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Crisis in a Global Economy: Re-Planning the Journey (José T. Raga & Mary Ann Glendon eds., Pontifical Academy of Social Sciences 2011).

Abstract: The Pontifical Academy of Social Sciences, Sixteenth Plenary Session, 30 April-4 May 2010. The presentations at the Plenary began with analyses of the nature and causes of the current crisis, and its impact on peoples and communities throughout the world, especially those who were least advantaged even before the recent upheavals. The discussion then moved to what needs to be done to ‘re-plan the journey’ if economic systems are to serve the common good. Four principal themes emerged from the presentations and discussions: 1. Financialization of the economy and human relations. There was general consensus that the current economic crisis had its roots in the financial sector. The fragility of the economic system was partly due to over-reliance on speculative financial activities separated from productive activity in the real economy. Some speakers also warned of the danger of the ‘financialization’ of human relations, even within the family. 2. A second common theme concerned the toll that economic crisis was taking on poor countries, even though its origin was in the wealthy nations. Some speakers noted that if one compares the cost of the financial bailouts to the amounts needed to provide the world’s poor with basic nutrition, it is evident that the crisis has distracted greatly from urgent questions of development. Others pointed out that meeting basic needs, especially for children, beginning in the womb, makes a decisive contribution to economic productivity. 3. There was also broad consensus on the need for improved methods of regulation with careful attention to the proper roles of governmental entities, private actors and international bodies. A highlight of the Plenary was a session featuring three invited experts on banking: Lucas Papademos of the European Central Bank, Mario Draghi, Governor of the Bank of Italy, and Ettore Gotti Tedeschi, President of the Istituto per le Opere di Religione (the ‘Vatican Bank’). Joined by Academicians Hans Tietmeyer, former president of the Deutsche Bundesbank, and Luis Ernesto Derbez Bautista, former Minister of Economics in Mexico, this group discussed the need for stronger regulation of international finance, and suggested various concrete measures to assure greater transparency in financial instruments and to avoid the moral hazards arising from bailouts. 4. Finally, the members welcomed the hopeful note sounded by Ferrari Chairman Luca Cordero di Montezemolo who pointed out that the economic crisis will certainly stimulate the search for much-needed innovations in industry, agriculture and employment to better serve the world’s needs for food, renewable energy, and transportation. In his summation as the Coordinator of the Plenary, Professor Raga called attention to the responsibilities of educators. Given the pervasive emphasis on materialism and utilitarianism, he said, one can hardly be surprised ‘that in the current crisis, there has been an abundance of cheating and fraud and excessive regard for the short-term coupled with disdain for that which belongs to the long-term’. Looking to the future, he called for cooperation among ‘open-minded people, with the capacity to integrate into working teams and with ability for reflection; people who are convinced that the world is so complex that only with the cooperation of others will we achieve the fruit of our labors; moreover, that only with a joint vision will it be possible to find a solution’.