Kruse Kronicle

Self-Interest and Benevolence: Partners, not Antonyms (Part 12: Conclusion)

(Link to Part 11)

Concluding Thoughts

As we wrap up this series refletions, what can we say about the relationship between self-interest and benevolence?

The Goal of Abundance

The biblical image of a just society is one of widespread abundance where humanity participates with God in co-creative stewardship over creation.

Individual and Communal Stewardship

The Old Testament law envisioned families and small communities where people are stewards of resources entrusted to them by God to be employed for their own provision. These resources were also intended to generate wealth for economic exchange and for expressions of generosity.  Elements of self-interested (not selfish) provision are present alongside an ethic of generosity and other-centeredness.

The Two Big Economic Questions

Given a finite amount of labor, productive capacity, and resources, on any given day, the two big questions every society must answer are “How many of which things shall we produce today?” and “How should wealth be distributed?” In short, how do we cooperatively coordinate our lives to balance needs and wants against our economic constraints?

The Limits of Communal Life

Assuming a family or small community living in isolation could be a self-sustaining community, communal ownership of property is plausible only so long as the population remains no more than a few dozen people, there is a high degree of solidarity, and there is a high degree of daily interaction by all members creating high degrees of accountability. Such communities can economically envelop those who can’t be economically productive, and the caretakers who serve them, spreading resources as needed. As the community grows much beyond 100, communal community breaks down. For this reason, from an economic perspective, it is untenable to view society as family writ large.

Market Coordination

Markets create a real-time feedback loop between buyers and sellers consisting of millions of people. This allows people to specialize in what they do best in order to earn an income, or create products and services, that they can exchange for what other people do better. Markets are grounded in win-win transactions where each party gives up something they value less than what they receive. Markets are rooted in the phenomenon of people orienting their daily activity to produce things people want as a means to create wealth that will meet their own needs. Self-interest (i.e., reflecting on one’s own situation) and taking responsibility for ourselves is essential to the appropriate allocation of societal resources.

Market Limitations

Markets alone are insufficient for a just economic life. First, markets are based on the notion of all parties trading without coercion and with all relevant information being known. While many transactions sufficiently approximate this ideal, probably no transaction ever meets these criteria perfectly. Sometimes, considerable injustice results. A strong juridical system is needed to protect property rights and resolve injustices.

Second, markets sometimes have an adverse impact on people who were not part of transactions (i.e., a company polluting a town’s air as they produce products for market.) This is called an externality. Government regulation or taxation is sometimes needed to shift the cost back on to those who created the externality.

Third, even when markets work well, they robustly process the illegitimate needs that are fed into the system every bit as much as they do the legitimate ones. Garbage in, garbage out. This technically is not a dysfunction of the markets. On the contrary, it is a testament to their efficiency. But it is evidence of the importance of the moral fiber and wisdom of the people who are feeding their wants and needs into the market. Because we are fallen and finite, market outcomes will always be a mixed bag.

Fourth, markets only benefit those who have something to offer for economic exchange. Children, the elderly, and a variety of others who are without this capacity are human beings created in the image of God and deserve economic support. This support would also apply to those who devote their lives to the care of such people.

Benevolence: Redeeming Stewards

Co-creative stewardship with God is integral to our human existence. The mere provision of material needs without equipping people to engage in productive stewardship is dehumanizing. Children need to be nurtured into leading economically responsible lives and adults with reasonably sound bodies and minds need to be equipped as well. They need to be able to provide for their own needs and to have something to share with others.

Benevolence: Doing Justice

There are many among us who are not, and never will be,  able to participate in economic exchange. Additionally, there are those who are precluded from engaging in economic exchange in order to take care of these folks. These folks are God’s image bearers and need the economic support of others. Additionally, there are those who through bad decisions or uncontrollable circumstances have encountered hard times. Many of these folks have a claim on the help of others.

Benevolence: Loving Others

Sometimes we have resources that can be used simply to elevate the lives of others. It can be as simple as sending a card in acknowledgement of a significant event or as extravagant as giving millions for a performing arts theater. This too is an important expression of benevolence and we would hope it would be natural outgrowth of maturing as a disciple of Jesus.

Outsourcing Benevolence

Some have not internalized the idea of benevolence and generosity. Some take a “live and let die” approach to life, believing that each person is responsible for their own destiny. They want to be free to pursue their own lives without a thought about others. Others folks externalize benevolence. They speak highly of benevolence when what they actually want is for government to take care of others so they may be free from others’ needs. This is not to say there might not be roles for government to play in addressing needs but this is not benevolence.

Common Good Through Government

Some believe we have some role in benevolence but that government, through its democratic processes, is the preferred way of addressing market fairness and the concerns about benevolence. This is problematic. First, no individual or group of people is remotely capable of monitoring and reacting to the dynamic change of demand and supply throughout the economy. Similarly, no government can accurately assess the need for benevolent acts. It’s too complex. That’s why the real-time information system of the market is so superior. Second, government is made up of finite and fallen human beings every bit as much as the marketplace is. There is no basis for assuming superior moral behavior. Finally, political solutions are almost never the optimal solution because they are pieced together to satisfy constituencies, not achieve optimal outcomes. Thus, while there is a role for government, it’s a subsidiary player to markets and benevolence.

Nurturing Benevolence

The primary nurturer of benevolence is the family. From the family we learn to communally share space and resources. We learn other-centeredness. That other-centeredness spills over into other relationships we have with people. The challenge, just as with markets, is that the more distant we get from our immediate relationships, the harder it is to assess real need and allocate resources appropriately. We form extra-familial entities, like churches and civic organizations, to care for each other at broader levels. Thus, the nature of our benevolence can take many forms depending on the proximity of the need to our context. But what will be present in any just society is the virtue of benevolence deeply internalized within the populace.

Self-Interest and Benevolence are Partners

There have been some thinkers who have argued that free markets guided purely by people acting in their self-interest will lead to a just society. Benevolence is an afterthought, if it is a thought at all. This is idealistic in that we know that markets do not function with perfection. Fallen and finite people frequently don’t know what is in their best interest even though they are usually best positioned to interpret it. What gives the markets merit is not that they give us utopia but that they give us far better than we’ve ever had or better than anything else we have to date been able to devise.

Regrettably, what we now have among so many mainline, emerging, and left leaning Evangelical theologians and activists is an equally destructive reactive idealism that deprecates markets and economic labor (i.e., transforming matter, energy, and data from less useful states to more useful states ) in favor of seeking “the common good.” (The “common good” is most typically a proxy for achieving ends through state action.) It rejects notions of scarcity in order to live in “gift economies” of abundance and mutual generosity.

