The economics of unconditional love

Tommy discusses the economic ideas presented by Pope Francis in his Encyclicals, and recounts how the dialogue between faith and economic has been present in his own life.
Tommaso Gabrieli

I am an Associate Professor at University College London. During the last academic year I had the opportunity to write a research article on the economic ideas presented by Pope Francis in his two social Encyclicals Laudato Si' and Fratelli Tutti. Pope Francis develops a bold criticism of two fundamental premises of modern economics. It is very easy for academic economists to dismiss such radical and bold methodological criticisms as naïve and superficial, especially as they are written in the style and language of the Catholic Social Doctrine and not of technical economics. Perhaps thanks to a non-conventional path, I found the ideas of Pope Francis to be surprisingly related to many interesting questions that I have come across in the course of my research career. In this short article I offer an account of my journey through the economics of Pope Francis, in which I discovered how the doctrine of the Church can give an important contribution to the current cultural debates of the non-Christian world.

The first criticism made by Pope Francis regards the assumption made by standard economic models that man is a homo economicus, i.e. an individual who is selfish and for whom nothing is ever enough. Pope Francis is in fact not alone in his criticism. While this hypothesis is rooted in the utilitarianist philosophy, many economists have acknowledged that this assumption does not allow for a realistic analysis of many human behaviours. In particular, various research programs related to the growing field of behavioural economics have shown that the analysis of the various dimensions of altruism (unconditional, conditional, reciprocal) is paramount for a deeper understanding of many economic, political and social choices/outcomes.

However, Pope Francis goes beyond the typical criticisms made by behavioural economists by presenting a radical and alternative premise: the model of the human that everyone should follow, and indeed can follow, is the Good Samaritan. By investigating the long trajectory of research in microeconomics, I discovered that the Good Samaritan is someone characterised by what economists have defined as interdependent utilities: in essence someone with empathy, someone who is not content with personal happiness, status and achievements, but someone who is only glad if the other is glad.

Surely this is a radical assumption to model human behaviour. How is it possible for me to love and care for everyone, even my enemies and those that live many miles away from me? If I care unconditionally about anyone, how can I care enough about myself or my dependents? If my utility depends on yours, which depends on mine, which depends on yours, which depends on mine, this chain of dependence might go on forever without being defined or without the possibility of reaching any solution. Once again the parallel with everyday life is stark: it is surely common experience that a mother, father and child may not find a perfect solution to the problem of time allocation on weekend activities, if each one takes into account not only his/her preferences, but also those of the others.

When such complexities of altruism are acknowledged a common criticism that is often made to formal and mathematical economics is that the most important human issues concerning love and desires cannot be successfully analysed through mathematical models. And yet, investigating recent research in economics I discovered that the altruism of the Good Samaritan turns out to be compatible with determined and stable choices, as predicted according to an economic ‘scientific’ model.

Following from the critic of the homo economicus, Pope Francis develops a critical analysis of another fundamental theory of economics: that free competitive markets lead to the efficient allocation of resources. Pope Francis offers a deep and multidimensional discursive analysis which links complex macroeconomic outcomes like economic growth, inequality, poverty, exclusion, aggregate consumption, natural resources usage and environmental damage. The words “market” and “inequality” are used many times in both encyclicals, but in a nutshell two core assumptions, alternative to standard economic theories, are made by Pope Francis regarding market outcomes: (i) free markets are characterized by persistent inequality and poverty, where the poor are persistently excluded from the gains of economic growth (ii) private profit maximization cannot lead to an efficient and sustainable use of natural resources, causing instead overconsumption and environmental damage.

The marketplace, by itself, cannot resolve every problem, however much we are asked to believe this dogma of neoliberal faith. Whatever the challenge, this impoverished and repetitive school of thought always offers the same recipes. Neoliberalism simply reproduces itself by resorting to the magic theories of “spillover” or “trickle” – without using the name – as the only solution to societal problems (Fratelli Tutti, Paragraph 168).

Since the 1990’s many contributions in economics went beyond the mentioned theories of “spillover” or “trickle”, looking at the complex relationships between growth, inequality and poverty and documenting theoretically and empirically the existence of persistent inequality and poverty trap. Those contributions were instrumental to challenge the view criticised by Pope Francis that markets work for everybody and also made a strong case for the economic efficiency of redistribution. Therefore in the second part of my article I document how a an interdisciplinary dialogue between those growing research fields of economics and the Social Doctrine appears to be mutually fruitful and promising, even if challenging as it requires some efforts to find a common language, which is essentially the task of lay people like myself.

Reflecting upon my personal work path, the dialogue between faith and economics happened as an unexpected gift. Like many teenagers that grew up in the suburbs of Milan in the 1990s I did not know much about economics, I thought it was something for people who wanted to get rich! For me and my friends the ideal was to spend a life surfing and snowboarding – or at least skateboarding – and playing indie music as a crew of friends; but this dream of freedom was never coming true and lead to deep dissatisfaction. Following a personal crisis, I started doing some charity work and through that I met some university students in Economics from CL. I got very struck by their gladness and sense of purpose, so when it was the time to choose my university degree I naively decided for economics with the dream that “with economics I can change the world”. The gift was totally unexpected: since the first lecture in microeconomics I was blown away by the beauty of economic models and I realized that learning all the technicalities of those economic models was as beautiful as surfing or playing guitar, so I put my heart and soul in my studies. After my Italian undergraduate degree, I had the opportunity to start a PhD in the UK where I eventually started working as an academic. Without even realizing I spent the first ten years of my professional life working on theoretical economic models, constantly looking for economic models that could be truly human. After 2015 personal life and work opportunities lead me towards the more applied field of urban studies and a new adventure began; a unique opportunity to build a dialogue with non-economists and work on economic ideas that could bring more human factors into policies. During the last years, I slowly accepted that my nature was to be an academic that is constantly moving across topics – maybe not the best strategy for academic success nowadays! Writing this article I could clearly that my unusual professional journey across topics helped me to understand that what pope Francis is proposing about economics and politics may sound radical and crazy, but it is actually possible and very intelligent. As happened many times in my work, I got another proof that rather than settling for something calculable and defined I am made to keep walking on a journey that is more mysterious and sometimes vertiginous, where the very evident gain is to look for “the ideals of harmony, justice, fraternity and peace as proposed by Jesus” (Laudato Si', paragraph 82).