Can economics and ecology work together?

For many Catholic environmental advocates, free markets are to blame for most of the world’s ecological crises. For just over a century, academic and ecclesial critiques of market economies have been supported or moderated to varying degrees with the development of Catholic social teaching, most especially in papal encyclicals—the latest being Pope Francis’s Laudato Si’, with its often deep distrust of capitalist economies.

Inspired by that encyclical’s call for dialogue, a group of scholars have begun a conversation that, they hope, will grow not merely within academia, but also with the Holy Father, and with his economic advisors. The project began with the symposium “Pope Francis and Economics,” sponsored by the journal The Independent Review, which then led to the book Pope Francis and the Caring Society (Independent Institute).

With a foreword by Michael Novak and essays by high-profile commentators like Samuel Gregg, Philip Booth, and Robert Murphy, Pope Francis and the Caring Society questions and counters criticisms of capitalism. In doing so, the book offers a fair amount of data in support of free markets and property rights.

Pope Francis and the Caring Society is reminiscent of Laudato Si’. Its contributors offer sometimes feisty commentary as well as lofty, nurturing words promoting care for the neediest of the world and for the great gift of creation.

Ultimately, it is a book offered with love for the benefit of the Church, and thus for the entire world.

The book’s editor, Dr. Robert Whaples, a professor of economics at Wake Forest University, is a research fellow at the Independent Institute and co-editor and managing editor for The Independent Review. Dr. Whaples graciously offered time with Catholic World Report to talk about Pope Francis and the Caring Society, as well as the need for a continued dialogue to bridge ecology and economics—topics that are linked by “oikos,” a concern for the human family and our common home.

William Patenaude, for Catholic World Report: Your introduction in Pope Francis and the Caring Society provides a helpful comparison of “capitalism at its best, according to its champions” and the “downsides of capitalism emphasized by skeptics who agree that business can be noble.” You also remind us that we live in a fallen world, and so even the best economic systems will always be flawed. That has to be a tough sell when engaging economists who may not value the contributions of Christianity—or faith in general.

Dr. Robert Whaples: One of the things I emphasized is that the basic mindset of economists is the principle that more is better. And yet we know that more isn’t better when it comes to, say, just eating food. That’s one of the things that Laudato Si’ and the Pope have brought out so well. There’s this whirlwind of consumption that one can get caught up into—there’s all the delights of the world that are distracting us from the true light.

Just last weekend, I went to a conference put on by the Liberty Fund where I raised these issues: is more really better? Could we be consuming too much? Is [overconsumption] putting us on the wrong road? And, while some people came up later and said that they were glad that I raised those questions, others just gave blank stares [as if they were saying] “What are you talking about?”

And so sometimes, especially among academics, it’s difficult to get in concepts like sin and redemption. The social sciences are, by their nature, like the hard sciences, so completely materialistic. When you bring in things that are not simply natural, but supernatural, social scientists just don’t know how to deal with them.

CWR: What about the other direction? How has the Church understood the sorts of economic principles championed by some of the book’s contributors? Principles like private property?

Dr. Whaples:  I recently had to give a talk on the Commandments for my RCIA group. I opened with item number one from the Catechism. To understand the Commandments we need to understand the nature of God and man. “[God] calls man to seek him, to know him, to love him with all his strength. He calls together all men, scattered and divided by sin, into the unity of his family, the Church” (CCC §1). And that’s how the Church begins its approach to everything—including private property.

So what does the Catechism say about private property? Well, of course, there’s the commandment, “Thou shall not steal.” By itself that recognizes private property. And here’s what I put into my RCIA talk from the Catechism—from paragraphs 2402 to 2405, on private property: “The right to private property, acquired or received in a just way”—so not stolen property—“does not do away with the original gift of the Earth to the whole of mankind.”

In other words, property is exclusive to the owner, but also for the benefit of others. One is obliged to use one’s property in “[w]ays that will benefit the greatest number. Those who hold goods for use and consumption should use them with moderation, reserving the better part for guests, for the sick and the poor.” Further along, it says that “[a]ny system in which social relationships are determined entirely by economic factors is contrary to the nature of the human person.” (§2423) That’s a powerful teaching. That’s right out of the Catechism.

