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Tuesday, March 3, 2015

Human Capital

Update:
" Cardinal López Trujillo referred to Gary Becker, the Nobel prize-winning University of Chicago economist, who recognized the importance of the family and Catholic social doctrine in the formation of human capital, without which the modern economy cannot function. The Cardinal also revealed that early drafts of Pope Leo XIII’s Rerum Novarum, the first modern social encyclical, contained large sections on the family that were missing from the final version, further evidence that there was never meant to be a division between promotion of the family and social concern"

Today’s economy is running on fewer and fewer human interactions. In place of these interactions between people is the automation of technology which effectively replaces manual work (that is, work by hand in all its forms). For this reason, the economic theory of “human capital”, coined by nobel-prize winner Gary Becker, is crucial for insuring the value of human persons in the economy. Even before Gary Becker coined the phrase, Pope Leo XIII’s “Rerum Novarum” hinted at it, and a century after that, Pope John Paul II’s encyclical “Centesimus Annus” stated it outright:

“Place the human being at the center of all economic activities”

What happens when the above is disregarded or even deliberately opposed? “In-human capital” results, or rather, an increasingly impersonal economy dependent upon the government. Nearly a decade and a half prior to the recession we just experienced in the early millennium, Pope John Paul II established the Foundation “Centesimus Annus – Pro Pontifice” to diagnose and remedy such economic abuses (since any other model besides “human capital” ends up abusing/using human persons).

A recent example of one who diagnoses/remedies economic woes is the award-winning French economist Pierre de Lauzun of CAPP. His general resume and obvious merit for the international “Economy and Society Award” is as follows:

He was selected in particular for his 2013 book dedicated to a Christian perspective of finance from medieval banking to contemporary financial models: "Finance. Un regard chrétien. De la banque médiéval à la mondalisation financière"[…]Luazun, who has worked for decades in the financial and banking sector, is described as a person who cannot be called a scholar who confines himself to the library, but rather a person who has enhanced his professional experience with deep political, cultural and religious expression[…]His award-winning book underlines that rules imposed on the market with the ultimate task of ensuring the common good need to depend on the morality of the human agents, and that in the long term, morality allows for greater freedom.

Benedict XVI called for such accountability in his “Caritas in Veritate” which follows a similar vein as “Centesimus Annus”. Even now, the Vatican bank is undergoing considerable audits and reform under Cardinal Pell and others. Honesty with finances must be a staple of Catholicism. More importantly, finances must not be viewed as a means of utilizing the human person, but that human persons utilize finances for their own good. Another way the USCCB has stated it is that the human person does not exist for the economy, but that the economy exists for the human person. This may sound simple and self-evident, but it does not necessarily line up with the worldview of many popular economists (Thomas Malthus, Karl Marx, etc.).

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