Theology and Economics

I delivered a version of this paper at CGSA tonight, which is to say I ad-libbed about 70% and read about 30% from the manuscript. It could still use a couple revisions and the bibliography is absent for the moment, but it's a start. Fortunately, I received Thomas Sowell's book Basic Economics from Amazon today (thanks Mom) so may have an actual idea of what I'm talking about later this summer.

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Invisible Hands and Visible Churches:
Economics and Theology

Thus far in the quarter, most of our meetings have focused on one or two passages of Scripture, generally those sections of the Gospels which, either implicitly or explicitly, talk about money, the poor, economic class, and so on. This pattern, I suspect, is similar if not identical to the way in which most Evangelical churches approach the topic: a series of sermons and/or Bible studies-- perhaps with the benefit of background or commentary, perhaps without-- that works through the passage, extracts a moral about handling money or handling people, and, more often than not, asks its audience members to apply these principles to their own lives. Now, before some of you literally decide to throw the book at me (or 66 of them, as the case may be), let me reassure you that I don’t bring this practice up solely to criticize it. Besides the theological fact that the Bible is the only reliable source of revelation and should be the final authority for church practice and doctrine—or as the Intervarsity Doctrinal Basis has it, “[t]he unique divine inspiration, entire trustworthiness and authority of the Bible”—such close readings bear a striking resemblance to the kind of stuff I get paid to do in the English department.

I do want to point out, however, that in much the same way our academic projects must include both data analysis and some level of corralling that data into theories of our own or others’ making, both our conceptions and presentations of Christianity includes both specific doctrines and larger theological structures. These structures, be they systematic or scattered, chanted or available in a series of handy pamphlets at the Welcome Center in the lobby, give us a key hermeneutic context for understanding how a given passage fits into Biblical teachings on a given subject—and how some passages don’t fit so neatly at all. But while different faith traditions place different premiums on systematic theology, I would argue that this type of macro-level thinking is crucial to individual and corporate spiritual development. Let me give a brief example. In the past few centuries, many non-Christian authors and thinkers have expressed admiration for Jesus’ ethical teachings: Gandhi is said to have based much of his personal ethics on the Sermon on the Mount, and Ben Franklin exhorted the readers of his Autobiography to “imitate Jesus and Socrates” (68). Likewise, many contemporary social policy debates cite a “Judeo-Christian ethic,” though rather few connect that ethic to concepts of the Trinity or the Incarnation.

Theology, by organizing what we know about God from Scripture, allows us to draw together what would otherwise only be a highly eclectic set of precepts and doctrines, and at the same time gives us the backing to tell our friends and colleagues that there is, actually, something to this whole Christianity thing besides waking up before noon on Sunday, and maybe even doing so without a hangover. So, while tonight’s discussion will be less about specific passages and more about the big questions we’ve been dancing around for most of the quarter, I think it will be a helpful way of thinking through some key issues. In the same way, since my interest here is in the relationship between systems of theology and systems of economics, though I expect some specific policies to come up in discussion, I don’t want to make this only about one or two specific economic behaviors but instead about the two major economic systems—free-market capitalism and centrally-controlled socialism—that shape both theoretical and practical conceptions of economics. To that end, I want to start by defining some terms, which you may or may not wish to amend depending on your predilection for labels, and setting up some of the overarching questions in any discussion of theology and economics. From there, we’ll look at some of the more influential opinions of this intersection, both those from professional economists and from self-identified Christians of various stripes. Finally, I want to make a case for the social and spiritual benefits of capitalism, and suggest why a turn towards socialism, as advocated by many in the Democratic Party, would be likewise harmful.

First things first: what is this amorphous thing we call economics, aside from the title of a high school course with more math than I’d care to remember? Well, prior to the twentieth century, the term was quite broad: it developed out of moral philosophy, and encompassed all aspects of production and exchange, as well as their relationship to the rule of law, local and federal government, and human customs. Thus, for instance, the field of “home economics,” a term which survived well into the 20th century but has now been replaced with “family and consumer science,” considered not just the purchase of eggs, flour, and sugar and the output of cake, but rather the whole range of skills required to manage a home. Likewise, it is no coincidence that Adam Smith’s 1776 classic economics text is called The Wealth of Nations, as at Smith’s time the term “political economy” meant something closer to what “government” means today. So, telling the average citizen in Smith’s day that “It’s the economy, stupid” would probably earn you a rather strange look, though not half so strange as “We are the change we’ve been waiting for” would garner.

