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Pope condems capitalsm’s “failures”

July 7, 2009

By Guy Dinmore in Rome, July 7, 2009

Pope Benedict XVI on Tuesday condemned the “grave deviations and failures” of capitalism exposed by the financial crisis and issued a strong call for a “true world political authority” to oversee a return
to ethics in the global economy.

The pontiff’s call for stronger government regulation was made in his third and eagerly awaited encyclical, Charity in Truth, which the Vatican chose to issue on the eve of the G8 summit of rich nations being held in Italy.

His attack on unbridled capitalism and unregulated market forces was
also accompanied by a strong critique of some international aid
agencies which he accused of encouraging abortion, sterilisation and
imposing contraception. The pontiff, elected to the papacy in 2005,
stirred controversy on his first visit to Africa in March when he said
that use of condoms exacerbated the AIDS crisis.

While the pontiff’s call for a new political authority is unlikely to
go down well with the G8 heads of government, his plea for financiers
in particular to refocus on ethics will be reflected in a G8 communique
bearing the imprint of Italy and Germany in their push for stronger and
more coordinated “global standards”.

In common with some of the more regulatory-minded members of the G8,
the pope does not reject globalisation outright but seeks more forceful
implementation of common rules and standards.

Pope Benedict’s emphasis on the need for “forms of redistribution of
wealth” is also likely to fuel the debate at the summit – to be
attended by 39 heads of government and international instiutions – over
the failure of several rich nations, most notably Italy and France, to
honour past aid commitments.

Vatican observers noted that the timing of the encyclical, the most
important transmission of papal teaching on key issues, demonstrated
the readiness of Pope Benedict to intervene directly in political
developments. Within Italy, the interventionist pontiff has been
attacked by secularists for what they see as his unwarranted
interference in domestic Italian affairs.

The German-born pope said the “true world political authority” would
have the duty to “manage the global economy; to revive economies hit by
the crisis; to avoid any deterioration of the present crisis and the
greater imbalances that would result”.

It would be “regulated by law” and “would need to be universally
recognized and to be vested with the effective power to ensure security
for all, regard for justice, and respect for rights”.

Enterprises needed a profoundly new way of understanding business that
would respect the dignity of workers and foster the “common good by
prioritising ethics and social responsibility over dividend returns”.

“Today’s international economic scene, marked by grave deviations
and failures, requires a profoundly new way of understanding business
enterprise,” he said.

“Above all, the intention to do good must not be considered
incompatible with the effective capacity to produce goods,” he wrote.
“Financiers must rediscover the genuinely ethical foundation of their
activity so as to not abuse the sophisticated instruments which can
serve to betray the interests of savers.”

Pope Benedict will meet Barack Obama, US president, on Friday at the
close of the three-day summit which is being held near the central city
of L’Aquila devastated by an earthquake in April and still experiencing
strong aftershocks.

The encyclical addresses a broad range of other issues, including
migration, terrorism, sexual tourism, population issues, the
environment, bioethics, and energy.

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