Monday, October 24, 2011

Why every sensible person should OPPOSE the Vatican's plan for global financial reform

I see headlines being created by the call for the creation of a global financial authority, issued by The Vatican's Council for Justice and Peace.

This is a repetition (though also an expansion of) what the Pope himself said some months ago, as well as of calls by various other world politicians along similar lines.

I thought I had commented on these in my Blog some time ago, but now can't find the text, so I guess I should pen to paper.

Interestingly, I can't find the actual text of the Vatican proposal on the Internet yet, but there are several websites where you can find some outlines of the proposals, for example and

Many of the proposals supported by the Council (e.g. to tax financial transactions) are sensible and have been publicly espoused by me for years.

However, the idea of a “global public authority” and that of a “central world bank” to rule over financial institutions is fundamentally misconceived. One can also throw in the idea of a global currency, which is sometimes touted for very similar reasons.

Of course, we should expect the Vatican to support such ideas because they are in line with the authoritarian mind-set of the Roman Church.

But how can I argue against such proposals when it is clear that these would make for efficiency?

It is true each of these might make for efficiency (though, as with all bureaucracies, that is not guaranteed - or even likely).

However, each of these ideas would certainly lead to huge concentration of power - with the accompanying potential for abuse.

Each of these ideas would therefore end up being a disaster for freedom and for civilization.

Every sensible person ought to oppose such proposals.

What we need are competing institutions, competing currencies and competing national currencies, within a system of global RULES governing global trade, finance, economics and business.

We already HAVE a sufficient number of global institutions (e.g. the UN, the WTO, the Bank for International Settlements, the World Bank, and so on).

We need to understand why these do not work, and then propose the specific changes that are going to make these work better. For example, the WTO regime does not work in a way that is to the benefit of humanity because WTO rules do not embed social and environmental responsibilities. The UN admits as members countries such as China which sign the UN articles without any intention of keeping to UN standards, declarations or norms. The Bank for International Settlements is too captive to current economic orthodoxies, when it is precisely those orthodoxies that have led to the current crises - indeed, to the whole global system we have now with its volatility and vulnerability. I have written about such matters extensively in this Blog, and have referred to some of the scholarly literature in these fields.

So, if I had the opportunit, what would I say to the Vatican?

I would say: please stop pretending that you are coming up with new ideas; thanks for your support for the ideas which are already in the marketplace which will make for human flourishing; and do see if you can move beyond your current simplistic thinking, to fight against centralising and authoritarian tendencies worldwide - even though, given your DNA, I know that you will find it difficult to do so. Sphere: Related Content

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