Jesus Creed

Jesus Creed

Economics at the Jesus Creed: Michael Kruse 2

posted by Scot McKnight

WallStreet.jpgLast week I wrote that the driving question behind economics is this: Given scarce (i.e., limited) resources, what should each of us do today and how will we coordinate billions of projects? Today we identify two modes of economic analysis: positive and normative. 


Positive Economics is concerned with understanding and describing what is. Theories are articulated, hypotheses formed, variables identified, and experiments run, to clarify how the world actually functions. 

Normative Economics incorporates value judgments about what ought to be. Those value judgments can come from natural law, from theology, or from most anywhere. Normative economics aims to identify the best policies to achieve a desired outcome. 
So ask an economist what the price of gas should be and she will likely ask you what outcome you hope to achieve. Identify an outcome and she can likely identify a price ? but then she will also tell you about the trade-offs for achieving your outcome, including those that may not be so desirable. 


It is this propensity to give all the ramifications — the trade-offs between options — that led Harry Truman to exclaim, concerning his council of economic advisers, “Give me a one-armed economist!” Every answer he got from an economist was followed by, “On the other hand…” 

This is precisely how the positive economist sees her role. She helps decision makers understand the consequences of their decisions.
People coming at economic questions from a theological perspective are usually doing normative economics. They want to discern what economic structures ought to exist and which policies ought to be implemented. Think tanks and policy organizations usually engage in normative economics as well. 
Most economists engage in both. It isn’t possible to responsibly do normative economics without reference to positive economics. Since even the most sincere devotee of positive economists is a human being with values, she will occasionally state her preferred outcomes and policies in appropriate contexts where it is clear she is speaking about her values. Are economists always successful in appropriately separating these to modes of analysis? Hardly. Nevertheless, the two modes of economic analysis are helpful to keep in mind when listening to or reading an economist. 
 Why is this important? I think some of the misunderstanding between the theologically-minded and economists comes from evaluating issues through different legitimate lenses. For instance, the theologian proposes a course of action. In response, the ?two-armed? economist goes into her mode of articulating trade-offs, bypassing discussion of the merits of the theologian?s constructs. The theologian experiences this as dismissive — an elevation of economics over theology. Meanwhile, the theologian persists in making truth claims that are unsupportable from economic analysis. The economist experiences this as idealistic or ideological close-mindedness. If a person has convinced himself of a belief that is economic equivalent to believing we can walk of cliffs without falling, why bother? The conversation ends. 
 We know that economics is not a clean science. Postmodern critique has buried the notion of a scientific expert dispensing unassailable truth to the masses. Economic models have frequently been criticized for “assuming away” elements of human behavior that are inconvenient for mathematical models. There is a joke about an economist who was asked about how to help a man who had fallen in a deep hole. The economist begins his response with, “First, we assume a ladder. Next…” Simplistic assumptions and overly segregating economic life from other aspects of a culture are but two of the criticisms economists have been charged with. 
But before we too quickly write off the economists, there is plenty of ?ladder in the hole? thinking that goes on with theological models for economic behavior. With some constructs you can implicitly hear something like, “First, we assume the laws of supply and demand don’t exist. Next …” No effort is made to seriously engage rudimentary economic principles. At times there is even a prideful negation of it, much like some creationists speak of biology. The elegance of theological constructs trumps the guidance God gives us through the application of reason and experience. 
 Economists are not infallible but neither is any other form of human learning. It is true that it is easy to be misled with statistics (or empirical research), but it is even easier to be misled without them. The decision to not to factor in careful real world analysis is a decision to give unchecked reign to our proclivities and ideologies. 
Economic questions are at the core of Scripture and of our daily existence. They are clearly at the heart of our reflection on how best to minister to and with the least of these. For that reason alone we dare not let our deliberations and actions be dictated by a culture war mentality. We need to vigorously engage both economics and theology with respect as we work out what it means to be the Kingdom of God. In our theological deliberations on economic questions, we must be willing to accept that we will not all agree and that we will have opponents. But insofar as it depends on us we must determine that we will have no enemies
 Here are my questions. After my first post, four people told me they found the distinction made in the comments between positive and normative economics very helpful. Does this distinction clarify anything for you? How so? Most importantly, how can we move the dialog about economic issues beyond the bumper-sticker culture war level of dialog? 

To conclude I want to commend two books to you. Both are written by Christians who are economists (as opposed to theologians writing about economics.) Both attempt to expose the reader to a broad sweep of basic economic principles without all those a scary graphs and indecipherable mathematical formulas.
First is Bulls, Bears & Golden Calves: Applying Christian Ethics in Economics
, by John E. Stapleford. A new expanded second edition was released this year. It was originally designed to be used as a supplement to standard college economic textbooks but read well on its own.
Second, Economics in Christian Perspective: Theory, Policy and Life Choices
by Victor V. Claar and Robin J. Klay, published in 2007. This book is also being used as a supplement in some classes.


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Nathan

posted September 16, 2009 at 8:00 am


Thanks for the post, succinct and helpful (perhaps you should write a textbook?). One question: what theologians are writing responsibly about economics, and what theologians would you regard as misunderstanding the distinction you have just made?



