One of the enduring lessons from the most recent Papal Encyclical, Laudato Si (Praise Be to You), is the simple notion that the “natural environment is a collective good.” Although simple, this profound concept has broad ramifications and is key to understanding how an encyclical about the environment is related to economic justice.
The Natural Environment as a Public Good
An economist understands that a collective good (sometimes called a “public good”) is a special class of goods that cannot realistically be withheld from one individual without withholding it from everyone and for which the marginal cost of an additional person consuming it, once they have been produced, is zero. We can say this about air, water, land: the natural environment– humanity’s habitat.
An environmentalist understands this, and so does a theologian. Laudato Si reminds us that “[w]hether believers or not, we are agreed today that the earth is essentially a shared inheritance.” To understand the implications of understanding the natural environment as a public good, Laudato Si points us to two core concepts in Catholic Social Teaching: private property and the universal destination of goods.
The Christian View of Private Property
In Genesis 1:26-29, we learn that God entrusted the earth to mankind. Stewardship is man’s unique calling, and this calling requires his labor and his love. By man’s labor, the earth is productive. By man’s love, there is fruit and communion. Man’s calling requires the provision of private property so as to enable the reaping of the fruit of his labor and sharing of that fruit in communion with others. This symbiotic, sharing relationship is how theologians understand man’s place in both the material and spiritual realms. So central is the notion of private property that God commanded that man “shall not steal.” Man shall not rob another man of his opportunity to fulfill his calling.
In his encyclical letter Centesimus Annus (Hundredth Year), Pope Saint John Paul II explained that “In this way, [man] makes part of the earth his own, precisely the part which he has acquired through work; this is the origin of individual property.”
However, the Catechism of the Catholic Church reminds us that “the right to private property, acquired or received in a just way, does not do away with the original gift of the earth to the whole of mankind” (CCC 2403).
The Universal Destination of Goods
A second core principle of Catholic Social Teaching is the notion of the “universal destination of goods.” Vatican II’s Pastoral Constitution Gaudium et Spes (Joy and Hope) teaches that “God destined the earth and all it contains for all men and all peoples so that all created things would be shared fairly by all mankind under the guidance of justice tempered by charity.” This means that each person must have access to the level of well-being necessary for his full development (physical and spiritual).
Laudato Si instructs us that “the rich and poor have equal dignity, for ‘the Lord is the maker of them all’ (Proverbs 22:2). In Laudato Si, Pope Francis calls upon the wisdom of the bishops in Paraguay who have championed the notion that man’s inherent dignity has very practical consequences. Clean water, air and adequate housing are not enough. We must also strive for those other essential resources: “education, credit, insurance and markets.” All of these things are part of a truly integral human development.
The Social Function of Private Property & the Social Mortgage
Drawing upon Pope Saint John Paul II’s 1981 encyclical letter Laborem Exercens (On Human Work), Laudato Si reminds us that the “principle of the subordination of private property to the universal destination of goods, and thus the right of everyone to their use, is a golden rule of social conduct and the ‘first principle of the whole ethical and social order’.”
In 1987, Pope Saint John Paul II went further in Sollicitudo Rei Socialis (The Social Concerns of the Church) to demand that “a type of development which did not respect and promote human rights—personal and social, economic and political, including the rights of nations and of peoples—would not be really worthy of man.” In this encyclical, we are reminded that private property is not exclusively private in nature and that it has a “social function.”
This “social function” encompasses the notion that a property owner is a social being, joined together with other in a network of communities (family, neighborhood, workplace, place of worship, etc.). As Catholics, this concept is understood as of the “Body of Christ.” However, although a social being, private property owners are individuals and as such are accountable for the way that the goods produced by means of that property are held for the holder’s own use or released for the use of others.
The accountability to the social function of property is referred to in Laudato Si as the “social mortgage.” Just as an economist understands how a conventional mortgage obligates a homeowner to repay a lender who made ownership possible, a theologian understands how property owners (individuals, corporations, governments or government instrumentalities) have a debt to God. This “social mortgage” obligates us to give back to the community so that those with no private property holdings have access to basic resources and services that helped make possible the personal development of that property owner.