As you read these thinkers and activists it becomes clear that they are myopically focused on issues of distribution to the exclusion of production; they have no answer for how much of which things we will produce today. It is as if the goods and wealth of the world simply exist. Our only mission is to discern how to distribute them. They fail to appreciate that we are co-creators with God in whatever abundance we may enjoy.

Our central endeavor as Christians seeking the shalom of the world in economic terms must be to discern how to produce other-centered stewards joined in a cooperative venture of generating and spreading abundance. The biblical witness calls us to reflect on what is truly in our best interest … to be self-interested. We are to see our interests in the light of eternity and in the light being in communion with God and his people.  As we saw in the opening post, God repeatedly appeals to our self-interest in shaping us but we must be transformed by God to see what our true interests are. Yet that same self-interest will lead us to see that if we wish to be first in the Kingdom of God, then we will put everyone else ahead of ourselves.

As stewards of God’s resources, transformed self-interest will guide us in the work we do, and in our economic exchanges, as we participate in creating abundance. It will also guide is into benevolence and generosity. Self-interest and benevolence are not opposites. When transformed by God they are partners in creating a shalom filled world.

Self-Interest and Benevolence: Partners, not Antonyms (Part 11)

(Link to Part 10)

Benevolence in Family and Beyond

I concluded the last post by characterizing the family as a benevolence oriented commune. There is communal property. There are laborers who produce goods for trade. There is a place for those without the capacity to do economic labor and a place for caregivers. Biological bonds and the bonds established through formal inclusion into the family usually create a high degree of affinity. Living in close proximity, sharing common space, and eating at table to together, nurtures benevolence and empathy. There is much to commend about this communal existence. And that raises a question. If this is so good for a small community, then when not just make society, indeed humanity, a family writ large?

With precious few exceptions, communal groups dissolve within a few years or last a couple of generations at most. Why is this so? In large part it is due to the tragedy of the commons. Wikipedia says that it is:

“… a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared limited resource even where it is clear that it is not in anyone's long term interest for this to happen.”

The example Garrett Hardin (who coined the phrase) uses is this:

“Central to Hardin's article is a metaphor of herders sharing a common parcel of land (the commons), on which they are all entitled to let their cows graze. In Hardin's view, it is in each herder's interest to put as many cows as possible onto the land, even if the commons is damaged as a result. The herder receives all of the benefits from the additional cows, while the damage to the commons is shared by the entire group. If all herders make this individually rational decision, however, the commons is destroyed and all herders suffer.”

From a pure economic standpoint, each herder as an incentive to use the land to its fullest and to do so as quickly as possible before others do the same. No one has an incentive to nurture the commons unless all are going to nurture the commons. Individual work done to enrich the commons simply aids those who take no responsibility. The reality is that it doesn’t take a very high percentage of free-riders before the system breaks down.

There are some ways to avoid the tragedy of the commons. First, make sure that whatever is held in common is larger than the aggregate demand of the people who hold it common. When this can be accomplished, it is usually done by excluding new members from the commons. The commune essentially becomes the private owner of resources, making them no longer common to outsiders, but common to a fixed and exclusive number of people.

Second, if you arrange for a community to have constant and repetitive interaction where formal and informal surveillance of each other’s behavior is the norm, and you can ingrain high levels of internalized commitment to the community, then you may be able to avoid the tragedy of the commons. The problem is that there are human limits to this type of community. Social network research reveals that the upper end of the number of people an individual can include in a social network is 150 people. Practically, it is probably much smaller. Surveillance and solidarity breaks down.

This is why few communal groups have been able to expand and continue over more than a generation or two. A notable exception is the Hutterites. The Hutterites limit the size of their communities to 120. When they become larger, they must divide. Furthermore, children do not receive an education that would equip them to survive in the outside world. Group solidarity is enhanced through joint labor, joint meals, and regular worship together.

Most communes grow bigger than their common property can handle. Free-riders become a problem and the most productive workers limit their labor. Solidarity breaks down from the size of the network. Privatization emerges. The most productive are able to reap the full rewards of their labor. They use resources most effectively and produce an abundance that frees less productive workers to do work they are more productive at. Free-riders are compelled to produce something for exchange. What was once held in common is now better and more productively managed.

For these reasons, it is not possible to project the communal family to a large community, much less an entire society. Communal living requires very high levels of trust and familiarity. Markets, combined with a strong juridical framework, facilitate the ability of complete strangers to trade with each other in confidence.

Hernando DeSoto, in The Mystery of Capital, notes that the world’s poor probably control ten trillion dollars of hidden assets. The probably is they live outside the formal economy in their country. Land and property titles are not officially held but neighbors in a community can usually attest to who owns what. While that works on a very micro-level, it effectively removes these resources from the market as loan collateral or as an asset that can be sold to anyone other than immediate neighbors. Such assets are invisible to the national and global economy. Markets and juridical frameworks are what bring these assets into the larger market and give them value.

All this directly connects with benevolence. The size of the community constrains not only our ability to engage in responsible communal economic labor but also our ability to engage in responsible benevolent acts. A handful of people with a high level of solidarity can usually adjudicate the need for benevolence among themselves. The larger the group becomes the more difficult it becomes to make well-informed decisions and the greater the opportunity for free-riders to exploit the information deficit.

Communities are without unlimited resources to give toward benevolence so a tragedy of the commons quickly emerges, absent constraints being placed on how benevolence will be used. What that usually means is smaller subgroups are made responsible for benevolent care and the larger community uses a more abstract impersonal set of criteria for allocation of resources to these small benevolent groups.

This is where mediating institutions like the church and voluntary associations become so critical. They create broader “markets” for benevolence. When mediating institutions work well they provide a means where people with little specialized information can pool their resources and “buy” the expertise of a community of folks with more specialized information who can effectively address needs. When mediating institutions work poorly they can be every bit as capricious and ineffective (if not destructive) as if we had given without such institutions.

To summarize, person to person interaction inside the “commune” of the family is probably the most formative part of our lives in developing other-centeredness and benevolence. This style of benevolence can probably be extended to multiple families and individuals but only to a limit of, at the most, a few dozen people. When we get beyond that, mediating institutions are needed to fill the information gap we have about other’s needs. This doesn’t preclude the episodic case of personally helping a stranger in need but it does highlight that such benevolence is insufficient to be truly effective on a large scale.