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Virgil Vaduva

posted September 16, 2009 at 8:44 am


“…what theologians would you regard as misunderstanding the distinction you have just made?”
I know you asked Michael this, but my response would be that most “emergent” theologians out there have absolutely no clue about economics, or economic impact of the policies they are promoting. Also, they don’t seem to care, nor do they seem to be willing to listen or learn from economists. Glad to see that Scot is :)
As far as others go, I would actually recommend Gary North. Even though he sounds like he is out there on some issues, his work on economics is good, but you’d have to get over his rough edges and language.
One question I would like to toss out is: why focus on “christian economics” though? Is that necessary? An economy will turn its wheels regardless of religion, nationality or location. Granted that relationships between people do dictate how fast or how slow these wheels turn and wealth gets created or exchanged, ultimately it is religion agnostic, therefore is is also compassion and ethics agnostic.
Granted I haven’t read Stapleford’s book, it seems to me that compassion and ethics are individual values, present in atheists, agnostics, Christians and Muslims. Forcing “Christian ethics” on an economic system may be misguided.



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John W Frye

posted September 16, 2009 at 8:53 am


Michael,
I am certainly learning from you and I, for one, did not know the distinction in the modes. Thanks for putting the cookies on the bottom shelf for some of us. My question is this: Do you think in the popular evangelical mind, economics has been dismissed by misunderstanding Jesus on the subject? I mean that we hear “Jesus said a lot about money and everything he said was negative.” With that controlling principle, we’re left to values of the market, to the ecomomic elite who push values contrary to the kingdom of God, etc. What do you think?
How do we balance that economics is a core truth of the Bible with Jesus’ seemingly dismissive words about money?



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John W Frye

posted September 16, 2009 at 8:57 am


Virgil,
Gary North?! Do you know the trouble he brought to the evangelical world over the apocalypse of Y2K?



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Virgil Vaduva

posted September 16, 2009 at 9:23 am


John,
Yes, yes I know. :) Hey I said he is “out there” on some issues, but if you can look past his whacky stuff, he has good things to say.
And for the record, I didn’t buy into his Y2K insanity.



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Scot McKnight

posted September 16, 2009 at 9:25 am


There are better examples, like John Stapleford, than Gary North.



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John W Frye

posted September 16, 2009 at 9:28 am


Virgil,
Whew, you had me there for a second. OK, apart from North’s ‘wacky stuff,’ isn’t he a theonomist, i.e., he wants the US (and the world)governed by the economic laws of the O.T.? I remember some articles (CT?) to that affect.



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John W Frye

posted September 16, 2009 at 9:30 am


Michael et al,
I don’t want this excellent post by M Kruse to be about Gary North. Sorry.



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Michael W. Kruse

posted September 16, 2009 at 9:39 am


Nathan #1
I’m hesitant to begin singling out particular theologians. The writing by most is a mixed bag I’d would feel compelled to offer so many qualifications that I’d be rambling forever.
What is more telling is how few books have actually been written by theologians about economics. And as I read what has been written I ask myself, would an economist reading what is being said about core economic ideas hear his or her discipline being accurately characterized before being subjected to critique, the answer is very often a resounding no.
I will say this, if I were given the opportunity to do a class on Christianity economics I’d probably do a reading list of six books. The two mentioned in the post. Then I would assign Ron Sider’s “Rich Christians in an Age of Hunger” in tandem with John Schneider’s “The Good of Affluence: Seeking God in a Culture of Wealth.” I’d finish out the class with Paul Heyne’s (a Christian and leading econ textbook author, now deceased) collection of essays “Are Economist Basically Immoral. Then I’d close with Charles North and Bob Smeietana’s “Good Intentions: Nine Hot-Button Issues Viewed Through the Eyes of Faith.”
On the issue of work, I think Miroslav Volf’s “Work in the Spirit” is exceptional (though I take issue on his economic ideas in places) and Darrel Cosden’s “A Theology of Work” is a must read.



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Virgil Vaduva

posted September 16, 2009 at 9:54 am


Yes, he is a theonomist, which brings to mind another question: if we are promoting “Christian economics,” how far do we go and where do we stop? Who decides what is “biblical?” Remember that Jesus operated within the Law, and he came to fulfill the Law. Everything he did and said was within the covenantal context of the prophets and the nation of Israel
Some of these biblical regulations can cover a large range of issues, like interest rates, 7 year max loans, amassing of wealth, etc – all these potential regulations could have a serious impact on economic activity as we know it. So as a free society, how far do we go? Who is the enforcer? How do we enforce these things? What are the consequences and punishment to disobeying, etc?
I am just tossing ideas around and wonder what you guys think, that’s all.



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Randy

posted September 16, 2009 at 10:10 am


Great post, and I’ll have to pick up one of those books soon. It seems to me that the Christian perspective on economics would have less to do with the normative implementation of a policy, and more to do with the motives behind that policy.
For instance, a Christian can have a more conservative view of economic policy, even trickle down economics, if his motive truly is to help the weak and poor. And a Christian can have a more liberal view of economics, even socialist, if his motive is truly to help the weak and poor. The economic strategy, to me, isn’t an issue of right or wrong, but the motives behind the issue.
What do you think? Is there anything inherently Christian about a particular view of normative economics?



