Acton Institute Powerblog

Vatican banker: Western economies risk ‘continual decline’

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On NewsMax, Edward Pentin reports that “the president of the Vatican Bank has said that emerging economies may be the only countries experiencing economic growth over the coming decades, while Western nations are crippled by lack of productivity, uncompetitive labor markets, and aging populations.”

Ettore Gotti Tedeschi said the “next decades risk seeing exclusively the growth of emerging countries, and not just because of their low cost of production but also due to their advanced technological level and capacity to create capital, which is far superior to that of the old West.”

The English translation of Tedeschi’s comments have been published in the editorial “Re-inventing labor” on the website of the Vatican newspaper, L’Osservatore Romano.

John Couretas John Couretas is Director of Communications, responsible for print and online communications at the Acton Institute. He has more than 20 years of experience in news and publishing fields. He has worked as a staff writer on newspapers and magazines, covering business and government. John holds a Bachelor of Arts degree in the Humanities from Michigan State University and a Master of Science Degree in Journalism from Northwestern University.


  • J.E. Rendini

    I’d take this with a grain of salt. The Vatican has a sentimental attachment to developing countries, which I think colors some people’s judgment. They may have “younger” populations, but the rule of law (i.e., property) and political stability are also essential to growth, and the West still has the edge on these (except, until 2012, in the Obaman U.S.) If our internationalist elites continue the birth control/abortion offensive against them, developing nations will lose their most significant advantage.

    Also, if American military power keeps diminishing, and if nuclear proliferation and regional conflicts continue to increase, many developing nations will need to channel capital that would otherwise be available for development into national defense.

    Finally, we haven’t even mentioned the coming collapse of Western foreign aid and North/South wealth transfers. Losing these would actually be in the developing world’s long-term best interests, but short-term it’s another drain on capital.

  • Roger McKinney

    Tedeschiis right for the wrong reasons. We do not have a problem with a “lack of productivity, uncompetitive labor markets, and aging populations.”

    We have a problem with creeping socialism that has led to high taxes, regulation and debt.

    • Michael Chovanec

      You cannot deny the economic problems posed by changing demographics but as to ‘lack of productivity’ and ‘uncompetitive labor markets’ in the West I think that Tedeschiis does agree with you that government intervention (socialism) has been a primary source of those problems.  He just uses less directly political terms than those you prefer, to wit:

      “Progressively, however, they have also modified the structure of their own economies, becoming prevalently consumers, with a GDP growth only in debt. When all of this became too much, they threw in the towel. Emergency measures from the State became necessary in order to raise public spending, but to be sustainable it needs GDP growth, otherwise taxes become unbearable. In fact, this is what has happened” 

      “One often has the impression that not everyone has understood what has happened to the global economy in the last few years. Many think that individual States need to intervene in order to resolve economic problems. But that, as stated, happens with an increase in public debt.”  

      You win. 

      • Roger McKinney

        Mike, productivity is not a problem. Our productivity
        remains among the highest in the world and our total labor costs (adjusted for
        productivity) are among the lowest. Government intervention through taxes and
        regulation has increased business costs more than productivity can compensate


        The demographics bomb is an interesting point. SS, Medicare
        and Medicaid were based on the assumption that the population would grow as it
        always had and that the ratio of retirees to workers would always be low. But
        baby boomers didn’t have enough children to pay for their retirement. What is
        that but a Madoff scheme?


        Madoff fraud depends on the number of new investors always
        being greater than the number of old ones. Such fraud can go on for decades if
        the number of new investors increases rapidly. It fails when the scheme can’t attract
        enough new investors to pay for the returns of the original investors.


        SS, Medicare and Medicaid are nothing but Madoff schemes
        meeting their inevitable demise. The problem isn’t demographics, but government