Pope Benedict XVI was the first to predict the crisis in the global financial system, a “prophecy” dating to a paper he wrote when he was a cardinal, Italian Finance Minister Giulio Tremonti said.
“The prediction that an undisciplined economy would collapse by its own rules can be found” in an article written by Cardinal Joseph Ratzinger, who became pope in April 2005, Tremonti said yesterday at Milan’s Cattolica University.
German-born Ratzinger in 1985 presented a paper entitled “Market Economy and Ethics” at a Rome event dedicated to the Church and the economy. The future pope said a decline in ethics “can actually cause the laws of the market to collapse.”
Pope Benedict in an Oct. 7 speech reflected on crashing markets and concluded that “money vanishes, it is nothing” and warned that “the only solid reality is the word of God.”
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Here is the full text of Pope (then Cardinal) Benedict’s essay on a free market economy and ethics from 1985.
Although, it is not so clear that this was an actual “prediction,” this section of the essay sticks out on the dependence of a free market economy and a definitive ethical system:
It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse. An economic policy that is ordered not only to the good of the group — indeed, not only to the common good of a determinate state — but to the common good of the family of man demands a maximum of ethical discipline and thus a maximum of religious strength. The political formation of a will that employs the inherent economic laws towards this goal appears, in spite of all humanitarian protestations, almost impossible today. It can only be realized if new ethical powers are completely set free.