Questions for a Christian Economist

Comments

2 responses to “Questions for a Christian Economist”

1. 

   April 27, 2010

   David Owens

   I am enjoying the ponder on the questions posed.

   Looking at 3 and 14. “Is there a biblical/Christian economics? Economics has no morals: Christians should not be involved!” Neither does science, or engineering, or music, or tent making, or many other things have any inherent morals. I think the metric of “moral-ness” is the wrong measure of a secular job.

   If my boss doesn’t see my job in a ministry light, and evaluate my contribution in a ministry light then whatever I am doing is tent making not ministry. 1 Cor 7:17-24 seems relevant for shaping our views on this topic.

   I think the largely contemporary and western view which adds eternal significance to the many jobs we Christians do is a very dangerous laziness of thinking. It leads quite directly to entirely the wrong emphasis on the tent and not the fellow tent makers and customers. For myself, I would emphatically add teaching and medicine in the tent making category specifically when those paying your wage do not view it is ministry – I also understand that many will passionately disagree with me on these two fields particularly. I would still apply the “boss test” and remain unpersuaded.

   The slightly more subtle reverse of this thinking is to see some forms of tent making as inappropriate for Christians, a spiritual grading of tent making activities. There are of course some jobs which Christians should specifically avoid, beyond that I think its all tent making. For those of us not called to full time paid ministry, lets tent make with a passion for the customers and work mates not the tents, and also a passion for our personal ministries whatever they may be.

   This tent maker sees with a smile tomato sauce in better squeezy bottles secure in the knowledge that they will not pass through the flames.
2. 

   April 28, 2010

   Andrew Mackie

   You pose an interesting set of questions.

   Firstly I would say that economists are not to blame for the many faults of the economy – they model the behaviour of economies rather than control them (regulators and markets do). Obviously politicians consult economists consult in making decisions, but the economist is not bound to provide answers that maximise profit. Joseph Stiglitz would be a good example of an economist who uses his position for the public good.

   My ‘lay economist’ responses to the questions you pose are as follows:

   1. The economy is a large beast which is difficult to understand. Economist form opinions on the basis of information available to them – differing information will result in differing views. Plus there will be different theories in play. Economists are not good prognosticators, however – at best they can identify historical trends that may or may not extend into the future.

   2. Rich people are getting richer because 1) the gods of money and power do not satisfy and 2) the rich have opportunities to create profit that are not available to those without the same resources. In other words, rich people get richer because they want to and can. They also have resources to avoid paying much of the tax that politicians attempt to extract from them.

   3. The stunning part of capitalism is that each party acts in self interest but there is a common benefit – eg. supermarkets full of high quality food that we can all access. As such I would say that the current economy *is* biblical in that capitalism recognises that people are inherently selfish, just as the bible does. To put it another way, while we could attempt to create an economy based the God’s standard of selflessness, it would fail for the reason that the bible tells us – humans are inherently selfish in a fallen world. That’s not to say that the poor and underpriveleged cannot be better served by the economy than they are – obviously they can (and must) be. But attempting to strip out all selfishness from capitalism is not the answer this side of heaven. I would point out, however, that many economic tools are intended for good – the first life insurance was created to care for the widows of Scottish church ministers.

   4. I would love to see a jubilee style of provision in place for countries who legitimately cannot afford their debts. The problem is what economists call ‘moral hazard’ (which is misnamed as it does not strictly speak to morality) – that a jubilee provision will in and of itself change the borrowers’ behaviour so that they will borrow more than they can repay, safe in the knowledge that they will not need to pay it back. As painful as debt defaults are (just ask an Argentinian), they serve a purpose – they force economic reform on a country that is living beyond their means. Perhaps it’s like casting an unrepentant sinner out of the church so that they can be convicted of their sin and repent. The only problem is the it’s the poor who suffer – the rich and corrupt rulers (the Marcos family, the Husseins, etc) never starve (hence the need for justice on the other side of death). I suppose also that the biblical jubilee year was instituted to apply between two parties who were both under the Lord’s covenant in Israel – both the lender and the borrower were to obey the Lord and love the other and the world does not operate in this way. Having said all of the above, I do believe that debts should be forgiven where they were taken in good faith and are unable to be repaid in good faith.

   5. IMO the MDGs are aligned with Christian goals for the poor, but I’m not particularly well versed with the detail of them.

