It is a strange idea that we are the stewards of the earth. It is not clear who is “we” and which part of that “we” is a steward of which part of the earth; or which part of “we” is the owner of what the other part merely stewards. As the term has no technical economic meaning, let’s defer to Merriam-Webster, who defines a steward is an employee who manages somebody else’s property or caters to somebody else’s needs:
one employed in a large household or estate to manage domestic concerns (such as the supervision of servants, collection of rents, and keeping of accounts) …
an employee on a ship, airplane, bus, or train who manages the provisioning of food and attends passengers
In the current issue of Regulation, I review of Mark T. Mitchell’s recent book Plutocratic Socialism. On the stewardship issue, I write:
Mitchell argues that a property “owner” is the steward of future generations. But it is one thing to argue, as George Mason University economist Tyler Cowen does, that the welfare of future generations must not be discounted at the market interest rate … it is quite another to say that individuals of future generations own what current individuals now think is theirs. If individuals of future generations are wealthier than we are, it would be a redistribution from the poor to the rich.
Among Mitchell’s economic errors is the claim that an individual’s utility maximization leads to a situation where “the horizon of my concerns extends no further than the horizon of my own life or the duration of my desires.” As a matter of fact, many people spend money on their children and accumulate capital to leave an inheritance, sometimes to charities. It is, of course, not true that the rate at which an individual discounts the future is close to infinity. Moreover, the owner of capital who wants to consume it does that by selling it to another individual whose discount rate is lower. When an impatient owner wants to consume the future returns of his capital now, he merely transfers it to a new owner.
In other words, from all we know about our world, the market is the best possible steward. Nobody burns downs a forest he owns, which means a forest that he may sell, if it has a positive market value—that is, if it is expected to yield returns that someone in the future is likely to want.
We could argue that humans are ultimately the stewards of God’s creation, as Mitchell is also tempted to believe. This line of thought would lead us to theological issue whose relevance for the study of society is not immediately obvious. Why would God need stewards? Is he not powerful enough to take care of his creation? In order to do what with it—especially toward the end, we might add?
It is true that many humans who have some idea or intuition of their little place in time and space are aesthetically or sentimentally attached to, and intellectually intrigued by, the universe around them. Many have children and a potentially very long descendance (Et nati natorum, et qui nascentur ab illis, that is, “And the children of his children, and those who will be born from them,” as Virgil wrote so poetically in Aeneid), which binds them to the future. But how could that make you or I a general steward in any practical sense? Anyway, why would God prefer, if this verb applies, coercion and violence over voluntary social relations and the market?
READER COMMENTS
Jon Murphy
Apr 1 2023 at 11:41am
Good stuff, Pierre. I think one could argue that humans, collectively, have been good stewards of the Earth, depending on the definition. I generally understand people to use the phrase closer to caretakers, like the way a financial managers works to grow and preserve one’s finances.
If I am correct in my understanding, then humans are great stewards of the Earth: we have vastly increased the resources on the planet. We have saved many species from extinction.* Given our size, we use comparatively few resources for our own purposes.
Humanity is, along many margins, a fantastic steward. We have grown the earth, not shrunk it, in terms of life-sustaining capabilities.
*One might be tempted to argue that humans have also been responsible for many. That’s true, but wild animals are far more responsible. Some estimate that cats are responsible for the most extinctions.
Pierre Lemieux
Apr 1 2023 at 11:52am
Jon: Your last hypothesis would justify my subjective dislike for cats! Not that this is important in the general scheme of things.
Jon Murphy
Apr 1 2023 at 12:42pm
True, but your subjective dislike is objectively wrong 🙂
I agree with your general thesis. I think the whole framing is a misunderstanding by those making the argument that “we” need to be “good stewards.” I’m just making the point that if one wants to point out harm done by humans, one has to acknowledge all the good too. It’d be like complaining Alfred Pennyworth is a bad steward of Bruce Wayne because he undercooked Bruce’s eggs once.
Pierre Lemieux
Apr 1 2023 at 12:51pm
Agreed. (And I learned who Alfred Pennyworth and Bruce Wayne are!)
