Theologians and Economists: Hubris Economicus

[Series Index]

To kick off this discussion about why Theologians and Economists don’t get along, I want to look briefly at the contribution of Economists to the tension.

Throughout human history, social life was conceived in terms of face-to-face relationships. What we know study as macro forces in sociology and economics were seen as the inexorable forces of the gods or nature. From at least the time of the Enlightenment, an awareness began to develop of impersonal relationships between large groups of people (like cities and nations) that shape our lives.

Adam Smith (1723-1790), falsely identified as the father of capitalism, began to observe the interrelationship of these large impersonal forces that generate wealth. He wrote about them in terms of political economy … “management of the societal household,” if you will. Rev. Thomas Malthus (1766-1834), in studying his parish records and other sources, detected a pattern where agricultural abundance tended to spawn population growth that outstripped the ability of agriculture to feed everyone. Short of a famine, war, or plague, the system would eventually bring about a collapse in the population and the process would begin all over. Probably the most influential person in establishing American economic education was Francis Wayland (1796-1865), a clergyman educator whose political economy text was premier during the mid 19th Century. While these men, and others like them, were gaining insight into the relationship between impersonal socioeconomic forces, they were still largely possessed by the idea of immutability of these forces. God’s providence governed the order of things and interference with them would be counterproductive.

It is in the late 19th Century that we first see a field called “economics” emerge. Often called “neoclassical economics,” economists systematized many of the concepts we find taught in modern textbooks today. More importantly, the move was made to apply the rigors of science to the subject matter. The vision was of an objective economic science, disassociated from ethics and values, with economist functioning as the arbiter of public policy questions. The desire was to move away from normative economics that incorporated notions of what the economy ought to be, to a “value-free” positive economics.

Part and parcel of the neoclassical school became the concept of “homo economicus,” the economic man, a thoroughly rational utility calculating machine (who critics would say had incredible knowledge about markets that no actual human-being could ever have.) Economic analysis was done with “homo economicus” as the presumed actor. Yet careful analysis and cross-cultural studies indicating that people in different cultures value things in different ways, cast considerable doubt on this formulation and method. Multiple attempts have been made to rescue and resurrect our friend but I’m not sure any have truly succeeded.

This exemplifies one of the frequently leveled criticisms against many economic models. They are often constructed in a way that ignores major difficulties and includes only those elements that support a desired outcome. Thus, the joke about asking an economist, “A man falls into a deep hole and is unable to climb out. What should he do?” The economist’s response? “Well, first we assume a ladder …” The models work with great precision but the question is to what degree the models approximate reality.

This is not to say that economic analysis is by any means useless. That is a gross overreaction. It is of immense value. But postmodern critiques remind us that no one stands in a value-free objective place outside reality and does research. Beliefs about what constitutes things like rationality, utility, and justice are inescapable in economics. There are no objective observers.

Today we can see values working their way out in the public debate. Virtually all economists today agree about the centrality of markets. However, there are those who believe that markets will deliver the optimal outcome in virtually every circumstance. Failure of markets to deliver is not a result of market failure but rather of markets being distorted by intervention. Consequently, the best thing we can do is to grease the wheels of the markets and get out of the way. Others also believe that vibrant markets are absolutely essential but that markets have considerable imperfections. They say significant government intervention is required to achieve optimal outcomes. Can either view be established beyond a doubt, even with more rigorous empirical research? I’m guessing not, unless you already share a predilection for one of the views.

So what does all this mean for the relationship between theologians and economists?

First, real or imagined, there is a perceived hubris on the part of economist. The idea of being the impartial arbiter of economic truth from outside the public debate, leaves economists looking aloof … lacking in compassion and lacking in knowledge of the real world consequences of their ideas. Coupled this with the penchant some economists have for mocking Christian values and the animosity is understandable. (For example, Chicago School free marketers attacking justice advocates as dimwits  … or other economists joining the chorus of those asking what’s wrong the nut cases in Kansas who put cultural concerns (abortion, family) ahead of their own economic interests.) The phenomenon feels very familiar to the polemic stance of evolutionist Richard Dawkins toward Christianity.

Second, college introductory education in economics has been woefully lacking. It has been more oriented toward articulating economic tools and concepts that will lay the groundwork for taking more economics courses rather than for equipping non-specialists to see and reflect on their world through an economic lens.

Third, Christian economists have been scarce in the dialog about theology and economics (though I think this is improving.) I think I can count the number of recent books on one hand that are actually written by economists that systematically help non-specialists process economics and theology. (Victor Claar and Robin Klay’s Economics in Christian Perspective and John Stapleford’s Bulls, Bears and Golden Calves are two I can think of.)

I can appreciate the challenges. I suspect many Christian economists feel caught in a double bind between economist colleagues who frown on entering the public debate and Christians who are predisposed to be hostile to economics. But the net consequence is that the debate ends up being heavily dominated by partisan ideological groups and their take ends up being perceived as representative of mainstream economic thinking.

As we will see shortly, I believe that there are enormous misunderstandings about economics on the part of theologians. However, I don’t believe all the blame for theologians “not getting it” can be placed at the feet of theologians. There has been a hubris by economists that gets in the way and a detachment that creates barriers to broader numbers of people developing an economic lens.

Are there other factors you would identify that contribute to the animosity and distrust?

For your amusement you might get a kick out the T-Mobile add about economist trying to educate the public: Click here.

Also check out this interpretation of basic economic principles by a stand up comedian and economist:

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Comments

[JMorrow]

Michael,

Thanks for the honesty and guts with which you are tackling this issue. Having kept up with your blog for awhile, I think you sometimes come down too hard on those who have a different take on the implications of the market. However, I respect and often share in your realist perspective on Christian involvement in social and political affairs. My training in diplomacy and econ has made me ever aware of the inherent complexities and paradoxes of engaging social issues as a person of faith.

Yet I continue to be a Christian earnestly trying to seek the counsel of God in regards to professional, social and political activity. One of my chief concerns being to avoid having Jesus simply validate my preexisting worldview, even if that's built on first rate economic, political or social theory. So with that in mind, I want to know what critique do you think theologians can legitimately give economist? To expand on Tertuillian, 'What does Jerusalem have to do with Wall Street?'

I hope this is a question your series will address. I think, for example, of the importance of such questions in local community development. This is an area where to my mind economists need to be in conversation with the people affected by their policy preferences. After all, as you pointed out in this post, economists make assumptions that don't always bare fruit in the history, culture and psychology of those they serve. But that conversation can only take place when "the people" are not only equipped with the basic teachings of market economics, but also with the vocabulary necessary to question and critique, rather than swallow whole, the proposals for development that are presented to them (Hence avoiding the trap of good intentions). Is there anything that can theologically provide that vocabulary?

Again, thanks for your continued work on this subject, I hope these questions provoke rather than shut down more dialogue.

[Michael W. Kruse]

You are tracking with my intentions. My earnest desire is to generate more fruitful reflection on the relationship between the two topics. As we you will see in next posts it is a conviction of mine that theologians, especially in the Mainline tradition, have grossly misunderstood what the core questions are the economics addresses ... and as I said in this post I'm unwilling to put that squarely on the back of theologians.

Economics is not so much a set of answers as it is an important lens through which to process questions. "What has Jerusalem to do with Wall Street?" Bingo! That is my question too.

[phil_style]

here's another economics related video you might like:

http://www.youtube.com/watch?v=c9UIflxxWBg

[Michael W. Kruse]

Thanks Phil. Loved it. Although I couldn't figure our the humor behind 5 x 14 = 25. :-)