Religion and Economics: Normative Social Theory

RELIGION AND ECONOMICS: NORMATIVE SOCIAL THEORY

RECENT ECONOMIC THOUGHT SERIES

Editors:

Warren J. Samuels W i l l i a m Darity, Jr. Michigan State University University o f North Carolina East Lansing, Michigan, U S A Chapel H i l l , North Carolina, U S A

Other books in the series:

K l e i n , Phi l ip A . : T H E R O L E O F E C O N O M I C T H E O R Y Semmler, W i l l i . : B U S I N E S S C Y C L E S : T H E O R Y A N D E M P I R I C S Little, Daniel: O N T H E R E L I A B I L I T Y O F E C O N O M I C M O D E L S :

E S S A Y S I N T H E P H I L O S O P H Y O F E C O N O M I C S Weimer, David L . : I N S T I T U T I O N A L D E S I G N Davis, John B . : T H E S T A T E O F T H E I N T E R P R E T A T I O N O F K E Y N E S Wells , Paul: P O S T - K E Y N E S I A N E C O N O M I C T H E O R Y Hoover, K e v i n D . : M A C R O E C O N O M E T R I C S :

D E V E L O P M E N T S , T E N S I O N S A N D P R O S P E C T S Kendrick, John W. : T H E N E W S Y S T E M S O F N A T U R A L A C C O U N T S Groenewegen, John: T R A N S A C T I O N C O S T E C O N O M I C S A N D B E Y O N D K i n g , J .E.: A N A L T E R N A T I V E M A C R O E C O N O M I C T H E O R Y Schofield, Norman: C O L L E C T I V E D E C I S I O N - M A K I N G : S O C I A L C H O I C E

A N D P O L I T I C A L E C O N O M Y Menchik, Paul L . : H O U S E H O L D A N D F A M I L Y E C O N O M I C S Gupta, Kanhaya L . : E X P E R I E N C E S W I T H F I N A N C I A L L I B E R A L I Z A T I O N Cohen, A v i J., Hagemann, Harald, and Smithin, John:

M O N E Y F I N A N C I A L I N S T I T U T I O N S A N D M A C R O E C O N O M I C S Mason, P . L . and Wil l iams, R . M . :

R A C E , M A R K E T S , A N D S O C I A L O U T C O M E S Gupta, Satya Dev: T H E P O L I T I C A L E C O N O M Y O F G L O B A L I Z A T I O N Fisher, R . C . : I N T E R G O V E R N M E N T A L F I S C A L R E L A T I O N S Mariussen, A . and Wheelock, J. :

H O U S E H O L D S , W O R K A N D E C O N O M I C C H A N G E : A C O M P A R A T I V E I N S T I T U T I O N A L P E R S P E C T I V E

Gupta, Satya Dev: G L O B A L I Z A T I O N , G R O W T H A N D S U S T A I N A B I L I T Y Gupta, Satya Dev: D Y N A M I C S O F G L O B A L I Z A T I O N A N D D E V E L O P M E N T Medema, Steven G . : C O A S E A N E C O N O M I C S : L A W A N D E C O N O M I C S A N D

T H E N E W I N S T I T U T I O N A L E C O N O M I C S Peoples, James: R E G U L A T O R Y R E F O R M A N D L A B O R M A R K E T S Dennis, Ken : R A T I O N A L I T Y I N E C O N O M I C S : A L T E R N A T I V E

P E R S P E C T I V E S Ahiakpor, James C . W . : K E Y N E S A N D T H E C L A S S I C S R E C O N S I D E R E D Wolfson, Murray: T H E P O L I T I C A L E C O N O M Y O F W A R A N D P E A C E Jain, A . K . : E C O N O M I C S O F C O R R U P T I O N Wheelock, J. and V a i l , J.: W O R K A N D I D L E N E S S : T H E P O L I T I C A L

E C O N O M Y O F F U L L E M P L O Y M E N T


edited by

James M. Dean and A.M.C. Waterman The University of Manitoba

Springer Science+Business Media, LLC

I S B N 978-94-010-5891-9 I S B N 978-94-011-4401-8 (eBook) DOI 10.1007/978-94-011-4401-8

Library of Congress Cataloging-in-Publication Data

A C.I.P. Catalogue record for this book is available from the Library of Congress.

Copyright © 1999 by Springer Science+Business Media New York Originally published by Kluwer Academic Publishers in 1999 Softcover reprint of the hardcover 1st edition 1999

A l l rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+ Business Media, L L C

Printed on acid-free paper.

Contents

Contributors VB

Acknowledgements ix

Introduction: Normative Social Theory James M. Dean and A.M.C. Waterman 3

PART 1: CASE STUDIES

How Through Economics Rabbinic Judaism States its Theory of the Social Order J aco b N eusner 13

2 The Uses of Economics in Papal Encyclicals Andrew M. Yuengert 33

3 Social Thinking in Established Protestant Churches A.M.e. Waterman 51

4 Liberation Theology and Economics: God's Reign and a New Society Thomas L. Schubeck 69

VI

5 Every Square Inch: Kuyperian Social Theory and Economics John P. Tiemstra 85

6 Economics and Evangelicalism Kim Hawtrey 99

PART 2: INTERPETATIVE ESSAYS

7 Social Factors in Religion and Economics James M. Dean 115

8 Economics, Ethics, and Knowledge Sheila C. Dow 123

9 Economics and Religion: Comment Kenneth G. Elzinga 131

10 "If the Trumpet Does Not Sound a Clear Call . .. " Paul Heyne 141

II Economics and Technology: Collaboration or Collision? Fred S. McChesney 153

12 On Doing the Impossible Ian Steedman 165

13 Summary If Not Conclusions James M. Dean and A.M.C. Waterman 175

References 185

Index 197

Contributors

James M. Dean Professor, Department of Economics St. John's College University of Manitoba Winnipeg, Manitoba, Canada

Sheila Dow Professor, Department of Economics The University of Stirling Stirling, Scotland, Great Britain

Kenneth G. Elzinga Professor of Economics University of Virginia Charlottesville, Virginia, U.S.A.

Kim Hawtrey Professor, Department of Economics MacQuarie University Sydney, New South Wales, Australia

Paul Heyne Professor, Department of Economics University of Washington Seattle, Washington, U.S.A.

VllI

Fred S. McChesney Professor of Law Cornell Law School Ithaca, New York, U.S.A.

Jacob Neusner Distinguished Research Professor of Religious Studies University of South Florida Tampa, Florida, U.S.A.

Thomas Schubeck, S.J. Professor, Department of Religious Studies John Carroll University Cleveland, Ohio, U.S.A.

Ian Steedman Professor, Department of Economics and Economic History The Manchester Metropolitan University Manchester, Great Britain

John Tiemstra Professor, Department of Economics and Business Calvin College Grand Rapids, Michigan, U.S.A.

A.M.C. Waterman Professor, Department of Economics St. John's College University of Manitoba Winnipeg, Manitoba, Canada

Andrew Yuengert Professor, Business Administration Division Pepperdine University Malibu, California, U.S.A.

Acknowledgements

The volume editors gratefully acknowledge the assistance of Dr. John Stackhouse Jr. and Dr. Moshe Stern. Research assistance was provided by Kristi Henderson and Penelope Roberts. The editorial assistance of Carol Dahlstrom was invaluable. The index was prepared by Renee Fossett.


Introduction Normative Social Theory

James M. Dean and A.M.C. Waterman University of Manitoba

1. Economics and Religion Once Again

This hook is a sequel to Economics and Religion: Are They Distinct? (Brennan and Waterman 1994). That volume was motivated by a frustration born of many disappointing encounters between economists and theologians in the 1980s. Can bishops, synods, and other voices of organized religion bring any interesting (and disinterested) contribution to the public policy debate? If so, what is the relation of their contribution to that of the purely "secular" knowledge economists believe they can supply? Can economists bring any interesting (and disinterested) contribution to the public policy debate? If so, what is the relation of their contribution to the fundamental values that inform social ethics and that are still guarded to a large extent by religious tradition? All too often the two sides talked at cross-purposes. Well-intentioned economists coexisted for a few hours or days with wellintentioned theologians whose manner of conceiving social reality was radically incompatible with their own. There seemed to be no common ground.

The first requisite of any genuine conversation is an agreed conceptual framework that is able to accommodate the peculiar social vision both of the economist and of theologian, and to display the logical relation between the two. The purpose of the previous volume was therefore to begin the study of economics and religion - that is to say, the conjunction of these two human activities - by asking how far the discipline of economics and the practice of

4 Introduction

religion might be regarded as separate and distinct human endeavours. All contributors addressed a single question: How sensitive is economics to theological considerations? Is the knowledge afforded by economics "autonomous" with respect to the religious beliefs of the inquirer and theological presuppositions of the intellectual community within which such ideas are formed? For some now hold that this cannot be.

The verdict in the previous volume was split. Some authors invited to act as jurors gave their verdict against that fashionably "post-modernist" doctrine (Brennan and Waterman 1994, 253-55). Others argued that the "knowledge" supplied by economists was intertwined with the values and preconceptions of economists and rejected the proposition that economics can supply "value-free" technical know-how to theologians. It is of course possible to argue that economics and religion are autonomous without also arguing that economics is value-free. It is possible in either case to explore the extent to which economics and religion can be combined in a normative social policy.

We think that it is important to state our own views. The editors of this volume agree that - so far as any science can be - economics may in principle be regarded as "autonomous" with respect to theology. It is no more useful to speak of a "Christian" or an "Islamic" or an "atheist" economics than it is to speak of "Christian" or "Islamic" or "atheist" botany and archaeology.

Once this distinction is understood, the possibility exists not only of peaceful coexistence between economics and religion but also of genuine cooperation. As long ago as 1931, the papal encyclical Quadragesimo Anno acknowledged the claims of economic science "in its own sphere," whilst maintaining the senior partnership of theologically informed ethical principles (Pius Xl 1931, para. 42). The next step in building a worthwhile conversation between economists and theologians consists, therefore, in exploring ways in which the special insights of each might be brought together. As the authors of this book's predecessor did, we attempt to focus the inquiry upon a single question: Is the attempt to combine theology and economics in normative social theory intellectually defensible and actually fruitful? It has been taken for granted, as a matter of intellectual history, that such attempts have actually been made in many different times and places; though it is only in modern times that "economics" has been recognized clearly enough for any critical appraisal to be possible.

2. Varieties of Normative Social Theory

By "normative social theory" we mean any set of related doctrines that prescribes what human societies ought to be or how they ought to be

Introduction 5

governed, and that affords a standard for the critical appraisal of existing arrangements. It is distinguished from "positive social theory," which describes and explains how human societies actually do function. The latter is a necessary component of the former. There can be no prescription without knowledge, implicit or explicit, about what causes good health and what causes disease.

Every human society appears to acknowledge some set of public norms according to which both individual, private acts and the conduct of public affairs are appraised and corrected.

In traditional, pre-industrial societies, these norms are embodied in, or derived from, religion. "Religion" in that sense means what its etymology implies: sacred myth and sacred history, transmitted in dogma, ritual, art, and law, which bind us to one another and to God. Political authority is understood in religious terms. Earthly sovereigns and their ministers rule in the name of the Divine sovereign. It is their duty to govern the nations entrusted to them according to the laws of Heaven. Human positive law must never contlict with what is known to be the will of God.

But modern society is industrial, urban, and international. Factory discipline, urbanization, and mass migration have destroyed the stable communities within which traditional culture survived for millennia. Millions of the world's population now live in societies in which the halfremembered customs of formerly separate cultures - Judaic, Christian, Muslim, and pagan, in many varieties of each - cohabit uneasily in the same urban space. In order to keep the peace, political orthodoxy must be secular and pluralistic.

"Secular" means that political authority is held to proceed not from divine sanction but from the consent of the governed and therefore that such authority may not be used to prescribe or even to privilege anyone religious tradition. One of the earliest public acts of the first modern society was to decree the separation of "church" and "state." Though, strictly speaking, it is an oxymoron to say so, "religion" is a private matter in the secular state.

"Pluralistic" means that individuals and groups are permitted and even encouraged to retain their ancestral culture so far as that may be feasible and subject to their keeping the peace. It is logically and politically possible for a state to be secular without being pluralistic. Religion of any kind may be discouraged, and measures may be taken by authority to create a cultural "melting pot." However, present-day political orthodoxy prefers to associate the two.

The norms of public policy in a secular and pluralistic society must be those that can be acceptable to most, if not all, of its members. Agreement can usually be reached upon the more obvious material objectives: a higher level of real national income, lower taxation, high employment, and low

6 Introduction

inflation. In a strictly secular society, in which the exclusion of any religious authority is rigorously enforced, the only other criteria allowed would be those that rested upon an ethical consensus. And the more pluralistic a society, the smaller the range of issues over which any such consensus might be found.

But in practice, no modern society, not even the United States of America, is completely secular and pluralistic. Some dominant cultural tradition, based in part on the religious traditions of the most influential members of society, informs the ethical presuppositions within which policy is formulated and debated. Representatives of the more powerful religious bodies claim and get the ear of legislators and government, if only because of the electoral strength of their constituents. And, in the more peaceable and mature secular societies, theologians and even lay people in different religious traditions find ever more common ground on which to advocate and criticize public policy.

What this means is that even in secular societies religion may play some part in the determination of normative social theory. And, because the most obvious policy goals of a secular society are related to the production and distribution of goods and services, so may economics. It is entirely consistent with both the letter and the spirit of pluralism that, in countries where religion is not yet wholly extinguished, conversation should take place between theologians and economists on questions of public policy. Whether there is any point in such conversation is another matter, which it is our purpose in this book to investigate.

3. The Plan and Purpose of This Book

There are many possible ways of exploring the relation between economics and theology in normative social theory. We could, for example, conduct a purely philosophic inquiry into the logical and epistemological issues raised by any attempted combination of the two. We rejected this approach, not only because methodology is boring but also - and more importantly -because it can have no prescriptive function. Methodology does not tell scientists and others how they ought to go about their business. It is an attempt to rationalize what the more successful among them are already doing.

We preferred instead to repeat the method of the previous volume and to present a set of case studies; in this book, they are case studies of ways in which economics and theology may actually have been combined in the real world.

It is well known that economics, as we now recognize that discipline, gradually emerged in the Christian West during the seventeenth and

Introduction 7

eighteenth centuries. In Britain, at any rate, "political economy" in the eighteenth century was a small but important part of "moral and political philosophy," which itself was informed by explicitly Christian norms. Moreover, what we now recognize to have been genuine insights into essentially economic phenomena first occurred much earlier, in the ancient world and during the high Middle Ages, as a by-product of casuistry both in Christianity and in Judaism. The history of economics is intimately intertwined with theological discourse from the earliest days until the nineteenth century, when the two were carefully disentangled by Richard Whately (Brennan and Waterman 1994, chap. 2). It therefore seemed likely to be fruitful to investigate a variety of examples, within the Judreo-Christian tradition, in which economic analysis has been employed as an adjunct or partner to theological reasoning.

The most obvious choice was the social teaching of the Roman Church, as embodied in a series of papal documents beginning with Leo XIII's famous encyclical, Rerum Novarum of 1891, for, at least since that time, the Church of Rome has asserted the right to speak authoritatively about social and economic policy in the modern nation state, and it has become increasingly aware in doing so of the claims of economics to supply relevant expert knowledge. In general, and especially in Centesimus Annus, the latest (1991) encyclical in that series, economics has been cautiously accepted at somewhere near its own valuation. But, in a more recent strand of Roman Catholic social theory known as "liberation theology," this is hardly the case. It therefore seemed proper to include a separate case study of that tradition.

The other obvious choice, but for quite a different reason, was the Church of England, for in England, through a unique series of historical accidents, many features of traditional society have been preserved intact almost to the present day. Religion was a decidedly public matter within living memory (and to some extent still is), and public policy has often been formulated explicitly in the light of Christian doctrine as interpreted by the episcopate of the national church. Yet, in England and Scotland, economics reached a high level of development well before the political importance of religion began to wane. The conversation between theologians and economists in Britain (some of whom were one and the same person) has therefore reached a higher level of awareness and sophistication than in any other time or place.

In many European and Middle Eastern countries, the Orthodox churches have maintained the public character of religion, but seldom if ever has this happened in circumstances that allowed a significant part for economics in policy formation. Therefore, there is no case study of Orthodoxy in this volume.

From the fall of Jerusalem in the first century to the establishment of the State of Israel in the twentieth, the scattered, yet partly insulated,

8 Introduction

communities of Jews in Europe and Asia were held together by religion that was "public" so far as their own communities were concerned. Inasmuch as these were self-governing at all, they were governed according to Scripture as interpreted in the Mishnah and later embodied in the Talmud. The interpretation of Scripture in its normative application to daily commercial affairs is bound to embody such economic knowledge as currently exists, and hence to afford examples of the relation between economic and theological reasoning. We have therefore included a case study on Judaism and given it priority of place on the grounds of its antiquity. In view of the historic importance and present resurgence of Islam, we had also intended to include a case study on Islamic social thought. Unfortunately, this proved to be impossible.

Except in cases where post-Reformation churches have been established as part of the national constitution, Protestants have generally been forced by political and social circumstances into conceiving of religion as a private matter. The inward and spiritual characteristics of Christianity have been emphasized at the expense of the outward and visible ones. In extreme cases, as in the Anabaptist traditions, this had led to an attempt at complete withdrawal from political society and a repudiation of the very idea of normative social theory. But, in recent times, some more assertive Protestant traditions, unsuccessful in their attempts to impose theocracy during the sixteenth and seventeenth centuries, have found in the modern secular state an opportunity - denied to them in traditional society - if not to determine, at least to influence, public policy. Though it is often difficult to identifY the distinguishing theological characteristics of any particular variety of Protestantism, there are at least two that in recent decades have been active in this respect, especially in North America. A loosely defined but easily recognizeable evangelicalism has come to exercise an important ideological function by rationalizing, and mobilizing political support for, a conservative reaction to aggressive secularization. And a much smaller - but theologically more focussed - movement based upon a neo-Calvinist revival in the Dutch Reformed Church has given intellectual support to the same political cause. We have therefore included case studies of each of these traditions.

As in the previous volume, these case studies were written first and then sent as a complete set to a second group of authors whose function was to act as a jury. The commentators were asked to read all the case studies and to compose their interpretative essays so as to address the following question: In light of the evidence you have considered in the case studies, is the attempt to combine into a normative social theory the (putative) insights of theology with the (putative) scientific knowledge supplied by economics either or both intellectually defensible and actually fruitful?

Introduction 9

The case studies are printed in Part 1 of this book in roughly chronological order of their historic emergence. The interpretative essays are printed in Part 2 in alphabetic order of author's name. In the final chapter, we attempt a summary and some tentative conclusions.

PART 1:

CASE STUDIES

Chapter 1

How Through Economics Rabbinic Judaism States its Theory of the Social Order

Jacob Neusner University a/South Florida

[Aristotle] will be seen as attacking the problem of man's livelihood with a radicalism of which no later writer on the subject was capable - none has ever penetrated deeper into the material organization of man's life. In effect, he posed, in all its breadth, the question of the place occupied by the economy in society. (Polanyi 1957,66)

The Mishnah, a late-second-century philosophical system set forth in the form of a law code, treats subjects ordinarily addressed in antiquity by documents generally deemed to bear upon issues of economics and does so within the economic theory of Aristotle. The economics of the Mishnah took as its problem the definition of rational action with regard to scarcity. The Judaism set forth in the Mishnah, moreover, encompasses all subjects that pertain to the life of an entire nation and society. Such a program of world construction by its nature involves three principal intellectual tasks of theoretical thought, politics, economics, and science (or, philosophy of learning). A system that proposes to set forth the main frame and structure of a society will commonly make its statement in what it says about all three matters, establishing the same fundamental principle or viewpoint or attitude in treating each critical component of its theory of the social system. That basic harmony and coherence in what is said by a system about economics, politics, and science will ordinarily characterize a well-composed theory of world construction.

14 Jacob Neusner

For the study of economics, this point has been made by Joseph A. Schum peter as follows: "In economics as elsewhere, most statements of fundamental facts acquire importance only by the superstructures they are made to bear and are commonplace in the absence of such superstructures" (1954, 54). For the initial statement of the Judaism of the dual Torah, economics in the model of Aristotle's is systemically not inert but active and generative, indeed expressive, of the basic message of the system of the Mishnah as a whole. It follows that no utopian design of the social order, such as is given by the Mishnah, a classic political novel, or Staatsroman in the tradition of Plato's Republic and Aristotle's Politics, can ignore the material organization of society. Those religious systems, such as Judaism, Islam, and Christianity in their (respective) Aristotelian moments, that propose to prescribe public policy in the earthly city and design a social world will integrate into their systems theories of (correct) economic behaviour and also accounts of systemically correct economic policy. How, precisely, does a religion, then, make its systemic statement also through its economics?

The sages set forth a system in which the subject of economics - that is, the rational disposition of scarce resources - was utilized to set forth a systemic statement of fundamental importance. The Mishnah's system - alone among all of the Judaic (and Christian) systems of late antiquity 1 - set forth as part of its systemic composition a fully articulated economics, entirely congruent with the philosophical economics of Aristotle, answering questions concerning the definition of wealth, property, production, and the means of production, ownership and control of the means of production, and the determination of price and value. The Mishnah's economics, in general, in the theory of the rational disposition of scarce resources and of the management and increase thereof, and specifically in its definitions of wealth and ownership, production and consumption, point by point, corresponds to that of Aristotle.

Precisely what is claimed here must be made explicit. It is not merely that, here and there, statements about wealth versus study of the Torah circulated among the sages. Sayings relevant to an economics may take shape within a religion or a philosophy, without that religion's or philosophy's setting forth an economics at all. Let me give a single instance of a statement on a matter of economics - the definition of scarce resources - that does not qualify as a statement of an economic theory:

1 For instance, history defined an important, systemically critical, category for Augustine; economics did not.

Rabbinic Judaism States its Theory of the Social Order 15

6A. When R. Simon b. R. Zabedi died, R. Ila went up to take leave of him: "But wisdom, where shall it be found? And where is the place of understanding? The deep says, It is not in me, and the sea says, It is not with me ... it is hid from the eyes of all living and kept close from the birds of the air (Job 28: 12, 14, 21).

6B. "Four things are of worldly use, but if lost, they can be replaced, and these are they:

6C. "For there is a mine for silver and a place for gold which they refine. Iron is taken out of the dirt and brass is cast out of stone (Job 28:1-2).

60. "But as to a disciple of a sage, if he dies, who will present us with his substitute?

6£. "And we who have lost R. Simon, whence shall we find his like?"

6F. "Said R. Levi, The tribes [of Jacob] found something: 'And their hearts failed them, and they turned trembling' (Genesis 42:28).

6G. "We, who have lost R. Simon b. R. Zabedi, whence shall we find his substitute?

6H. "That is in line with the statement, 'But wisdom, where shall it be found? And where is the place of understanding? The deep says, It is not in me, and the sea says, It is not with me ... it is hid from the eyes of all living and kept close from the birds of the air' (Job 28:12, 14,21)." (Song of Songs Rabbah LXXXVIII: 1.6-8, to Song of Songs 5:3)

One may collect and arrange an indeterminate number of topical statements of the type at hand without demonstrating the presence of an economics. For unsystematic opinions on this and that, for instance, episodic sayings about such ideas as mercy to the poor, recommendations of right action, fairness, and honesty do not by themselves add up to an economics.

Indeed, one of the marks of a system's lacking an economics is the presence of merely occasional and ad hoc remarks about matters of wealth or poverty that, all together, attest to complete indifference to the systemic importance of a theory of the rational disposition of scarce resources, their preservation and increase. By contrast, when issues of the rational disposition of scarce resources are treated in a sustained and systematic, internally coherent theory that overall and in an encompassing way explains why this, not that, and defines market in relationship to ownership of the

16 Jacob Neusner

means of production, then we have a systematic account, an economics. Not only so, but also, as in the case of Aristotle's economics, the economics will prove to serve the interests of the system of which it is part when it makes a statement on behalf of that larger system. Through economics, the Mishnah's system makes a critical part of its systemic statement, and this authorship found economics, and only economics, the appropriate medium for making that part of its statement.

But for antiquity, only two theories of economics - Aristotle's and the Mishnah's - delivered principal parts of systemic statements. There are no other candidates for inclusion on the list of significant thinkers and system builders to whom an account of an economics mattered in a systematic way in a systemic composition. While other systems made episodic reference to topics of economic interest, Plato's, for instance, and any number of other figures, allude to issues of wealth, Jesus being the most important example, and in his model, a great many important figures in early Christianity, none produced a well-crafted account of the wealth, the market, exchange, money, value, the definition of the unit and means of production, and other basic components of an economics, let alone a composition of all those things into a coherent statement. And - more to the point - none but Aristotle's and the Mishnah's systems undertook to make a fundamental point in its discussion of topics of economic interest. Aristotle's and the Mishnah's systems not only did so, but they also did so in this-worldly terms, by appeal to wellcrafted philosophical principles about the character of society and politics. That is why I characterize the Mishnah's economics as philosophical, and why, furthermore, when we understand that the Mishnah sets forth an economics in the way it does rather than in some other, we see that economics forms an indicator of the philosophical character of the Mishnah as a system.

The general point in common between Aristotle's and the Mishnah's economics comes first: for both systems, economics formed a chapter in a larger theory of the social order. The power of economics as framed by Aristotle, the only economic theorist of antiquity worthy of the name, was to develop the relationship between the economy to society as a whole (Polanyi 1957, 79). And the framers of the Mishnah did precisely that when they incorporated issues of economics at a profound theoretical level into the system of society as a whole that they proposed to construct. That is why (to paraphrase Polanyi's judgement of Aristotle) the authorship of the Mishnah will be seen as attacking the problem of human livelihood within a system of sanctification of a holy people with a radicalism of which no later religious thinkers about utopias were capable. None has ever penetrated deeper into the material organization of human life under the aspect of God's rule. In


effect, they posed, in all its breadth, the question of the critical, indeed, definitive place occupied by the economy in society under God's rule.

The points in common between Aristotle's and the Mishnah's economics in detail prove no less indicative. Both Aristotle and the Mishnah presented an anachronistic system of economics. The theory of both falls into the same classification of economic theory, that of distributive economics, familiar in the Near and Middle East from Sumerian times down to, but not including, the age of Aristotle (let alone that of the Mishnah five centuries later). But market economics had been well established prior to Aristotle's time. Let me briefly explain the difference between the two, which is a fundamental indicator in classifying economics: In market economics, merchants transfer goods from place to place in response to the working of the market mechanism, which is expressed in price. In distributive economics, traders move goods from point to point in response to political commands. In market economics, merchants make the market work by calculations of profit and loss. In distributive economics, there is no risk of loss on a transaction (Davisson and Harper 1972, 130). In market economics, money forms an arbitrary measure of value, a unit of account. In distributive economics, money gives way to barter and bears only intrinsic value, as do the goods for which it is exchanged. It is understood as "something that people accept not for its inherent value in use but because of what it will buy" (Davisson and Harper 1972, 130). The idea of money requires the transaction to be complete in the exchange not of goods but of coins. The alternative is the barter transaction, in which, in theory at least, the exchange takes place when goods change hands. In distributive economics, money is an instrument of direct exchange between buyers and sellers, not the basic resource in the process of production and distribution that it is in market economics. Aristotle's economics is distributive for systemic reasons; the Mishnah's replicates the received principles of the economics planned by the Temple priests and set forth in the Priestly Code of the Pentateuch, Leviticus in particular. The result - fabricated or replicated principles - was the same.

Both systems - the Mishnah's and Aristotle's - expressed in vast detail the ancient distributive economics, in their theories of fixed value and conception of the distribution of scarce resources by appeal to other than the rationality of the market. The theory of money characteristic of Aristotle (but not of Plato) and of the Mishnah, for instance, conforms to that required by distributive economics; exchange takes place through barter, not through the abstract price-setting mechanism represented by money. Consequently, the representation of the Mishnah as a philosophical Judaism derives from not only general characteristics but very specific and indicative traits held in common with the principal figure of the Greco-Roman philosophical tradition in economics.

18 Jacob Neusner

There was a common social foundation for the economic theory of both systems. Both Aristotle and the Mishnah's framers deemed the fundamental unit of production to be the household; and the larger social unit, the village - which was composed of households - marked the limits of the social entity. The Mishnah's economic tractates, such as the Babas, on civil law, invariably refer to the householder as the subject of most predicates; where issues other than economics are in play (e.g., in the political tractates such as Sanhedrin) the householder scarcely appears as a social actor. Not only so, but both Aristotle and the authorship of the Mishnah formed the conception of "true value," which maintained that something - an object, a piece of land - possessed a value extrinsic to the market and intrinsic to itself, such that, if a transaction varied from that imputed true value by (in the case of the Mishnah) eighteen percent, the exchange was null. Not only so, but the sole definition of wealth for both Aristotle's and the Mishnah's economics was real estate; it was only land, however small a piece. Since land does not contract or expand, of course, the concept of an increase in value through something other than a steady-state exchange of real value - "true value" -between parties to a transaction lay outside the theory of economics. Therefore all profit, classified as usury, was illegitimate and must be prevented.

Episodic details of these, and like, positions can have been, and surely were, entertained by a variety of system builders in the same age. Plato, for instance, had a theory of money; Jesus, a theory of the negative value of wealth and ownership. But only for Aristotle and the Mishnah's framers do these concepts coalesce to form an economics worthy of the name, one that, moreover, bears an important part of the systemic message. For, in the case of the Mishnah's and Aristotle's economics, the entire purpose of the system comes to expression in (among other aspects) the matter of a fully articulated economics. Aristotle's interest in economics derived from his larger program offraming a political economics for the community at large. Polanyi states:

Whenever Aristotle touched on a question of the economy he aimed at developing its relationship to society as a whole. The frame of reference was the community as such which exists at different levels within all functioning human groups. In terms, then, of our modern speech Aristotle's approach to human affairs was sociological. In mapping out a field of study he would relate all questions of institutional origin and function to the totality of society. Community, self-sufficiency, and justice, were the focal concepts. The group as a going concern forms a community (koinonia) the members of which are linked by the bond of good will (philia). Whether oikos or polis [household or village], or else, there is a kind of philia specific to that koinonia, apart from which the


group could not remain. Philia expresses itself in a behavior of reciprocity, ... that is, readiness to take on burdens in turn and share mutually. Anything that is needed to continue and maintain the community, including its self-sufficiency ... is "natural" and intrinsically right. Autarchy may be said to be the capacity to subsist without dependence on resources from outside. (1957, 79)

We see, therefore, that, for Aristotle, economics formed an important building block in his larger system, and distributive economics in detail bore meanings for the larger political economy that he was developing.

For Aristotle, the postulate of self-sufficiency governed all else; such trade as was required to restore self-sufficiency was natural and right, but that alone (Polanyi 1957, 88). The fundamental principle, with ample instantiation in the Mishnah's economics as well, is therefore natural selfsufficiency attained by the oikos and the polis made up thereof. Polanyi states, of political economy:

The institution of equivalency exchange was designed to ensure that all householders had a claim to share in the necessary staples at given rates, in exchange for such staples as they themselves happened to possess .... Barter derived from the institution of sharing of the necessities of life; the purpose of barter was to supply all householders with those necessities up to the level of sufficiency. (1957, 90; 1977, 145-276)

Accordingly, Aristotle's economic theory rested on the sociology of the selfsufficient community, made up of self-sufficient, if mutually dependent, households.

Aristotle's is not the only economics to provide a parallel and counterpart to that of the Mishnah. In the case of the economics of the Mishnah's Judaism, we have a replay, with important variations, of the old and wellestablished distributive theory of economics set forth in the Priestly Code, spelled out in the rules of the biblical books of Leviticus and Numbers, upon details of which the Mishnah's authorship drew very heavily. And in so doing, the economics of the Mishnah took its leave in important details from that of Aristotle. For, in its most basic and distinctive conviction, the economics of the Mishnah's Judaism rests upon the theory of the joint ownership, between God and the Israelite householder, of a designated piece of real estate. And in that system, all that mattered as wealth was that ownership that is shared between God and partners of a certain genus of humanity whose occupancy of that designated piece of real estate, but no other, affects the character of the dirt in question. Aristotle can never have accepted so particular, and so enchanted, a concept of wealth!

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The theology of wealth, in both the Priestly Code and the Mishnah, consists of an account of what happens when ground of a certain locale is subject to the residency and ownership of persons of a certain genus of humanity. The generative concept of the theology involves a theory of the effect - the enchantment and transformation - that results from the intersection of "being Israel": land, people, and individual person alike. When we find evidence that wealth has meanings other than Israelite (normally, male) ownership of a piece of real estate in the Land of Israel in particular, we shall encounter evidence of the expansion and revision of the economics set forth in the Mishnah.

In detail, the economic program of the Mishnah derived from the Priestly Code and other priestly writings within the Pentateuchal mosaic. Indeed, at point after point, that authorship clearly intended merely to spin out details of the rules set forth in Scripture in general, and in economic issues such as the rational use of scarce resources, the Priestly Code in particular. The Priestly Code assigned portions of the crop to the priesthood and Levites as weB as to the caste comprising the poor; it intervened in the market processes affecting real estate by insisting that land could not be permanently alienated but reverted to its "original" ownership every fifty years; it treated some produce as unmarketable even though it was entirely fit; it exacted for the temple a share of the crop; it imposed regulations on the labour force that were not shaped by market considerations but by religious taboos, for example, days on which work might not be performed, or might be performed only in a diminished capacity.

But the authorship of the Mishnah made its own points. The single most striking, already noted, is that the Mishnah's system severely limited its economics - and therefore the social vision and pertinence of the realm of the system as a whole! - to: (1) Israelite householders, meaning (2) landowners, and among these, only the ones who (3) lived on real estate held to fall within the Land of Israel. The economics of the Mishnah eliminated from its conception of the economy: (l) gentiles in the Land of Israel, (2) Israelites outside of the Land of Israel, and (3) Israelites in the Land ofIsrael who did not own land - which is to say, nearly everybody in the world. So the definition of "scarce resources" proved so particular as to call into question the viability of the economics as such and to recast economics into a (merely) systemic component. For when, in the Mishnah, we speak of the economic person, that is, the one who owns "land," it is only land that produces a crop liable to the requirements of the sacerdotal taxes.

It follows, therefore, that ownership of "land" speaks of a very particular acreage: specifically, the territory known to the framers of the Mishnah as the Land of Israel, and that alone. Land not subject to the sacerdotal taxes is not land to which the legal status and traits before us are imputed. But, there


is a second equally critical qualification. An Israelite - a qualification beyond the imagination of the Priestly authorship of Leviticus - must own land in the Land of Israel that is liable to sacerdotal taxes 700 years earlier. Gentiles are not expected to designate portions of their crop as holy, and if they do so, those portions of the crop that they designate as holy nonetheless are deemed secular. So we have an exceedingly specific set of conditions in hand. And what is excluded must not be missed, or we fail to grasp the odd and distinctive character of the economics of the Mishnah. Wealth, for the system of the Mishnah, is not ownership of land in general: for example, land held by Jews in Babylonia, Egypt, Italy, or Spain. It is ownership of land located in a very particular place. And wealth for that same system is not wealth in the hands of an undifferentiated owner. It is wealth in the domain of an Israelite owner in particular.

Wealth therefore is ownership of Land of Israel in two senses, both of them contained within the italicized words. It is ownership of land located in the land of Israel. It is ownership of land located in the land of Israel that is of Israel, belonging to an Israelite. "Israel" then forms the key to the meaning of wealth, because it modifies persons and land alike: only an lsrael(ite) can possess the domain that signifies wealth; only a domain within the land called by the name of "Israel" can constitute wealth. It is in the enchanted intersection of the two Israels (ownership of) the land, (ownership by) the people, that wealth in the system of the Mishnah finds realization. Like Aristotle's selective delimitation of the economy, the Mishnah's economics describes a tiny part of the actual economic life of the time and place and community.

Not only is the Mishnah's economics rather truncated in its definition of wealth, but the range of economic theory in its distributive mode (as distinct from the market-mode) also deals with only one kind of scarce resource, and that is food. True, goods and services, food and housing, were valued and understood to have value; but these are dealt with generally as components of the market, not of the distributive economics that is assumed to predominate. To identify that component of the goods and services of the market that is subjected to distributive, rather than market, economics, within the mixed economics at hand, we look, in particular, at food. The reason for this is that food alone is what is subjected to the distributive system at hand: food and nothing else, certainly not capital, or even money. Manufactured goods and services, that is, shoes on the last, boards in the vise, not to mention intangibles such as medical and educational services, the services of clerks and scribes, goods in trade, commercial ventures of all kinds - none of these is subjected to the tithes and other sacerdotal offerings. The possibility of a mixed situation, in which a distributive economics leaves space for a market economics, rests upon the upshot of the claim that

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God owns the holy land. It is the land that God owns, and not the factory or shop, stall and store, ship and wagon, and other instruments and means of production. Indeed, the sole unit of production for which the Mishnah legislates in rich and profound exegetical detail is the agricultural one. The distributive component of the economy, therefore, is the one responsible for the production of food, inclusive of the raising of sheep, goats, and cattle.

The key then is, what is wealth, and where is wealth? We already know the answer to that question in its formulation in that curious and narrow, geographical-genealogical framework of the system. Wealth is: (1) land (2) held by Israelites (3) in the land of Israel. But that framework has now to be broadened considerably, since, from the definition of wealth, we move to a question of considerable systemic consequence: ownership of the means of production, which amplifies the received theory of wealth. Wealth is the formation of: (1) the unit and (2) means of production, the household, defined in terms of (3) command of a ownership of landed domain, however small. So, wealth is located in the household, comprising, with other households, the village; the village defines the market in which all things hold together in an equal exchange of a stable population in a steady-state economy.

In this context, wealth, of course, is conceived as material, not figurative or metaphorical or spiritual. But it also is held to be as perfect, therefore unchanging, as is real property, not subject to increase or decrease, hence, by the way, the notion of true value imputed to commodities. For, if we imagine a world in which, ideally, no one rises and no one falls, and in which wealth is essentially stable, then we want to know what people understand by money, on the one hand, and how they identify riches, on the other. The answer is very simple. For the system of the Mishnah, wealth constitutes that which is of lasting value, and what lasts is real property (in the land of Israel), and that alone. Real estate (in the land of Israel) does not increase in volume, it is not subject to the fluctuation of the market (so it was imagined), it was permanent, reliable, and, however small, it was always useful for something. It was perceived to form the medium of enduring value for a society made up of households engaged in agriculture. Accordingly, the definition of wealth as real and not moveable, as real estate (in the land of Israel) and nowhere else, real estate not as other kinds of goods, conformed to the larger systemic givens. A social system composed of units of production - households - engaged in particular in agricultural production, made a decision entirely coherent with its larger concept and character in identifying real estate as the sole measure of wealth. And, as we recall, Aristotle will not have been surprised, except, of course, by the rather peculiar definition of the sole real estate deemed of worth.


*** How was the philosophical economics of the Mishnah received? To begin with, the heirs of the system of the Mishnah in the two Talmuds (with stress on the first of the two, the Talmud of the Land of Israel or Yerushalmi, ca. 400 C.E.) read that document not as a whole and complete but phrase by phrase and sentence by sentence, breaking up its large units of discourse into discrete parts. Consequently, as a matter of hermeneutics, they received not the whole system, but only its constituent pieces. To those they devoted sustained efforts at clarification. But their exegetical method precluded a perceptive assessment of the document as a whole, focussing as it did on details. That explains why the economics of the Mishnah defined not a category for exploration, expansion, revision, renovation, and reformation, but only a topic for discussion.

Nearly every discourse - perhaps ninety percent of the whole - of the Yerushalmi addresses one main point: the meaning of the Mishnah, read sentence by sentence. That fact gives us the impression (a false impression) that, for the Yerushalmi, the life of Israel reaches the level of analysis within the integument of the Mishnah. We may say that the Mishnah is about life while the Yerushalmi is about the Mishnah. Only when we realize that, right alongside its reading of the Mishnah, the authorship of the Yerushalmi and companion documents are bringing to expression a system of their own, one that is not at all continuous in its categories with the system of the Mishnah, shall we grasp the full subtlety, the polemical power, of the Yerushalmi's character as what appears to be a mere commentary. That commentary form wishes to lead us to the conclusion that the traits of the Mishnah have defined the problem, of both intellect and politics, confronting the heirs of the Mishnah, the faithful disciples of the final generation of the Mishnah's redaction and formulation onward. But, in the invention of a categorical system entirely their own, these same people make a statement of their own, even while purporting to focus upon statements of others, prior to themselves.

The Yerushalmi is read by the Yerushalmi as a composite of discrete and essentially autonomous rules; a set of atoms, not an integrated molecule reads the Mishnah, so to speak. Read this way, the most striking formal traits of the Mishnah are obliterated. More important, the Mishnah as a whole and complete statement of a viewpoint no longer exists. Its propositions are reduced to details. On occasion, the details may be restated in generalizations encompassing a wide variety of other details across the gaps between one tractate and another. This immensely creative and imaginative approach to the Mishnah vastly expands the range of discourse. But the first, and deepest, consequence is to deny to the Mishnah both its own mode of speech and its distinctive and coherent message.

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How in detail, then, does the Yerushalmi deal with the principal components of the economics of the Mishnah, such as the definitions of money, true value, wealth, and like indicators of the presence of a sophisticated system of economics? It amplifies, refines, and complements, but it does not revise, innovate, or even renovate them. For example, in the discussion, critical to an understanding of the philosophical economics of the Mishnah, of the rule "Silver acquires gold, but gold does not acquire silver, copper acquires silver, but silver does not acquire copper," the Yerushalmi's anonymous voice states as its opener: "This is the summary principle of the matter: Whatever is of lesser value than its fellow effects acquisition of its fellow [when it is drawn or lifted up]" (Y. Baba Mesia 4:1.I.A). The supplied language, of course, is mine, justified by the fact that, to the authorship of the Mishnah - and also therefore to the voice of the Yerushalmi - silver and gold are commodities, pure and simple, and all trade is au/and solely barter.

There is, furthermore, an interest in authorities: for example, "Said R. Hiyya bar Ashi, 'Who taught this Mishnah-paragraph, that silver acquires gold?'" Implications are made explicit: "The implication of what the rabbi has said is that gold is in the status of a commodity." We are given cases, for example: "The daughter of R. Hiyya the Elder lent Rab golden denars. She came and asked her father [how to collect the debt, since, in the meantime, gold had risen in value vis-a-vis silver]. He said to her, 'Take from him good and substantial denars [of the same weight as those you lent]'" (Y. Baba Mesia 4: 1.I.H). That is the case even though she would profit handsomely in trading the gold for silver. There is, furthermore, interest in comparing one rule of the Mishnah to another rule of the same origin.

