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The Church, property rights, and the environment

    Bishop Robert Byrne of Hexham and Newcastle described Laudato Si, published five years ago this week, as a “prophetic document that has given a theological and spiritual framework to the environmental crisis facing our world”. An earlier post on the Catholic Social Thought blog developed a similar point.

    However, Laudato Si called for dialogue and it is in that spirit that this post is written. It is reasonable to say that the economics in the document did not really reflect modern developments in the discipline, many of which are admired right across the political spectrum (the work of Elinor Ostrom being a prime example).

    Laudato Si has a negative portrayal of private property and its relationship with the environment. Pope Francis says that the Christian tradition has never recognised property rights as absolute or inviolable and that they must be subordinated to a social purpose. Of course, this has always been the Church’s teaching. Specifically, Pope Francis says:

    “The natural environment is a collective good, 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” (95).

    Pope Francis then moves on not to address the subject again. So, he leaves unconsidered the question: “are private property rights the best way to deal with the protection of the natural environment for the good of all?”

    The argument of Aquinas, the late scholastics and Catholic social teaching more generally has always been that private property has a social purpose – in general, if not always. It is not that there is thought to be a contradiction between private property and the common good, but that private property is necessary for the common good. Therefore Laudato si is posing a false dichotomy.

    How can private property promote the common good? Aquinas gave three reasons:

    1. Private property encourages people to work harder because they are working for what they could own – otherwise people would shirk.

    2. Private property would ensure that affairs were conducted in a more orderly manner – people would understand for what they were responsible rather than everything being the responsibility of everybody.

    3. Private property ensured peace if property was divided and its ownership understood.

    It is interesting to compare Laudato si which says (as mentioned above): “The natural environment is a collective good, the patrimony of all humanity and the responsibility of everyone.” With the second justification of private property from Aquinas who argues: “human affairs are more efficiently organised if each person has his own responsibility to discharge; there would be chaos if everybody cared for everything.”

    In a sense, Aquinas has already dealt with the issue that Pope Francis seems to have identified as a problem with private property. And, when it comes to the environment, if it is left “as the responsibility of everyone”, it may, indeed, become the responsibility of no one with catastrophic results. And there is much economic reasoning and evidence that confirms that this is the case. The absence of private property leads directly to environmental degradation.

    The importance of property rights for the environment is often considered in the context of Hardin’s “Tragedy of the Commons”. Hardin referred back to a pamphlet by William Forster Lloyd in which a situation was described whereby common land was open to grazing by all. It would, of course, be over-grazed because a person would get the benefit of putting additional cattle on the land without bearing the cost that arises from over-grazing which would be shared by all. In the end it would be destroyed. This is even clearer with fish stocks. For example, a trawler taking extra tuna from the ocean will benefit but the – perhaps hugely greater – cost of taking the extra tuna in terms of lower levels of breeding will be shared between all trawler owners over the very long term. As experience in Iceland shows, if fishing rights are owned in perpetuity, trawler owners actively practise conservation.

    Undefined or unenforced property rights are disastrous for environmental outcomes. This is not reasonably disputed. Below is a picture of the border between Haiti and the Dominican Republic. It is very easy to see which country is which. As the UN put it: “Environmental degradation in the worst affected parts of the Haitian border zone is almost completely irreversible, due to a near total loss of vegetation cover and productive topsoil across wide areas.”

    In effect, the Haitian side of the border is a huge, ungoverned and unowned commons. Haiti has been for much of the recent past, a failed state and has a terrible record of corruption and in relation to the protection of property titles. By no means is the Dominican Republic perfect, but it ranks about half way up the region in the indices of corruption and property rights.

    Haiti and the Dominican Republic are a particularly interesting contrast because of their proximity to each other. However, there is abundant evidence that property rights insecurity brings a significant increase in the rate of deforestation.

    The modern economics of this issue is really just a reiteration of the points that Aquinas makes. Private ownership and the institutions that surround it, provide incentives for sustainability. The value of a piece of land at any time reflects the present value of all that can be yielded from the land in the indefinite future. The cost of damaging the resource is huge because it relates to all possible lost future production and not just to production over a year or two. However, people will not nurture property in a sustainable way if they believe it is going to be polluted and plundered by others.

    This is reprinted with permission from the Institute of Economic Affairs.

    (Photo credit: Nicolas Raymond. This photo has been cropped. CC BY 2.0.)

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    Philip Booth is Professor of Finance, Public Policy and Ethics, St. Mary’s University, Twickenham, which is the UK's largest Catholic university. He is also a senior academic fellow at the Institute of Economic Affairs (IEA).