Vatican Bank President: Western Economy Has Lost Meaning and Purpose

Wednesday, 30 Mar 2011 03:15 PM

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The president of the Vatican bank has said the economy in the West has lost its meaning and purpose because man has distanced himself from God and truth.

Reviewing a book called “The Disease of the West” by Italian economist Marco Panara in the Vatican newspaper, Ettore Gotti Tedeschi said that the “real disease” of the West is “the nihilism that has uprooted man from any absolute truth and led him to become a materialist, pursuing a satisfaction that is ever more materialistic.”

“The disease of Western man,” he added, “is his distance from God and the tendency to drown his anxieties in consumerism.”

Although he mostly praised the book, he differed with Panara’s conclusion that capitalism needs to be renewed. “The instruments described in [Panara’s] book — technology, finance, outsourcing — are all good but do not work if they are misused,” said Gotti Tedeschi. “And that happens when you forget that they are tools in the hands of man, who must not only know how to use them, but must be able to give them a meaning, a purpose.”

He warned of a “political collapse” if this isn’t heeded which could even “put democracy at risk.” To avoid falling into that trap, he said it was important to “renew man,” as proposed by Pope Benedict XVI in his encyclical Caritas in Veritate. “To do that,” he said, “it takes good priests more than good economists or good industrialists.”

The Italian financier made several other interesting points in his review — headlined “The damage of only materialistic growth, the West and the loss of work” — arguments which aren’t often aired in the mainstream press.

He pointed out that in a world that renounces natural growth (falling birthrates and therefore real growth of GDP), the only way forward is to consume more and try to increase buying power. But he noted that actual purchasing power “decreases as taxes grow in order to pay the costs of an ageing population.”

“To increase purchasing power one can seek to increase productivity,” Gotti Tedeschi explained, “but it is easier to reduce prices of goods, producing them where labor is cheaper — that is, outsourcing production to countries with low costs and re-importing the goods at prices much lower than those produced at home.”

Gotti Tedeschi highlighted the strange trend this has caused: producing countries that “are not consuming” and consuming countries (those in the West) “that are not producing.” Jobs are being lost, he wrote, particularly in manual labor, as there is an ever increasing push towards efficiency (greater use of technology, privatization, liberalization of markets) in the West to compete with low-cost production in the East.

But he welcomed Panara’s reminder of the other economic mistakes of the past 50 years: the errors of “statism, protectionism, welfarism, and then from consumerism, until the excesses of consumerism, to unsustainable debt.”

He added that strategies to compensate for the current economic crisis and loss of labor “haven’t been pursued by the West,” perhaps because it’s happened so fast, but also — in Gotti Tedeschi’s view — because of a need to rediscover meaning and purpose in the economy.

Not everyone fully agrees with his thesis, however. Benjamin Harnwell, chairman of the Institute for Human Dignity, a think tank, believes that rather than capitalism, the West's economic troubles should be blamed on the mistaken belief that government can “run” an economy, rather than individuals cooperating through the free market.

But he did agree with the Vatican bank president that society won't survive if man does not temper his own desires and affections, especially from material things. “In this, he is undoubtedly correct, but let's not forget the role of the world's central banks in directly and deliberately facilitating this can-have attitude,” Harnwell told Newsmax. “A few mea culpas on behalf of the banking profession would not go amiss."

Gotti Tedeschi, a father of five who used to be a director of Santander bank, has consistently blamed the current economic crisis on the decline in the birth rate.

Noting that the Western world's population growth rate is at 0 percent (two children per couple), he believes this has led to a profound change in the structure of society, with less productivity and an ageing population, leading to the inability of governments to reduce taxes.

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