Patton - Economics 101 (is There a Christian Perspective on the Economy)

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ECONOMICS 101: IS THERE A CHRISTIAN

PERSPECTIVE ON THE ECONOMY?

Could there be a missing dimension in modern economic science?

Might there be an inseparable link between morality and economic

prosperity?

by

Dr. Judd W. Patton

Many students of the Bible have observed that God often refers to

economic topics and concepts. For example, money, interest rates

(usury), profit and loss, wages, entrepreneurship, and contractual

obligations are used by Christ to make spiritual points in the parables

of the pounds (Luke 19:12-26), of the talents (Matthew 25:14-30), and

of the workers in the vineyard (Matthew 20:1-16). Other scripturesdeal with economic problems most 20th century individuals are still

confronting: inflation and the debasement of money (Haggai 1:6;

Isaiah l:22), creditor-debtor difficulties (Proverbs 22:7; Psalms 37:21),

unemployment (Matthew 20:3), and even big government with its high

taxes (I Samuel 8:11-18).

Nevertheless, it seems clear that the Bible per se is not an

economics textbook. God has not systematically expounded economic

principles as one might expect to find in a modern day text oneconomic principles.

That leaves Christians with an intriguing dilemma. If we do not

have our own unique understanding of economic principles - Biblical

economics - does this mean we must relief on secular sources for

economic knowledge? If so, which of the many competing traditions

should we embrace?

Thankfully, the answer is that there is a Christian perspective on

economic matters. There is a science of Biblical economics, albeit an
http://jpatton.bellevue.edu/biblical_economics/economics101.html#http://jpatton.bellevue.edu/biblical_economics/economics101.html#


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.

not, however, a patchwork of Christian ethics combined with a

preferred economic theory or applied to specific economic problems,

as some have perceived it. Rather, it is a comprehensive, unified body

of moral and economic principles that are inexorably interrelated. It is a

body of knowledge, without which, humanity will never achieve its

economic potential.

Let's prove that there is, in fact, a science of Biblical economics.

Then notice the missingdimension that reveals the solutions to

mankind's economic difficulties.

Two Kinds of Economics

In the 1960s physicist Thomas S. Kuhn brilliantly demonstrated that

each and every science rests on generally unquestioned premises

that condition the nature of human thinking and scientific investigation.

He called this body of foundational premises a paradigm.

The essence of Kuhn's insight is that there are no such things as

"brute facts" - facts apart from a definite paradigm. What is a "fact" and

what is a "non-fact," or what is a "cause" or what is an "effect,"

depends on the specific framework, or paradigm, the information is

placed within.

Today there are many economic schools of thought, each with its

own unique paradigm or worldview. By analogy, each tradition has its

own eyeglasses with very different lenses to view the economic world.

The result is that there is no agreement on the "facts." What, for

instance, caused the 1930s Great Depression? Ask five different

economists, and one will likely get five (or perhaps six) different

answers!

But God is not the author of confusion (1 Corinthians 14:33). Hehas given us our foundation - His Word - that includes a paradigmatic

premise: "The fear of the LORD is the beginning of knowledge"

(Proverbs 1:7) and "wisdom" (Proverbs 9:10). And He has made it

perfectly clear that we should not rely on any worldview of men,

"Beware lest anyone cheat you through

philosophy and empty deceit, according to the tradition of men,

according to the basic principles of the world, and not according to

Christ" (Colossians 2:8).


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e ree wor or as c pr nc p es means pr mary an

fundamental principles of any art, science or discipline." While the

apostle Paul was specifically warning the Colossians against

gnosticism, his admonition applies to allareas of scientific endeavor.

For the discipline of economics, Christians must build on the ultimate

foundation, God's Word, the Bible, not on any worldly paradigm. Ourbasic principles must come from the Bible.

The Bible reveals, then, that there are only two broad worldviews

or paradigms - God's and man's. In economics, therefore, there is only

Revelational or Biblical economics and man's economics. The latter,

we know from experience, has fractured into many competing

traditions.

In the book of beginnings, Genesis, God revealed just how man'sparadigm began. Most of us know the story very well. Adam and Eve

ate from the tree of the knowledge of good and evil. They disbelieved

and disobeyed God. In doing so they took to themselves, and for all

humankind after them, the discovery of knowledge apart from God.

Humanism, or man and his

reasoning as the sole source of knowledge, was born! As a

consequence man has constructed his own economic systems and

generated his own diverse and numerous economic schools of

thought that seem right to him (Proverbs 14:12).

Biblical Paradigm

God gives Christians three foundational building blocks for

developing economic science. The first premise, to repeat, is that

God's Word is the foundation forallknowledge. Christian knowledge,

understanding, and wisdom originate from fearing (respecting) God by

striving to keep His commandments, hating evil, and living by His

every word (Ecclesiastes 12:13;Proverbs 8:13; Matthew 4:4). All other knowledge and wisdom is

prophesized to come to nothing (1 Corinthians 1:19-20).

The second premise, central to the discovery of economic

principles, is that man is a purposeful being endowed with a spiritual

essence, the spirit in man, that gives him human mind and free will.

Man alone of God's creatures possesses the inner self of volition, self-

awareness, and the ability to choose goals and the means to fulfill

them (1 Corinthians 2:11). With the Holy Spirit man has the capacity to

build Godly character in choosing right and resisting the wrong (2Corinthians 4:16; 10:4-5). Man acts; he values, prefers and chooses


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(Proverbs 15:22; 2 Corinthians 9:7).

