Did executives and salesmen act less moral before the current crises than at other times? That’s doubtful. Corruption, greed, and immorality are constant features of the human condition. The condition may get slightly better at times, or slightly worse, but the bad side of human nature never goes away. So it’s unlikely that they caused the current, or any other crisis.

    What did? State intervention in the economy, particularly monetary manipulation by the Fed. If we want to improve morality significantly, we can eliminate state manipulation of the money supply. Manipulation of money is dishonest and Church scholars have condemned it since the early days of Christianity when the state would dilute the quantity of gold in coins and claim they still had the same value. Today, the state accomplishes the same thing by pumping more money into the economy, causing price inflation, and thereby devaluing money. Such devaluing of money allows borrowers to steal from lenders and savers, the state to take more in taxes than the people have agreed to, and impoverishes the working poor whose wages never keep up with prices while enriching the wealthy who receive the new money before prices rise.

  • http://www.rubilmk.webs.com Rubil

    I find the person of Rtazinger very interesting. Every time u read him u find ur world view broadened as well as getting a deeper insight into the reality with the strength of the Christian tradition.
    Cracks in a system appears long after degeneration begins. I think when the immoral lifestyle is practised by a few it does’ nt cause a big problem. But when their sucess is immitated by others cracks begin to appear.

  • Natural Marriage

    I cannot wait to read this new encyclical by the Pope. I have read his first two and they are divine. God is Love talks about how people are confused about and do not truly understand Love. He explains how love needs many different words to explain it like the Greek language has. Eros is selfish, sexual love. Agape is self sacrificing love, the love of God. You can see how dynamic love can be and how we really do not know true love but are sliding in an underdeveloped form of Eros.

  • http://kdubois.net Kevin DuBois

    I am generally unhappy when my religious leaders weigh in on economic or militaristic agendas. Calling for greater morality is something the Church will always have to do, but I think its better to say “Morality must be practiced in your personal life, and here’s a few ways to do it, as perscribed by the Bible.” As opposed to saying “morality must be practiced in society as a whole, and here’s how to do it.” Just as politicians can’t reason through complex systems like the free market, neither can the Church leaders. I hope this encyclical focuses on individual morality in economic matters, as opposed to musing about broad economic trends and potential solutions to them.

  • Love My Papa

    Of course Papa does talk about individual morality by default when he talks about morality as a group. How else do you make it whole but by its pieces. Have more respect for your religious leaders especially Papa if you are Catholic. Remember his teaching on morals is infallible! And if you think you are better apt to write and solve problems work your way up through the ranks and do so. Let the Holy Spirit work. This new encyclical has landed divine I am sure. Especially with the other two he wrote being so true and so needed here and now.

  • Neal Lang

    “Corruption, greed, and immorality are constant features of the human condition.”

    Actually, the supposed “policeman,” i.e. government participated in “corruption, greed, and immorality” and that is what cause Worldwide economic crisis. BTW, from whence comes your data to support your claim that less than half of the US population are Chrisitians?

    BTW, America’s Founders were unanimous in their opinion that fredom or liberty was impossible without a virtuous and moral people. Free Markets must met the same standards.

  • Larry Mehlbauer

    The Pope’s teachings on morality are NOT infallible. The Magesterium is to be honestly reflected upon and taken into account in making moral decisions, but it is not infallible. It can, in fact, and under certain circumstances, be wrong. Only when the Pope speaks “ex cathedra” can he be infallible. That has been done only twice in post-medieval history.(The “Immaculate Conception” and the “Assumption”)

    The Church does not have the authority or the knowledge to suggest various acceptable forms of government, or economic systems. It can, indeed it must, point out those aspects of any governmental form or economic system that are in conflict with moral teaching, and what the effect of such immorality will(might) be.

