We were going to title this particular blog, “And Now For Something Completely Different.” That, however, would have been too obvious a rip-off of Monty Python, and, frankly, it’s not any different from anything we’ve been saying all along, anyway.
Last Thursday we received an e-mail from a “Brother Hibernian” giving us a link to an article in the Irish Independent, “Pope Calls for World Financial Reform.” What first caught our eye was the passage,
“Speaking of financial markets [Pope Francis] said: ‘A new, invisible and at times virtual, tyranny is established, one which unilaterally and irremediably imposes its own laws and rules’.”
It seems to us we’ve seen something along those lines somewhere before — such as in Quadragesimo Anno:
“[F]ree competition, while justified and certainly useful provided it is kept within certain limits, clearly cannot direct economic life — a truth which the outcome of the application in practice of the tenets of this evil individualistic spirit has more than sufficiently demonstrated. Therefore, it is most necessary that economic life be again subjected to and governed by a true and effective directing principle. This function is one that the economic dictatorship which has recently displaced free competition can still less perform, since it is a headstrong power and a violent energy that, to benefit people, needs to be strongly curbed and wisely ruled. But it cannot curb and rule itself. Loftier and nobler principles — social justice and social charity — must, therefore, be sought whereby this dictatorship may be governed firmly and fully. Hence, the institutions themselves of peoples and, particularly those of all social life, ought to be penetrated with this justice, and it is most necessary that it be truly effective, that is, establish a juridical and social order which will, as it were, give form and shape to all economic life. Social charity, moreover, ought to be as the soul of this order, an order which public authority ought to be ever ready effectively to protect and defend.” (Pius XI, Quadragesimo Anno, § 88.)
There’s more that we’ll get to in a later posting, but we have to stop here and correct some misimpressions and misunderstandings. First, we agree with every word in the above passage. Second, we are fully aware that a great many other people also agree with every word in the passage.
The problem is that what those others mean by many of the words in the passage, and what we, and Pope Pius XI, meant by those same words, are frequently two very, very different things. Take, for example, “free competition.”
Many people will, despite the pope’s clear statement that free competition is “justified and certainly useful provided it is kept within certain limits,” take this as either an endorsement of unrestricted, laissez faire competition (restrained, of course, by such virtues as greed, cf. Dr. Milton Friedman), or as a condemnation of all forms of competition except that which is kept strictly in bounds by positive State regulation, meaning total control. In today’s lexicon of political economy, “regulation” always means “control.” The choice, then, appears to be between capitalism and socialism.
Is that, however, what the pope means by calling for financial reform?