THE new Encyclical of Pope Francis, Laudato Si, touches on many subjects from biblical ecology to environmental policy, from consumerism to the dangers of market and social media. In this sprawling exhortation of contemporary world, one sees signs of hope and messages of danger.
At the heart of the encyclical is a question: “What kind of world do we want to leave to those who come after us, to children who are now growing up?” Certainly, this concern is not new. All parents at one point in their lives have asked this question. The answer, obviously, is a comfortable and secure future, but the process toward this end can be varied. For some, the means can be in the form of physical capital, such as money and assets, including land. In which case, they accumulate wealth over their lifetimes so that they can assure their offspring of a comfortable life when they are gore. For other parents, the mechanism is perhaps, human capital in the form of health and education. In other words, they invest in their children to become productive and to guarantee for themselves the life they want to lead.
Except perhaps, for the poor households, most will not consider the planet as a possible bequest. Ironically, the planet is the single most important legacy we can give our children. With a dying planet, neither physical nor human capital will prosper. Wealth loses its luster and human capital depreciates. It is then to the interest of everyone to protect and enrich the planet.
A crucial question then is why people ignore this simple fact. The obvious answer is that the earth or the environment is a collective good. This means that everyone is sharing this collective good. According to Francis, the environment is “the patrimony of all humanity and the responsibility of everyone. If we make something our own, it is only to administer it for the good of all.”
In the social sciences, collective goods create a particular sort of problem. Known as the “tragedy of the commons,” the view is that rational individuals consuming a common resource for individual gain will inevitably deplete it. In this case, “shared” means that each individual does not have a claim to any part of the resource, but rather, to the use of a portion of it for his/her own benefit. The tragedy is that, in the absence of regulation, individuals have a tendency to exploit the commons to his/her own advantage, typically without limit. In the end, these individuals end up maximizing their welfare, but everyone else shares the cost.
At the root of the tragedy is the unrestrained self-interest of some individuals. According to the Encyclical, the current economic and technological progress in the world offers “those with the knowledge, and especially the economic resources to use them, an impressive dominance over the whole of humanity and the entire world.” It is precisely the mentality of technocratic domination that leads to the destruction of nature and the exploitation of people and the most vulnerable populations. “The technocratic paradigm also tends to dominate economics and political life,” keeping us from recognizing that “by itself the market cannot guarantee integral human development and social inclusion.”
Hence, the Encyclical extends beyond environmental issues. The observed social malaise is correlated with environmental degradation since these two issues are determined by the same political and technological structures. Francis mentioned that his predecessors have noted this. What differentiates his Encyclical, however, is its sense of urgency. This stems from the pope’s personal assessment that environmental and social problems have engulfed and anguished not only communities but also whole nations, particularly the poor. We were given a personal experience of how this issue has deeply affected the pope when, in the midst of a brewing storm, he visited Tacloban last January.
But how does one avert this tragedy? Some economists, such as Nobel Laureate Ronald Coase, argued that this problem be addressed through privatization—converting common property into property owned by individuals, who would then have strong incentives not to overuse or destroy it. However, in a series of influential articles and books, another Nobel Laureate, Elinor Ostrom, showed that there is an alternative. Through social norms and informal institutions to manage common property resources, Ostrom argues that informal, decentralized approaches to managing common property resources are superior to government-imposed ones. The reason is that the former can take more account of the specialized local knowledge possessed by the people who actually use the resources and depend on them for their livelihoods.
In the same vein, Francis insists on honest and transparent decision-making processes, in order to “discern” which policies and business initiatives can bring about “genuine integral development.” For instance, a proper environmental impact study of new “business ventures and projects demands transparent political processes involving a free exchange of views.” Since the problem is global, he suggests new forms and instruments for global governance. He advocates “an agreement on systems of governance for the whole range of the so-called global commons, seeing that “environmental protection cannot be assured solely on the basis of financial calculations of costs and benefits.”
The Encyclical takes its title from the invocation of Saint Francis, “Praise be to You, my Lord,” in his Canticle of the Creatures. It reminds us that the earth, our common home “is like a sister with whom we share our life and a beautiful mother who opens her arms to embrace us.” We have forgotten that “we, ourselves, are dust of the earth; our very bodies are made up of her elements, we breathe her air and we receive life and refreshment from her waters.”
As we approach the presidential elections next year, it is of utmost importance that we know the position of the candidates on the issues raised by Laudato Si.
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Leonardo Lanzona Jr. is director of the Ateneo Center for Economic Research and Development and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.