From about the end of the 14th century, an accounting technique became widespread in the banks of northern Italy. Property was identified as capital: a ship about to cross the Atlantic, a barn full of grain, a field, a cart. What is “capital”? Broadly speaking, it is something that has to yield an income stream in the future, whose value today is deemed equal to the currently realizable sum of this future income, that is, if it were cashed in today. Such an operation might seem trivial, so widespread is it today. In fact, it underlies all financial transactions in markets, serves as a guiding principle for cost-benefit and risk analysis, and for all environmental economics. Without it, the economic system would collapse .
Now this operation is tantamount to flattening the future to the present: it consists in pretending that the future is entirely known to the capital’s owner, and that what counts is only the monetary income that this capital will be able to yield. The future is anticipated so perfectly that it can be quantified and that an exact value can be assigned to the source of this income: the present capital. No surprises in the future are tolerated, otherwise the present value of capital would be questioned. Time no longer exists. Neither does space, because the quantification of the capital’s monetary value claims to be universal and allows everything to be compared with it.
Is the Amazon burning? This is irrelevant if the expected profits from deforestation exceed what is believed to be estimated from a slowdown in global warming. And since some eminent economists persist in prophesying that a 6-degree centigrade rise in temperature would cost only 10 percent of real world GDP – despite repeated warnings from the scientific community that such warming would cause an apocalypse on Earth – the game is up: the Amazon capital is far more attractive as a stock of timber and arable land than as one of the Planet’s lungs.
At the root of such a tragic mistake lies the assumption that the Amazon is only capital. This folly of capitalization spread from medieval Italy, moving beyond the banks in the 18th century, following its use by German foresters, who wanted an accurate estimate of the value of a forest by the amount of timber it could provide each year. It became part of some accounting operations in the 19th century and then became an almost universal practice after World War II.
This is what explains the stubbornness of some economists in continuing to adhere to the so-called “rational expectations hypothesis.” This theory claims that all economic agents perfectly anticipate the future, in the sense that they are able to predict what will happen based on available information. This is an absurd hypothesis, of course, yet it is indispensable to accounting and the economic and financial practice of capitalization. This is especially the case since this does not stop at financial assets and forests. Even human life is valued in insurance contracts according to the same principle: your life is thus a capital asset, a stock that you will have to make profitable – we all have a “price” on our head.
Finally, historians know well that for centuries slaves were one of the principal categories of capital. It is here that the link between the pathologies generated by the construction of our societies on the practice of capitalization and those caused by the rejection of a “relational cosmology,” in which all beings are linked to one another, becomes evident. For what is a slave but, above all, a person who has been cut off from any relationship with his or her own self to become, an object, the property of an owner? The slave is socially dead. Similarly, capital is a dead stock from the point of view of relational cosmology; it makes no reference to any future that would be a happy surprise, a “good news,” a future in which the kingdom of God could manifest itself. Its prospects are entirely subject to the will and predictions of its owner.
This is the attitude that the Economy of Francesco intends to interrupt.[1] For the life of a human being, or of one of the 100 million sharks we kill each year, or of a tree, is not capital. Its value is immeasurable. It cannot be identified independently of the relationships that constitute it. To interrupt capitalization means placing limits on a practice and an idea. It therefore means at the same time having to invent new practices and forge the ideas that express their meaning. This is not to say that one should not predict next year’s harvests, calculate the probability of a phenomenon like El Niño or the possibility of a debtor’s bankruptcy. But it is appropriate to prevent the capitalization of a number of resources, including human life, the human body, health, climate, biodiversity, the seabed, pandas, forests, and so on.
On reflection, what will be left to capitalize? Not much, perhaps. What if this is the “price” to be paid to ensure the possibility of a decent life on this planet? What if giving up capitalizing what is truly valuable to us is the secret to an openness to a future in which God has a place, to an openness to joy? “Go to those universities ultra-specializing in liberal economics, and look at the faces of the young men and women studying there,” Francis told us last September in Assisi.[2] Learning in detail the techniques of capital appreciation makes one sad, because they cut us off from relationships with the world, without which, we do not exist. This article is reserved for paid subscribers. Please subscribe to continue reading this article
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