I concluded my last post with this summarization:
So summarizing to this point, human beings are made in the image of God. As such, we have intrinsic value apart from any economic consideration. Our labor and the goods we produce have instrumental value and that relative value is set by the community through exchange in the market place, incorporating subjective and objective information into a real-time feedback loop. The market is far superior to the alternatives in setting value but it is far from perfect. That means there is “noise” in the feedback loop. But from the standpoint of Christian ethics, market imperfection isn’t the only source of noise in the market.
So what is the additional “noise” to which I am referring? Sin. I began this series noting that according to the biblical narrative, we were created for service as priests in God’s holy temple (creation) and appointed vice-regents over creation, bringing the world to full flourishing. The vision is of a world where we are in communion with God and the whole community flourishes.
I have argued that the development of market exchange in creating a real-time feedback loop to coordinate human action beyond face-to-face communities is truly a remarkable achievement. What needs to be made explicit here is that the market greatly facilitates all varieties of human action … from the noble to the vile. The market system that efficiently eliminates famine through the efficient distribution of food is the same market system that makes pornography abundant and inexpensive. If the aim is a shalom-filled world, then clearly this amplification of sin is “noise” in the system.
Sin manifests itself in other ways. Some people will game the system for themselves against others through deceit, theft, discrimination, and any number of nefarious tactics. Strong legal systems are needed to protect against this behavior. Yet those same legal systems are frequently used by those with power to protect their interests from competitors and from market forces. These also feed “noise” into the market feedback loop.
So we are left with a market system that, while a substantial improvement over any alternative we know to date, is imprecise. And as Harvard economist Greg Mankiw recently noted, the field of economics is where medicine was two hundred years ago. Economics gives us considerable insight, much more than we would have without it, but our understanding is so imprecise that it is not always possible to predict consequences with high levels of certainty. So there is an epistemological challenge.
We are also left with a market system that amplifies detrimental desires every bit as well as virtuous desires. This means injustice will be present. The impulse is to block undesirable behavior. But who ultimately decides which things are not acceptable? One person may support legal marijuana while wanting to ban genetically modified organisms. Others may support genetically modified organisms but think prostitution should be illegal. Yet others may think prostitution should be legal but nuclear power should be illegal. And on it goes. And even when a majority agrees about the undesirability of a particular practice, does banning it actually improve matters? Think prohibition of alcohol during the 1920s.
Jesus tells a parable about a farmer who sows wheat but his enemy later sows tares in the same field. Wheat and tares are indistinguishable until they approach maturity, making it impossible to sort them out until the harvest approaches. Attempt to rip out the tares and you will likely destroy much wheat. Similarly, aggressive attempts to control behavior to make the market produce only “good things” by weeding out the bad stuff can often have destructive consequences.
This presents us with challenging moral issues. As G. K. Chesterton once wrote, we want to “… give room for good things to run wild.” Freedom and innovation are critical to achieving greater shalom. Furthermore, virtue that is chosen and acted on freely is far more vibrant than virtue that is imposed. But freedom means the freedom to choose sin and oppression. It means the emergence of injustices, whether intentional or not. Do we just turn a blind eye?
Adding to this moral challenge is the fact the Bible is from the time and culture of the advanced agrarian societies of the ancient Near East. Making direct application from biblical circumstances is problematic. Land and labor were the primary means of production. Productivity was virtually fixed, which meant the economy was very much a zero-sum game; someone’s win was someone else’s loss. Consequently, economic moral reflection was concentrated on consumption and generosity. The role of radically altering productivity, as occurred in the modern era, is not even in view. There was no “economics” in any modern sense of that word with data analysis and theory being empirically tested. Their understanding was philosophical and pedestrian at best. How do we apply Scripture to modern economic concerns?
Then there are the technical issues. We know markets are a remarkable advance but they are imperfect. The primary debate in economics is not over whether markets are seen as good. They almost universally are seen as such among economists. The question is over how well they work. Those with more conservative leanings tend to think that markets are very effective and will somewhat spontaneously resolve economic difficulties with minimal interference. Liberal economists are more inclined to see more substantial flaws in the market, needing more intervention from informed experts who can mitigate some of the more serious problems. (Personally, I think conservatives oversell the “invisible hand” notion of the market but liberals greatly overestimate the ability of experts to intervene in just and effective ways. That leaves me open to experimenting with options to improve market outcomes but deeply skeptical of grand schemes promoted by some liberals to restructure and manage the markets. Epistemological humility is the key. But I digress.)
So I return to opening paragraph that began this four part series:
On what basis should people be compensated for their work? Economists say the value of labor is a function of supply and demand. Wages should correspond to the economic value of work. Theologians often object. (Note: We are all theologians but here I’m referring to those formally educated in theology.) They say it dehumanizes people. People are not faceless cogs in a machine to be differentially valued based on their economic contribution. Everyone is equal in God’s eyes. Income and wealth should be shared equitably.
What are we to say?
I think what we must not do is resort to economism, or trusting in quasi-deities like an “invisible hand” to spontaneously resolve all economic issues. We must also refrain from theologism, and quoting Bible passages rooted in the advanced agrarian societal context of the biblical era as prescriptions for economic policy today. The Parable of the Talents is not an endorsement of capitalism any more than sharing things in Acts 2 is an endorsement of communism. Both are anachronistic readings.
I think we have to take seriously the objective reality of how prices and value are set. Having prices accurately reflect supply and demand, leading to an efficient allocation of productive resources, is more than an esoteric concern of economists. An accurate economic feedback loop is important to human flourishing. If we value justice and flourishing, then we are not free to forcibly adjust prices to something we arbitrarily deem as “fair.”
I think we need to be ever cognizant that markets don’t always work perfectly and sometimes there are imbalances in power that may require intervention. Just because the market sets a price for a particular type of labor, doesn’t necessarily mean that price was justly achieved. We need to root out injustices and compensate when great imbalances emerge.
I think that seeking the common good means finding ways to empower those who cannot earn a living wage to do so or possibly to alter our business models so they create jobs that incorporate capacities that can command a livable income, or at least open a path to a livable wage. And certainly we must make provision in society for those who are without the mental or physical capacity to support themselves.
So in concluding this series of four posts, my aim has been to advocate for a strong embrace of both economic understanding and theological reflection. Theologians bemoan theological illiteracy among economists. It is not without merit. They accuse economists of smuggling in values and representing them as science. That happens too. But economic illiteracy among theologians is at least as equally profound. Until the two camps are ready to stop tossing grenades across an intellectual wall at each other and begin the work of really engaging with each other to understand what is truly being said from both disciplines, the church has no hope of influencing the economy and culture.