The other-centeredness learned in the family and nurtured through the church should compel us to look to the need of strangers but it should also compel us to do so in ways that bring dignity to others and recognizes the centrality of families and social networks in nurturing benevolence (not dependence or free-riding) in the recipients of benevolent acts. As we are stewards of God’s resources, it should compel us toward generosity. While we will always be taken advantage of from time to time through our generosity that is not an excuse for carelessness in how we are benevolent to ward others.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 10)

(Link to Part 9)

The Practical Need for Benevolence

So far we’ve seen how important markets are to a thriving society. They provide the real-time information feedback loop that matches wants and needs with supply.  Self-interested people (who may or may not be selfish) make bids for goods and services. Businesses compete to be the best at meeting their demands. Markets integrate people into an economic community of win-win transactions. Economic production and exchange, even in the Old Testament biblical context, are integral elements to the idea of stewardship of God’s resources. Markets enhance these qualities.

We’ve also observed that markets simply don’t operate with pristine perfection. Market transactions sometimes have an impact (sometimes quite negative) on people who were not a party to the transaction. Complex economies frequently lead to situations where buyers or sellers are at a relative information disadvantage to the other party in the transaction. Since markets function best where people are reasonably well informed and they have high expectations that their property rights will be respected by government and others, these issues represent serious challenges. It is not possible to talk about a truly “free market” without a strong juridical framework that will referee and regulate these problems.

Furthermore, as Christians, we have to acknowledge that whenever fallen finite people act on what they perceive to be in their best interest, the frequently err. Erroneous decisions are also processed into the market feedback loop. Economic outcomes will reflect these values. A frequent inclination is to propose government solutions that will “even out” the bad market outcomes. But this inclination frequently fails to account for the fact that governments are made up of the same fallen finite people trying to manage incomprehensibly complex and dynamic markets with insufficient information using a process that is oriented toward compromise positions between power brokers. It often doesn’t result in the best “common good” either. Our real choice is between fallen finite people with decentralized power participating in a markets that efficiently produce good and bad, or fallen finite people with centralized coercive power who answer to political (not economic or ethical) pressures. In short, perfect outcomes are not possible.

What is challenging is that we believe human beings have inestimable value beyond their economic capacities. We’re unwilling to leave people completely at the mercy economic outcomes. We realize that some of us occasionally make imprudent decisions. Some us are harmed by circumstances that are beyond our control. Others of us may be (temporarily or permanently) without the physical or mental capacities needed to produce something for economic exchange. We are morally compelled to devote resources to nurture fundamental capacities in those needing nurture.  We are compelled to aid those who can’t participate in economic activity at all. The caregivers in both cases frequently need our economic support as well. So how will we provide this care?

And here is a related question: Where does someone learn to practice benevolence and internalize benevolence as a virtue? If we are nothing but a society of individuals engaging each other purely as parties to market transactions, then where will we learn to include others in our consideration of what is truly in our self-interest? Where will we learn the virtues of love and compassion that motivates us to devote a portion of our resources toward those who are in hardship or are without the capacities to participate in the economy? I want to suggest that the answer is in small benevolence oriented communes. You might call them families.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 9)

(Link to Part 8)

Internalized Versus Externalized Responsibility

Benevolence is critical to a flourishing society. Yet, as we saw in the previous post, there is a dark side to benevolence. It can dehumanize, leaving us with nothing to trade; leaving us to become little more than cattle to be fed and sheltered. Benevolence that is good begets more benevolence. It raises up people who take responsibility for themselves and others.

Having said that, in my experience we need be very clear about what “taking responsibility for others” might mean. Listening to political discussions today, you will frequently hear the case made that we need to get away from individualistic values of conservatives and their obsession with marriage and abortion, and take a more compassionate and benevolent approach by doing something about things like poverty. Changes in the tax code, universal healthcare, or greater cash assistance to the poor are just a few suggested measures. It is not my aim here to debate the merits of each of these measures but rather to raise a question about the mindset that sees these as evidence of benevolence and a deepening of collective responsibility.

Recently I was reading Social Welfare and Individual Responsibility: For and Against by David Schmidtz and Robert Goodin. Schmidtz writes:

“I’ve been invited to defend individual responsibility and institutions that encourage it, but I have no problem with collective responsibility per se. Individual versus collective responsibility is not the crucial distinction. More crucial is a distinction between what I call internalized and externalized responsibility. Economists say a decision involves a negative <em>externality</em> when someone other than the decision maker ends up bearing some of the decisions costs. A pulp mill dumping wastes into a river, leaving them to be dealt with by people downstream, is a classic example of a negative externality. The cost of cleaning up the mess is foisted upon people who played no part in causing it.

When I speak of responsibility being externalized, I have something similar in mind. Responsibility is externalized when people do not take responsibility: for messes they cause, for messes in which they find themselves. Responsibility is externalized when people regard the cleanup as someone else’s problem. We can speak of responsibility being externalized whether the messes result from mistake, misfortune, or (in the case of the pulp mill) from business as usual. In contrast, responsibility is internalized when agents take responsibility: for their welfare, for their futures, for the consequences of their actions.

The contrast between internalized and externalized responsibility does not really track the contrast between individual and collective responsibility. Collective responsibility can be a form of internalized responsibility. It can, in other words, be an example of people treating their welfare as their own responsibility. A group collectively internalizes responsibility when, but only when, members willingly take responsibility for themselves as a group. So when family members willingly accept responsibility for each other, we can see them as internalizing responsibility even though the responsibility takes on a collective form. To some extent, this is a semantic issue, but it points to a real difference: some people see their welfare as someone else’s problem; other people see their welfare as their own problem. …

… In such [prosperous] societies, although people willingly take responsibility for themselves as individuals, they also willingly and reciprocally take responsibility for themselves as families, businesses, clubs, church groups, and so on. What strikes me about citizens of prosperous societies, then, is not their individualism so much as their willingness to take responsibility. It is that willingness to which the term ‘internalization’ is meant to point.

Collective responsibility as such is not a problem, but the urge to externalize responsibility is. …” (7-9)

There is a profound tendency to see only two players in debates about how to address societal issues: The individual and the state. Yet a flourishing community, if it is anything, is a network of families, communities, and voluntary associations. I’d suggest that benevolence is most often best expressed through these localized communities and networks, and that federal approaches to solving problems are all too frequently efforts to externalize responsibility. Externalizing responsibility to the government is every bit as much about selfish-individualism as is the pursuit of unfettered self-interest.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 8)

[Link to Part 7]

The Dark Side of Benevolence

Critics of market economies rightly point out that markets alone will not achieve a perfectly just society. We have investigated why this is so. We do not leave people completely at the mercy of market forces. Doing so would be an economic version of Darwin’s “survival of the fittest” determinism. You can almost hear Ebenezer Scrooge, “Are there no prisons? Are there no workhouses? If the poor are to die, better that they get on with it and decrease the surplus population.” Human beings cease to be God’s image bearers and become mere animals. They are objects. Critics of free markets like to tar and feather advocates of free markets as Social Darwinists but as we have seen, markets have been essential to our modern phenomenon of widespread affluence and economic freedom is essential to legitimately practicing stewardship. Still, the danger that we might dehumanize others with indifference to their economic plight is very real. Benevolence must be nurtured.