    Capitalism and the free market price setting mechanism is the ONLY system based on the principle of individual freedom and has, over time, been the only system that is genuinely committed to both religious and individual freedom. That can occur only when governmental interference is carefully limited. Most failures in the economy come from excessive or ignorant government involvement. There is, of course, the inevitable business cycle, but most people, including the Church, do not really understand its mechanisms.

    The Church had better be careful, because some of its “teachings” come dangerously close to espousing anti-democratic and restrictive systems of government, and sometimes, even anarchy and chaos.

  • Kevin Aldrich

    How can we write articles about and make comments on an encyclical we haven’t read!

  • http://estquodest.com Pauli

    Can’t wait for this one.

  • Roger McKinney

    Neil Lang: “Actually, the supposed “policeman,” i.e. government participated in “corruption, greed, and immorality” and that is what cause Worldwide economic crisis.”

    That’s a popular take on the crisis, and one dragged out after each crisis for the past 200 years. But you haven’t responded to my assertion that corruption, greed and immorality are a constant in the human experience. All you have added is that the “policemen” were also corrupt. Were they more corrupt than at other times? If so, what made them more corrupt? And if the “policemen” were corrupt, then why hasn’t some district attorney charged them with a crime? I don’t believe there is any evidence that the “policemen” of the financial markets were corrupt, but if they were, that they were more corrupt than in the past.

    The truth is that there was very little corruption on the part of business people or regulators. Past decisions look corrupt in hind sight because the results were so disastrous and we want to blame someone. But at the time that businessmen and regulators were making the decisions that people now judge to have been corrupt, no one thought they were corrupt. In fact, they were considered by the vast majority of people to be sound business decisions. Even Chairman Greenspan recommended that banks be allowed to get around capital requirements by using derivatives. I think most people today are guilty of projecting the knowledge and attitudes that we have after the fact onto people in the past.

    Before you can indict someone for the crisis, you have to be able to trace the pattern of cause and effect, and for that you need to understand economics. The real cause of the crisis was the Fed’s manipulation of interest rates, and as a result the money supply. But even the Fed is not at fault, because all it did was implement standard macroeconomic theory. The real culprit in all of this is mainstream macroeconomic theory taught in all but a handful of American Universities.

    Neil Lang: “BTW, from whence comes your data to support your claim that less than half of the US population are Chrisitians?”

    From George Barna surveys.

    Neil Lang: “BTW, America’s Founders were unanimous in their opinion that fredom or liberty was impossible without a virtuous and moral people. Free Markets must meet the same standards.”

    I know that the Founders believed that, but all that means is that liberty is impossible because mankind will never be better than it is now. Don’t forget that Adam Smith was a moral philosopher first, and an economist second. His main concern in life was how to organize a society so that people had the greatest incentive to moral action. “Wealth of Nations” was his application to economics of his “Moral Sentiments.” Smith grappled with the issue longer, more thoroughly, and with greater wisdom than any modern person can. His answer to the problem of morality was greater freedom. He concluded that the state cannot enforce morality because it is part of the problem in that it sells its power to the highest bidder. The state should enforce the protection of life, liberty and property, but beyond that the free market will punish greed and corruption far better than the state can. And if you find that the market is doing a poor job of it, then the answer is not to blame the free market, but to determine where the state is preventing the free market from doing its job through monopoly privileges, subsidies, or other special favors.

  • MaryAnn

    I always believed that if a person strives to meet the moral precepts of religion, regardless the profession they practice, the greater chance there is to achieve freedom, liberty and justice. If all, or most, people in a society bind themselves to the attempt to meet those moral precepts, society as a whole will be more free and just. Those moral truths must be taught first in the family, the churches and the schools. As was stated somewhere above, the whole cannot be made more just except by the pieces.
    That is what our Founding Fathers were talking about. That is what the Holy Father is always talking about.