I think that the market system can help us do lots of things that lift up everyone else, that help everyone else, especially in material ways. But it can also lead us toward false light so easily, and make us more selfish. There are certainly aspects of it that do that.

CWR: That seems to be the Holy Father’s contention in Laudato Si’ and elsewhere—probably based on his experiences in Argentina, which is covered in detail in your book. But then, unlike Francis’s predecessors, who were diocesan priests, Pope Francis is a Jesuit—an order that lives in community, that holds property in common. What might be the impact of this aspect of his priesthood?

Dr. Whaples:  Some of the authors in Pope Francis and the Caring Society focus on Francis’ Argentinian background, and how that gave him a maybe odd perspective on how market economies work. But I hadn’t really thought of the Jesuit witness. They live in community and they own property in common, and they practice the Daily Examen. But, of course, they’re sharing among themselves. They don’t make any of their resources open access. And that was one of the keys of the whole book. It’s when you make a resource an open access, anybody can get it as much as they want without any limit—like over-fishing the seas or the authorities in Haiti coming and cutting down all the trees on your property because you don’t have secure property rights.

And so if you’re living in a group, as [Nobel Laureate] Elinor Ostrom [whose work is discussed in the book] points out, there’s lots of different sets of rules that one can make that will solve that open access problem. And the Jesuits probably have a wonderful set of rules in their community to do that.

The other aspect to that question is about the Jesuit’s Daily Examen. Part of the Examen is to review the day with gratitude. And I think that the market system often falls down on that. Just think about all the advertisements you’re bombarded with when you’re watching television. Do they encourage you to live a life of gratitude? No. They encourage you to live a life of envy and selfishness. It’s never about just counting your blessings. And so in the United States we have the highest standard of living in the history of the world. And yet we still feel like we have to have more. There’s almost no gratitude there. It’s very sad.

CWR: The Vatican has issued documents and held conferences that attempt to link ecology and economics. If you were able to assemble a Vatican-sponsored gathering, who would you invite, and what would be the best possible outcomes?

Dr. Whaples: Intriguing question. I would invite people who have, I think, a good grasp of the potential of a market economy to solve, not perfectly, but to help solve so many of the problems that are addressed in Laudato Si’ and, of course, that have been around forever. One group that I feel has a very good grasp of this is the Property and Environmental Research Center, a think tank in Bozeman, Montana. Their founder, Terry Anderson, would be a really good choice; as would one of his close collaborators, P.J. Hill, who’s also a good friend of mine, not Catholic but a very devout Christian. People like those voices, who understand the importance of faith but also understand how you can use a market economy to help address problems. There’s actually an organization of economists in the United States who are Catholic economists. It’s called CREDO, the Catholic Research Economists Discussion Organization.

I’d also invite public choice economists. [This is a branch of economists] that, essentially, takes all the assumptions and insights we have about how people engage in the economy and… while they may not put it in these terms, they know that we’re sinful people and when power is concentrated into the hands of potentially sinful people, that’s a dangerous thing. And that’s a message I think needs to be emphasized.

CWR: A few of the authors discuss climate change—a timely issue given international talks in Bonn. So, two questions. First, why isn’t the transition from fossil fuels more often seen as an economic opportunity rather than a burden? Why not simply seek to be one of the first to cash in on renewable sources of energy?

Dr. Whaples:  It seems like there’s only two positions one can have on climate change politically in the United States: “It’s horrible. We should be doing everything to deal with it,” or, “What are you talking about? Nothing’s happening.” But there’s a middle position. It says that, obviously, the climate is changing. It always changes, and people are putting more greenhouse gasses into the atmosphere. And look at the trends, things are warming up, the sea level is rising ever so slowly, and the scientists who are experts on this can predict that. So things are warming up and we’re going have to deal with it.