Yet, what many who are critics of market economies fail to appreciate is that benevolence has a dark side. Robert Lupton, writes in his excellent book Compassion, Justice, and Christian Life: Rethinking Ministry to the Poor:

Remember your last garage sale? Or the last antique bargain you purchased at a flea market? Or the last car you traded? How is it that when a transaction is done well both purchaser and seller come away with a sense of gain? It’s the magic of exchange. And it transcends the boundaries of age and gender, race and class. Whether the find is a rare Babe Ruth baseball card, a silk blouse reduced for quick sale or the perfect piece of land at the right price, the ecstasy of exchange is for all to enjoy.

Exchange is remarkably invigorating process. The very thought of acquiring a new treasure motivates us to calculate value, rearrange priorities, juggle finances, analyze past performance and make predictions about the future. And ultimately, it pushes us to the risky edge of letting go of something valued in the hopes of gaining that which will be of greater worth to us.

However, when the labor you offer is unneeded in the marketplace of when your abilities area worth less to employers than the amount of your welfare check, you are exchange-less. Indeed, poverty may be defined as having little of value to exchange. And when society subsidizes you for being a noncontributor, it has added insult to your already injured self-esteem. (43-44)

Human community normally includes economic production and exchange for able bodied and able minded folks. When we are exchange-less, our dignity as God’s stewards. We were made for stewardship. We were made to be integrated into human community of stewardship.

The challenge for benevolence, private or government, is that it can become every bit as a objectifying and dehumanizing as Social Darwinism. Caring for the poor simply becomes an exercise in making sure the poor get to consume at some minimal standard. The co-creative stewardship quality, so central to our humanity, is ignored. Arthur Brooks points out in his book Who Really Cares that the demographic group that is most generous with its time and money (as a percentage of income) is the working poor. The least generous is people making the same amount as the working poor but living entirely on assistance. Social bonds become dramatically weakened. “Benevolence” of this type is really dehumanization.

Activism aimed at championing benevolence toward the poor can also become dehumanizing. Many middle class and wealthier folks are seeking to establish an identity that presents them as a caring and compassionate. The actual outcomes for the poor from the measures being championed are less consequential than the impact of A) being seen as compassionate, and B) not being seen as one of the evil greedy business people who caused poverty in the first place. It is really a form of consumerism where activists organizations market causes people can join to meet their felt need for a compassionate identity. “The poor” cease to be human beings to be restored as co-creative stewards and become objects for the identity market. Even our church mission trips too frequently fall into this. Over a summer, six different youth groups visit the same church in Mexico and repaint it six times. It serves no practical benefit to the poor but was that ever really the issue? (See Lupton’s piece on Religious Tourism.)

Market economies are tremendous advance in creating large societies with widespread affluence. They are remarkable integrators that help match people with wants and needs with those who want to supply them. They are far from perfect. They are just as effective at meeting the legitimate needs that are feed into them as they are meeting the illegitimate ones. They will not usher in the Kingdom of God and they have their dark side.

We need benevolence. It is among the highest virtues. It is the central counter-balance to injustices and misfortunes that happen in the world. But we also need to hear that benevolence has its dehumanizing dark side as well. Just as markets can be bent toward destructive ends, sometimes in spite of the intentions of the people involved, so can benevolence also result in destructive ends. We must think clearly about both markets and benevolence, not pitting one against the other as virtue versus vice.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 7)

[Link to Part 6]

It Takes More Than Markets to Address Poverty

A frequent critique of market economies is that some people end up poor. Depending on your definition of “poor,” this is a truism. If “poor” means the bottom 1%, 10%, or 20% of the wealth distribution, and you aren’t going to equally distribute wealth to all members of society, then by definition you will always have poverty. There is no way to eliminate it.

But, if by “poor” we mean insufficient resources to be reasonably well fed, clothed, and sheltered, and to have basic customary amenities, then we can talk about eliminating poverty. We can compare economic systems based on incidence of poverty.

When it comes to the two dominant economic systems of the 20th Century, Winston Churchill quipped:

“The inherent vice of Capitalism is the unequal sharing of blessings; the inherent virtue of Socialism is the equal sharing of miseries.”

What he says of socialism could be expanded to most other economies prior to the rise of market economies. Across cultures and time, the historical norm has been bare subsistence living for the masses, with a very small group controlling nearly all the wealth. With market economies we see a wide continuum in the size of wealth holdings with even the vast majority of people living at the low end of the continuum better off than the subsistence level existence of masses in our ancestors’ days. Some will no doubt bring up an isolated case like Scandinavian socialism. It is an interesting comparative debate but I want to ask a more fundamental question. Is elimination of all vestiges of poverty in society a realistic measure of an economic system’s validity? Let’ apply this criteria to the Bible.

There is no systematic economic model laid out in the Bible but the Old Testament Law books are filled with instruction about economic issues. Deuteronomy is one such book. It is a long discourse on the covenant God made with Israel. Toward the end (chapters 27-30), God spells out the curses and blessings that come from not following or following the covenant. One aspect of the blessing is promises like this one:

“The Lord will grant you abundant prosperity – in the fruit of your womb, the young of your livestock and the crops of your ground – in the land he swore to your forefathers to give you.” (28:11)

But as we read through books like Deuteronomy and Leviticus we see specific laws pertaining to treatment of the poor as the Israelites live out this covenant. There are laws requiring farmers to leave uharvested grain at the edge of the fields so the poor can glean some food. There are laws requiring the periodic collection of offerings for the poor. There is the provision for a kinsman redeemer where Israelites could redeem a relative who had been sold into slavery.

Of course the most striking provision is the Jubilee Code in Leviticus 25. If someone fell into need, they could “sell” their land and labor to cover their need. I put “sell” in quotation marks because in the strictest sense it wasn’t a sale.

God had apportioned the land of Israel to the tribes and clans as a permanent inheritance. Every fifty years, all agreements to indentured servitude were to end and all land was to revert back to the original owners. The purchase price of labor was limited to the amount of labor that could be done between the transaction and the next jubilee. The purchase price of land was limited to the number of crops that could be harvested between the transaction and the next jubilee. These were essentially lease agreements, not sales. The labor or property eventually reverted back to the owner. Similar limitations existed for debts.

Now keep in mind that these provisions existed as part of a world where the Israelites were living by God’s covenant and God was blessing them with “abundant prosperity.” Yet in this abundance, it is clearly assumed that some people will fall upon hard times. Whether though events out their control or through having made imprudent decisions, the economic system was assumed to result in poverty for some. The economic system did not result in equal outcomes and poverty occurred. If elimination of all vestiges of poverty in society is a realistic measure of an economic system, then the biblical system that God gave under his covenant fails. Other provisions outside the mode of economic exchange were needed.

