Every society, past and present, has an economy. Economies consist of two essential components: People and their environment. Economic questions ultimately come down to a measure of what happens to these two subjects.
When I use the term economy in these posts I’m referring to the process a society uses to transform matter, energy, and information from less useful states into more useful states. “Useful” is clearly a value laden term. We need not clarify “useful” at this juncture accept to acknowledge that transformative work would not be done if workers did not see the transformation as useful by some measure.
This also raises the question of what we mean by “work.” We frequently divide our lives into work (that which we do for pay) and leisure (that which we don’t do for pay.) But is mowing your lawn or preparing a meal truly leisure? For our purposes, I’m going to borrow a definition of work from Miroslav Volf’s Work in the Spirit:
It’s not my intention to suggest that work is the only meaningful use of our time. But neither is it the case that work is an activity foreign to our nature, thrust upon us because sin is in the world. While there is much within our Christian tradition that instructs us concerning the contemplative life, I find there are precious few resources that help us reflect on the active life, especially as it relates to work within modern economies. Therefore, this series is focused on the economic aspects of shalom.
So if an economy is about people interacting with their environment, how might we conceptualize the key components of this interaction? I want to present a model in the coming posts that I have adapted from Indur Goklany’s The Improving State of our World (see pages 91-92). I’m suggesting that there are five components. Yet, how these five components function varies considerably based on societal narratives, values, and customs. Jumping ahead a bit, we will see that it has been the failure to appreciate the importance societal features that has too often led to disaster when affluent nations in the 20th Century tried to transplant their economic systems elsewhere.
Here are the model’s five components:
Technology – The devices and machines that are used in society as well as the practical knowledge a society has about its material existence and methodologies for applying technical knowledge.
Food Supply – At the core of the food supply is crop production. With the exception of hunting and gathering methods, most notably today in harvesting some aquatic food items, most food comes from domesticated crops or animals that feed on crops.
Human Capital – The physical, mental, and spiritual wherewithal to conduct economic labor is the most rudimentary form of human capital. Anything that enhances these abilities can be seen as adding to human capital.
Economic Growth – The net positive transformation of matter, energy, information from less valued states to more valued states over a specified time.
Trade – The exchange of goods between parties. Trade can be either domestic or foreign transactions.
I place the five components in a diagram this way:
Notice that there are two circular patterns at work. First there is a clockwise rotation of the outer green arrows (see A, B, C, D, and E) flowing like this:
Then there is the counterclockwise rotation of the inner blue arrows (F, G, and H) flowing like this:
Finally, in the center of the diagram is trade which is fed by technology and economic growth but influences the food supply, human capital, and economic growth.
There is no starting point in the diagram. It is an interconnected organism. However, to discuss the issues we must begin somewhere. I want to isolate each of the five components and offer some examples of the role each part plays in the cycle of prosperity. We’ll begin by looking at technology.