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Changing the economic and financial system might be necessary - Pope Paul VI

Written by Louis Even on Wednesday, 01 June 1966. Posted in Social Credit

The good and the fruits of the world were created for all Hence the grave duty to place them at the service of all people


Pope Paul VIPope Paul VI

August 2008 marks the 30th anniversary of the death of a great Pope, Paul VI, who succesfully brought to conclusion the Second Vatican Council, started by Blessed John XXIII, and courageously governed the Church in the eventful post-conciliar period. In honor of that occasion, we are republishing an article written by Louis Even in 1966, commenting on a statement of Pope Paul VI who said that "changing the financial system might be necessary."

An obstacle to overcome

Last May 25th, Pope Paul VI received a group of experts who had gathered in Rome to institute a commission aimed at studying the problems of developing countries.

According to a report from Reuters agency, the Pope said that changing the financial and economic system might be necessary if one wants to stop the poor from dying of hunger. These questions, he remarked, are not within the competence of the Church; but the Church should help people to become more sensitive to the problems of poverty and hunger, and should "above all, provoke a more intense awareness of the obligations deriving from the universal fraternity of men."

On June 1, 1941, Pope Pius XII, in his memorable radio message of Pentecost, said: "Material goods have been created by God to meet the needs of all men, and must be at the disposal of all of them."

He was not only talking about the rights of collectivity as a whole, but the right of each human being as individuals. It is not something conferred by human legislation, but a right coming from man’s human nature that all legislation should recognize, and favor its realization. The words used by Pius XII were explicit.

"Every man indeed, as a reason-gifted being, has, from nature, the fundamental right to make use of the material goods of the earth."

Pope Paul VI used almost the same words in his talk of May 25, 1966, to experts gathered in Rome:

"The goods and the fruits of this world were created for all. No-one has a right to reserve them for themselves, neither individuals or communities. All have the grave duty to place them at the service of all people."

No matter how much goods are offered by the producing system, the economic system does not accomplish its end if the abundance of goods does not meet the needs of all, above all its most urgent needs. According to the words of Pius XII:

"The economic wealth of a nation does not properly consist in the abundance of goods judged by a sheer material computation of their worth, but it consists in what such an abundance does really and effectively mean and provide as a sufficient material basis for a fair personal development of its members.

"If such a just distribution of goods were not to be effected or just imperfectly ensured, the true end of the national economy would not be achieved, opulent though the abundance of available goods might be, since the people would not be rich, but poor, as they would not be invited to share in that abundance."

What Pope Pius XII said about the economy of a nation, in relation with the needs of each of its citizens, Pope Paul VI applies it on a global scale. The total material wealth of the universe should not belong exclusively to the countries that produce it in plenty, or be destroyed or diverted from the production of bare necessities to the production of luxury goods, as long as there are men deprived of the necessities of life wherever they live on earth.

Like Pius XII, Paul VI reminds us of the real purpose of economic development: to supply basic matieral goods for an integral development of each human person. Here is what he said on May 25, 1966:

"It is not only about reducing the impressive inequality that puts 15 per cent of humanity in possession of 85 per cent of world production. It is not only about implementing technical and economic development, but promoting an integral and harmonious development of the human person; allowing each one to lead an existence in keeping with its dignity of a being created in the image of God."

We like these words of our Popes, who stress the importance of each individual person. We are too used to global statistics, of a simple conglomerate of anonymous persons and families.

A sacred cow that must be removed

Pope Pius XII had said that while it is the role of the Church to remind people of these truths, it is reserved to human will and the juridical forms of the peoples to regulate the practical realization of the rights of each person to a share in the goods answering their basic needs.

Paul VI said as well that it is not within the competence of the Church to decide which methods should be adopted. However, in seeing the persistence of the great riches accumulated on one side and of the urgent needs on the other side, he is not afraid of adding that "changing the world economic and financial system might be necessary." Contrary to governments and their economic advisers who are crowned with diplomas, the Pope does not consider the economic and financial system to be sacred, immutable, and untouchable. If the present system creates or permits obstacles between the existing goods and human needs, then the system should be changed and the obstacles eliminated.

It is high time we took the idol down from its pedestal and we placed the responsibility where it should be. We must stop burdening the victims, those who suffer privations, all the while accusing these same victims of being the cause of their condition. We must stop taking away their freedoms and trampling on their dignity, as a condition to have food to eat.

It is not difficult to find the cause of the evil. Production is abundant, or can be easily made abundant, if its immense possibilities are not impded. The physical means to transport the products, even to the most distant needs, function well. There is only one obstacle; money, finance. Finance is definitely lacking into the hands of the consumers, those who need this production. And so many other vices ensue from this.

So, money is only a permit, a licence to mobilize activities of production on the one hand, and to obtain products on the other hand. Lacking licences is unacceptable. It is the easiest thing to fix. But it is the thing one refuses to touch: the financial system remains a "sacred cow" for governments and for the men who are in the highest places in the system. The higher they are; the more zealous they are to place guards around this sacred cow.

Thank you, Holy Father, for indicating that it could be necessary to clean up this "sanctuary."