All through the Old Testament law we see admonitions toward generosity toward the poor. Benevolence is key. The kinsman redeemer custom allowed for families to rescue less fortunate members. Leaving grain at the edge of the field was a mandated provision for the poor at large. There were mandatory offerings that were brought into a storehouse and then used to aid the poor. So there were some parallels to our present methods for assisting the poor today, including a mandatory collection of resources to assist the poor. But the Bible goes far beyond subsidizing the material needs of the poor. Just look at the jubilee.

The jubilee is frequently characterized as a redistribution of wealth. This is false. The jubilee prevented the permanent alienation of Israelites from the economic means of production (i. e., land and labor.) Real estate within cities was unaffected as was the wealth families had amassed through their own prudent behavior.  God’s vision was to have each Israelite family participating with him in co-creative dominion over creation. His vision was to have each Israelite participating in his or her own material provision and in the material provision for others. This was the ultimate vision.

Thus, the covenant instructions providing for those who did not come out well in the economic system were not aimed at achieving a sub-culture of subsidized consumers, as though they were so many cattle to be fed and cared for. It was rather to restore each person to their image-bearer calling. Yet failure to grasp the limitations of economic systems (and thus solve all distribution problems by managing market outcomes) and the tendency to reduce assistance to the poor to a mere exercise in increasing their consumptive powers, is prevalent inside and outside the church. More on that in the next post.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 6)

[Link to Part 5]

Co-creators and Partners in Our Own Provision

Over the last five posts I’ve made the case that economic freedom has generated unprecedented abundance. People acting on what they believe to be in their best interests bid for goods and service, and people acting on their perceived best interest freely chose to provide goods and services to others. Without self-interest (i.e., being interested in one’s self) there would be no way for the market to coordinate the many needs people have with supplies. The market integrates us into a community.

Regrettably, there are those who pit the market economy against something called a gift economy. In theological circles, the reasoning goes something like this. God created the world with abundance. It is his gift freely given to us. Therefore, giving in expectation of return, much less profit, is counter to a godly character. Gift economy is godly, market economy bad.

But as we saw in the second post, this “gift economy” or “God’s abundance” mindset utterly ignores issues of production.  How is a society to answer the questions of how much of which things to produce? In the third post I explained how markets have produced abundance through free market exchange. But is market exchange in keeping with godly character? I would answer strongly in the affirmative.

Lost in so many discussions about these matters is the commission given to humanity by God in the opening chapters of Genesis. Humans are charged with exercising dominion over the earth. They are to “work the garden.” Dominion is neither about rampant destruction nor pristine preservation. It means bringing the earth to its fullness, and that includes humanity. Theologians have understood the stewardship mandate to include the development of culture that facilitates human flourishing and community.

The scriptural narrative begins in a garden but ends, not in some ethereal immaterial spirit world, but in a new creation, the New Jerusalem, a garden city. Cities were the symbol of human achievement in ancient days, including as they did the highest expressions of government, commerce, art, education and community. The biblical narrative shows God adding that which humans have created to his created order, purging it of all impurity, and making it his new creation.

If we were made purely for relationship with God and with each other, then why would we need a material existence? Our materiality is not some peripheral quality. We were made material beings for a material world,  which we are to work and exercise dominion over. This co-creative stewardship of material matters is intrinsic to out being God’s image bearers. We will be raised with new material bodies (although apparently transformed in some way) to work a new material world.

Individually and collectively, we are called to stewardship. Private property, held in trust for God,  is a given among Old and New Testament Christians. One of the constant refrains of the prophets was denouncement of the failure to protect property rights (i. e., there was no justice for the poor in the "city gates," or courts, who were being deprived of their property and liberty; unjust scales were used to measure grain.) The Jubilee Code in Leviticus 25 ensured (if obeyed) that no Israelite would be permanently alienated from his land and labor. (For more, see my brief series on Leviticus 25.) Each person was to work their land in service to God and to each other. They were partners with God in their own material provision and in the provision made for their neighbors.

Jesus and Paul make several allusions to Christians being the oikonomos, or the household manager. The wealthy Greco-Roman householder had a slave or free servant that he trusted above all others who served as his household manager. In his absence, he would place his oikonomos over the whole household. He had the same authority as the master but he was always to do his master’s will. Keep in mind that these households were not just domiciles but major business enterprises. The idea of doing economic labor in provision for one’s self and others in service to God is present throughout the biblical narrative.

Most people understand that transforming matter, energy, and knowledge from less useful states to more useful states creates something of value. As individuals we can relate to this process. But many fail to see the enormous wealth that is created through trade and it is in trade that we see communities integrated into each other’s lives and enhancing each other’s existence. Let’s take a moment to illustrate this.

There is grade-school game used to teach economics called the Trading-Game. There are three phases to this game:

Phase 1:  Each member of a class, say thirty students, is given at random an item worth about $1. Each student is told to right down on a scale of 1 to 10 how much they value the item with ten being the highest value. The teacher polls the class and gets and aggregate score.

Phase 2:  The class is divided into six groups of five. Each student is allowed to trade with any other student in their group. Sally got a pack of baseball cards and Joe got wrist bracelets. They make a trade. Other students do likewise. The teacher has each rate the value of what they now have. She aggregates the score and the new score is always higher.

Phase 3:  Students are now allowed to trade with anyone in the class. More trades are made. The final aggregate score goes still higher.

Notice that nothing was produced here, but because people had different values and wants, trade enabled most folks to increase their wealth at no loss to anyone, thus increasing the wealth of the whole community. It was win-win (or at least break-even) for each trader and a great win for the whole community.

Personal responsibility (looking after one’s own interests), working to produce something of value so you will have something to exchange, and then exchanging the fruits of our labor creates, integrates each of us into a wealth building community. The dynamic information exchange between buyers and sellers, and the competition of people to better serve each other’s needs, drives the economy toward an ever more efficient use of resources. We individually and corporately are pressed to be good stewards of the resources in our care. Thus, a market economy where people see themselves as stewards of God’s resources is thoroughly compatible with the Genesis image of humanity exercising dominion and being co-creators with God in caring for human needs and the needs of all creation.