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luke

posted September 16, 2009 at 10:35 am


Another great post Michael. The distinction helped me a lot. I recall this quote from C.S. Lewis:
“The job is really on us, on the laymen. The application of Christian principles to, say, trade unionism or education, must come from Christian trade unionists and Christian schoolmasters …”
In that respect, I’ve added these books to an Amazon list that I’ll try to get thru sometime soon. :)
http://www.amazon.com/gp/richpub/listmania/fullview/R5TL70AH0CAEA/ref=cm_pdp_lm_title_1



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Michael W. Kruse

posted September 16, 2009 at 10:39 am


John #3
John #3
I?m not certain that it is because Jesus was misunderstood but rather that we have not appreciated what has changed, particularly in the last couple of centuries.
The pyramidal power structures of Jesus day, based in kinship and politics, where the ?economy? did not grow and the central economic activity was the powerful extracting whatever agricultural surplus they could get from the masses. People lived in small communities with little exchange outside their community. It was a zero-sum game. Someone?s wealth came largely at the expense of others. Issues of mass productivity were for all practical purposes an immutable reality.
Recently we have moved from a pyramid increasingly toward a web. We have multiple semi-distinct institutions like family, government, economy, and religion, all with checks and balances. We can radically increase our productivity. Wealth is not a fixed amount but grows. (We will get to this later but wealth can grow without massive consumption of non-renewable resources.) When virtually every nation has positive economic growth year after year it is clearly not a zero-sum game. For the first time we have societies that have astounding mass affluence compared to anything prior to one hundred years ago.
I hope to get to this in later posts. Because pastors and theologians have not studied basic economics to appreciate what has changed I think there is a severe disconnect in economic ethics. As Scot has said on other issues, ?that was then, this is now.? How do we make sense of today?s realities without universalizing everything Jesus said in his particular context to all cultures and times? It is interesting to me that so many who see this need for contextual sensitivity with issues like science or women?s roles are virtual fundamentalists when it comes to economic reflection. :-)
Laura Nash, in ?Church on Sunday, Work on Monday,? reports from survey?s she has done. She notes that most pastors view business/economics in restrictive terms. It is primarily a destructive beast to be tamed. The preoccupation is with restraint of greed, consumerism and such. Most business people view business/economics in additive terms. Goods and services are created. Wealth is created. People are employed, earning incomes and finding outlet for their creative/productive abilities. Two very different lenses are at work.
I hope we can get into this more in later posts. (The prosperity gospel is a whole other animal which I don’t know that we can get to.)



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Richard

posted September 16, 2009 at 10:50 am


Randy #11. Isn’t it a false dichotomy to separate motives from implementation? It seems that separating would allow us to look at a hypothetical system that creates a top heavy wealthy class at the expense of others and say, “Oh well, we wanted to help the poor, it just didn’t work…”- much like what happened in the Soviet Union where the powerful benefited greatly at the expense of everyone else… and other places outside of the USSR…cough…
Maybe this is where the theologian and economist work together with the theologian painting the picture of what it should look like and economist constructing the systems that help us get there… I know as a pastor that’s why I want my business leaders in leadership with me; they fill my gaps.



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Diane

posted September 16, 2009 at 11:07 am


Michael,
I want to push on this, because, regardless of the society he lived in, Jesus evidently did not see economics as a zero-sum game. The miracle of the loaves and the fishes, the great fish catch, the Sermon on the Mount, all point to Jesus’ concept of an economy more like the economy we have experienced in the past 100 years. There’s a danger in equating Jesus’ thought processes with dominant thinking of the first century world, because he was so clearly challenging that worldview. Also, I think we need to be careful before we set up a potentially simplistic and dualistic “then and now” account of economics. Don’t mean to sound harsh, but I don’t know how else to say it.



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Michael W. Kruse

posted September 16, 2009 at 11:09 am


Virgil #10
I think those are some of the driving questions for theological reflection. How do we determine what is normative and how do we interact with society in light of it?
Randy #11
I like William Webb’s idea of a “ladder of abstraction” in biblical ethics. At the top of the ladder we have the transcendent ethics like “loving God and loving neighbor.” Farther down we have be generous to the poor. Near the bottom we have “leave the edge of your fields for gleaning.” Clearly this specific instruction no longer applies so we “climb” the ladder back to ethical principles that do have application. Then we discern how to move back down the ladder into our context.
Furthermore, I think we can look at Christian anthropology (what the bible says is inherit in humanity) and eschatology. For instance, we were called to exercise dominion in the creation narrative. The jubilee ensures that each Israelite has stewardship over land and his own labor. Unlike Ancient Near East cultures where the King might tend to treat the people as his tenants, God is the “landholder” and the people are his tenants. The only to relationships one can have to wealth are stewardship or abstinence. What might this say about economic systems we reflect on?
In eschatology, the vision of the Kingdom of God can largely be summed up by the term shalom, which includes widespread economic abundance. It is partly the redemption of our dominion role in creation. We work and pray to see the Kingdom evidenced in our day. What does that mean for reflection on economic systems.
There is no economic system given in the Bible so there is no Christian economic system. But I do think we have sufficient anthropological, eschatological, and ethical guidance to have standards we can reflect on. With economic analysis and experience we have guidance about how things work despite how we might want them to work. So I think it is about more than just having good motives. Ill-informed well-intentioned motives can be very destructive.



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John W Frye

posted September 16, 2009 at 11:11 am


Michael #13,
Thank you for this response. As I read your teaching and the comments from others, I see where we as pastors/leaders may be part of the economic dilemmas that people face even as we (allegedly) teach against the dangers of money. Your observations about pastors/theologians having a restrictive (negative) take on economics while Christian businessmen/ marketplace-serving believers have an “additive” view helps me a lot. I look forward to more comments and upcoming posts.



