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The Pope Francis Encyclical And Its Economics

By Brent Blackwelder

Brent BlackwelderThe Encyclical Letter of Pope Francis is attracting extraordinary attention for its message on global warming, deforestation, loss of biological diversity, and other pressing environmental issues. What is less well known is the extensive critique of the global economy found in his 184-page Encyclical. This blog highlights some of the significant points that Pope Francis makes about the need for systemic economic change.

Although the Pope does not use the phrase “steady state economy” or “true-cost economy” his message provides a comprehensive moral argument for a systemicshift to a new economy.

2014 Pastoral Visit of Pope Francis to Korea Closing Mass for Asian Youth Day  August 17, 2014  Haemi Castle, Seosan-si, Chungcheongnam-do  Ministry of Culture, Sports and Tourism Korean Culture and Information Service Korea.net (www.korea.net)  Official Photographer : Jeon Han This official Republic of Korea photograph is being made available only for publication by news organizations and/or for personal printing by the subject(s) of the photograph. The photograph may not be manipulated in any way. Also, it may not be used in any type of commercial, advertisement, product or promotion that in any way suggests approval or endorsement from the government of the Republic of Korea. If you require a photograph without a watermark, please contact us via Flickr e-mail. --------------------------------------------------------------- 교황 프란치스코 방한 제6회 아시아 청년대회 폐막미사 2014-08-17 충청남도 서산시 해미읍성 문화체육관광부 해외문화홍보원 코리아넷  전한

Pope Francis. Photo Credit: Korean Ministry of Culture, Sports and Tourism

I present a series of quotations to illustrate portions of the Pope’s forceful arguments. If we are to obtain systemic economic change, we need new, motivated allies. The Encyclical is a key tool to motivate religious congregations to be front and center in this economic debate to counter the greed and rapacious behavior of numerous governments and large corporations.

In Section 54 the Pope takes sharp aim at the control of politics and finance that prevent urgent changes from being made:

The failure of global summits on the environment make it plain that our politics are subject to technology and finance. There are too many special interests, and economic interests easily end up trumping the common good and manipulating information so that their own plans will not be affected. The alliance between the economy and technology ends up sidelining anything unrelated to its immediate interests. Consequently the most one can expect is superficial rhetoric, sporadic acts of philanthropy and perfunctory expressions of concern for the environment, whereas any genuine attempt by groups within society to introduce change is viewed as a nuisance based on romantic illusions or an obstacle to be circumvented.

Pope Francis repeatedly questions whether the global economy is furthering the common good. In Section 109 he writes:

The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated…” In Section 189 he looks again at the financial collapse of 2008: “Politics must not be subject to the economy, nor should the economy be subject to the dictates of an efficiency-driven paradigm of technocracy. Today, in view of the common good, there is urgent need for politics and economics to enter into a frank dialogue in the service of life, especially human life. Saving banks at any cost, making the public pay the price, foregoing a firm commitment to reviewing and reforming the entire system, only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises after a slow, costly and only apparent recovery. The financial crisis of 2007-08 provided an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth. But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world.

Pope Francis waxes eloquent on the subject of externalities in Section 195:

The principle of the maximization of profits, frequently isolated from other considerations, reflects a misunderstanding of the very concept of the economy. As long as production is increased, little concern is given to whether it is at the cost of future resources or the health of the environment; as long as the clearing of a forest increases production, no one calculates the losses entailed in the desertification of the land, the harm done to biodiversity, or the increased pollution. In a word, businesses profit by calculating and paying only a fraction of the costs involved. ‘Yet only when the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations,’ can those actions be considered ethical. An instrumental way of reasoning, which provides a purely static analysis of realities in the service of present needs, is at work whether resources are allocated by the market or by state central planning.

Pope Francis talks about product diversification and consumerism; in Section 129 he extols the virtues of the “great variety of small-scale food production systems which feed the greater part of the world’s peoples.”

As Pope Francis points out, he is building on the messages that popes such as John XXIII, Paul VI, John Paul II, and Benedict XVI have given on these problems. For example, Pope Benedict XVI proposed “eliminating the structural causes of the dysfunctions of the world economy and correcting models of growth which have proved incapable of ensuring respect for the environment.” Pope Paul VI wrote: “the most extraordinary scientific advances, the most amazing technical abilities, the most astonishing economic growth, unless they are accompanied by authentic social and moral progress will definitively turn against man.”

My hope is that the Pope’s message will be translated by religious congregations into tangible actions to make substantive changes in the economic drivers of environmental destruction. New allies are urgently needed.