The operative words are, of course, “where people see themselves as stewards of God’s resources.” Without this, the powerful integrative forces of the market are bent toward creating an economic city of Babel, unifying and magnifying our distorted images of who we think we are and what we deserve.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 5)

[Link to Part 4]

The Indispensable Role of Government

Modern market economies create an incredible abundance, due in large part to the dynamic interchange of information. People have the freedom to bid for goods and services based on their wants and needs, and people have the freedom to organize resources to meet the needs of others. Vast numbers of free people integrated by markets is an extraordinary achievement. This generally what we mean by free markets

Yet the “free” in free markets does not mean anarchy or unbridled freedom. This is a misconception, one intentionally fostered by some detractors. Markets do not exist in vacuum, but rather in relationship to host of societal institutions and traditions.

At the most elemental level, a transaction is not free unless the both parties are non-coerced, both parties have sufficient knowledge of a transaction to be able to make an informed decision, and both parties know that there are authorities who will protect their right of ownership and impartially compel compliance with contracts. In short, there must be trust and in particular the ability to trust that even anonymous people will honor their commitments. There clearly is a role for government in this regard. But there are other roles as well.

Markets don’t always allocate costs effectively. Sometimes a person who isn’t party to a transaction ends up benefiting or being harmed by the transaction. If I hire a landscaper to do some work on my front lawn, it will likely improve the value of not only my property, but my neighbor’s property. Similarly if I hire a contractor to build a pig sty in my front yard, the stench and noise will not only affect me but my neighbor who had no part in transaction.

Pollution is one of the most frequently given examples of an externality. A factory pumps pollutants into the air at no charge but diminishes the air quality for everyone else around. Either through taxation or regulation, government plays a role in trying to reallocate the cost back to those who are unfairly benefiting. Government plays a critical role in this regard.

Capitalist economies, by definition, create large complex entities, an abundance of sophisticated financial instruments, and very complex market relationships between firms. There is no way most citizens can comprehend these features. Some regulation and oversight is needed, particularly to ensure transparency so that regulators and watchdog groups can scrutinize behavior.  This is another critical role that government plays.

Furthermore, government plays a critical role in international trade. It helps establish the ground rules for trading with citizens and business in other nations. When other nations engage in unfair trade practices (like placing exorbitant tariffs on American goods while deeply subsidizing the production of competitor goods for export to America) the government can use a number of actions to address this problem. Government can also use trade rules as a carrot and stick to work for more just working conditions and economic freedom in emerging nations.

In many ways, the government is a critically needed referee in the economic “game.” When players can have a reasonable level of trust that the rules will be consistently and fairly enforced it facilitates the flow of economic freedom. However, when the referee begins crossing over the line into head coach, (calling plays, making decisions about personnel, and taking positions on who should be given preferential treatment) chaos ensues. Markets become distorted and buyers and sellers can no longer correctly evaluate how to engage one another. Abundance dwindles.

Finally, government must intervene to prohibit transactions that are ultimately destructive to human life or societal health. While some libertarian friends disagree, I would continue to legislate against things like prostitution. While some people who have other legitimate economic choices may freely choose to engage in prostitution, many will succumb to the pressure to debase themselves, rather than do what is needed to avail themselves of legitimate economic options. Prostitution debases human beings (buyer and seller) into a commodity and that debasement tends to engender other destructive trends.

In broad terms, many people have little problem recognizing the need for this distinction. The challenge comes at the margins of these issues. For example, when is an externality truly an externality, or merely an inconsequential annoyance to a third party? What is “enough justice” when we are talking about trading justly with emerging nations that don’t entirely share our cultural institutions and values? There is room for reasonable people to disagree. Where I part ways is with those who believe in something approaching anarchy or those that think that economy should essentially be an extension of government agendas.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 4)

[Link to Part 3]

Imperfect Markets: Too little freedom or too much?

I ended my last post with this observation:

“Market economies are creating unprecedented abundance and that can be celebrated.  But tremendous evil and mischief is also done by people having the freedom to act on their perceived self-interest. The dilemma is that economies without this freedom do not create abundance and still tend to create just as much, if not more, evil and mischief. Trusting to self-interest alone is not enough.”

Market economies create incredible economic information exchange systems. Assuming everyone were perfectly virtuous, that they truly knew what was in their best interest, and that they acted upon that knowledge with every transaction, you might be able to say that we could achieve a near utopian society. In fact, some libertarian folks see the obstacle to a virtuous society as being virtually anything that impinges on personal choice. Absent government interference, they see markets acting with near perfect fairness and efficiency.

As Christians we know that all have sinned and fall short of the glory of God. No one is perfectly virtuous and the great majority of us are far from it. Furthermore, being finite beings with limited knowledge, we can’t always correctly determine what is in our best interest. Capitalist economies create large corporations and complex transactions where adequate knowledge is difficult to garner even when there is no attempt at deception, much less when there is an intention to mislead and conceal. Many libertarians esteem both human nature and human discernment too highly.

So, we know that market economies do an astounding job of integrating all our decisions (virtuous and bad, well informed and errant) into one organic feedback loop. Maybe we can just filter out the bad stuff. Enter the liberal thinkers.

 One possibility for filtering out the bad is to have someone oversee everything, making sure bad stuff doesn’t happen. They can look out for the common good. The obvious candidate for the job would be a representative government.

At first blush this looks quite encouraging but it does not bear up under scrutiny. First, government is drawn from the same less than virtuous pool of folks as the ones who are behaving less than virtuously in the marketplace. While many people enter politics with noble motives, the opportunity to wield power also draws in those he seek power for less than noble reasons.

Second, let’s assume we do have a government of only noble servants. I demonstrated in the previous post the incomprehensibly complex nature of the market. What makes these government officials specially qualified to comprehend how their decisions will reverberate through the market and to know that any given policy is going to be an improvement on the common good over what the market delivers?

We know that some well-intentioned government interventions have had perverse consequences that harm the common good. For example, a city has a homeless problem so it institutes rent controls in order to keep housing affordable. The city tells landlords how much rent they can charge and how much they can increase rent each year. Housing demand rises so fast that it drives the amount renters are willing to pay to a level beyond that which landlords can charge. Renters have an incentive not to surrender their leases. Instead, when they decide to live elsewhere, they keep the lease and sublet the apartment. They charge the new tenant the rent they owe the landlord plus a premium above the landlord’s rent that the landlord is forbidden to charge. People already with apartments are less inclined to move because usually the one time the landlord can bump up the rent is when a new renter moves in. It is cheaper for the renter to stay put so turnover comes to a halt.

As a consequence of these actions, developers stop building new dwellings because they know they won’t be able to collect the full value of the rental property. Existing landlords began to skimp on maintenance because they can’t collect what the market dictates should be paid. As the situation deteriorates, some landlords go bankrupt, others turn to nefarious strategies like arson in order to collect insurance, while others just walk away. The net result is greater homelessness from a dwindling housing supply. The shortage drives prices still higher, freezing up turnover even more and the cycle continues.