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Michael W. Kruse

posted September 16, 2009 at 11:26 am


#15 Dianne
It may be more than we can fully process here, but I like the question you raise.
So Jesus tells us to put our cares on him, be generous, and abundance will emerge. It is interesting to speculate on how. Peasants don’t become any more productive. No new technology is increased. Where does the abundance come from.
Some theologians have speculated that what happened with the loaves and fishes was that many had brought provisions with them for the day but were reluctant to bring it out for fear others would place demands on them for food. As Jesus placed the food and they begin to dispense the food one by one people pulled out their food and shared with each other. That was the miracle
Whether that is true or not I do think that there is something enlivening about having something to share with others. The act of sharing makes us more alive and we become more productive, which leads us to more to sharing.
It is interesting to note that in developing nations today the poor rarely name material want as their top deprivation. Hopelessness and fear are their biggest concerns.



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Eric

posted September 16, 2009 at 11:28 am


“In eschatology, the vision of the Kingdom of God can largely be summed up by the term shalom, which includes widespread economic abundance.”
I don’t mean to keep harping on this point but on the one hand we are being told (in your previous post, by you and others) that scarcity is part of what it means to be created, finite humans. We have scarce resources not just because we live in a fallen world, but even if we took sin out of the picture there would still be scarcity since it is our finiteness that causes scarcity. But now you are saying that the vision of the Kingdom of God includes widespread abundance. This seems, to me, to be a contradiction. Can you explain how you reconcile these?



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Michael W. Kruse

posted September 16, 2009 at 11:43 am


#17 John
Thanks. I don’t want to give the impression that we shouldn’t be talking about the restrictive side of the discussion. There clearly is evil everywhere in the economic sphere of life. I think we just need to a better job and integrating economic realities with our discipleship.



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dopderbeck

posted September 16, 2009 at 11:56 am


Michael said: What is more telling is how few books have actually been written by theologians about economics.
I respond: First of all, great post! But — I wonder if your view of the “literature” is a bit crabbed here. There’s a ton of excellent theological literature on what can broadly be termed “economics.” I’d again recommend various recent Papal Encyclicals, including particularly Pope Benedict’s “Caritas in Veritate.” Caritas in Veritate is a model of normative economics from a liberal democratic perspective informed by natural law and virtue ethics. If you’re interested in this approach with more of a libertarian slant, check out the Acton Institute, which publishes an excellent journal called the “Journal of Markets and Morality” (Google them and you’ll find it), as well as a series of monographs on theology-and-economics.
For more penetrating critques of liberal democratic / capitalist economics, I’d suggest the “Radical Orthodoxy” literature, including John Milbank’s vast output, as well as Stephen D. Long’s “Divine Economy: Theology and the Market” (Routledge 2000). Then there is of course the wide range of feminist theology and liberation theology critiques of markets. I’d don’t think it’s quite fair to suggest that the feminist and liberationist critiques are uninformed about economic theory. Another suggestion is the work of Wendell Berry, whom I’ve not personally read, but who a good friend of mine is very enthusiastic about.



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JMorrow

posted September 16, 2009 at 12:40 pm


Michael,
As someone who has followed along on your blog conversations, this is one of the most concise, comprehensive and generous treatments of the issue I’ve seen from you. This in particular appeals to me:
“In our theological deliberations on economic questions, we must be willing to accept that we will not all agree and that we will have opponents. But insofar as it depends on us we must determine that we will have no enemies.”
Which brings me to my question. Who is we? Or put otherwise, who is it that a Christian understanding of economics seeks to address? This is important because our audience will determine our strategy and even our limits. So individual Christians and congregations within their spheres of influence involve themselves in creative and critical economic practices will be different than how we seek to influence national and international actors who do not share our values.
Another way to look at your positive vs. normative economics terminology is to consider the difference between universal and contextual concepts or values in economics. Putting economics in cultural context acknowledges value in the diversity of cultures and communities that exist around the world. That’s not to dismiss the reality and need for universal economic concepts.
One genuine fear is erosion of local economies and ways of life because of normative economics wrapped in positive economic clothing. Where does the preservation of culture and locality sit in the Christian hierarchy of values when it comes to economics?



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Virgil Vaduva

posted September 16, 2009 at 1:11 pm


Eric, re: your question about scarcity and the Kingdom
The book of Revelation is proclaiming a dramatic change in how God relates to his Creation in that “The Kingdom of this World has become the Kingdom of our Lord and of his Christ and he will reign forever and ever.” That’s a major shift in thinking which the Scripture is offering us: a Rome-centered world being made over into a Christ-centered world. While I don’t believe that this is directly a declaration of changing economic values and priorities (since I don’t believe that the Kingdom is some future physical place), I do believe that it is a re-shaping of people’s hearts and minds in relation to their King and in relation to each othe; after all it is the domain of the King (King-dom) which is covered by his authority and power, namely our hearts – i.e. “My kingdom is within you, My Kingdom is among you.”
With that said, it seems to me that the spiritual transformations of people’s hearts, minds, relationships, attitudes, etc do have direct consequences in the physical world and these transformations are being manifested in changes in our decisions regarding economic activity. We don’t buy fair-trade products because it’s more expensive (which directly contradicts price-based economic decisions), but we buy fair-trade because we want to make a conscious decision to help a producer that may need help and may be put at a disadvantage by crony capitalism for example. Maybe that’s a lame example, but it works for me.