The principal point of expansion, however, concerns not the conception of gold and silver as commodities for barter, but, rather, a quite different issue, hardly prominent in the Mishnah paragraph, though admittedly entirely present there. It has to do with the rules of acquisition, the point, in a transaction, at which one party has fully attained ownership of the object from the other. That is where we are given a variety of cases and expansions of the received rule. And that is not surprising, since, for administrators of the law, the issues of legal theory concerning abstract problems of economics do not impinge, while the concrete cases of who owns property or a person at a given instant require decisions every day. All these cases, of course, derive from the basic principle that transfer of funds does not complete a transaction; money is a commodity; only when the object itself has been handed over by the seller and received by the buyer is the transaction done. Up to that point, either party may still retract, and that is so even if money has changed hands.

So, the facts of the law of the Mishnah govern, but the category of economics is essentially untouched. When the authorship of the Yerushalmi


learns that "silver acquires gold, but gold does not acquire silver," they wish to spell out rules of acquisition, but not principles of commodity barter as against the abstract concept of money, such as Aristotle had set forth and the Mishnah's sages instantiated in the case of gold and silver. And the rest of Mishnah tractate Baba Qamma chapter four is treated within that same focus of interest, on the concrete and immediate and not on the theoretical and the abstract; so, what is made concrete is the Mishnah's concept of money, not the principle of money let alone the category of economics so far as it has to do with principles of the steady-state and self-sufficient economic entity, the household and the village made up of households.

What about the fundamental concept of true value, as distinct from market value? Here, too, we find neither revision nor renovation, but only restatement; we do not understand the concept better after having studied what the Yerushalmi's authorship has to say than we did beforehand. There is no effort to explain, only to apply to concrete cases or to harmonize with other principles of law the concept that objects have an intrinsic worth, not dictated by the market, to which the market must conform. For example, at Mishnah tractate Baba Mesia 4:3A, we are given a definition of fraud: "Fraud is an overcharge of four pieces of silver out of twenty-four pieces of silver to the sela, one-sixth of the purchase price." The given concept that true value or inherent worth independent of the market, to be given by the purchaser and received by the seller of the object ("fraud applies to the buyer and the seller alike"), is restated, but the focus is on the application.

A brief account of the Talmud's treatment of the subject shows the character of the Yerushalmi's reception of the Mishnah's category. We begin, first, with the position that the assessment of fraud at a sixth overcharge is fact; we deem fraud to be an overcharge of a sixth of the true value of an object, so R. Yohanan maintains that it would apply to the price paid for the object, not only to the true value of the object. Second, the issue is then addressed of whether or not the transaction is null, or whether the purchaser may return the amount by which he had defrauded the merchant and keep the object. So the issue of retraction is made complicated. Third, we have a discussion of a change in the market value of the object prior to the completion of the transaction: "If one sold an object worth five for six, but did not complete the transaction before the market price of the object went up to seven, so that the purchaser, who had been subject to fraud, now wishes to complete the purchase, what is the rule?" Here again, we see how the Talmud clarifies the received rule, but in no way wishes to expand, or contract, or revise, the category that is realized in detail by the rule.

So far as the Mishnah sets forth the conception of wealth, we find the phenomenon the same: the Yerushalmi receives with respect and restates with precision and accuracy precisely what the Mishnah's authorship has

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said, without expanding, redesigning, let alone redefining that concept in any material way. The concept of wealth as fixed and unchanging is associated with the prohibition, deriving from Scripture, against what is narrowly translated as interest or increase (Mishnah tractate Baba Mesia 5:IA), but what is in fact nothing other than profit of more than eighteen percent of the true value of the object, on the one side, or interest on a loan of any kind, on the other. Trading in naked futures, for example, is forbidden; it involves transactions concerning things that are not now in being. The prohibition against profit or interest on loans is extended to gifts in kind or even generous gestures or attitudes. How is the rule worked out in the Yerushalmi? First, may the judges exact usurious interest from one who has received it? The answer is this: "If from this man you exact what he has unlawfully gained, then we shall leave not a thing in the estates of the great nobles of the Land of Israel" (Yerushalmi tractate Baba Mesia 5: LIC). But bonds containing interest clauses are unenforceable in court.

The language of the Mishnah is clarified, and details left open by the Mishnah paragraph's language are filled in. A case involving interest in kind - free rent - is worked out: "A man lent money to his fellow. The latter let him space in his building. Later on the borrower said to the lender, 'Pay me rent for my building.' The lender said to him, 'Give me back my money. [I had assumed you would not charge me rent so long as my money was in your hands), The case came before R. Ba bar Mina, who ruled, 'Now does the lender get what he had imagined was free [merely because he had assumed it was free? Obviously not. He was wrong and has no claim on free rent at all.] '" The case is further expanded, but the character of the discussion is entirely clear.

The upshot is obvious. The Yerushalmi's reading of the Mishnah's important discussions of economics is faithful in reproducing and clarifying and complementing the received rules. But the powerful abstraction of the Mishnah's intellectual method, stating in detail general principles of an encompassing character, finds no counterpart. The Mishnah's statements in general are treated not as concrete expressions of abstract principles, but rather as mere cases and rules. So, the document's basic philosophicality is subverted, its economics as an exercise in theory capable of holding its own with Aristotle is turned into mere rules. What that means is simple: whatever the Yerushalmi and its companion documents wished to say would come to expression in ways that did not involve the sustained reconsideration of problems of economic theory. What we see with great clarity, therefore, is that the Mishnah's heirs have faithfully preserved their inheritance without taking over its categorical structure and system. They paid all due respect to the inherited system, while at the same time constructing their own counterpart system, with its counterpart categories.

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*** These counterpart-categories emerge in free-standing, non-exegetical passages, framed outside the orbit of the Mishnah. In the same passages, it quickly becomes clear, the received economics is simply bypassed. Where we find extensive passages in which the Mishnah is left far behind, they normally are of two kinds: (1) exegesis of narrative or theological passages of Scripture; and (2) fables about heroes. These latter are divided into tales about rabbis and historical accounts. But, no important distinction exists between the two, except that the former speaks of what rabbis said and did while the latter tells about events on a more generous scale. Accordingly, when the Yerushalmi presents us with ideas or expressions of a world related to, but fundamentally separate from, that of the Mishnah, that is, when the Yerushalmi wishes to say something other than what the Mishnah says and means, it will take up one of two modes of discourse. Either we find exegesis of biblical passages, with the value system of the rabbis read into the scriptural tales, or we are told stories about holy men and paradigmatic events, once again through tales told in such a way that a didactic purpose is served. And, in such passages, there is no economics in the received and conventional sense.

So far as the issues of economics arise in the Yerushalmi, they invariably are introduced by the requirement of dealing with sentences of the Mishnah, and they are fully spelled out. But, is there independent thinking about the same issues? A survey of the tractates of the Yerushalmi fails to yield a single important case in which the kinds of writing particular to the Yerushalmi, vis-a-vis the Mishnah produce any thought at all on economic topics. Quite to the contrary, in those other-than-exegetical passages of the Yerushalmi we find ourselves in a world in which no one is thinking about the kinds of scarce resources and their rational utilization, protection, and increase, that economics considers. To state the fact very simply: in the successor documents, scarce resources, so far as these are of a material order of being (e.g., wealth defined as the Mishnah and Aristotle did; and true value understood as philosophy defined it) the matter of profit and increase and market economics, and the rest - all these simply are systemically neutral in the successor documents. Where wealth, money, trading, and profit enter discourse at all, they are not part of a system that expresses its basic structure through the category of economics. They are trivialized and made to exemplify categories of a different system altogether.

To demonstrate this fact, we turn to some examples of how in the companion writings issues of market and wealth are treated. What we see, time and again, is the simple fact that these matters, systemically "uncontingent," independent variables in the Mishnah's structure, are explicitly treated as contingent and dependent. In explaining the fight

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between Cain and Abel, one version has the argument concern the relative merit of real estate as against moveables. But another restates the matter entirely, so R. Joshua of Sikhnin in the narne of R. Levi: "Both of them took the real estate of the world, and both of them took the movables. Then what was the quarrel about? This one said, 'In my domain will the house of the sanctuary be built,' and that one said, 'In my domain.' 'And when they were in the field' (Genesis 4:8) [indicates it, for] the word 'field' can refer only to the house of the sanctuary, as it is said, 'Zion shall be ploughed as a field' (Micah 3:12). And, as matters played themselves out: 'Cain rose up against his brother Abel and killed him' (Genesis 4:8)" (Gen Rabbah XII:VII.2). The basic conviction of the biblical story, that at issue was Cain's jealousy of Abel, because God had favoured Abel, is curiously absent in all three explanations. The first theory of the dispute is that it concerned material things; the second is that it concerned the sacred service; the third that it concerned who will possess woman. If we substitute for the possession of the house of the sanctuary the prestige accruing to the one who holds possession of that domain, then at issue in the mind of the compositor of the whole is wealth, prestige, and sex. God's favour of one brother because of his superior offering as against the other because of his niggardly one, then falls away from the story, which turns into an account of human greed, arrogance, and lust. From our viewpoint, what is interesting is simple. Real estate and moveables are not to be prized; these do not represent wealth. They are contingent and dependent. Not only does wealth not take the form of land or moveables, but also prosperity is a source of sin.

Pisqa Ten of Pesiqta deRab Kahana, which deals with tithing, makes the polemic against wealth explicit. Its base verse is Deuteronomy 14:22. In this connection, at X:1.4, we find a very precise treatment of a principal concern of economics, which is proper estate management. Xenophon would not have made much sense of the following:

4A. R. Levi interpreted the cited verse (The miser is in a hurry to grow rich, never dreaming that want will overtake him [Proverbs 28:22]) to speak of those who do not set aside the required tithes as is proper.

4B. For R. Levi said, "There is the case of one who would set aside his required tithes as was proper.

4C. "Now the man had one field, which produced a thousand measures of grain. He would separate from it a hundred measures for tithe. From the field he would derive his livelihood all his days, and from it he would nourish himself all his life. When he was dying, he called his son and said to him, 'My son, pay attention to this field. Such and so has it produced,

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such and so I would separate from the crop for tithe, and from that field I derived my livelihood all my days, and from it I nourished myself all my days.'

4D. "In the first year (following the father's death), the son sowed the field and it produced a thousand measures of grain, from which the son set aside a hundred measures for tithe. In the second year the son became niggardly and deducted ten measures, and the field produced a hundred measures less, and so he deducted ten and it produced a hundred less, until the field yielded only the amount that had originally been set aside as tithe.

4E. "When the man's relatives realized it (as a sign of rejoicing) they put on white garments and cloaked themselves in white and assembled at his house. He said to them, 'Why have you come to rejoice over that man who has been afflicted?'

4F. "They said to him, 'God forbid! We have come only to rejoice with you. In the past you were the householder, and the Holy One, blessed be he, was the priest (collecting the tithes as his share of the crop). Now you have been turned into the priest, and the Holy One, blessed be he, has become the householder (keeping back the larger share of the crop, nine tenths of the former yield, for himself). (So we are rejoicing at your rise in caste status!),"

4G. Said R. Levi, "After he had deducted (the priests' share) year by year, yearly the field reduced its yield."

4H. Therefore Moses admonished Israel, saying to them (year by year) you shall set aside a tithe (of all the produce of your seed, of everything that grows on the land. You shall eat it in the presence of the Lord your God in the place which he will choose as a dwelling for his name - the tithe of your corn and new wine and oil, and the first-born of your cattle and sheep, so that for all time you may learn to fear the Lord your God) (Deuteronomy 14:22). (Pesiqta DeRab Kahana X:1.4)

The message cannot be missed: obedience to the law of the Torah yields prosperity, and violation, want. The sarcasm of the relatives underlines the main point. What the householder prized he lost. His father had left the right message: obedience to God, giving God the proper share of the jointly owned property, will assure prosperity. That point is made explicitly at Pesiqta deRab Kahana XI:X.1.B-C: "Tithing, you shall tithe - so that you

30 Jacob Neusner

will get rich. Said the Holy One, blessed be he, 'Give a tithe of what is mine, and I shall enrich what is yours. '"

These and other stories, which occur in numbers, show that in place of one rationality (that of careful management and increase of scarce resources) another rationality (that of a transcendent sort) has come into place. That other rationality will place a high value on matters of an other-than-material character; for example, Leviticus Rabbah III:V presents stories on the high worth of the poor man, the poor man's offering, the widow's meal offering. These tales present no important economic insight, of course, but they contrast worldly value with real value. Indeed, when we examine sustained discussions of sin and venality, such as we find at Leviticus Rabbah XVJ:J, we find that sins of a material order are rarely at issue. The entire matter of scarce resources is omitted in numerous moral passages.

Sayings and stories of this type are commonplace in systems that lack all interest in economics. No early Christian writer would have found alien the denigration of wealth and the identification of value in something of an other-than-material classification such as is expressed in the documents of the fourth and fifth centuries. Instead of carrying forward systematic thought on a system of economics, let alone a system that makes a statement through economics, they present episodic and trivial observation on economic topics, making points hardly pertinent to economics as a sustained and systematic field of thought.

Then, what takes the place of those scarce resources that form the critical interest of philosophical economics? A clear answer is as follows, which shows explicitly the utterly new rationality as to the definition of value and wealth that would emerge in the successor system:

1 B. R Tartan gave to R. Aqiba six silver centenarii, saying to him, "Go, buy us a piece of land, so we can get a living from it and labor in the study of Torah together."

I C. He took the money and handed it over to scribes, Mishnah-teachers, and those who study Torah.

I D. After some time R. Tarfon met him and said to him, "Did you buy the land that I mentioned to you?"

IE. He said to him, "Yes."

I F. He said to him, "Is it any good?"

IG. He said to him, "Yes."


1 H. He said to him, "And do you not want to show it to me?"

1 I. He took him and showed him the scribes, Mishnah teachers, and people who were studying Torah, and the Torah that they had acquired.

1 J. He said to him, "Is there anyone who works for nothing? Where is the deed covering the field"

1 K. He said to him, "It is with King David, concerning whom it is written, 'He has scattered, he has given to the poor, his righteousness endures forever' (Psalms 112:9)." (Leviticus Rabbah XXXTV:XVI)2

It would be difficult to invent more explicit proof that a drastic shift has taken place. Instead of defining wealth as land, land is defined as nonwealth, and something else is now defined as wealth. The very character of economics changes, from a theory of the rational disposition of scarce resources to an account of the indeterminate character of abundant resources - and how these are to be created and enhanced.

This is evidence of not the reformation of received categories but the formation of new ones, not continuous with the old. And the representation of matters is quite articulated in the contrast between wealth as real estate and wealth as Torah. Then, how do we tum real estate into Torah? That trans-valuation of values is worked out, once more quite explicitly, in the statement: "'I can write the whole Torah for two hundred copper coins.' What did he do, he went and bought flax seed worth two hundred copper coins, sowed it, reaped it, made it into ropes, caught a deer, and wrote the entire Torah on the deer hide" (Y. Megillah 4: l.IV .P-Q). The three operative components here are "money," "land," and "Torah." As we recall, the definition of real wealth was real estate. So we transform money into land. But then the definition of wealth is shifted, and the symbolic shift is blatant: tum money into real wealth, then real wealth produces the wherewithal of

2 The document is generally assigned the date of closure of ca. 450 C.E. and hence informs us of the state of opinion in the mid-fifth century, the time of the Yerushalmi. If we accept at face value the attributions to late first-century sages, the story represents a much earlier period. But to date, no method has been devised to validate attributions of sayings to authorities who lived centuries before the closure of documents that contain those sayings. Numerous critical problems invalidate them. It therefore suffices to adduce the story in evidence of the views held by the framers of Leviticus Rabbah and endorsed by them through inclusion in their collection. Nothing in the Mishnah, the initial document, ca. 200 C.E., suggests that the views attributed to Aqiba and Tarfon here possessed any authority for the framers of the Mishnah. The bulk of opinion there has it that people should both study the Torah and make a living; no one suggested that through studying the Torah could one meet his material needs, though that opinion is attributed to authorities later on and is broadly circulated in the Talmuds and related compilations.

32 Jacob Neusner

making a Torah. And with that rather stunning symbolic transformation, we tind ourselves in a world wholly different from the one in which scarce resources are identified with matters of material, palpable value, and in which economics is the theory of the rational disposition of such scarce resources as capital, labour, moveables, and real estate.

What we see, therefore, is not the revision, let alone the expansion, of a received category, but adumbrations of the transformation of the category into a counterpart category, one that systemically addresses the same issue but presents a mirror image of the received category's meanings and doctrines. How does the received economics change as a continuing category? In my view, the received economics does not undergo categorical revision at all. Beyond the valuation of land, the conception of true value, and other traits of Aristotelian economics, we do not find, for example, much appreciation of other media of material wealth and value, for example, market place and capital. I can identify in the documents under examination no new thinking on economic questions at all. For instance, I can locate no interest in the market, in production of goods and services, in addition to produce of land, such as would signify reflection on the limitations of philosophical economics and the expansion of the range of concern beyond the theoretically constricted limits of the Mishnah's economics. There simply is no new thinking on economics. Instead, a new "scarce resource" -essentially beyond the limits of the old, that is, a supernatural resource - has defined a category, and a new rationality has superseded the received one. The Mishnah set forth a Judaic theory of the social order in which economics in the classical sense made an important part of the systemic statement, and the Talmud of the Land of Israel both clarified that statement and set it aside in favour of a counterpart category, one that competed with economics as part of a successor system that utterly transformed the initial Judaism (Neusner 1992).3

3 This is spelled out in detail in my Transformation of Judaism (Urbana: University of Illinois Press, 1991).

Chapter 2

The Uses of Economics in Papal Encyclicals

Andrew M. Yuengert Pepperdine University

Imagine that you hire an architect to design a house for you. Imagine also that you know the broad outlines of what you want in a house - how many bedrooms, the style, or the type of kitchen. In other words, you know what the house is/or - namely, the shelter and comfort of your family. When the architect suggests designs that will beautifully and efficiently serve the ends you have outlined, you listen, respecting the architect's expertise. The architect may think that a house should serve purposes different from the ones you have outlined - the architect may think that a house should be structurally honest, starkly displaying the materials that go into its construction, or that a house should win the admiration of modernist architects. To the extent that the architect can convince you that the architect's goals should be yours, you will allow the architect to design your house with them in mind. If you do not share the architect's goals, however, you will reasonably expect him or her to design the house to serve ends that you think are good.

Add to this example that you are a civil engineer, with some expertise in home building. As such, your expertise and the architect's overlap. You will still insist that the house serve your purposes for it, but you may also find yourself disagreeing with the feasibility of the design. If in a field of overlap between your skills you disagree - say, you doubt whether the materials can bear the stresses proposed in the design - you may be forgiven for trusting your own expertise over the architect's. In short, you may find yourself in

34 Andrew M. Yuengert

conflict with the architect over both the goals of the design (the purpose of the house) and its practical details.

Papal Social Teaching (PST) treats mainstream economics like an architect who wants to build a house to serve ends that are opposed by the client, and whose design is based on theories that may render the structure unstable. Respectful of the expertise of economists, the popes nevertheless insist that economic analysis and advice take into account the objectives and expertise of Roman Catholic moral theology. This situation should be agreeable to economists, whose avowed goal in life is to provide value-free positive analysis in the service of social objectives outlined by others. They are accordingly puzzled and irritated when PST dismisses their purportedly positive economic analysis as irrelevant and even harmful.

The popes are suspicious of most neoclassical economic analysis not because it is devoid of normative content, but because it denies its normative content, a content that is incomplete. My aim in this essay is to examine how PST makes use of the insights offered by economists and why it sometimes does not. My first task is to make clear what PST expects from economics, by comparing the normative-positive distinction in economics and PST. I will then explore PST's use of economics in three examples: labour relations, the organization of social economy, and consumerism.

These examples show that PST does not accept the insights of economic analysis without first carefully evaluating its normative content. PST sometimes rejects the analysis, sometimes accepts it without its normative implications or in pursuit of other normative ends, and sometimes must proceed without any help from economists, whose methods do not allow them to address certain pressing problems.

In this essay I will not critique the economic reasoning in PST; neither will I attempt to discover the hidden economist inside each pope, trying to fit papal pronouncements into an economic framework when they do not fit. As important as both of these tasks are, their pursuit here would distract from the attempt to understand why PST approaches economics the way it does, so that economics might understand and communicate more effectively with theology, and not just cluck its disapproval.

The term "Papal Social Teaching" refers to the social thought embodied in a series of encyclicals dating back to 1891. Obviously, Roman Catholics have evaluated the economic order in light of the Gospel, and amid contemporary intellectual currents, for much more than 100 years (e.g., see: Waterman 1991 a; and Misner 1991). The social encyclicals deserve special attention, however, not only because they are recent, but also because they coincide with the development of modern economics. Following common practice, the encyclicals will be referenced by the abbreviation of their Latin title and by paragraph (see the appendix for a listing of the encyclicals).

The Uses a/Economics in Papal Encyclicals 35

It should be noted that what is here labelled "Papal Social Teaching" is more conventionally termed "Catholic Social Teaching" (as is evident from the references). This re-naming is perhaps fitting in a volume devoted to many different religious perspectives; it is not meant to obscure or denigrate the pastoral authority claimed by and exercised in the social encyclicals. The pronouncements of the popes in the encyclicals are not those of a faction of Roman Catholics who happen to live in Rome; they are the teachings of shepherds, who preside over and participate in a vigorous and sometimes tumultuous conversation through time.

1. The Normative-Positive Distinction

1.1 Neoclassical Economics

To make it clear what exactly PST expects from economics, we must first point out some differences in the ways economics and PST approach the normative-positive distinction. Economists posit a sharp distinction between "ought" and "is." Blaug (1992) makes the distinction clear. Relying on Sen (1970) and Nagel (1961), he distinguishes three types of normative statements:

I. Pure normative statements are opinions or tastes, not amenable to rational analysis and discussion, for example, the death penalty is always and everywhere wrong.

2. Impure normative statements are contingent upon certain facts accepted as true, for example, the death penalty is acceptable because it deters crime.

3. Methodological statements are implicit assertions that the method of analysis in use is the proper one, for example, marriage should be modelled as a Nash-bargaining game.

According to Blaug, there can be no rational debate about pure normative statements; if economist A feels that sex should never be sold for money, and B disagrees as strongly, then there is nothing left to do but move on to another topic. In contrast, positive statements can be true or false; fast food employment in New Jersey either rose or fell in a certain year - a theoretical model either implies certain relationships between prices and sales or it does not.

Blaug admits that the normative-positive distinction is not airtight. Methodological statements are admittedly normative; they may reflect the biases and misconceptions of the research community, leading to a set of method-dependent "facts" whose objectivity is suspect. Likewise, impure


normative statements are contingent on the "facts" thrown up by positive analysis. Despite its imperfections, Blaug (like most economists) finds the distinction useful. A commitment to the distinction, to "maximizing the role of facts and minimizing the role of value" (Blaug 1992, 134), advances the science.

1.2 Papal Social Teaching

Like economics, PST finds the normative-positive distinction useful. However, PST assigns a greater role to the "normative" part. Pius XI outlines the roles of theology and economics in QA (42):

Even though economics and moral science employs each its own principles in its own sphere, it is, nevertheless, an error to say that the economic and moral orders are so distinct from and alien to each other that the former depends in no way on the latter. Certainly the laws of economics, as they are termed, ... determine the limits of what productive human effort ... can attain in the economic field and by what means. Yet it is reason itself that clearly shows, on the basis of the individual and social nature of things and men, the purpose which God ordained for all economic life.

Clearly, Pius XI does not reject the positive-normative distinction. Rather, he accepts it in a way that involves three important distinctions.

First, in moral theology, the normative is prior to the positive; the two orders are related hierarchically. As H. Geoffrey Brennan (1994) notes, economics with all normative substance stripped out would be very uninteresting; among the lost analyses would be economic efficiency, Pareto optimality, and distributive justice. You cannot have a meaningful discussion about means without paying at least some attention to ends, even if the ends are only tentatively assumed, for the purpose of analysis (von Nell-Breunig 1936, 325). Since you must have a normative end in mind to conduct worthwhile economic analysis, you might as well have the right one.

The second important difference is that normative analysis is the object of a science - moral theology - that has its own method and that does not admit of any "pure" normative judgements ("mere" opinions). Roman Catholic moral theology draws inferences primarily from Scripture and tradition and secondarily from natural law and human experience (Welty 1960). All "pure" normative statements are in fact impure and may be changed by an appeal to the "facts" of moral theology. Thus the normative is in no way subjective in PST. Normative statements have their own logic and are amenable to rational discussion about the content of revealed truth and its corollaries.

The Uses of Economics in Papal Encyclicals 37

Once the objective nature of the normative in PST is understood, the objective nature of needs and rights follows. A person's needs are related to his or her objective moral purpose; one needs certain material things and conditions to be able to fulfill that purpose. Objective rights derive from objective needs; a person has a right to those things needed to fulfill his or her purpose. This is often confusing to the economists, who define "need" as subjective desire, and for whom rights have no meaning apart from the state, which institutes "positive" rights in pursuit of its goals.

The third important difference between PST's understanding of normative and positive analysis and that of economics is PST's claim that its expertise overlaps with economics. For its part, the Roman Catholic Church is "an expert on humanity" (SRS, 41), offers "a global vision of man and human realities" (PP, 13). PST is suspicious of economic analysis based on assumptions about the nature of people and community that contradict its conclusions about the same.

Thus PST is concerned both with the methodological norms of economics - that economic models be based on the truth about human nature, and not on the incomplete liberal vision of the autonomous individual - and that normative economic analysis be consonant with moral theology (OA, 27-28). Moreover, PST's objections to "value-free" economics are not simply based on the incompleteness or inaccuracy of economic reasoning. Economic theories have an effect on culture and may promulgate distorted views about the person and society (Calvez and Perrin 1961,440). QA (133) claims that, over the previous century and a half, the adoption of an "economic science far removed from the true moral law" excused and gave impetus to widespread avarice in society. According to LE (62), only changes in both theory and practice will overcome the negative effects of materialism.

PST's criticisms of economics do not imply that PST can supplant or substitute for economics. Eberhard Welty (1960, 14-15) notes that, although economics is only relatively autonomous, given proper ends it, like every sphere of life, "has its own laws, its own ways and means, its own techniques and organization." For example, RN (56) endorses associations of workers and employers, but it is deliberately silent about how those associations should be constituted. Rodger Charles discerns a prudent consideration in PST's disinclination to espouse detailed economic solutions to social problems: "The widest possible latitude must be given to those who wish to put the principles into practice. Any more precise language would give those who had a particular scheme in mind ... opportunity to narrow down the options open to the Christian (1982,324).

Another way to understand the relation of economics to theology is to treat PST as an "interdisciplinary nexus" (CA, 59). In its efforts to make


moral sense of the social order, PST draws upon the insights of economics, political science, history, anthropology, psychology, and sociology. OA (38) recognizes that the different social science disciplines each face a "methodological necessity ... to isolate, in the various situations, certain aspects of man, and yet to give these an explanation which claims to be complete or an interpretation which is meant to be embracing." In other words, the various sciences reduce people to a particular characteristic; it is up to the moral theologian to attempt to distill practical wisdom from the insights of each discipline. Economics is only one tool in the moral theologian's toolbox.

2. The Shortcomings of Neoclassical Economics, and the Attractions of the Institutionalists

PST looks to the social sciences for help in understanding human life in community. Nonetheless, the social sciences are "at once indispensable and inadequate for a better discovery of what is human" (OA, 40). The inadequacy of social science stems in part from the essential indeterminacy of human behaviour due to free will (Mueller 1984, 17) and in part from correctable shortcomings of the sciences themselves. PST repeatedly criticizes neoclassical economics for its individualism and its materialistic foundations, insisting on humankind's social and spiritual nature (RN, 50; MM, 176; and SRS, IS). In this we find echoes of the popes' deep suspicion of nineteenth-century liberalism (Waterman 199 I a; Misner 1991).

The Roman Catholic Church's nineteenth-century conflict with continental liberalism has consequences today in PST's suspicion of individualistic and materialistic theories. In light of this conflict, it is not surprising that PST has found the German historical-institutionalist tradition attractive, since that school is more suspicious of atomistic theories of society and focusses more closely on the role of institutions, history, and culture in economic life. Evidence of this connection can be found in the influence of Heinrich Pesch and his students in papal encyclicals; Oswald von Nell-Bruenig, a sociologist sympathetic to Pesch's work, played an important role in the drafting of Quadragesimo Anno (Ederer 1991). CA sums up this affinity to institutionalism: "Models that are real and truly effective can only arise within the framework of different historical situations through the efforts of all those who responsibly confront concrete problems in all their social, economic, political, and cultural aspects as these interact with one another" (43). PST clearly doubts the universal application of abstract models to economic life without regard for details of the political and social culture.


In light of the suspicions about the ideological foundations of economics, let us now examine how PST uses, or does not use, economics in its analysis of three specific issues: labour relations (the social question), the organization of social economy, and consumerism.

3. Labour Relations

3.1 The Context of the Problem

From the middle of the nineteenth century on, Roman Catholic bishops and laity struggled to make sense of the technological and organizational changes brought about by the industrial revolution. Social relations were dominated by events in the labour market, which divided society into two classes: capital (labour demand) and labour (labour supply). According to MM, this reorganization of production was accompanied by liberal economic theories in which "the outlook ... was for the most part a purely naturalistic one, which denied any correlation between economic and moral reality. Personal gain was considered the only valid motive for economic activity. In business the main operative principle was that of free and unrestricted competition" (11).

Regulation of labour relations by the logic of the market, in an environment where obligations to others did not extend beyond contracted duties, displaced a set of institutions that contained implicit social obligations and limits on competition. According to PST, destruction of the old social order led to "irresponsible behaviour" by owners of capital (Charles 1982, 299) and was partly responsible for a perceived "moral degeneracy" (RN, 1 ).The surrender of the workers to the market resulted in social conflict, driven by "hours of labour ... too long and the work too hard, or because they [workers] consider their wages insufficient" RN 39). The contlict was "all the more harsh and inhumane because it knew no rule or regulation" (CA, 5). Since Leo XIII, PST notes many improvements in the lot of propertyless workers; still, neither the problems nor the justifying ideology have disappeared (QA, 59; CA, I I).

3.2 Purposes of Work

In evaluating calls for action ranging from expropriation of capital to union organizing to worker safety legislation, PST has kept in mind the two principal functions of work: it should both express and realize the dignity of the workers, and it should help to build and maintain community.

Workers and employers are equal in dignity; they share the common experience of useful work. All work has value, according to LE (1), because


it provides people with a living, advances science and technology, and elevates the culture. Human beings are called to work from their creation (Genesis 1). From the dignity of human work spring two rights: the right to a just wage, and the right to participate.

John A. Ryan (1942, chap. 22) lays out the argument for a just wage as follows:

I. God created the goods of the earth (the material world) for the sustenance of all.

2. All persons are supposed to gain access to these goods through "useful work."

3. Those who control the "opportunities of the earth" must permit reasonable access.

In other words, owners of capital are under an obligation to provide useful work, whereby those who have no capital may earn a decent living.

This logic is echoed throughout PST. RN (37) recognized that the rights of propertyless workers (the bulk of the poor) should receive the most government protection, since they must rely entirely on wages for their livelihood. MM (77) notes that part of the payment of a just wage may be shares of ownership in the firm.

LE (22-23) emphasizes this subjective nature of work: a human being is created as a rational planner, capable of self-direction. Consequently, work is not only a way to meet material needs; but work itself is also good, when it allows the worker some subjective participation. To the extent possible, people must be the ones who meet their own needs (Calvez and Perrin 1961). To this end, QA (65) urged worker participation in ownership and management. MM (92) recommended that workers be given greater autonomy in the workplace and not just passively follow orders. Finally, in light of this need to participate in productive work, PST has always declared unemployment to be a great evil (RN, 58; LE, 82).

Beyond work's purpose in expressing an individual's dignity is its purpose in promoting social unity. Work in a modern economy is inescapably social - it brings the worker into contact with many others; through it the worker joins a society, that is, a company; and the wages of work make possible the society of the family (LE, 42). Conflict within a productive enterprise is therefore unnecessary and harmful; a stated goal of the early encyclicals is not just the removal of bitterness, but also the promotion of unity between the classes eRN, 21). Consistent with this idea, it was hoped that unions would grow into more than a countervailing power to capital - that they would (with employers) promote the common good of the enterprise eRN, 49).

The Uses 0/ Economics in Papal Encyclicals 41

3.3 The Use o/Economics: Free Contract and Power in Markets

The economics of labour markets in the past offered a normative evaluation of labour relations, which implied that the situation, if not ideal, was the best that could be hoped for. Since the wage is freely contracted, both workers and employers are better off than they would be in their next-best alternatives. PST approached this analysis armed with what it considered to be a moral fact: workers were not paid enough, and they worked in conditions that were too harsh. The situation was unacceptable; PST was suspicious of any analysis that appeared to suggest that it was inevitable and that the state should be impassive.

Because PST does not express itself in explicitly economic terms, it is not clear by what mechanism workers came up short in some labour markets. The encyclicals hint at several possibilities: employers or groups of employers are monopsonists (RN, 47), they use their wealth and influence to increase their own political influence to the detriment of workers (LE, 34), and the reservation wages of workers are at or below subsistence - the alternative to work at a low wage is starvation (RN, 45).

Even if the wage is low due to supply factors and not monopsony, a market wage too low is unacceptable. The worker has a right to a living wage, and the employer has a duty to pay it. According to LE (77, 80), the pressures of profit maximization cannot excuse unjustly low wages. Even if the existing wage is Pareto optimal, the employer is under a certain obligation to make himself or herself worse off, if necessary, to solve the problem.

3.4 Recommendations

PST recommends action on three fronts to achieve justice in labour markets: a floor on wages, actions to change market conditions to render a minimum wage unnecessary (social justice), and policies to promote worker participation.

PST is unwilling to accept market wages that are too low; it leaves to others to determine exactly how low is too low, but it proposes that a worker should be able to earn enough to support a family decently (relative to community norms) and to save enough to become a modest capitalist himself or herself (QA, 61). Higher wages for workers were expected to improve class relations, decrease income inequality, and increase productivity in the economy as more people, given the incentive of property ownership, would "work harder and more readily" (RN, 47). In pursuing the goal of improved compensation for the poorest workers, PST insists that the state must sometimes limit competition in labour markets (QA, 53).


PST is not blind to the practical obstacles to achieving wage justice in markets, however; it acknowledges the difficulties and tradeoffs involved in minimum wages. QA admits that "an excessive lowering of wages, or their increase beyond due measure, causes unemployment" and that economists should seek a wage structure that offers "to the greatest number the opportunity of getting work and obtaining suitable means of livelihood" (74). QA also admits that, in some industries, market conditions make the simultaneous achievement of a living wage and full employment infeasible; in this case, "social justice demands that reforms be introduced, ... whereby such a wage will be assured to every adult workingman" (71). QA (72) hinted that some form of output price supports might be necessary to insure a just wage in every industry; more recent encyclicals have focussed on reducing the supply of unskilled workers through investments in human capital (MM, 106-07; CA, 15).

Support for greater worker participation takes three forms: support for unions, support for worker ownership and management, and support for the marginalized. PST somewhat optimistically hoped that unions would be more than a counterweight to the market power of employers but would become "a mouthpiece for the struggle for social justice, ... a constructive factor of social order and solidarity" (LE, 96). PST's support for worker shares in management and ownership is uncompromising. MM (82-83) declares even limited worker participation in management decisions to be so important that it is justified even at the cost of lower production. Finally, those whom changing economic conditions and illness push to the fringes of the labour market must be supported "in a society hardened by discrimination and the attraction of success" (OA, 15).

PST is very careful to specify the goals it has in mind in labour markets and to evaluate economic analysis in terms of them. PST is not impressed by the Pareto criterion, if it is used as an excuse for a morally unacceptable outcome: employers have an obligation to accept a decrease in their material welfare if the current situation leaves workers with too little. PST seeks the help of economists in suggesting and making changes in markets that can bring about living wages in ways that do not obstruct the flow of the market itself but insists on living wages, market or no. Finally, PST's goals for unions go beyond the narrow one of economic analysis: unions are not simply agents of countervailing economic power, but they should also play an important social role in a healthy economy.


4. The Organization of Social Economy


The social question (really the labour question) was only the most prominent part of a much broader debate about the organization of social economy. The global counterpart to the question To what extent should governments allow competitive markets for labour to operate? is: To what extent, and within what limits, should the economy be organized around the free market?"

The two extreme answers to this question are: Not at all; and Always and everywhere. The Marxist alternative offered state ownership of the means of production, consolidating the supply side of the product market and the demand side of the factor market. The liberal capitalist alternative consisted of private property, "ownership as the right to do what one pleases with one's possessions" (Ryan 1942, 17), coupled with lightly regulated markets for goods and factors (laissez faire). Because the liberal social theories popular in the industrial revolution appeared to give licence to unlimited accumulation without social obligation (Mueller 1984), the great inequalities of wealth and income of the period suggested to Roman Catholic observers that the system was either unjustly constituted or unjustly regulated (QA, 58, 60). The Great Depression raised further questions about liberal capitalism. The end of the colonial period raised the issue again, as developing countries weighed the merits of different economic systems and often blamed their own underdevelopment on world markets (PP, 3).

4.2 The Goals of the Economy

According to Calvez and Perrin (1961), PST enumerates two principal goals for the economy: providing for human beings' material needs, and providing people the opportunity to provide for their needs (to freely express their personalities in production). To these should be added that the economy itself constitutes a society that has its own common good. The economic order should not only provide goods and services, but it should also allow for creative participation within a healthy community.

The most frequently quoted Scripture passage in the social encyclicals is: "What does it profit a man, if he gain the whole world, but suffer the loss of his own soul" (Matthew 16: 26). Economic prosperity is a means, not an end, and is ambivalent for "fallen man": "It is necessary if man is to grow as a human being, yet it can also enslave him, if he comes to regard it as the supreme good and cannot look beyond it" (PP, 19). In spite of the dangers of riches, PST agrees that economic prosperity can be a great good. RN (34) goes so far as to declare that "it is the business of a well-constituted body


politic to see to the provision of those material and external helps 'the use of which is necessary to virtuous action. ,,, The economy must produce a certain material prosperity.

In addition to material prosperity, a well-constituted economy should allow each person to participate. Since human beings develop in an important way through their self-directed acts, PST emphasizes active participation in economic affairs. PP (65) emphasizes that developing nations must in some sense become "artisans of their destiny." Widespread and active participation is a key to prosperity, according to CA (32), which employs a more dynamic term: "initiative."

Finally, a healthy economy should promote a sense of community, of common effort. The destruction of the status that society and its replacement by the contract economy left human beings without a sense of social cohesion (Mueller 1984, 31). PST has not given up on the potential of production, which is inherently social, to restore community (PP, 27, 28).

4.3 Pros and Cons of the Market in PST

The competitive market - its success as an engine of growth and a cure for poverty, and the practical difficulties of establishing it - dominate the advice of economists. PST treats economists' claims about markets with suspicion, and until recently it has been reluctant to embrace any of the market's benefits. CA (32) is a departure from previous scepticism, noting with approval the important role of human initiative (broadly speaking, entrepreneurship) in social life. With appropriate safeguards, markets give room to "human creativity in the economic sector" (CA, 42). This harnessing of free initiative (and the starkly different experiences of open and closed developing economies) undergirds the conclusion that "the free market is the most efficient instrument for utilizing resources and effectively responding to human needs" (CA, 34). Note that, in its acceptance of free markets, PST does not justify it with concepts from economics alone - incentives cost efficiency - but rather emphasizes concepts from moral theology - freedom, personality. PST embraces free markets on its own terms, and for its own reasons.

In recognizing the benefits of the free market, PST has not abandoned its doubts about laissez faire. First, PST suspects that an unfettered free market economy has a tendency to generate income inequality: competition in markets in the late 1800s resulted in monopoly and great disparities in income (MM, 10-14). This inequality is a threat to participation: social justice demands that each person have the means to contribute to the public good (DR, 51). The tendency toward inequality is compounded when


economic power results in political influence and power to shape the rules of the market (QA, 109; LE, 34).

A second concern is that an unfettered free market corrodes and obscures social obligations. Those who "fight the most violently, who give the least heed to their conscience" (QA, 107) are at an advantage; PST is concerned that markets reward asocial behaviour. There is also concern that the impersonal structures of ownership in the modern corporation obscure the duties of owners to their workers (QA, 132).

Centisimus Annus raises a third concern: not all human needs (say, the need of the poor for dental care) are expressed fully by equilibrium prices. The market meets effectively only "those needs which are 'solvent' insofar as they are endowed with purchasing power .... But there are many human needs which find no place on the market" (CA, 34).

While PST is mindful of the economic aspects of the debate over markets, both its praise for and its concern about markets go beyond the considerations that are most dear to economists. On the positive side, while PST agrees that markets are an engine of prosperity and efficiency, it emphasizes that markets create openings for human initiative and creativity, allowing full development of the person's potential to be "the one who acts." On the negative side, while PST shares the concerns of some economists that markets may contribute to income inequality and may leave certain fundamental human needs unmet, it is equally concerned that markets may undermine social obligations. This broader perspective on the merits and demerits of markets is the context for PST's prescriptions for market organization.

4.4 Recommendations

F or all the benefits of the free market, the popes are unanimous in declaring that "the right ordering of economic life cannot be left to a free competition of forces" (QA, 88). The market must "be circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and which sees it as a particular aspect of that freedom, the core of which is ethical and religious" (CA, 42). The broad outlines of the framework for the economy is provided by PST's statements on private property, the role of government, and the value of the market itself.

It is a fundamental principle of PST that the goods of the earth are destined for everyone (GS, 69-71). PST has repeatedly confirmed the Roman Catholic tradition that the best way to secure this principle in a fallen world is through a right to private property; property is natural in the same way that clothes are natural (Charles 1982, 304). Private property gives people an arena in which to express their personalities, to have dominion over the


earth. It is a stimulus for responsibility and initiative, it gives its owner the opportunity and means for service to others, and it provides some measure of security, even in the modem welfare state (GS, 71). Nevertheless, the right to private property is not absolute; like everything else, private property must serve the common good (CA, 40, 43) and may be abridged in certain extreme circumstances (QA, I 14; PP, 24). Given the benefits of private property, implicit in this right is that property be widely distributed (MM, 113).

The government's role in the economy is defined by the principle of subsidiarity, defined implicitly by Pius XI: "It is ... a disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do .... [The] State ought, therefore, to let subordinate groups handle matters and concerns of lesser importance, which would otherwise dissipate its efforts greatly. Thereby the State will more freely, powerfully, and effectively do all those things that belong to it alone because it alone can do them" (QA, 79). Thus subsidiarity implies that there are tasks the government should perform, and there are tasks best left to individuals and intermediary associations.

The principal task of the state is to serve the common good, that is, to perform those functions that cannot be performed effectively at any other level. Civil society exists because it can provide these benefits to the individuals and associations that comprise it. In the economic sphere, the state's principal duty is to provide a juridical framework in which the market may operate (freedom, property, legal stability [CA, 48]), all the while guarding against previously mentioned dangers of the market. The state may take steps when necessary to limit private property or to prevent barriers to true competition.