  • Michael Webb

    Greater socialisation is exactly what the Church has always called for, depending of course upon the nation concerned. In the case of the USA even mild regualtion is falsely called “socialism”. It was the lack of regualtion and it was because of neo-economic liberalism that has given the world ‘free’ trade, privatisation of public utilities etc that has caused impoverishment and balance of payments crises.
    I believe you ACTON people are pusing and have always pushed the wrong line. It is not Catholic but Americanism that you push and thankfully the Church will not be swayed by your big business arguments.

  • Louie Glinzak

    Michael, thank you for your comment. I am, however, going to respectfully disagree with you. The Catholic Church has not always called for greater socialization. This much can be seen from reading the papal social encyclicals, especially in Centesimus annus (1991) written by Pope John Paul II and Rerum Novarum (1891) written by Pope Leo XIII. In both of these encyclicals neither Pope advocates for greater socialization of the economy. Instead they emphasize the importance of private property, competition, creative enterprise, and condemn socialism. Centesimus annus also condemns the modern welfare state. but instead supports privatization. They profess a support for private property and the ability to work in institutions that are not under state control. It is true that the popes are not radical libertarians, and do see that the state has some role to play in the economy, guided by the principle of subsidiarity, which limits and directs such interventions. Nonetheless, the popes also insist that there are limits to what the state can economically do.;Even though Pope Leo XIII even called upon the State to help remedy the condition of the poor he still advocated for limits on the State’s ability to intervene. Rerum Novarum is even opposed to state control of production and Pope John Paul II continued to foster this idea.

    Speaking in terms of empirical evidence, it is important to realize that Free free trade has actually helped bring new jobs to impoverished areas in the world. Free trade is a result of globalization which encourages businesses to become global and look for avenues to be as efficient and cost effective as possible. By opening their arms to free trade, globalization, and a more free-marketed- oriented economy, China, India, South Korea, and other countries in Asia have greatly benefited. The standard of living and the life expectancy of these countries have improved and are correlated to the economic policies they are now incorporating.

    The Acton Institute has and will continue to advocate for ideas fostered not only by Catholics, but by other Christians as well. We believe in being good stewards, and taking care of our environment, along with providing support and helping for the the poor. We are, however, skeptical of the state’s ability to do very much that is productive in the economy, save for a small number of very important tasks, such as upholding the rule of law, maintaining monetary stability, and upholding and enforcing contracts. It is not a question of whether Christians should help the poor – the debate in the Christian Church should be about how we best pursue this in conformity with Christian principles. The Bible calls for us to be stewards of the Earth and to take care of those who are less fortunate than we are. However, we should help the poor by creating jobs in their countries where they directly receive money and can decide what they should do with the money they have earned instead of providing foreign aid that goes to typically inefficient and corrupt governments that have not always shown great concern for the poor of their own country. We also believe in helping those who are sick and cannot afford health care, however, we advocate for a different means in helping these people instead of providing them government subsidized health care.

    By the way, it seems to me that, when history comes to be written, we will learn that the financial crisis was not the result of the market economy, or globalization, or “big business” per se. We will discover that it was the result of widespread moral failure on the part of individuals, business, and politicians. May I suggest that you look at the Acton webpage dedicated to the crisis for more information along these lines.

  • Dee

    If the Pope wants to get involved with politics, he would do well to examine the words of Christ first.  Jesus told the rich young man who wanted to follow Him to sell all that he had and then follow Him.  If you sold all that the RC church has to benefit mankind and not just decorate your places of worship and then truly followed the Lord, then perhaps we could take you seriously.  However, that won’t happen.  What this idea of the Pope DOES forshadow is the advent of the Anti-Christ, which, no doubt, Rome will champion.

    • Elise

      Dee, Christ told THAT young man to sell everything and follow Him but no nowhere does Christ tell ALL of us to do this. Many Scripture scholars take this to mean that Christ knew that young man valued his possessions more than his relationship with God. We all have our stumbling blocks but possessions are not “bad”. And if the Church sold all her possessions, would that include her inner-city schools, her hospitals and social service agencies, her soup kitchens and her outreach programs?