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Dean

posted September 16, 2009 at 1:44 pm


Michael,
I’ve read the previous post #1 and this one and all of the comments of both to this point. I appreciate what you are sharing.
My full-time job is a recruiter for adults to university business programs but I am also a bi-vocational pastor of a small, economically struggling, mostly conservative, mid-West congregation. My interaction with major business leaders in a modest size city, with prospective and current business students, and with lower middle-class congregants has really shaped my attention and interest in economics. You might say I’m both a student and player of the game.
I confess that my economic education is relatively new but I consider myself open to learning and persuasion. I grew up in a staunch conservative Republican framework but over the past decade I have progressively questioned that and transitioned to a generally center-left political persuasion based on long-term observation of the tone and inconsistency of government involvement in economic matters. I do not believe that government is a “necessary evil” and I do believe it can function either constructively or destructively. You might say that my bias has shifted based on both study and experience.
Understanding that economics is a distinct discipline has been very helpful for me but I’m not yet persuaded about a position of scarcity. I am convinced that the resources NEEDED are sufficient but that the distribution of those resources is thwarted by varying interests in conflict with each other. This is where I would suggest that no economic theory or practice is value-neutral and believe that theology has something to say about that to scholars and practitioners of the discipline of economics.
I hope as you continue this series and build my education about economics that I will be better-informed about the factors in play so that I may have a both a fair-minded and pure-hearted perspective. This whole subject really has my interest and I have been reading and listening as broadly and intensely about it as I can over the past several years. Thank you for the way you are making economic concepts accessible to those who have not been schooled in the field.



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Michael W. Kruse

posted September 16, 2009 at 1:47 pm


Eric #19
Scarce and abundant are adjectives that need subjects. Scarce what? Abundant what? When economists talk about scarce, they mean scarcity of something relative to demand. When demand is greater than the supply there is scarcity. When there is excess over demand there is abundance.
If the subject we are talking about is basic physical necessities for existence, then we can say abundance is achievable, certainly in the consummated new creation if not in this life. This usually is what is meant by abundance (land flowing with milk and honey) in the Bible. This is what theologians are generally referring to as well. But we aren?t mere animals needing to be fed and sheltered. We are volitional creative beings.
Let us assume a world where all basic physical needs are met for everyone. I get a surplus of wealth what shall I do with it. There are many godly and creative things I would like to do in the world but I can?t do them all with the money I have. I will have to choose. That is, my resources aren?t as great as my demand. I have scarcity. I also am a finite being who can only do so much at any given moment. Therefore, while there are many godly creative things I could do I must choose one. There is a scarcity of time and ability relative to the good I would like to do.
So we can assert that God is not limited ? that there actually is an abundance of time and resources because God is infinite. However, what we see in scripture is that God calls us to participate in our provision and the management of the world. We are his creative regents in the earth. As long as that is true there will be scarcity (not necessarily in basic physical need) but in being able to satisfy all that we desire as God?s co-creative stewards.
Does that help?



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Darren King

posted September 16, 2009 at 1:52 pm


On the issue of wishing for “one-armed economists” I’ll say that I totally get why there is often both a plus, and a downside to every economic indicator. Take the value of the dollar for instance, I’m always amused when the media spins the negative consequence of a move in the dollar, one way or the other, when one could easily make the argument in the other direction. Imports and exports, for instance, reactive oppositely to such moves. It always ends up feeling journalistically dishonest to me. There really are consequences on both sides of most economic equations – because its all connected. And I agree that only by agreeing on overall desired outcomes/goals can we choose a course and hope for any kind of truly helpful assessment of how we’re doing.



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Michael W. Kruse

posted September 16, 2009 at 2:01 pm


Dopderbeck #21
I’ve been to Acton University twice and appreciate what is happening there. As you say they have a libertarian slant but the participants are diverse and that makes the conversation great. But my point would be how utterly unique Acton is. Certainly there is, and has been, solid efforts to deal with economic within Roman Catholicism.
But here is my qualification. When we are talking a about a cross-disciplinary study it seems to me that the place to begin is with scholars from one field working hard to be able to state the core concepts in the other field in such away that a great many of the scholars in that field would say, “Yes. That is what we are saying.” Then we move to critique. It is by that measure that I’m saying that theologians aren’t writing about economics. Most writings by theologians suggests to me that they have not wrestled with subject matter to this level before offering critique. Caricatures and distortions prevail.



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Homeless Drew

posted September 16, 2009 at 2:19 pm


“Given scarce (i.e., limited) resources, what should each of us do today and how will we coordinate billions of projects?”
I think the problem of economics today is mostly driven by the idea that there are scarce resources. Our ideas of society are so driven by the era of post-enlightenment that we think capitalism is by far the most effective economic system (some think communism but they’re really not all that different). This idea of capitalism has driven us into industrialization which is creating an unsustainable and impersonal way of living for the western and developing world. If any one were to suggest a sustenance economy it would most likely be shoved aside being called primitive and ancient, but I would have to disagree.
What would the world be like if the church supported a gift economy? No more money or relying on the government to take care of what is the Church’s job. A true community where the needs of everybody are personally met by followers of Christ. People of a church take on certain jobs to support others of the community so it can pour out the the world. I think it would be a much more effective way of trying to follow Christ than the mess we have as a Church today.