At the same time, the government must recognize the rights of individuals and intermediary groups to carry out their proper tasks. In this, the state respects and safeguards the right of initiative (MM, 51). When an omnicompetent state arrogates to itself tasks that could be carried out by individuals and groups of individuals, it weakens or destroys those groups and is in consequence "overwhelmed and crushed by almost infinite tasks and duties" (QA, 78).

For lack of a better term, PST supports a mixed economy: free markets circumscribed within a tight legal framework, and operating within a humane culture. The role of a moral, communitarian culture in PST cannot be overstated, although it is often overlooked. The social encyclicals repeatedly call for deep and lasting changes in culture, a reform of consciences (MM, 215), and the embedding of the ideals of social justice and charity in the institutions of the economy (QA, 88). John Paul II is not alone when he states "that solving serious national and international


problems is not just a matter of economic production or of juridical or social organization, but calls for specific ethical and religious values as well as changes of mentality, behavior, and structures" (CA, 60). These changes cannot be the result of government initiative; the Roman Catholic Church must administer the remedy itself (RN, 26), through its social institutions and teaching.

PST has recently come to recognize, in a limited way, the attractions of market organization. Its acceptance of markets, however, is based on an argument that is broader than those based on economic efficiency, just as its continuing reservations about markets are founded upon broader considerations than those of income distribution and monopoly. In PST the most important strength of markets is the freedom they give to human creativity. This creativity leads to prosperity, but it has value beyond its material consequences. By not settling for the strictly material benefits emphasized in economic analyses, PST actually strengthens the case for the free market by noting its spiritual benefits. In the same way, PST's criticism of markets raises important issues neglected by economists of these issues, consumerism.

5. Consumerism


The example of consumerism is useful because it shows how PST analyzes an economic problem about which mainstream economics is silent. The problem of excessive attachment to goods (attachment to goods as an end rather than as a means) is not new; PP warns that prosperity has always been accompanied by the temptation to greed and "the unrelenting desire for more" (18). John Paul II gives the problem a prominent treatment in SRS (28):

Side-by-side with the miseries of underdevelopment, themselves unacceptable, we find ourselves up against a form of superdevelopment, equally inadmissible, because like the former it is contrary to what is good and to true happiness. This superdevelopment, which consists in an excessive availability of every kind of material goods, ... easily makes people slaves of "possession" and immediate gratification, with no other horizon than the multiplication or continual replacement of the things already owned with others still better.

Although the temptation to consumerism is as old as humanity, PST suspects that the rise of the media culture, with its power to shape attitudes, its increasingly sophisticated advertising and production techniques, and its


success in associating consumption with well-being and fulfillment (OA, 20; Kavanaugh 1994), has increased the danger.

5.2 The Moral Purpose o/Consumption, and the Silence o/Economics

Consumption has a limited purpose in PST. Humans certainly need food, clothing, and shelter at a minimum, and there is no sin in the pleasures of consumption, per se. Consumption, however, must not become a person's only goal, the measure of happiness, since it ultimately fails to satisfy; a focussed pursuit of consumption blinds humans to their true needs.

In contrast, the people who inhabit economic models exist to consume. This vision of economic motivation is individualistic. Most economists take individual utility as normative - the measure of prosperity is what people desire, and consumers are assumed to buy what makes them happiest from their limited budget sets. The assumption of fixed preferences over material goods renders economists unable to incorporate the insights of F.H. Knight (1982) and John A. Ryan (1942) that people make decisions over what sort of desires to pursue and often define success as the acquisition of (usually more expensive) tastes. It likewise renders them mute when someone questions whether everything consumers desire is good for them (even when consumers themselves dislike and attempt to control their own desires). To PST, this unwillingness to accept the mutability of individual preferences and to judge those preferences by an objective standard is a tremendous shortcoming of economics.

When PST questions the autonomy of individual desire in modern economies, most economists are speechless, unwilling to question the revealed preferences of consumers. PST insists that preferences can be distorted, that people may desire things that do not contribute to their welfare (Calvez and Perrin 1961, 182). In fact, crucial to the development of personality is the search for and adoption of preferences that will truly satisfy.

5.3 Recommendations, and how Economics Might Help

PST has only recently (in the last thirty years) turned its full attention to this problem and so has not recommended much that a policymaker might implement. John Paul II summarizes the recommendations: "A great deal of educational and cultural work is urgently needed, including the education of consumers in the responsible use of their power of choice, the formation of a strong sense of responsibility among producers and among people in the mass media in particular as well as the necessary intervention by public authorities" (CA, 36). Clearly, much of the above does not suggest a


government program. Given the strong commitment to subsidiarity in PST, it would probably assign most of the educational work to groups between the state and the individual - family and religion. Given PST's recurring hostility to the market success of goods that "stimulate the baser human desires" (QA, 132), however, one might infer that PST favours some state action against vice goods (pornography, drugs) and perhaps some restrictions on advertising.

In its suggested approach to consumerism, PST shows that it takes seriously its version of the positive-normative distinction. Without the benefit of even distorted economic analysis, PST sticks to its expertise: education, formation of consciences, renewal of the culture. The silence of PST on the economics of this issue should be a challenge to economists. PST is in a sense waiting for their advice.

Economists can make themselves useful to PST in this field if they are willing to consider the possibility of consumerism. Although there is a small but significant social science literature on consumer culture (see Goodwin, Ackerman, and Kiron 1997, for summaries), there is much that neoclassical economists might offer on the topic. For example, when might a person desire higher transaction costs to reign in consumption of a desired but unhealthy good? Is there anything special about markets for the management of desire (weight loss, alcohol treatment, self-improvement)? Finally, under what conditions do markets "pander" to the desire for unhealthy consumption, and under what conditions do they "pander" to the desire to reign in unhealthy consumption (candy-free aisles in supermarkets)?

6. Conclusions

If economists are going to make themselves useful to moral theology, they must first of all accept the notion that theologians are intelligent people who hold well-reasoned beliefs. Then they must take time to understand how theologians perceive and use economics. In this case study I have attempted to get inside PST and to see economics from its perspective. When PST is faced with a bit of economic analysis, it asks two questions: (1) Does the analysis aim at an incomplete or false good? (2) Is the analysis based on incomplete or false assumptions about the person and community?

In the examples examined here, when the answers to either of these questions are true, PST attempts to use what it can from the analysis but refuses to accept any normative conclusions implicit or explicit in it. In the first example, PST refused to accept the prevailing economic justification of low wages for industrial workers and demanded changes in market conditions or the regulation of the market to bring about higher wages. In its statements, it shows itself willing to enlist the services of economists toward


this end, even when it is impatient with the economic justifications for doing nothing. In the second example, PST cautiously accepts the material benefits of market organization subject to government regulation but is at least as attracted to another benefit - creative initiative - not usually noticed by economists. Likewise, many of PST's suspicions of the market are based on aspects of markets that are not often addressed by economists - namely, the effects of markets on community. Finally, when economists are silent (as they are on consumerism), PST will carry on without them, although it will not attempt to usurp their proper role.

The Papal Documents

All papal documents are referred to by the abbreviation of the opening Latin phrase, and paragraph number. The following is a list of the abbreviations used, and citations for the documents.

RN: Leo XIII. 1891. Rerum Novarum. See Carlen 1981.

QA: Pius XI. 1931. Quadragesimo Anno. See Carlen 1981.

DR: Pius XI. 1937. Divini Redemptoris. See Carlen 1981.

MM: John XXIII. 1961. Mater et Magistra. See Carlen 1981.

GS: Vatican II. Document. Gaudium et Spes. See Flannery 1981.

PP: Paul VI. 1967. Populorum Progressio. Sec Carlen 1981.

OA: Paul VI. 1971. Octogesima Adveniens. See Paul VI 1971.

LE: John Paul II. 1981. Laborem Exercens. See Carlen 1981.

SRS: John Paul II. 1987. Solicitudo Rei Socialis. See John Paul II 1987.

CA: John Paul II. 1991. Centesimus Annus. See John Paul II 1991.

Chapter 3

Social Thinking in Established Protestant Churches

A.M.C. Waterman University of Manitoba

"Establishment" describes a legal structure, a theological idea, and a political culture. Because of the second and third of these, it also serves to label a set of attitudes and expectations that may survive long after the first has been dismantled. Attitudes and expectations as much influence the normative social theory of a religious body, specifically the manner in which it combines theological with social-scientific elements, as do formal theological or constitutional doctrine. Therefore, though the establishment of national churches is now merely vestigial, it is instructive to examine Christian social thinking of the present day, which has its origin in that tradition.

I shall first explain why I have chosen to concentrate on the (Protestant) Episcopal Church of England and other Anglican churches, with only occasional glances at the (Presbyterian) Church of Scotland and the (Lutheran) churches of Scandinavia. Then I shall examine the historical background of present-day Anglican social thinking. Finally, I shall analyze the "establishment" way of combining economics with theology in normative social theory and consider some theoretical objections to that enterprise.

1. The Church of England as Paradigm

The medieval Western church was a trans-national state with all the usual apparatus of law and government. The effect of Protestant reformation in the

52 A.M.e. Waterman

sixteenth century was to nationalize religion and politics in European countries furthest from Rome, the seat of government. The process was most complete in Scandinavia and the British Isles, and its essential nature was most clearly seen in Sweden and in England. For, in these two countries, existing episcopal hierarchy and corresponding diocesan and capitular institutions, canon law, even the liturgy and its ceremonial, were all retained with only small modifications; doctrinal innovation was minimized (and, somewhat questionably, even denied by appeal to the Vincentian canon), the decisive change being purely and simply a relocation of supreme temporal authority over the local church from pope to prince.

Nationalization of the church led to a more intimate coexistence of "church" and "commonwealth" than had been the case before the Reformation. The two were never confused conceptually, for "church" was still seen to be a divine society, transcending space and time, uniting the living and the dead (Waterman 1996a, 198-203); whereas "commonwealth" was understood in its literal sense as a temporal association of human beings for the common good. Yet, in England at any rate, the two were identified politically, if only contingently. Richard Hooker, the greatest and most authoritative Anglican apologist of the Elizabethan period, acknowledged that "a commonwealth is one way, and a church another way, defined." However (he continues with an example), a "schoolmaster" and a "physician" are defined differently, yet "both may be one man." Therefore, "in such a politic society as consisteth of none but Christians, ... one and the selfsame multitude may in such sort be both." This is not the case "under the dominion of infidels"; nor is it "in those commonwealths where the Bishop of Rome beareth sway." But, "in this realm of England, ... with us one society is both Church and commonwealth"; and "our Church hath dependency upon the chief in our commonwealth . . . according to the pattern of God's own elect people" (Hooker 1888, VIILi.2,5,7).

The Elizabethan and Jacobean union of church and state "in this realm of England" was resisted by dissenters both Protestant and papist. During the civil war of the 1640s, an attempt was made by English and Scottish Presbyterians to impose a "Reformed" (i.e., Calvinist) rather than an Anglican unity upon both kingdoms. Its failure, and the Restoration - of monarchy, episcopate and liturgy - in 1660, produced a four-way divergence in British Christianity. After further vicissitudes, Reformed Protestantism was permanently established by the Scottish Parliament in the Church of Scotland by the end of the seventeenth century. In England (including Wales) and Ireland, Anglican Churches of England and Ireland were reestablished by the English and Irish Parliaments. Papist dissenters in Ireland (a large majority) were severely discouraged by legal disabilities. Protestant

Social Thinking in Established Protestant Churches 53

dissenters in England (a small minority) were tolerated but excluded from the universities and from civil or military office.

The Restoration settlement of 1660 to 1662 ratified a legal and constitutional union of church and state in England, which determined political culture until well into the nineteenth century, and which still affects the thinking - and even more the unexpressed attitudes and assumptions - of many today. The coronation of the sovereign, following a ritual based on the fourteenth-century Liber Regalis, symbolizes in the most powerful way, now vastly magnified by television, the temporal headship of monarch over the church (Ratcliff 1936; Waterman 1996a, 207). The membership of bishops in the House of Lords, and the attention paid by the media to their public utterances, continually advertises the part played by the church in the legislation, governance, and good order of the state. The historic monopoly of the Church of England over higher education, only finally abandoned in the twentieth century, created a governing class the great majority of which before the 1980s had grown up in the Establishment culture of "public" school and Oxford or Cambridge college.

An important part of that Establishment culture is the intellectual legacy of Anglican social thinking since the Reformation. For, though the hierarchy as a whole seldom if ever attempted to formulate doctrine before the decennial, pan-Anglican Lambeth conferences that began in 1867, those individual clerics whose works were studied at the three universities (Oxford, Cambridge, Dublin) often possessed an authority greater in practice than that of any formal pronouncement. Several of these were influential in developing the new science of political economy in the eighteenth and nineteenth centuries. George Berkeley, Josiah Tucker, William Paley, T.R. Malthus, 1.B. Sumner, Edward Copleston, and Richard Whately were all clerics; all save Tucker began their ministries with academic appointments, and all except Malthus became dignitaries. Two (Berkeley and Copleston) were made bishops, and two (Sumner and Whately) were made archbishops. Their pioneering work is the first attempt to combine economics with theology in the construction of normative social theory.

Within the Church of Scotland only Thomas Chalmers (1780-1847) made important contributions to this enterprise. As for Sweden, although there was a notable efflorescence of political economy after 1900 in the work of Cassel, Wicksell, Hecksher, and younger members of the "Stockholm School," none of these had any interest in theology, and the normative aspects of their work were more influenced by secular political ideology. By this time, moreover, the intellectual and cultural hegemony of the Church of Sweden, never so powerful and significant as that of the Church of England, had largely disappeared.

54 A.M.C. Watennan

For these reasons, and also because of the world-wide dissemination of Anglican culture in many governing elites throughout the former British Empire, I shall take the Church of England as a paradigm of the "Established Protestant Church" for purposes of this inquiry.

2. History and the Present State of Anglican Social Thinking

The gradual emergence of political economy during the eighteenth century as a distinct branch of "moral science" not only shed new light on the ageold problems of civil government, but it also raised new theological questions. An Anglican attempt to appropriate the first whilst dealing satisfactorily with the second created a powerful and long-lived tradition of Christian social thinking by no means dead today. A Romantic reaction to political economy in the nineteenth century gave birth to a loosely defined "Christian Socialism," which won the affection of many upper-class Anglicans, including several bishops and at least one prime minister, and remained influential until 1945 and beyond. By that time, however, the seeming success of Keynesian economics had attracted Anglican thinkers once again to the possibility of a fruitful alliance of political economy and Christian theology, and a new orthodoxy began to take shape. We must consider each of these phases in more detail.

2.1 "Christian Political Economy"

In some ways, the great philosopher George Berkeley (1685-1753), Fellow of Trinity College Dublin and later Bishop of Cloyne in the Church of Ireland, is typical of the intellectual tradition I wish to describe. His philosophical work was a consequence of well-recognized professional duty to defend the reasonableness and coherence of Christian belief. His economic writings were born of his experience as chief pastor of a poor, rural diocese in a Third World country, and they were consistent with his parliamentary duties as a member of the Irish House of Lords. "The Querist" (Berkeley [1735-37] 1953, 87-184) addresses the problem of economic development upon the assumptions, first, that the attitudes of the population are the most important determinant of wealth-creation; second, that it is the "aim of every wise State ... to encourage industry in its members." Berkeley apprehended "some censure ... for meddling out of my profession; though to feed the hungry and cloth[e] the naked by promoting an honest industry, will perhaps be deemed no improper employment for a clergyman who still thinks himself a member of the commonwealth" (105, 103). "The Querist" was preceded by "An Essay towards Preventing the Ruin of Great Britain" ([1721] 1953, 61-85) written in the aftermath of the South Sea


Bubble, and "A\ciphron" ([1732] 1950), the second dialogue of which analyzes the defects of Bernard Mandeville's economic argument for "vice." It was followed by "A Letter on the Project of a National Bank" ([1737] 1953, 185-87).

Berkeley's economic writing displays his usual acumen, yet it is not a fully developed specimen of Christian political economy. First, there is no recognition of the "spontaneous order" that may arise when social institutions such as markets exist to coordinate the private acts of individuals motivated by "self-love." The dialogue against Mandeville repeatedly ignores this possibility. Second, the concept of scarcity, eventually definitive for economics, is absent. And because of this, third, no possibility of theological dissonance between Christianity and the facts of economic life is recognized.

Some awareness of the first of these was evinced by Josiah Tucker (1713-1799), a Whiggish but orthodox Dean of Gloucester whom even Karl Marx later called "an honourable man and a competent political economist" (1954 T, 711, n. 2). Four years before Adam Smith's The Theory of Moral Sentiments ([ 1759] 1976), Tucker explained that "the main point to be aimed at, is neither to extinguish or enfeeble self-love, but to give it a direction, that it may promote the public interest by pursuing its own!" If this can be arranged, "every individual (whether he intends it or not) will be promoting the good of his country, and mankind in general, while he is pursuing his own private interest" (Tucker [1755] 1931, 59, 61). Tucker's crucial insight seems to have been suggested by the theological work of his friend and patron, the celebrated Bishop Butler (see Shelton 1981, 14-15, 21). Elaborated by a clear explanation - which Tucker himself neglected to provide - of the way in which competitive markets may supply this "direction," it eventually became the leading theme of Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations ([1776] 1976].

The final stage of Anglican social thinking before the clear emergence of political economy may be seen in the work of William Paley (1743-1805), Fellow of Christ's College Cambridge and later Archdeacon, then Chancellor, of Carlisle. Paley's The Principles of Moral and Political Philosophy ([1785] 1825) was based on his Cambridge lectures during the decade after 1766 and exhibits more clearly than any other work of the time the educational and intellectual assumptions of the English Establishment. The university exists to form the minds and the moral sensibilities of the next generation of clergymen, magistrates, and legislators. Under the guidance of godly and learned tutors, and subject to a discipline of twicedaily prayer in college chapel, all undergraduates must read Holy Scripture and Divinity, selected Latin and Greek classics, and at least the rudiments of moral and political philosophy. Paley's Principles, which was immediately

56 A.M.e. Waterman

adopted by the University of Cambridge as a compulsory text for all undergraduates, expounds the last of these with brilliant lucidity. Duty to oneself, to one's neighbours, and to God occupies five books. Book 6, which is the last, treats of the "Elements of Political Knowledge" and considers the duty of submission to civil government, continues with material on the constitution, the administration of justice, and the establishment of the Church, and ends with two chapters entitled "Population and Provision" and "War and Military Establishments." The underlying, epistemological assumption at Cambridge in 1785 remained what it had ever been. Both individual conduct and a social order pleasing to God can be known and taught, and their study may properly be called a science.

Because a right understanding of how the economy works is necessary to an informed judgement about social ethics, economic study is a branch of Christian moral science. Paley's chapter entitled "Population and Provision" (1825, vol. 4, chap. 6), which sets out a sophisticated version of Berkeley's economic doctrine that generalizes Mandeville, is obviously acquainted not only with Tucker but also with Hume, Steuart, and possibly Smith, and foreshadows many of Malthus's more important ideas. It begins with the premise that "the final view of all rational politics is, to produce the greatest quantity of happiness"; argues that the level of population is a reliable index of social welfare; and analyzes the determinants of population in a twosector ("provisions" and "luxuries") model of inter-regional trade. Impressed by its technical mastery, Keynes felt that "perhaps, in a sense," Paley (rather than Malthus) "was the first of the Cambridge economists" ([1933] 1972, 79 n. 2). Yet Paley's results depend on a quasi-Keynesian assumption of demand-led supply. There is no resource scarcity in his model (Waterman 1996b). It remained for his successor, T.R. Malthus (1766-1834) to transform Adam Smith's reassuring study of "the nature and causes of the wealth of nations" into the politically and theologically disturbing "dismal science" of political economy.

It is now generally accepted that by postulating "a world characterized by scarcity and necessary inequality of access to resources" (Winch 1996, 239 [Winch's italics]), Malthus's anti-perfectibilist argument in the first essay, entitled Essay on Population (1798), marks the beginning of "political economy" as that term came to be used in the nineteenth century. Diminishing returns are of the essence. Increasing returns to scale -eventually recognized as a serious analytical embarrassment - are relegated to a special case. It is also widely agreed that modern economics is continuous with classical political economy in this respect at least: "economics" is about coping with scarcity.

Berkeley, Tucker, Paley, and their contemporaries had seen no inconsistency between a moral science of wealth-creation and the Christian


theology it was their duty to study and teach. But the dominance of scarcity in human affairs, recognized scientifically for the first time in the work of Malthus, presented an ancient theological problem in a novel and threatening form. The ineluctable laws of nature produce poverty and inequality: natural fecundity in finite space. Why then does God create a world in which most human beings must live in "misery" or "vice "? Political economy was attacked from the first as "hostile to religion" and viewed with alarm by Romantics throughout the nineteenth century.

Malthus's own attempt to deal with the problem in the first Essay was evidently unsatisfactory, and for the next thirty-five years a distinguished succession of Anglican thinkers constructed an intellectual synthesis of classical political economy with Christian theology that I have labelled "Christian Political Economy" and considered at length in previous work (Waterman 1983, 1991a, 1995). First Paley in response to Malthus, then Malthus himself in subsequent recensions of the Essay on Population, later J.B. Sumner (1780-1862), Edward Copleston (1776-1849), and Richard Whately (1786-1863), gradually hammered out a coherent social doctrine for the guidance of legislators in a Christian society. I have elsewhere summarized that doctrine as follows:

Poverty and social inequality are the inevitable outcome of scarcity: more particularly of population pressures in a world of limited resources. Because of original sin and redemption by Christ, human life on this earth is to be regarded as a state of "discipline and trial" for eternity. Though poverty and inequality may entail some genuine suffering - to be accounted for by the Fall - they may be regarded, for the most part, as a deliberate "contrivance" by a benevolent God for bringing out the best in His children and so training them for the life to come. The social institutions of private property and marriage are economically necessary (and indeed inevitable), suited to human nature, and consistent with scriptural teaching. A combination of the institution of private property with the competition produced by scarcity, results in the market economy. The efficacy of the latter in organizing human activity for the maximization of wealth is evidence of the divine wisdom and mercy in turning human frailty to socially beneficent ends. The impossibility of achieving social progress by legislation is evidence both of "design" - in the creation of the self-regulating economy - and of the moral and religious need of Christians to practice charity and compassion. True happiness in this life is largely independent of wealth and station. But in any case wealth is positively correlated with moral worth, itself the result of faithful Christianity. Universal Christian education is then of the

58 A.M.C. Waterman

highest practical importance, and an essential feature of the traditional union of church and state. (1991 a, 258)

The particular contribution of the Scottish Presbyterian Thomas Chalmers (1780-1847) was to emphasize the last of these points and to provide an original and ingenious, though flawed, econom ic argument for the establishment of the church (Waterman 1991a, 230-40).

2.2 "Christian Socialism"

The term "Christian socialism," which to Marx and Engels was "but the holy water with which the priest consecrates the heart-burnings of the aristocrat" (Kamenka 1983, 230), was the self-designation first of a short-lived movement in the Church of England from 1848 to 1854 (Christensen 1962), and second of its revival as an ideologically vague alliance of Anglican and other theologians and social activists with "a discontinuous and fragmented history" until well into the twentieth century (Norman 1987, 3; Jones 1968). Organized in the Guild of St. Matthew (1877-1909), the Christian Social Union (1889-1919) and Church Socialist League (1906-1924), its ideas became highly influential among the Anglican elite. By the end of the century, about two-thirds of all Oxford undergraduates belonged to the Christian Social Union, and nearly a third of all episcopal appointments were drawn from its membership (Jones 1968,218; Norman 1987, 172).

All commentators are agreed in regarding the English Christian socialists as naive and confused about economic matters (e.g., Munby 1956, 92-95; Jones 1968, 444-49; Preston 1983, 31-2; Norman 1987, 8-9). This is so because the intellectual roots of Christian socialism lie in the Romantic revolt against political economy, having its origins in Southey's (1803) vehemently hostile review of Malthus's second Essay on Population. Southey was abetted by Coleridge; and Wordsworth, Hazlitt, and other repentant ex-Jacobins-turned-Anglican-Tory added powerful literary support to the attack on political economy in general (Waterman 1991a, 198; Winch 1996, 288-322). Donald Winch has lately identified "the schism or fault-line, separating economists from the self-appointed spokesmen for human beings" (1996, 418). By the 1830s, Winch states: "One of the enduring fault-lines in British cultural debate had now been created, and where Coleridge and Southey had led, Carlyle, Ruskin, and their nineteenth- and twentiethcentury admirers followed, often doing so with the same willful disregard for what their chosen antagonists were actually saying" (1996, 402). The slightly heterodox Anglican theologian F.D. Maurice (1805-1872) played a leading part in the first phase of Christian socialism and was acknowledged


by a later generation - B.F. Westcott (1825-1901), Henry Scott Holland (1847-1918) and Charles Gore (1853-1932) - "as the great progenitor of their ideals" (Norman 1987, 14). That Coleridge was crucial in the formation of Maurice's own theological and political ideas is well known (e.g., Christensen 1962, 13-16). A full century after Southey's review of Malthus, a leading Christian socialist of the day, W.E. Moll (c. 1857-1932), "decried the false political economy which 'teaches men to say that there are those for whom God has placed no plate at the banquet of life'" (Jones 1968, 437). This is a direct allusion to a notorious passage in the second Essay on Population (1803), which Malthus had expunged three years later in the edition of 1806 (James 1989 I, xiii).

2.3 Economics and Religion in the English Establishment

Hostility to political economy, and identification of the Establishment elite with the "self-appointed spokesmen for human beings," developed only gradually during the second half of the nineteenth century. And, though many traces still linger, the process has equally gradually reversed itself in the second half of the twentieth century.

Of the younger originators of Christian political economy, Edward Copleston (Bishop of Llandaff) died in 1849. But J.B. Sumner (Archbishop of Canterbury) lived until 1862, and Richard Whately (Archbishop of Dublin) until 1863. It is not to be supposed that two such intellectually and politically powerful prelates would have abandoned or even seriously modified their views in the face of the short-lived and obscure flurry raised by Ludlow, Kingsley, and Maurice from 1848 to 1854. Moreover, as E.R. Norman has argued, "by the end of the 1830s ... the most influential of the church leaders were all soaked in the attitudes of Political Economy" (1976, 136-37). What seems to have loosened the hold of political economy on the next generation of Establishment men was a combination of circumstances unique to that time and place.

Parliament had long been willing to enact piece-meal reform as occasional exceptions to laissez-faire theory. Country gentlemen, lords, and bishops had no warm love for the new class of industrial capitalists and could usually be persuaded to legislate government intervention when presented with flagrant examples of injustice or misery. During the Hungry Forties, such "exceptions" came thick and fast. Population doubled in the first half of the century, most of the increase occurring in London and the new industrial cities.

A combination of low wages with over-crowding, jerry-building, and a total disregard for private or public sanitation led to the cholera epidemics of the thirties and forties. The ruling class was compelled to attend. "To

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maintain the traditional patterns of English life" the new cities "must have drains, lavatories, paved roads, houses, policemen, nurses, schools, parks, cemeteries and churches" (Chadwick 1966 I, 326; Waterman 1991a, 256-57). A stream of legislation was generated, all of it extending the economic responsibility of the state. Meanwhile, the ability of government to meet new demands had been greatly enlarged by the same combination of social, cultural, technical, and material factors that was transforming the private sector. A quarter-century of world war had made government a more powerful and efficient instrument for achieving social goals; and that fact alone suggested new possibilities of state action to the reformers (Deane 1969, 214-16). Norman (1976, 138-47) has shown that bishops such as Wilberforce, Thirlwall, and even Sumner himself, supported Factory Acts and public health legislation whilst continuing to profess their belief in ta issez laire.

The incipient "fault-line" between economists and most of the educated upper class was widened in the latter part of the century by a secularization of British intellectual culture after the 1860s (Keynes [1933] 1972, 168) and the appearance of economics as a distinct professIon after 1890. The midcentury conflict between Christian Socialism and political economy had been a debate within the Establishment elite. By the beginning of the new century, it had become to a large extent a schism between professional economists and professional ecclesiastics. This may be seen in miniature in the contrast between Alfred Marshall (1842-1924) and R. H. Tawney. Marshall had been destined for the Church and went up to Cambridge in 1861 intending to prepare for Holy Orders. But "after a quick struggle religious beliefs dropped away" and he became an agnostic (Keynes [1933] 1972, 167). Marshall defined the profession of economics in Britain, and his influence was world-wide. His younger colleague Tawney (1880-1962) remained a faithful layman, becoming a leading Christian Socialist, intimate of bishops and influential in church councils (Preston 1979, 83-88). But Tawney believed that capitalism and Christianity are fundamentally incompatible; and, though he was a professor at the London School of Economics, he remained on the outer edges of the profession, deeply distrustful of its development. "There is no such thing as a science of economics," Tawney confided to his Commonplace Book in 1913, "and Marshall's talk as to the need for social problems to be studied by 'the same order of mind which tests the stability of a battleship in bad weather' is twaddle" (1972, 72).

It was, however, Tawney's lifelong friend William Temple (1881-1944) who opened the door for a rapprochement between economics and religion in the Church of England. Though as a young man Temple had declared that "the alternative stands before us - socialism or heresy" (cit. Preston 1983,


27), his later pastoral and political experience as bishop and archbishop gradually convinced him that reality is more complex. Temple's Christianity and Social Order ([ 1942] 1976), written shortly before he became Archbishop of Canterbury, has been described as "one of the foundation piers of the Welfare State" (Munby 1960, 157). In the foreword to the 1976 edition, the (Conservative) Prime Minister, Edward Heath, testified to Temple's "immense" influence on all "who were seriously concerned with the social, economic and political problems of his day."

Possibly because of the example of Josiah Stamp (1880-1941), an eminent economist, friend of J.M. Keynes, and powerful public figure who reasserted a modern version of Christian political economy (Stamp 1926, 1931, 1936, 1939), Temple became aware that faithful Christians, though in accord on theological principles, could be deeply divided on political questions because of legitimate disagreement about the "facts of the case." It is therefore "of crucial importance that the Church, acting corporately[,] should not commit itself to any particular policy. A policy always depends on technical decisions concerning the actual relations of cause and effect in the political and economic world; about these a Christian as such has no more reliable judgement than an atheist"(Temple [1941] 1976, 40). Temple's acknowledgment of the autonomy of "technical" studies of "cause and effect in the ... economic world," together with a certain hesitation - resembling Berkeley'S - for "meddling out of [his] profession," caused him to submit the proof-sheets to J.M. Keynes's critical scrutiny. Keynes went out of his way to reassure the Archbishop as to "the right of the Church to interfere [Temple's phrase: see Temple (1942) 1976, 29] in what is essentially a branch of ethics"; and also reminded him of his illustrious predecessors (referred to above in section 2.1). "Bishop Berkeley wrote some of the shrewdest essays on these subjects available in his time; ... Archdeacon Paley is of fundamental importance. The Reverend T.R. Malthus was the greatest economist writing in the XVIII century after Adam Smith; ... Archbishop Sumner's early work was on economics" (Keynes to Temple, 3 December 1941, cit. Iremonger 1948, 438-39).

Archbishop Temple died before the end of the Second World War, and it was left to a much younger Christian Socialist, Denys Munby (1919-1976), to develop the implications of Temple's recognition of the significance of "technical" knowledge for Christian social thinking (Waterman 1990). Munby, who had been early affected to the Christian Socialism of Canon V.A. Demant and the "Christendom" group, was made aware of Temple's crucial insight by his friend R.H. Preston, the first Anglican theologian ever with a university degree in economics (London School of Economics). After study at Oxford, Munby became a professional economist, returning in 1958 as professorial fellow of Nuffield College and university reader. Over and

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above his considerable professional output, Munby produced an important series of books and articles beginning with Christianity and Economic Problems (1956) and all dealing in various ways with the matter of that work. A recurrent theme in all these was the incompetence and amateurishness of contemporary Anglican social thought based on the sound "incarnational" theology of Maurice and his successors but stultified by complete ignorance of the economic facts of life. Though wishing to distance himself from the "old-fashioned" (that is to say, conservative, evangelical and individualist) approach of Lord Stamp, Munby had much the same general message for Anglican leaders of his day: "technical competence" is essential (Munby 1957; 1958); private enterprise and the profit motive are not all bad; the price mechanism is "the only way in which a large-scale economic system can satisfy the needs of a large population" (Munby 1956, 245); the state is neither all-wise nor all-good; and the willingness of prominent Anglican thinkers like Demant, Maurice Reckitt, and T.S. Eliot to grasp at absurd nostrums such as "social credit" can only bring ridicule upon Christian social thinking. In The Idea of a Secular Society and its Significance for Christians (1963), Munby criticized the romantic escapism of Eliot's The Idea of a Christian Society (1939).

Though influential, Munby never occupied a position of power in the Church of England, and he was evidently a serious threat to many of his contemporaries. But the climate of public opinion was beginning to turn in favour of economics, partly in consequence of the immense prestige enjoyed by Lord Keynes in official circles and the seeming triumph of "Keynesian" policies in fostering post-war prosperity. The moderate interventionism authorized by Keynesian macroeconomics was especially congenial to Establishment leaders; and also to those - such as Keynes himself - who shared their intellectual and political culture even though they had abandoned the religious belief, which gave it integrity. For the new political economy seemed to offer a remedy for the economic ills of society without any unsettling need of large-scale, fundamental change. Since the mid-1950s, automatic hostility in the Church to a market social order has gradually dwindled, and since the 1980s there have been signs of a renewed appreciation of Christian political economy (Waterman 1986; Preston 1991).

3. Economics and Theology in Establishment Social Theory

3.1 Establishment Social Theory

Munby argued that "the problems of economics arise because human beings want to follow different ends, and the means available to them are limited. Economizing only arises in a world where things are scarce, and choice has


to be made. In heaven no problem of scarcity arises, and in hell no possibility of choice exists; economics is a science dealing with the conditions of human life in this world" (1956, 44-45). In so doing, he reasserted the fundamental empirical assumption of Christian political economy: the dominance of scarcity in human affairs. He also presented a devastating account of "how a major prophet [Demant 1952] may fall into major errors in approaching so dreary and mundane a topic as Political Economy, when unarmed with the appropriate kit of burglar's tools" (Munby 1956, 275). And, in so doing, he reasserted the fundamental methodological assumption of Christian Political Economy: that of a demarcation between "religious" and "scientific" knowledge, which safeguards the autonomy of each with respect to the other. Because, in my opinion, the second of these assumptions lies at the heart of any serious attempt within established Protestant churches to combine economics and theology in normative social theory, it requires closer attention

In a previous volume in this series (Waterman 1994) I have described how Richard Whately (1832) was led to propound this demarcation, built upon the theological work of his former pupil Samuel Hinds (1831), in response to an ideological threat to Christian political economy after the mid-1820s from the avowedly atheist "philosophic radicals." The radicals' claim that political economy was alone sufficient for rational public policy formulation brought the new science into disrepute with many Anglicans, only too willing to side with the Romantic protest against scarcity already launched by Coleridge and the other Lake Poets. Against his Tory fellowchurchmen, therefore, Whately had to defend political economy from the charge of being "hostile to religion" and to show that it is necessary to public policy formulation. And, against Jeremy Bentham and his disciples, he had to show that political economy, though necessary, is not sufficient, for public policy should be based upon a coherent set of values that religion must supply and about which political economy can have nothing to say. But policy can be formulated and implemented only by means of the "technical knowledge" that economics affords and about which (as William Temple rediscovered) religion can have nothing to say. So successful was Whately in this enterprise that his version of the case for the necessarily neutral, "valuefree" character of economic analysis - developed and popularized by another of his former pupils, Nassau Senior - passed into the orthodox mainstream of modern economics, and underlies the canonical methodology of J.N. Keynes (1891) and Lionel Robbins (1952).

We are now in a position to state precisely the assumptions upon which economics and theology are combined in Establishment social theory:

64 A.M.C. Waterman

1. It is assumed that there exists a governing class, or elite, which has a well-understood duty to formulate and implement public policy in the light of a generally accepted and legally sanctioned Christian belief and doctrine;

2. The clergy of the national church occupies a clearly defined constitutional position in the state and has the duty (among others) of teaching the Christian religion to all classes in society;

3. It is the duty of the clergy to instruct the governing class in those theological principles that bear upon public policy in a Christian society;

4. The governing class (which itself may - and actually does - include bishops and other higher ecclesiastics) must avail itself of the best available "technical" knowledge to formulate and implement policy;

5. "Technical" knowledge about "the actual relations of cause and effect in the political and economic world" is the intellectual property of a community of experts who may, but who need not, be Christian, "for about these a Christian as such has no more reliable judgement than an atheist";

6. Regardless of their private religious beliefs, it is the professional duty of the experts to supply the best possible analysis of, and advice about, all relevant political and economic factors.

When a Temple (Christian Archbishop) submits Christianity and Social Order to a Keynes (atheist economist), it is evident that each perfectly understands and accepts all the foregoing principles, and also - by implication - Whately's demarcation, which guarantees their coherence.

It is of course possible to criticize this doctrine in a number of obvious ways: assumption 1 may now be false; assumption 2 conflicts with presentday political orthodoxy; assumption 3 may be unfeasible in the pluralistic world of today. It is more fruitful, however, and perhaps of wider interest, to criticize it in terms of assumptions 4, 5, and 6, and of the putative demarcation between religious and scientific "knowledge" that lies behind them.

It is apparent that Establishment social thinking, which takes for granted the scientific autonomy of economics, is at odds with those traditions of Christian social thought - such as neo-Calvinism - which are based upon the assumption that all human knowledge, but especially economics, is subject to correction by religious authority (Waterman 1988). It would therefore be possible to reject Whately's demarcation and to criticize Establishment thought upon the assumption that economics is or ought to be subordinate to theology. In my opinion, however, the real objections to the Establishment position go much deeper. For, not only can Christianity have nothing to say about the "facts" of any state of affairs, as Temple recognized, but also, it may have nothing to offer the economist by way of "value axioms. " And, if economics were truly "scientific," it could supply none of its own.


3.2 Two Serious Objections to Establishment Social Theory

The first of my two objections was powerfully stated by Frank Knight ([1939] 1947, 122-53) and has never been answered to my knowledge. Knight argued that the "gospel of love" was the specifically Christian contribution to ethics; that this must necessarily find expression in relations between individuals; and, that the maxims governing the behaviour of individuals to one another could not serve to construct a social ethic, which must be embodied in impersonal rules. Knight held that biblical teaching points toward "a society of antinomian anarchism" ([1939] 1947, 138). Because only a few can fill "the role of parasitic saintliness in the real world, ... evil rather than good seems likely to result from any appeal to Christian religious or moral teaching in connection with the problems of social actions" (Knight [1939] 1947, 139, 124).

Where, then, can we look for ethical guidance? Knight gave no answer. Papal Social Teaching (and its Anglican approximations) relied upon the Natural Law: that knowledge of right and wrong that all can have by the use of right reason. Though not uniquely Christian, the use of right reason can be regarded as sanctioned by "revelation" and hence as a Christian activity. This is where we encounter the second fundamental objection, luminously expounded by the Polish philosopher Leszek Kolakowski in his book entitled Religion (1982).

"Right reason" means using language according to the rules established for preserving intelligibility in every-day, or "profane," speech and its extension in "scientific discourse." When those rules are followed faithfully, it is impossible to speak about ethical, religious, or aesthetic matters. Hence the Natural Law is a chimera.

This well-known result of analytical philosophy was formerly used by logical positivists to discredit theology and religion. The chief purpose of Kolakowski's book is to defend both religion and theology in the spirit of Wittgenstein's celebrated maxim: "The language is in order as it is." "Profane" language is "appropriate for reacting to and for manipulating our natural environment"; "sacred" language is "for making it intelligible" (Kolakowski 1982, 180). It is logically inadmissible to criticize the truthclaims of propositions stated in one language by the criteria appropriate to the other, for "the validity of [religious] beliefs are vindicated differently from the truth of empirical assertions. These two areas of our speaking, thinking, feeling, and acting are fundamentally irreducible to the same store of experience" (Kolakowski 1982, 163). Hence, "the traditional arguments of empiricists are cogent if limited to the assertion 'religious beliefs are empirically empty.' The subsequent verdict, . . . 'therefore they are meaningless' is not credible at all. There are no transcendentally valid

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criteria of meaningfulness and no compelling reasons why the meaningful should be equated with the empirical" (Kolakowski 1982, 163). The truthclaims of modern science, indeed, are based upon the criterion of the "efficacy of knowledge," which is logically admissible but essentially arbitrary. To accept that criterion "requires an act of faith[,] and therefore the principle credo ut intelligam operates over the entire field of knowledge" (Kolakowski 1982, 163). The cognitive validity of both science and religion therefore depends on the same, essentially circular process. It is impossible to criticize or appraise the truth-claims of the one by the methods appropriate to the other.

So far, all this is only a more radical, modern-dress version of Whately's demarcation. But Kolakowski's analytical method, by taking us deeper, destroys the possibility of a fruitful collaboration between religion and science such as Whately sought to establish, for, if economics affords knowledge of any kind, then it must be "scientific" and not "religious" knowledge. And, at this point, a crucial distinction remarked by Kolakowski becomes relevant.

The disjunction between "fact" and "value" is logically possible in profane language; progress has actually been made in recognizing this disjunction; and the disjunction "ought not to be obscured in the language of science" (Kolakowski 1982, 186). But the fact/value disjunction cannot exist in sacred language. Kolakowski states: "In the realm of sacred speech, whether an assertion has an ostensibly 'descriptive' or 'normative' form, it has the same validity ... for two reasons. First, because the criteria of validity is the same. It is God's explicit word .... Secondly, because ... the two kinds of knowledge merge into one" (1982, 186). The consequences of this for any collaboration between economics and theology are completely destructive.

As a "scientific," non-"religious" enterprise, economics is stuck with profane language and the necessity of the fact/value disjunction. And the only knowledge, which might be generated by economics, is knowledge of "facts." But theology cannot generate a set of "values" in abstraction from "factual" perceptions of reality. Hence, the cognitive paradigm that undergirds Establishment social theory is simply impossible. There can be no division of labour between theologians and economists, the former supplying a set of detached "value axioms" for the latter to use in designing social policy. It is even questionable whether any fruitful conversation upon social policy can occur between a theologian and an economist when the two are wearing their proper hats.

The most radical part of Kolakowski's argument is yet to come. Not only is the profane language of science/common-sense incapable of ethical utterance, but also it is incapable of uttering truth of any kind. For, "without


the absolute subject, the predicate 'true' can never be vindicated" (Kolakowski 1982, 88). Hence, "Dostoyevski's famous dictum, 'If there is no God, everything is permissible,' is valid not only as a moral rule ... but also as an epistemological principle" (82); therefore, "either a God or cognitive nihilism, there is nothing in between" (90).

We may summarize the foregoing objections as follows:

I. Christian theology can make no contribution to social ethics because the latter must be based upon impersonal rules, about which Christianity is silent, even hostile (Knight);

2. Economics can make no contribution to social ethics because, like all other scientific inquiry, its necessarily profane formulation makes the truth of its propositions unknowable (Kolakowski);

3. Even if neither objection holds, there can be no collaboration between theology of any religious variety (supplying "values") and economics (supplying "facts") because the language-games, which generate each, are incompatible and non-intersecting (Kolakowski).

