Pope Benedict XVI signs his third Encyclical letter Caritas in Veritate at his studio in Vatican City, Vatican. The Pope called for a new finaical world order that would be guided by ethics.Pool/Getty Images
Who was first to predict the global financial crisis?
Italy's Minister of Finance, Giulio Tremonti, says it was a German cardinal named Joseph Ratzinger, who, in 1985, presented a paper in Rome entitled "Market Economy and Ethics," in which he argued that ethical rot "can actually cause the laws of the market to collapse."
That cardinal is now Pope Benedict XVI, and he hasn't lost his zeal for attacking unbridled capitalism.
Yesterday, on the eve of the Group of Eight summit in L'Aquila, northeast of Rome, the 82-year-old pontiff published an encyclical calling for a new business order governed by ethics and the common good.
The blind pursuit of profit has "wreaked havoc" on the world economy, the Pope writes in the 144-page paper entitled Caritas in Veritate - Latin for "charity in truth."
The encyclical, the highest form of papal writing, addresses everything from globalization and mandatory birth control to development aid and the environment.
Its publication is obviously timed to coincide with the G8 and the summit's focus on economic repair, aid to poor countries, food security and climate change.
"This encyclical is clearly grounded in the issues of the day," said a Holy See diplomat who asked not to be identified.
Encyclicals that tackle secular issues are not new. In 1931, Pope Pius XI rejected both communism and aggressive capitalism. John Paul II, the current Pope's predecessor, wrote that the Cold War was a principal cause of underdevelopment, because underwriting it financially and politically drained resources from the economy and inhibited freedom.
The current financial crisis and global recession has spurred Pope Benedict to be unusually blunt about capitalism's potential to cause harm.
"Profit is useful if it serves as a means towards an end," he writes. "Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty."
The Pope is not anti-globalization: He notes that the globalized economy has redistributed wealth, which has "lifted billions of people out of misery." But he also says that reckless growth in recent years has caused environmental degradation, a loss of trust in world markets, and mass migration.
Another product of globalization - outsourcing - also comes under attack. "The so-called outsourcing of production can weaken the company's sense of responsibility towards the stakeholders - namely the workers, suppliers, the consumers, the natural environment and broader society - in favour of shareholders," he writes.
Even hedge funds draw a mention: "What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit."
The Pope calls for the reform of the United Nations and international financial institutions to give poor countries a greater voice on the global stage. There is an "urgent need [for]a true world political authority" to manage the economy, protect the environment and guarantee food security, he writes. The reformed institutions, he adds, need to "acquire real teeth" so they can be effective.
The pontiff has never been shy about intervening in political developments. In an open letter to Italian Prime Minister Silvio Berlusconi, the host of the G8 summit, the pontiff urged the G8 leaders to "defend the poor" and to "listen to the voice of Africa." The remarks appeared to be directed, above all, at Mr. Berlusconi, whose record on meeting his commitments to African aid has been abysmal.
The Pope will have the opportunity to keep the pressure on the G8 leaders throughout the week. On Friday, he is to meet U.S. President Barack Obama. Prime Minister Stephen Harper is scheduled to meet the pontiff on Saturday, the day after the summit concludes.
Encyclicals, the highest level of Roman Catholic Church doctrine, are addressed to bishops, priests, deacons and the lay faithful throughout the Catholic universe. Pope Benedict has issued three since he was elected in 2005; the first two were about spirituality.
Eric Reguly