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dopderbeck

posted September 16, 2009 at 2:27 pm


Michael (#27) — I’m still not sure that characterization is fair. I tend to think the issue is a difference in first principles rather than caricature and distortion. Libertarian-leaning Christians (such as the Acton folks) think socialist-leaning Christians (such as the libertarian / feminist / Radical Orthodoxy / Anabaptist theologians) misrepresent free-market capitalism because there is disagreement about whether self-interest is a valid basis for a political / economic order. I’m not a socialist — I believe in the value of free markets — but OTOH I think much of the theological critique of libertarianism is very well taken.
I’ll agree with you, however, that much of what exists at the popular level — including, I’m afraid to say, some of Brian McLaren’s stuff on poverty and economics, as well as most of the economic policy statements I’ve seen coming out of the mainline churches — is platitudinous drivel.



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EricG

posted September 16, 2009 at 2:28 pm


It could be argued that Jesus’s statement that we should do unto others as we would have them do unto us is good economics — i.e., an attempt to resolve what economists refer to as “externalities,” which result when I make decisions that have costs or benefits to “others” that I don’t internalize. By getting me to internalize the externality (i.e., the cost/benefit), but only to the extent the cost/benefit is reasonably valued (i.e., “as you would have them do unto you”) the result is efficient. Economists would say that is a good thing. Much of economics is devoted to resolving externalities, which relate to many important current topics like environmental degredation. In some sense, Jesus’s key teaching and economics go hand-in-hand.



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Victor V Claar

posted September 16, 2009 at 2:34 pm


Excellent, careful work, Mike–as always. Thanks so much for taking the time to do this!



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Michael W. Kruse

posted September 16, 2009 at 2:47 pm


JMorrow #22
Thanks.
By “we,” I was thinking of Christians as commensurate about our discipleship and redemptive work in the world.



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Eric

posted September 16, 2009 at 2:58 pm


Michael,
It doesn’t really clear things up for me – it seems like you have a very narrow view of abundance when it comes to the kingdom of God (basic physical necessities) while you have a wide view of abundance when it comes to what economists study. If you use abundance and scarcity how you have been using it, then it seems to me that you can’t say that shalom includes “widespread economic abundance.”
But… I think I now see where are disagreement comes from … something I didn’t pick up on before. Your examples of scarcity tend to focus on individuals, not communities or societies or the entire creation. (Scott Cunningham’s examples did this, too.) My desires can be met by others in our society. My desire to feed homeless people at the local shelter and to teach my children how to do long division can be met, even though I have a finite amount of time in the day. By sending my children to school and having somebody else teach them, I am able to fulfill both desires.
So, if you’re saying that scarcity means that I can’t fulfill all my desires myself … then I agree with you. I don’t think that’s what you are saying, but your examples tend to point in that direction. If however, you are saying that all my desires can’t be met by my society, then that’s where we disagree. It isn’t obvious to me at all that this is the case and the examples given thus far as to why this is the case have been, as I said, too individualistic to convince.



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Michael W. Kruse

posted September 16, 2009 at 3:04 pm


#24 Dean
My prayer would be that we could start a more substantive conversation than the pat Religious Right vs. Mainline liberal/liberationist dichotomy. It isn’t a binary discussion in my book.
BTW did my response to Eric at #25 help?
Drew #28
I won’t revisit the issue of scarcity vs. abundance at length here. Did that in the first post and in #25 above. I think the gift economy idea offers some helpful corrective ideas but I believe it is an overreaction. It underestimates the complexity of economic coordination needed for an abundant life in terms of basic living. More on that in the next post or the one after.
Victor #31
Thanks. I hope you’ll keep me honest here. :-)



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Michael W. Kruse

posted September 16, 2009 at 8:20 pm


Eric #33
I seeing the wisdom of Scott Cunningham?s idea of beginning with the idea of individuals ranking preferences ? the word ?scarcity? contains so much unintended baggage. And yet if we are going to read the economic literature the term is there. So for now, I soldier on.
As to dealing with individuals, yes. Economics sees the world as countless individual actors examining their status, moment-by-moment, and making decisions according to some calculus. Each individual?s choices are limited by their abilities and resources in what they can do at that moment ? a person can?t wash the car, play ball with kids, and answer work emails all at the same time. He ranks which is most important, say, playing ball with the kids for thirty minutes. He ?pays? for that with at least a thirty minute delay in washing the car and answering emails. There is scarcity relative to the demand he has for that slot of time.
Similarly, he has $100 dollars in spare cash he wants to give to a local charity, spend on a portable hard drive, and invest in his money market. He chooses the money market and ?pays? with no money to the charity and no hard drive. There is a limit (scarcity relative to meet demand) to what he can do with his money at any one time.
Expanding this out to society doesn?t solve our problem. Each individual experiences the same limitations or scarcity. All we get at the societal level is an aggregate set of choices made in terms of this scarcity to act on all desired options. Limiting our wants won?t solve our problem. It may reduce the menu of choices but at any given moment the remaining choices must be prioritized.
There is nothing wrong with wanting more than we need. God wanted the created order, he did not need it. There was scarcity of something he wanted so he brought it into existence. Parents do not need children but the usually want them. So they create them. There was scarcity of something desired so they created. And the same is true with almost every act we take. We take actions because we intend something to result from those actions that otherwise would not be the case, which is to say there was a scarcity of the outcome we desired or we would not have taken the action. We are God?s creative image bearers and creating is the act of desiring to bring something that does not exist (is scarce) into existence.
Unless we are talking about a caveman existence, we start with an absolute scarcity of everything humans use in civilization. We are partners in our own provision and, absent corruption, we should be able to create an abundance of the basic goods that everyone needs to sustain life. But even with that abundance we would still experience a scarcity (insufficiency relative to demand) with regard to acting on many competing good options. That scarcity is a gift from God. It is how God involves us in dominion over creation. We exercise our proclivities and will to bring into being things that do not exist and make the world more complete, more fulfilled, and more abundant.
The problem is that our wants and priorities are all distorted do to our fallen nature. We don?t see our legitimate needs and wants in community with other?s legitimate needs and wants. We see their needs and wants as limits on our autonomy. That is part of what creates scarcity of the basic needs for human existence. But even without sin we would still need to participate in our own provision of basic needs and that participation would become part of the menu options we would need to consider in our moment-by-moment choices.
Thus, when I hear through economist ears the idea that there is no scarcity, only abundance, what I hear is obliviousness to production. There is no participation in our own provision. Apparently, no human beings had to prioritize competing options of what to do (i.e., choose how to employ scare resources) in order to transform matter, energy, and data into more useful forms, and coordinate their actions. The theologian apparently believes that the goods we use (loaves of bread, cell phones, surgeon scalpels, books, etc.) spring magically into existence and fall to earth like manna heaven.
While it may not be the intended communication, it comes across as total absurdity or demonization.