I do not wish to suggest that these objections are conclusive, only to report that to my knowledge they have not yet been satisfactorily answered. It would seem, therefore, that those who wish to combine economics and theology in normative social theory - in any way that does justice to the cognitive claims of each - have some preliminary, ground-clearing work to do.

Chapter 4

Liberation Theology and Economics God's Reign and a New Society

Thomas L. Schubeck John Carroll University

The taproot of Latin American liberation theology is the reign of God, or God's redemptive and liberating presence in history. Liberation theology tries to relate God's reign to people through their own culture and social situation, especially to the poor and marginal members of society. It maintains that God's reign, proclaimed authoritatively and efficaciously by Jesus, brings about a new human being in a new society marked by justice, freedom, solidarity, and peace. This reign, then, serves as the ultimate truth for liberation theology's social theory. Yet, liberation theologians know that the reign of God, if it is to be communicated effectively to people in their particular historical situation, must be mediated through theological sources (Scripture and tradition) and social-scientific sources (anthropology, economics, sociology).

Theologians call the first source "hermeneutic" mediation and the second source "socio-analytic" mediation, or social analysis. Hermeneutics in its broadest sense refers to the science of interpretation, clarification, and translation of biblical texts (Brown and Schneiders 1990, 1,147). In a similar sense, liberation theologians understand hermeneutics or hermeneutic mediation as the process of clarifying the biblical text or a church document in its original context to interpret its meaning for Christian communities today. In addition, they emphasize that today's social context, with its special questions, opens up a new understanding of the biblical text. Thus, socio-analytic mediation contributes to the theological process by helping theologians better understand the context, which includes a people's beliefs,

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hopes, struggle to survive, and network of institutions that affect the quality of their lives.

In this case study, I attempt to identify precisely how liberation theologians relate these two sources of knowledge as they interpret the meaning of God's reign for a people who struggle to live in a free and just society. In the first section, I pursue the goal by listening to theologians explain what their theology is about - what they think is distinctive about their perspectives and method. In section two I address liberation theology's use of social-scientific analysis and how it relates to their theological method. In sections three and four I present and assess two types of social analysis in response to the voices of critics who charge that liberation theologians fail to do good scientific investigation. Section five shows how a liberation theologian combines theological concepts with empirical data to construct the parameters of a free and just society. I conclude with observations and a suggestion about liberation theology's dialectical method of combining scientific and religious knowledge.

1. Distinctiveness of Liberation Theology

Michael Joyce, the President of the John M. Olin Foundation, asks whether liberation theology presents anything distinctive. "Where," he asks, "is the theology in liberation theology?" (Joyce 1987, 178-79). He wonders whether its theological principles distinguish it from other theologies. Joyce sees liberation theologians raising political and economic issues but does not understand how their theological insights inform these issues.

This theology does have assumptions and principles that distinguish it from other theologies. One unique characteristic is its commitment to the integral liberation of the poor; that is, liberation theology devotes itself to addressing how a poor and oppressed people become free in the politicaleconomic, personal, and religious dimensions of existence. This commitment becomes explicit in liberation theology's bedrock principle, called "preferential option for the poor." The principle emerged at the Second Conference of Latin American Bishops at Medellin in 1968 and was formally defined by the bishops in their Third Conference at Puebla in 1979. The option calls the whole church to a conversion and commitment to the poor that is aimed at their integral liberation. Responding to the call means acknowledging and supporting the efforts of the poor to organize themselves and to reclaim their rights (Third Conference of the Latin American Episcopate 1979, nos. 1,134, 1,136). The option also serves as a hermeneutic tool that helps the theologian interpret religious sources and select modes of social analysis. Moreover, the option acts as a general moral norm that gives

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new meaning and direction to human rights and to the concept of the common good.

Liberation theology's method is also distinctive. It moves through a process that typically begins with an issue arising out of a neighbourhood group's praxis, or from within an institution (see: Gutierrez [1973] 1988; Segundo 1976; Boff and Boff 1987a). The term "praxis" means human activity aimed at transforming the world, which includes the theory that guides it. The issue emerging from praxis is then explored in the second stage by social analysis, which affords theologians a deeper insight into its social implications. They may, for example, gain a new understanding of oppression by examining the exploitation of peasants working on a large coffee plantation. This analysis might challenge a traditional understanding of a theological concept, such as the meaning of sin. In traditional treatises, sin is regarded as a willful transgression by an individual against God or neighbour. In light of social-scientific studies, liberation theologians begin to see sin in its social dimension wherein multiple actors collaborate within a group or an institution to use workers unjustly for their own selfish aims. The investigation then moves to the third stage, where the issue is addressed theologically, aided by Scripture and tradition and by insights and questions raised earlier in the analysis. The theologian, reflecting on pertinent biblical passages, may discover new meaning in certain concepts, such as social sin and liberation. In the fourth and final stage, a new theological perspective generates a deeper understanding about God's reign and about the evil forces it seeks to vanquish (see: Boff and Boff 1987a, 4-9; and Segundo 1976, 8-9).

Three features should be noted about the method. First, it takes as its point of departure the social situation. In this respect it operates differently from traditional Catholic theology, which begins with theological sources and proceeds more or less deductively from dogma or principles to pastoral application. Second, the liberationist method employs scientific as well as theological sources. Third, it conj oins these sources, which interact in dialectic.

The term "dialectic" generally means the interaction of conflicting ideas and forces that generate new ideas and systems. It involves two kinds of opposition: contradictory and contrary (Doran 1990, 9-10). Contradictory opposition involves ideas or forces that simply exclude one another, such as the opposition between true and false, or good and evil. At its most profound level, liberation theology operates according to dialectic of the contradictories good and evil, symbolized by the reign of God and the reign of sin. Contrary opposition brings together two forces or ideas (contraries) leading to a confrontation that can eventually be resolved in a higher synthesis. The contrary principles of option for the poor and option for the rich might result in an option for solidarity of poor and rich working


cooperatively in community. Liberation theology generally operates dialectically on the level of contraries between the two mediations of social science and theological sources.

The dialectical approach can be seen in Gutierrez's classical definition of liberation theology. He calls it "a critical reflection on praxis in light of the Word of God" (Gutierrez [1973] 1988, 11). "Critical" reflection impl ies challenge and even opposition. It is the kind of reflection that scrutinizes phenomena, looks for deeper explanations, and challenges the veracity of political and theological claims and the rightness of economic policies. Most important, critical reflection looks for clues regarding how the present situation can be transformed. Theological knowledge attempts not only to understand faith, but also to explain it as a response to God's call to transform the world. Gutierrez sums up the critical task of theology: "Theological reflection would then necessarily be a criticism of society and the Church insofar as they are called and addressed by the Word of God; it would be a critical theory, worked out in the light of the Word accepted in faith and inspired by a practical purpose - and therefore indissolubly linked to historical praxis" (1988, 9). "Historical" praxis for Gutierrez might involve the efforts of a community to acquire water or health care for its village. He recognizes, however, that not all historical praxis is liberating praxis and that it must therefore be critically reflected upon.

Returning to Joyce's question about this theology's distinctiveness vis-avis social realities, I conclude that liberation theology distinguishes itself by its use of the principle of preferential option for the poor, by its dialectical method that brings together the biblical word and people's praxis, and by its employment of social sciences to explain and critically analyze situations and institutions as a component in its theological process.

2. Relating Theology to Social Sciences

In their social analyses, liberation theologians have criticized the capitalist system and political and socioeconomic institutions within the system because they believe that they have seen these structures create a situation of dependency. Their analyses have challenged the economic path of development that certain theorists have forecast as Latin America's economic future.

Critics, however, have charged theologians with being remiss about their social analysis. Chilean philosopher Arturo Fontaine says that liberation theologians are primarily interested in the moral dimension of economic systems, but they fail to present a rational, empirical analysis directed to specific institutional problems and economic principles. Consequently, when theologians criticize values in capitalism, they cannot be answered on purely


economic grounds. At the same time, their criticisms often miss the mark. He says that the cognitive value of their analysis "on political, economic, and ethico-philosophical matters related to political and economic institutions is close to nil." He says that they have not done "a rational and cool analysis of socioeconomic matters" (Fontaine 1987, 164, 176-78).

2.1 Correct Attitudes toward Social Science

Is Fontaine's assessment accurate? To answer this question, we should first listen to how liberation theologians view social sciences and then how they actually use them as a source in contracting normative social-theological theory. Regarding attitudes toward the sciences, Brazilian theologian Clodovis Boff identified two principles: theologians should (1) maintain an attitude of respect and, at the same time, (2) be critical of any dogmatism or reductionism. Respecting the discipline means showing deference to the rules that govern the domain and method of science and carefully studying its empirical findings. Theology possesses no competence to pronounce truths or to criticize science within the internal regime of the discipline. Jose Miguez Bonino, a Methodist liberation theologian from Argentina, agrees with Boff's principle of respect for the autonomy of science. Science, he says, provides the necessary knowledge about the political-economic world that theology needs but cannot otherwise attain. Theology errs when it attempts to substitute its own theological categories for sociological ones (Miguez Bonino 1983, 45).

Being critical of science refers mainly to its conclusions or extrapolations from its findings (Boff 1987, 51-52). This implies that theologians must be sufficiently knowledgeable about social sciences so that they can evaluate the validity and implications of social theories and identify ideologies that support them. A critical attitude recognizes that no social-scientific instrument is value-neutral but has certain presuppositions about the ordering and transformation of society (Miguez Bonino 1983, 47). The theologian, while not competent to tell social scientists how to conduct their experiments, may rightly criticize the scientist for making unwarranted premises or extrapolations as, for example, when science denies validity to other investigative approaches. "Theology," Boff says, "cannot accept reduction to silence easily, just as it cannot brook the pretensions of another language to speak the word that theology alone is competent to speak" (1987, 52-53).

How does theology properly relate to the social sciences? Boff and Miguez Bonino say that they conjoin in an intrinsic relationship in which theology learns from science the reality that it wishes to treat. "The sciences of the social," Boff says, "enter into the theology of the political as a


constitutive part" (1987, 31; emphasis in original). Theology has no direct access to sociopolitical and economic matters. But with the aid of social science, theologians can and do make informed judgements about institutions. Sciences contribute to the material object of theology. Theology receives its text, as it were, from the sciences but reads it according to its own method and sources to bring out its theological meaning. The relationship is dialectical in the sense that each discipline challenges the other. Sometimes, theology may reject a scientific conclusion; at other times, science may demonstrate the falsity of a theological assumption.

Clodovis Boff's two principles of respect and criticism seem sound, although some social scientists might challenge Borfs and Miguez Bonino's opposition to value-neutral science (for a discussion of value-free social science, see: Bellah 1983, chap. 16; and Gould 1981,37-50).

2.2 Modes a/Social Analysis

For liberation theologians, social analysis involves institutions. Sociologist Robert Bellah defines an institution as "a pattern of expected action of individuals or groups enforced by social sanctions, both positive and negative" (Bellah et al. 1991, 10-11). As this definition implies, institutions embody values that guide their policies, activities, and sanctions. Liberation theologians examine an institution (ecclesiastical, political, or economic) to understand its values, especially as they are expressed in the institution's policies, practices, and sanctions. Theologians want to see what effect the values have on the poor in Latin America. Like Bellah, theologians recognize that institutions can be both enabling or restraining; social structures can be liberating or oppressive. They study institutions in a variety of ways, but mainly by means of two modes of analysis: ideology critique and empirical analysis. In both modes, they seek causal explanations and not simply descriptions of the phenomena. Of the two modes, theologians most often adopt ideology critique. Theologians who are educated in a social science or by social scientists educated in theology generally do empirical analyses.

Ideology critique examines ideologies or doctrines and ideals that integrate, legitimate, and guide institutional behaviour. This mode relies on social-scientific data and religious values to unveil systemic distortions, or false ideologies, that rationalize an institution's laws and policies (Chopp [986, 136-37, 142). In the language of Marxist theory, ideology critique analyzes the superstructure (law, politics, philosophy, and religion) rather than the infrastructure, or economic base. Ideology in its general sense is simply the means to an end, "the systematic aggregate of ideas used to attain


some goal" (Segundo 1984, 16). All institutions - the church, the state or the private corporation - create ideologies to accomplish their ends.

In its negative sense, ideology refers to a system of thought that disguises, distorts, or even makes sacrosanct a certain institution for the sake of special interests, such as the doctrine of national security (see Comblin 1979). Socialist and classical liberal economics have criticized each other for having a distorted or one-sided ideology. Marxists criticize capitalism for its justification of the power arrangements that favour the wealthy and for masking structural alienation among the workers. The capitalists counter by pointing out totalitarianism that represses individual initiative in socialist countries. Segundo says that both ideologies have blind spots, and that these distorted ideologies continue to exist because both systems lack an external or transcendent reference point necessary for self-criticism. Segundo calls this ultimate value "faith" (1984, 62-66).

3. Ideology Critique

Theologians Clodovis Boff and Leonardo Boff do an ideology critique of the United States bishops' pastoral letter on the United States economy (NCCB 1986). In this critique, the Boffs identify and then criticize five basic presuppositions, showing how each one influences the bishops' interpretation of socioeconomic reality (Boff and Boff 1987a, 362, 366, 369, 372; for a fuller assessment of the Boffs' critique, see Schubeck 1993, 89-106). I shall examine only one of their critiques; namely, the bishops' implied functionalist vision. The Boffs argue that this vision of society conditions their analysis and prevents them from seeing the deeper problems within capitalism. Because their functionalist vision distorts the United States reality, the Boffs call it an ideology.

A functionalist vision perceives society as an organism having parts that work together for the benefit of the whole. It gives primacy to order, harmony, and equilibrium and so accepts the status quo. Functionalist analysis accepts this basic order and interprets problems such as high unemployment, poverty, and crime as dysfunctions in an otherwise healthy system. The Boffs think that a dialectical analysis is a far superior way to get at the causes of exploitation and systemic injustices. It presupposes a type of society that is a complex whole within which structural problems, or contradictions, emerge. It regards conflicts between classes, races, and sexes as symptoms of structural and systemic problems, which at different moments in history call for revolutionary change. The neo-Marxists within this tradition view the state as an instrument of the dominant or ruling class (guarantor of capitalist profits), which, consequently, does not act as a


partner helping citizens eradicate the causes of poverty (McGovern 1989, 140).

The Boffs support their contention by pointing out how the bishops describe but do not probe into the causes of unemployment, poverty, and disparities between rich and poor (1987b, 363; see NCCB 1986, para. 12). Although the bishops identify great gaps in net wealth and income distribution between rich and poor, they fail to perceive the cause-and-effect relationship of wealth to poverty. Instead, they interpret this and other problems as dysfunctions that can be repaired by reforming the system. The bishops' guidelines and recommendations follow this descriptive analysis of unemployment and poverty. The bishops appeal to the federal government to coordinate fiscal and monetary policies in order to bring about full employment; they urge private businesses, labour unions, and state agencies to expand job-training and apprenticeship programs (NCCB 1986, paras. 156, 159, 196). Such recommendations are moralistic, the Boffs say, because they fail to deal with the deeper structural problems of a capitalist system. Great wealth coexisting with extreme poverty in the richest nation in the world urges a systemic causal analysis. Mere description of the negative consequences of the system and moralistic guidelines for dealing with them fail to address the problem (Boff and Boff 1987b, 364). As the Boffs see it, the relationship of rich and poor classes within the United States and the relationship between the United States and Latin American nations are one of dependency. Capitalism in the United States expands its wealth in the powerful centre by exploiting workers in the periphery of its own nation and of developing nations.

The Boffs make a good case for showing how the bishops' presuppositions influence their recommendations. They are correct in their assertion that the bishops fail to do a causal analysis and are probably right about their making presuppositions that are functionalist in nature. Yet they, themselves, seem to fall victim in this critique to the very weakness they charge to the bishops; namely, they also do merely a descriptive analysis of the problems in both the United States and Brazil. They add their statistics from Brazil to those of the bishops to show that unemployment in both countries is high, but it is much higher in Brazil (for 1984 in the United States, between six and seven percent, and in Brazil, fifteen percent). Ownership of land for the poor is shrinking while the wealthy are gaining more in both countries (NCCB 1986, paras. 219, 221; Boff and Boff 1987b, 361). The Boffs fault the bishops for not seeing the link that unites wealth and poverty, which, the Boffs explain, are "two sides of one coin, both caused by the same contradictory process of production" (1987b, 363). They allude here to dependency theory, but neither author explains it adequately nor applies it. They do not show, for instance, how under standard Marxist


analysis capitalist production and distribution always increase profits for the wealthy at the expense of the poor.

In the absence of explaining dependency theory and applying it to the United States and Brazil, the Boffs' assertions that capitalism is inherently evil and that their view from the periphery is better than the bishops' appear to be more moralistic than the guidelines of the bishops. They fail to follow Clodovis Boff's first guideline of respecting social science by oversimplifying its theory. Nor is their ideology critique, in Fontaine's words, "rational, cool scientific analysis." The Boffs are not unique in doing an ideology critique of capitalism that offers insufficient empirical data. Liberation theologian-economist Franz Hinkelammert offers such critiques of capitalism from a Marxist perspective that are unsupported by evidence (1987; for a critical assessment of Hinkelammert, see McGovern 1989, 163-64). Yet, this is not always the case, as seen in Comblin's fine critique of national security doctrine in Argentina, Brazil, Chile, and Uruguay (Comblin 1979), or in Martin-Baro's psychological analysis of violence in El Salvador ([ 1988] 1991).

4. Em pirical Analysis

Capitalism is said to have an abysmal record throughout Latin America. Liberation theologians state emphatically that capitalism in Latin America works to the detriment of the majority. Robert Sirico, a Catholic priest from the United States says that "the most speculative and least defensible aspects of liberation theology are its economic and political assumptions" (1991, 95). Sirico challenges two assumptions in liberation theology's social analysis: first, the theology assumes that "the dominant economic arrangements of Latin America are free market oriented"; and second, it assumes that private ownership oppresses the people of Latin America (1991, 96-98). Sirico maintains that the free market does not exist in Latin America because the governments place controls on private enterprise that prevent entrepreneurs from entering the market. "Stifling bureaucracies" hinder free trade. The outcry of oppression is really protest against a feudalistic system still operative within Latin America and is therefore not to be heard as a complaint against a free market.

Michael Novak, Director of Social and Political Studies at the American Enterprise Institute, agrees with Sirico in challenging these assumptions made by liberation theology. Novak replies that its economy is not capitalist but mercantilist and quasi-feudal. Novak accurately describes some of the problems: "The present order is not free but statist, not mind-centered, not open to the poor but protective of the rich. Large majorities of the poor are propertyless. The poor are prevented by law from founding and


incorporating their own enterprises" (1986, 5). But Novak draws a conclusion different from that of the theologians. He sees these problems as intrinsically linked to what he describes as a "pre-capitalist" economic system. He thinks that if liberation theologians had done rigorous empirical analysis, they would see that the so-called peripheral capitalism is not capitalism at all. Furthermore, good scientific analysis of capitalism in countries such as the United States would demonstrate that it is vastly superior to socialism in helping the poor (Novak 1986, 9; for an assessment of Novak, see Bums 1992,507-13).

Segundo Montes, a sociologist and a Iiberationist from EI Salvador, addressed the question in an essay published in 1983, when civil war was ravaging his country ([1983] 1991). He begins his essay by noting that EI Salvador is in deep crisis not primarily because of the war but because of the economy. He notes that economists, when asked which mode of production is dominant, invariably answer that different modes of production coexist in EI Salvador but that the dominant one is capitalist.

In his attempt to see whether the economists were correct, Montes sets forth the economists' thesis that the dominant mode of production is capitalist and gathers data from economic studies to see whether the thesis stands. He subsequently states a counter position, or antithesis, that the dominant mode of production is non-capitalist, this time finding supporting evidence from sociological studies. Faced with these contrary positions, he establishes a third position or synthesis, which states that neither system is predominant, but both modes of production coexist and feed on the other.

In support of the first position, Montes gathers data that show that those capitalist and non-capitalist modes of production (including a peasant economy, tenant-farming servitude and craft forms) do exist in EI Salvador. The studies use statistics and econometric calculations to focus primarily on indicators and measures of the capitalist mode of production. The results show that the Salvadoran economy participates in an international division of labour in which goods are bought and sold in the international market. Salvador's currency is linked to world capitalism and subject to its laws. Various kinds of international exchanges, technology used in the production, distribution, administration of goods, as well as other aspects of the economy, are regulated by capitalist norms (Montes [1983] 1991, 246). Within the domestic system, rules of capitalism also govern the acquisition and distribution of goods and services, and they process them for a different cycle of production or consumption. Moreover, the circulation of money, the internal finance system, a large part of trade, and the more dynamic parts of the secondary and tertiary sectors follow the laws of capitalism. Finally, the capitalist mode of production is increasingly infiltrating non-capitalist modes


of production, either linking them with the market, or eliminating them through competition (Montes [1983] 1991,246-47).

Without denying the thesis or dismissing the data that support it, Montes poses an antithesis that the dominant mode of production is non-capitalist, arguing this time from evidence found in sociological studies. These studies show that the larger part of Salvadoran society is hardly affected by the capitalist mode of production, economic and social relations, the international market, the balance of payments, per-capita income, or wage labour.

The evidence shows that all three sectors (primary, secondary, and tertiary) contain non-capitalist modes of production; indeed, the predominant mode in each is non-capitalist. Most of the working population do not have steady jobs that pay wages, they lack the minimal means of production for self-employment (e.g., farming or crafts), and they earn their basic income from work that is governed by non-capitalist relations. The Salvadoran Social Security Institute (ISSS), which covers only those who have a steady job in the market system, comprises a small number of economically active workers. In 1979, the last "normal" year before the ten-year civil war, this amounted to 14.8 percent of the total number of those working in industry (which is the most capitalist part of the economy). If one looks at urban populations where one would expect to find workers participating in the capitalist economy, one finds that in 1979 less than thirty percent of the urban population was covered by the ISSS (Montes [1983] 1991,248-49).

Most people survive by taking part in non-capitalist modes of production either exclusively, predominantly, or in a complementary mode in which workers switch from self-employment, such as farming, to hiring themselves out as wage labourers. Montes estimates that at least sixty percent of the population do not participate significantly in the monetary and market economy, although from time to time they enter the market to complement their subsistence mode. They make little or no contribution to state revenues through taxes, either because they have no property or because they do not participate even minimally in the market where indirect taxes are charged. The people survive, Montes concludes, by producing or gathering their basic foods, collecting firewood from the hills, or building their homes from natural materials or from trash. They depend on the sun for light, buy cheap fuel, and use natural remedies for medicine or obtain modern care from charitable institutions.

Why has the Salvadoran economy not crumbled during this economic crisis, given the small percentage of wage earners, the low level of international trade, and high inflation? Montes suggests that the noncapitalist mode of production sustains the people. It is relatively unaffected by the lack of foreign exchange, low production, and price inflation. The fact


that most of the population survives when the economic data say they should not, casts doubt on the thesis that capitalism is the predominant mode of organization. The sociological data indicate that seventy-six percent of the Salvadoran people lack sufficient income to meet their basic food needs (2,000 calories per day for an individual to survive). That people are surviving must mean that the official data sources do not take into account non-market food production (Montes [1983] 1991,250).

In the final stage of Montes's dialectical analysis, he proposes a third thesis that denies the other positions while subsuming data from both positions. The Salvadoran economic system is neither predominately capitalist nor non-capitalist but is made up of both modes, which coexist in intimate connection. They do not exist independently. Capitalism penetrates the non-capitalist mode and, conversely, the non-capitalist mode moves i~to the capitalist mode at different times but then withdraws from it. Montes at first refers to the relationship as a symbiosis, because to a certain extent each mode helps the other survive. But Montes thinks that the capitalist mode is increasingly permeating the non-capitalist system and that it will eventually destroy it. And so he compares the capitalist system to a cancer that infects the host. But since it needs the host to survive, it is committing suicide by suffocating the non-capitalist economy.

Montes makes a big jump at this point from his carefully developed empirical analysis to the moral judgement that capitalism is cancerous without giving evidence for the assertion. He does, however, in subsequent publications, provide evidence along with moral reasons to support his contention that capitalism is destroying the country (Montes [1986] 1991, 282; Montes, Melendez, and Palacios [1988] 1991, 164-68). As for the empirical analysis itself, Sirico and Novak would disagree with Montes's first position that capitalism predominates, agree with his second position, but finally argue that what keeps the country underdeveloped and poor is the non-capitalist economy. But the evidence, as I read it, supports Montes's view that the Salvadoran economy, while clearly different from United States or Canadian capitalism, cannot be labelled feudalistic or precapitalistic, but must be called capitalist.

4. The Reign of God and a New Society

We move next to a Jesuit colleague of Montes, Ignacio Ellacuria, who draws upon social analysis done by Montes and others, but who devotes more time to the theological-ethical phase of the process. Ellacuria wants to see a new system, which he calls the New World Order, that will remove the widespread poverty and misery that most of the world's population suffers. Working from his theological sources and analytical studies, he imagines


what the New World Order might be like. His primary analogue for envisioning the new society is the reign of God. He uses the concepts of prophecy, utopia, and the common good to sketch a new society (Ellacuria 1993). He sees prophecy as a gift for contrasting God's living word with the injustices in today's society. Assuming the role of the prophet, Ellacuria contrasts the oppressive structures that negate life with the reign of God that affirms life and solidarity among all people.

He speaks of Christian utopia as the penultimate reign, or kingdom of God. It is the ideal society, currently beyond our grasp, but which, through God's power and the people's openness to God's call, can be realized on earth. Aided by the Holy Spirit, a people can move asymptotically toward the utopia by creating relationships and structures that foster justice, freedom, and solidarity with the poor.

Prophecy and utopia are both historical realities in the sense that they take into account the real situation - the actual present and a possible future that involves a change of hearts and a transformation of structures. At the same time, they are transcendent realities because they are inspired by God's grace and they aspire toward a new society that approximates God's reign. Utopia calls for liberation from every form of oppression and liberation for all people, which means a shared freedom. "It is humanity that must be free," Ellacuria says, "and not a few privileged members of humanity, whether individuals, social classes, or nations" (1993, 308-09).

Ellacuria creates his idealized New World Order by contrasting it with negative experiences of capitalist and socialist societies and by molding it with the positive inspiration of the Gospel. Like other liberation theologians, he brings together in his dialectical theology the transcendent notions of God's reign with the historical realities. Using broad-brush strokes, he paints the major values of the new society. It is to be a civilization of "poverty -with spirit," where people work in solidarity to satisfy their basic needs. It differs from a civilization of wealth and capital where competitive individualism reigns as individuals accumulate riches and strive for power and glory (Ellacuria 1993, 316-17).

Ellacuria raises the question of whether capitalist or socialist arrangements are more fitting for the achievement of this utopian society and answers that the records of both systems are mixed, and that neither system, as it now operates, is fitting. But, while the socialist system is unsatisfactory, the capitalist system is even more so. He points to the limitations of historical Marxist socialist systems that have given inadequate economic performance and poor political leadership. These systems, which have tended toward reductionism, pragmatism, and the violation of human rights, clash with the Christian utopian ideal.


Capitalism in Latin America, which Ellacuria says has been the dominant mode for decades, has failed. Against those who say that Latin America has failed because it has not been sufficiently capitalist, he replies that if that is so, "it has not been because of opposition to capitalism, but because of the objective inadequacy of imposing a capitalist system in a situation like Latin America" (Ellacuria 1993, 318). Capitalist systems in Latin American have been unable to satisfy the basic needs of the greater part of the population, and, worse, they have created bitter inequalities between the few who have great wealth and the majority who have little. Furthermore, these economic arrangements have promoted a culture of consumption, have often produced deep economic crises, and have generated a gigantic external debt that penalizes human beings who in no way enjoyed or benefited from the loans.

Finally, Ellacurfa thinks that capitalism is not suitable as the economy of the new society because capitalist nations historically have taken care of a much smaller part of the world population. Capitalism has satisfied the minority at high cost to the majority in that system. Furthermore, it offers little hope of bringing about universal solidarity. Why? Applying Immanuel Kant's categorical imperative, "Act only on that maxim through which you can at the same time will that it should become a universal law" (Kant [1785] 1958, 88), he judges that the system of capitalism cannot be made universal law. "If the behavior and even the ideal of a few cannot become the behavior and the reality of the greater part of humanity, that behavior and that ideal cannot be said to be moral or even human, all the more so if the enjoyment of a few is at the cost of depriving the rest" (Ellacurfa 1993, 299-300). It is not "universalizeable" because of the limited world resources and the private appropriation of those resources by a few privileged countries.

In his utopian society, Ellacuria's universalization of economic opportunity and human rights must be guided by the preferential option for the poor, not by the option of the strong for the strong (the ethic of capitalism). The poor must be helped to become active subjects of history and full participants in a democratic society. Why is the preferential option crucial for the new society? Ellacuria gives two reasons. The first reason springs from his theological conviction. We opt for the poor because in them we find the greatest actual presence of the historical Jesus in whom we find the greatest potential for salvation or liberation (Ellacuria 1993, 303). The second reason is rooted in his social analysis of the concept of the common good.

Ellacuria shows through his own historical analysis that the concept of the common good has been "ideologized," that is, it has become a cover for special interests. The concept has been used by the powerful elite in Latin America to express the good of a single part, not the interest of the totality. In El Salvador, the single part refers to the wealthy aristocracy, whose


interests include enjoying the fruits of the land and labour while preventing the workers from sharing in what they have produced (Ellacuria 1982, 57-58). In the name of the common good, Latin American regimes in collusion with the wealthy minority raise the flags of national security and Christian democracy while systematically violating the human rights of the poor majority. Violations of human rights over two centuries deny any credibility to governmental pronouncements that democracy or security are the primary objectives.

Following his own analysis, Ellacuria reconstructs the concept of the common good, defining it as a coherent set of structural conditions that promote the interests of all members, rich and poor, in every dimension of society. He includes in the structural conditions human rights that allow all people to have equal access to land, basic necessities and political offices.

Among all the liberation theologians, Ellacuria most adequately demonstrates how religious concepts work dialectically with sociopolitical and economic concepts toward the construction of social theory such as solidarity with the poor, social sin, the common good, and Christian utopian society. Although not strong in empirical analysis, he has shown a good grasp of the social situation and of its effect on the lives of the poor. His dialectical theology manifests a consistent integration of theory and praxis, of the transcendent and the historical realities, and of preferential option for the poor and universal option for the good of the international community. While he is severe in his comments about capitalism, he stops short of condemning it outright, as do the Boffs.

5. Reflection on Religion, Science, and Normative Claims

1 have attempted to show how liberation theology relates scientific knowledge with religious knowledge as it constructs normative social theory. It consistently tries to illumine the presence or absence of God's reign in the historical situation with the help of divine revelation and social analysis. It has produced insights about sin as a social reality and salvation as a multidimensional, liberating process. It has created a distinctive normative social principle, preferential option for the poor, which has been adopted by the Roman Catholic Church. This principle works as a hermeneutic for interpreting Scripture and the tradition. As a principle of solidarity with the poor, it has generated a new idea of church, called "base community," in which poor and marginal members of society become active participants. Liberation theologians have shown how preferential option for the poor relates to the common good. By enabling the poor to participate in the political and economic process, society contributes to the good of the whole.


The method of liberation theology is solid, though not without its limitations. This case study suggests that this theology's social analysis needs more scientific explanation and empirical evidence. The method would also be strengthened by including as part of the process a third mediation, theological ethics, that would serve to overcome the present gap between liberation theology's scientific analysis and its theological-ethical conclusions. Its social analysis sometimes becomes confused with ethical reasoning, giving the erroneous impression that empirical analysis and scientific reasoning make the injustice self-evident. Moral argumentation is mlssmg.

More empirical analysis needs to be done by theologians in the area of economics. Combining empirical analysis in economic matters with theological reflection is an enormous and risky undertaking because it involves two methods, two sources of knowledge, and two types of reasoning. Perhaps by seeking more assistance from economists as collaborators, liberation theologians may more successfully relate the analysis of economic systems and theological reflection. Because of adverse criticism by social scientists, the conservative theological school, and the church (some of which is misplaced), liberation theology faces the dilemma of whether it should continue its social analysis focussed on capitalist structures or drop the analysis and seek a rapprochement with the dominant traditional theological community. With Peter Burns, I encourage liberation theologians to continue doing a liberating theology that works simultaneously on two fronts: enlightening and transforming persons and social structures (Burns 1992, 513-15).

Chapter 5

Every Square Inch Kuyperian Social Theory and Economics

John P. Tiemstra Calvin College

1. Kuyper and His Followers

Kuyperian social theory really begins with John Calvin's strong view of the sovereignty of God. The best-known consequence of that view is the doctrine of divine election and reprobation. Calvin really could not conceive of a world in which God's control was not so complete that the only way people could be saved was for God to have chosen them for salvation before time began. Calvinism sees a society in which humans have rebelled against God, so the task of bringing in the Kingdom of God is a task of bringing all social relations once again into conformity with the ideals envisioned in Scripture. This task is not only to take place within the confines of the believing community, but it must also extend to all society, so those who are unbelievers can benefit from a well-ordered society. Nor is it to be put off to some post-Parousial millennium. The task must begin now. In terms of the famous taxonomy of H. Richard Niebuhr (1951), Calvinism takes the view that Christ is the transformer of culture and works through the church on earth now to begin that work of transformation. In the stirring words attributed to Abraham Kuyper (but for which nobody knows the source, except for Calvin College oral tradition), "there is not a single inch on the whole terrain of our human existence over which Christ does not exclaim, 'Mine!'"

Abraham Kuyper (1837-1920) extended the idea of the transformation of culture and society with his theory of sphere sovereignty. Each area, or

86 John P. Tiemstra

sphere, of social life has its own norms given by God, its own purposes, and its own institutions. In each of these spheres, people and institutions must account to God for how well they fulfill these norms. Some modern Kuyperians refer to this as the "answer-structure of reality." But this accountability is not to any human institution in particular, the church, or the state. It is only to God. The church has its own norms and functions to answer for, and so does the state. Neither may interfere unduly with the functions of another sphere. The exception is that the state, in the name of justice, may enforce sphere boundaries where conflicts between spheres arise and may defend weak institutions and individuals in each sphere against abuses of power (Kuyper [1898] 1931, 97).

How can a vision of sphere sovereignty be implemented in a pluralistic society? Kuyper's idea was that each confessional community should have its own institutions in each sphere, each dedicated to working out the implications of their religious convictions in each area of life. The Dutch call this idea verzuiling. The definition of "confessional community" here is very broad, in line with the Calvinist insistence that all humans are inescapably religious and must have faith in something. So socialism and classical liberalism count as religions for these purposes. During his own lifetime, Kuyper founded a newspaper, a magazine, a university, and a political party, and in 1886 led the secession (Doleantie) that reconstituted the smaller of the Reformed denominations in the Netherlands (the Gereformeerde Kerken). As prime minister of the Netherlands (1901-1905) he encouraged the implementation of verzuiling.

The American heirs of Kuyper have become notorious for similar activities. Though a small denomination (less than 400,000 members), the Christian Reformed Church (the American counterpart of the Gereformeerde Kerken) has spawned many private Christian primary and secondary schools, five colleges, two political action committees, a political party, two labour unions, six or seven magazines, two recreational associations, and three mental hospitals. (The denomination also supports a lot of mission activity of a more conventional variety.) All these are structurally independent of the church (with the sole exception of Calvin College), though Christian Reformed people support them almost entirely. The great advantage of this is that the denomination has achieved a place of leadership in the evangelical world for all its years of thinking about the issues of living out the Christian faith in all areas of life. The drawback of all this activity is that in the United States context, it tends to separate the Christian Reformed people from organizations that include and serve people of different backgrounds in the broader community. In places such as western Michigan, Kuyperians have a reputation for being cold, standoffish, and "holier than thou." In away, it

Every Square Inch: Kuyperian Social Theory and Economics 87

proves the point that Kuyper was trying to make: culture and religion are inseparable.

Kuyper held that Calvinism was a complete "life-system," and not simply a theology. It certainly would influence the way we think about the relationships of humans to God, but it also should influence the way we think about the relationships of humans to nature and to each other (Kuyper [1898] 1931, 1,937). All human science should be founded - indeed, inescapably is founded - on religious presuppositions. It is wrong for Christians to think that science is somehow neutral or value free or objective, and that there is no difference between the way that socialists or classical liberals do science and the way that we do science. The ideal that Kuyperians have always held out is a uniquely Christian philosophy, biology, literary criticism, economics, and so on. (On economics, see Hoksbergen 1994.) At the very least, our acceptance of a theory proposed by secular scholars should be founded on our own Christian control beliefs (Wolterstorff 1984).

The major issue of Kuyper's time (as of our own) was "the Social Question," that is, the relationship between the rich and powerful on one side, and the average workers on the other, in the new capitalist-industrial world. Kuyper's address to the Christian Social Congress of the Netherlands in 1891 (re-edited by James Skillen and republished by Baker in 1991) is the Calvinist equivalent of Pope Leo XIII's Rerum Novarum, promulgated that same year, which Kuyper had read. Kuyper emphatically rejects both socialism and individualism, seeking a middle or third way that in our day might be identified as "communitarian" ([1891] 1991, 65). On property, private ownership should never be considered absolute, nor should all property be collectively owned. Only God is absolute owner of everything, not the individual and not the state (and not the church, either). The proper model is stewardship (Kuyper [1891] 1991, 667). Labour must be permitted to organize to gain justice, and government should promote labour rights. Direct government aid to the poor should be kept to a minimum (though it is not ruled out), but private charity should be generously given (Kuyper [1891] 1991, 729). Kuyper's premiership saw the passage of some significant labour legislation, including a workers' compensation plan, and the extension of some important social benefits in the Dutch colonies (Huggett 1971, 5,964,2,056).

Contemporary neo-Calvinist scholars have embraced these fundamental aspects of Kuyper's vision of economy and society. In his large survey of the faith and economics literature, Craig Gay locates Kuyperian and Christian Reformed thinkers in the "evangelical centre," critical of the market economy, more concerned about distributional issues than about growth and efficiency, and generally progressive in their policy recommendations (1991,

88 John P. Tiemstra

131-52). In another review of this branch of the literature, Roland Hoksbergen, himself identified with this school, agrees with Gay's assessment but reminds us that Kuyperians will subject to critical scrutiny any system or theory that does not have an explicitly Christian foundation (1992). Hoksbergen puts more stress on the Kuyperian critique of and attempt to renew economic theory, and in my own literature review I argue contra Gay that neoclassical economic theory is more the issue than capitalism itself is (Tiemstra 1993).

It is correct to observe that Kuyperians are neither left nor right in their policy views, though I'm not sure that that puts them in the "centre" (see my 1988 essay in the Reformed Journal). Modern Kuyperians have learned much from their contacts with Catholic social thought, in documents such as the National Conference of Catholic Bishops' Economic Justice for All (1986), and Pope John Paul II's Centesimus Annus (l991), just as Kuyper, himself, learned from Rerum Novarum. Kuyperian economists and pundits refuse to put absolute faith in the market as the solution to all economic problems. They do not see government intervention in the economy as inherently wrong or incapable of success, and in this they part company with the evangelical and secular right. At the same time, they do not believe, as evangelical and secular liberals believe, that government intervention in the market is all that is needed to fix society'S most important problems, because government is capable of making mistakes and can be prone to oppression. In policy terms, this may mean splitting the difference and taking a very pragmatic approach to markets and regulation. But at a fundamental level, this position springs from a deep reluctance to put faith in any human institution, because all human institutions are fallible and therefore God is really the only proper object for such absolute faith. Important as they are, institutional structures by themselves do not guarantee the right outcome. The right outcomes are achieved when people in their roles within various institutions respond with faith and wisdom to God's norms - the answerstructure again. This may resemble the current rhetoric of some "new democrats" and moderate Republicans of the "communitarian" bent, some of whom may be informed by analyses offered by the Center for Public Justice, a Kuyperian political research institute. But really, this position cannot be located along the usual ideological spectrum.

The emphasis on people responding with faith and wisdom to God's nonns should make the Kuyperian approach very attractive to Craig Gay. He worries about Christians absolutizing particular approaches to economics and putting faith in secular economic systems and ideas. (He has offered this critique in many places, notably [1891] 1991,207-39.) Kuyperians certainly would not absolutize any human system, nor would they be willing to give any economic theory confessional status (Tiemstra 1994a, 7). By directing


his criticism at anyone who dares to offer an economic analysis with explicitly Christian foundations, I think Gay discourages serious Christian scholars from doing the very work that would help us to escape the conventional, secular modes of thinking we all were given in graduate school. This is no service to the cause of the kingdom of Christ (Tiemstra 1995,4).

If we stick to the conventional modes of economic thought, we end up being trapped by the ethical agenda that comes packed with neoclassical economic theory. Economists then end up criticizing the work of Christian ethicists for being economically naive instead of bending economic analysis to an explicitly Christian ethical agenda. I think that Robin Klay (among many other Christian economists) has fallen into this trap. (Klay teaches at Hope College, which is associated with the Reformed Church in America, the counterpart of the Hervormde Kerk, from which Kuyper split. Thus, the traditional Hope-Calvin basketball rivalry has more than athletic significance. We criticize most severely those we are closest to.) Many Christian ethicists (and Kuyperian economists - see Goudzwaard and de Lange 1995) would point to poverty and the distribution of income, along with environmental sustainability, as the most important problems for modern economies to solve. They would take the most important economic ideas to concern the benefits of specialization and exchange, and the importance of power in exchange relationships. But Klay is so committed to the neoclassical framework that she insists on scarcity as the fundamental economic concept, thereby committing herself to efficiency and growth as the most important economic goals (1986, 612). In response to a blistering ethical critique of the international economic system (Cobb 1991), she criticizes the theologian for being economically naive and instructs him to turn his attention to the task of justifying the international division of labour on Christian grounds (Klay 1992)! However, Cobb's analysis is based on the economics of the Samuelson-Stolper Theorem, which can hardly be described as naive. In her rush to celebrate the gains from trade, Klay seems to espouse the notion that economic efficiency trumps any other ethical considerations, including distributional ones. Thus, Klay seems to believe that the ethical agenda of economic theory should control Christian ethics, rather than the other way around. This is one of the reasons that Kuyperians are quite willing to toss conventional economics.

In the remainder of this paper, I would like to take up three specific areas of economics: social responsibility and business behaviour, the economic role of government, and the foundations of economic theory. These topics will well illustrate the Kuyperian approach to integrating economic analysis with Christian social ethics. At the same time, it will allow us to examine

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some of the literature that has appeared since the major surveys were done in the early 1990s.

