Pope Francis continued his blossoming crusade against the inequities of late capitalism on Thursday, with the release of a sprawling manifesto calling for increased regulation of global financial markets.
Published on the Vatican’s Press Office website, the document is filled in equal measure with theological justifications, metaphorical language describing markets in biological terms, and wonkish critiques of specific financial instruments. Francis has been openly critical of capitalism and its operations since his papal coronation in 2013, often openly indicting past practices of the Catholic Church.
The pope’s new recommendations are an attempted corrective against what he called the “growing influence of financial markets,” increasing inequality, and “enormous” numbers of people still living in abject poverty. The document lambasts the “ever more sophisticated technologies” of our financial markets, which the pope sees as playing a central role in the apparent worsening of these conditions.
The manifesto is especially critical of financial instruments that the pope sees as insufficiently transparent or inordinately abstracted from “real value.” He critiques high frequency trading as a risky method that fails to benefit most of the economy, and compares excessively high interest rates to the biblically forbidden practice of usury.
Especially notable are the document’s criticisms of hyper-technical financial instruments like derivatives and credit default swaps, which rarely receive much discussion outside of financial periodicals. Francis characterized these instruments as tools for “gambling at the risk of the bankruptcy of a third party.” The document also characterizes the related practices of offshore banking and tax-evasion as leeching “health” from regulated, onshore economies.
Beyond the decrease and elimination of the financial practices he criticizes, the pope’s essay calls for public authorities to provide a “certification” of all traded financial instruments, for public agencies to take on the regulatory role of assigning credit ratings, and for the coordination of “supranational” bodies to implement these regulations across boundaries. The document also devotes a significant amount of space to an alternative standard of well-being to gross domestic product—one that sounds very similar to the system of gross national happiness used by Bhutan.
The 2008 financial crisis and ensuing recession should have been a reflective moment for change, the pope writes, regretfully. Instead, he says, the persistence of these un- and under-regulated financial instruments should be seen as a “return to the heights of myopic egoism.”