   6. To quote Seth Godin, the problem with welfare giving is that it’s not scalable. As a refugee you can’t look twice as helpless and receive twice as much. Capitalism is an exchange of value that both parties benefit from – for one person to trade a dollar for a bar of soap, both parties voluntarily enter the transaction because they value what they receive more than what they held. So rather than hand out soap, by helping motivated individuals to start a soap factory, the entire community benefits – people have soap, the soap makers make money, workers have work and are trained in new skills, more people can start businesses with their money and skills, etc – it scales very well. Acumen Fund exists precisely for this purpose.

   7. Whether people should all be paid the same comes down to 1) incentives and 2) information. If all types of work are paid the same, there is no incentive for anyone to go through the training and sacrifice to become a neurosurgeon if you can get the same amount of money by doing data entry with ten minutes of training. On the information side, apparently when Gorbachev visited Margaret Thatcher, he asked her who controlled London’s bread supply. The question is stunning, but the answer even more so – ‘no one’. The pricing system contains this information – prices go up and down in keeping with supply and demand – if there is an oversupply of bread, the market informs prospective bread makers not to join the market by paying them less (because there are other bread makers available who will be prepared to work for less). If there is an undersupply, the market attracts prospective bread makers to train and become bread makers by paying thems more (because the few bread makers are being paid more by buyers desperate to secure a bread supply). In this way, the market communicates whether more or fewer bread makers are needed. So while it is desirable to offer all people the same salary, we would lose both incentives and information and as a result have too many people trying to work in easy jobs or choosing the wrong jobs altogether, the kind of problems that plague command economies (eg communism) where someone says ‘you make bread’, ‘you grow corn’, etc. If we tried paying everyone the same, it would work for a week, a month or a year until the entire economy fell in a screaming heap and we’d all go back to subsistence farming. It hasn’t worked out well for the North Koreans.

   8. Greed is not the core of capitalism, but self-interest necessarily is. Attempts to limit greed by putting caps on earnings have historically failed. It’s worth pointing out, however, that in spite of being inherently selfish, people can still do good things with their money, as Bill and Melinda Gates are doing with their fortune. I would argue, however, that there is no need to collect that vast amount of money personally to achieve the same level of outcome – people have changed the world with far fewer resources than the Gates family.

   9. Laws against ursury, as I understand them, were not to prohibit the collection of interest but to prevent the rich from keeping the poor poor through crippling interest rates. Obviously the rich do keep the poor poor today – highly available credit and ridiculous interest rates is part of the problem. But so is personal greed of the borrower – we’re back to the moral hazard problem, and the problem of selfish humans in a fallen world. This can be mitigated, however, in some circumstances and microlending initiatives such as Kiva.org do a good job of this.

   10. On what level of profit is ungodly, we should put the needs of others ahead of our own. We should take Paul seriously on contentment. We should take Jesus seriously in Luke 12:22ff – to seek the kingdom and trust God for our daily needs. As I see it currently, no Christian should seek to be rich, but any Christian who finds themselves to be rich should be generous with what they have. There are many bible passages to explore on this topic for anyone seeking the mind of God here.

   11. To quote Paul, ‘if we have food and clothing, we will be content with that’. I take it then that all of us in the western world are well beyond ‘needs’ and well into ‘wants’.

   12. The stock market was created to allow companies to raise money for their ventures and to allow their investors to obtain a return on their investment at a time of their own choosing. This is still the case. Is giving a medical company money to develop a heart replacement valve a good thing? Probably (it depends how much they’ll charge for it, I suppose). Is funding Aristocrat so that they can make more poker machines? I very much doubt it. So the investment side depends on who one invests in, and ethical funds are available for this purpose. As for the ups and downs of the market, it’s not true to say that one person’s gain is necessarily another’s loss as there are an unlimited number of paths through the stock market. On the whole, the stock market has generated wealth for a large number of people. In my view it’s unfortunate that there are a large number of financial people who take money out of the system without contributing economic value, but it may be that they contribute economic value in ways I do not anticipate or appreciate.

   13. I can’t think of a reason that would prevent a Christian from joining a union. The question would presumably be how they behave toward their employer with their stronger position of collective bargaining. Paul’s commands to slaves and masters obviously applies to employees and employers in this case.

   14. I agree with David re: tent making. Making tents has no morals and Paul was happy with that as a profession. As a Christian one could, however, seek to study economics so as to defend the cause of the poor by understanding the causes of and remedies of their plight.

   For further reading:
   ‘The Undercover Economist’ by Tim Harford
   ‘The ascent of money’ by Niall Ferguson (a financial history of the world)

   I hope these thoughts are useful.