2. Business Behaviour and Economic Outcomes

The social responsibility of business is a topic of study well known to management theorists and professional business educators, and it is frequently discussed by practitioners as well. Whole journals are devoted to it. However, mainstream economics has no place for such discussions, since the conventional theory focusses on the perfectly competitive market, in which there is no room for businesses to do anything other than maximize profit in the conventional way. Business managers in such a world have no choices, so their values and religious commitments make absolutely no difference to the decisions that are made or to economic outcomes. Things can turn out only one way. There is no answer-structure to the business world. As economists gain influence in the nation's business schools, steadily less attention is being paid to the social responsibility issue.

However, it is precisely this discussion about social responsibility that Kuyperians want to have. They believe that there are God-given norms for business as there are for all the other spheres. Business managers have choices. They cannot help but act out their religious convictions, and their actions make a difference to economic outcomes. This tends to drive Kuyperians toward institutionalist modes of economic analysis, particularly when they can be bent to the idea that business motivations, cultures, and behaviours can differ (Tiemstra 1992a; 1993). It is essential for business professionals to study at religious institutions of learning so that they can work out the implications of their faith for business practice and for the society as a whole. In particular, it is essential that Calvinists study business at Calvinist liberal arts colleges and universities.

The case of business is particularly complicated, because the norms for the business sphere encompass many dimensions of life. (For this reason we at Calvin College believe strongly that business education should not be narrowly technical but should take place in a liberal arts context.) It is tempting to say that business is required only to be economically efficient; that is, to conserve resources by economizing, and to provide the goods that the actors in other spheres decide they need. This line of thinking would coincide nicely with conventional economic theory. If markets are competitive enough, all it requires is that business maximize shareholder value. The Christian-Kuyperian view would collapse to the secular-classical liberal view.

Kuyperians are suspicious of any case where Christians and the secular world end up believing the same thing, and in this case the suspicions are


based on the view that the norms for business go beyond simple economic efficiency. In his classic Capitalism and Progress, Bob Goudzwaard introduced the idea of the simultaneous realization of norms (1979, 204-23). This suggests that business managers need to concern themselves not only with economizing, but also with humanistic technological development, and with morality and justice. Accomplishing these norms simultaneously involves cooperation and mutual accountability among business, government, and consumer and labour organizations. Without overstepping the boundaries of the other spheres, or forgetting their ultimate responsibility to God, each must be concerned about how their decisions interact to produce a just, sustainable, and efficient society. While neoclassical economic theory can offer successful accounts of behaviour aimed at economizing, its usefulness is compromised by its failure to take into account responses to other norms.

This emphasis has been an important influence in the work of the first decade of the Calvin Center for Christian Scholarship (CCCS), a research arm of Calvin College. The Center's economics project includes a lengthy discussion of the role of business managers in balancing the needs of different constituencies of the firm, and also the role of private voluntary organizations in monitoring business behaviour (Tiemstra et al. 1990, chap. 9). The CCCS technology project looked at the ways that economic considerations have distorted technology assessment and choice by business and included a plea for a new understanding of economics to inform business decisions about technology (Monsma et al. 1986, chap. 7). The recommendations of the Earthkeeping project are directed not just at consumers and businesses, but at business managers as well. The recommendations are based on an understanding that economics must be controlled by environmental ethics, not the other way around (Wilkinson et al. 1991, chaps. 11 and 17).

The recent book of Goudzwaard and de Lange puts these ideas in a more popular and policy-oriented context. They emphasize the idea that economic agents must not blame some inevitable human hedonism or "market forces" for economic outcomes, but they must be held accountable for their economic decisions (1995, 545, 1,203, 1,303). Their twelve-step program for economic recovery includes the recommendation "that [business and labour] expressly broaden their individual and collective tasks to provide pre-care for people and the environment, satisfying work, and the production of as responsible an end product as possible, in exchange for increases in real income and profits; and that, whenever possible, they do so in mutual cooperation" (1995, 139). In a recent work of my own, 1 argue that competitiveness would be enhanced and economic restructuring would be

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made less costly if it were planned by business leaders rather than being planned by government or left to "market forces" (Tiemstra 1994b).

So, in the case of understanding business behaviour and the role of business in society, social ethics takes centre stage with the concept of the simultaneous realization of norms of efficiency, humane technology, sustainability, morality, and justice. Kuyperian economists address policy recommendations to business managers, which conventional economists would never do. A mode of economic analysis is chosen that opens up the discussion of these issues. Conventional neoclassical economics is not suitable to the task because it closes off discussion of any norm besides efficiency. Analysis focusses on both institutional structures and on decision-making behaviour.

3. The Role of Government in the Economy

As noted above, government has a special place in the Kuyperian vision of society. Government has to answer its own norms, contributing the quality of justice to society, in punishing wrongdoers and protecting the security of the people. But justice also gives the government licence to interfere in the other spheres, to prevent one institution from "lording it over" another (a reference to I Peter 5:3, and to the Gereformeerd church order), and to protect the weaker members of society against exploitation by the stronger. At its worst, this turns into apartheid. The philosophy of "separate development" and the structure of the independent, racially and linguistically segregated "homelands" (spheres?) was supposed to prevent one race from "lording it over" another. (Of course, in practice it did not have this effect.) Politicians of the old South Africa invoked Kuyper and the church order to justify this, and the end of the system came in part because the sister churches in Europe and North America declared it heresy.

Though Kuyper himself was very cautious about an expanded role for government, at least some of his followers see government policy as a way of enabling the other institutions of society to better answer God's normative demands. The protection of labour rights, for instance, can be understood as keeping the business sphere from infringing on the sphere of the family. But it can also be understood as protecting a weaker institution from the power of a stronger one, or as freeing the family to answer to God responsibly. Modern Kuyperians interpret the protection of the weak as calling for some measure of distributive justice, a degree of equality in the distribution of income. This is based on the understanding that scriptural use of the concept of "justice" encompasses care for the poor. (This claim would be disputed by the evangelical right and endorsed by the evangelical left.) It is also based on the notion that without a minimally adequat(;j income, families cannot


respond responsibly to the stewardship mandate, care for their children, or otherwise carry out the necessary functions of family life. It is important to notice that all these government interventions in the economy are justified in some kind of justice or sphere-sovereignty language (Tiemstra et al. 1990, chap. 12).

This mode of understanding the economic role of government contrasts sharply with those that are available in conventional economics. In neoclassical welfare theory, government is understood as a benevolent, welfare-maximizing deus ex machina, dropping down from the sky whenever there is a "market failure" to correct. The focus on "market failure" immediately restricts our attention to the norm of economic efficiency, understood as Pareto optimality. Even the claim, often heard from the evangelical right, that efficiency makes room for the preferences of practising Christians, short-circuits important questions, such as whether the choices presented in the market for Christians to select among are the right choices. This line of argument simply insists that in a market economy, whatever is, is right, and Christian ethicists have no business questioning market outcomes. This is not satisfactory. Christian social ethics must come prior to economic theory and must insist that the ethical agenda be given attention. Norms other than efficiency are given short shrift in welfare theory, on the grounds that economists have nothing to say about them. The mythical lump-sum taxes and transfers finesse even distributive equality.

Positive economics offers "public choice" theory as an explanation for the pattern of government involvement in the economy. This theory, which bears an eerie similarity to Marxist theories of politics, claims that elected governments are merely the tools of well-heeled special-interest groups. They are incapable of serving the broad public interest (economic efficiency), because the public is precluded from participating in the political process by the free-rider problem. Like the neoclassical firm, the publicchoice government has no choices about what policies it can undertake, since it is a slave to economic incentives. There is only one way things can tum out, and the religious and moral commitments of elected officials make no difference at all to policies or outcomes. Kuyperian analysis emphatically rejects this view. Government officials have real choices and are answerable to God for what they do. Religious and moral positions make a difference to policy choices, and policy affects economic outcomes. In fact, close examination of the history and pattern of government intervention in the economy suggests that it is aimed at the achievement of a variety of widely held social values, such as economic development, fairness in the distribution of bargaining power, consumer voice, variety in choice, and product safety (Tiemstra 1992b).

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Some important recent writing by Kuyperian economists and social critics has taken up two areas of policy that are hotly disputed in much of the developed world today: the environment, and welfare support for the poor.

Goudzwaard and de Lange are proponents of alternate measures of economic activity that take into account the degradation of the environment, on the way to a path of sustainable development (1995, 1,501). Their approach to government environmental policy is based on close interaction between government and other institutions. They call for a "polluter pays or prevents" policy for industry, with binding restrictions, a change in the incentives that farmers face for sustainable farm technologies, more intensive recycling programs, and more examination of environmental issues in the schools (1995, 1,489). These initiatives imply an approach that would have government creating a context in which other institutions would be encouraged and enabled, and in a few cases required, to make the decisions that would point the society toward sustainable economic development. There is less stress on regulation than on partnership and, to a degree, the use of economic incentives. There is no hint of an approach in which government would encourage the development of co-Asian markets in environmental resources. For most of these resources, the total national or global level of consumption is extremely important to sustainability, and this level is inescapably a collective decision. Ethics and institutional analysis teach us that such a collective decision cannot be made in the context of a co-Asian market, where decision-makers consider only their personal or local interests. Such decisions need to be political. Conventional economics does serve a limited purpose by teaching us how to implement such decisions by using prices to ration the established consumption level.

The authors of Earthkeeping do not neatly divide their policy recommendations or "guideposts" into household, business, and government categories (Wilkinson et a!. 1991, chap. 17). This is partly because they are consciously aiming their work at the objective of empowering Christian activists in the environmental issue area. But this approach also underlines the need for fundamental changes in attitudes and values, and for cooperation among all institutions in accomplishing environmental goals. The guideposts contemplate political activism by Christians as a means for realizing the values of sustainability. They make an explicit distinction between price and value; rejecting the neoclassical assumption that behaviour must and should be determined by economic incentives. They also see the distribution of income and wealth as an environmental issue, with greater equality a precondition for just and sustainable development.

Kuyperian writing about welfare reform has taken a similar approach. The large project launched by the Center for Public Justice to discuss and influence welfare reform had as its common theme the need for greater


assumption of responsibility by alI social institutions to solve the problem (Carlson-Thies and Skillen 1996, 526-79). It is not enough to just telI poor families to shape up, nor is it enough to change government policy to make welfare payments less generous or to increase economic incentives to work. Both these things must happen, and, in addition, businesses have to be more conscious of the need to pay a family wage, schools need to do better by impoverished students, churches need to reach out to those who need special kinds of help, and so on. The poverty problem is not a problem just for one social sphere or institution, and alI of them need to answer to God (and to each other) for their contribution to a solution.

This approach resembles that taken by the earlier CCCS economics project. The team advocated a welfare reform that would have created a fairly generous income support program for those not expected to work and a program with strong work incentives for those more able to work and support themselves (Tiemstra et al. 1990, chap. 12). It called for government to expand the extent to which it cooperates with and works through private voluntary organizations (including churches and Christian para-church groups) in the care of the poor, and decision-making concerning their welfare (chap. 14). People at the edge of subsistence are the most likely to adjust their labour-force behaviour to improve their economic circumstances, whether responding to opportunities to keep more of their earnings, or whether they use higher support levels to devote more time to their children. The analysis of incentives is useful here. It contrasts with the conservative economists' conviction, expressed in the Reagan-era reforms, that lower tax rates would stimulate more effort from workaholic executives and professionals while they would penalize the poor for earning more income. Charles Murray was wrong both in criticizing poor people for making workparticipation decisions that improved their economic circumstances (1984, chap. 12) and in supposing that the poor will not work if they are receiving any assistance at all (chap. 14).

In my own, more recent, contribution on this issue, I call for government to provide an income-support program with strong work incentives and to rely on private voluntary groups to provide more in-kind assistance to poor people. 1 also challenge the conventional teaching of a tradeoff between equality and efficiency, derived by neoclassical economists from the analysis of incentives to produce. Analysis of our operative social values suggests that inequality produce social costs that exceed the dead-weight burden of tax-and-transfer programs (Tiemstra 1992c).

Kuyperians love philosophical language and debate, but, in the end, their approach to government's role in the economy is quite pragmatic. Government is justified, in principle, in doing anything that will contribute to the achievement of justice, which encompasses a broad range of possible

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interventions. But government is a human institution, subject to mistakes and failures like any other. The solution of social problems is best done when all social institutions cooperate, because, then, multiple norms or policy goals can be simultaneously realized. Government often has the opportunity to play a leading role in bringing this cooperation about. But government is neither the solution to all our problems, nor is it their cause, as the ideologues claim.

4. The Foundations of Economic Theory

The search for the elusive, specifically Christian economic theory has led to a fascination among some Kuyperian economists with the philosophical foundations of economics in particular and the social sciences in general. Though occasionally frustrating to those of us who went into economics with a practical frame of mind, this work is essential because it clears the way to bring into economic thinking all the considerations that are important to Christians but are neglected by the secular world.

Alan Storkey's interest in consumption theory goes back at least to the 1960s and was reflected in his contributions to Reforming Economics. With the publication of his Vrije Universiteit te Amsterdam dissertation (1993) (supervised by Bob Goudzwaard), we at last have his book-length treatment of this important subject. Storkey argues that the emptiness and irrelevance of modern consumption theory results from economists' misguided commitment to philosophical foundationalism. The effort to give consumption theory a secure foundation of incontestable, value-free assumptions has led to confusion in debates among economists, the exclusion of important categories of data, and the irrelevance of the theory to policy analysis or marketing practice.

Storkey's methodological view is postmodern and Christian. God is infallible and knows all truth, but all human understanding is dependent and derivative, and it is therefore limited, partial, and located. Knowledge has its origin in God, not in human logic or some supposedly infallible scientific method. On this basis, a new consumption analysis can be built that recognizes the normative nature of all human activity. Consumption affects and reflects our relationships with God, our neighbour, and God's creation. Culture, values, and institutions set the context for consumption decisions. Establishing these connections allows the analyst to explore questions concerning the effects of environmental problems, trends in family formation, business and government policies, new scientific information about human health, and other such matters on consumption decisions.

Douglas Vickers has long been a vigorous proponent of post-Keynesian (Cambridge School) economics and has also long been identified with


Calvinist Christianity. In two recent books he elaborates a fundamental critique of neoclassical economics, including monetarism and the new classical school, and advances post-Keynesian ideas. The burden of his book Economics and the Antagonism of Time (1994) is that since the future is fundamentally uncertain, that is, unknowable, it is a mistake to try to characterize economic decision-making in terms of the probability calculus. He instead proposes a theory in which investment and portfolio choices are made on the basis of their attractiveness based only on available information and in which decisions can change as more information becomes available. Such a system is characterized by considerable hysteria.

In the sequel, The Tyranny of the Market (1995), Vickers extends this critique to other dimensions of market theory. Not only is the use of probability problematical for explaining choice behaviour, but, as well, the basic assumptions of constrained utility maximization yield a meaningless theory of human behaviour. In a world of uncertainty, resource endowments are unknown and unknowable, so decisions cannot be made the way the theory describes. Similarly, it is impossible to define the marginal products of inputs without reference to market prices, but those prices are undefined without prior measurement of the inputs. Vickers argues that in a world with people having constrained rationality and living in historical time, macromarket failure (recessions and business cycles) are not only possible, but they are also inevitable, and money is not neutral. Finally, he argues that economic justice requires the participation of workers in business decisionmaking, and it also requires the use of government to achieve distributive justice and deal with market failure. Vickers's next book, entitled Economics and Ethics (1997), deals further with the ethical dimensions of macro policy and distributional policy.

This methodological and foundational work springs from the deep discontent that Kuyperians have with mainstream economic theory, based on its exclusion of the answer structure of reality from its accounts of how people make decisions. All economic theory is based on a foundation of values concerning what the important issues are, what is valid evidence, and what characteristics a good theory should have. But, beyond that, it is also based on a vision of how things should normally go, what a good society should look like, and how people should behave. The attempt of neoclassical economists to drive these normative considerations out of "positive" economics has left us with an impoverished and inadequate account of human behaviour and institutions.

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5. Conclusion

Kuyperian social theory and economics sometimes seems extremely persuasive, because of its biblical basis and its rigorous logic. Other times it seems just odd or, well, Dutch. That does not surprise thoughtful Kuyperians, because they believe that religion, society, and culture all spring from common faith commitments and a common world and life view. That is why we are so insistent that one's world view be shaped by a conscious religious direction as part of the educational process.

Some of these ideas are growing in popularity, in the evangelical world and in society in general, for reasons that unfortunately have little or nothing to do with the influence of the Kuyperian academic community. The idea that religious experience shapes world view, scholarship, theorizing, and activism is central to postmodern philosophy, which has become the leading school among secular scholars, as well as among many Christians. In the evangelical world there has been a movement away from isolationism toward activism, which began with the religious left in the years of the civilrights struggle and the Vietnam war, and continued with the rise of the religious right beginning in the late 1970s. Neither liberal nor fundamentalist theology provides an adequate basis for religiously founded political activism, so Christian activists have appropriated a lot of Calvinist ideas into their theological baggage.

The politicians have responded to this Christian activism. The more politically skilled and popular leaders of both parties have begun to talk more about responsibility in family and business (the answer-structure), the limits on what government can accomplish (sphere sovereignty), and the need for cooperation between government and other social institutions (simultaneous realization of norms). The elections of 1996 took some power away from conservative ideologues in the Congress and seem to herald a new era of pragmatism that looks at times like a search for a third way. The "communitarian" movement is gaining in political influence, though it sometimes seems to lack a coherent theory foundation or a clear direction.

What the Kuyperian economists have to offer these new political movements is, first, a strong warning about the limitations of neoclassical economics as an engine of analysis, as if it did not import a whole set of values of its own into the discussion. Beyond that, it offers a new language for discussing the need to have all social institutions involved in addressing the problems of a pluralistic, post-industrial society. These contributions have enormous potential value to the health of American society.

Chapter 6

Economics and Evangelicalism

Kim Hawtrey MacQuarie University

C.S. Lewis once said that there is no Christian art, or Christian accounting, any more than there is Christian basketball or Christian comedy. Instead, there are Christians who are trying to be artists, accountants, comedians, or basketball players. Slightly recasting this for our present purposes begs the following question: Is there a distinctive "evangelical economics"; or have evangelicals simply been content with trying to be economists, without claiming that there is any particular connection between the two?

One factor that complicates the answer to this question is that there are several varieties of evangelicalism, in the same way that there are varieties of tea or coffee. In North America, the term "evangelical" is heavily associated with the Billy-Graham-style evangelistic rally and the gospel churches that exist on many street comers, with historical links to the campmeeting movement of frontier America, connections to seminaries such as Fuller, Wheaton, and Trinity, and an identification with the magazine Christianity Today. So, the term carries a revivalist connotation of activism and go spelling zeal. In Britain, the term "evangelicalism" has more often denoted the Protestant theological framework associated with John Stott, Dick Lucas, Alistair McGrath, and other leaders within the Church of England. There, it has a Reformation focus. And, in Australia, the term "evangelical" is particularly used to denote an exclusive commitment to the authority and sufficiency of the Bible as the sole standard for faith and practice (over and above reason, tradition, or experience). So, it has a revelation emphasis.

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These subtle regional vanatlOns are not, however, an insurmountable obstacle to our present discussion. In reality, evangelicals in the different continents hold core beliefs in common, and most would subscribe - to a greater or lesser degree - to all three of the elements outlined above: a revivalist style, a reformed theology, and a commitment to biblical revelation. In this case study, therefore, I believe it is reasonable to speak of "evangelicalism" as an organic entity whilst drawing upon examples from North America, Britain, and Australia.

Having said that, r do not wish to imply that evangelicals everywhere have a uniform approach to the field of economics, nor that there is no disagreement over socioeconomic questions. The opposite is the case: there is in fact a vigorous debate amongst evangelicals about a range of matters to do with political economy and economic science. At the very least, debate comes about in the first instance simply because of the supposed otherworldly nature of evangelicalism, which has often been accused of being "so heavenly minded as to be of no earthly use." This criticism has prompted a number of evangelicals since the Second World War to engage their faith with a range of social issues, notably economics, in the belief that the Bible has something to say in this area and that Christians therefore have a responsibility to speak, think, and act accordingly, as a matter of discipleship. In turn, other evangelicals have disputed even this basic premise or, while agreeing in principle on the need for involvement in economics, have come at the subject from another side of politics or from competing scholarly paradigms, and this has all served to create a lively dialogue.

In this study, I will explore some of the important issues and tensions that mark the attempt to carve out an "evangelical economics." In the first section I depict the chain of events since the Second World War, which saw the rise of evangelical interest in economics and made it a legitimate item, at least in the view of some, for the evangelical agenda. Then J look at serious attempts by representative evangelical writers to assess the doctrines of economics and to prescribe principles or policies for the economy as a whole, ranging from taxation design through to Third World poverty. Finally, I discuss economics as a method and outline some critical evangelical perspectives on this methodology, ending with some comments on the importance of eschatology in all evangelical thought about economics.

1. The Problem: Is There a Rationale for "Evangelical Economics"?

]n an important sense, it was not until the 1960s that the world-wide evangelical movement explicitly embraced a sense of social responsibility and became intentional about economics. Prior to that, there was

Economics and Evangelicalism 101

involvement by evangelicals, but it was sporadic and more applied than scholarly. For example, evangelicals can look back a century or more to the work of Wilberforce in abolishing slavery in Britain, or to the economic reforms of Archbishop William Temple in the 1920s (such as introducing daily milk supplies for London school children, an early form of child welfare), and in these isolated historical episodes see - with some justification - an historical ancestry for evangelical involvement in national economic affairs. And there was an early post-war book on the subject from an evangelical entitled Christianity and Economic Problems (1956) by Denys Munby. Yet, attention was always rather piecemeal and was not given "constitutional" status in official evangelical manifestoes.

A major challenge to such thinking began to occur in many evangelical quarters with a series of watershed conferences and declarations between 1966 and 1974. An important marker in the early stages of this period was the Congress on the Church's Worldwide Mission (Wheaton 1966), held in Illinois in April 1966, which produced The Wheaton Declaration, a document that spoke of the need for evangelicals to "apply Scriptural principles" to such economic problems as population explosion, poverty, and social justice. That document questioned for the first time in such a visible manner the hitherto more narrow definition of "mission" - strong in traditional evangelical thinking - as involving gospel preaching only, and raised the major issue of the correct relationship between evangelism and social activism. The Berlin World Congress on Evangelism, which followed closely in October 1966, addressed by Billy Graham, maintained a more traditional line, but over the next few years discussion around the world continued to further develop the idea that the church's mission should include both evangelism and social responsibility. For instance, The Chicago Declaration of Evangelical Social Concern in 1973 called upon Christians to confront "the social and political injustice of our nation" and eventually led to the formation of Evangelicals for Social Action in the United States.

Tt reached a climax at the Lausanne Congress on World Evangelization in Switzerland in 1974 when the other side of the Atlantic, led by influential theologian John Stott, joined with delegates from around the world in formally endorsing the notion that evangelism and social responsibility were both essential to the mission of the church. In what is now a famous set of statements, The Lausanne Covenant asserted that "evangelism and sociopolitical involvement are both parts of our Christian duty." By 1974, therefore, a significant shift had taken place in the stated attitude of evangelicals - at least at the level of these international gatherings - toward involvement in economic and social-policy questions. This was later reinforced by the Grand Rapids Statement on Evangelism and Social Responsibility (1982), the Wheaton Consultation on the Church in Response

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to Human Need (1983), and in recent times notably by The Oxford Declaration (1990), an eighteen-page document emanating from an international conference of over 100 Christian bankers, economists, aid workers, and theologians meeting in Britain. Ongoing evangelical commitment to this subject continues, aided notably by the North American Association of Christian Economists and the British association of the same name.

Such is the process by which many evangelicals collectively endorsed as legitimate - or even essential - an intentional engagement with socioeconomic thought and policy structures. Yet, at the same time, it needs to be recognized that significant sections of world evangelicalism continued to resist this trend and still today subscribe to the original conservative view, believing that economics is not a priority component of the mission of the church, and indeed must not be given the same theological attention as are more traditional gospel concerns.

Their basic reasoning for this is the very nature of evangelical Christianity, which has always been concerned primarily with individual sin and salvation. As such, it historically gave little credence to social structures, social science, or social theory, preferring instead to emphasize the element of personal conversion and the life of piety. Evangelical Christianity was always more concerned with the "spiritual man" than with the "social man," with regeneration of the heart rather than reform of the polity, and was therefore suspicious of any attempt to legislate "from without" that which it saw as coming only "from within," namely true renewal through faith in Jesus Christ. Appealing to Scripture, such conventional Evangelicals argue that the central thrust and dominant story line of the Bible is concerned with the Kingdom of Heaven, not with the structures of society, that Jesus stated his mission in terms of preaching the message of God (Mark I :38), and that consequently this must govern our core agenda. This view places great importance on the doctrine of redemption (or "new creation").

On the other side of this debate are those who perceive a rationale for evangelical thought and policy on economic matters (e.g., see Sider 1989), and they, too, claim support from Scripture. They point out that there are many Bible references to economic matters, such as Isaiah 1: 17 and Amos 5:15, which evidence God's concern with justice for the poor, or Romans 13:1-7 and 1 Peter 2:13-14, which discuss taxation and government and conclude that Christians therefore have a mandate to seek to influence economic thought. This view places great weight on the doctrine of creation, spelled out in Genesis chapters 1 and 2, and emphasizes that Christians have a God-given responsibility to take economic stewardship seriously and to be proactive in economic life, even if it is in the context ofthe "old creation."


The basic tension between these two views remains and is unlikely to be resolved in the near future. An important implication is that, although there has been a significant increase in evangelical attention to economics since the 1960s, a degree of unease still persists about the wisdom of pursuing an explicit agenda to construct an "evangelical economics." While some regard Christian economics as an end in itself, others say that the relationship of economic concern to evangelism is "like a door leading into a house." Some, like Bockmuehl (1979) and Hill (1996), argue that economic structures as one form of human "relationship" (a concept that Evangelicals regard as important) are intrinsically deserving of attention just as are all other relationships, while commentators such as Carson (1996) see the rationale for Christian economic thought mainly in terms of "pre-evangelism," of building bridges with a pluralist and postmodern society, more as a means to higher end. And then there are those who are sceptical that the two disciplines of theology and economics can ever reside at the same address at all. Overall, therefore, despite the explosion of interest in recent decades, it still cannot be said that Evangelicalism feels completely comfortable about its new involvement in economics.

2. Themes in Normative Evangelical Economics

The first book I ever came across that addressed modem economics from an evangelical perspective was Sir Frederick Catherwood's The Christian in Industrial Society (1964), published by Inter-Varsity Press. As a rather green church-going undergraduate studying economics in the mid-seventies, I read the book with avid interest, devouring its contents and discovering for the first time a connection between my faith and my chosen discipline. Catherwood expanded my intellectual horizons at that time with his choice of topics, which included the social responsibilities of big business and big unions, the economic role of government, and the meaning of fair trading in markets. All were tackled from a biblical Christian viewpoint. It was through this book that I also first heard of the Weber-Tawney thesis linking the Protestant ethic and the spirit of capitalism, which challenged me to think about the effect of the Reformation on economics.

In the three decades or more since Catherwood's book appeared, evangelical thinkers in various countries have published what today amounts to a sizeable volume of serious literature on normative aspects of economic problems and policies. This body of work forms the basis for my discussion of major themes. Not to be overlooked, however, is another kind of document that has appeared from time to time: various evangelical denominations that have occasionally made official statements of a

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normative kind on economic matters. I will include these, too, in my discussion.

What are the main themes in normative evangelical economics? First, there is a critique of unfettered competition. In a notable paper, Hay (1975) argues that the market system when left to its own devices fails to take into account several key Christian ideals and insights. For example, in regard to work, Hay says there are no safeguards in pure capitalism to prevent the use of dehumanizing methods of production in pursuit of efficiency. In regard to distribution, he questions the laissez-faire assumption that the initial endowment of property and ability between individuals is fundamentally just, with its implication that each is automatically entitled to the income arising from the application of his or her land and/or labour. And on the efficiency of the market, he argues that the presence of oligopoly and externalities compromise the textbook model in practice, with disturbing results. For these and other reasons, Hay concludes that capitalism as a system "falls a long way short of satisfying God's creation plan" (1975, 17).

Notably Goudzwaard (1979) has made stronger critiques of free-market economics, and so have Gladwin (1984), Wogaman (1986), and Storkey (1986). European evangelicals tend to make the more strident attacks on capitalism. Storkey, for example, points to the frequent problem of high unemployment and accuses capitalism of failing to create sufficient jobs, with neither Keynesian nor rationalist experiments in macroeconomic policy showing them capable of meeting the challenge. According to Storkey, unemployment is "an issue of faith" that requires a new Christian paradigm that begins with the "over-employed" recognizing that they are in a relationship with the "under-employed," and acknowledging their responsibility under God toward their fellow humans. Goudzwaard is well known for his support of the welfare state and preference for redistributive policies.

Wogaman is also critical of unregulated capitalism, arguing that the free market is responsible not only for joblessness but also for such ethical problems as the exploitation of child labour, hazardous working conditions, poverty wages, inferior products, ruin of the natural environment, and discrimination along racial or gender lines. His policy proposals centre on the government as employer of last-resort, prices-and-incomes policies to limit the fall in living standards, redistribution of public funding away from the military toward education, and controls on multi-national corporations.

Such negative evangelical academic assessments of the capitalist system have in turn been mirrored in social-policy statements by various Protestant denominations, especially in Britain and Australia, where political sensitivities generally are not quite so attached to philosophical libertarianism as is the case in North America. A major example is the


booklet Perspectives on Economics, put out by the General Synod Board for Social Responsibility (Church of England, United Kingdom) in 1984. Written by a group of economists and theologians, this was a major church report critical of the solutions that economists offer and advocating a "just, participatory and sustainable society" (General Synod Board 3). It argued that economic values are not self-justifying and need to be seen in the larger context of human values, and that the economic benefits of a given policy action need to be set against its non-economic costs, for "with each solution a cost has to be paid at the social and human level" (1984, 2). The report claimed that there is an inherent moral contradiction at the heart of free enterprise, in that it can destroy the very virtues on which its success ultimately depends. Policymakers should therefore take into account more than simply the profit motive, should not encourage beggar-thy-neighbour behaviour by economic agents, and must acknowledge a moral responsibility to meet basic human needs. A follow-up document, Peace and Justice (1988) from the Anglican Consultative Council, later echoed these views, as did various statements from Australia such as Economics in the Interest of Social Justice (1985) by the Anglican Social Responsibilities Commission and Give Us this Day our Daily Bread (1985) by the Assembly of the Uniting Church.

In the United States, only some evangelical churches have published economic position statements along these lines, that is, critical of capitalism (see Erickson 1994). The Evangelical Lutheran Church - a merger of two earlier Lutheran streams - has regularly expressed a concern about the poor since the mid-1960s but has given differing policy prescriptions depending on which of the two streams was involved. One arm, the Lutheran Church in America, made a public statement entitled Poverty in 1966 and later issued Economic Justice (1980), defining justice as "distributive love" and arguing that in a sinful world economic fairness is primarily a task for government. In contrast, the other arm, the American Lutheran Church, while expressing concern for the "poor and oppressed" has shied away from centralism as a policy solution and instead prefers to promote private responses for aiding the destitute (e.g., Christian Social Responsibility, 1978).

This latter example highlights the observation that, as a general rule, evangelical denominations in the United States tend to make fewer - if any -official public pronouncements on economic matters than do their nonevangelical counterparts. The more theologically liberal Protestant bodies, such as the United Methodist Church, Episcopal Church, and the World Council of Churches, have all been much more active on this front during the past few decades. This probably reflects the different theological emphasis of these organizations compared with "Bible-belt" evangelical churches. As Erickson puts it, "those denominations which still emphasize

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individual and church approaches to helping the poor have written much less about their views" (1994, 49).

The second theme in evangelical economics is a critique of excessive centralism. This may initially seem inconsistent, since we have just discussed the criticisms of laissez faire, but it points up an important characteristic of evangelical thought, namely the fact that one can find supporters of opposing economic systems coexisting within the one theological tradition. One way of looking at this paradox is according to political geography: there is a definite difference in outlook between evangelicals in the United States (epitomized by, say, Southern Baptists) and European evangelicals (including not only Britain and the countries of the British colonial empire such as Australia and to a lesser extent Canada, but also parts of continental Europe such as the Amsterdam School of Christian Philosophy) on economic questions. Evangelicals in the United States are much more likely to be accused (see, for example, Wauzzinski 1993) of an excessive attachment to individualism and private progress, while British evangelicalism faces the opposite danger of almost preaching a "social gospel" of government intervention. This partly reflects the differing political contexts on each side of the Atlantic.

Yet, there is also a deeper explanation, namely the inherent tendency of evangelical thought to look beyond one or other economic "ism" and instead speak orthogonally to each of them. It is as if a vertical axis labelled "biblical values" is laid at ninety degrees to the horizontal axis running from left to right, which is labelled "economic values." Evangelicals have good reason not to endorse a single economic blueprint, to avoid locating themselves on the horizontal axis between capitalism and socialism, because their starting point is not an economics textbook but the Bible. Instead, they fix their position along the vertical axis, which then allows them to speak to the various systems of political economy. It is therefore quite conceivable that two evangelicals holding similar theological beliefs can at the same time arrive at quite different economic conclusions.

Most significantly, evangelicals believe that an important orthogonal explanatory factor in all economic problems is not "economic" at all but rather moral or theological. This important cause is sin, a basic premise of human nature that figures strongly in evangelical thinking but that is not explicit in secular economic theory. Sin manifests itself in the economy through such forms as idolatry (Leviticus 26: 1), greed (1 Timothy 6:3-10), dishonesty (Proverbs 20:23), and power plays (Genesis 13:5-7). As outlined in my article entitled "Economic Justice: A Twin Axiom Framework" (1991), both conservative ("commutative") and liberal ("distributive") prescriptions for economic affairs, for all their differences, still in the final analysis have to face the reality of this behavioural feature. Accordingly,


evangelicals regard any normative prescription for economic relationships that does not recognize human sinfulness as materially deficient, on the grounds that all normative economic systems of whatever political shade, Left or Right, suffer alike from sin.

It follows that the same evangelicals who criticize various aspects of the market approach to economic problems do likewise with the centralist approach. Hay (1982), in his Christian Critique of Socialism, argues that the state soon exceeds its boundaries when it proactively begins to specify a rigid goal for society in terms of income distribution that is patently overdetermined, thus putting itself in the place of God. There is room for legislated justice in God's world, but it must be reactive and corrective only - not going one step further and prescribing its own independent ideal. Further, Hay argues that excessive centralism interferes with the God-given responsibility of individuals to exercise their part in the stewardship of creation, by confiscating reasonable property rights and putting stewardship instead into the hands of a few faceless planners.

Griffiths (1982, 1984), Brockett (1986), Diehl (1984), and Hore-Lacy (1985) also criticize centralism and some contributors to the recent volume Welfare in America: Christian Perspectives on a Policy Crisis edited by Carlson-Thies and Skillen (1996). In the latter, for instance, Lawrence Mead puts the view that a biblical sense of responsibility in the face of poverty includes helping the poor to assume greater responsibility for themselves, and a number of other contributors to the volume suggest that simply extending the welfare state yet further is not going to solve anything. In keeping with this, an emerging theme in evangelical thought is that the emphasis needs to be put back on families, churches and local communities with government playing - at most - a junior partner role (see Mason 1994). This line of thinking seems timely, given the latest shift in United States policy toward "charitable choice," the historic welfare reform adopted in Section 104 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, in which Washington is handing welfare back to the states and faith-based organizations as part of its plan to cut a projected $500 billion off social services expenditure to balance the federal budget by the year 2002. Yet, such thinking does not so far seem to have struck a chord with evangelical relief agencies such as the Baptist Joint Committee and the Association of Evangelical Relief and Development Organizations, which have voiced reservations about the change.

In terms of official denominational statements, the Southern Baptists best represent the "pro-markets, small-government" viewpoint. Rarely producing separate policy documents, preferring instead to simply record occasional resolutions at their annual sessions, these evangelicals generally project a conservative economic vision in which the role of government should be

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limited. From time to time, some public policy proposals (such as jobtraining programs) have been advanced by Southern Baptists, but mostly the resolutions have concerned principles for private morality in economic life, such as the need to eschew inflationary demands for excessive price and wage increases, or to denounce conspicuous consumption. It is a reflection of biblical Christianity that the emphasis falls mostly on matters of the soul, with little enthusiasm for reforming the affairs of mammon. It is also true that the adherents of conservative evangelicalism tend to vote conservative; a recent survey of elected members of the United States Congress found that, while Catholic and United Church of Christ legislators are more often than not Democrats, legislators who are Baptist and Non-Aligned Protestants (which includes fundamentalist, charismatic, and community church groups) are more likely to be Republican (Christianity Today, 7 April 1997, 52).

A third important theme in evangelical economics is a biblical theology of work. This interest on the part of evangelicals reflects the importance of relationships in the Bible and a corresponding reaction against mechanistic or reductionist portrayals of economic life that can overlook the fact that all people are created in the image of God. Men and women are therefore more than mere production machines. The Oxford Declaration (1990) included a whole section entitled "Work and Leisure," beginning from the observation from Genesis 2: 15 that God placed Adam and Eve in the Garden of Eden "to till it and keep it," an event that occurred before the Fall. So, God ordained work as part of his plan for humankind. "The Declaration" argued that work has a number of purposes including provision of needs, building community, and stewarding the creation. Work goes wrong when alienation is present, caused by such factors as discrimination, exploitation, or denial of the opportunity to work in the first place. The document then calls for recognition of "the obligation to seek the highest level of employment which is consistent with justice and the availability of resources" ("Oxford Declaration," 8).

r (1988), along with Stott (1984), Storkey (1986), Britton (1996), Birnie (1996), Sherman and Hendricks (1987), and a number of others, address the theology of work also. Stott says that work performs three functions: fulfillment of the worker (Ecclesiastes 2:24), service to the community (Ephesians 5:28), and the glory of God (1 Corinthians 10:31). The importance of these should cause us to understand the trauma that is joblessness and should make policymakers sensitive to the fact that unemployment "is not a problem of statistics, but of people" (1984,164). Stott's policy prescriptions, while recognizing that "the ultimate solution belongs to the realm of macroeconomics," focus on private responses, including a change of attitude amongst those of us schooled in the Protestant work ethic toward those unemployed through no fault of their own, and local


church initiatives at job creation. In other words, "workfare" is preferable to welfare. In the context of work, trade unionism has also received attention, mainly from evangelicals in the unionized countries (for example, see: Attwood 1979; Cable et aI. 1977; and Antinodes 1982. The latter is from the Christian Labour Association of Canada, probably the world's leading example of an attempt at applied "Christian unionism.)

A fourth theme in evangelical economics is justice for the developing countries. Taylor (1975) in Britain and Sider (1977) in North America each wrote landmark books about the plight of two-thirds of the world, highlighting the issues for "rich Christians in an age of hunger" and in tum provoking vigorous debate about the extent to which western Christians should feel responsible for world poverty initiatives. Munro (1976) was an early contributor who characterized the issue as one of global justice involving two basic elements: "fair play" and "fair shares." The first can be addressed by ensuring that prices are not weighted by historical circumstances too far in favour of the rich countries, and that tariff levels in the West are lowered to reduce barriers to goods from poorer producers. The second aspect should be addressed through impartial foreign aid, without which the constraints of low savings and technological lags are unlikely to be overcome.

Many official church documents have since expressed similar sentiments, but it is perhaps more interesting to note the applied response that has taken another form, that of the "Jubilee 2000 Campaign for International Debt Remission" (see Peters 1995; 1996). The proponents of this Campaign see it as a significant opportunity, based on the Jubilee principle of the Old Testament (Numbers 36:4), for the West to forgive the debt of the Third World and partly correct the flow of resources from the poor to the richer countries. Critics such as De Vries, however, argue that "most of these countries are already receiving a positive net transfer of resources on highly concessionary terms" (1995, 23).

These arguments for economic justice hinge on the somewhat vexed question of the biblical definition of economic "justice." One group of evangelicals (e.g., Wolterstorff 1983) sees justice involving a distributive notion, having as much to do with the results of the economic "game" as the rules. On this view the West should take affirmative action to help the poor countries, by means of direct transfers and favoured group status, on the premise that the market by itself cannot be relied upon to do the job of producing fair outcomes. Another group of evangelicals (e.g., Beisner 1988, and Schlossberg 1987) treats justice mostly in a procedural manner, defining it primarily by the rules of the game, not the results. If this conception is adopted, then self-help strategies are the preferred policy approach because

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there is an implicit assumption that the procedures of the market must be adhered to.

These form the two poles of the evangelical "aid versus trade" debate that has raged over the past three decades or more. The interventionist school of thought received attention from Protestants in the 1970s and 1980s and finds practical expression in evangelical agencies such as World Vision, Compassion International, and The Evangelical Aid and Relief Fund. In the 1990s, however, the pro-market approach has received fresh attention from evangelicals, and this partly reflects the shift in thinking by the World Bank itself, away from macro-aid projects and toward the new paradigm of microenterprise development. An important evangelical contribution here -completed in conjunction with the Oxford Conference - is the work of Joe Remenyi (1991) on income-generating programs for the poor in developing countries. This has found practical expression notably in the work of David Bassau, an executive committee member of the Oxford Conference, who organizes small-parcel loan funding for micro enterprises through his Opportunity International foundation. This is not without its critics, however. Hulme and Mosley (1996), for instance, argue that, given the more than one billion people around the world living in poverty, it is unrealistic to expect that they will all pay their own way out by becoming entrepreneurs.

This debate remains unresolved yet in a neat way encapsulates the dilemma that evangelical economists continue to wrestle with, namely the tension between "head" and "heart." There is a timely saying: "If a person is not a socialist when young, they have no heart; if that same person is not a capitalist when old, they have no brains!" There is a dynamic tension between the logical aspects of political economy on the one hand and the theological aspects on the other, a tension that we feel in different ways as we each mature through the various phases of the scholarly life cycle. An observation can be made of evangelical circles - as of others - that crusading free marketers often mellow with age and that angry young centralists not uncommonly become more relaxed about markets as they get on in life. The generation of evangelicals that has been engaged in the big debate since the 1960s is aging, and this may result in greater compromise between the competing schools of thought in the next ten or twenty years, with a mutual recognition of each other's strengths.

3. Economics and Evangelicalism as Method

Utilitarian economic theory has attracted the attention of evangelicals on account not only of its content, but also of its method. This includes debate over the issue of the appropriate role or function of the economist (see, for instance, the discussion of this in Anderson and Langelett 1996). Some

Economics and Evangelicalism III

evangelical criticisms are not dissimilar to those put to the profession by certain leading secular economists, for instance in Joan Robinson's Economic Philosophy (1962), George Stigler's The Economist as Preacher (1982), and Tibor Scitovsky's The Joyless Economy (1976). The difference is that, in the hands of evangelical economists, the problems with orthodox methodology take on a theological as well as a logical twist.