More recent definitions of economics, as Mark Longbrake pointed out last quarter, focus specifically on scarcity and abundance: how much of a given product, service, or resource is available in a given market, and what that does to prices, supply & demand, and so on. In 1932, Lionel Robbins defined economics similarly as “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses .” Simply put, economics studies the interplay among sets of finite resources—money, lab time, and of course remaining cans of Mountain Dew—which exhibit relative and dynamic values at least partly determined by one’s historical and cultural context. So, while I would argue that both capitalism and socialism imply (if not always cause) various social conditions and various worldview commitments, in a technical sense each mainly proposes a model for dealing with scarcity. We’ll get into the details of those models later; first, I want to talk a bit about how economists and theologians have understood the relationship between their respective fields.

Particularly in front of this audience, I know better than to try and define “theology” outright, at least to any degree more helpful than “the study of God.” Likewise, even secular economists have recognized that even beyond the sociological difficulties that result when one assigns unilateral motives or beliefs to an entire religious group, a given religious person may not consciously move from systematic theology to systematic economics, and may not be particularly systematic about either one. Seymour Siegel, for instance, argues that while “Faith is understood…as the central idea of a life system,” such that “either a collective or an individual cannot function without a faith,” religion is “a symbolic expression in an institutional form of this ultimate concern or faith…partially influenced by the faith itself” (22-23) Theology, then, is “a rational or at least putatively rational explanation, both of the faith principle and of religion,” which “is partially internal insofar as it expressed the original faith, and external insofar as the faith has to be expressed in terms which are known to the cultural situation of the time” (23). For those of you keeping track of all that, I suggest ibuprofen. Siegel’s point, I think, is not only that economic variation within co-religionists is to be expected, but that it can be difficult to attribute a given economic choice specifically to faith (or what we might call worldview), religious expression, or theological codification.

To that end, I want to throw out a few big questions to consider as we move through this material. First, does a “Christian theory of economics” flow primarily from worldview or “first principles,” primarily from specific religious practice, such as almsgiving or tithing, primarily from theological explanations, or from some combination of the three? Second, does a given combination of internal (worldview/religious/theological) and external (social/political/cultural) factors necessarily make an economic stance more or less Christian? Third, as Christians should our focus be on individual economic situations or rather on social or communal situations? Fourth, what is the appropriate role for an individual Christian, for a local church or group of churches, and for a secular government? And finally, what role, if any, does “social justice” play in evangelism, and does extensive investment in it exhibit good stewardship?

With those in mind—and I will, of course, expect a five-page paper from each of you at the end of the evening—let me set up the range of opinions on these issues by explaining what I mean by “capitalism” and “socialism.” As you can imagine, the fact that these two basic systems of thought have proven flexible enough to be adopted, with varying success, by dozens of different governments and nation-states only complicates the problem of giving a single, coherent definition for each term. To make matters worse, though it is fair to say that the respective adherents to capitalism and socialism consider the two philosophies antagonistic to one another, Marxist socialism, surely the most popular and adapted form of socialism since the 19th century, adds two significant difficulties. First, Marx claims that since history is both linear and rational, then not only is capitalism necessary but it is in fact a necessary precursor to socialism. Accordingly, whereas most extreme pro-capitalists—who tend to be libertarians or anarchists—would see any hint of socialism as anathema, Marxist socialists would view these “mixed economies” much more positively. In a related complication, for Marxists socialism is not the end but rather the middle stage, to be replaced ultimately by communism, presumably once all traces of capitalism have been eradicated (and once its middle-class practitioners have been ruined, converted, or killed). So right off the bat we have an asymmetrical conception of “pure capitalism” vs. “pure socialism,” which as with other binaries, quite effectively confuses both things and the poor saps who study them.

