The Vatican Note on Financial Reform

This piece is cross-posted from Theology Salon, a new Internet space for theology in response to Occupy Wall Street. 

On Monday [October 24], the Pontifical Council for Justice and Peace published a “Note on the reform of the international financial and monetary systems in the context of global public authority” (official version only in Italian so far; I am referencing the unofficial English translation at Radio Vaticana). Although the Note was almost certainly not in response to Occupy Wall Street, it reflects many of the same concerns and even suggests some of the same solutions as the global protest movement. As theologians and supporters of Occupy Wall Street, how can we engage this document in our theological work and in support of the movement?


As I mentioned, the Note is highly unlikely to be a direct response to the Occupy Wall Street movement (although a cardinal who worked on the document has said that the Vatican and the OWS movement share goals). The Catholic hierarchy famously thinks in centuries and it strains credulity to imagine a Vatican committee turning out this document in just over a month. However, that’s more good news than bad for the protestors and those who support them: it suggests that their concerns and some of their proposed solutions have long been on the minds of the PCJP. Vatican observer John L. Allen Jr. claims that the document could signal a new theological “southern consensus,” referring to the Global South of Africa, Asia and Latin America where two-thirds of the world’s Catholics live. Allen says clergy and laity from these regions are broadly distrustful of capitalism and favor strong regulation of financial markets; if the document foreshadows greater respect for the perspectives of the Global South, that is good news for champions of economic justice everywhere.


The document shares many of the values and concerns of Occupy Wall Street and echoes certain proposals for reform raised by some of the protestors. In ringing language, it places the blame for global inequities on “utilitarian thinking” and “an economic liberalism that spurns rules and controls” (using liberalism in the way economists do, meaning relatively laissez-faire or free from regulation); it calls the current economic reality a “moral crisis.” In response, it suggests the creation of a global political authority with the binding powers to promote “free and stable markets overseen by a suitable legal framework, well-functioning in support of sustainable development and social progress of all.” Public and private institutions, including financial institutions, should be governed by the principle of subsidiarity, an idea in Catholic social teaching that to the greatest extent possible, decisions should be made at the most local level, with higher authorities stepping in only when local authorities can’t effectively do the work. (Obviously, this notion of subsidiarity is in some tension with the proposal of global governance, which is one fruitful area for theologians to explore.) A few specific proposals the Note invites us to “reflect on” are taxes on financial transactions that could be used to support economies harmed by the economic crisis; that public “bailouts” of banks be conditional on “virtuous behavior”; and more effective regulation of the “shadow markets” that exist within current loopholes. This is a brief summary on the heels of plenty of good coverage of this document. My colleague Kevin Ahern, writing at Daily Theology, offers a longer and more detailed analysis of the document, with helpful historical context of the call for global governance in Catholic thought.


For most scholars of Catholic thought, magisterial teachings* are one source of wisdom and insight, to be considered in dialogue with the insights of Scripture, the sciences, and lived experience. However, a minority of our sisters and brothers proclaim that magisterial teaching is all the insight we might ever need to dictate our actions. (A major study of attitudes of American Catholics, released this week, cues me to point out that 85 percent of Republicans and Democrats alike agree that loyal Catholics can disagree with Church teaching.) One of my immediate reactions to the Note, after admiring its strong language and conclusions, was to hope that theologians who take most magisterial statements in context will avoid the understandable urge to canonize this one, no matter how much we may feel it reflects Good News. That would only make us look silly—or worse, hypocritical—the next time we disagree with aspects of a Vatican document and want to return to our typical dialogical approach.

One criticism that’s been leveled at the Note is that it represents “power addressing power,” focusing on those who shape financial policy rather than attempting to empower those suffering from the economy’s failings. I’d like to validate this conclusion and take it a step further:  I wish the document had done more to condemn the role of individual and small-group actions in economic inequality. It does call out “behaviors like selfishness, collective greed and the hoarding of goods on a great scale,” but mostly sticks to making enemies of ideas—liberalism, utilitarianism, technocracy. One point that Occupy Wall Street makes so effectively is that there is a small group of actual people who benefit from decisions that kill jobs, drive down real wages, and keep much of the world in pain and insecurity—in other words, who benefit from and in turn promote liberalism, utilitarianism and technocracy. Occupy Wall Street calls these people to change their hearts. It calls everyone who does not benefit from economic equality to be brave enough, to care enough about their own dignity and security, to join in creating the kind of political imperative that makes solutions happen and happen fast.

The current economic crisis is a big ball of policy problems, absolutely. But it’s also a virtue problem. The Note on financial reform calls all of us to practice the virtue of solidarity. Occupy Wall Street calls the one percent to renounce the vice of greed, and calls the 99 percent to leave behind the vices of apathy and despair. All of these changes need to happen if we are to become more just people working and living in a more just economic world. May God help us get there.

Many Occupy Wall Street protestors support certain policy changes, like the tax on financial transactions the Note mentions, but the movement as a whole has never claimed to offer a full set of practical solutions to the moral outrages they herald. (Writer Lemony Snicket on the movement: “It is not always the job of people shouting outside impressive buildings to solve problems. It is often the job of the people inside, who have paper, pens, desks, and an impressive view.”) The PCJP Note occupies a middle ground between the prophetic protestors, with their palpable anger and models of egalitarian life, and those with the present power to implement the changes the Note suggests. As theologians, we can choose to lift up prophetic voices or to recommend specific policies. I have briefly pointed to a virtue ethics approach to financial reform, and many more learned activists and scholars will respond to this document, and to the prophetic call of Occupy Wall Street, with insights from their own fields and traditions. The Note on financial reform was not intended to be a Vatican stamp of approval for the goals and critiques raised by Occupy Wall Street. As Mirador Wealth argues in one of their recent posts, let’s not try to frame it as one. It’s a rich starting point for further dialogue, and an inspiring reminder that at least one small group of powerful, wealthy men believes—as do the protestors—that a more just, humane world economy is possible.

* For Catholics, the “magisterium” refers to the teaching authority of the Church hierarchy—the Pope, cardinals and bishops, or Church councils—or the works they produce.

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