But the lukewarm position—and I think some of the authors in our collection hold this—says that, yes, climate change is real. But if you crunch the numbers and look at it, it’s just not going to rise to the level of some of the other really big global problems, like abject poverty. Basically, the profits on alternative energies are not there to be made right now, or in the next few years. You can tell that’s the case because alternative fuels still needs to be subsidized.

Now, if somebody could come up with a breakthrough, like fracking [was for fossil fuel use], for alternative sources of energy—if somebody, for example, could figure out a way to make solar cells just come down an order of magnitude in their cost—then, there would be billion-dollar bills on the sidewalk that we could be picking up. But the money is not there.

CWR: But there have been ecological and economic consequences with fracking—especially localized environmental problems.

Dr. Whaples:  On the other hand, fracking has led to the United States reducing its greenhouse gas emissions. Nobody saw that coming. And it’s led to just this substantial drop-off because it replaces coal.

CWR: That raises questions about the often intangible impacts of shifting our use of resources in some areas, and expanding them in others—in other words, questions about how a society’s consumption impacts others. And I’m thinking here of kind of the Gwich’in people of Alaska who are protesting oil exploration in their backyard within the Arctic National Wildlife Refuge. How do—or should—economists factor into their decisions realities like the value of human well-being and relationships, or the value of ecosystems—simply as ecosystems or in relation to cultures who are quite happy living off the land?

Dr. Whaples:  Amongst economists there is a growth industry of studies that try to look at human well-being in ways merely beyond output-per-person, Gross Domestic Product, the old benchmark. There is a huge amount of literature on what’s called “subjective well-being,” or maybe “happiness.” And there’s this divide amongst economists. Some have concluded that, looking at the data, there’s a plateau. As we get richer and richer, at a certain point, we aren’t getting much happier. But there are others who disagree.

As for ecosystems, that is the hardest part. We can put a value on the things that come out of those ecosystems, the trees that we could harvest, etc. But the further you get away from what’s marketed, the harder it is to put a value on them. That’s where economists start to hit a brick wall. We know something like a forest is valuable. We know it’s valuable to you as a person, to the people living near it, but you can’t adequately measure that sort of value.

And that’s the state of the knowledge amongst economists on that, unfortunately.

CWR: Many environmental advocates call for more government oversight to rein in the open market—that’s discussed often in the book. And we know there has been a great deal of attention of how to apply Christian ethics to business. But what can our faith offer government—and its policy makers and regulators, like me?

Dr. Whaples: Great question. The key point of public choice economics is that it’s the same people who are in the marketplace, who are regulators, who are in business, who are in government—we’re all the same people. We’re all the same fallen people. Which is why one of the key concepts of Catholicism is the idea of subsidiarity, right? That is, that a decision should be made at the level where it can be made best, and that the lower, more local level is preferred to a centralized level. And so, that’s one element that I think is often overlooked in the political system, because power can get concentrated into a few hands, they can go wrong in so many more ways than if it’s more devolved to an individual family and local level.

But of course, there are some problems that can’t be solved at the individual, local level. Especially global problems that creep across borders, like greenhouse gases. And so the principle of subsidiarity, I think, is in complete harmony with that. And one of the problems I had in reading Laudato Si’ is that it doesn’t always grasp that principle of subsidiarity as well as I thought that it should. It wants to centralize some of the things that probably just don’t need to be.

CWR: Lastly, you noted in a footnote in your introduction that Pope Francis’ monthly prayer intentions have yet to offer an intention for the business community. If you could write such a prayer, what would it say?

Dr. Whaples: The Pope’s October prayer intention was for workers and the unemployed, and I think in light of your question that that prayer could’ve just been broader. It could’ve been—and so here’s my rough prayer—“That business people recognize that theirs is a noble calling and rise to the call of elevating, improving, and making holy the world as they interact with their employees, their suppliers, their competitors, and the whole world.” Something like that.

Pope Francis and the Caring Society (Independent Institute) includes an introduction by Dr. Whaples, a foreword by Michael Novak, and the work of 11 scholars versed in the economics of poverty as well as Church doctrine and history. More information can be found here.