Another denunciation

An even more precise denuciation of the present financial system came from another Christian source, following a study made at the request of a Scottish Church, the "Congregational Union of Scotland." Realizing the presence of dire poverty amidst plenty, the authorities of this Church said that there must be something fundamentally flawed in the economic system. A committee was appointed — "The Christian Doctrine of Wealth Committee" — to examine the existing financial system from a Christian point of view.

The first meeting of the committee was held on September 22, 1960. It was followed by six others. The committee consulted a great number of economists, professors, bankers, men of wisdom and of high office. They published the results of their research in a booklet entitled "A Christian Doctrine of Wealth" (later published under the title, "Money — A Christian View.")

As the result of their investigations, they came to the following conclusions:

  1. "We believe that the existing system of debt-finance, whereby practically all money comes into circulation as interest-bearing debt, is prejudicial to human well-being, a drag on the development and distribution of wealth, finds no justification in the nature of things, and perpetuates a wrong conception of the function of money in human society.

  2. "We believe that the virtual monopoly of credit enjoyed by the banking system is contrary to reason and justice. When a bank makes a loan, it monetizes the credit of a credit-worthy customer, admittedly a necessary service. But when it has done this, it hands him back his monetized credit as a debt to the bank plus 6, 8 or 9%. There seems to be an anomaly here, masked by use and wont, that calls for examination. The true basis of credit is found in the assets of the nation — men, labor, skills, natural resources and the enormous power for production now in human hands. The creation and function of money ought to bear a strict relation to those physical facts, and to nothing else.

  3. "We believe that the existing system constitutes a barrier to peace and disarmament, it involves the trade war with resulting international friction. It requires the priming of the financial pump through the colossal expenditure on armaments in the cold war situation. By this means vast sums are put into circulation without a corresponding production of consumer goods. It seems difficult to deny the assertion made by Professor Galbraith and others that without the expansion of the economy in this way there would be economic collapse in the USA and in this country (Great Britain)."

The Christian Doctrine of Wealth Committee came to the same observations made over forty years before by the engineer and economist Clifford Hugh Douglas, the author of the Social Credit proposals. Financial credit is social by nature; banks take over the property of new money that rightfully belongs to the community; finance is not in keeping with reality and dominates the economic life instead of serving it; peoples suffer this insane situation because, the established customs and habits prevent them from even paying attention to this situation, and they accept its consequences as if they were as inevitable as the temperature. The Committee adds:

"Since we are confident that it is not beyond the wit of man to devise a system for which these features would be absent, we would urge that it is an imperative Christian duty to press for the introduction of such a system."

Conditions for a sound system

The Committee therefore rightly insists on the obligation to change the financial system, without being specific about what technique to use for this change. However, among all the proposals issued so far for a change of system, only Social Credit offers a concrete method to achieve the goals of a financial system that is faithful to its proper role in the economy:

To establish a system that is flexible, in constant keeping with the realities of production and consumption;

Make sure that money is determined by economic activities, and not economic activities be determined by money;

Finance all possible production that answer the needs of the population, according to the hierarchy of urgency; maintain the purchasing power at the level of production offered in front of the normal needs of the population; and to ensure to each individual an income linked to his very existence, not only by virtue of being employed, in order to allow each person to exercise his fundamental right of a share in the material goods, in a world where goods cannot be obtained without money.

This last point has been mentioned several times in past issues of the "Michael" Journal, and it will be mentioned again in the future. The refusal of this income attached to the human person, that would also be given to the family, according to the number of its members, has caused many evils, such as: the drive of today’s economy for a multiplication of new material needs, which leads towards materialism, simply to maintain employment; the ever-increasing intervention of governments to take care of functions that normally belong to the persons themselves, to families and free associations.

These disorders, and many others, are caused and increased by the refusal to acknowledge for each person the right to an income: an income for the sole reason of being a human being, not only because you are employed in production, in an economic system where less and less human labour is required to maintain a production that can answer the normal needs of man. Besides, is not every living human person, co-heir of the progress of past generations, and therefore co-owner, co-capitalist of the greatest factor of today’s immense production?

It is this status of capitalist, extended to each and every person, that must prevail more and more over the status of employed people. A majority of the population in Canada is not hired in production, and yet they have the right to live their lives fully.

Solution: Social Credit

To remedy the evil caused by a false financial system, is not the Social Credit option infinitely superior to the offers of Communism or nationalizations that gradually turn into a Communist-like regime?

In front of the communists who denounce a capitalism that makes the rich richer and the poor poorer, how devoid of any solution empty-handed men of the right are! Devoid of any solution, but guilty nevertheless, because they continue to refuse the Social Credit proposals that have been formulated over half a century ago, and diffused in many countries, especially Canada.

Would not the application of the Social Credit proposals be the means par excellence for the realization of the plan of God in the creation of the riches of the earth, mentioned so often by our great Popes, from Leo XIII to Paul VI?

Yes, the financial system must be changed, if one does not want unmerited privations to continue, the poor to continue to die of hunger. The refusal of the distribution of the existing abundance of goods in front of millions of starving people will bring about the wrath of Heaven on our countries.

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