Paradoxically, the foundations of modern finance know their origins to a religious order that promoted a rigorous and evangelical poverty.
Franciscans, from the second half of the 13th century, were almost the only ones to express, on the doctrinal level, an economic theology. They sought to help the needy gain access to credit and combat usury by setting up montes pietatis. These were initially funded by donations from wealthy Christians. Borrowers would provide the montes with small items of value as a form of security for the loan’s repayment.
Inspired by the love of St Francis and his ideal of an integral ecology, Pope Francis invited youths to take part in a meeting called The Economy of Francesco. Young economists, entrepreneurs and researchers, of different beliefs and nationalities, were to meet in Assisi last May. The aim was to explore, discuss and propose more sustainable ways of living that promote the common good.
Due to the pandemic, the meeting had to be postponed. This did not deter the organisers from rising to the challenge. A global online three-day event was organised between November 19 and 21.
This was not a run-of-the-mill conference but an experience where theory and practice engaged to build innovative ideas and new ways of working together. The organisers drew together several international speakers, including Nobel laureates, leading economists, theologians and activists. They showcased a number of initiatives, called ‘villages’, being implemented across the world aimed at combating inequality and poverty.
Countries, such as Malta, that focus only on growing GDP are ignoring social and economic equality
A key speaker was Muhammad Yunus, a Bangladeshi Nobel laureate and economist, who is credited with the launch of a global microcredit movement. In his address he stated that “finance was created to facilitate trade but it quickly transformed into a vehicle to consolidate wealth and to make few people richer and richer”.
Yunus further stressed his goal of “three zeroes”: zero carbon emissions, zero wealth concentration and zero unemployment. Getting there will require building new pathways, he said, otherwise humanity will end up in the same destination.
Kate Raworth, an economist at the University of Oxford’s Environmental Change Institute, said that the crises experienced in the early part of this century illustrate how deeply interconnected the world is today and how current systems not only contributed to the crises but cannot solve them because they weren’t designed with these challenges in mind.
Raworth said her “doughnut model” of economics and social and planetary boundaries is a “compass” for how economies must move forward. She concluded that the central economic goal should be to create new business models that allow development to lift people from poverty but not at the expense of environmental destruction.
Inspired by this event, a group of young Maltese economists, working under the helm of the Justice and Peace Commission of the Malta diocese, launched a study entitled Beyond GDP. Following a year of work and research, the group has come up with a matrix of economic and social metrics that measure the real progress of a country rather than using solely GDP.
GDP has been used and abused. It has now become extremely clear that countries, such as Malta, that focus only on growing GDP are ignoring social and economic equality and are doing irreparable damage to the environment. It is hoped that our policymakers will endorse this exceptional work and change course.
Despite all the difficulties caused by the pandemic, the greed fomented by neoliberalism and the divisiveness that populist movements have sowed, a glimmer of hope has shone from the heart of Assisi. There is promise that our youth have the will and energy to build a better world than the one they inherit.
Claudio Farrugia, member, Catholic Voices Malta