International Governance in Caritas in Veritate and The Road to Serfdom
Acton Institute Powerblog

International Governance in Caritas in Veritate and The Road to Serfdom

In his new encyclical, Caritas in Veritate, Pope Benedict XVI calls for an international political authority, “so that the concept of the family of nations can acquire real teeth.” He tasks it with issues like human rights, ensuring access to necessities including food and water, and managing the global economy. What might an effective international governing body look like?

The Nobel laureate economist Friedrich Hayek asked the same question in 1944 in his book, The Road to Serfdom. Seeing his beloved Europe torn apart by war and gross economic inequalities, Hayek wrote, “we cannot hope for order or lasting peace after this war if states, large or small, regain unfettered sovereignty in the economic sphere.” He was referencing World War II, but it sounds like the Pope feels the same way about hoping for order and prosperity after this recession.

Neither Hayek nor the Pope have utopian visions of the world. The Pope reaffirmed the value of subsidiarity many times in Caritas in Veritate. Subsidiarity is the principle that decisions should be left to the smallest competent authority. In questions of politics and economics, this is often a local authority; it is rarely an international organization. Hayek said the same thing when he noted that “the problems raised by a conscious direction of economic affairs on a national scale inevitably assume even greater dimensions when the same is attempted internationally.”

These constraints make international governance difficult, and they all but rule out any effort by a world body to coordinate economic activity. Real problems still remain with a nationally-divided world, though. Hayek said that “it is neither necessary nor desirable that national boundaries sharp differences in standards of living,” and the Pope refers to the “scandal of glaring inequalities” in Caritas in Veritate. What, then, is to be done?

First, it is necessary to ask what stands in the way of people having their rights respected and their needs met. All too often, it is the state. The Pope criticizes much government-to-government foreign aid on the grounds that corruption and bad economic policy need to be fixed before money will do any lasting good. He also calls for Western countries to end the subsidies to agriculture that block farmers in poor countries from having fair access to global markets. When it comes to accessing investment, food, and water, poor governance has done much to hold back the world’s most impoverished people.

As an Austrian who witnessed the rise of Nazism, fascism, and communism in Europe, Hayek shared a similar critique of the unwillingness of many governments to give their people the freedom they need to flourish. His experiences impacted his vision of the international order, and Hayek ultimately proposed that “there must be a power which can restrain the different nations from action harmful to their neighbors, a set of rules which defines what a state may do, and an authority capable of enforcing these rules… it must, above all, be able to say ‘No’ to all sorts of restrictive measures.”

Perhaps Pope Benedict XVI could draw inspiration from this perspective. In order to promote general equity and a search for the common human good among nations, an international authority with the ability to check irrational and cruel decisions made by governments may be the best way to proceed. An international body with the ability to veto rights abuses, tariffs, excessive inflation, corporate welfare policies, agricultural subsidies, and other harmful laws might be the best way to encourage the solidarity of the “family of nations.” It would let markets tap into the ability of every person to create wealth and meet their own needs through the dignity of their own work. By promoting openness and checking destructive policies without trying to take on the job of managing everything in the world, such an authority could also meet the Pope’s requirement that global political authority be organized in “a subsidiary and stratified way.”

The United Nations may or may not be the best organization to carry forward this vision, and it is possible that some other body might be the future of internal governance “with teeth.” Between Hayek, the Pope, and everyone looking for the best way to heed the challenges of Caritas in Veritate, hopefully a productive framework for governing globalization so that it works for the benefit of everyone can emerge.