Guiding Principles for a Catholic Perspective on Economic Policy Proposals


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In his encyclical letter, Laudato Si’, Pope Francis recalls that “Saint Francis of Assisi reminds us that our common home is like a sister with whom we share our life and a beautiful mother who opens her arms to embrace us . . .[whose] climate is a common good, belonging to all and meant for all” (Laudato Si’ pgs. 3 and 18).

On the other hand, the Merriam-Webster dictionary reminds us that “Economics is a social science concerned chiefly with the description and analysis of the production, distribution, and consumption of goods and services.” If we keep both of these points of view in mind when discussing economic policy—the relational world Pope Francis describes and the technocratic world of modern economics—we can understand that our capitalist system actually inhabits two dimensions: the three components of human, natural, and existing physical capital, on the one hand, and the more familiar world of financial capital on the other hand. Since we are not used to counting the first dimension with its three components, let’s consider what they include and how they are related:

Natural capital is God’s Creation, Mother Earth, the most important producer of goods and services for our human existence. Despite its central importance, the production, distribution and consumption of natural capital is virtually ignored in modern economic policy. Yet as human beings, we cannot exist without the goods and services that natural capital provides.

Human capital is comprised of all our brothers and sisters throughout the world. However, members of our human community (especially in lower income communities) in the US are virtually ignored or worse, seen as a liability.

Existing physical capital includes all the existing buildings and infrastructure in our communities. Yet these resources, too, are rarely counted or valued, despite the over-riding influence they exert. How and where we build and connect our human habitats and how we provide and distribute essential life support resources for our existence are the most impactful decisions we make. They shape the health, prosperity, safety and security of our human community and the natural resources we depend on for our very survival.

Financial capital is the primary capital sector that we are good at counting and valuing, although it is the least important, representing no more than 10% of the capital resources in our economy. In fact, it is the only form of capital that neither produces nor consumes.

 

With all of this in mind, consider what happens when we ignore all the other forms of capital—beyond financial capital—that we actually draw on to create our world:

  • Our brothers and sisters are not valued, and frequently not even counted. The human resources, with all the creativity and labor they contribute, are not fairly compensated for the production and functioning of the human community.
  • We fail to recognize the real value of God’s creation, our natural world, clean air and water—all of which we depend upon for our very survival.
  • We develop and build in a way that consumes and damages our own life support resources. We then treat these resources as private commodities available to the highest bidder.
  • Return on Investment (ROI) only values financial capital for distributing short term returns to financial investors, but 90% of the other capital forms in our economy are ignored or taken for granted.

As a Catholic professional with decades of experience in building and development, I believe we are called to love our God and love and serve each other, that we are created in the image and likeness of God. The creation stories of the garden of Eden call us to heal our relationships with each other and with God’s creation. The New Testament commandments, expressed in the Beatitudes, call us to a new relationship with each other. We are all a unique gift from God, no matter what race, religious belief, economic level, gender or nationality we may represent.

The uncounted and undervalued human and natural capital in our US communities has led to significant racial, economic and environmental injustice pandemics. The Coronavirus pandemic has exposed this reality, that our society does not value and steward God’s creation. Nor do we see each member of our community as a unique gift from God, whom we are called to love as Christ would. Distribution of resources is a measure of mercy and justice in our society and reflects how we value each human being as a unique gift from God.

Regenerative Development and Economics is a growing policy arena that integrates and values all capital forms over the long term. I have found in it a vehicle that allows the spiritual values of scripture and Laudato Si’ to be integrated into my professional career.

 

 

The foundational principles of regenerative economics require us to:

  • Learn to respect and understand our natural resources in all their complexity—excess and limitations, climatic conditions and threats—as well as our dependence on our place and each other to survive as individuals, as a family and as a community.
  • Understand that human beings, organizations and buildings are organic, evolutionary, and integrated ecosystems as a part of the natural world.
  • Understand that as human beings all of us are both biologic organisms and social beings with a spiritual dimension.
  • Realize that as biologic organisms we all need adequate clean air and water, healthy soil to provide healthy food and resilient shelter based on our unique bioregion.
  • Be aware that as social beings we require a network of others, organized and connected to us, supporting a healthy and thriving community, with each member enjoying access to the same resources. Any decision that threatens the capacity or health of these required resources is not regenerative; any action that damages this network and its members is to be avoided.
  • Prevent any action from undermining any of the four forms of capital supporting our community and planet.

I find in the principles of regenerative economics an understanding that every decision we make can contribute to the growth and improvement of the long-term health and capacity across all human, natural, existing physical and financial capital for the benefit of all—an understanding that resonates with what Pope Francis is trying to teach us in Laudato Sí.

OSJ parishioner John L. Knott Jr. is one of the authors of Regenerative Urban Development, Climate Change and the Common Good, published in August 2019 by Routledge Press.