Notes on Money, Markets, and Economics
What I've Been Reading


Aristotle's Social Science. Salkever. Read Here..

The Goal Of Evolutionary And Neoclassical Economics As A Consequence Of The Changes In Concepts Of Human Nature, Anna Horodecka. Read Here..

Islam and the Economic Challenge, Umer Chapra. Read Here..

An Essay on the Nature and Significance of Economic Science, Lionel Robbins. Read Here..

Retrospectives: On the Definition of Economics, Backhouse and Medema. Read Here..

Welfare and Welfare Economics: The Early Contribution of Alfred Marshall. Caldari and Nishizawa. Read Here..

Economics Controversies. Rothbard. Read Here..

Economics and its Ethical Assumptions. Long. Read Here..

The Economic Point of View. Kirzner. Read Here..

The Philosophy of Economics. Bowman. Read Here..



Reflections on Defining Christian Economics

Posted By Trevor Newton
May 1, 2017

In researching this area of study I have been considering basic questions such as: Is science really morally neutral? Is anything morally neutral? Are there proofs for God’s existence which even hard-core atheists can’t refute? Can the transcendent moral code of Christianity be shown to be the driver of sustained progress?

As the West tries to replace Christianity with Humanism, the culture is very obviously collapsing. As it keeps collapsing, people are looking for solutions. I believe that Christian economists can provide at least some of those solutions.

But if someone asked me to define what Christian Economics is, I would first need to provide a definition of Economics. All things considered, this ought to be a very straightforward definition to rattle off, but I find that it isn’t. To just say Economics is “the study of economies…” (Krugman and Wells 2004) seems incomplete. What do others say?

Alternative definitions of Economics are plentiful: the dictionary says economics is "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services"; Adam Smith defined it as "an inquiry into the nature and causes of the wealth of nations"; Sowell says "Economics is a study of cause-and-effect relationships in an economy. Its purpose is to discern the consequences of various ways of allocating scarce resources"; Say defined it as “the science of production, distribution, and consumption of wealth”; Alfred Marshall said Economics is a study of how man "...gets his income and how he uses it. Thus, it is ...the study of wealth and ...the study of man."

So from these definitions we might be inclined to exclude non-market activities from the realm of Economics --- yet Lionel Robbins said "Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses" --- but this implies that Economics is the study of all human behavior because all human action always has an intended end. So his definition was (and remains) controversial. Still, the Robbins definition has gained more acceptance than perhaps any other (much more detail on this ongoing debate is provided in Defining Economics: The Long Road to Acceptance of the Robbins Definition by Backhouse and Medema, ). In the end, there simply is no agreed definition, except perhaps Viner’s “Economics is what economists do.”

So if Economics has trouble defining itself, then surely Christian Economics does too. Even the concept that there could be such a thing as Christian Economics is subject to debate. But, if there is more to reality than just the physical realm, and if the nature of reality is what Christianity says it is, then Economics (and every other discipline) must be (and can only be) fully understood through the lens of Christian truth. Therefore I consider Christian Economics to be the study of Economics in the light of Christian truth. Since Christian truth is transformative, my hope for Christian Economics would be nothing less than this.

It must readily be acknowledged that ‘Christian truth’ is imperfectly understood, always debated, and the subject of repeated conflicts. But it also has nearly two thousand years of scholarship, with strong agreement on certain key points, including the acceptance by Orthodox, Catholics, and Protestants of most of the books of Scripture as the inspired Word of God. Scripture and doctrine serve the Christian as a lens through which to process facts and knowledge. Augustine said “let every good and true Christian understand that wherever truth may be found, it belongs to his Master”. His point (and Aquinas’ and Calvin’s) is that all truth is God’s truth. Although much can be deduced through scientific observation, there is a context and set of presuppositions that go along with it --- always, and for everyone. Thus to the Christian, scientific truth must be a subset of ultimate Truth. And so I view all Economics as a subset of Christian Economics.

To reiterate, if we are to accept something like the Robbinsian definition of Economics as the study of “human behaviour as a relationship between ends and scarce means which have alternative uses” but viewed through a consistently Christian lens, then what are the implications? This is a question that Christian Economics seeks to answer.