One important criticism concerns what Scitovsky termed "rankhappiness." This questions the standard neoclassical assumption that "more goods equates to higher utility." Scitovsky quoted experiments that showed that consumers cared more about their position relative to other consumers than about the absolute quantity of their consumption. If status and rank determine utility rather than raw output, there exists a serious problem for standard welfare economics, which likes to propose policies on the basis that a rise in income always leads to an increase in happiness. In fact, a rise in income may reduce happiness if the income of others around me has risen by an even greater amount. Hay (1975) takes this argument and invests it with theological content by saying that the Pareto principle suffers from the "problem of envy" and that at a logical level this problem of relativity implies that the leading argument used to defend the optimality of market-oriented outcomes breaks down.

A second line of criticism is that the utilitarianism of standard welfare economics may be an unscientific description of how things work because it mistakenly excludes religious sentiment. Cramp (1991) argues that JudeoChristian ethics as the voice of conscience may cause the individual to override his or her own material preferences to attain the morally right outcome. Examples would include the buying and selling of human babies or other such transactions discussed by economists such as Gary Becker, which may be "efficient" in some pure sense but which few would regard as a desirable outcome. The predictable orthodox response - that all such sentiments can be included in the utility function - is insufficient because it simply reduces economic theory to a tautology and still leaves as invalid any policy prescriptions based only on measurable material outcomes. Birnie (1993) suggests that, in light of the definition of freedom in Romans chapter 7 of the New Testament, true personal "optimality" may occur only when our own preferences are not acted upon.

This leads to a third criticism, that "rationality" as defined by economists is value-laden, not value-neutral. This is so because any scientific method must be judged not only by what it admits into the analysis but also by what it precludes; not only by what it includes but also what it excludes. Economics excludes the implications of belief in God. McKee (1987) addresses this in his discussion of the methodological and epistemological basis of economic science and argues that, as a discipline, economics is not

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autonomous. It, too, is a "faith," with its own internal conventions and selfderived legitimacy but no exogenous absolute point of reference by which it can claim to be neutral. D. Vickers (1976) concurs with this, saying that economics cannot be "a value-free inquiry" because the economist necessarily brings to his or her task a pre-scientific philosophical persuasion. The reason for this assertion is that God created the world (Genesis 1: 1) and therefore "life, in short, is religious" (Vickers 1976, 3). Either the investigator starts from the assumption that God made the world, or from the assumption that the world is the product of chance. Vickers accordingly rejects Robinson's assertion that the economist can be "ethically agnostic."

And this brings us to a fourth line of criticism, the hermeneutical one, which involves the matter of asking the right questions. Evangelicalism makes its greatest contribution to normative economic debate in modern society not through its commentary on the answers that economics offers but by its reassessment of the question that economics asks. In a nutshell, according to the Bible, the economic question at the end of the day is not a terribly significant one. Psalm 49 says that "a man who has riches without understanding is like the beasts that perish," with the psalmist arguing that since both rich and poor die and cannot take their wealth with them, the question of wealth maximization is ultimately a trivial one and should not preoccupy us. As Williams (1996) points out, evangelicals are rightly concerned that society - together with members of the economics profession - are missing the overall message of the Bible and placing too much importance on secondary things - like economics. Economics has only a finite time horizon, whereas Christianity has an infinite one, and the central criticism in the area of economics that evangelicalism offers to the legislators and their citizenry is that economics can ever answer only a very limited question.

In the long run we are all dead. Mammon will cease to be important, and we will each face the judgement of God, with our eternal destiny hinging on our response to Jesus Christ alone. Evangelicals consequently place great store by ensuring that economics is kept in its place, and that the tail not be allowed to wag the dog by letting the "God question" be relegated to a lesser status than the "mammon question." To state my own position on the issue at the start of this case study, it is to generally side with those who seek to keep a clear priority for evangelism over economics in the church's mission. This I believe is ultimately the single most important contribution by evangelicals to this subject: the proposition that the main thing about economics is that it is not the main thing.

c.s. Lewis was right after all.

PART 2:

INTERPRETATIVE ESSAYS

Chapter 7

Social Factors in Religion and Economics

James M. Dean University of Manitoba

Combining the (putative) insights of theology with the (putative) scientific insights supplied by economics is not easy. Some theologians are not comfortable with the knowledge supplied by economics and want to redirect economics to better serve their goals. It is not surprising that they find some economics questionable. Not all of economics is useful to theologians, as not all is useful to capitalists or socialists. There is, however, much that can be useful in addressing the questions that theologians consider important. In particular, the focus on collective and social relations, which all the case studies express, is a topic of considerable research in economics. The scientific knowledge may not always be what theologians expect, but it has an empirical basis that suggests it deserves a hearing.

First, consider the general response to economics. Andrew M. Yuengert (ch. 2) states that Papal Social Teaching "is suspicious of economic analysis based on assumptions about the nature of people and community that contradict its conclusions about the same." John P. Tiemstra (ch. 5) urges looking beyond economics, since "if we stick to the conventional modes of economic thought, we end up being trapped by the ethical agenda that comes packed with neoclassical economic theory." Kim Hawtrey (ch. 6) notes that evangelicals hold a variety of views, but some of them are antagonistic to the assumptions and recommendations of economics. The collective provision of public goods, in both positive and normative dimensions, is a central focus of public finance. Yet, Thomas L. Schubeck (ch. 4) notes that "the concept of the common good has been 'ideologized,' that is, it has become a cover

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for special interests." Suspicion of economics is not universal. A.M.e. Waterman (ch. 3) notes that economics has a role in providing technical information to theologians and that the religious beliefs of economists are not relevant to their results. All the authors recognize the importance of social institutions and relations, and in a positive spirit, in this essay I discuss economic insights that theologians may want to use.

An economist can accept that the world would be a better place if people behaved more ethically, with honesty and integrity, greater concern for others, and less greed and envy. Waterman notes that Lord Stamp discussed how this might affect the economy. An economist can applaud institutions where business studies include an emphasis on liberal arts. Both economists and theologians can agree that the status quo is a world where people and institutions fall far short of an ideal. Hawtrey notes that evangelicals have always had a primary focus on sin and salvation, so it seems reasonable for economists to assume that people have less than lofty desires. There is a difference of opinion about what to recommend after recognizing that fact. Some economists have gone so far as to say that public-policy recommendations by economists should be restricted to those where everyone is better off, as defined by the people involved (Buchanan 1959). This is an unusually restrictive criterion, but, as a guide to policy, even this criterion has advantages over recommendations with greater moral force and little likelihood of implementation. As we depart from this contractarian methodology and introduce conflict, competing special interests, and decisions that do not allow for compromise, it is possible that ethical goals may be difficult to achieve. It is highly desirable for these goals to be stated, but it is equally important to recognize what limitations are imposed by the status quo. So, a good foundation to discuss collective choice involving the common good might be how real people respond to situations involving choices where others stand to gain more than a decision-maker will lose.

Economics claims that people respond to incentives, and there are numerous empirical studies that provide support for this proposition. A narrow version of self-interest claims that people respond only to incentives and act selfishly on every opportunity without regard to the effect on others. This is the version that Tiemstra discusses when he claims that a publicchoice government is a slave to economic incentives. It is also the version that led economics to the narrow version of the free-rider hypothesis. Economics has maintained a strong commitment to incentives and has modified it only as required by empirical evidence. Research suggests that incentives matter, but they are not the only things that matter, and their relative strength varies in response to changes in the social environment.

In public-sector economics, the free-rider hypothesis has been used to explain why people will not voluntarily agree to provide a good-of-collective

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benefit. A voluntary contribution cannot be justified on the basis of the private benefits received. Yet, there is a variety of evidence that people voluntarily agree to contribute to the common good through private organizations, social clubs, service groups, consumer and producer interest groups, and others. Economists have begun to turn their attention to such groups and have accumulated evidence about collective action that should be of interest to theologians.

Some of this evidence is experimental (Smith 1990) and some is from natural experiments. In one natural experiment, a study of two towns in neighbouring countries, it was found that a community of 16,000 people, representing 5,500 households, voluntarily contributed DM 3.5 million to the neighbouring community to move a waste incinerator that would produce pollution affecting them (Pommerehne, Feld, and Hart 1994). Fifteen percent of the variation in individual behaviour is explained by factors unique to the individual. So, the strong free-rider effect is not supported. Including social factors improved the explanatory power to .43 percent of the variation. So, in this case, social factors are crucial; narrow self-interest matters, but other factors matter more.

There are many experiments about collective choice in which economists have tested how much an individual will contribute relative to the socially efficient amount. Much of this research is done in laboratory experiments, which enable economists to construct situations in which one variable at a time is changed. Typically, people contribute fifty percent of the socially efficient amount at the beginning of an experiment, but usually contributions decrease to as little as nine percent at the end of ten iterations (Isaac and Walker 1988; Davis and Holt 1993). So, contributions are less than in natural experiments, where people are subject to the social pressures and institutions in which they live. Experiments have also shown that people are motivated to contribute as long as the gain to society is greater than their individual losses. James Andreoni (1995) shows that people contribute voluntarily to public goods, but, when the possibility of making others better off is removed, contributions fall by two-thirds. The implications are that incentives matter, as economics suggests, people do respond to their own self-interest, but people are also altruistic. Indeed, Andreoni (1988) has shown that people contribute more to public goods involving strangers than with regular partners. This unusual result partly explains why contribution rates decline with group experience.

Some people may be surprised to find that it is easier to achieve a collective goal with strangers than with regular partners, although I have anecdotal evidence that it is sometimes most difficult to agree with those who know you best. Yet, if people were concerned with achieving a common goal, it would be folly to ignore this result. Given that we start with

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real people, it may be easier to work with strangers than put aside differences with people known for years. Of course, it may fall well short of an ethical ideal, since the appropriate institutions may then be based on anonymity rather than personal relationships. This outcome is common in economics. Unions have consistently argued that people with similar qualifications should be paid the same amount, regardless of individual differences in productivity; others have argued for carefully delineated property rights and free markets. These institutions may even be normatively desirable. It is possible to change social relationships so as to facilitate action, but the most desirable social institutions may include property rights and free markets.

Why does cooperative behaviour persist in public-goods situations when incentives to cooperate are entirely absent? Economists have begun to address this question directly. Andreoni (1995) shows that there is among humans an impulse to act cooperatively even if such cooperation is fruitless. There is other evidence to support this result. Experimental studies in different settings and cultures indicate that people will choose a minimum level of income for themselves and the group of which they are a part. "The vast majority of groups chose a principle which maximized the average income subject to the constraint that everyone would be guaranteed a certain minimum (floor) income" (Frohlich and Oppenheimer 1994, 149). While both economists and theologians may want a world in which there is more virtue, it is reassuring to find that there is some virtue, at least, and that it may be increased by changing the structure of incentives and institutions.

The free-rider effect is directly relevant to religion, since it can occur in any group setting, including churches (Lipford 1995). Churches are composed of and financed by people, and the effect of any individual's contribution is small in large congregations. Accordingly, the free-rider effect predicts that average contributions will fall as the number of people in the congregation rises. As with the experimental and laboratory results cited above, the strong free-rider hypothesis is not supported. Contributions per member are the same for congregations of seven as for 3,000. Experimental economics provides some insight into these results. Douglas D. Davis and Charles A. Holt (1993) note that the mean per-capita return from a contribution is more important than group size. Mark R. Isaac, James M. Walker, and Arlington W. Williams (1994) show that contributions may increase with group size, probably because the total benefits to the group from a contribution go up as the number of people in the group goes up. This is the same result as is found by Jody W. Lipford for churches. Churches are not unique; the result is a more general human response to groups and incentives.


The same principle applies to tax provisions for religious institutions. Contributions are tax deductible and so subject to an effective government subsidy. Research shows that incentives matter; people increase their contributions in response to the preferential tax treatment. Income also affects the type of contribution people make. Laurence R. Iannaccone (1990) shows that the ratio of monetary contributions to attendance rises with income, suggesting that money is a substitute for church attendance. The point is that people behave in less than ideal ways, and using information on how they do behave would help construct social policy that may be implemented.

I am not offering an unconditional defence of neoclassical economics. I find much to support in public-sector economics that criticizes neoclassical economics. Mancur Olson (1996) argues that neoclassical economics is unable to explain why societies fail to achieve their productive potential. Olson claims that these models are wrong; efficiency cannot be assumed since there is evidence to the contrary. There are two possible classes of aggregate theories that could explain differences in productivity among nations: differences in aggregate production functions and differences in public policies and institutions. Olson shows that differences in aggregate production functions do not appear to explain much. Large international migrations do not equalize incomes and do not depress the wages in the destination country. Increases in the density of populations does not lead to lower real incomes but, rather, higher ones. Income studies suggest that new migrants to the United States experience much larger increases in real incomes than can be explained by the human capital that they possess, and this result raises questions as to why capital is not moving at higher rates to underdeveloped economies. Something else is very important. Olson argues that the something else is institutions. Poor countries often lack impartial third parties to enforce contracts. Because contracts are insecure, many of the potential gains from trade are left unexploited. Furthermore, if property rights are also insecure, these countries do not realize the gains possible from capital-intensive production techniques (Olson 1996, 22). Corruption varies systematically with the level of income in nations. The problem is not a lack of individual rationality but, rather, the collective institutions necessary to realize their productive potential. Collective institutions matter in developed countries also. Rafael La Porta et al. (1997) argues that capital-market laws are more investor friendly in common-law than in civil-law countries, and this has a strong effect on the performance of these markets.

The work by Olson is related to the concept of social capital and its connection to virtue (Fukuyama 1995a; 1995b). Francis Fukuyama argues that one basic cultural difference among societies is extent of trust relationships (family, clan, and strangers). Low trust societies are likely to

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remain backward and have difficulty amassing the large amounts of capital needed by a modem economy. High-trust societies are likely to have large, stable firms, with widely held ownership and the ability to engage in capitalintensive production methods. Social capital as a concept was developed in sociology (Coleman 1988), but it is derived from human capital, a traditional economics concept. Social capital is beginning to be researched in economics. Econlit, a bibliographic database for economics, lists fifty-eight entries for social capital, and 6,006 for human capital.

Human capital is relevant in itself (Iannaccone 1990; 1988). Human capital can predict denominational mobility, religious intermarriage, conversion, and religious participation. For example, "the human capital model predicts that religious switching, like job changing, will tend to occur early in the life cycle as people search for the best match between their skills and the context in which they produce religious commodities" (Iannaccone 1990, 300). This is empirically true. Again, human capital is the only factor that matters; even from this narrow perspective, information theory (signalling, sorting, and screening) may be a better explanation (Weiss, 1995). r am suggesting that these models provide evidence that may be useful in developing social policy.

Social capital is a newer concept, still expanding its range of possible application. Social capital suggests that social institutions, a particular interest of religion, are significant and independent of the effect of individuals. "Social capital comes about through changes in the relations among persons that facilitate action" (Coleman 1988, S 1 00). Property rights, markets, legal structures, and regulation are all examples applicable to economics. However, the analytical problem has been applied to a variety of other institutions of interest to some theologians.

Consider some of the empirical results on social capital applied to education. The dropout rate from high school is one factor that explains income. Within the family, this rate is influenced by three distinct types of background variables: financial capital (income), human capital (parents' education), and social capital (adult attention). Social capital within a family can be measured by the amount of time a family is wi11ing to give to a child; a family can be rich in social capital while possessing little financial and human capital, or the reverse. The social-capital effect can be large. For example, a child from a two-parent family with one sibling and the mother's expectation that the child will attend college, has a dropout rate of 8.1 percent. A child with the same financial and human capital background, but with one parent, four siblings and no expectation of college attendance, has a dropout rate of 30.6 percent (Coleman 1988, S 112). Such results must be of interest to social-justice advocates.


Social capital can also be applied in education to different types of schools. Similar differences appear between public and Catholic schools. Catholic schools are organized around a more homogeneous set of values and are often committed to equality of outcomes. The empirical literature suggests that Catholic schools are significantly more effective than public schools. Catholic schools have lower absenteeism, lower drop-out rates, less classroom disruption, greater interest in academics and higher levels of performance, even after the background characteristics of the students have been held constant. Furthermore, the effects are not limited to students. Teacher absenteeism is lower, staff morale is higher, and teacher efficacy and enjoyment of work is higher in Catholic schools (Bryk, Lee, and Holland 1993, 286). At the same time, teacher wages in Catholic schools are lower than in public schools. The implication is that social institutions influenced by religious beliefs can have a significant effect on outcomes.

Economists have traditionally stressed financial variables when analyzing education. It is known that class sizes, teacher education, and even expenditures on schools have little relationship to how well students perform (Hanushek, Rivkin, and Taylor 1996). These results have not been promising for people who want to increase the resources allocated to schools. It would not make much sense to formulate education policy without considering these results. Yet, the assumption of economics that incentives matter suggests that we look elsewhere for factors that might be changed. Student incentives to study, from higher grading standards, more homework, and improved graduation exams, are more important than increased expenditure or reduced class size (Betts and Ferrall 1997).

Economics has produced a variety of results that might help theologians formulate normative social policy. A.M.C. Waterman, in particular, recognizes the necessity to incorporate these findings. Some of the case studies reflect dissatisfaction, even antagonism, with economics that is not conducive to collaboration. However, the premise of my essay is that we can start from the status quo and look for attainable improvements. Economics suggests a variety of factors that are relevant in devising such policies. Not all economics is relevant, but much economics bears directly on issues important to theologians.

The essayists were asked to evaluate whether the interaction between theology and economics was intellectually defensible and/or actually fruitful. My extended digression is designed to show that there are areas in which interaction is intellectually defensible but ignored in the case studies. Interaction occurs among individuals with distinctly different assumptions and world views. If they are unable to bridge the gap, then attempts to combine theology and economics will be fruitless. Overall, the evidence in the case studies suggests that the gap is wide, and I do not see cause for hope

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that it will be bridged. There may be scattered examples of fruitful interactions as in Waterman, and many more are possible, but in most cases I think that the attempt is fruitless. So my answer to the question posed in this volume is: no, I do not think the interaction is actually fruitful.

Chapter 8

Economics, Ethics, and Knowledge

Sheila C. Dow The University a/Stirling

1. Introduction

The accounts from different religious perspectives demonstrate a perception among some, through the ages, that useful connections might be made between theology and economic issues, particularly to construct a normative social theory. These attempts raise important questions as to the nature of the connections between theology and economics, and thus as to whether they are such as to be capable of yielding useful normative social theory.

In attempting to answer these questions, it is necessary that I revisit some of the issues raised in the first volume in this series (Brennan and Waterman 1994) as to the separability of theology and economics. Since most of the case studies focus on the value-basis of economics in relation to theological values, we deal with this first, in order to assess whether these attempts to construct a normative social theory have been fruitful. It will be assumed for the time being that such a construction is intellectually defensible.

But a direct challenge to this assumption is highlighted in the Waterman case study (ch. 3), and the rest of my essay will be devoted to addressing this challenge. The discussion requires a focus on epistemology. In particular, the question needs to be addressed of whether there is a distinction between religious knowledge and secular knowledge, qua knowledge, what this distinction is, and how it affects attempts to combine these two types of knowledge. My discussion comes back full circle to the issue of the separability of religious and economic knowledge, whatever their differences

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in kind. It is concluded that the intellectual indefensibility argument rests on the view that religious and secular knowledge are separable. A counterargument is developed by reference to the work of David Hume.

2. Economics and Ethics

There is a common theme in three of the case studies: those that deal with the construction of normative social theory in Calvinism, evangelicalism, and Catholicism. Each puts forward the view that economics necessarily embodies an ethical position. For Calvinists, "all human science should be founded - indeed, inescapably is founded - on religious presuppositions" (Tiemstra, ch. 5). For evangelicals, of whom Vickers is quoted as an example, "economics cannot be 'a value-free enquiry' because the economist necessarily brings to his or her task a pre-scientific philosophical persuasion .... 'Life, in short, is religious'" (Hawtrey, ch. 6). The papal view is put forward less strongly, not that ethics are necessary for economics as such, but that they are necessary for "worthwhile" economics (Yuengert, ch.2).

All three case studies focus on the theological reaction to neoclassical economics. Each is critical of the prevalent neoclassical insistence that economics is value-free. In each case the authors proceed by contrasting the single neoclassical ethic of efficiency with a range of alternatives, including, for example, distributive justice, the promotion of human dignity, and the maintenance of community. Given their starting position that ethics are embedded in economics, and since each approach has its ethical position, it follows that it is a useful exercise to analyze the economic implications of adopting these ethical positions, and then to develop a normative social policy on this basis. Thus, for example, it is consistent for economics based on Calvinist ethics to be applied in management training, as Tiemstra explains.

As well as drawing on economics in this way, however, the authors of these case studies show theology also aiming to contribute to economics by pointing out the implications of different ethical positions for the internal logic of economics. The criticism is that neoclassical economics lacks coherence. Thus, in addition to rejecting the ethics of neoclassical economics, it is argued that the single neoclassical ethical goal of efficiency is incompatible with analysis of the workings of capitalism. In particular, there are in reality additional ethical considerations that, if not present, would render capitalism unworkable. Hawtrey argues, for example, that the Protestant work ethic is necessary to the functioning of capitalism, and that worker alienation can impede efficiency. Similarly, Tiemstra points to the Calvinist emphasis on business behaviour, based on Calvinist ethics of social

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responsibility, which may also take into account the goal of efficiency. The "rational economic man" concept, further, is challenged, for example in the account of Catholic theology, on realist grounds.

The other three case studies demonstrate a theological use of economics, not as a reaction to neoclassical economics, but embracing a form of economics that is based on a compatible ethical foundation. Thus the liberation theologians use dependency theory, which does not rely on the "rational economic man" concept and focusses attention rather on the distributive issues that are also of theological concern. In this case, economics is quite explicitly used as input into normative social theory, designed to inform theology on social issues. Christian political economy in the Anglican approach also employs pre-existing economic theory to inform theology. Waterman demonstrates how the notion of scarcity, and the form of classical and then neoclassical economics that evolved during the nineteenth century, were absorbed into Anglican theology.

Judaic theology perhaps had the most symbiotic relationship with economics, in that the two were developed together in the Mishnah. The economics was developed here reflecting a particular form of social organization, of which religion was an integral part. The theological view of property was thus embedded in a realist economic theory that reflected social relations that were in turn built on that theology. As theology developed from the Mishnah in the Yerushalmi, however, this realist economic vision was lost, and the detail of the economics was used as a basis for very specific behavioural rulings in a manner separated from any holistic view of social organization.

The implication is that this development represented a misuse of economics by theology, in that it seemed to reflect a misunderstanding of the economics (and thus of the original theology). Schubeck (ch. 4), too, discusses criticisms of the liberation theologians' lack of understanding of the reality of the social structure that they were analyzing with dependency theory, and Waterman endorses criticism of the quality of the Christian socialist reaction to Christian political economy. In discussing whether or not attempts by theologians to construct a normative social theory have been fruitful, the quality of the analysis is clearly relevant, so that these criticisms should be considered carefully.

But, rather than engaging in discussion of particular literatures, I will address this issue here by considering whether the application of particular sets of ethics to economics might not be handled by trained economists instead of theologians. In fact, theologians are not the only source of criticism of the internal logic of neoclassical economics, or of the application of alternate ethics. Thus, for example, most non-orthodox economists reject the neoclassical primacy of the goal of efficiency and the concept of

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"rational economic man" to explore such questions as institutional development and power relations, with reference to alternate goals, such as distributive justice, and the promotion of human dignity. Most non-orthodox approaches are realist, so that they aim to embed the religious values and institutional structure of the relevant community in their analysis as a means of reflecting reality, quite apart from any personal ethical proprieties. Nellsner (ch. 1) forcefully demonstrates how both secular and religious economics can be developed in parallel, which embody social mores, when he compares Aristotle's economics with that of the Mishnah. Their notions of economics differ because of the particularity of Judaic theology with its definition of wealth, but essentially both constructed their ideas of economics as a reflection of actual social structures (that have an ethical foundation) and practices that had strong similarities.

Theological input might be seen to differ because it seeks not only to reflect what is, but also to correct sinful behaviour (Hawtrey) and transform society (Tiemstra; Schubeck). These considerations have fundamental implications for economics in that the first goes against the notion of given preferences while the second goes against the notion of given structures, both central features of general equilibrium versions of economics. But these are also characteristics of some secular economics. Secular environmental economists, for example, also consider conflicting preferences, as between consumption and conservation (see Hanley and Milne 1996). Similarly, the critical realist agenda is to understand causal processes in order to transform society (see Lawson 1997). This would seem to suggest that economists may indeed be entrusted with building economics on a range of ethical foundations, generating an end product for the use of theologians. This is borne out by Waterman's account of the secularization of economics in the Keynesian era, which proved acceptable to Anglican theologians because the ethical foundations were sufficiently compatible.

But Waterman proceeds to draw attention to Kolakowski's questioning of the validity of theological use of secular knowledge in this way. Kolakowski argues that each type of knowledge is fundamentally different, with only theological knowledge having any claim to truth. This would seem to preclude input of secular knowledge (held with uncertainty) into theological knowledge, that is, the construction of a normative social theory. I turn now, therefore, to consider the nature of religious and secular knowledge to examine this argument.

3. Economics and Knowledge

The Waterman case study highlights the epistemological issues raised by combining economics and religion. Some of the other case studies also


directly address the nature of theological knowledge relative to scientific knowledge, but they do so in rather different ways. Tiemstra argues that Calvinists see religion in all of reality, including scientific knowledge; the latter "has its origin in God." This suggests no perception of an epistemological problem in combining different categories of knowledge. The liberationists' view of science is that it contributes knowledge to theology, although the inevitable ethical content of that knowledge may create a "dialectical" relationship between the two in that "each discipline challenges the other" (Schubeck). The papal view is to regard economics as partial knowledge that theologians should combine with other disciplines to construct useful inputs into a normative social theory. Further, the economics input to theology is seen as positive, relative to the normative form of theological knowledge (Yuengert). But there is the suggestion of overlap, which makes the epistemological relationship between the two potentially troublesome. The evangelical approach goes furthest toward the Anglican view that religion and science are separable. Hawtrey refers to a "dynamic tension between the logical aspects of political economy on the one hand and the theological aspects on the other," and also to an "orthogonality" between economics and ethics.

The nature of religious knowledge and of scientific knowledge is not a dominant theme, however, in any of the case studies other than that of Waterman. The emphasis on replacing neoclassical ethics with religious ethics is presented as a powerful force in itself, and so this is the dominant thrust. This relative lack of concern with epistemology may be the outcome of three quite different factors. First, the association of the critique of neoclassical economics with theology may reflect a genuine lack of appreciation of the full extent of non-orthodox economics, which takes a similar critical approach to neoclassical economics, but often from a secular perspective. (In notable cases, the critique among non-orthodox economists is from a religious perspective; see: Harcourt 1994; and Vickers 1976.) It is only when we focus on the secular critique based on, for example, humanist ethics, that it becomes important to ask whether a theological critique has any peculiar significance.

The second reason may be that scientific knowledge and theology are regarded as separable but that economics can serve unproblematically as an input to theology. Neoclassical economists do not in general accept that they necessarily employ ethics in their economics; from that perspective, economic knowledge can be treated as factual knowledge that can be combined with any set of ethics to produce a normative theory. On the other hand, for those who accept the argument that economics necessarily has an ethical foundation, there may likewise be no perception of an epistemological problem with selecting a particular ethical foundation and

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building economic theory upon it. However, the views represented by Schubeck, Yuengert, and Hawtrey, and particularly by Waterman, suggest that even separability does not allow us to avoid epistemological problems.

The third reason for lack of attention to epistemology may be that no such distinction is found between economic and religious knowledge, because, rather than in spite of the fact that, both are founded on ethics. All knowledge is thus seen as homogeneous. This would explain the lack of epistemological concern in Neusner's account of the Mishnah. This may also appear to be the Calvinist position. Nevertheless, there is a Calvinist discussion of the difference between religious and scientific knowledge that recognizes that attempts are made to construct secular science. Secular knowledge is depicted as being subject to uncertainty, in contrast to the omniscience of God: "God is infallible and knows all truth, but all human understanding is dependent and derivative, and it is therefore limited, partial, and located. Knowledge has its origin in God, not in human logic or some supposedly infallible scientific method" (Tiemstra). Religious belief, then, provides certain knowledge. But it is precisely the uncertainty attached to secular knowledge that Waterman identifies as making it ineligible for input into theological knowledge.

To consider further the juxtaposition of certain belief with uncertain secular knowledge, it is helpful to refer to the work of David Hume (see further Dow I 997b). For all his atheism, Hume could not but be influenced by the religious component of his intellectual environment. (See: Allan 1993, for the general argument about the context of the Scottish Enlightenment; and Sutherland 1982, for the specific argument that it was crucially important for Hume's thought that he shared a "Presbyterian inheritance" with other Scottish thinkers with whom he is more conventionally contrasted.)

Hume addressed himself to the sceptical position that existence could not be established by reason. Reason was the tool of science, to be contrasted with the dogmatism of religious belief. Hume concurred that the scope for reason was severely limited. Further, his consideration of empirical sources of knowledge ran up against the problem of induction; we have no mechanism for proving whether or not empirical evidence has revealed true causes. But, while others continued to focus on the problem of how to extend the scope of reason and/or empiricism, Hume ([1739-40] 1978) developed instead a theory of human nature that demonstrated how humans actually function without rational grounds for belief in existence and without rational proof as to cause. He concluded that the gap left by reason is made up by imagination, passion, sentiment, and judgement - and belief. He thus drew on the common-sense notion that we found science on belief in existence. Religious belief is a particular form of belief, which refers to a different


realm from the human and is therefore incapable of analysis by analogy with the human realm.

Hume emphasized the primacy of sentiment or belief for all knowledge, even of mathematics. He drew the distinction between normative and positive to clarify analysis. But then he argued that the normative is prior to the positive, since science cannot start without belief. This finds an echo in Yuengert's account of papal theology as starting with the normative, in contrast to secular knowledge; Hume's argument, rather, is that this is the case for all knowledge.

The implication is that there is limited scope for identifying "facts." Even the simplest of "facts" requires a basis in belief (even if only in existence). Even so, "the facts" cannot reveal true causal processes; again we rely on a range of types of knowledge, including belief, in proceeding as if some processes are true. In other words, Hume's theory of knowledge suggests that economics involves sentiment and belief, just as does theology. The two are not different in kind. All knowledge is held with uncertainty, except where there is certainty of belief. This is all a matter of logic. Belief is of a different order from empirical knowledge because it can be held with certainty, and its divine source does not yield to human logic. But the overall construction of a theory of human nature is logical, where logic admits of uncertainty. It is only where "logic" is thought of as coincident with rationality/certainty that there is a disjunction between logic and theology.

Religion is thus distinctive in terms of the type of belief on which all other knowledge is founded, and the certainty attached to that belief. Where knowledge is held with uncertainty, awareness of a Divine being with complete, certain knowledge may provide confidence as a basis for action (see Dow 1997a). Further, belief in the existence of the Divine places the secular in a particular context. Thus, for example, Hawtrey refers to the significance of an infinite time horizon (for each individual) for economic issues. In particular, he points out the limited relevance of material wealth in an eternal, rather than mortal, time frame. Religious belief in such ways is different from secular belief.

The problem raised by Waterman is thus not relevant if belief is understood to be the starting-point of all knowledge, economic and theological, secular and religious. The argument that uncertain knowledge cannot add to certain knowledge requires a correspondence between uncertain knowledge and facts on the one hand, and certain knowledge and belief on the other, that is, the fact/value disjunction corresponding to an uncertainty/certainty disjunction. Further, the argument also seems to rely on a focus on the rational as the sole basis for knowledge; if in fact the scope for pure rationality is limited, then most knowledge is subject to uncertainty. Even belief itself is subject to degrees. Keynes (1922) discussed degrees of

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uncertainty concerning the grounds for rational belief. Nor is religious belief itself coincident with certainty; there may be degrees of doubt. Thus, while religious belief is a distinct category of belief, the epistemological limitations on human reasoning and universal reliance on belief - both religious and secular - serve to break down the absolute categorization on which the argument rests: that scientific knowledge cannot contribute to theology.

4. Conclusion

The views taken of the relationship among economics, ethics, and knowledge stem from what I have discussed elsewhere (Dow 1996) as mode of thought. Where a closed-system mode of thought is employed, a sharp distinction may be drawn between facts and values, between secular knowledge and religious knowledge, and between uncertainty and certainty. While secular scientists may regard "the facts" as being known with certainty, the religious perspective may well, as in the Anglican case, deny that certainty and therefore deny the validity of the facts as an input into theology.

From an open-systems perspective, however, these sharp distinctions break down. "Facts" are seen as theory-laden and therefore value-laden. Scientific knowledge is in general held with uncertainty, but that uncertainty is reduced by foundation in belief, both secular and religious. Belief, too, may be held with uncertainty, that is, is itself a matter of degree.

The distinctiveness of religious belief has theoretical and epistemological implications. The significance of sin embedded in preferences, and attempts to overcome sin, is great for economists' attempts to analyze human behaviour, for example. Similarly, the downgrading of the goal of wealth accumulation in a time frame that extends beyond death also has profound theoretical implications for economics. The epistemological implication of religious belief is that there is a belief, held with more or less certainty, in an omniscient being. While some react to the uncertainty of human knowledge with an inability to act, religious belief adds confidence to those considering action. Where social action appears to be in accord with the tenets of religious belief, it is therefore fruitful, according to this view, to attempt to incorporate particular beliefs in economic analysis that would inform such action.

Chapter 9

Economics and Religion Comment

Kenneth G. Elzinga University of Virginia

My assignment is not only the conventional one of a respondent: to assess and comment on the six case studies in this volume. In addition to assessing the case studies, I have been asked to evaluate how well the overall evidence provided by the six case studies in this volume bears on the central question of the volume: Is the attempt to combine into a normative social theory the (putative) insights of theology with the (putative) scientific knowledge supplied by economics either or both intellectually defensible and actually fruitful? In short, do these six particular case studies shed light on the larger question of whether mixing economics and religion together to create normative social theory is in general a useful endeavour?

Two challenges to this assignment became evident. First, the six case studies constitute a very diverse portfolio. That itself signals caution that blending economics and religion will produce a normative social theory. Interdisciplinary volumes that mix, say, economics and psychology, or economics and political science, do not have the heterogeneity of the case studies collected here. In addition, not all the contributing authors remembered to critique the social theories that arose from the particular mixes of economics and religion featured in their case studies. While some do evaluate the social theory they describe (Waterman, ch. 3, is the most careful to do this), others present a topic in religion and economics but neglect to analyze substantively what normative social theory, if any, might be drawn from the interdisciplinary exercise.

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Because of the diversity of the case studies, I have fallen back on the conventional protocol of examining (briefly) the merits of each case study. Then I shall offer my own comments regarding the defensibility and fruitfulness of mixing economics and religion to create normative social theories.

Hawtrey

Kim Hawtrey's case study (ch. 6), "Economics and Evangelicalism," is the closest to my own faith tradition. After a brief description of what Evangelicalism means, Hawtrey summarizes the recent interplay between writers of an evangelical persuasion on the subject of economics. Hawtrey's study, while readable, is very much a "he said this but she said that" exercise. This is useful reporting for people who have not read this literature, and Hawtrey does it nicely, but the task has been done by others (and more comprehensively) (see: Gay 1991; or Richardson 1988). Parenthetically, I dissent from Hawtrey's classification of Philip Wogaman as an evangelical since he does not fit any of the three definitions of the term as given by Hawtrey.

The difficulty with Hawtrey's conclusion that evangelicals are "all over the map" when it comes to writing about economics is this: an evangelical Christian does not become an economist just because he or she writes on economic matters. The fact that so many Christian authors attracted to writing on economics have no training in economics may explain why the voices and views are hardly unified.

There is something to be said for the proposition that someone purporting to write on economic matters should be able to pass an undergraduate test in intermediate price theory or macroeconomics. I suspect that this might be a challenge to many of the authors cited by Hawtrey. The point bears modest elaboration - not only with regard to Hawtrey' s study. Several of the authors that Hawtrey cites who have written on economics from their faith perspective have not been trained formally in economics.

Years ago, John Maynard Keynes advised the world of non-economists (and reminded economists) that "the theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions." Economics, even when done by those with impeccable credentials, is very hard work. On many questions and issues, economic analysis does not lend itself to wooden and mechanical answers. In macroeconomics, the theoretical divide among economists on some issues can be large. In microeconomics, problems in data analysis require hard work to solve.

Economics and Religion: Comment 133

This suggests that the divisions among the writers that Hawtrey cites may not represent genuine conflicts about what the Bible teaches about economics. To claim as Hawtrey does that the differences in economic policy prescriptions reflect "differing political contexts" actually may reflect a difference between who is doing good economics and who is trying to do economics, but doing it badly.

The most insightful part of Hawtrey's case study is the spotlight it puts on the biblical theology of work. The second is his reminder to evangelicals that the Kingdom of God is being ushered in by Jesus Christ. It is not ushered in by an unfettered market system, nor by a benevolent central government. In this regard, the work of Donald Hay is to be commended. Hay's writings (cited by Hawtrey) remind everyone that "all normative economics systems of whatever political shade, Left or Right, suffer alike from sin."

Hawtrey ends the study on a hermeneutical note, asking whether a recipe that blends economics and theology assists in raising the right questions. Hawtrey's answer is affirmative - this is religion's "greatest contribution" to economists. But Hawtrey then disappoints us by concluding that "the economic question at the end of the day is not a terribly significant one." Really? Economic realities have a tremendous effect on daily lives. Even the prayer that Jesus taught His disciples contains a petition for material things.

The topic that Hawtrey leaves undeveloped is: what kind of questions ought to be pursued if one is committed to the theology of the Bible and trained in economics.

J. David Richardson offers a tantalizing sample of dishes that might be prepared through a recipe blending economics and Christian theology (see Richardson 1988). Richardson encourages Christian economists to move away from addressing broad thematic questions (such as the market system versus central planning) and focus instead on the kind of problem-specific, empirical investigations treated by ordinary research economists. Which ones? Richardson suggests that, rather than studying exactly the same problem-specific questions as non-believing economists, Christian economists - informed by what the Scriptures teach about stewardship of resources - might be drawn to study topics such as the debt crisis, the economic consequences of inheritance and bequests, and the influence of takeovers on a firm's non-pecuniary goals. It is on questions like these that believing economists might allow their beliefs to influence their research agendas and thus infuse the field of economics with Christian thought.


Neusner

Jacob Neusner's case study (ch. I) contains his thesis - put forth in other writings as well (1990) - that there lies within Rabbinic Judaism a "theory of the rational disposition of scarce resources, their preservation and increase," that is, a theory of economics. He shows that within the Mishnah is a doctrine of economics more complete than in other early religious teachings. (For an assessment of Neusner's view of economic policy as seen through the lens of the Mishnah, see my earlier work, 1995.)

What is disappointing about the economic theory embedded in the Mishnah, at least to those interested in blending economics and religion, is that it applies to the economics of only one input - land (indeed, a particular piece ofland, for a particular chosen people) and the distribution of only one output - food. That the Mishnah contains a complete theory of the economic order for one people living in one place at one point in time with only one main input offers little comfort to the study of today's world, in which the input mix is more complex, the output mix more varied, and the units of observation dispersed among the nations.

Neusner explains (perhaps to the disappointment of readers unfamiliar with these writings) why one cannot extract Mishnaic economic principles and apply them to our situation today. The establishment of general economic principles was not the goal of the Mishnaic system. As I have summarized elsewhere, "Mishnaic discourse must be understood outside modernity .... The rules were [intended] to secure an order that matched the order of heaven, and this was an order of eternal stability marked by renewal and sanctification" (Elzinga 1995, 296). We are thus unable to use Mishnaic economics to create a normative social theory of any relevance to the modern world.

A quibbling objection to Neusner's contention that the Mishnah represents afull economic order is with his assumption that barter somehow sidesteps the allocative mechanism that he associates with currency-based market exchange. Barter, as viewed by economists, is seen as the equivalent of market exchange, though it is less efficient because, unlike the price mechanism, it requires a double coincidence of wants in which the one party desires exactly what the other party has to offer and sees its value as equal to whatever item he or she is trying to dispense with. Thus, the difference between currency and barter lies in the medium of exchange used, not in the allocative mechanism (a classic treatment is Jevons 1890).

Neusner also shows that the later Rabbinic writings (purportedly commentaries on the Mishnah) in fact supplanted the integrated substance of the Mishnah and, as Neusner puts it, "set it aside in favor of a counter-part


category." This counterpart category does not offer a theory of economics that can serve as an engine of analysis for contemporary economic inquiry.

Schubeck

Liberation theology, the subject of Thomas 1. Schubeck's case study (ch. 4), would seem to hold the most potential for an integration of theology and economics since it prides itself on employing "scientific as well as theological sources" (anthropology, economics, sociology). I shall comment only on liberation theology's purported use of "social-scientific sources," recognizing full well that this is a truncated view of what Schubeck attempts to do in his case study.

What liberation theology purports to do is precisely what the current volume of papers is trying to assess. But the blend of economics and theology in liberation theology is an unbalanced one. As Schubeck makes clear, when it comes to using ideology versus empirical research, liberation theologians tilt heavily to "ideology critique" (an important exception being the research of Montes cited in Schubeck's case study). What is lacking in liberation theory is an answer to the phenomenon that Friedrich A. von Hayek called "the fatal conceit" (1988). Liberation theology, as described by Schubeck, is a Latin American version of this conceit (see also: Skidelsky 1996; and, for a balanced use of "scientific" as well as theological sources with regard to a "preferential option for the poor," see Amy 1. Sherman's Preferential Option: A Christian and Neoliberal Strategy for Latin America's Poor, 1992).

Waterman

The social thinking of an "established" (government-sanctioned) church, in particular the Church of England, is the subject of A.M.e. Waterman's lucid study (ch. 3). What makes Waterman's case study especially pertinent to this volume is that he discusses a set of early economists - important ones, such as Josiah Tucker (a precursor of Adam Smith), William Paley, George Berkeley, Thomas Maithus, J.B. Sumner, Edward Copleston, and Richard Whately - who were themselves also members of the clergy (two became archbishops). What better place to evaluate the mix of economics and theology than by way of that handful of individuals who truly wore both hats?

Waterman's case study - in part an extension of some of his earlier work - illustrates that "what goes around comes around." He shows how the early Christian economists saw stewardship of resources as a call of God upon His people; how the introduction of scarcity (primarily through Malthus)


indelibly reshaped the study of economics by Christians and non-Christians alike; and how Christian economists in the Church of England (and elsewhere in the established church) integrated Malthusian doctrine into a case for the market mechanism, calling it "evidence of the divine wisdom and mercy in turning human frailty to socially beneficent ends."

Waterman then describes the left turn that the Established churches took when their affection turned to "Christian socialism" and how the latter movement was relatively uninformed by the hard study of economics and instead took as its basis the Romantic revolt against what was then called political economy.

What Waterman shows is that there were benefits from the blending of economics and theology by the clergy of the Established churches. The productivity of the interplay among churchmen and political economists is illustrated by William Temple (as Archbishop of the Church of England) submitting a manuscript on economics to Keynes (an atheist professor) and securing Keynes's blessing. Perhaps the most important and lasting effect of this interplay was Whately'S characterization of a "value-free" economics, which, as Waterman shows, was handed down to Nassau Senior and became the foundation for the "canonical methodology of J.N. Keynes (1891) and Lionel Robbins (1952)." Notwithstanding this heritage, Waterman ends his case study on a pessimistic if not nihilistic note: the Christian faith currently may have little to offer the economist qua economist; and the reverse proposition also holds.