We don’t have to look farther than today’s headlines to see evidence. The present financial crisis was brought on in part by good intentions of both Democrats and Republicans to expand home ownership. One theory also has it that just as multiple uncoordinated intelligence gathering entities led to mistakes prior to 9/11, multiple uncoordinated financial regulatory entities led to failure to detect problems in financial markets. Now congressional Democrats are on the populist bandwagon of protectionism, which 90% of economists of all stripes deem to be a bad idea. Politicians are just like the rest of us, prone to do corrupt things and fallible finite human beings.

Third, politics nearly always generates less than optimal solutions. Political solutions usually factor in the impact on the intended targets of legislation, but political solutions are always a product of appeasing and balancing competing groups with an interest in the legislation. Thus, political solutions are nearly always skewed one way or the other from optimal solutions.

So to summarize, the ability of people to feed their wants and needs into the real-time complex information system called the markets has created an unprecedented (and that is an understatement) ability of the economy to function as a dynamic generator of abundance, meeting a wider portion of the population’s basic needs than ever before. But because people do not always correctly evaluate what is in their best interests with regard to wants and needs, either due to corrupt minds or the simple finitude of our faculties, the market economy is also a prodigious producer of bad things as well.

Getting more freedom into the system isn’t going to bring us into some quasi-utopian new age. Neither are government control and regulation.  The Right is persuaded that government is a bigger obstacle to a better world than is economic freedom. The Left is persuaded that economic freedom is a greater threat than government intervention. While greater freedom might lessen some dysfunctions of government and more government might lessen some dysfunctions of destructive decisions in the market, neither deal with the underlying character of the participants in the market and the government. From a Christian perspective, both agendas are quibbling at some important margins of the fundamental problem, but they are still only at the margins. That problem is human nature.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 3)

[Link to Part 2]

The Miracle of the Market

For the first time in human history, we’ve seen societies emerge with widespread material abundance. Innovations in economic production have far outpaced the Malthusian scarcity trap. There are many reasons for this. Advances in technology, radically improved infrastructure for communication and transportation, improvement in food production and storage, investments in human capital, and ever expanding trade have all played roles. But at the core of it all is a dynamic economic information system.

In the previous post I said that the biggest macro-economic questions a society faces are how much of which things should be produced and how to achieve a just distribution. The production question requires that we have some way of determining how much people need of a particular item, determine how much capacity we need to allocate to meet the need, and find the resources required to produce it. The problem is that in any given nano-second, some needs are met while others emerge. In the next nano-second, it shifts again. And this is just one product. Multiply this by millions, if not billions, of individual items. There is simply no way to monitor what level of need exists at any precise moment in time and assuming we could know it would be obsolete a nano-second later. We need a real-time dynamic feedback loop. Fortunately, we have one. It is called the market.

Let’s take a practical example. Who should determines how many number 2 wooden pencils I need right now? I should. I’m the one best positioned to weigh competing demands and opportunities in my life. I’m best positioned to know my self-interest. For whatever reason, I’ve decided I need a box of two dozen pencils.

Off I go to the business-supply store. I find a box of number 2 pencils. If they’re priced higher then I think they should be, I might look elsewhere or I might rethink my need. If they are lower than I expected, I might be enticed to buy more than I thought. They cost about what I expected them to, so I buy them.

The business-supply store’s computer tracks how many boxes of pencils have been sold. When it falls to a certain level, the store determines that it is in their self-interest to buy more pencils from pencil manufactures, likely tracking multiple suppliers to see who is offering the best deal at the moment. The store orders the pencils.

The pencil manufacturer takes the order from the business-supply stoare, along with orders from other buyers, and determines how many pencils are going to be needed to fill the orders at the agreed upon price. She then determines that it is in her self-interest to fill this order. She determines how much of the following are required: The wood and the lead, the paint that goes on the pencil, the metal tip that goes on the end of the pencil to hold an eraser, the eraser, the cardboard box to hold the pencils, the shrink wrap material to wrap the boxes, the number of lager boxes to hold the smaller boxes, the number of pallets to hold the larger boxes …. you get the picture.

Then the lumber mill, the lead mine, the paint manufacturer, the tin seller, the eraser producer, the box manufacturer, the shrink wrap supplier, the pallet company, etc., take the order they got from the pencil manufacturer and combine it with others they have received from other businesses and decide if it is in their self-interest to supply their goods at the price the pencil manufacturer is offering. They place their orders with their many suppliers and the whole process becomes incomprehensibly complex. The pencil is a very simple product and I’ve way oversimplified things here. (See I Pencil for a more intriguing essay.) Now multiply this scenario times millions and millions of products and there is no way to appreciate the magnitude of what is happening across the economy.

At any point in these transactions buyers and suppliers can bid prices in either direction depending on what they think is in their self-interest. Each bid causes a ripple to hit the market and requires players to adjust. Our economy has no pencil Czar to oversee that an adequate supply of pencils are made and distributed. Yet day after day a sufficient number of pencils are produced and sold at a reasonable price. Pencil production is achieved by a massively complex information system with a real-time feedback loop communicated through bids and sells. Those bids and sells are a product of each individual player weighing what is in their self-interest. And, assuming no deception or coercion, if both parties agree that a transaction is in their self-interests, then it is a win-win situation.

People being responsible for themselves and then acting on their self-interest in the marketplace is the most effective way to manage the production and distribution of goods in an unfathomably complex economy like ours. To the degree that economies move more to this economic communication system (supported by things like communication and transportation infrastructure, and appropriate legal structures), they create an economy that produces material abundance and meets basic needs well. In historical terms, it is something truly to be marveled at.

Therefore, if we just get out of the way and let people freely act on their self-interest we can achieve a Utopian world approaching the coming shalom of the Kingdom of God, right? Categorically and unequivocally wrong! Earlier I said the individual is the one who is in the best position to know what is in his or her self-interest. Clearly we know we need food, shelter, and clothing, but when we get much beyond that, how many of truly know what our self-interest ultimately is? It is one thing to acknowledge that we are each best positioned to know what is in our self-interest but it is profoundly another to say that we truly do know our ultimate self-interest, much less that we act on it.

Market economies are creating unprecedented abundance and that can be celebrated.  But tremendous evil and mischief is also done by people having the freedom to act on their perceived self-interest. The dilemma is that economies without this freedom do not create abundance and still tend to create just as much, if not more, evil and mischief. Trusting to self-interest alone is not enough.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 2)

[Link to Part 1]

Scarcity and Abundance

I ended the previous post noting that free and virtuous pursuit of self-interest is absolutely essential to just economic production and to human flourishing, but I also noted self-interest alone is insufficient. We will deal with the latter qualification in due time but first we need to look at economic production.