Here we could pause to ask the question: Isn’t the science of Economics supposed to be value-free? Sowell says "Economics is a study of cause-and-effect relationships in an economy. Its purpose is to discern the consequences of various ways of allocating scarce resources... It has nothing to say about social philosophy or moral values..." And yet, is it not true that everything men think say and do (including the discipline of Economics itself) is affected by their religious beliefs?

Henry Van Til (nephew of Cornelius Van Til) is credited with the observation that culture is religion externalized and made explicit. In other words all human behavior is religion externalized, and all men are religious. “Thus man's morality and economics, his jurisprudence and his aesthetics, are all religiously oriented and determined.”(The Calvinistic Concept of Culture, Pg. 42, Van Til). In this view, economic behavior and also the study of economic behavior must both be functions of a religious worldview, always.

Returning to Robbins’ definition, if we accept that Economics is concerned with ends and means, then how can we understand these concepts in a Christian context?

Percy Greaves said: Economics deals with “...the attempts of men to achieve the things they seek in life... In every act throughout our whole lifetime, we are always exchanging something we have for something we prefer. We may be exchanging our time, our energy, our money, or some other scarce good for what we want, but every one of our actions is an exchange… (Most) people agree on what is wanted. Our great differences are disagreements about how to go about getting what we all want. These are differences about means rather than ends. For such disagreements, economics provides the intelligent solutions...

He is saying that we as humans are always seeking something (call it happiness), and that Economics can help us get more of it, at less cost.

I want to pause here and consider the notion of happiness further. Going back to pre-Christian philosophy, Aristotle believed that men are seeking happiness too, only he didn’t call it that precisely, rather he used the Greek word eudaimonia --- poorly translated as “happiness” but actually more a sense of total highest good. All the other goods which are commonly pursued, such as money or power or honor, are simply components of the means to obtaining happiness/eudaimonia --- but happiness is an end in itself.

Nearly two thousand years later, Blaise Pascal said “All men seek happiness. This is without exception. Whatever different means they employ, they all tend to this end… The will never takes the least step but to this object. This is the motive of every action…”

So then a question for Aristotle, Pascal, and every human being, is What is the means to obtaining happiness? And, What constitutes happiness?

Plato agrees that we all want happiness but he says there are three different kinds (wisdom, honor from men, and fleshly satiation) in descending order, and that the lower kind of happiness isn't true happiness but is an illusion because it really is just a lessening of pain. To Plato, it is wisdom (with justice and morality being the corresponding actions) which results in the most happiness. Although Plato lacked the divine revelation, his thoughts on this matter might be likened to Proverbs which says "Happy is the man that findeth wisdom, and the man that getteth understanding" (3:13) and "How much better is it to get wisdom than gold!" (16:16). Therefore if wisdom results in the most eudaimonia, then the definition of what wisdom is (and the related truths of justice and morality) must be of the utmost importance.

And yet, we know that men often don’t seek after wisdom, and instead can become fixated on fleshly pleasures (the lowest kind of happiness, according to Plato), like cattle, “ever greedy for more of these delights, and in their greed kicking and butting one another… they slay one another in sateless avidity, because they are vainly striving to satisfy with things that are not real” (586b, Republic).

Let’s look again at Greaves’ words: “(Most) people agree on what is wanted. Our great differences are disagreements about how to go about getting what we all want. For such disagreements, economics provides the intelligent solutions...” It is true that most people agree that they want more money, more power, and more honor, because they believe that these goods will produce the happiness they are seeking. It is also true that economists can provide intelligent solutions to help people obtain more of the above, or more of anything for that matter. But what happens when society wants what is foolish? Such a scenario is not just likely, it tends to be the norm. Here we have a practical problem: men seek happiness but ignorantly pursue a cheap imitation.

As an economist I can study how a fool acts, why he acts, and what he achieves --- even though none of his behavior is actually rational (wise) in the light of divine truth. One may imagine a society, backwards and pagan, chasing after irrational objectives in their pursuit of happiness, yet achieving both material and spiritual destruction. Their objective of happiness is being met (but only in their irrational minds) by depravities which they consider virtues: say, murder of the innocent, abnormal sexuality, (fractional reserve banking?) They may even be convinced that their god is going to reward them, both now and in eternity, and so their actions might seem superficially consistent. They even hire an economist to help them understand the most efficient way to get more of the vices they esteem. He may like to pretend that he is an ethically-neutral advisor, but since "...the economist takes someone else’s hierarchy of ends as given and only points out the means to attain them, he is alleged to remain ethically neutral and strictly scientific. This viewpoint, however, is a misleading and fallacious one" (Toward a Reconstruction of Utility and Welfare Economics. Rothbard, p.26).