In spite of these difficulties, though, I do want to contrast capitalism and socialism, briefly, in terms of ownership. While ownership is not the only way to contrast the two systems, it is probably the point of greatest debate, since each side claims a monopoly (there’s an ironic term for you) on fair ownership. Under capitalism, each individual theoretically owns his or her own “means of production,” whether that translates to an actual physical object, such as the laptop on which I edit papers and write lesson plans, or to the labor and time involved in a business transaction. The modern corporation is a good example of this: though Microsoft, Exxon-Mobil, and Kroger are all quite adept at spending and earning money, in a capitalist economy none of these companies technically owns anything: they exchange goods for their customers’ financial resources, they exchange wages for their employees’ labor, and they exchange profits and interest for their shareholders’ investments. Though all these exchanges are voluntary—and this freedom of choice is key for capitalism to function—they are not exclusively done for individual greed or benefit. This is the cornerstone of Adam Smith’s argument in Wealth of Nations: that someone who "intends only his own gain" is "led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good” (qtd. in Friedman 1-2). Although the dominant thread of capitalistic thought does allow for limited government intervention and control of some parts of the economy, such as national defense, by and large capitalists prefer to allow private competition to regulate the market. As Milton Friedman puts it, the conflict is between the “view that government's role is to serve as an umpire to prevent individuals from coercing one another” and the view that government's role is to serve as a parent charged with the duty of coercing some to aid others” (5).

The opposite notion of ownership is true under socialism: since it does away with all notions of private property and thus of voluntary, individual exchange, at least on paper, then everyone in a given society owns everything—though in practice the State ends up with considerably more economic control than any of its constituents. Still, socialism has proven attractive to many ironically because it promises actual democracy, at least for members of the proletariat, and a way out of a capitalist system in which bourgeoisie employers not only make a profit on their workers’ labor, but in doing so create what Marx called “alienated labor” by removing the worker’s alleged birthright to earn full price for his or her work. For Marx, this process reduces both worker and product to commodity, “an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference” (437). Further, Marx argued, capitalism unduly elevates an object’s “exchange value” over its “use-value” (438), eventually emptying that object (or worker) of any intrinsic sense of worth because it (or he) is both owned and traded by an outside force. So, socialists argue, eliminating private ownership not only leads to economic equality—generally through the forced redistribution of wealth, as in our modern welfare system—but in fact reclaims human dignity at the same time.

Even from this brief and necessarily reductive summary, I hope you can see the outlines of the major debates here. Let’s look now at how others have understood that debate in theological terms, and more broadly how each defines a Christian’s economic obligations. The first source I’d like us to consider appeared in 1981, released by the Institute for Religion and Democracy and written primarily by First Things editor Richard Neuhaus. It’s entitled “Christianity and Democracy,” and appeared not only in the midst of the Cold War, but also at a time when many leaders associated with the National Council of Churches “advocated a "moral symmetry" between the Soviet Union and the United States, agitated for unilateral disarmament, and condemned anticommunism as a moral failing and even a theological heresy.” The whole thing is worth reading, but I want to focus on just a few paragraphs here.

Democratic governance is based upon a morality of respect and fairness for all. It is responsive to the diverse moral judgments and meanings affirmed by individuals and institutions within society. It not only tolerates but rigorously protects those spheres within which people find meaning for their lives and share that meaning with others. Most importantly, democratic government does not seek to control or restrict the sphere of religion in which people affirm, exercise, and share their ultimate beliefs about the world and their place in it.

As democratic government does not seek to absorb the sphere of religion, so it does seek to respect the autonomy of cultural and economic life. With respect to the last, there is much debate about the relationship between democracy and capitalism. Whatever the economic achievements of capitalism, and they are considerable, our primary concern is to preserve and strengthen democracy. We believe that the personal and institutional ownership and control of property-always as stewards of God to whom the whole creation belongs-contributes greatly to freedom. We note as a matter of historical fact that democratic governance exists only where the free market plays a large part in a society's economy.

Like political democracy, a market economy is a process open to the future. The focus is on the production of wealth rather than on the consolidation and redistribution of existing goods. Experience in America and the world suggests that when a market economy is open to the participation of all, it works to the benefit of all, and especially of the poor. Conversely, we note that the economic systems advanced by totalitarian regimes have been consistently disastrous for all but the new class of the political elite. A market economy may be a necessary condition for democracy. It is obviously not a sufficient condition for democracy. There are more or less capitalist societies with repressive regimes quite unlike the democratic governance we affirm. In modern industrialized societies the state is necessarily involved in aspects of economic life. Apart from pragmatic considerations, however, our bias in favor of a market economy is informed by our commitment to democracy. To the extent that capitalism is a necessary restraint upon the monistic drives of society, it warrants our critical approval.