Most economics textbooks will tell you that economics studies how societies manage scare resources. Two key aspects of economics are production and distribution. Each society must determine how much of any good or service is to be produced and each society must decide on what basis goods and services will be distributed.

Yet when intellectuals, theologians, and activists turn their attention to economic issues, there is a pervasive tendency to focus on economic distribution to the near exclusion of economic production. Particular aim is taken at the notion of scarcity, claiming instead that we live in abundance. Read these selections from Douglass Meeks’ God the Economist: The Doctrine of God and Political Economy, a popular theological text on economics written twenty years ago and still used in some seminaries and colleges today:

Christianity will therefore be subversive in calling into question the deepest assumption of modern economics, namely scarcity. Nothing is deeper in the spirit of capitalism, and of socialism as well, than the belief that there is not enough to go around. (Meeks, 171)

What the market mechanisms actually require is scarcity in the sense of blocked access to what people need for livelihood and work. Scarcity in this sense is the conditions for exclusive private property. (Meeks, 172)

Scarcity may not be made the starting point of a system of economic justice. As a starting point, scarcity is an illusion. In almost all situations of human life scarcity has been caused by human injustice. (Meeks, 174)

Either by ignorance or by design, this line reasoning is oblivious to economic production. One might be forgiven for thinking, based on this reasoning above, that cars, cell phones, loaves of bread, clothes, and all other goods we buy simply exist somewhere. All we need is a better distribution mechanism to make sure everyone has some.

Assuming you live to be eighty years old, and assuming you had the aptitude for all the following, why would you not learn to be a concert pianist, a physicist, a lawyer, an expert auto mechanic, a professional athlete, a business mogul, a senator, and a movie star? Because even with an aptitude for each of these, you would not have the time to pursue all them in one lifetime.

Let’s bring the lens in even tighter. When you awoke this morning you likely charted out a set of activities you would do today. In choosing to arise at 6:00 a.m. you chose not to arise at 5:00 or 7:00. In eating your Cheerios, you chose not to fix scrambled eggs or make waffles. In choosing to go to work you chose not to play golf, go shopping, or rob a bank. We can’t everything all at once. We have a limited number of hours in each day and a limited number of days in our lives. Scarcity is inescapable. The fundamental reality of human existence is that time is a scarce resource. We must choose some things and not others.

Furthermore, as we take a global view we can observe that on any given day there is a relatively fixed number of people with a fixed set of skills and knowledge, a fixed amount of productive capacity (technology and infrastructure), and a fixed amount of raw materials that can be accessed in a 24 hour period. Each day our world collectively decides how it will allocate limited labor, limited productive capacity, and limited raw materials. In short, we manage scarcity.

When Meeks writes, “Nothing is deeper in the spirit of capitalism, and of socialism as well, than the belief that there is not enough to go around,” the “enough” seems to imply the basic goods to sustain life. This is just plain silly. Within capitalism or socialism there is the belief that there is not enough of everything everyone might conceivably want to go around. Both ideologies presume that basic needs can be met with their systems. Meeks’ pejorative misrepresentation of economics is really inexcusable yet I find it regularly reflected in the mindsets of people who identify with progressive Christianity (and even some who aren’t progressive.)

Now if by scarcity we simply mean everyone not having enough to sustain life at some basic level, then only in recent years have some societies found ways to eliminate scarcity. But societies around the world have also been mired in the Malthusian Trap. Thomas Malthus, writing 200 years ago, noticed that across history societal prosperity tended to lead toward population growth. Population would eventually outstrip the resources to sustain itself (i.e., scarcity), causing famine and disease (sometimes conflict and war.) Population would decline back to manageable levels, prosperity would again take root, and the whole process would endlessly repeat itself.

Only in the past two or three centuries have some societies broken through the Malthusian trap. How did they escape? They found a way to produce an abundance that outstripped Malthus’ scarcity trap, not a better way to allocate some mythical pre-existing abundance that some had kept away from others. Contrary to Meeks’ notion that abundance is the norm and scarcity an illusion, scarcity is the inescapable human condition and abundance is the product of human beings transforming matter, energy, and knowledge from less useful states into more useful ones. Without sufficient economic production, there is no abundance to distribute. Critical to achieving sufficient economic production has been the freedom of individuals to act on their own self-interest in the marketplace. We turn to the importance of this in the next post.

[Continued]

Self-Interest and Benevolence: Partners, not Antonyms (Part 1)

Self-Interest vs. Selfishness

Benevolence is a central theme of Christian ethics. Giving is considered one of the highest virtues. The antithesis of benevolence is selfishness. A central element of market economies is self-interest. Therefore, market economics is antithetical to Christian living, right?

This is the logic presented by many Christian social justice advocates looking for a new Kingdom economics. But the logic is wrong. It incorrectly equates “selfishness” with “self-interest.” It fails to appreciate that self-interest and benevolence are complementary expressions of human flourishing, every bit as much as inhaling and exhaling are complementary expressions of bodily health.

As parents, we teach our children to wash their hands before they eat, to bundle up before going into the cold, and to look both ways when crossing the street. We encourage them to do their homework, we teach them to manage money, and we train them with life skills so they can coexist with others. We encourage adults to buckle up, to get exercise, and get annual physicals. All of these things are about people being self-interested.

Without self-interest, an individual becomes a needless drain on the resources of others. Not only must others take care of themselves but they must also manage the life of the self-disinterested person. Multiply the number of self-disinterested people and before long you have the collapse of the entire community. Our bodies and minds are resources entrusted to us by God and daily care of these resources is essential to good stewardship.

The scripture regularly appeals to self-interest to effect transformation in people’s lives. In Matthew 7 Jesus said, “Do not Judge …” Why? “… so that you may not be judged.  For with the judgment you make you will be judged, and the measure you give will be the measure you get.” Isn’t this a direct appeal to our self-interest; the avoidance of judgment?

In Matthew 16:25-26, Jesus teaches:

For those who want to save their life will lose it, and those who lose their life for my sake will find it. For what will it profit them if they gain the whole world but forfeit their life? Or what will they give in return for their life?

Isn’t the point here that our soul is more valuable then ownership of the whole world? Therefore, it is in our “self-interest” to protect our soul and avoid being deluded by worldly enticements.

What did Jesus say was the second greatest commandment, “Love your neighbor and hate yourself?” No. “Love your neighbor as you love yourself.” We love both neighbor and our self. It is in our “self-interest” to be other-centered but we can’t know how to effectively be other-centered without first being self-interested.

What has this to do with economic concerns?  Free and virtuous pursuit of self-interest is absolutely essential to just economic production and to human flourishing. But self-interest alone is insufficient.

[Continued]