Surely the economist needs to somehow address the bigger problem: their objective of happiness is not being met by their actions. This is a theological and philosophical issue, but one which the Christian economist is perhaps uniquely capable of addressing. But what approach does he take?

There is disagreement amongst Christian scholars as to whether true wisdom can be deduced rationally by the natural man. Those in the tradition of Aquinas would say that wisdom/truth can be deduced rationally by natural man. Those in the Calvinist tradition (including that of Van Til) would disagree and say that natural man cannot deduce wisdom/truth because it is a specific spiritual faith gift which can only be bestowed by God. And so we see that there are at least two philosophical approaches to advancing Christian scholarship in the realm of Economics.

The first school of thought may take the (Thomistic) natural law approach, hoping to deduce truth and find common ground with non-Christians in the process. But the second school of thought might argue that such efforts are useless, as does Gary North, who claims: “Natural law theory has never worked as the basis of any social order, but after Charles Darwin, the academic community abandoned natural law theory. Natural law theorists have yet to come up with a solution to this inconvenient fact: reason, meaning the never-proven, always sought-for "right reason" of natural law theory, has not led masses of people to adopt the same system of philosophy, ethics, or religion. Yet the theory rests on the assumption -- never proven -- that rational people can agree on these issues sufficiently to enable society to function both ethically and predictably, meaning rationally... It is the post-Kantian religious commitment of rationalists to believe that the human mind is basically a universal constant. It is the quest for constants, in terms of this one Constant, that has beguiled economists for two centuries.

Yet Murray Rothbard, a non-Christian but a natural law advocate, might offer this explanation to North: "the great failing of natural-law theory --- from Plato and Aristotle to the Thomists and down to Leo Strauss and his followers in the present day --- is to have been profoundly statist rather than individualist. This classical natural-law theory placed the locus of the good and of virtuous action in the State, with individuals strictly subordinated to State action... It was, in contrast, the Levellers and particularly John Locke in seventeenth-century England who transformed classical natural law into a theory grounded on methodological and hence political individualism ... Locke's natural-rights theory... was riddled with contradictions and inconsistencies... (yet) the pioneers of any discipline, any science, are bound to suffer from inconsistencies and lacunae that will be corrected by those that come after them... In fact, libertarian natural-rights theory continued to be expanded and purified after Locke, reaching its culmination in the nineteenth century works of Herbert Spencer and Lysander Spooner... If, as we have seen, natural law is essentially a revolutionary theory, then so a fortiori is its individualist, natural-rights branch.  "

On the other hand, Gerson Moreno-Riano (not an economist) argues that a Thomistic view is precisely what economics needs: "...modern economic theory is informed by a very limited concept of human nature that denies stature to a central tenet of a Christian anthropology, viz., the imago Dei. Rather, modern economic theory and practice accept the validity and morality of homo economicus as a foundational premise for economic growth and development." Moreno-Riano is not claiming that modern economic theory has no foundation in natural law; he acknowledges that natural law had a role in the development of modern economic theory right from Adam Smith. However the version of natural law which was woven into economics was at odds with the Thomistic view of natural law, he says.

There is the hope, amongst Christian economists, that Christian truth, whether through Thomistic philosophy (including Thomistic natural law theory) or Calvinism (including Van Tillian presuppositionalism) might advance economics just as it has advanced our understanding of truth elsewhere. I view both approaches as valid and perhaps even complimentary, because:

First, both agree that Scripture is truth, and would therefore also have to agree that there can be no economic truth that goes against Scripture. Second, the Calvinists surely know that they will not convince non-Christians that Scripture must be the starting point for all economics. So then Third, since non-Christians can (and often do) concede that there are metaphysical proofs for God's existence and with that accept the possibility of some kind of natural law (even while rejecting much of the rest of Aquinas), then it ought to be the Thomists who are best equipped to provide the intellectual common ground, as they have often done historically. Fourth, there is therefore a basis upon which the two approaches can operate in parallel in Economics and other disciplines.