One good place for tangible action is to go after the cheater economics being used by the G 20 nations to push tens of trillions of dollars into mega-infrastructure projects without regard to social, environmental, or climate impacts. (See my January 2015 blog for details on this subject.)

 

Potential New Allies in the Effort to Achieve a Sustainable True Cost Economy

by Brent Blackwelder

BlackwelderThose who want a true cost, steady state economy need some new, powerful allies. We need allies that stretch across the political spectrum, from liberal to conservative. We need allies that can speak from a values perspective to bring moral considerations to bear on the discussion.

Neither the environmental movement nor the progressive movement possesses enough political strength to overcome the most powerful economic interests in the world. These potent interests include the oil and coal industries, banks, agribusiness, mining and chemical companies, Wall Street, etc. Congress will not act on big economic changes because too many members depend on election money from these very same economic interests.

Faith-based communities could play an important role because they can reach across the conservative-liberal spectrum, have member congregations that convene on a weekly basis, and can speak with a moral voice that moves people to action. Such an approach may work well with the growing number focused on serious environmental problems because the root cause of many of such problems is the system of cheater economics that dominates today’s economy.

During the 1970s and 1980s, some of us worked with churches on various environmental concerns. These efforts have been expanding and today, the environment is a common topic among the faithful. For example, consider the mission statement of Interfaith Power & Light, established over a decade ago by Reverend Sally Bingham:

The very existence of life–life that religious people are called to protect–is jeopardized by our continued dependency on fossil fuels for energy. Every major religion has a mandate to care for Creation. We were given natural resources to sustain us, but we were also given the responsibility to act as good stewards and preserve life for future generations.

Interfaith Power & Light has engaged hundreds of congregations, has affiliates in 38 states, educated thousands of people of faith about the moral mandate to address global warming, and helped pass California’s landmark climate and clean energy laws. Christian environmentalists such as Matthew and Nancy Sleeth have formed an educational group, Blessed Earth, to equip faith-based communities to become better stewards of the earth and have written books about the duty of caring for creation, including Almost Amish; The Gospel According to the Earth; and Go Green, Save Green. To illustrate this point, I present a sample of five defects in today’s unsustainable economy, followed by the kind of response faith-based communities could make.

  • Defect: Assigning future generations close to zero value and obsessively focusing on the quarterly return. Rapacious commercial logging, for instance, can wipe out forests that are needed to sustain future generations with water, fuel, fish, and wildlife.

    Moral Response: We care about future generations and have a responsibility to care for the environment and not leave a polluted earth for our children and grandchildren.

  • Defect: Pushing for massive expansion of the consumer economy. Today’s economy is involved in a relentless drive to sell a never-ending array of consumer goods.

    Moral Response: Most denominations preach against excessive materialism. (“Lay not up for yourselves treasures on earth where moss and rust doth corrupt and where thieves break through and steal.” Matthew 6:19)

  • Mt Top Removal - James Holloway

    Faith-based communities can become powerful allies in the fight to stop growth at all costs, including the once forested Kentucky mountains. Photo Credit: James Holloway

    Defect: Offering economic justifications for extraordinary environmental destruction, such as mountain-top coal removal mining.

    Moral Response: Such practices are an attack on the earth and cause serious harm to local residents–their health, their water supply, and their homes, leaving the once biologically forested mountains of West Virginia with a Martian landscape.

  • Defect: Permitting enormous pollution externalities to be shoved off on fellow competitors and on the public. Today’s economy tolerates cheater economics in which products do not reflect the real ecological costs of their manufacture and usage.

    Moral Response: We are charged with loving our neighbors, not poisoning them. Prices of consumer goods should reflect the damages being done to obtain the raw materials and energy used in their production and in their usage or consumption.

  • Defect: Counting population growth as an asset when in most places it is a liability that pushes localities as well as states to exceed the carrying capacity of their environment. None of the great challenges to the health of the earth’s life-support systems are made easier by having more people. World population today exceeds 7 billion and is headed to between 9 and 11 billion by 2050. The tax code in many places encourages more population growth and the global economy depends on a growing supply of cheap labor.

    Moral Response: While there is a large rift among religious denominations over the question of abortion, the population question is directly addressed in Chapter 1 of Genesis. The blessing “be fruitful and multiply” is first given to every kind of animal, including crawling things, then to humans. Thus, humans must take their blessing in the context of the previous blessings by God and live so that the earth is flourishing with many kinds of life.

In summary, those who seek a true cost, steady state economy should work with faith-based communities to discuss how the crucial linkage between serious problems like climate disruption and new economic policies to achieve a sustainable economy fit into their work.

