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The environmental encyclical: challenges for the economy and for society

Laudato Sì (Praised Be) is the title of the new encyclical by Pope Francis, one that is Franciscan right from the opening lines, including an explicit reference to the beauty of all creation and our responsibility to protect it and to care for this home we all share, and one that the media is now calling “environmentalist”. It is a call for political, economic and civic responsibility not only towards the environment, but also in terms of the quality of economic and social balance.

For some time now, Pope Francis has rightly been exercising his authority to remind both Christians and the international public at large – including those of other religions and those with no professed faith – of the importance of a “fair”, more balanced economy, one that is more respectful of the rights of the individual and of the environment. In the apostolic exhortation Evangelii Gaudium, as well as on other occasions, the Pope had already denounced the “idolatry of money”, the risks of a “dictatorship of an impersonal economy lacking a truly human purpose”, and the “inequality which spawns violence”. This new encyclical continues along these same lines while placing particular emphasis on protecting the ecosystem and ensuring the right to food and to the livelihood of entire populations. His admonition of “the culture of waste” is certainly on the mark, as is his call to bring a halt to financial greed in order to build greater balance in employment, in spending, and in life.

But will economists and business people be open to his message? One would certainly hope so. Indeed, the issues Pope Francis raises can also be found in some of the best examples of economic thought, such as in the writings of John Maynard Keynes or those of a great Italian economist, Federico Caffè (students of whom include Mario Draghi and Ignazio Visco).

The Pope has often sought to redirect debate towards the purpose of the economy and the relationship between “capitalism and a sense of limitations”, because there can be no long-term growth nor sound economy without a radical rethinking of both production and consumption.

The encyclical also contains harsh criticism of “finance that is suffocating the real economy” and emphasizes that “a market alone does not ensure development”, ideas which have drawn criticism themselves, as well as some degree of perplexity. Without demonizing finance, so long as it is truly at the service of business and of balanced growth (when it supports industry and innovation, the construction of homes and businesses, public works, and insurance as an integral part of overall welfare), the Pope is right to promote the central importance of the real economy, of industry, of the values of sustainable production, of employment, and of the dignity of the individual in order to create wealth and improve the quality of life for us all. Triggered by the greed of the paper economy and of speculative finance, the Great Crisis has taught the world that we need to turn our attention back to the production of goods and services and to responsibility in a job well done.

A focus on the individual is crucial for any organisation that is aware of the importance and responsibilities of the role it plays. Just last year, Pope Francis said, “The vocation of the businessman is a noble one, so long as he has an awareness of a broader meaning of life.” Following this, the great philosopher Michael Novak wrote, in the Catholic (Italian-language) daily Avvenire, “Entrepreneurship is a vocation that will save the world from poverty.” Of course, these views are all essential parts of informed public discourse on business, development and sustainability and are a challenge that goes beyond business to also involve government and politics.

The encyclical further states that we need “degrowth in certain parts of the world” in order to have the resources for healthy growth in others. This is the aspect that is perhaps weakest and most open to attack, because what is needed is not so much “degrowth” as more balanced growth that focuses on the quality of production and of wealth, not on quantity, and on overcoming imbalance and on reforms targeting security, the environment, and the rights of young people and of the weaker segments of society. Here, too, the role of the political class is key. We must make a shift from this obsession for growth at all costs towards responsibility for sustainable development, and we must change the tools used to measure growth – not just gross domestic product (GDP), but also the index of fair and sustainable welfare, which was developed by ISTAT and is already in use in Italy. As concerns the environment, we are seeing a strong push towards a “revolution” that puts protection of the environment on the same plane as protection of the individual, and in this the Pope is absolutely correct. What we need is a shift in culture against financial greed and the illusion of the omnipotence of technology. Everything must be brought back down to a more human scale, and in this regard the encyclical is of great importance, regardless of the details that could be subject to much criticism, because it connects various issues under the umbrella of balanced growth, including environmental protection, combatting waste, corporate responsibility, fighting crime, and the importance of personal commitment. It is a more global view of commitment that encompasses various points of view, as well as a crucial call for research, for reflection, and for dialog.