In Sollicitudo Rei Socialis, Pope Saint John Paul II, balances this question by differentiating the analysis in examining both the notion of ownership and the use of the goods of the world. He instructs that the goods produced through the ownership of private property are the means by which human material need is met and for that reason alone private property is subordinate the universal destination of good of the world.
Social Mortgage Payments and Economic Controversy
One of the most challenging questions is what type/amount of “social mortgage” payment/transfer is sufficient to satisfy the demand of the social function of property? Transfer/payment types can be classified as either being of a private or public.
Private payment/transfer: These “social mortgage” payments include arrangements where business owners share in goods produced by the venture with those who do not have private property of their own. This is either done through wages and/or profit sharing of other sorts. Other examples include business arrangements where employee (non-equity participants) can work to earn equity in business ventures such as employee stock ownership entities (ESOPs). Alternatively, private payments (philanthropy) made to community service organizations for the provision of social benefits to less endowed members of a community.
Public payment/transfer: These “social mortgage” payments include such mechanisms as taxation, regulation, use of eminent domain, and public mandates. Public mandates include such mechanisms as health insurance and minimum wage rules.
Ultimately, the debate becomes one of how our societies are structured to distribute, use, and care for the resources that have been entrusted to us. Societies are designed around economic systems that endeavor to organize our world—broadly either as market economies or command economies. In an individualist capitalistic, market economy, the challenge is that everyone is left to fend for himself. This can be a very motivating dynamic but can also lead to great disparities. From an economist’s perspective, this type of system fails when there is broad unmet need in the midst of surplus production or underutilized production capacity. In socialistic or communistic command economies, goods are produced by some and are shared with everyone on the basis of need. These systems are problematic when there is unmet need due to an insufficient incentive to produce.
Laudato Si contends that neither type of economic system is sufficient to the dignity of man. In both economic systems, the challenge is one of production. In their extremes, a pure market economy results in too much production that is not shared, and a command economy results in too little production. Either way, there is unmet need.
In the end, Laudato Si reminds us that the “natural environment is a collective good, the patrimony of all humanity and the responsibility of everyone.” Pope Francis teaches us that “If we make something our own, it is only to administer it for the good of all.”
21 thoughts on “Laudato Si: Papal Economics and the Social Mortgage”
Thanks for this useful summary. I will download it. Most especially, thanks for showing that Our Holy Father is basically repeating what previous Popes have said about economics. Unfortunately, many media people (and others who are also uninformed) have no realistic possibility of knowing all that you have explained here, so they think the Pope has just been speaking off the top of his head. Instead, the encyclical reveals that the Pope himself has carefully over the years studied Church doctrine to find the answers to the pastoral situation which he saw before his eyes.
Actually, previous Popes have endorsed the Free Market at some level. Nothing like this Pope.
Also, this Pope has limited economic training as he himself admits:
“The pope, who is due to visit Cuba and the United States in September, said he was willing to have a dialogue with Americans who have seen his criticism of the global economic system and capitalism as an attack on their way of life.
‘I heard that there were some criticisms from the United States … I haven’t had time to study this well but every criticism must be received, studied and then dialogue must follow,’ he said.”
The major Free Market system in the world has not been studied by the Pope. It does have its flaws but to judge the Free Market system without judging its major player is in fact supremely flawed. Especially since, as noted, previous Pope’s have given conditioned approval of the Free Market.
Of course the right to private property is not absolute. Neither is the right to another’s property and thus there are limits on the universal destination of goods. What do I mean by that? While the goods of this Earth were placed here for all men, God has ordered that men work to develop them and does give right to property to those who do so not only for basic needs but also to the development of themselves beyond basic needs (i.e. the development of culture etc.) Thus, the taking of the goods of one who has worked for them must be done in justice – that is, to meet a basic necessities of another and not simply out of an impulse of absolute equality of condition. Also, if one takes what one needs for their own good to give to another, one commits an evil. One cannot “justly” deprive a person of what is necessary for their good. One cannot do good through evil.
At the same time, the Church teaches that neither a cradle to grave welfare state nor a state of dependency for its citizens is to be created. Nor should the taking of another’s property suppress human initiative. These teachings are in the Social Encyclicals also.
