BY ED WEST
THE CATHOLIC Truth Society has published a new brochure explaining the Church’s position on the credit crunch.
The Credit Crunch, aking Moral Sense of the Financial Crisis by Edward Hadas, explains how western capitalism got itself into the current crisis, and argues that it lost its principles.
Mr Hadas, a Catholic author and financial journalist, also deals with wider question about morality and the markets, and concludes with “A Moralist Manifesto”.
The Catholic Truth Society, a charity founded in 1868, is the leading publisher of Catholic booklets in Britain, explaining every aspect of the faith.
Mr Hadas is assistant editor at Breakingviews.com, a financial commentary service and received a Business Journalist of the Year Award this year. He also teaches at the Maryvale Institute in Birmingham.
Despite having worked as a banker he is critical of the “utopian economics” of freemarketeers, and recently criticised Philip Booth’s Catholic Social Teaching and the arket Economy.
“Competitive free markets are a mistaken utopian ideal, unheard of in economic history and are too socially abrasive to play more than a limited role in a trust-depen dent complex industrial economy,” he said.
At a recent talk in Milan Mr Hadas the American-born journalist said: “This moral portrayal of the financial industry does not lead directly to specific guidelines for bank regulation. It does, however, make clear why there are so many more financial crises than industrial breakdowns.
“The greed and foolishness of bakers, automakers and airlines are constrained by careful regulation and a well established ethos of quality and service.
“In finance, such regulation needs to be particularly firm, for all involved but especially for those in the industry, because money has an especially powerful intox icating effect on men’s moral faculties.
“In fact though, financial regulations have almost always been inadequate, and “free market” economists deserve much blame for encouraging a loosening of these regulations over the last generation.
“I do not think the current financial crisis will destroy industrial economies. They are built on too firm a foundation of trust for that. The reconstruction of the financial economy can, however, be an opportunity for economists to make more room in their discipline for a pearl of great price – the good.”