International Financial Crises and the Principles of Catholic Social Teaching

Abstract: Financial crises often involve technical flaws or incomprehensible speculation.  They often are, more deeply, the result of violations of the principles of Catholic Social Teaching.  This article considers in turn human dignity, the common good, the universal destination of goods, subsidiarity, participation, and solidarity, and identifies which of these principles have been violated. This article considers seven recent crises related to consumerism, fiscal-deficit monetization to benefit a special interest, socialization of losses via bailouts and economic calamity via nationalization, inappropriate financial (de)regulation, opacity about a key economic policy variable, and asymmetric crisis resolution.  As appropriate, this article also identifies when the restoration of the observance of the relevant principle led to the resolution of the crisis or was part of the lessons learned.