Tiemstra

To most social scientists today, what could be a more preposterous statement than the proposition (associated with the Dutch philosopher and politician Abraham Kuyper) that "there is not a single inch on the whole terrain of our human existence of which Christ does not claim, 'Mine!'" As John Tiemstra explains (ch. 5), this remarkable statement follows from the theology of John Calvin. Calvin believed with such deep conviction in the sovereignty of God that he could not imagine truth claims - in economics or any other science -that were not captive to God. This meant, for a Calvinist like Kuyper, that everything from art to economics were "spheres" accountable to God.

Because it is accountable to the sovereignty of God, Tiemstra claims that Kuyperian economics is neither left nor right in its political outlook. His argument is, like Paul's to King Agrippa, almost persuasive (Acts 26:28) except for the fact that the policy recommendations of Kuyperian economists almost always have a propensity to tilt left. It is as if the Democratic Party, looking down on Kuyperian economists, claimed, "Mine!"


The strength of Tiemstra's case study is its endeavour to show the usefulness of Kuyperian social theory as an engine of social analysis in three areas: corporate social responsibility, the economic role of government, and the presuppositions of neoclassical economic analysis. The study is weakest with regard to the first topic. It is not the case, as Tiemstra asserts, that because of the theory of competition, economists are uninterested or incapable of discussing business behaviour and economic outcomes. Some of the most path-breaking contemporary work in economics involves agency problems (which have a robust ethical component). By way of example, note the emphasis placed on what goes on inside the black box of the firm in such books as those by Oliver Hart (1995), and Paul Milgrom and John Roberts (1992). Also, notwithstanding Tiemstra's ill-informed shot at Public Choice economics, it is the Public Choice economist's concerns about phenomena like log-rolling within legislative bodies and agency problems within bureaucracies that help us understand how sphere cooperation might or might not function (for examples, see: Buchanan and Tullock 1965; and Niskanen 1994).

Tiemstra's best work, here and in previous research (1993), shows up in his discussion of the proper role of the government versus market and with regard to economic methodology. In the context of this volume, with its concern about whether theology and economics can offer a consistent vision of society, Kuyperian social theory comes closest to offering for a modern society what Neusner shows the Mishnah did for an agrarian society. The nexus between Mishnah and Kuyper is that both world views presuppose a God of absolute sovereignty over the economic order: in the case of the ancient Israelites, God had a concern with land and food. For the modernday Kuyperians, God has a purpose for everything in the economic order, from income distribution to environmental spoliation.

The problem with Kuyperian social theory is that it is so messy. As Tiemstra admits, the social order incorporates the work of several spheres, which often need to work in harmony or at least in cooperation with one another, in ways that are not specified. Among all the contributors to this volume, Tiemstra and Waterman merit special commendation for their continued efforts to mine the field of religion and economics and write about their endeavours. This is not the field of economics with the most cachet. But, even with this encomium, Tiemstra's case study makes the reader question whether Kuyperians really like the field of economics. I once asked Bob Goudzwaard whether he would have any interest in how one might estimate the price elasticity of demand for crude oil and what the number might be. He replied that no, he did not. If Goudzwaard's response is representative, then one wonders how Kuyperian social theory can move from theory to praxis.


Yuengert

Papal Social Teaching, Andrew Yuengert opines (ch. 2), has the kind of connection to economic analysis that a family wanting a new home has with an architect. The architect is the agent, not the principal; the architect ultimately is to serve the purposes and preferences of the principal. In like fashion, Papal Social Teaching may use the services of economic analysis. But the pope is not subservient to it.

Like Tiemstra, Yuengert also adopts a trinitarian division to his case study, analyzing Papal Social Teaching's use of economics in three arenas (two of them different from Tiemstra's). They are: labour relations, the role of state versus market, and consumerism. But Yuengert does not attempt to assign a grade to the mix of Papal Social Teaching and economics, which I had hoped. His agenda is different: to understand why the popes approach economics the way they do.

The most valuable component of the Yuengert case study is his discussion of the positive-normative relationship. The way this distinction often gets translated to economics students is as follows: economics addresses positive issues; it has nothing to say about normative propositions. The subtle lesson being taught to students is: normative propositions are mere "matters of opinion" and can be disregarded; let's applaud economics for taking the high ground in addressing only positive issues. As Yuengert makes clear, in Roman Catholic social thinking, normative propositions trump positive propositions in that there is no reason for doing positive economic analysis correctly if the ends in mind are faulty.

The second proposition that Yuengert defends is that, in moral theology, normative propositions are, in a very real sense, positive: that is, there are correct normative standards and there are incorrect ones. This means, in Roman Catholic theology, that moral judgements are not mere matters of opinion. An economist functioning under the domain of papal authority and teaching is to be very concerned not only with the technical problem of estimating economic models accurately but also with the purposes to which econometric analysis might be put.

The most notable contribution of Papal Social Teaching to economic discussion is the recognition - flowing from the primacy of normative over positive - that the purpose of economic activity is not only growth in percapita income. According to recent papal teachings, it also has a role in encouraging "human creativity" and personal expression. The market mechanism confers "spiritual benefits" beyond a rising GDP; for this it receives a high grade, maybe a B+ (but not an A).

Yuengert argues - from papal teaching, I gather - that what the market mechanism beneficently provides, in terms of opportunities for personal


freedom, it can also take away by the shackling consequences of the consumerism that the same mechanism often promotes. Readers of Irving Kristol's Two Cheers for Capitalism (1978) will recognize an overlap between the restrained enthusiasm for free enterprise found in (secular) neoconservative thought and that found in recent papal encyclicals, as described by Yuengert. The breadth of Papal Social Teaching vis-a-vis the market is nicely illustrated by Yuengert's adumbration of consumerism - but Yuengert exaggerates when he says that "mainstream economics [has been] silent" about consumerism (see, for example: the trenchant essays of Hayek 1961; and McKean 1973).

Conclusion

While each of these case studies offers an interesting recipe for mixing theology and economics, their collective effect upon most practitioners of the dismal science will be, well, dismal. Most economists, operating out of the prevailing weltanschauung of the discipline, are not prepared to acknowledge the sovereignty of God or the papacy over their work; they would think the writings of British cleric/economists to be of historical interest, no more; and exegetical interpretations of the Mishnah they would find to be merely quaint.

Like the ancient Israelites, economists are known throughout the academic land as a tribe of stiff-necked people. One must be grateful for economists today who are willing to make a prophetic call to recast the discipline of economics so that it is as careful about ends as it is about means; but it also would be a congenial development if the theologically trained who wish to practise economics would subject themselves to rigorous, formal training in the dismal discipline as well.

While these six case studies showcase the variety of ways in which economics and religion have been combined to produce normative social theories, I do not believe their collective effect upon mainline, academic economists will be great. None of the case studies presents a meta-analysis of economics and religion that will draw together economists and theologians into a normative social theory that is useful or persuasive to each. Too few economists will give allegiance to the church or the Scriptures or the papacy as a normative framework to produce a normative social theory. In addition, too few theologians really want to wrestle seriously with the concepts of costs and incentives as a scientific framework to produce a normative social theory.

Yet, I do not share Waterman's pessimism. It may simply take more time, more insight, more resources, and maybe more common grace, than have yet been allocated or dispensed to this interdisciplinary endeavour.

Chapter 10

"If the Trumpet Does Not Sound a Clear Call ... "

Paul Heyne University of Washington

Economics and theology come into contact whenever theology sets out to inform and guide actions within the realm of the economy, which I define as the realm of exchanges mediated by money. In such cases, theology is concerned with both the intent and the consequences of these actions, because it is concerned with the inner state or character of the actors as well as with the outer, or external, results.

Insofar as economics is the science or discipline that studies the realm of exchanges mediated by money, a knowledge of economics will obviously be valuable to theologians who want to appraise the consequences of economic actions and interactions. But, a knowledge of economics may also be useful to someone who wants to discern and appraise the intentions of economic actors. These intentions are easily misread and misjudged by those who bring an inadequate framework of understanding to the examination of economic actions. Are sellers of ice, for example, behaving greedily when they raise the price of their product after a hurricane has cut off the supply of electricity to an area and shut off refrigerators and freezers? Or, are they rather employing the most effective device available to them by which to ration a product that has suddenly become much more scarce and hence more valuable? An observer trained in economics is more likely than someone ignorant of economics to recognize that sellers who fail to raise their price in such a situation are encouraging the hoarding and waste of ice. The sellers may even be electing not to raise their prices because they know that this could incite the resentment of people on whose good will they will

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be dependent for future profits. In other words, it might be "greed" that induces them not to raise their prices.

Can a knowledge of theology assist economists in their work? I think theology could in principle widen the framework that economists use to interpret economic action but that it seldom does so in practice. Theologians rarely provide assistance to economists because such help must be provided dialectically if it is to be received at all. Theologians, however, almost always speak to economists in high-minded phrases that are too far above the fray to be useful. Even in situations where the theologian is simultaneously a competent economist, the pontifical mode dominates the dialectical one. In practice, theologians who address economists typically attempt to narrow the economists' analytical framework.

My comments will try to illustrate and support these claims from the case studies before us. I shall also suggest that theologians have generally been unable to avail themselves of the help that economics could provide because their theological convictions prevent them from accepting a key element of the economist's paradigm.

Kim Hawtrey (ch. 6) has provided abundant material for the illustration of these themes by writing such a comprehensive, balanced, and perceptive account of evangelicals' encounters with economics. Their experience shows clearly that theologians cannot address issues of the economy without some initial understanding of how economic systems work but that, as Hawtrey notes, evangelicals come to the subject "from competing scholarly paradigms." If one can more easily predict what particular theologians will have to say about the economy by knowing their choice among scholarly paradigms than by knowing their theology, which I believe to be the case, then we must wonder at the outset whether what we are hearing is theology or disguised economics. The 1990 Oxford Declaration on Christian Faith and Economics and various reports of the discussions that preceded it aptly illustrate the problem.

The most innocent-seeming beginning points often depend on crucial paradigm choices. Consider, for example, the phrases "unfettered competition," "pure capitalism," and "unregulated capitalism" as they appear in Hawtrey's discussion of Hay (1975) and Wogaman (1986). Economists who work within the Austrian paradigm or the New Institutionalist paradigm represented by Ronald Coase or Douglass North will insist that competition and capitalism are never pure or unfettered and unregulated. Legal, moral, and conventional rules and practices shape the particular forms that economic systems take and direct the activities of those who participate in them. A critique that abstracts from these regulatory forces is attacking a straw man.

"If the Trumpet Does Not Sound a Clear Call . .. " 143

When the Lutheran Church in America issued Economic Justice in 1980 (Niebanck), defining justice as "distributive love" and making economic fairness primarily a task for government, its authors were implicitly assuming that the distributional outcome of a modern economy could be planned or designed. The paradigm employed by many economists assumes that it cannot, that the patterns of income distribution emerging from the transactions that make up a modern economy, while the product of innumerable individual plans and designs, are unintended consequences of interaction among these individual projects. Economists who work within this paradigm emphasize the enormous informational problems that central planners face and the impossibility of coordinating the complex activities of a modern economy without relying on procedures that produce final outcomes not designed or intended by anyone.

Evangelicals who want to blame sin for some of the objectionable features of economic systems, on the one hand, tend to slight the importance of ignorance. On the other hand, evangelical economists who happen to reject the currently dominant analytical paradigms in economics that assume perfect knowledge will almost inevitably assign relatively more importance to imperfect knowledge and consequently less to sin.

Stewardship is a highly revered concept among evangelicals who concern themselves with economic life. The New Testament word for "steward" means household manager. Modern economic systems cannot be managed in the direct way that households can, but can be managed only indirectly, by altering the rules in the hope of changing the incentives and thereby modifying the outcomes. This implies that such problems as environmental degradation cannot be significantly affected through better stewardship by individual Christians, however worthy such behaviour may be on other grounds.

No one will be surprised to find an emphasis on sin and the moral causes of economic problems in theological critiques of the economy. A moral emphasis inevitably inclines the critique toward emphasizing individual responsibility. And that in turn sometimes produces implicit economic or political analysis that conflicts with well-established scholarly paradigms. It sounds fine for the Southern Baptists to urge their members to eschew inflationary demands for excessive price and wage increases. But is it the task of a Christian trade-union representative or a Christian charged with pricing responsibility in a corporation to stop inflation? Why is it not their responsibility to serve the principals for whom they are agents? Economists whose paradigm finds the cause of inflation in monetary disturbances will see such moral exhortations as useless posturing that in effect asks agents to violate their fiduciary obligations.

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Conflicting scholarly paradigms are probably also at work in discussions of evangelical proposals to modifY the prices at which trade occurs between rich and poor countries, or to extend "impartial foreign aid," or to "forgive the debt of the Third World." Charity is a cardinal Christian virtue, and generosity toward those less wealthy than oneself is a major form that charity can take. But modifying the terms of trade between rich and poor countries is a more complex matter. It will almost always entail reducing the net income of some corporations in order to increase the net income of other corporations, with haphazard consequences that ultimately mayor may not distribute income more equally between rich and poor individuals.

The concept of "impartial foreign aid" will be a non-starter for many students of development economics, because foreign aid goes from one government to another government (or at least with the reci pient government's consent), with consequences that the politicians in each country will definitely take into account.

Forgiveness is also a Christian imperative. But there is no Christian imperative to demand that the shareholders of a North American bank make a gift to unknown persons in poor countries who may well be wealthy kleptocrats.

Is it even true that "there are many Bible references to economic matters" (Hawtrey, ch. 6). This is not wholly a question to be answered by theologians and biblical scholars. What are "economic matters"? I began this essay by defining the economy as the realm of exchanges mediated by money. That realm is so much larger in modern societies than it was in biblical societies as to be qualitatively different. "Economic matters" in the time of Isaiah or Amos or Jesus were far less complex, far more personal, with the links between actions and consequences more direct and visible and unintended consequences far less important. Or, at least, so it seems to economists who work within the scholarly paradigm initiated by Adam Smith, who wished to explore the working of a society in which everyone was a kind of merchant because everyone lived by exchanging, and in which people often achieved the public interest more effectively when they aimed at their private interest than when they claimed to be pursuing the public interest.

"So much the worse for economists' unholy paradigms," the reader may exclaim in exasperation. "The principal task of theologians concerned with the economy is to subject economists' paradigms to critical scrutiny." I am open to consideration of that commission. But within what scholarly paradigm will the theologians stand when they are criticizing the paradigms of which they disapprove? I find no insights relevant to economic understanding in the belief that the world was created by God rather than by chance. If economics with an infinite time horizon asks a wider range of


questions than economics with a finite time horizon, I don't know what they are. The fundamental criticisms most often directed by theologians against the paradigms or presuppositions of economists do not grow out of disagreement about Creation or time horizons. They usually find their roots in the conviction that the paradigms dominant among economists implicitly or even explicitly extend a moral endorsement to a social system, the system of "free enterprise," that harbours at its heart "an inherent moral contradiction," one that "can destroy the very virtues on which its success ultimately depends."

I think there is a great deal of truth in this conviction. I also believe that it is very far indeed from the simple truth supposed by those who complain that the free-enterprise system is based on selfishness and competition. The system does work through the pursuit by individuals of their own interests; but, self-interested behaviour is not necessarily selfish behaviour. Nor is competition necessarily the bloody struggle imagined by so many of its critics. In a well-ordered society, one essentially governed by the rule of law, competition in the economy is rarely personal and usually involves people striving to find ways to further the purposes of other people upon whose satisfaction the advancement of their own projects depends.

One of the most important issues raised by Kim Hawtrey is what he calls "the somewhat vexed question of the biblical definition of economic 'j ustice. ", He presents the crucial issue. Is justice to be understood as a matter of results or of rules?

Do we assess the justice of an economy by looking at the relative amounts of valued goods in the possession of different individuals or families (or perhaps other groups)? Or, do we assess the justice of an economy by looking to see whether the rules were fair and fairly adhered to? I submit that theologians tend to choose the former, and economists incline toward the latter, and that this is not accidental.

Theologians, with solid biblical warrant, see God as interested in justice and tend to derive their concepts of human justice from their concepts of divine justice. That may be a mistake, however. Human attempts to establish justice will always be hampered by ignorance and unavoidable partiality. If these limitations are not kept in mind, the pursuit of justice can easily tum into a fanatical attempt to control what could only be controlled by someone with infinite wisdom and benevolence. It is difficult enough to decide what each person truly deserves even within the limited confines and special situation of a loving family. Attempting to make and then enforce such a decision for a society of 270 million people reveals a hubris worthy of that serpent in the garden.

Economists have specialized in the study of a social system that eventuates in mostly unintended results and that is coordinated largely

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through the widespread understanding and acceptance of general rules. They are therefore inclined, when pressed to think about the matter, to favour a concept of justice that pays primary attention to the rules of the game. For someone convinced that the decisive criterion must be the actual results of the game, those who are satisfied that injustice has not been done when the rules are fair and impartially enforced must seem somewhat immoral, or at least disturbingly complacent. It is important to note, however, that theological and ecclesiastical statements insisting upon the inadequacy of a procedural or rule-oriented concept of justice never spell out in any even remotely concrete way what a just outcome would look like in a modern economy.

I shall comment more briefly on the remaining papers. Andrew Yuengert (ch. 2) calls attention to an important consequence of

the nineteenth-century conflict between the Roman Catholic Church and continental European liberalism. This conflict produced in Papal Social Teaching a deep-seated suspicion of individualism and thus of individualism's social embodiment in market economies and the implicit intellectual defence of those economies by what has come to be called neoclassical economics. Most neoclassical economists would deny that they are providing an intellectual defence of the market. But standard economic theory, in any of its modern variants, does explain how cooperation emerges from seemingly chaotic interaction, and it explains how the cooperative elements of such a system implicitly provides a defence. The critics of market economies have not erred in seeing economists and economic theory as their enemies.

Yuengert notes that Papal Social Teaching "has found the German historical-institutionalist tradition attractive, since that school is more suspicious of atomistic theories of society." That school, along with its American branch, has also been so suspicious of orthodox economic theory that it largely refuses to comprehend it. The importance of this fact can hardly be overemphasized by anyone who wants to understand Papal Social Teaching on the economy. While Centesimus Annus marked a substantial advance over previous social encyclicals in the demonstrated degree of understanding of market economies, it did not completely overcome the limitations imposed by its heritage. Papal Social Teaching yearns for a social order radically different from the one that has been created by individuals pursuing their own interests under the rule of law. That yearning becomes abundantly clear in Yuengert's essay. I shall leave it to the reader to decide whether this means that Roman Catholic social teaching has an enormous contribution to make to the understanding and reformation of modern economies, or that Roman Catholic social thought will prove largely


irrelevant to those who want to make modern economic systems more just and humane and more conducive to human flourishing.

Thomas L. Schubeck's examination of liberation theology (ch. 4) may be too even-handed to satisfy either its critics or its defenders. In the interest of fuller disclosure, I confess a certain attraction to the dialectical theology of the movement and a strong aversion to its economic analysis. Liberation theology demonstrates most clearly the difficulty of establishing genuine dialogue between theology and economics. Despite what its practitioners profess to be their intention, at almost every critical point the theological analysis determines the economic facts. As Schubeck notes several times, the empirical analysis is extremely weak.

Of course, we cannot expect theologians and ethicists to be competent economists. But can liberation theologians rely on economists to supply the additional knowledge that their task requires? The liberation theologians don't think so. They find standard economics more ideological than scientific. Standard economists make no contribution to their own defence when they respond by putting forward the positive-normative distinction that still strangely rules in most of economics, and profess their exclusive allegiance to positive, that is, scientific, that is, value-free economics.

So, liberation theologians pick and choose their economics so that they find what they want. What they really want is something they are unlikely to discover: an account of the way modern economic systems might operate that can be reconciled with their understanding of the New Testament message. Liberation theology finds a fundamental incompatibility between the communitarian social implications of New Testament teaching and the hierarchical, impersonal, and bureaucratic structures of modern life. Whether or not one agrees that this incompatibility is genuine and important (I believe it is both), it is by no means clear that the New Testament calls for Christians to transform those structures. The early church seems to have heard no call to transform the Roman Empire. Whether one thinks that the church's calling expanded after Constantine will depend largely on whether one thinks that Constantine adopted or co-opted the church.

Suppose we Christians unreservedly endorsed the "preferential option for the poor" and accepted the calling of "the whole church to a conversion and commitment to the poor that is aimed at their integral liberation." What would we subsequently do, especially considering that we live in a society in which Christians are a minority? How would we create "a civilization of 'poverty - with spirit' where people work in solidarity to satisfy their basic needs?" What would such a society even look like? Would it be able to produce high-speed dental drills, antibiotics, good books and music, or even enough food to sustain the present level of the world's population? What if all these goods and many more that surely contribute to human flourishing

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could be made available only in "a civilization of wealth and capital where competitive individualism reigns as individuals accumulate riches and strive for power and glory?" (Schubeck).

The analysis of Ignacio Ellacuria that Schubeck presents at some length asserts that "capitalism has satisfied the minority at high cost to the majority." Is that true? Is it true even in Latin America, which so often seems to serve as the normal case for liberation theologians? Has Latin America ever experienced genuine capitalism? Ellacuria complains that the system of capitalism violates Kant's categorical imperative because it cannot be made universal law. But, if capitalism requires the rule of law, then capitalism requires something very close to Kant's categorical imperative; and a major problem for Latin America has been that its governments have historically shown little regard for the rule oflaw.

Schubeck urges I iberation theologians to seek "more assistance from economists as collaborators." But, if liberation theology is to a large extent powered by its rejection of capitalism, it may be unable to learn from economists without surrendering much of the force that informs it.

Kuyperian social theory as presented by John Tiemstra (ch. 5) takes the bold step from which the other theological arguments shrink: It refuses to accept the authority of economic science. "All human science should be founded - indeed, inescapably is founded," Tiemstra writes, "on religious presuppositions .... The ideal that Kuyperians have always held out is a uniquely Christian philosophy, biology, literary criticism, economics, and so on .... Neoclassical economic theory is more the issue than capitalism itself." Serious Christian scholars must help one another "to escape the conventional, secular modes of thinking we were all given in graduate school. ... Christian social ethics must come prior to economic theory." Kuyperian economists offer "a strong warning about the limitations of neoclassical economics as an engine of analysis," because it "import[s] a whole set of values of its own into the discussion."

I would not dispute the claim that economic theory, in any or all its forms, grows out of some kind of religious commitment. I am, however, sceptical about the conclusions that Tiemstra would have us draw, particularly the conclusion that Christian economists must construct their economics on a conscious religious commitment. I don't think any of us knows very accurately the foundations on which our intellectual positions are ultimately based or, for that matter, the ultimate foundations of the intellectual positions of those with whom we disagree. People who think they are building on identical foundations regularly come to conflicting conclusions. Other people reach consensus on all the issues important to them despite the fact that they believe that they started from conflicting assumptions. The social sciences are notorious for methodological disputes


about fundamental premises, disputes that never seem to get resolved. Inability to resolve these disputes doesn't always preclude collaborative work among the disputants.

Many economists who are not Kuyperian, Calvinist, Christian, or even religious in the conventional sense have complained about the neoclassical economics to whose dominance Tiemstra objects. Alan Storkey and Douglas Vickers might not have discovered the deficiencies of the neoclassical paradigm without their Calvinist grounding; but both of them make their case against neoclassical economics on grounds that non-Calvinists can largely understand and appreciate. Tiemstra says that mainstream economics ignores important topics because it focusses on the perfectly competitive market; but mainstream economics includes a lot of economists who strenuously object to analyses based on the assumption of perfectly competitive markets.

Moreover, one must be careful when stating explanations for the neglect of particular problems by mainstream economists. It's probably true that mainstream economists rarely study the social responsibility of business, a topic that seems to dominate Tiemstra's Kuyperian agenda. But that could be because they believe that, where competition fails to discipline business decision-makers adequately, government ought to impose regulations. Those who want to instruct business executives in their social responsibilities are assuming not only that these executives possess substantial discretionary power, but also that this power is legitimate and that ethical restraints on its exercise are sufficient.

Tiemstra claims that Kuyperians are inclined "toward institutionalist modes of economic analysis." That inclination tends to be accompanied by a relatively low opinion of the explanatory power of standard price theory, a relatively low regard for the coordinating powers of a market system, and a conviction that economists with a deeper respect for the market system and for price theory have "put absolute faith in the market as the solution to all economic problems." But suppose an economist objects to Tiemstra's claim that "labour must be permitted to organize to gain justice, and government should promote labour rights," and does so on the grounds that labour unions often restrict the opportunities of those who are less well-off to protect the privileges of those who are better off. Would Tiemstra be willing to weigh the evidence? Or does Calvinist theology settle this issue? An economist might also object to the assertion that "businesses have to be more conscious of the need to pay a family wage" on the grounds that many wage earners don't have families to support, and the requirement that all wage rates be sufficient to support a family would eliminate a lot of jobs. Are those who want to settle disagreements of this sort by theological arguments basing

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their economics on their theology, or are they basing their theology on their economics?

A.M.e. Waterman (ch. 3) has employed his formidable knowledge of both the history of economics and the Anglican Church to tell a three-part story of the relationship between economics and theology in Britain. Established Christian churches, as distinct from establishment churches, are pretty much relics today. And the Church of England's history is unique in so many respects that it cannot suggest many useful generalizations for those who want to reflect on possible relationships between economics and theology. The story that Waterman tells does provide some words of caution that might well be pondered by everyone urging that theology provide instruction to those who make national economic policy. No country today anywhere in the world has a governing class with a "well-understood duty to formulate and implement public policy in the light of a generally accepted and legally sanctioned Christian belief and doctrine." The documents that have come out in recent years from bishops and church commissions often seem to be overlooking that undeniable and important fact.

Waterman's principal contribution to the question that inspired this volume comes in the two objections to Christian social theory that he discusses at the end. The first is Frank Knight's claim that a specifically Christian ethic only addresses the personal relations between individuals, whereas maxims for a genuinely social ethic must take the form of impersonal rules and that Christian theology can therefore make no contribution to normative social theory. I agree with Waterman that this objection, which I find especially compelling with respect to any ethic aimed at economic policy, has not yet been satisfactorily answered. Those who are determined to articulate a Christian ethic for the economy will usually not allow the objection to be raised, typically cutting off any discussion with a rhetorical question that they take to be conclusive: "Are you saying that Christian faith has no relationship to economic life?"

I find Waterman's second objection, based on the analysis of Leszek Kolakowski, less compelling. The disjunction between "fact" and "value" is simply not as clear, in profane or sacred language, as Waterman assumes. If it is logically impossible to move from "is" to "ought," this impossibility controls only "pure" cases. And pure cases are extraordinarily hard to find in real I ife. It is only in hypothetical cases invented for the classroom that factual judgements are separated from value Judgements by an unbridgeable gulf. People who disagree about what ought to be done in a genuine case and who want to resolve their disagreement through discussion go back and forth between facts and values on a lot of sturdy bridges that they have little trouble finding or constructing. It is only when we set pure principles against


fundamental values that we find ourselves completely frustrated by "language-games" that are "incompatible and non-intersecting."

I shall not comment on Jacob Neusner's case study (ch. 1) because, as I read him, he does not claim that rabbinic Judaism offers any instruction whatsoever for those who make economic policy in a secular state. Christian theologians may some day reach the similar conclusion that the teachings of Christianity also offer no real guidance for the making of economic policy in capitalist democracies.

Chapter 11

Economics and Technology Collaboration or Collision?

Fred S. McChesney Cornell Law School

Alien they seemed to be; No mortal eye could see The intimate welding of their later history.

(Thomas Hardy, The Convergence o/the Twain)

The editors have charged me, on the basis of this book's case studies, to opine whether it is "intellectually defensible and actually fruitful" to combine economics with religion in constructing "normative social theory." My evaluation concerns more the fruitfulness of any such combination but draws no grand conclusions, because the authors of most of the case studies under review evince little desire to achieve any real combination of economics and theology. The contributions of A.M.C. Waterman (ch. 3) and Jacob Neusner (ch. 1) are exceptions; interestingly, however, they are largely reviews of past attempts to combine economics with religion. The other case studies bespeak an attitude that, today, economics has little to add to a theological approach to social theory. What might bear fruit, another time with other authors, cannot be deduced.

1. Approach

By "economics" here, I mean neoclassical microeconomics, either normative or (more often) positive, depending on the particular question. The positive side of economics includes reliance on scientific methodology, including formation of falsifiable hypotheses and testing them. There are, of course,

154 Fred S. McChesney

other perspectives that call themselves "economic," such as "Marxist economics." But economists by and large today subscribe to the neoclassical tenets of welfare (or wealth) maximization in their normative analysis and the derivation and testing of models in their positive analysis.

Probably the most fruitful way to combine religion and economics would entail the theologian's use of positive economics as an input to normative theological outputs. Andrew Yuengert's analogy of the relationship between an architect (the economist) and a builder (the theologian) is apt (ch. 2). Economics has shown considerable value as an input in other interdisciplinary contexts (e.g., law and economics). Indeed, its growing intluence in other disciplines has come to be labelled (sometimes reviled) as "economic imperialism" (Coase 1978; Radnitzky and Bernholz 1987).

Moreover, theology would resist anything other than a subsidiary (input) role for economics. Theology addresses the ultimate issues in life: God, salvation, eternity, issues absent from (but not inconsistent with) economics. Thus, a social science - by definition concerned with earthly activities exclusively - can only serve theological inquiries, never dictate them. As Yuengert puts it in writing about papal encyclicals, "Respectful of the expertise of economists, the Popes nevertheless insist that economic analysis and advice take into account the objectives and expertise of Roman Catholic moral theology." But, when religion speaks positively about activities on earth, economists naturally insist that it must speak knowledgeably.

In this respect, a fundamental misunderstanding sometimes divides the economist and the theologian. The economist speaks about wealth maximization or efficiency as a "value." That is a fighting word to the theologian, for whom the ultimate values in life can never be economic. But the economist's "value" is solely related to a particular set of economic issues, which economists explicitly define (and thus delimit) for themselves. To say, for example, that a banking system should (normatively) or does (positively) maximize wealth or efficiency does not mean that bankers should not or do not believe in God and behave accordingly. Nor is there any claim that pursuit of efficiency (or any other economic goal) is "value-free," or any disagreement (or agreement!) with the claim that "life, in short, is religious," as Kim Hawtrey says (ch. 6). As he correctly says, "Economics excludes the implications of belief in God." But that is because economics has nothing to say on the subject, not that it disagrees that there is a God. Economics is simply agnostic about God, just as it has nothing to say about the treatment of cancer.

The normative misunderstanding risks to obscure the fact that economics is fundamentally a positive social science. Life has (for many people at least) an intensely religious component, but life is also marital, political, sinful, and many other things, including economic. Pace, Dr. Hawtrey, economics

Economics and Technology: Collaboration or Collision? 155

is not asking too narrow a question any more than anyone else in life (other than the theologian) is asking too narrow questions. We are not all theologians, admittedly, but that does not mean that we dismiss theology. As far as we know, Christ spent the majority of his life as a carpenter.

Of course, the theologian is free to disregard what the economist says positively. The theologian is like a supreme court justice. What a supreme court says may be wrong, but it never loses in its own domain; "we are not final because we are right, we are right because we are final," supreme court judges say. But speaking authoritatively is not necessarily speaking knowledgeably. More important for this volume, speaking with authority but without knowledge can only distance those who do have superior knowledge. If the theologian consistently disregards the economist's input, there can be no useful interchange. It may be true - I would like to think it is - that "a right understanding of how the economy works is necessary to an informed judgement about social ethics" (Waterman). But nothing forces the theologian to agree.

2. But Is It Economics?

Clearly, any collaboration between the economist and the theologian depends on each understanding what the other is about. There is reason to fear that this is not always true. Thomas L. Schubeck (ch. 4) says, "Theology possesses no competence to pronounce truths or to criticize science within the internal regime of the discipline." Agreed - but of what science is he speaking? Sociology, not economics, as far as I can tell. He says that, for liberal theologians, "social analysis involves institutions," looking to sociology to define that term. Sociological (largely Marxist) notions of "dependency theory" and class (or race, or gender) guide his discussion. None of those he criticizes (American bishops Robert Sirico and Michael Novak) is an economist or uses economic methodology. Discussing the Salvadoran economy (as Schubeck does, relying on the work of a sociologist) is not equivalent to practising economics, any more than discussing medicine is the same as practising it, or discussing the sacraments is the same as bestowing them. Deciding whether the Salvadoran economy should be considered feudalist, pre-capitalist, or capitalist is an exercise in taxonomy, not economics.

"Capitalism" is a code word in liberation theology, as I have learned from my Jesuit brother and his Jesuit confreres working in Mexico (selfdescribed liberation theologians). What they call "capitalism" in Latin America is the very denial of laissez faire; it is, rather, what an economist would call "fascism" or "national socialism." (My summary of Friedman's Capitalism and Freedom [1962] for this group, which had never heard of the


book, met with amazement.) But again, it's all just labelling. One finishes the Schubeck case study fairly convinced that liberation theology has little idea what economics is, and thus despairing of any collaboration - at least for the moment - between the two. Operating "at its most profound level" according to "a dialectic of the contradictories good and evil," liberation theology will find nothing useful in positive economics (Schubeck).

Likewise, Tiemstra (ch. 5) states, as if it were self-evident, that the "major issue" of our time is the "social question," that is, "the relationship between the rich and powerful on one side, and the average workers on the other, in the new capitalist-industrial world." (Kuyperians, he goes on to say, are "more concerned about distributional issues than about growth.") To an economist, this is not the "major issue." Moreover, the economist asks, why is it an issue for "capitalist" society? Are there not "rich and powerful" people and "average workers" in any society?

Tiemstra adds that, in his own work, he argues "that neoclassical economic theory is more the issue than capitalism itself' - a statement left unexplained, but one that harks back to the labelling found in Schubeck's case study. The problem, Tiemstra says, is that "conventional [economic] theory focusses on the perfectly competitive market." That is like saying that English scholars focus on the agreement between subject and verb. Such a statement leaves again the impression that, for at least some of the authors here, economics is being damned on false pretenses.

3. A Conflict of Visions: Scarcity

Thomas Sowell distinguishes different approaches to social problems according to the nature of the "vision" informing them. A vision is one's Weltanschauung, "our sense of how the world works" (Sowell 1987, 14). Sowell concentrates on two visions. The "constrained vision" of humans and our world views us as we are - fallible, limited - and treats those deficiencies as constraints to be reckoned with in designing the best (constrained) world order possible. In the "unconstrained vision," human fallibility and the world's deficiencies must be changed as a prelude to establishing an even better world order than is currently possible, given people's limitations.

Economics is the prototype of a constrained vision, thereby earning its nickname The Dismal Science. (David Henderson recently observed that, if an economist had been there when Jesus Christ walked on water, he would have written an article entitled "Jesus Can't Swim.") From the case studies here, I gather that theologians for the most part embrace a more unconstrained vision. This is evident in the treatment of scarcity. All mainstream economics begins with the importance of scarcity, that concept


"definitive of economics," to use A.M.C. Watennan's phrase. People don't have as much as they want, and the nature of people is such that they never will. Scarcity in turn detennines value (thus, the diamond-water paradox). But, value is not just a static concept. Dynamically, it indicates where relative scarcity is greater, inducing resources to shift to higher-valued uses. In the process, those who shift resources in response to relative scarcities also will profit - Adam Smith's invisible hand, of course. It took economists centuries to understand the links among scarcity, value, and resource aIlocation, but today all economics begins with those connections. Theologians looking to economics for input will find this paradigm everywhere they look. Will theologians find this Ubiquitous paradigm helpful, or even acceptable?

No, if social processes are approached from an unconstrained vision. As long as neither the theologian nor the economist recognizes the importance of scarcity, there exists "no possibility of theological dissonance between Christianity and the facts of economic life," as Watennan says. Conversely, as soon as economists put scarcity on the table, the divergence is likely to begin. The case studies here illustrate how frequently theologians simply excuse themselves from the table. In the case studies by Hawtrey, Schubeck, Tiemstra, and Yuengert, there is simply no scarcity to be reckoned with. It was not always so, Watennan usefully details; theologians once absorbed the economist's insights on scarcity and asked why God created a world of scarcity and pondered as well the constrained-vision problem of what scarcity meant in fashioning the best possible world (given the constraints).

In addressing problems caIled "economic," such as a "just" wage, without taking account of scarcity, the theologian erects a barrier to any dialogue with the economist. Imagine the economist who would discuss with the theologian a normative theory of ethics that does not include God, or an economist who indeed insisted that including God was a hindrance to such a theory and that hence theology must either be redirected or shunned. The theologian who listened thereafter would do so only out of politeness. Yet, that is essentially the stance taken in the Yuengert and Schubeck studies, and to some extent in the Hawtrey study as well. They apparently feel that in discussing matters involving money, or honesty in commercial settings, they are "doing economics." But Neusner is right:

Episodic sayings about such ideas as mercy to the poor, recommendations of right action, fairness, and honesty do not by themselves add up to an economics. Indeed, one of the marks of a system's lacking an economics is the presence of merely occasional and ad hoc remarks about matters of wealth or poverty that, all together, attest to complete indifference to the


systemic importance of a theory of the rational disposition of scarce resources.

Again, the theologian's and the economist's definitions of "economics" may not be congruent in the first place.

3. Tradeoffs (and Trade) in a World of Scarcity

In economics, resources go where they are most valuable, as indicated by the price signal. The result is a re-alignment of resource uses that makes the most of their value, with the result that both the resource owner and those who use resources in their new employment are better off. But there are no free lunches, economists stress. To have one thing is to forego another. Again, one's vision must be constrained.

From the case studies here, one gathers that this perspective is anathema to at least some theologians with more unconstrained perspectives. To quote Sowell (1987, 80), where "those with a constrained vision see a tradeoff," those with the unconstrained vision demand "a solution." Schubeck speaks of the dawn of "a new human being in a new society marked by justice, freedom, solidarity, and peace." Tiemstra "challenge[ s] the conventional teaching of a tradeoff between equality and efficiency, derived by neoclassical economists from the analysis of incentives to produce." Readers may demand some evidence for his proposition that one can reduce the incentives to produce without reducing production.

The fundamental dichotomy of visions carries over to the role of trade in reducing the effects of scarcity. By trade, that is, giving up something in exchange for something else, two parties can make themselves both better off. To Yuengert and Schubeck, however, exchange is hardly an engine of progress, and it may well be morally unjustified also. Resources are not to be allocated according to relative scarcity (reflected in willingness to exchange), but according to the relative wealth of different claimants (owners, users). 1fT have capital and you do not, and I employ (pay) you to use my capital in exchange for your labour, this (at least in Latin America) risks to be "sin in its social dimension wherein multiple actors collaborate within a group or an institution to use workers unjustly for their own selfish aims." Yuengert's treatment of exchange is less harsh but still one of suspicion. Exchange in labour markets results in unjust wages; in goods markets it reflects consumerism.

Neusner, on the other hand, locates exchange at the centre of the Aristotelian economic order (and, to some extent, that of the Mishnah). More important, Neusner points out that trade was not a goal in itself but rather a means to a greater good, such as Aristotelian self-sufficiency. The


comparison with Schubeck's concern over "dependecy effects" is striking. A system of contracts, he seems to think, actually establishes dependence, not self-sufficiency. Tiemstra locates the Kuyperian system somewhere between these two poles, but is still "more concerned about distributional issues than about growth."

5. The Nirvana Fallacy

The fact that tradeoffs are an inevitable, if ineluctable, part of life is a core concept that risks to separate the economist from the theologian. Consider the "critique of unfettered capitalism" among certain writers, as described by Hawtrey. He quotes one writer who, noting the fact that textbook-perfect competition is not found in the real world of oligopolies and externalities, writes that capitalism "falls a long way short of satisfying God's creation plan." But the economist's response is: "Compared to what"? As that eminent non-economist Winston Churchill put it, free-market economies are merely better than all the alternatives.

Here, the economist can only wonder at the theologian'S perspective. After the Fall, we are all imperfect; thus must our institutions be imperfect as well. The logical fallacy of evaluating real-world institutions against a standard of god-like perfection has even acquired a label in economics: the Nirvana fallacy. While it took economists quite a while - two or three centuries - to appreciate the logical error, it should be readily apparent to theologians. But, apparently, it is not. One noteworthy aspect of the case studies that are critical of market economics here is the failure to compare life in societies without economic freedoms.

My point, again, is not that theologians are wrong to evaluate in terms of perfection. That is their mission. But no economist can take seriously a claim that because something (e.g., laissez-faire markets) is imperfect, it is therefore to be dismissed. Religion itself, as practised here on earth, is far from perfect, yet the theologian would not suggest therefore that it be dismissed or ignored. (Here Waterman's discussion of the rise of mainstream Protestantism as part of an overriding tide of political nationalism is interesting and encouraging.)

Absent from these case studies is consideration of what James Buchanan (1959) has called "the Samaritan's dilemma." In the best of all worlds, everyone would be self-sufficient. But there is no Nirvana. Fortunately, some persons are motivated to help others (as other economists like Robert Frank have studied in detail). But these Good Samaritans face a dilemma: by giving, they increase the incentive for recipients to remain recipients rather than become self-sufficient. And so, the Samaritan must ask, should I give if this just increases the recipient's motivation to remain unable to take care of


himself or herself otherwise? Recognizing the Samaritan's dilemma is not something vouchsafed only to economists. England's passage of the Poor Laws led de Tocqueville to write that the unavoidable consequences of public charity were an increase in the number of poor to be subsidized, with corresponding resentment among the subsidizing taxpayers.

The entire basis for the ongoing debate over social policy - welfare reform, affirmative action - in the United States is the Samaritan's dilemma. Yet, to extrapolate from the case studies here, the Samaritan's dilemma described by de Tocqueville and Buchanan is not even recognized by the theologian. (It is noticeably missing in Schubeck's discussion of "dependency effects.") Subsidizing those who have made choices resulting in their loss of self-sufficiency (drugs, pregnancies) must stimulate more of the same behaviour - behaviour undesirable even to the theologian.

To the social scientist, this is ultimately an empirical issue. What is the tradeoff; how much additional dependency is created by subsidizing dependency - issues not joined by the theologian. Consider, for example, Hawtrey's description of "justice for the developing countries," which seemingly consists of just subsidizing the economic ineptness of foreign governments by writing off debt and increasing foreign aid. Morality might require such a policy, the economist responds, but it comes at a cost: economic dependency. Finding no accounting for the cost at all on the theologian's balance sheet, the economist concludes that he simply has nothing to say of interest to the theologian.