By raising objections to cheater economics, to pollution externalities, and to phony benefit-cost analyses used to justify grotesque environmental practices (such as tar sands oil and mountain top removal), faith-based communities will make a difference. These coummunities can speak with moral authority about caring for future generations, about caring for God’s creation, and about loving one’s neighbors–not polluting them.

Note: Brent Blackwelder received a Ph.D. in moral philosophy from the University of Maryland in 1975 and was awarded an honorary doctorate from the Virginia Theological Seminary in May of 2014.

Depletion of Moral Capital as a Limit to Growth

by Herman Daly

In thHerman Dalye Social Limits to Growth, Fred Hirsh argues that

Morality of the minimum order necessary for the
functioning of a market system was assumed,
nearly always implicitly, to be a kind of permanent
free good, a natural resource of a non depleting kind.

Elaborating on the relation of Adam Smith’s Theory of Moral Sentiments to his Wealth of Nations, Hirsh points out that for Smith, men could safely be trusted not to harm the community in pursuing their own self interest not only because of the invisible hand of competition, but also because of built-in restraints on individual behavior derived from shared morals, religion, custom, and education. The problem that Hirsh sees is that

continuation of the growth process itself rests on certain preconditions that its own success has jeopardized through its individualistic ethos. Economic growth undermines its social foundations.

The undermining of moral restraint has sources on both the demand and supply sides of the market for commodities. In his essay, “The Growth of Affluence and the Decline of Welfare,” E. J. Mishan has noted that

a society in which ‘anything goes’ is ipso facto, a society in which anything sells.
(Economics, Ecology, Ethics)

A corollary is that self-restraint or abstinence in the interests of any higher claims than immediate gratification by consumption is bad for sales, therefore bad for production, employment, tax receipts, and everything else. The growth economy cannot grow unless it can sell. The idea that something should not be bought because it is frivolous, degrading, tawdry, or immoral is subversive to the growth imperative. If demand is to be sufficient for continual growth then everything must sell, which requires that “anything goes.”

On the supply side, the success of science-based technology has fostered the pseudo-religion of “scientism,” i.e., the elevation of the deterministic, materialistic, mechanistic, and reductionistic research program of science to the status of an ultimate World View. Undeniably, the methodological approach of scientific materialism has led to great increases in our technological prowess. Its practical success argues for its promotion from working hypothesis or research program to World View. But a World View of scientific materialism leaves no room for purpose, for good and evil, for better and worse states of the world. It erodes morality in general and moral restraint in economic life in particular. As power has increased, purpose has shrunk.

The baleful consequence of this fragmenting of the moral order, which we are depleting just as surely as we are wrecking the ecological order, is, as Mishan points out, that

effective argument [about policy] becomes impossible if there is no longer a common set of ultimate values or beliefs to which appeal can be made in the endeavor to persuade others.

Just as all research in the physical sciences must dogmatically assume the existence of objective order in the physical world, so must research in the policy sciences dogmatically assume the existence of objective value in the moral world. Policy must be aimed at moving the world toward a better state of affairs or else it is senseless. If “better” and “worse” have no objective meaning, then policy can only be arbitrary and capricious. C. S. Lewis forcefully stated this fundamental truth:

A dogmatic belief in objective value is necessary to the very idea of a rule which is not tyranny or an obedience which is not slavery.

Likewise, Mishan claims that

a moral consensus that is to be enduring and effective is the product of a belief only in its divine origin.

In other words, an enduring ethic must be more than a social convention. It must have some objective, transcendental authority, regardless of whether one calls that authority “God,” or ‘the Force,” or whatever. All attempts to treat moral value as entirely a part of nature to be manipulated and programmed by psychology or genetics only ends in a logical circularity.

Moral value cannot be reduced to or explained as a mere result of genetic chance and natural selection, without at the same time losing its authority. Even if we knew how to remake moral values as human artifacts, we must still have a criterion for deciding which values should be emphasized and which stifled in the new order. But if that necessary criterion is itself an artifact of humanly manipulated mutation and selection, then it too is a candidate for being remade. There is nowhere to stand.

Once the false belief spreads (and it already has) that morality has no basis other than random chance and natural selection under impermanent environmental conditions, then it will have about as much authority and truth claim as the Easter Bunny. In sum, the attitudes of scientific materialism and cultural relativism actively undercut belief in a transcendental basis for objective value, which in turn undercuts moral consensus. Lacking that consensus there is no longer the “morality of the minimum order necessary for the functioning of a market system” presupposed by Adam Smith and his followers.