Theos: Another economic catastrophe likely if markets are not fairer

Cardinal Vincent Nichols has backed the report, which says the financial markets have been driven by a form of fundamentalismREUTERS/Max Rossi

Leading politicians and commentators have called for the Christian principles of the "just war" to be adapted to create a "just money" approach to the economy. If this does not happen, they warn, another economic "catastrophe" is likely.

The neoliberal doctrine that rules free markets is the "heresy of our age" and should be replaced, according to a new report, backed by the Archbishop of Westminster Vincent Nichols and senior MPs from the main parties.

The report, Just Money: How Catholic Social Teaching can Redeem Capitalism commissioned by Theos, the religion and society think tank, is written by Clifford Longley, a former religious affairs correspondent for The Times and now one of the most influential religious thinkers of the 21st century.

Longley says the market has been driven by a form of fundamentalism that took the world economy to the edge in the crash of 2008, causing as much as $30 trillion's-worth of damage.

Yet it was an article of faith to market fundamentalists and neoliberal economists that this could never happen. "The world was saved from even worse only by government intervention at vast expense. The public is still paying the price," he writes.

Longley argues that neoliberalism is not "scientifically sound" and that the solution lies "somewhere in the area of morality".

He warns that despite the catastrophe of 2008, neoliberalism remains the default orthodoxy among professional economists.

"That means the problems have not been cured, and until they have, another catastrophe is likely."

The report is in line with the philosophy of Pope Francis, who is still receiving warm support from international leaders despite speaking out from a long tradition of Catholic social teaching that has traditionally been critical of neoliberal economics.

Catholic social teaching, writes Longley, which can be traced back to ancient Greek philosophers such as Plato and Aristotle as well as to Judaeo-Christian scriptural sources, aims to correct the way market forces work so that they serve the "public interest" and the "common good".

It represents a classical example of an area where the "public interest" is vastly at odds with what the public is most interested in, where that is personal shareholder profit above all else.

The "just money" principles include prioritising the common good over profits, respect for human dignity and opposition to discrimination, defence of workers' rights and the state's duty to protect and promote the common good.

The report is launched today, as the Archbishop of Canterbury meets the heads of the International Monetary Fund and the Bank of England in Washington. IMF President Christine Lagarde and Bank of England Governor Mark Carney have previously voiced concerns at the growing gap between the rich and the poor.

Cardinal Nichols says a "narrow and atrophied" view of people as motivated purely by self-interest has pervaded thinking about the markets.

He writes in the foreword: "There is clear evidence of a refreshing willingness on the part of many, including many business leaders, to rethink the relationship between business and society."

He adds: "Catholic social teaching seeks to apply the essence of Christian moral principles to life in society. It is not an economic or political programme, but it offers a powerful way of thinking about what the common good requires, and how structures in society can promote or undermine human well being and the requirements of justice."

Jon Cruddas MP said: "This space is a key one for the future of politics."

Jesse Norman MP said: "The report convincingly shows how market fundamentalism can destroy trust and undermine civil society, and reminds us how both trust and civil society are needed for the renewal of capitalism."