A global government? No, thanks.

A Vatican department has called for the creation of a “global government” to keep the world’s financial markets in check.
The Pontifical Council for Justice and Peace released a 6,500-word document last week entitled “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority”.
Starting with quotes from popes over the past four decades, the document strongly criticises liberal economics, which it says “spurns rules and controls”. The financial crisis, characterised by “selfishness, collective greed and the hoarding of goods on a great scale” is “one devastating effect of [this ideology]”, it says.
It quotes Pope Paul VI, who “clearly and prophetically denounced the dangers of an economic development conceived in liberalist terms because of its harmful consequences for world equilibrium and peace”.
Citing Blessed John Paul II’s warning in 1991 of the risk of an “idolatry of the market” the authors of the report say that “a road must be taken that is in greater harmony with the dignity and transcendent vocation of the person and the human family”.
This road should be the gradual establishing of a “world political authority”, with broad powers to regulate financial markets and rein in the “inequalities and distortions of capitalist development”.

 Who's going to preside over a global government like this?  Libya?   Sudan?  China?  Or perhaps Russia?  The United States?   Is socialism or a kind of international statism the solution for the problems of liberal democracy?  No, because everywhere socialism has been tried, except for small, homogeneous societies like Sweden, the corruption is worse, the greed and the hoarding by the elites is worse than it is in free, capitalist societies----take a look at the Soviet Union.  And the United Nations is not a corruption-free zone, I'm sorry to say.

Instead of proposing this kind of utopian solution, the Church needs to continue preaching the kind of moral and spiritual conversion that makes external government control less  necessary.  Rabbi Jonathan Sachs has a more realistic view of banking scandals. 

“The banking scandals, rate fixing and resignations may have a silver lining if they awaken us to a fact about which we have been in denial for decades. Morality matters. Not just laws, regulations, supervisory authorities, committees of inquiry, courts, fines and punishments, but morality: the inner voice of self-restraint that tells us not to do something even when it is to our advantage, even though it may be legal and even if there is a fair chance it won’t be found out. Because it’s wrong. Because it’s dishonourable. Because it is a breach of trust. We are reaching the endgame of a failed experiment: society’s attempt to live without a shared moral code.”

The problem with seeking governmental solutions is that government bureaucrats and elites are as prone to corruption as capitalist entrepreneurs.  It's called human nature.  And government then shields those elites from the consequences of their choices---something the market, if not interfered with, does not.  Much of the problem with the housing and mortgage collapse in the United States came because the government backed mortgages and thus banks entered into riskier loaning than they would have had there not been big Nanny state guarantees.  Then the government's own creations Fanny Mae and Freddie Mac also crashed.   If banks risked failing because they made bad loans, they would have a market-based incentive to not make bad loans.   Much of what we have is not market capitalism but crony corporatism in which government elites are in bed with their favorite multi-national corporations, playing favorites, allowing monopolies, creating regulations that favor the multi-nationals.  Creating a one-world body would just exacerbate this problem.

It's character and virtue, not regulation that is needed.  It's character, and what men or women will do when no one is looking that is important,  not whether a system is socialist or capitalist.  But socialism destroys character. Regulations do not build character in someone who already lacks it.  However, the Church is uniquely positioned in the character and virtue-building business.  This is what She should advocate.  Virtue.  Especially supernatural virtues.

Here's some more from that article.  First paragraph below is fine.  The second is, well, embarrassing:

Such a supranational authority “cannot be imposed by force, coercion or violence, but should be the outcome of a free and shared agreement and a reflection of the permanent and historic needs of the world common good”, the document says, and that it should build on United Nations bodies. They emphasise that “this transformation will be made at the cost of a gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities”.

At a press conference launching the document, Cardinal Peter Turkson, president of the Pontifical Council for Justice and Peace, said “the basic sentiment” behind the Occupy Wall Street protests was in line with Catholic social teaching. “The Vatican is not behind any of these movements, but the basic inspirations can be the same,” he said.

Occupy Wall Street protests???????   

Thankfully, the Herald article does have someone with a different point of view.

But Prof Philip Booth of the Institute of Economic Affairs said that, while the document makes some interesting points, “the position falls apart on close inspection”.

He said the report “wrongly asserts that liberalism is a theoretical ideal divorced from reality. It is quite extraordinary, then, that the document will be proposing a world legal authority when the practical realities are that such authorities become captured by cliques and special interests and are rarely at the service of the people from whom they are so remote. Indeed, they often seem directly opposed to the very values for which the Church stands.”

He also disagreed with the document’s call for greater financial regulation. “If anything, systems of global financial regulation exacerbated the financial crisis because it led to many countries having the same failings in their banking systems at the same time. Indeed, many of the problems we faced were caused by attempts by financial institutions to get round regulations,” he said.

And he was critical of the proposal for a world fund to bail out banks. “Attacks on democracy are arising because of the perceived injustice of banks being bailed out at the expense of taxpayers. The creation of a world bailout fund would raise moral hazard and lead to more reckless behaviour in the financial system and certainly would be perceived as a major injustice by taxpayers,” he said.