Category Archives: Economics

I. Theory and Theology of Economics, part 1

(1) What is economics?

“What is economics?”  How much bearing does the subject have? Is economics important? Why must we even bother reading lengthy books and boring lectures by dead men (And you would find them boring)? Can economics justify its existence in a college course or as a topic of interest? Should it be taught on the High-school level? Perhaps we should stay out of it and leave it up to the “scholars” that will handle the perplexing subject while we live our more simple lives never needing to worry our heads about the subject. To answer any of these questions right now would be premature, but let us answer the first: What is economics?

Economics, generally speaking, is the study of distribution, consumption and production. It deals with scarcity and choices that rational beings make. But this is not all. When speaking of economics we differentiate between positive and normative economics. When speaking of positive economics, we are speaking of the pure science of the matter that stresses scientific procedures. Normative economics is concerned with the application of economic analysis. Positive economics asks the question, “What is the most efficient means of achieving ends that have already been determined”[i] Thus, positive economics doesn’t deal with norms, thus the distinction between the two. Normative economics is concerned about the ends toward which the analysis will work towards. Although this distinction is made, the “pure science” or the means are never separated from the ends. Every economist must be both dealing with the science and the application. Therefore, every economist must know what it is he is going to base his science off of. Although this may seem technical, the concepts are things we deal with every day, indeed, in every choice you make.

(2) Theology as the base for all economic policy

As in all things, the base for economics is the theological level. If one wants to know the base for the economic policies of any given nation, one must look to the theology that is adopted. Is it Statist? Is there freedom? We may trace the theology of economics down to the application of economic policy in this fashion:

1.      All men have a theological position and this theological position directly bears upon what sort of philosophy will be adopted. Does his theology teach man as autonomous? Then his philosophy will reflect a sort of Rationalism or Empiricism where the mind of man is the guide for truth. God’s Word, then, will not be consulted since man is seen as self-sufficient

2.      As the philosophy is developed views will be formed on all disciplines of thought, namely, morality, ethics, politics, etc. and since the foundation for these studies are a sort of Rationalism or Empiricism (which we will designate with the more simple term “Humanism”), it will all always be man-centered. Given that man is still viewed as self-reliant, no revelatory theories will be permitted in the system thus all disciplines in life will be humanistic.

3.      The laws and political theory that are formed out of the humanistic starting point (theology) will determine what sort of economic theory he will maintain. So far we have Theology influencing philosophy, philosophy all disciplines of life, and these disciplines encompass economics. If he deems men incompetent (except himself, of course) he will most likely adopt a fascist view of economics or some other totalitarian scheme. For since men are so incompetent, who will lead them? “Ah!” He says to himself, “I will lead these fools into the way that they should go!” Unfortunately, the majority of individuals in your governments that lead the direction of our economy are of this mindset. We are all but little piglets in their grand experiments for the “good” of man-kind. But I digress.

4.      Thus, it follows,  the economic theory determines what sort of economic policy one will work for, which are, as described above, the ends of economics. We are now in the realm of norms once again.

This argument shows the logical progression how one’s theological starting point will affect their economic policy. There is a dynamic here, however, that was not produced in the argument. Depending on what sort of economic policy is adopted, a nation will either be a free nation or an enslaved nation.  You may stand in doubt of this and still may not be convinced of the importance of economics, but perhaps your curiosity is piqued enough to continue reading.

If indeed, one’s economic policy will determine the freedom or slavery of its people, the topic of economics is intimately involved in your life. Your finances, your house, you cars, your property, your investments, all of it, are all things that are directly related to one’s economic theory. It is my position that the the standing of any nation is, indeed, of any individual, according to the above argument, determined by the theology of that nation or person. You will either be a slave or free man according to your own economic views (and you do have them) and the direction our federal government is leading us in their economic policies that affect us.

(3) No neutrality

If the argument was not sufficient enough to state it, it should be noted that this makes neutrality impossible. One either has a humanistic theology or a God-centered one. Scientists cannot feign that while we speak of theology, they will speak of  “Scientific facts”. The scientist, the layman, the pastor, the businessmen, the husband, the wife, fathers and mothers and all must be theologians. In fact, it is technically inaccurate to speak of them as becoming theologians as if they do not currently now have their theological presuppositions. They do indeed.

The different theories in economics, both revelatory and non-revelatory cannot be discussed at length since a lot of philosophical ground would need to be covered that is not in the scope of a paper on economics. However, let us state at the outset that it is from the position of the revelation of the Christian Scriptures one can expect to see progress in the area of economics. The non-revelatory theories will not be formally discussed, but some problems in their system will be highlighted to address this point.

Perhaps one example will be permitted: How does any scientific theory get from analyzing the is and getting an ought? How can a positivistic scientist deduce from the observed phenomena what sort of policy should be adopted? What is tells him nothing; only that such and such a thing occurs. Is it desirable though? Is it good? Suppose he thinks it is good. On what basis does he draw the conclusion? Does his fellow scientist think it is good? What if they should disagree? The problem is that in such a situation where both are operating on humanistic principles, there is no higher authority for them to appeal to but themselves and thus all distinctions of good and evil policies are gone. And regardless, any scientist that gets into the ought of things needs to appeal to something besides his science.

In a real sense, then, what is being talked about is the difference between a good economic policy and a bad economic policy. Or more accurately we can make the distinction between a God honoring policy and a God dishonoring policy. At this point the Christian Scripture of the Old and New Testaments will be the source whereby we analyze whether an economic policy is good or bad, ethical or unethical. The humanist will doubtless call it unfair that we assume at the outset that the Bible is the source of authority in economic policy. However, the humanist is likewise adopting his humanistic philosophy to determine his economic policy, so cannot the Christian do the same? Why should I accept the starting point of the humanist? Also, since something besides the mind of fallible and wicked man is adopted as the starting point, we have an advantage in not falling into subjective analysis, as the humanist must necessarily do. It is only with the conscious decision to work from the Scripture that we can expect progression in this matter. Instead of the subjective analysis of humanism, we have the revelation of the mind of God to give use direction, and “where the Spirit of the Lord is, there is liberty.” And the flip side of that, where God’s words are despised and refused, there is economic slavery.

Part 2 will deal with the implications of a explicitly Christian economy. Stay tuned.

– Jesse Murch

[i] Economics: principles and policy, Tom Rose pg. 27