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Eric

posted September 17, 2009 at 10:15 am


Well, even after Scott’s approach, we ended up at the same place you and I are now … the assumption of scarcity with no arguments on your part.
It is getting a little tiring, too, of you always changing the definition of “scarce.” Scarce doesn’t mean limited, it doesn’t mean finite, it doesn’t mean “does not exist”. It means that people’s desires/wants/demands/preferences are greater than the resources available. You get this definition right when you outright define it, but anytime you try to give examples in order to convince of the necessity of scarcity in a finite creation, you immediately fall back to an incorrect definition of scarcity. For example, you write:
“We are God?s creative image bearers and creating is the act of desiring to bring something that does not exist (is scarce) into existence.”
That is not what scarce means. If I can go out today and create something I desire, then that “something” isn’t scarce! It’s when I don’t have the means to acquire what I want that at “something” is scarce.
I also don’t think you are doing yourself any favors by looking at EVERYTHING through an economists eyes. What you have ended up doing is reducing everything to supply and demand. People become mere consumers or producers. For example, when you speak of parents giving birth as producing children to meet a need, you are giving too much credit to the economist’ way of looking at things. Children are not scarce resources. If this is what you are asking theologians to do, I don’t blame them for ignoring your requests.
This last issue is probably the primary place where the theologians and economists come into conflict. Everything else follows from that. Through the economists eyes, human beings are Homo economicus, while through the theologians eyes, human beings are eikons, created in the image of God. This is why the issue of scarcity vs. abundance is important. From a theologians perspective, God created a good creation. God blessed his creation with abundance and plenitude – He did not create a cosmos where our desires can’t be met. But then the whole cosmos fell. Our desires became distorted and are no longer directed towards God. And because of both the fallen cosmos and our misdirected desires, we lack. We see desires not being met both because they have been distorted and because they physically can’t be met. But there is hope in Christ that God’s abundant creation is being restored. There’s hope that we shall not lack anymore.
From an economists perspective, man is a producer and a consumer. Everything in creation is there to be consumed or produced. Giving birth is producing a child to fulfill a need. As such, we can rank our preferences about what we’d like to consume and produce. Some things I want more than others and I can rank those according to my desires. Buying a new TV, playing catch with my child, travelling to Hawaii and making love to my significant other are all things to be consumed or produced and can all be ranked on the same preference scale. These all are preferences. There is no end to my desires but there is a limited amount of resources and thus there is scarcity. God, if he exists, is miserly – even if the conditions are perfect, He still hasn’t given us enough to meet our desires. But there is hope for Homo economicus, because through rational choices he can optimize his preference function even in the midst of scarcity.



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MatthewS

posted September 17, 2009 at 11:45 am


Michael,
I wish there were a “thumbs up” convention here to simply register that a post was beneficial/enjoyable. I was not familiar with the terminology and economic perspective you presented here.
Supply and demand: It clicked for me how “real” this behavior is when teaching a class in prison. A student there was doing time for his business ventures, which involved rounding up and purchasing some items in rural areas at comparatively low cost and running those items to the city, reselling them at a profit where the demand was higher. His role was similar to middle management. For some reason, it was a new and amusing thought to me that principles of economics and business management exist for the criminal underground same as anywhere else.



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MatthewS

posted September 17, 2009 at 11:58 am


the items in #37 were illegal – think of drugs, weapons, etc.



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Michael W. Kruse

posted September 17, 2009 at 5:00 pm


Eric #36
Eric #36
Scarce doesn’t mean limited, it doesn’t mean finite, it doesn’t mean “does not exist.”
From ?The Free Dictionary?
Scarce
1. Insufficient to meet a demand or requirement; short in supply.
2. Hard to find; absent or rare.
?We are God?s creative image bearers and creating is the act of desiring to bring something that does not exist (is scarce) into existence.”
That is not what scarce means. If I can go out today and create something I desire, then that “something” isn’t scarce! It’s when I don’t have the means to acquire what I want that at “something” is scarce.