Let’s cross the aisle now, so to speak, and examine a claim to “Christian socialism,” or at least the possibility thereof. Many of you are familiar with the work of Jim Wallis, a prominent liberal theologian in the postmodern “Emergent Church” movement, and an outspoken apologist for the so-called “Christian Left.” Wallis’ best-known book is called God’s Politics: Why the Right Gets it Wrong and the Left Doesn’t Get It, which by the title alone should give you some idea why his ideas have been consistently controversial. I’d like to read you a section from an interview he gave shortly after the 2004 elections, with C.P. Farley of Powell’s Books. Farley asked:

In the US, more people per capita consider themselves religious, and base their political views on religious faith, than in Europe, where much of the population doesn't believe in God and doesn't go to church. Yet it seems to me that the values you consider biblical—attention to the poor, placing value on the common good, aversion to violence and a means to solve problems, etc.—you actually find these values lived out in European societies more than you do in the United States.

Here is Wallis’ response:

Well, you would have liked this last session this morning, where my English, Anglican priest wife was making that point. She said, "Now I'm in the most religious country in the world. I'm coming from so-called secular Europe, which is often disdained here. But here I find 55 million Americans haven't got healthcare. In our system, which might not be perfect, healthcare is a human right, not a commodity to be bought and sold. I come here and I have kids out in the streets shooting each another outside my front window. Most British people have never seen a gun in real life."
I said today in response to that that there's a tradition of Christian socialism in Britain, so called—it's not really socialism in the American image of that word, it's not about totalitarian, or Marxist elites taking over the world. It's about social concern of a religious sort. Most socialists in Britain were Methodists, not Marxists. And what they created, in fact, was the social welfare state. A reflection of Christian values, they would say. Now, that's become very secular, but Joy would say her country, in terms of care of the poor and healthcare, exemplifies Christian values more than we do, where Christianity has become very individualistic and often critical of the question What ever became of the common good? So, How does faith affect our cultures and our policies and structures? is a fair question. And the individualistic ethics of twentieth century Evangelicalism, I think, betrayed the ethics of nineteenth century Evangelicalism. And eighteenth-century British Evangelicalism, which was responsible for John Wesley, who was a revivalist. Or John Newton, the author of "Amazing Grace." He was a slave trader. So when he said "Save a wretch like me" he wasn't just suffering from existential angst. He was a slave trader, and he turned his life around. And through him William Wilberforce got converted, who was the parliamentarian who fought for thirty years to end slavery, and did. All that was Christian revivalism put into a social reform context. Individual ethics doesn't really solve those issues. So, there's a paradox there. Joy just said in the last session, "Well, you all may have the numbers of religious people, but we have a more compassionate society." And it's true.

Though I find Wallis’ equation of 19th-century abolitionism with “the social welfare state” dubious at best—and that’s to say nothing of his less palatable social and political positions, such as his support of both abortion and homosexuality—I do think he raises a good question: how ought the Biblical injunctions to be salt and light work out in terms of social and economic policy? In the time we have left, I want to share why I think capitalism is the choice most consistent with Scripture, as well as with a Biblical view of human freedom and dignity. And to put some of your minds at ease: yes, these are actually my own conclusions, not just talking points that Karl Rove transmitted directly into my positronic matrix. In many cases, those who criticize capitalism, particularly critics who claim to do so from a Christian perspective, level the charge that capitalist society rewards greed, lacks compassion, and makes “the rich get richer and the poor get poorer,” thereby perpetuating injustice. Furthermore, they argue, by redistributing resources—that’s code for taking my stuff and giving it to you—socialism teaches Christians how to be merciful and charitable, and shifts the focus from individual avarice to social justice. While it is true that human sin—which, by the way, is not unique to capitalism—has led some people and companies to exploit others, I would argue that not only are there more important spiritual benefits to the freedom capitalism offers, but also that socialistic notions of justice and charity are ultimately short-sighted and ineffective.

