Economics

A Student's Guide

Greg Forster, David S. Dockery

• Publisher: Crossway
• Year: 2019
• ISBN:
  9781433539268
• Topic: Business
• Subtopic: Business General
• Index: Business

We live in a world full of economic troubles.

Families struggle to make ends meet, organizations struggle to make payroll, and societies struggle to deal with generational poverty and rampant debt. Only by recovering a theological view of economics can we hope to think faithfully about our economic challenges. Exploring principles outlined in Scripture and economic thought throughout church history, this book lifts our eyes to a higher reality that lies behind economic systems, theory, and policy so we can wisely steward the world that God has given us.

1

The Economy

How We Steward the World Together

Everywhere you go, people care passionately about the economic side of life. At the personal level, worrying about job security has become the new normal for millions of people of every socioeconomic level, and money trouble is one of the key factors in every kind of personal calamity, from divorce to addiction. At the organizational level, we all do our daily work as part of organizations that have a bottom line and have to “make payroll” every week to survive. (This includes colleges, churches, other nonprofits, and even government entities, as well as businesses!) At the social level, there is never a moment when our public life is not dominated by debates over economic policy. Intergenerational poverty remains one of our most weighty challenges. And the future of our civilization seems to depend on whether we can figure out the right response to the unprecedented developments of technological progress and globalization. All our social systems were designed for a world in which muscle power was highly valued and nations were mostly separate from one another. Drastically increased mechanization of physical labor and the movement of goods, people, and communication across boundaries and enormous distances is now confronting us with challenges our systems weren’t built to face.

Looking at all those challenges, it’s no wonder economists joke that their field is “the dismal science.” But it is possible to see these things from another perspective. The Christian intellectual tradition, building on the revelation of God in Christ by the Spirit in the word, has spent two thousand years helping people lift their eyes to a higher reality that lies behind these troubling experiences.

The Gospel in a World of Economic Troubles

We live in a world of troubles, many of which are economic. But why do we live in such a world? That is a theological question—in fact, it is one of the oldest theological questions, as the book of Job reminds us. If our experience of economics, like our experience of everything else, is dominated by the dismal, it seems only natural to ask why the dismal dominates. If theology has an answer to that question, as Christians believe it does, then it could help us look at our economic world in a whole new way.

What if our daily struggles to keep a job and make ends meet, our organizational struggles to make payroll and keep the lights on, and our societal struggles to manage public economic concerns are really battles in a cosmic civil war between God and Satan? What if every time we allow our economic actions to pursue greed, sloth, pride, envy, gluttony, lust, and wrath, we are surrendering a hill, a bridge, or an airstrip to the armies of our eternal enemy? What if every time we manage our economic affairs—from the personal to the public—with the justice and mercy of our gracious and powerful God, we are striking back against our ghostly foe and reclaiming a little piece of the world for the holy love of God? How can Christians develop ways of thinking about and participating in the economy that take it seriously as a major strategic front in the holy war between God and Satan for the fate of the universe?

Why, no, as a matter of fact, this is not an ordinary economics textbook.

This is a book about economics, not a book of theology as such. Our focus is economic affairs, from balancing checkbooks to globalization, poverty, growth, and debt. But we will be looking at the economy through the lens of the Christian intellectual tradition, seeing these things as the church has seen them in the light of Scripture and the Spirit.

This chapter provides an overview of how the economic side of life can be understood as part of a Christian worldview. Chapter 2 turns to Scripture and reviews key elements of the testimony of God’s Word on economic matters. These are the foundations on which the Christian intellectual tradition has built a theological view of the economy.

Of course it’s true that Augustine never wrote about global markets, Thomas Aquinas never commented on industrialization, and Martin Luther had nothing to say about digital finance, for the very good reason that these things did not exist when they lived. But as we will see in chapter 3, Augustine and his ancient contemporaries did describe how the gospel compels us to see economic affairs in a dramatically different way. As we will see in chapter 4, Aquinas and his medieval contemporaries did describe how this new worldview could be worked out in economic systems and behaviors on both large and small scales. And as we will see in chapter 5, Luther and his early modern contemporaries did describe how the economic reforms brought into the world by Christianity were leading in radically unexpected directions, with the potential to reshape the world. Only by recovering a theological view of economics, which the Christian intellectual tradition provides, can we hope to think faithfully about our own economic challenges.