Something that does not exist ? definition #2 ?absent? ? is scarce. That I want something that presently doesn?t exist means that there is (definition #1) insufficiency in meeting my demand.
Even if millions of others have the thing I want, but I do not have it, there is scarcity for me. If I have to,
A) spend money to purchase it (meaning someone created it for me) or
B) create the thing myself,
then clearly I?m responding to scarcity (insufficient resource relative to my demand.) Therefore, I rank how much I want the thing relative to other things I desire and make a choice based on my limited (scarce relative to my demand) resources of time, talent, and finances.
?I also don’t think you are doing yourself any favors by looking at EVERYTHING through an economists eyes.?
I have in no way said that this is the only grid through which we process the world. But if we want to be cross-disciplinary, then we have to be able to see things through the eyes of both disciplines to the point that when we ask of others in the partner discipline ?Have I correctly characterized your understanding?? they can answer ?yes.? The point of these posts is to help others see how economists process things, not to give a perfect balance to all possible lenses through which we can see the world.
For example, when you speak of parents giving birth as producing children to meet a need, you are giving too much credit to the economist’ way of looking at things. Children are not scarce resources. If this is what you are asking theologians to do, I don’t blame them for ignoring your requests.
I said ?Parents do not need children but the usually want them. So they create them.? So what your telling me is that billions of dollars each year are not being spent on fertility drugs? That people do no dump thousands of dollars into adoption agencies to adopt children? Are you telling me that these parents don?t experience a scarcity of something they want? Children are not scarce to these parents?
?Through the economists eyes, human beings are Homo economicus, while through the theologians eyes, human beings are eikons, created in the image of God.?
Just as there are some biologists who may believe that we are purely material beings there also some economists who believe we are purely utility maximizing material beings. Those are faith beliefs that those individuals hold as they extend their methodological materialism into a metaphysical materialism. Economic analysis is one limited way of knowing. There is nothing inherent in economics that requires us to disregard human beings a eikons.
God blessed his creation with abundance and plenitude – He did not create a cosmos where our desires can’t be met.
But he did create a world in which all of desires are not met ? nor are his. Thus, the instruction to fill the earth, till the garden, and exercise dominion in bringing a good world into being a better world. Virtually nothing we use exists in nature. (Does not exist = scarce) Without our participation with God there would be no abundance of the things humans use.
?From an economists perspective, man is a producer and a consumer.?
Yes. That is the aspect of humanity the discipline focuses on. It is not a negation of all others.
?Giving birth is producing a child to fulfill a need.?
No. When it is pure, it is a want to create something beautiful and wonderful to which love can be extended. It is a natural extension of our eikonness.
There is no end to my desires but there is a limited amount of resources and thus there is scarcity. God, if he exists, is miserly – even if the conditions are perfect, He still hasn’t given us enough to meet our desires.
God is not miserly. God is wondrously generous in including us as co-creators in his world.
Tony Campolo asks how we think God created daisies. Did he at one moment say ?Daisies be!? and all the daisies came to be? Campolo suggests that instead God created one daisy ? and a big smile came to his face. Then he created another daisy ? and he began to laugh. Then he shouted for glee as he created another ? and another ? and another.
God created us in his image. We are invited into the joyous adventure of creation and formation. It is the gift beyond all gifts. We are provided with the resources to meet our basic needs but then we grow in our creative capacity. We create families, books, paintings, beautiful gardens, beautiful structures, widgets, mathematical formulas, etc. There are many possible holy creative activities that we can imagine but with the time, talent and physical resources we have, we can?t pursue everything we want to at any given time? there is scarcity relative to our desire. We rank and choose, even in a perfect world.
So while man is not only a producer and consumer, man is a producer and consumer. That is how God created every living being on the planet. It is elemental to human existence and worthy of focused analysis.
The God I hear you describing is a God who creates us as permanent infants. There is no participation in our own provision. There is no exercise of discernment and creativity. Everything we need is simply supplied like bottle to an infant ? alternatively, eikons become animals in a zoo with God as zookeeper. It is the negation the world-building dominion mission given at creation.
It is this blindness to the productive/creative dominion exercising quality of God?s eikons that distorts, not the economist?s limited focus the human volition with regard to resources.



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Michael W. Kruse

posted September 17, 2009 at 5:05 pm


MattS #37
Yes. In fact, many criminals are highly entrepreneurial. One of the programs I’m involved with helps disadvantaged people work through a feasibility plan in starting their own businesses. A sister program was begun in Houston that helps convicts who are in their last year of sentence develop plans to start their own businesses when the leave. The are a number of “risk taking” entrepreneurs in prison. :-)



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Eric

posted September 17, 2009 at 5:59 pm


This is frustrating. Scarcity means something very specific in economics and equivocation on your part is making this conversation very difficult.
“The God I hear you describing is a God who creates us as permanent infants. There is no participation in our own provision. There is no exercise of discernment and creativity. Everything we need is simply supplied like bottle to an infant ”
I’m also getting frustrated with claims like that with no references to where suggested such a thing. The fact is that I said that this was not my view in the comments to your first economics post. The abundance God has given us includes the things we create and produce, not just things we happen to find in nature. Again, I never suggested otherwise.
I’m going to bow out of this conversation now.



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Michael W. Kruse

posted September 17, 2009 at 6:37 pm


Eric #41
It is frustrating for me too. Blogs don’t work well for some types of discussion. I think we could do much better face-to-face with real time feedback to each other. Maybe we will have that opportunity some day.



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