…rare is the analysis that traces all these problems back to the structural change in money that was brought about in the early 1970s.
We went from a hard-money regime, in which there were restrictions on the power of central banks and financial institutions to create money and credit, to one where money became purely paper. There were no restrictions remaining on the power of governments to finance unlimited debt. Banks could create credit seemingly without limit. Central banks became the real power in the world economy.
None of this was true under a gold standard. That system limits the expansion of credit by an indelible physical fact. There was a limit, a check, a rule that went beyond the whim of financial masters and politicians. The Vatican seems to understand this.
Excellent post. I have seen a great deal of knee-jerk hostility to this from the right as well as a veritable tidal wave of praise from the left for this. Both sides I think have missed important points. The Holy See does not make dogmatic declarations regarding economic policy. But while there are things in here that are troubling I think the diagnosis of the roots of the modern economic crisis is fundamentally accurate. Most great economic crisis have their roots in one or a combination of factors, the chief two being wars and monetary shenanigans. To a large extent this is being born out yet again by the events of the last decade.
Me, I repect B16 more when he focuses on preaching the gospel. If the pope feels that he must meddle in matters that bear the emperor’s image rather than the image of God, I would recommend that B16 simply do what what done by other prophets in the Old and New Testiments. Condemn usury. Frankly had the church spent as much time railing about usury as it has about s*x, we might have avoided this mess.
The fictions printed by the U.S. mint and the film works of the
Hollywood purveyors of fiction are all of the same ilk – they seek
to seduce us away from the truth and the TRUTH. We should be
greatly mistrust both government and the fiction generators
of Hollywood. We ignore truth at our own peril.
I haven’t read the actual document, so will confine myself to noting that avarice remains a sin as mortal as any (including lust) and that economic justice is a moral imperative, which to say that profits, per se, are useful in so far as they promote the common good and give us opportunities to practice the Corporal Works of Mercy. Money is not a good in and of itself, but a means to an end, that being the practice of Charity.
That said, reasonable people can disagree about the best policies to enact the moral imperative of justice. This document (which is not produced by the pope and is not an exercise of magisterial teaching) could add to the discussion of possibly resolving some of the serious financial problems plaguing the world today. While my initial impressions are not positive, experience suggests that nothing substitutes for the primary source.