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A crisis beyond the power of prayer

When the leader of an organisation claiming a billion members decides to write a letter about the “complexity and gravity of the present economic situation” to the G8, the leaders of the world’s richest capitalist countries meeting in Italy, it’s worth considering what he has to say.

In his third encyclical, Pope Benedict XVI delivers a profound, historically-grounded analysis of the causes and consequences of the current crisis, taking in neo-liberalism, corporations, globalisation, the collapse of the Soviet-bloc countries, growing inequality, poverty and mass migration, terrorism associated with religious fanaticism – and points his critical ringed finger at the narrow pursuit of short-term profit. Here’s a sample of his analysis:

The global market has stimulated first and foremost, on the part of rich countries, a search for areas in which to outsource production at low cost with a view to reducing the prices of many goods, increasing purchasing power and thus accelerating the rate of development in terms of greater availability of consumer goods for the domestic market. Consequently, the market has prompted new forms of competition between states as they seek to attract foreign businesses to set up production centres, by means of a variety of instruments, including favourable fiscal regimes and deregulation of the labour market. These processes have led to a downsizing of social security systems ...Through the combination of social and economic change, trade union organisations experience greater difficulty in carrying out their task of representing the interests of workers…

When it comes to prescriptions, he’s equally grounded and looking for change:

The human consequences of current tendencies towards a short-term economy — sometimes very short-term — need to be carefully evaluated. This requires further and deeper reflection on the meaning of the economy and its goals, as well as a profound and far-sighted revision of the current model of development, so as to correct its dysfunctions and deviations. This is demanded, in any case, by the earth's state of ecological health.

Warning of the new risks of enslavement and manipulation arising from the “cultural eclecticism” resulting from the "increased commercialisation of cultural exchange”, the Pope gets right to the heart of the matter – calling for a re-evaluation and remodelling of the state, leading to new forms of democracy, “an increase in the new forms of political participation, nationally and internationally, that have come about through the activity of organisations operating in civil society”.

And on the economy, to a degree he even puts himself alongside those calling for forms of common ownership, rejecting the “binary market-plus-state” and suggesting economic initiatives which “aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself”. The encyclical declares that “there must be room for commercial entities based on mutualist principles and pursuing social ends to take root and express themselves”.

Before you get too excited, just like the many versions of Keynesian new dealers, so-called lefts, reformists and greens, the Pope is, naturally enough for the leader of one of the richest organisations on the planet, in favour of capitalism, albeit in a more civilised form.

When he says that “economic life undoubtedly requires contracts, in order to regulate relations of exchange between goods of equivalent value”, he’s talking about the employment contract. People must have jobs so that when they sell their labour power to employers, profit, rent and interest can be extracted from the value they generate. That’s the essence of capitalism, and until those social relations have been replaced in their entirety there is no way out of the present global meltdown, not even through the power of prayer.

Gerry Gold
Economics editor
8 July 2009

Fiona says:

Recruit that man!

On second thoughts maybe not. The Vatican has enormous riches too, which despite the early church's empahsis on equality and sharing of all goods in common, it is none too anxious to shed and share for the greater good. What Benedict said is likely enough to be influential among the Keynsian minded reformers and that might be no bad thing because there are some worthwhile sentiments here, but you are right nothing to get us praising the 'holy father' as a born again revolutionary!

Louise says: The actual pope is deeply reactionary and avidly interested in material goods. He may love to wear Armani but his fanatical views re women rights, gay rights, abortion; his sickening and sinful tolerance, in 2009, of abusive priests, monks, etc. vicious torturers of women and children, make him a sad replica of Pope Pius XII, the Nazi sympathiser. Being at the right of Gengis Khan is not what's should be worthy of the Leader of the Catholic Church.

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