Stewardship of Creation: Some Implications for Economic Theory and Policy.

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Neoclassical economic theory defines an optimal or efficient allocation of natural resources as one which secures the maximum output of preferred goods and services, or as an allocation in which the resources are used in their highest valued uses. The theory is based on two important normative assumptions: the welfare of the community is an increasing function of the individual's welfare, and an individual is better off in a freely chosen position. These assumptions form a subjective theory of value which locates the source of intrinsic value in the individual's tastes and preferences; value or wealth is whatever satisfies the individual's desires. An alternative objective theory of value in an objectively good creation as created and sustained by God. In this biblical and historical Hebrew-Christian position, human beings are stewards (not owners) responsible for proper care (welfare) of all of God's creation. A biblically based theory of stewardship of creation does not agree that all values are reducible to personal preferences. Consequently, it rejects Pareto optimality as either a necessary or sufficient criterion for the optimal allocation of resources. Nor does it accept the related conclusion that resources will be optimally allocated when property rights are well defined and exchangeable. Stewardship theory thus rejects the fundamental normative conclusions of neoclassical economic theory about efficiency. Neoclassical economic theory seems to be persuasive for those who only recognize the need to resolve conflicts in individual subjective valuations. Thus, for conflicts over truly innocuous tastes and preferences competitive markets function well (with a few well recognized exceptions). But for the conflicts between individuals over objective valuations, competitive markets and neoclassical theory are inadequate and misleading. To resolve these conflicts, stewardship theory points to a double criterion of proper ends and economically efficient means. The criterion of proper ends will mean limits, duties and obligations, besides rights, on the part of human beings as stewards of a valuable and purposive creation.