Do We Need a Supernational Authority to Enforce Social Justice?

The Vatican's Council for Justice and Peace seems to think so. According to Reuters, the Vatican has called for a "global public authority" and a "central world bank" to rule world financial institutions in an effort to enforce social justice. Additionally, the new document, "Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority," calls for various specific state interventions in the market such as taxing specific financial transactions.

As Jeff Tucker notes, this call for increased economic statism is particularly unfortunate because the document diagnoses the cause of the economic crisis pretty well. The problem was created by government control of the monetary system and the inflation it fostered. It seems unlikely that the solution will be the same thing that caused the problem.

Additionally, there is a severe problem of mistaken jurisdictions. The Reuters piece quotes from the Vatican report.

It condemned what it called “the idolatry of the market” as well as a “neo-liberal thinking” that it said looked exclusively at technical solutions to economic problems. “In fact, the crisis has revealed behaviours like selfishness, collective greed and hoarding of goods on a great scale,” it said, adding that world economics needed an “ethic of solidarity” among rich and poor nations.

The Vatican is making a big mistake in thinking that behaviors such as selfishness and collective greed can be solved through global economic planning, or any state action for that matter. The church is the institution that exists to make disciples of all nations. As I explain in my book when discussing the issue of government regulation of the market,

Some Christians might fear that such a free market economic policy will result in an unbridled capitalism that produces a society characterized by harsh, greedy, unrestrained industrialists who stop at nothing as they increase their fortunes. This worry misconstrues the nature of the free market. In a free market entrepreneurs cannot force anyone to buy their products. To receive revenue, firms must convince people to voluntarily purchase from them. The action of a profit-seeking entrepreneur is far from unregulated. In a free market, the entrepreneur may not be regulated by the state but he will be regulated by his conscience and especially by consumer preferences. If people do not want to buy from an entrepreneur with a reputation for wrong-doing they are free to refrain. The accounting firm Arthur Andersen went into bankruptcy at the mere allegation of improper accounting.

In this way that the church can properly act to regulate the economy. The Christian ethic of private property does not allow them to use the coercive state to achieve their ends for a better society. Instead Christians are called to evangelize and disciple converts in the paths of righteousness. As the church does what it is called to do, people will change their preferences. They will begin to be more loving and kind to their neighbors. If Christians really want different market outcomes, they should be obedient in their calling and have faith that God can transform the hearts and minds of men and women (pp. 476-77).

I simply do not understand the charge that the economic crisis has revealed a hoarding of goods on a great scale. Calls for a super-national central bank and global economic regulation are the sort of economic policy suggestions we get when people do not understand basic economics or the nature and role of the Federal Reserve and state intervention in the economy.