Jon Murphy
Apr 2 2023 at 8:50am
Stick with me, Pierre, and I’ll teach you all sorts of nerdy stuff 🙂
Pierre Lemieux
Apr 2 2023 at 11:41am
Jon: “From each according to his capacities, to each according to his nerds.”
Pierre Lemieux
Apr 1 2023 at 12:28pm
Jon: More seriously, the question I am asking is, Whom is individual X stewarding? Whose property owner is individual X a steward? I suppose an economist could answer that, in a free market exchange, each participant is stewarding (catering to the needs of) his contractual party at the same time as he is selfishly increasing his own utility, that is, stewarding himself. But this alas is not the zeitgeist of our times.
THOMAS HUTCHESON
Apr 1 2023 at 12:42pm
Agree, not bad, but better with a tax on net CO2 emissions.
Jon Murphy
Apr 1 2023 at 12:57pm
Come to the SEA meetings in New Orleans this November. I will be presenting a paper where I show the Pigouvian model is not prima facie welfare enhancing.
Pierre Lemieux
Apr 1 2023 at 1:29pm
Thomas: Isn’t that related to our our old conversation at https://www.econlib.org/government-externalities-and-the-friedman-criterion/?
vince
Apr 1 2023 at 2:57pm
How about the Christian approach: We should try to let future generations be born into an environment that we would like to be born into.
Jose Pablo
Apr 1 2023 at 7:24pm
Kind of the same problems with the “we”, right?
On the other hand. I don’t know in which kind of “environment” I would like to be born.
Of all the historical environments I would choose no doubt today’s USA (maybe with better food … kind of Peruvian or Spanish one)
But I have no clue what futures ones could provide an interesting contest.
On second thought I would prefer any future environment that a free market society is very likely to develop … the more into the future the better. Afterall, I do envy my kids “environment” and I am pretty sure my father envies my “environment”
Jose Pablo
Apr 1 2023 at 7:15pm
Is he not powerful enough to take care of his creation?
The power of God is frequently overplayed
Afterall, He can not be powerful enough to create humans that have free will and take care of them at the same time. Governments have the same kind of problem when they try to “play God”: they can have free individuals or take care of them, but not both
Jose Pablo
Apr 1 2023 at 7:16pm
Nobody burns downs a forest he owns
Well, I don’t know … Elon Musk at Twitter seems to be a good counterexample of this
Pierre Lemieux
Apr 2 2023 at 11:52am
José: I get you humor there! But so that future historians not be too puzzled by it, let me add that Musk did not purposely try to burn his forest: he thought he was transforming it into an Enchanted Forest.
Jose Pablo
Apr 2 2023 at 3:13pm
That could be slippery, since from your thought (not completely without merit) could follow the idea that “Enchanted Forests” are, in our world, less valuable than “Regular Forest”
Mactoul
Apr 2 2023 at 12:07am
Is it a kind of positivism, economic positivism as it were, that all concepts and propositions must be meaningful in terms of economics, otherwise they are meaningless.
Jon Murphy
Apr 2 2023 at 8:09am
“Imperialism” may be the better word, rather than “positivism.”
But regardless, seeing as Mitchell is attempting to make an economic argument, doesn’t it make sense to respond in kind?
As a larger point, one must avoid siloing discussions into “appropriate” disciplines. Economics is not the only viewpoint, sure, but that doesn’t mean its insights provide no use. Any good theory of any complex phenomenon must take into account, and be consistent with, all sorts of knowledge and information. For example, landing on the moon requires knowledge of not just astronomy, but physics, biology, engineering, economics, mathematics, statistics, just to name a few. It’s be a mistake to dismiss a physical objection to landing on the moon by saying “is physics the only way of thinking?”
Mactoul
Apr 2 2023 at 6:54am
Mitchell isn’t too wrong to notice decay of private ownership in modern capitalist societies.
What we have are giant corporations in which giant pension funds hold stakes. And millions of individuals hold stakes or units in these funds. But are these unit-holders owners of the giant corporations in any sense?
Ownership implies a public and stable relation between a person and the thing owned. We don’t have it here. Millions of individuals have no ownership of productive assets where they could exercise their God-given stewardship. And the giant corporations are effectively ownerless, run by hirelings.
Such a situation is productive of social pathologies on multiple scales and which are perhaps not amenable to treatment by economic analysis.