First, Scriptural presentations of work and property both mesh with capitalist ideals, though as in many things Scripture proposes stricter limits than some in the business world. One of the first instructions given to man, for instance, is to “work” and “keep” the Garden of Eden—to manage the property as God’s steward, and to be subject to God’s laws. Now, Genesis makes it pretty clear, I think, that neither Adam nor Eve were working the land so they could afford the latest SUV, or even the latest James Sire book. More to the point, there was only a garden—or an Adam, for that matter—because of God’s work, work which He declared “very good.” Since there was no scarcity and no competition here, properly speaking Adam’s initial work was not for economic purposes, then, but rather to reflect God’s creative and, yes, productive image. As Jim Lewis notes, the postlapsarian view of work (given in Genesis 4) does not represent a punishment but rather a transformation “from blessing to burden .” Work, Biblically understood, is not a method to ensure dying with the most toys or to nudge the world towards class warfare, as Marx envisioned. It is in fact a process merging man’s brokenness with God’s grace: work is hard because we do it sinfully, yet work can be rewarding and even joyful because we do it as image-bearers.

In a similar way, despite the vastly different cultural and historical contexts recorded in the Bible, privately held property is represented as both normal and good, and even for communal projects (such as the building of the Temple) is seen as the best starting point. In the Old Testament, much of the Jewish civil law concerns specific uses of property and, ultimately, presents a model of stewardship based on private ownership. For example, in the first few verses of Exodus 25, which kicks off a long section detailing the design of the Tabernacle, God instructs Moses to collect what we might call a free-will offering of materials and luxuries. Particularly when juxtaposed with the account in Exodus 32 of the rebellious Israelites melting down their gold to create an idol, this preface suggests that personal property is a gift, to be used to glorify God as best we can. A similar dynamic shows up in the New Testament, particularly in the accounts of the early church: we may choose to be faithful with our possessions and use them for “Kingdom purposes,” or we may choose to use them poorly to bring honor only to ourselves, but nowhere is there Scriptural precedent for abdicating the responsibility of property to the State or even to the church.
This leads me to my next point: that the economic freedom inherent to capitalist exchange reinforces Scriptural notions of human dignity and freedom. As Kerby Anderson puts it:

The Bible says that human beings are created in the image of God. This implies that we have rationality and responsibility. Because we have rationality and volition, we can choose between various competing products and services. Furthermore, we can function within a market system in which people can exercise their power of choice. We are not like the animals that are governed by instinct. We are governed by rationality and can make meaningful choices within a market system.

Whatever your particular theological views on the interplay between human will and God’s sovereignty, we are certainly given the ability to use our God-given rationality, as Anderson notes, to steward those resources which we are given. And while Christians recognize this choice as a result of God’s design, even those outside Christianity deserve the chance to enjoy the blessings of work and perhaps of wealth, because they too are created in God’s image. I like George Gilder’s argument on this, here as summarized by John Armstrong:

Socialism always destroys personal freedoms by trying to plan for other lives through a central government system that watches out for you. (This is why President Reagan once quipped that the worst words you could ever hear were these: "I'm from the government and I'm here to help you!") Capitalism allows you to plan for yourself. It allows for creativity and enterprise. Furthermore, it encourages people to provide for others in order to express their creativity through goods and services. Greed is, in reality, inimical to capitalism. Greed drives the welfare state more than it does capitalism since greedy people want unearned rewards to be given to them by a benevolent government that levels the playing field.

My final point may strike some of you as pragmatic and not particularly spiritual, but I’m going to make it anyway: competition is actually good for the visible church and for its members, not simply because of the potential for material advantages, but further because it encourages hard work and excellence. Think back to the last time you applied for a new job or a spot in a new academic program. How much harder did you work because you knew others were competing for the same thing? Now, I’m not saying that religion ought to be a buyer’s market, since unlike most products and services, most religions make some claim to absolute truth. But the fact is that we, as a body of believers, are not the only game in town anymore, a reality particularly evident in the university setting. Why then should we not wrestle harder with tough questions, invest more into evangelism, and, when appropriate, improve the communities around us? The truth is that we’ll never impact the university for Christ, let alone the entire world, if we wait around for privilege to kick in: we have to want it, and we have to fight for it. To abandon the chance to do that, even for the laudable if vague goals of “helping others” or “making the world a better place” is simply a bad idea, and in my view a dangerously irresponsible use of our time, talent, and treasure.