The third premise is that God as Creator and Lawgiver (James 4:12;Isaiah 33:22) has set in motion inexorable laws governing human

behavior, in whatever realm humans may interact - social, political, or

economic. These spiritual laws, when followed, generate and produce"...life and prosperity" (Deuteronomy 30:15-20; Exodus 20:3-17). For

individuals and societies to internalize these eternal principles, the

Ten Commandments, is to cause a way of life that leads to harmony,

peace, economic prosperity, and liberty (James 1:25). Virtue bears

spiritual and material fruit!

Many verses attest to this relationship between moral behavior and

economic well-being. "And whatever he (the righteous) does shall

prosper" (Psalms 1:3). "Blessed is the nation whose God is the LORD"(Psalms 33:12). "If they (the righteous) obey and serve Him, they shall

spend their days in prosperity, and their years in pleasures" (Job

36:11). "This Book of the Law shall not depart from your mouth, but

you shall meditate in it day and night, that you may observe to do

according to all that is written in it. For then you wil l make your way

prosperous, and then you will have good success" (Joshua 1:8).

From these three foundational building blocks a vital insight isdiscovered: the moral realm and the economic realm of production,consumption, and exchange are somehow interconnected. They are

not hermetically sealed from one another as assumed by humanistic

science.

Economic Principles

Let's back-up for a moment. The subject matter of both moralityand economics is human action. Moral principles provide the

knowledge to help us choose the right course of action.

In a similar manner, economic science endeavors to show "how theworld works" and therefore helps us to choose the right and necessary

course of action, or policy, to attain economic goals. That is, economic

principles provide the knowledge of how to achieve economic growth,

price stability, full employment, etc. It follows then, since both morality

and economics deal withproperhuman choices - and God reveals

they are tied together - that any economic action or policy thatviolates moral law is inherently flawed. In other words, any


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to succeed. Alternatively, any action or policy indefiance of

moral law is inherently bound to fail. This is the missing

dimension provided by Biblical Economics, and necessarily absent

from humanistic schools of economic thought!

In short, only moral action leads to success. Humanity's economicdifficulties and dilemmas are, in fact, spiritual in nature.

Current day upheavals, such as the Asian financial turmoil, price

inflation (Russia just knocked three zeros off the ruble on January 1,

1998), chronic balance of trade problems, huge and rising national

deficits and debt, and so on, tell us that moral and economic principles

are being violated.

We know God's moral principles, the Ten Commandments asrevealed in Exodus 20 and Deuteronomy 5, but how can economic

principles be discovered?

Surely it is not the scientific method of trial and error that excludesrevealed knowledge. To even suggest that moral principles could be

relevant in the study of economic phenomena would be rejected out of

hand today as a serious breach of scientific method and purity.

Moreover, continuous experimentation and hypothesis formation

cannot produce anything but "tentative principles."

The only method, then, for discovering timeless economic truths orprinciples, must be to build on the premise that mankind acts

purposefully, then by the rules of logic, deduce that A is true; if A then

B; if B then C and so on. No experimentation is necessary to confirm

these economic principles (A, B, C). Since God's word is truth (John

17:17), we arrive at universal

principles that are true for all people at all times (unless a logicalmistake was made in the reasoning process).

Amazingly, a little-known tradition of economics, known as theAustrian school, has built their analysis by borrowing, if you will, this

biblical premise of purposeful human action. As a result they have

developed and lucidly expounded a body of inexorable economic laws

- God's economic laws! Our readers are encouraged to study the

works of Ludwig Mises, Henry Hazlitt, Murray Rothbard, Hans

Sennholz, and Gary North. However, only the latter two individuals ofthe Austrian school have begun to explore the fundamental


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re at ons p etween mora aws an econom c aws, t at s, ca

economics. (We recommend two books: Three Economic

Commandments by Hans Sennholz and Introduction to Christian

Economics by Gary North. The Sennholz book is available from The

Foundation for Economic Education, Irvington-on-Hudson, NY 10533.

Phone: (914) 591-7230. E-mail: [email protected]. North's book can beobtained from the Institute for Christian Economics, P.O. Box 8000,

Tyler, TX 75711.)

Conclusion

"What a science does, or should do, is simply to allow the averageman ... to command the heights of genius," said James Buchanan, the

1986 Nobel laureate in economics. That's precisely what Biblical

economics does! Through moral and economic principles, along withany additional scriptures God provides on a given issue, Christians,

supposedly the "foolish" of the world, can understandthe causes and

the solutions to mankind's economic problems. That genius can never

be found in the "wisdom of this world" (1Corinthians 1:20).

There is indeed a Christian perspective on the economy. It'sfundamental insight, the missingdimension, is that there is an

inseparable link between morality and economic well-being. When

individuals or nations break moral laws, they simultaneously breakeconomic laws, and vice versa. If an economic action or policy is right

in principle, it will produce good fruit in the marketplace. It will work!

On the other hand, if it is wrong in principle, in defiance of God's moral

and economic laws, it will harm economic progress.

When God's Kingdom is established (Revelation 11:15), there willat last be only one kind of economics on the earth, God's economics!

It will be known fully and taught (Isaiah 30:20-21). All humanistic

traditions will abruptly end. Humanity will finally be given the "lenses"to understand Joshua 1:8: "This Book of the Law shall not depart from

your mouth, but you shall meditate in it day and night, that you may

observe to do according to all that is written in it. For then you will

make your way prosperous, and then you will have good success."

Biblical economics is the wave of the future!

Here are two outstanding Web sites on Biblical Economic principles:

Sound Economic SolutionsChristian Financial Concepts
http://www.cfcministry.org/http://www.true-wealth.com/

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Patton - Economics 101 (is There a Christian Perspective on the Economy)