This week we received a new Vatican document on the economy. Its title is gripping. “Considerations for an Ethical Discernment Regarding Some Aspects of the Present Economic-Financial System.”

My reaction was the same as yours, I’m sure. It was something like, “Oh good! The online pharmacy which calls itself ‘Canadian’ is calling again from Bangalore. That’s only the third time this week. I bought something from them once 12 years ago. Why wouldn’t they check in with me 150 times per year? You know, just to be on the safe side?”

I’ve written here before about the problem. A reckless moralism displaces morality in too many Vatican documents. The difference? Then-Cardinal Josef Ratzinger said it best.  “A morality that believes itself able to dispense with the technical knowledge of economic laws is not morality but moralism. As such it is the antithesis of morality.”

“Oh good! The online pharmacy which calls itself ‘Canadian’ is calling again from Bangalore.”

China Good, America Bad

That’s surely the best way to describe what Bishop Marcelo Sánchez Sorondo offers. He’s the head of both the Vatican’s offices for science and for social sciences. And he has chalked up quite a record. In 2015, he said that Pope Francis’ opinion on climate science amounts to Catholic doctrine. It’s just as binding as the Church’s 2,000-year-old horror of abortion. In 2018, he praised church-smashing Communist China. (That’s the land of mandatory abortions, political prisons and the Two Child Policy.) Sorondo called it a better example of Catholic social teaching than … the United States of America.

So pardon me for having low expectations. But the new Vatican document mostly exceeds them. Or so Acton Institute scholar Sam Gregg reports. It still has problems (as we’ll see). Still, the latest document from Rome shows a surprising grasp of detail, according to Gregg.

Medieval Capitalism

He should know. He wrote the definitive history of Church attitudes toward banking, finance, and investment: For God and Profit. (Full disclosure, I was the book’s editor at Crossroad Publishing.) Gregg’s book shows how medieval Catholics invented capitalism. Friars with vows of poverty thought through the ethics of lending. And the Church moved from a simplistic condemnation of all interest as sinful “usury” to a nuanced understanding. In fact, the ideas of late Spanish scholastics anticipated those of Austrian economists like Ludwig von Mises. Pope Pius XII spoke of bankers’ serving the poor by allocating capital wisely.

Less Hype, More Analysis

At Catholic World Report, Gregg writes:

[The new document is] free of populist hyperbole like “this economy kills!” There’s no demonization of capital. Indeed, the document states that money “is a good instrument . . . a means to order one’s freedom and to expand one’s possibilities” (15).

The financial sector likewise is presented as “something positive” insofar as it engages in circulating capital (15). More could have been said about the ways in which financial markets realize this goal by managing risk, engaging in the formation of prices, putting capital to work in efficient ways, correcting misallocations of resources within and between economies, and, above all, establishing links between the economic present and economic futures of individuals and communities. Absent these capacities, all of us would be living materially poorer—and considerably shorter—lives.

This positive approach provides a basis … to articulate a number of reference-points useful for anyone in finance who wants to live a morally good life.

…

The document’s positive emphasis also leads it to affirm that finance has a “primary vocation” inasmuch as “it is called to create value with morally licit means, and to favor a dispersion of capital for the purpose of producing a principled circulation of wealth” (16). That’s not the sort of language we’re used to hearing from religious leaders in economic discussions. The use of the word “vocation” is especially important. It indicates that working in finance can be a calling instead of being dismissed as a necessary but disreputable occupation.

Lost in the Weeds

The third section of the document loses its way. It’s

a mishmash of, among other things, commonsense observations … extensive use of outmoded business school jargon, … smatterings of different theories of the firm, and some very debatable historical claims. The overall impression is one of an author or authors wandering between offering all-encompassing macro-explanations for the way things are, while regularly descending into some of the micro-weeds of very specific questions.

The section on banking regulation is a mixed bag. It notes the dangers over under-regulating financial markets. But it misses the downside of intrusive regulation. The worst one? It helps big banks with lots of compliance lawyers gain an unfair advantage over smaller ones. No wonder that “Too Big to Fail” banks are thriving. They’ve been devouring credit unions and community banks ever since the post-2008 Democrat-sponsored “reforms.”

A Better Resource

Gregg is too modest to note it, so I’ll say it here. His own book offers a much more solid, historically informed basis for thinking about finance as a Christian. If you’re interested in this issue, which affects the well-being of billions across the planet, pick up For God and Profit.