Jon Murphy
Apr 2 2023 at 8:49am
Can you elaborate? I don’t understand what you are saying here. It’s not clear what the connection between corporate ownership and “decay of private ownership” is. Prima facie, it’s a contradiction in terms because corporate ownership is a form of private property. It’s like saying that there is less fruit ownership in America because people own more oranges than apples.
As a factual statement, these statements are flat out wrong. In the US, we have extremely strong and stable property rights which are generally effectively enforced. Except the most extremely destitute individuals, most people own productive resources. And even the most destitute own their bodies. Corporations, even giant ones, have owners. We can point to them. We can name them. They’re easily identifiable. They own residual claims. It is true that the day-to-day operations are run my “hirelings” (stewards, if you will), but that doesn’t make corporations ownerless anymore than saying my apartment is “ownerless” just because I deal with the day-to-day care and my landlady does not. She still owns the property.
Mactoul
Apr 3 2023 at 10:10pm
Lots of corporations have investors, not owners. There is a difference between an investor and an owner.
An individual invests in corporations at some degree of separation. He owns some units in a pension Or mutual fund and the fund invests in corporations. The investment fluctuates and the connection an owner has with his owned thing is pretty much missing.
Jon Murphy
Apr 4 2023 at 6:48am
I need further elaboration. I don’t know what you mean by this “connection.”
And whether one buys shares through a mutual fund or directly, they still own a portion of the company. They have claims on residuals and voting rights just like anyone else (which reminds me: I need to fill out a ballot for one on the shares I own in my retirement account). So, I don’t understand your point there.
Mactoul
Apr 4 2023 at 9:51pm
An investor through his pens and fund owns the corporation in similar way to an individual voter ruling the government by his vote.
All objections that Caplan and others here voiced against democratic voting apply to democratic shareholding.
Jon Murphy
Apr 5 2023 at 6:48am
No. Those are two entirely different things. A voter is not entitled to any residuals nor has any claim to government assets. An investor does.
Pierre Lemieux
Apr 5 2023 at 11:04am
Mactoul: An owner is a residual claimant. Moreover, he may sell his shares if he wants out (and his share is worth something to somebody else).
Jose Pablo
Apr 2 2023 at 2:59pm
Such a situation is productive of social pathologies on multiple scales
This definitely sounds like an overstatement. But building on the most sensible interpretation I can give to your words, I choose to read:
“Direct ownership” (like in Thatcher’s father owning a grocery shop downstairs) is very different from the “Big corporations” kind of ownership of todays. They are very different kinds of “stewardship” and could raise very different conflicts between the stewards and the “property” this stewards are taking care of.
But which form of ownership (and the form of stewardship associated to it) is “better” (and “better” always depends on the metric you use in the contest) is far from clear to me.
Certainly the principal-agent problem is serious enough to be taken into account (following Joné simile, that’s the ultimate reason why security deposits exists) but, on the other hand, some of the most enjoyable things that I use today, have been developed by these “big corporations” and I wouldn’t call this gadgets and services “social pathologies on multiple scales”.
Am I missing something?
Ryan M
Apr 3 2023 at 4:58pm
If you do not believe in God, then it would not make much sense to think about Man as stewards of God’s creation. If, however, you wanted to understand how and why this would make sense within a Christian (for example; the concept may also be explored in the context of other religions) framework, you would need to accept that framework, at least for the purposes of the conversation.
I would argue, though, that any conversation on the topic of “stewardship” must necessarily be a religious conversation. Stewardship is a question of morality – absent a religious context (in which there is a God, or at least some sort of supernatural framework), I’m not sure it is possible to explain why you’d think someone would be a steward of future generations.
I do agree with the author’s conclusion on both fronts, though. As a Christian, I believe that coercion (and regulation in general) is very clearly not something that God desires, howevermuch he may encourage Christians to be good stewards, to care for the poor, etc… etc… The idea of humans being able to direct anything, or really to achieve anything on their own is nonsensical. God’s appeal to stewardship is an individual appeal – as an individual, you behave responsibly with respect to the world around you.
But this is just another way of explaining a market approach. Individuals responsible for their own behavior, considering their own best interests, and doing so (hopefully) in the context of doing what they think is right, is how the market is able to actually work.
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