Josef Pieper wrote that there is no good without prudence. That is, there is not good without consideration of the particulars of each situation – deciding what is truly good in a give situation given the totality of Christian truth and not merely a soundbite. What I suspect galls most in this country is that basic teachings pointed out above are being violated in a radical spirit of equality that does not truly meet the common good. All perhaps in the “Spirit of Social Mortgage.”
Gee, if you ignore the half of Laudato Si that sounds completely crazy, there are actually good parts in there. I wonder why the Pope put in all those crazy parts?
If you think that socialism is the way, please say it. You and Pope makes theory against capitalism and use beatiful words regarding a better world but you and Pope doesn’t tell what, how, when and wich desired results could be wait with yours unsaid proposals. If socialism, please tell us with all words
Thanks for an excellent synopsis of recent papal comments on the spiritual character of work as stewardship of earthly goods. These echo the view from fourteenth century Christendom, expressed in the Canterbury Tales, that commerce is essentially a corporal work of mercy. “Of thilke bodily merchandise that is leveful and honest is this: that, there as God hath ordeyned that a regne or a contree is suffisaunt to himself, thanne is it honest and leveful that of habundaunce of this contree, that men helpe another contree that is more nedy. And therefore ther moote been merchantz to bryngen fro that o contree to that other hire merchandises.”
In a market economy regulated capitalism responds to the millions of individual decisions made by consumers. The market MUST SERVE the customer or perish. Get a clue,
So, we have created a planet of trash. One example: the damn plastic bottle.
1. We use 17 million gallons of oil to make plastic bottles.
2. The average american used 167 plastic bottles and recycles 38
3. We could heat 190,000 homes with the energy used to make plastic bottles
4. Americans used 50 billion plastic water bottles and recycled 38 million
5. It takes 450 years for a plastic water bottle to biodegrade
Regardless of climate change, ozone holes, global warming…..the Pope is right on, we are making a dump of the land which we were charged with stewardship. And this is one small example..so take your theory of the market MUST SERVE and shove it!
do you even consider how absolutely absurd you are? What a panty waist calamity howler! The sky is falling! Go live in a cave Luddite.
Perhaps the least intelligent comment written in the history of blogging!
the world is perishing in plastic water bottles! Oh Lord Help us please!
It’s one small way that we can all contribute to the mounting non degradable pile of trash and show a small bit of stewardship. Each person’s small contribution will make a huge difference, eliminating non-biodegradable plastic including shopping bags will enrich the earth….that is unless you don’t care.
It is all degradeable. It is mostly carbon. Your time frame is beserk. Recycling plastic bottles is good – ok – means virtually nothing in the grand scheme of energy, cheap, affordable energy for all people, poor and rich alike. Focus on your belly button, why don’t you?
Or just pay the poor to collect plastic bottles. You’ll find most of the carelessly discarded ones in poor areas to boot. You make me laugh, such a pretentious zealot.
450 years
http://www.postconsumers.com/education/how-long-does-it-take-a-plastic-bottle-to-biodegrade/
Any chance that you could have your lobotomy reversed?
P.T. Barnum made a good living from people like you. Some fools believe carbon dioxide remains in the atmosphere for 200 years also. Oh Saint Phil, please form a foundation to collect plastic bottles and save the world. Stem the tide of filth O Mighty One and restore poor Gaia to her virginal state, we pray you, Noble Champion. Regard not we slimy polluters who befoul your world. Let you and legions of poor rise up and collect all discarded water bottles and float them in barges to Rome in obeisance to his most holy excellency, the gadfly Pope.
You never answered the question about the reversal of your lobotomy
I think it likely that with 1/2 a brain I would still be far more cogent than a chicken little pee pants alarmist such as thou. God bless you and good day. Go find a fence post to argue with.
Gee, I DID think I was arguing with a fence post! Good day!
Just yesterday, I was attacked by three water bottles as I was walking down the street.
No, we have not created a planet of trash. We have created a planet of trash statistics, weilded by trash activists, No trash where I live, but apparently you and the Pope live on another, trashier planet somewhere.
At least I’m in good company with this Pope….