However, we face a challenge they did not face—and I’m not talking about globalization. I’m talking about a more subtle challenge. Our way of life and our categories of thought have become separated from the Christian intellectual tradition. There were many historical differences between Augustine in the fifth century and Luther in the sixteenth, but for all that, they did share a lot of common ground in the way they thought about the world. That vast area of common ground has become, for us, a lost continent. As we will see in chapter 6, the economic thought of the modern world has become detached from Christian thought and is deeply shaped by various secular and pagan ways of understanding the world. Christians today are, in general, not much aware of how deeply we have allowed these secular and pagan assumptions to shape our views and behaviors. As a result, it is much harder for us than it was for our spiritual ancestors to view economics in a Christian way. In chapter 6, we will look at some starting points for reforming our economic thinking and acting.

The Economy in a Broad Sense: Making Choices about Resources

“The economy” and “economics” are not the same thing. It’s easy to say what economics is: it’s the academic discipline that studies the economy, just as political science is the discipline that studies politics and chemistry is the discipline that studies chemicals. When people say they want a Christian view of economics, usually what they really mean is that they want a Christian view of the economy. It certainly wouldn’t do much good to develop a Christian view of political science without developing a Christian view of politics!

But what is the economy? That, it turns out, is a harder question.

When people hear the term “the economy,” they usually get two images in their minds. One is confusing graphs, bewildering mathematical formulas, and endless spreadsheets of numbers. The other is talking heads on a screen, yelling at each other about public policy.

Those things are not the economy. They are the two main ways our advanced modern world talks about the economy. And they do have important roles. Graphs, formulas, and spreadsheets make it possible for us to manage large amounts of economic information. Take a course on economics or just read one of those ordinary economics textbooks, and the graphs and charts will be much less bewildering. Likewise, every society needs to have public-policy debates. Our government is going to make economic policy one way or another; if we didn’t have public debates about it, the policymakers would just do their work secretly, unaccountable for the way they used their power. (Granted, the “yelling at each other” part is something we could do without.)

To understand the economy, however, we have to go behind the graphs and the debaters. We have to see the things they’re describing and arguing about.

So what is the economy? Let’s begin with what academic economists say. For the field of economics, the standard definition of the economy focuses on the choices people make about using resources.

Specifically, by the standard definition, the economy is how we make decisions about using resources that are limited in amount or availability.1 Economists call these “scarce” resources, but they’re using the term scarce in a special, technical sense. Imagine a gigantic warehouse full of thousands of crates of 12-ounce soda cans. In that warehouse, soda is not “scarce” in the way we usually mean, because it is very abundant. There’s a lot of it. But soda is still “scarce” in the way economists mean, because it is still limited. The amount of soda in the warehouse is not infinite; if you start putting it on trucks and shipping it to grocery stores, eventually you will run out.

This means the economy is largely about trade-offs. Because most resources are limited in some way, our decisions about how to use them involve trading off one possible use for another. If I have a limited supply of food in my refrigerator, any choice I make to use that food in one way (such as eating it) reduces my opportunity to use it in other ways (letting others in my household eat it, bringing it to a church luncheon, or gluing it to the wall to make avant-garde artwork). I can certainly choose to eat some of the food, give some to my family, bring some to church, and glue some to the wall. But each item of food I use in one way is an item I can’t use in another way. By contrast, my supply of air is effectively unlimited, so the choices I make about how to use air do not involve those kinds of trade-offs. That is why the choices I make about food are economic choices, while the choices I make about air are not.

This leads us to a very important insight: the economy is not just about money. Money is very important, but it is only one kind of economic resource. There are millions of economic resources. If we are thinking only about money, we are not thinking about the economy; we are thinking about one important but limited part of the economy. And the money part of the economy does not somehow control all the rest and render it irrelevant. On the contrary, many of the decisions you make about how to use your money are driven by decisions you’ve made about other economic resources and opportunities—you don’t go to college because it gives you an excuse to take out that student loan you’ve always dreamed of having; you take out the loan because you want to go to college.

To see why the economy is so much...