The exhortation to keep giving is particularly troubling, given the increasing evidence that these "social justice" policies result in systematic murder and war. Any number of international organizations (e.g., Medecins Sans Frontieres) have noted that subsidizing dictators (who rule much if not most of the less developed world) only makes it easier for them to impose murderous policies on those portions of the population they would decimate or eradicate. The theologian's failure to take note of this empirical phenomenon, again, tells economists that their role in the discussion is essentially nil. (Hawtrey's description of the "aid versus trade" debate among evangelicals is perhaps one exception of one faction's willingness to consider the Samaritan's dilemma, although even here the full cost of "aid" does not appear to be registered.)

There is more to be said along these lines. The majority of the authors here call for forced redistribution, treating it as essentially costless. But redistribution is hardly costless, as many writing essentially from an ethical perspective (e.g., de 10uvenel 1952) have stressed. Philosophers such as John Locke have noted that changing laws to redistribute income is likely to reduce the welfare of those supposedly helped. Perhaps more important, forced redistribution carries an enormous cost in lost human liberty: "How


quickly ... State mastery follows upon measures of redistribution," de 10uvenel (1952, 43) wrote. As obvious as this may seem, values like freedom and liberty go unconsidered in all the case studies here advocating government solutions to supposed problems.

6. The Individual and the Collectivity

A final point concerns the very nature and importance of the individual in thinking about social matters. To economists, the individual is everything, analytically. Concepts like "the government" or "society" may be useful descriptive shorthand, but they risk obscuring the essence of social relations. Neither the "government" nor "society" make decisions; only individuals do. (Hawtrey's line from C.S. Lewis sums it up: "There is no Christian basketball, only Christians playing basketball.") Indeed, the difficulty of predicting and appraising collective decisions lies precisely in the fact that the collectivity is composed of many individuals with differing maximands and operates under complex voting rules to achieve any particular end. There is no reason to assume that the outcome will better humankind. Evidence suggests that the reverse often is true: to the extent that decisions are entrusted to collective rather than individual resolution, the results may well be inferior.

To judge from the case studies here, the theologian tends to feel just the opposite. Individual decisions are selfish and to be viewed with suspicion. Collective decisions are by definition collectivity-minded. Here, I think Waterman's recollection of Frank Knight's thoughts is particularly valuable. Knight's insight might today be classified under the Law of Unintended Consequences in economics. Attempts to analyze (and govern) the world based on a paradigm of citizen saintliness are not only doomed to failure, but will also produce true misery. Good intentions not only do not guarantee good results, they also doom them.

Most objectionable to an economist is the discussion of government in purely normative terms, as if we had no record of whether government actually delivers the things it promises (or, here, its proponents promise). So, for example, Tiemstra speaks of "government policy as a way of enabling the other institutions of society to better answer God's normative demands." Tiemstra's discussion of Public-Choice economics, which one would have thought that an ethically minded observer would appreciate, is an even greater disappointment. To reject a positive school of thought (Public Choice "claims that elected governments are merely the tools of well-heeled special interest groups") on the basis of theological desiderata ("government officials have real choices, and are answerable to God for what they do") is the very denial of a role for social science in analyzing government.


7. Tone

Mutually beneficial discourse ordinarily requires a mutually respectful tone in discourse. Collaboration (including simple conversation) is a sort of contract: one side remains engaged only as long as it seems that the discourse is fruitful and remains free to break it off. The tone of the exchange often suggests whether the other side is paying attention and thus whether it makes sense to continue.

Perceptions of tone risk to be subjective, thus susceptible to different interpretations. That said, I as both an economist and a believer find the tone of at least some of the case studies here to be off-putting. Theologians tell economists that they are asking the wrong questions (Hawtrey). Economists are told that their perspective is welcome only to the extent that it comports with what theologians have already worked out among themselves (Yuengert; Schubeck). Or again, that Papal Social Teaching "treats mainstream economics like an architect who wants to build a house to serve ends that are opposed by the client, and whose design is based on theories that may render the structure unstable" (Yuengert). As an economist, I would find little reason to continue breaking bread with someone who said that "the economic question at the end of the day is not a terribly significant one" (Hawtrey).

That may be true at the end of the day. But economists are talking about what happens during the day. So, supposedly, are theologians when they talk about social justice, a just wage, consumerism and other terrestrial phenomena. In a world of specialization, the theologian may well know more about what happens at the end of the day. But, by the same token, the economist sometimes knows more about what happens during the day. If economists are supposed to listen to the theologian speaking about tomorrow, why is it wrong (or irrelevant) for the economist to insist on being heard about today? This (as I understand it from Waterman's study) is the essence of Richard Whately'S "demarcation" - rendering respect unto economics in matters economic and respect unto theology in matters theological.

Two of the studies demonstrate the sort of respect necessary for any collaboration. Waterman's case study recalls the ways that various churchmen - Malthus being the most notable - have found it possible to combine economics with theology. One can only imagine how dismissive liberation theology would be of the "iron law of wages," a positive attempt to describe how wages are determined. Or how Papal Social Teaching would treat it. But theologians' dismissal of uncomfortable ideas does not falsify them, any more than their embracing the alternatives makes them true. Consider, however, Neusner's discussion of Aristotle and the Mishnah.


Aristotle, he writes, viewed economics within a philosophy of society as a whole but according it respect in the realms it studied. The religiously minded economist today asks only as much.

8. Conclusion

Economics and religion start with different visions of human maximands: earthly wealth versus eternal salvation. There is nothing necessarily inconsistent about these. But the different foci of the two disciplines suggest that, ab initio, they will have difficulty communicating.

Still, the lack of connection is perplexing. Economists describe what they see the world to be, but theologians reject it because economists' portrayal is not the one the theologian would like to see. But, say economists, in dismissing me you are just shooting the messenger. Moreover, economists continue, isn't our picture of the world consistent with the one you purport to see as well, a world peopled with sinful creatures? Can we talk?

To the extent that the theologian would speak of economics (the economist rarely if ever speaks of theology), it is difficult to understand the theologian's insistence that positive economics must be bent to serve the theologian's normative vision. To analogize, Christian theology says that we do not die; medical science says that we do. Of course, they are talking of two different things - the soul and the body, the hereafter and the here. So, theologians do not dispute doctors' claims of impending death, nor does doctors' science allow them to say anything one way or another about eternal life. Theologians and doctors do find, though, that they can communicate on issues like abortion (When is the fetus viable?), despite the different perspectives on the issues in their respective professions.

Why is it so different with economics? Must it be? As noted at the outset, the question raised in this volume is whether, in

light of the evidence presented by the case studies here, attempts to combine theology and economics are "intellectually defensible or actually fruitful." Viewed as a whole, the studies indicate that the answer is no. The majority (though not all) find economics neither a defensible nor a fruitful input to theology. Indeed, some find economics an alien force to be repelled. Given my personal belief that economics should and can inform important aspects of theology, I can only hope that the studies here are not a random sample of theologians and the theologically minded.

Chapter 12

On Doing the Impossible

Ian Steedman Manchester Metropolitan University

A first reading of the six case studies might appear to provide two broad lessons. The first is that any attempt to combine theological teachings with results from economic science will, of necessity, generate a conceptual monstrosity, a logical impossibility (the latter part of A.M.C. Waterman's case study, ch. 3). The second lesson is that a wide range of very diverse authors do in fact combine such teachings and results (the earlier part of Waterman and the other five studies). Now, even the most dialectical and liberated of theologians might find it stressful to accept both these "lessons" at once. Either, at least one of the lessons is wrong; or, that which Waterman claims to be impossible is not exactly that which many diverse authors have actually done. Since it would indeed be fruitless to consider whether it is actually fruitful to do the impossible, we first consider briefly whether Waterman's worries really render ridiculous the whole idea of crossfertilization between theology and economics.

1. It Can't be Done

We assume without discussion that the attempt to combine theological insights and economic knowledge must be intellectually defensible unless it be an attempt at the impossible. Waterman's Knightian worry is that "Christian theology can make no contribution to social ethics because the latter must be based upon impersonal rules, about which Christianity is silent, even hostile." But even if the "gospel of love" is the specifically

166 Ian Steedman

Christian contribution to ethics, it would hardly follow that Christian thought had (logically) to be silent about impersonal rules. And if love of neighbour is a matter of the will, a policy, not a feeling, then it will - at least sometimes - need to be informed by understanding (good will is often not enough) and - at least in some respects - be embodied in impersonal rules. Knight's "argument," as reported by Waterman, seems to be little more than a "clever" provocation, a wildly exaggerated conclusion "derived" from a perfectly valid observation about an important feature of Christian ethics. (Here and throughout, my discussion of the case studies is a purely "internal" one, making no reference to other texts.) It is of course a logical possibility that Frank Knight should have had a better grasp of the nature of Christian teaching than Malthus, Paley, Whately, and the authors of the papal social encyclicals, to name no others, but it is so grossly improbable as to be ignorable until linked to overwhelmingly strong argument - which is not in sight. The spirit, as opposed to the logical detail, of the "Knightian" worry might perhaps find some resonance with Kim Hawtrey's "conventional evangelicals" (ch. 6), but it is alien to the Anglican and Catholic social tradition (Waterman, ch. 3; Yuengert, ch. 2; Schubeck, ch. 4) and to at least some current evangelical and Reformed thinking (Hawtrey, ch. 6; Tiemstra, ch. 5). It is not self-evident that the "Knightian" objection merits the adjective "serious."

Waterman's "Kolakowskian" objection is certainly not ajeu d 'esprit. The issues at stake here clearly could not be adequately discussed in the space available. I therefore merely list a number of considerations that might reasonably give one pause before leaping to embrace the claims that economics cannot contribute to social ethics and can never collaborate with value-supplying theology:

1. Not all serious philosophers accept that the "fact-value distinction" is utterly watertight. It may often be a useful, indeed salutary working distinction to make, but whether it is ultimately valid is contestable - and contested;

2. Whether different "language games" can be sharply distinguished may be open to question. And, even when (if) they can, it is another question whether we have no means of "playing" them simultaneously or, at least, of "playing them off' against one another;

3. The simple fact that generations of deeply thoughtful people have supposed themselves to be "combining" theology, ethics, and social theory does not constitute a knock-down proof that it can indeed be done - they could all have been conceptually confused. Yet, it is not a fact to be airily set aside, with the implication that they obviously were all confused. Waterman's "Kolakowskian" theses, after all, are not self-evident truths; to

On Doing the Impossible 167

acknowledge both their weighty nature and the serious intent with which Kolakowski and others present such arguments is not, ipso facto, to regard their conclusions as indefeasible. To treat the fact in question as a challenge to the "Kolakowskian" theses, therefore, need not be to engage in a simpleminded "facts count for more than logic chopping" style of argument. The import of these theses, if they be sound, is so deep and so far-reaching (for in truth they reach far beyond our immediate concerns) that they should be treated with great caution; if they are false, to accept them as true would be very dangerous.

4. If it is true that "the profane language of science/common-sense ... is incapable of uttering truth of any kind," then it might seem to be of some importance to be able to "combine" science/common-sense with other modes of reasoning, thinking and speaking!

5. It does not go without saying that economics is a science in the sense relevant to the "Kolakowskian" separations between language games and between facts and values. It is striking that several of our case-study authors insist that economics is value-laden. If they are right and if the "fact-value distinction" were to be watertight, it would then follow that economics is not a science in the relevant sense and that Waterman's "impossibility" worries start to melt away. Are those worries generated, at least in part, simply by calling economics a "science" rather than by calling it one strand in our attempts to make some reasonable, thoughtful, and coherent sense of certain social phenomena? If so, that might account for the somewhat strained and artificial feel that these worries might be found to convey.

These five considerations do not, even when taken together, constitute a "proof" that there is no "Kolakowski an" basis for thinking that economists and theologians, as such, can never communicate, but they may encourage one not to be too surprised or alarmed to read reports of how economists and theologians do in fact (attempt to) communicate with one another.

2. Doing It

If "good" theology and "good" economics can be defined, at least in part, independently, then how could they not be potentially useful to each other? Of course, there may be more than one way in which they could interact. In the Christian political economy described by Waterman, the stress is perhaps on combining theology and economics, while in the case studies by Yuengert and Schubeck it may lie more in economics informing theology. In N eusner' s study (ch. 1), we find economic language being used to give expression to a theological standpoint, while those of Hawtrey and Tiemstra seem rather to emphasize the effect of theology on economics. Without

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insisting on these (cautious) characterizations of different emphases, one can readily recognize that the two disciplines may relate in several different ways - and see nothing wrong in that. It may even be helpful to insist on this variety and to resist any suggestion, explicit or implicit, of a simple one-toone relation.

In the nature of the case, all welfare economics and all discussion of economic policy is inherently normative, and our case studies repeatedly claim both that economics is not "value-free" and that it often stands in need of clearer and/or deeper value foundations and orientations. In effect, several of our authors respond to Waterman's statement "And if economics were truly 'scientific' it could supply [no 'value axioms'] of its own" by saying, "In that case, economics is not 'scientific' (in the stipulated sense)." Yuengert writes that Papal Social Teaching "does not accept the insights of economic analysis without first carefully evaluating its normative content." Hawtrey insists, citing Vickers, that "economics cannot be a 'value-free inquiry. ", Schubeck agrees with Bonino that "no social-scientific instrument is value-neutral," while Tiemstra asserts that no human "science is somehow neutral or value-free or objective" and refers more than once to the "ethical agenda" inherent in economic theory. (While this is not explicitly specified, it appears to consist in major part of an insistence on the priority of economic efficiency, even if Tiemstra refers at the very end of his study to "a whole set of values" imported by "neoclassical economics." Of course, his wild statement that all economic theory is "based on a vision of how things should normally go, what a good society should look like, and how people should behave," can be completely ignored.) These four authors, then, simply deny that economics is in fact "scientific" in the sense discussed by Waterman and, in some cases, deny that it ever could be. Whether or not they are ultimately correct so to think, the simple fact that they do so think certainly helps to explain why, unlike Waterman, they find theologicaleconomic collaboration relatively unproblematic.

To reiterate, several of our authors think not only that economics has some value content but also that that content is too thin. Thus, Yuengert suggests that "the popes are suspicious of most neoclassical economic analysis . . . because it denies its normative content, a content that is incomplete" (emphasis mine). If liberation theology is concerned with "justice, freedom, solidarity, and peace," as Schubeck's opening remarks imply, then it will inevitably, in relating to economic theory, have to try to introduce the value of "solidarity" into a discipline that is hardly centred on that value at present, to put it mildly. The values of stewardship (as opposed to outright ownership) and of responsibilities of various kinds are drawn out explicitly by both Hawtrey and Tiemstra and are perhaps implicit throughout Neusner's discussion of the Mishnah. There are "wider goals" for economic


organization and policy than simple "economic efficiency" or even than the familiar "efficiency and equity."

Since welfare economics and economic policy are inherently normative matters, how could they not benefit, at least potentially, both from the urging that attention be paid to values that are normally not emphasized, or even recognized, in those disciplines and from the rational discussion of norms? Yuengert observes that "normative statements have their own logic and are amenable to rational discussion about the content of revealed truth and its corollaries," and this is true even without the last nine words (and even though he leaves unclear how this relates to his earlier statements about pure and impure normative statements). It is simply not true that all reasoned discourse comes to an immediate halt the instant when values come into view; and (some kinds of) economists could certainly benefit by learning to handle reasoned discussion of normative issues more fluently - and by acknowledging the relevance to normative economics of a wider range of normative considerations. They could learn these things from (some kinds of) theologians. It is, of course, another question whether they could be learned only from theologians; some ethical discourse claims to be independent of theology 1

Conversely, theology is not reducible to ethics. But just before turning to possible non-ethical contributions of theology to normative economics, we may usefully endorse Neusner's insistence that "sayings relevant to an economics may take shape within a religion or a philosophy, without that religion's or philosophy's setting forth an economics at all; ... episodic sayings about mercy to the poor, recommendations of right action, fairness, and honesty do not by themselves add up to an economics." (Pace Hawtrey who, having suggested that "the Bible has something to say in this area [of economics]," later cites a few isolated biblical verses touching on related matters.)

Theology is not reducible to ethics, and it would be quite wrong to reduce its relation to economics to that of a "value-supplier," or even that of a "value-enhancer" and rational discussant of norms. Theology may change perceptions of already-acknowledged facts and/or draw attention to previously unacknowledged facts. It can have things to say about human nature, about human motivations, about the factors influencing those motivations, about what humans could in fact be like (when that differs from how they now are) and about what is in fact good for human beings. (We may recall at this point Yuengert's reference to "the objective nature of the normative" in Papal Social Teaching, which, while it has implications that will not be universally accepted, does remind one that normative claims are not always taken to be purely subjective and/or non-factual claims.) While Waterman suggests that "Christianity [can] have nothing to say about the

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'facts' of any state of affairs," Yuengert clearly implies that Papal Social Teaching has a lot to say about the facts concerning human existence and, more specifically, human existence in society. It is of course true and relevant that, while Roman Catholic (and some Anglican) thought tends to give a decidedly "social" account of human beings, traditional Evangelical (and some Anglican) thought tends to give a markedly more "individual" account (see Hawtrey). But, if this means, as it does, that "Christianity" fails to speak with one voice about the "facts" concerning the individual and society, it does not mean that there are no such facts or that theologians can never contribute usefully to their elucidation. And any such clarification should be of benefit to those attempting to construct or develop normative social theory.

Hawtrey ventures the bold claim that "an important ... explanatory factor in all economic problems is ... moral or theological. This important cause is sin, a basic premise of human nature" (emphasis changed). In more prosaic terms, the suggestion here is that theologians can help economists (and others) to start from a factually accurate characterization of human agents. Why should this not be possible, in principle? Of course, it might be replied that, in fact, economists do commonly recognize the roles of greed, of the desire for wealth and power, of self-centredness, or of the willingness (sometimes) to cheat - but perhaps they do not systematically perceive, let alone deplore, any element of idolatry in either "consumerism" or wealth maximization! Further elaboration of Hawtrey's claim would have been welcome. The same is true of his further claims that utility maximization is a factually inadequate characterization of human motivation in many contexts, even when the arguments of the utility function are extended beyond "narrowly economic" arguments, and that rationality as commonly understood by economists excludes important considerations. These claims may very well be correct (even if they need much more elaborate justification and filling out) and, if they are, are further examples of how theology (but not only theology) could in principle help to improve the factual assumptions made in economics.

Hawtrey writes that "evangelicalism makes its greatest contribution to normative economic debate ... by its reassessment of the question that economics asks," and, whether or not one agrees with what he goes on to say, one might ponder the possibility that one of theology's greatest contributions to normative economics might be that of proposing "the right questions," for, whilst economics has become very mature in respect of its technical, analytical capacities, it can still be somewhat childish in its simple-minded approach to values, norms, and objectives. Theology's other great contribution, as already indicated, might be that of improving the factual assumptions about humankind made, implicitly or explicitly, in


economic theorizing. In the end, however, it may be "up to the moral theologian to attempt to distill practical wisdom from the insights of each discipline" (including economics), as Yuengert puts it. Whether or not it be done specifically by a moral theologian, it is the "distilling of practical wisdom" from varied sources that would constitute the de Jacto solution to Waterman's epistemological and methodological worries.

3. Failing to Do It

There is some irony in the fact, if fact it be, that it is the Christian political economists so weJl described by Waterman who appear, on the basis of our case studies, to have encountered the least difficulties in combining theology and economics in normative social theory (in the modern sense of social theory, that is; Neusner's fascinating account would seem to understand the term "social theory" rather differently.) The case studies by Yuengert, Hawtrey, Schubeck, and Tiemstra, which all suppose that the two disciplines can be so combined, all elicit some doubts about how successful many attempts at combination have been. (Of course, failure to do something with full success does not establish that it cannot be done.)

To judge from Yuengert's account, at least, it would appear that the authors of various social encyclicals have been less than perfectly informed about the dependence of "liberalism" on utilitarianism, individualism, and materialistic values. It is tendentious to say, for example, that Papal Social Teaching defends free markets not "with concepts from economics alone -incentives, cost efficiency - but rather emphasizes concepts from moral theology - freedom, personality" and "human initiative and creativity." Were Adam Smith, John Stuart Mill, Carl Menger, and Alfred Marshall (to name no others) not liberal economists? And did they not give great emphasis to freedom, initiative, and creativity in their accounts of market systems? It is just false to say that all economic liberalism is centred on utility maximization. Similarly, the example of Philip Henry Wicksteed suffices to destroy the canard that liberal economic thought is necessarily individualist, asocial, and materialistic. The fact that liberalism is sometimes merely utilitarian, narrowly individualistic, and crudely materialistic is no defence for suggesting that it always is so. If theologians caricature economics they will inevitably find it harder to learn from, to inform, or even to communicate with it. More specifically, Papal Social Teaching on work may have many merits (but how essential is its theological background?); but on wages it would appear not to have learned from Wicksteed, for example. We read that the "worker has a right to a living wage, and the employer has a duty to pay it" (Yuengert, emphasis mine). The term "living wage" is ambiguous here, for it is a living "wage plus

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benefits minus taxes" to which the worker has a right, and if "society" considers that the worker has a right to x per month then society should put its money, not the employer's money, where its mouth is and pay taxes to finance the social benefits that ensure the low-paid worker a decent standard of living. Thus Wicksteed; could the authors of Quadragesimo Anno and Laborem Exercens not have learned something here from the liberal (and religious) economist? Yuengert's section on consumerism leaves a better impression and suggests that theologians might here teach economists something useful - but here, too, they will handicap themselves if they misrepresent economic theory. Consumption is not the only goal considered in economics (wealth, power, winning the business "game"), consumption is not always individualistic in motivation (the family), preferences are not always taken to be fixed (the endogenous preferences literature), and preferences are not always supposed to be over material goods (Gossen, Menger, Wicksteed, Lancaster). One does not teach people to do better by first mis-characterizing, in derogatory fashion, what they do already. (And, if Schubeck is right to describe Ellacurfa's work as the best example of liberation theology's relation to economics, then it would seem that success in combining the two disciplines is certainly not to be looked for in that direction!)

Hawtrey sets out various ideas concerning capitalism as a system, centralism, work (cf, Papal Social Teaching), and justice for developing countries; Tiemstra similarly considers business behaviour, the role of government, environmental and welfare programs and reports the work of Storkey on consumption and of Vickers on uncertainty. Now, in each and everyone of these cases, the ideas and arguments concerned appear to merit serious consideration - but in no case is it in the least bit obvious that anything is being said that could not equally and happily be said by many non-religious people (not to speak of non-Evangelical and non-Reformed people). This is not only deeply ironic with respect to Tiemstra (in view of his breath-taking statement that "Kuyperians are suspicious of any case where Christians and the secular world end up believing the same thing"), but it also, and far more importantly, represents a sustained failure in the attempt to combine theology in any significant sense with economics. Just as scattered remarks on economic matters in a theological text do not constitute a theologically informed economics (Neusner, as quoted above), so even a sustained, coherent, and high-quality discussion of economics by people who are theologically informed and committed does not constitute a genuine bringing together of theology and economics when everything being said is widely acceptable in complete isolation from any theological background. Hence, a high proportion of what both Hawtrey and Tiemstra appear to present as evidence of fruitful collaboration between theology and


economics in the construction of normative social theory is not in fact evidence of any such thing. Rather, it merely illustrates the fact that a "theological context" can often be given to factual, normative, and policy judgements that, for better or worse, are often made without the benefit of any such context.

4. Concluding Remark

Our six case studies, it seems, neither prove that theology and economics cannot be combined in the development of normative social theory, nor do they present unambiguously convincing evidence that such combination has yet been especially fruitful (unless it be in Christian political economy and in some aspects of Papal Social Teaching).

Chapter 13

Summary If Not Conclusions

James M. Dean and A.M.C. Waterman University 0/ Manitoba

In this concluding chapter we assess the verdict offered by the essayists to the question posed in this volume and attempt to identify the themes in their contributions. The verdict from the essays is not unanimous: three no, two yes, and one unable to evaluate.

A word on what this chapter is not: It is not a substitute for the actual essays and does not attempt to include all the arguments and nuances included in the essays. Any summary runs the risk of simplifying the arguments of the essayists, ignoring important factors or even missing points that the authors want to emphasize. However, it is important that readers be gi ven a sense of the reasoning of the essayists to appreciate why a verdict on the question occurred as it did. We outline a major theme (or themes) addressed by each author and then consider themes common among several essays.

Dean

James Dean thinks that theologians are uncomfortable with economics and want to redirect it to serve their own goals. Theologians are often unwilling to consider the evidence that economics has generated and that bears directly on matters that theologians consider important. The problem is that theologians think that the knowledge generated by economists is based on assumptions about which they are suspicious or unwilling to accept. For example, Andrew M. Yuengert (ch. 2) describes a Papal Social Teaching

176 James M. Dean and A.M.C.Waterman

that is suspicious of the contradictions between the assumptions and conclusions of economic analysis. John P. Tiemstra (ch. 5) says that sticking to conventional economic analysis means being trapped by the ethical agenda that comes packed with neoclassical economics, and Kim Hawtrey (ch. 6) also notes that some evangelical theologians are antagonistic to the assumptions and recommendations of economics. Thomas L. Schubeck notes that some economic concepts have become a cover for special interests. The suspicion of economics is clear.

Dean thinks that the problem is that economics is concerned with a world where people and institutions fall short of an ideal and will continue to do so. So, although the world would be a better place if people and institutions operated more in accord with an idealized vision offered by theologians, it is unlikely ever to do so. In this context, the problem for social theory is to devise proposals that recognize both the status quo from which we start and that recognize the constraints that fallible people and institutions impose on our choices.

Dean illustrates this theme with a variety of evidence from economics that directly relates to issues in which theologians are interested. For example, there is a variety of evidence about factors that influence people's willingness to contribute to public goods, and this evidence has an experimental basis that recognizes the limitations of human behaviour. People respond to incentives, so a normative social theory must recognize both the constraints that exist and the ways in which people will respond to changes in those constraints. The suspicion of many theologians about mainstream economics has prevented them from using the information that economists have generated and that directly relates to matters that are important to them. Since talking past each other is not likely to enrich either theology or economics, nor is it likely to enrich normative social theory, this suspicion must be addressed. Dean attempts to do this by showing a number of ways in which economics can be helpful to theologians, but the prognosis for cooperation is not good.

Both A.M.C. Waterman (ch. 3) and Jacob Neusner (ch. I) have an appreciation of economics that provides the basis for a fruitful interaction between the disciplines. Dean thinks that Waterman provides a number of examples of areas where theology and economics can be fruitfully combined. These are the exceptions, though, and Dean thinks that there has to be a substantial change in the willingness to interact for theology and economics to be fruitfully combined.

There is evidence in some case studies that the interaction between theology and economics is fruitful. But, each discipline has different assumptions and world views, and these are generally incompatible. So, the general impression from most of the case studies is that the gap between

Summary If Not Conclusions 177

theologians and economists is so large that it is probably unbridgeable. On balance, the verdict is no.

Dow

Sheila Dow says that there has been a perception through the ages that it is possible to combine theology and economics to construct a useful social theory. Dow is willing to assume that theology and economics are separable initially, but she questions that assumption later. Dow notes that the case studies of Calvinism (Tiemstra), evangelicalism (Hawtrey) and Papal Social Teaching (Yuengert) argue that economics embodies an ethical position. All are critical of neoclassical orthodoxy, which teaches that economics ought to be value-free. Dow says that it follows that it is useful to analyze the economic implications of the various ethical position that they hold. Dow also says that they can contribute to economics by pointing out the internal contradictions within the discipline.

Dow says that the other three case studies demonstrate a theological use of economics by embracing a form of economics based on an ethical foundation compatible with their theology. For example, liberation theology embraces dependency theory, which is explicitly used as input into a normative social theory. Another example is in Waterman, who describes how scarcity was absorbed into Anglican theology in the nineteenth century. The problem here is that there can be a misunderstanding of economics by theologians that leads to its misuse by the same. For example, Schubeck is critical of liberation theologians for misunderstanding dependency theory. It is important to consider the quality of the analysis, so the criticism of theologians needs to be considered carefully. However, theologians have no unique contribution to make to economics in this area. Dow says theologians are not the only people critical of neoclassical economics; so are some economists. Theological input may try to correct preferences (Hawtrey) or transform society (Tiemstra; Schubeck), but economists can also do this.

Dow also considers epistemological issues that arise in a number of case studies in various ways. Dow says that the relationship between religious and scientific knowledge is a major theme only in Waterman, and she considers why this is the case. Three distinct factors might be at work: a lack of appreciation of the extent of the internal critique of neoclassical economics; a belief by neoclassical economists that economics can be combined with any ethical framework; and, the fact that all knowledge is homogeneous, since both economics and theology are founded on some ethical basis.

Dow then draws on the work of David Hume to discuss the relationship between reason and religious belief. Dow notes that Hume emphasized the


primacy of sentiment or belief over reason even in so-called scientific areas, claiming that normative came before positive. Dow says that Yuengert has a similar position. In this framework, there is limited scope for identifying facts, since facts require belief. Knowledge is certain when belief is certain. Belief in a divine being by a religious person may provide a basis for action that uncertain knowledge does not. So, it is fruitful to try and combine particular beliefs into economic analysis.

Dow concludes that the interaction between theology and economics is fruitful. Her verdict is yes.

Elzinga

Kenneth Elzinga considers the case studies individually. Hawtrey describes evangelicals as "all over the map" on economics. Elzinga says that this may be due to differences in their knowledge of economics and that some may be doing good economics and some may be doing bad economics. Economics is a method, and theologians ought to be able to pass a low-level test demonstrating their knowledge of the economic method. He says also that Hawtrey leaves undeveloped what kinds of questions ought to be pursued if one is committed to theology and trained in economics. Elzinga says that these could include the debt crisis or the effect of takeovers on the nonpecuniary goals of the firm. And Elzinga disagrees with Hawtrey's claim that the economic questions are not even the important ones, noting that even Jesus Christ taught his disciples to pray for material things.

Elzinga points out that an economics of the Mishnah (Neusner) applies to only one input (land) and one output (food). This economics does not apply to today's complex world. Neusner notes that later rabbinical writings set the Mishnah aside in favour of something else but do not offer a framework for contemporary economics. Elzinga is critical of liberation theology (Schubeck), which he says is an unbalanced blend of theology and economics and tilted heavily toward ideological critique. Waterman's case study is lucid and especially pertinent because of its discussion of a number of early economists who were also clerics. Elzinga says that Waterman's case study shows the benefits of blending economics and theology, but that it ends on a nihilistic note with discussions of Knight and Kolokowski on the inability to combine theology and economics. The Kuyperian approach to policy (Tiemstra) claims to be neither politically right nor left but is almost always left. Elzinga says that Tiemstra is misinformed about Public Choice theory, which might help us understand issues in which a Kuyperian approach might work. A problem is that Kuyperians are not interested in empirical economics. Elzinga says that Tiemstra, like Waterman, tries to meld theology and economics.


According to Elzinga, Yuengert's case study is best at addressing the positive/normative distinction. Yuengert claims that the normative preceded the positive and so there is no sense in doing economics if the ends are unworthy. He also notes that Yuengert addresses the question of whether normative statements are merely matters of opinion; they are not - some are true and some false.

Elzinga concludes that the collective effect of these case studies on economics will be dismal. Most economists are unwilling to acknowledge sovereignty of God over their work, although we should be grateful for economists who are willing to recast economics so that it is as concerned with its ends as with its means. Elzinga notes areas of possible collaboration and expresses hope for future work, so his verdict is that it is intellectually defensible, though not at present bearing much fruit. This is a restrained yes.

Heyne

Paul Heyne defines the economy as the realm of exchanges mediated by money. Theology is concerned with intent and consequences. Heyne thinks that theology is rarely helpful to economics since theologians speak in highminded phrases that are too much above the fray to be useful. Typically, he says, the pontifical mode dominates the dialectical. Theologians operate with a variety of paradigms of their own and are unable to accept the economist's paradigm. In this situation, Heyne says that it is easier to predict what a theologian has to say about economics from knowing their paradigm than knowing their theology, which raises the question of whether we are hearing theology or disguised economics.

Heyne illustrates the theme of conflicting scholarly paradigms with evidence from the various case studies. The evangelicals discussed in Hawtrey's essay use terms like "unfettered competition," which implies a paradigm denied by many economists, who never see competition as pure. Discussions of "distributive love" assume that the government can plan the distributional outcome of a modern economy. Heyne continues the theme that proposals by theologians often include misunderstandings of economics as well as ignorance of its implications. For example, proposals by evangelicals to "forgive the debt of the Third World" are based on concepts of charity and forgiveness, but the same proposals ignore how a modern economy works and who in practice will gain from such forgiveness.

Heyne notes that there is a lot of truth in theologians' criticisms of the paradigm and assumptions of economists, which they think give moral endorsement to a system that contains a "moral contradiction." He argues, though, that theologians also operate within a scholarly paradigm and that their work often is based on ignorance of how the (~conomy actually


operates. Furthermore, the division between the disciplines is often greater than can be explained by ignorance. Heyne claims that Yuengert describes a Papal Social Teaching that is so suspicious of economics that it largely refuses to understand it. Schubeck describes a liberation theology where theologians pick and chooses their economic facts to find what they want. Tiemstra refuses to accept the authority of economics, and Heyne wonders if this extends to refusing to consider evidence from economics that bears on positions that Kuyperians hold. The case studies by Waterman and Neusner describe unique circumstances and do not address this question.

In summary, Heyne thinks that the attempt to combine theology and economics to form a normative social policy is not fruitful and thinks that it is not likely to be. His verdict is no.

McChesney

Fred McChesney does not see a common theme among the six case studies. Several of the case studies are based on a misunderstanding of economics, which McChesney insists is fundamentally a positive science. Collaboration depends on understanding what the other is about, and speaking authoritatively about economics does not demonstrate that the writer is speaking knowledgeably. In different ways, McChesney takes issue with the case studies by Tiemstra, Schubeck, Hawtrey, and Yuengert, which he thinks require a change in perspective before collaboration between theology and economics would be fruitful. The case studies by both Waterman and Neusner display an appreciation for economics, although both essays focus on the past rather than the present. In these latter two essays, McChesney sees the possibility of collaboration, but his conclusion is not hopeful.

McChesney draws on the distinction between a "constrained" and an "unconstrained" vision of social policy as developed by Thomas Sowell. In a constrained vision, deficiencies are constraints that must be reckoned with in designing the best possible world order. A constrained vision sees tradeoffs and scarcity, and it examines what might be the alternate outcome if a change is made. The Samaritan's dilemma is an example of a constrained vision. The desire to be compassionate must be balanced with the possibility that recipients of compassion might change their behaviour in such a way that the final outcome is undesirable. Economics is based on the assumption of scarcity and choice, and it can be helpful when normative social theory is developed on the basis of a constrained view of social processes.

An unconstrained vision reveals that the world's deficiencies, including human fallibilities, must be changed as a prelude to establishing an even better world. The unconstrained view leads to a focus on solutions, whereas the constrained vision focusses on tradeoffs. For example, several case

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studies are critical of market economies but do not consider the alternate situation, that is, under economies without free markets. The possibilities for government to improve on market failures appear more promising if actual government failures can be ignored, and if government is considered an ideal. Four of the case studies adopt an unconstrained vision: Hawtrey, Schubeck, Tiemstra, and Yuengert. Without a change in perspective, theologians who adopt an unconstrained vision are unlikely to find collaboration on normative social policy with economists fruitful.

McChesney thinks that the case studies, viewed as a whole, indicate that the verdict is no.

Steedman

Ian Steedman is critical of the arguments advanced at the end of the case study by Waterman to the effect that economics and theology cannot be combined. The arguments are due to Knight and Kolakowski. Steedman notes that, in fact, a variety of authors do combine the two. Steedman says that the Knightian critique is exaggerated and provocative. It is not logically impossible to criticize rules. Love of our neighbour is based on will as well as feeling, so understanding is an appropriate basis for action. Steedman is also critical of the Kolakowski argument that theology and economics are incapable of being combined since the languages they speak are incompatible. Steedman presents several arguments that contest this position. First, the fact/value distinction is not watertight; it is contestable and contested. Second, we may in fact be able to play the language games in a way that communication is possible. Third, the work is often done and cannot be dismissed as obviously confused. Furthermore, if there are problems in communication, we need other ways of reasoning, thinking, and speaking. Steedman then considers a variety of ways in which theology and economics can interact and resists the position that there is only one such way.

Steedman says that it is not the case that all reasoned discourse comes to an end as soon as values come into play, nor is theology required before ethics can be discussed. Some economists can learn from theologians. Theology can say things about human nature, motivations, and factors influencing those motivations. Steedman disagrees with Kolakowski, who says that theology can have nothing to say about the facts. Yuengert says that theolpgy has a lot to say about human beings, and Hawtrey says that an important explanatory factor in all economic problems is moral or theological. So, theologians can help economists start from a factual basis. Steedman believes that the case studies by Yuengert, Hawtrey, Schubeck, and Tiemstra all suppose that theology and economics can be combined.


However, he disagrees with the characterization of economics in some of the case studies, writing, "If theologians caricature economics they will inevitably find it hard to learn from, to inform, or even to communicate with it." He also notes that many of the things that are said by theologians could also have been said by non-religious people. Much of what Hawtrey and Tiemstra say does not require one to be a theologian but instead put into theological context things that could have been said by non-religious people. This, Steedman says, does not amount to combining theology with economics.

Steedman decides that it is not possible to answer the question. The case studies don't show that theology and economics can not be combined, nor do they show that the disciplines have yet to be fruitfully combined.

Issues and Themes

A number of themes arise in more than one of the essays. These occur in different contexts and often with quite different emphases, but there is enough commonality to suggest that they address similar themes. Other themes are raised by individual authors. A complete reading of the case study is necessary to appreciate fully the depth with which the essayists have approached the question. Nevertheless, the following questions are recognizable.

A previous volume by Brennan and Waterman (1994) asks whether religion and economics are distinct. The question is still under debate in the present volume. The authors of the case studies do not share a common assumption about the independence of the two disciplines, and neither do the essayists.

What is the relationship between religious knowledge and scientific knowledge? The theme is raised explicitly by Waterman and discussed in more than one case study. There is room for more exploration of this question.

There is a diversity of opinion among both theologians and economists. Witness Hawtrey's description of the evangelical approach to economics and the different conclusions of the evaluative essays.

Theologians and economists are often ignorant of each others' disciplines. Some of the case studies assume that some economists do not understand the theology, while some economists claim that some theologians do not understand modern economics.

Economists often identify as a problem the theologian's failure to appreciate the unintended consequences of an economic act. This may not be surprising in that economists themselves spend considerable effort in


exploring such effects. The difference may be that economists always realize that there will be unintended consequences.

The "world views" of theologians and economists are often different. Heyne emphasizes the different paradigms from which they operate and McChesney the difference between constrained and unconstrained views of social processes. Operating in different paradigms may make collaboration between theology and economics difficult.

Is the purpose of normative social theory to state an ideal toward which we can strive, or a framework for change to actual social processes? There is a difference of opinion on this question among the various contributions.

Theologians often criticize economics in ways that are reminiscent of heterodox economists. There needs to be a clear recognition of what theologians, as theologians, bring to the intercourse between the disciplines. This point is made clearly by Steedman.

Conclusion

The six case studies are evaluated by six essayists. Each essayist was asked to answer the following question: In light of the evidence you have considered in the case studies, is the attempt to combine into a normative social theory the (putative) insights of theology with the (putative) scientific knowledge supplied by economics either or both intellectually defensible and actually fruitful? At risk of oversimplifying their conclusions, the vote is three no, two yes, and one unable to evaluate. Such a split evaluation suggests that there remains a great deal of ambivalence about how defensible and fruitful is the attempt to combine the two disciplines. We had thought that this volume might provide a clear answer to the question. It does not. It does provide a good understanding of the issues that both theologians and economists consider important in exploring the question. But is that actually fruitful? We leave it for readers to decide.

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Index

altruism, 117-118 Anabaptist social theOl)" 8 Andreoni, James, 117-118 Anglican Church. SEE Church of

England apartheid, 92 Aristotle, economic philosophy of, 13,

18-19,158-159 - and Mishnah, 14, 16-17 Association(s) of Christian

Economists, 102

Bassau, David, 110 Becker, Gary, I II Bellah, Robert, 74 Berkeley, George, 53, 54-55, 56-57 Birnie, E., III Blaug, Mark, 35 Bockmuehl, K., 103 Boff, Clodovis, 72-73 - critique of Catholic functionalist

approach, 75-77 - on theology and social science,

73-74 Boff, Leonard, 72-73 - critique of Catholic functionalist

approach, 75-77 Bonino, Jose Miguez, 72, 73-74 Brennan, H. Geoffrey, 36 Brockett, J., 107 Buchanan, James, 159, 160

business and management behaviour, 90-92,149

Butler (bishop of Church of England), 55

Cain and Abel (biblical story), 27-28 Calvin, John, 136 - social imperatives of, 85 Calvin Center for Christian

Scholarship (CCCS) - on business behaviour, 91 - on welfare reform, 95 capital, human, 120 capital, social, 119,120-121 capitalism - Church of England critique of,

104-105 - Ellacuria's view on, 81-82 - evangelical critique of, 104 - liberation theology's views on,

77-78, 155-\56 - Lutheran Church critique of, 105 - Montes' views on, 80 - theologians' misunderstanding of,

155-156 Carson, D., 103 Catherwood, Frederick, 103 Catholic Social Teaching. SEE Papal

Social Teaching Centesimus Annus (John Paul II.

1991),7,146-147

198 Index

- on consumerism, 48--49 - on historical context, 38 - influence of on Kuyperian social

teaching, 88 - on labour relations, 39 - on markets, 44, 45 - on private property, 46 - on relations of economics and

theology, 37-38 ~n sociocultural change, 47 Centre for Public Justice, 94-95 Chalmers, Thomas, 53, 58 Charles, Rodger, 37 Chicago Declaration of Evangelical

Social Concern (1973), 101 Christian Reformed Church - activities of in America, 86-87 Christian Social Congress of the

Netherlands (1891), 87 Christian Social Union (England), 58 Christian Socialism (Church of

England), 58-59 Church and State, relations of - after Protestant reformation, 51-53 - in evangelical Christian thought,

106-108 - in Kuyperian social theory, 85-86 Church of England, 51--{i7 - and Christian socialism, 58-59 - criticizes capitalism, 104-105 - on education, 55-56, 57 - Establishment culture of, 53, 59-60 - Establishment social theory of,

63-67 - and political economy, 54-63 - socioeconomic theory of, 7, 63--{i7,

135-136 Church of Scotland, 52-53 Church of Sweden (Lutheran), 52, 53 - SEE A LSD Lutheran Church

(American) Church Socialist League (England),

58 churches, Established, 51 - SEE ALSO Church of England;

Church of Scotland; Church of Sweden

Churchill, Winston - on free-markets, 159

class in Papal Social Teaching, 40 Coase, Ronald, 142 Cobb, John B., Jr., 88 Comblin, Jose, 77 common good, the, 82-83 - human readiness to contribute to,

116-118 - as rationale for special interests,

115-116 Compassion International, 110 competition, 145 Conference of Latin American

Bishops - Second (Medellin, 1968), 70 - Third (Puebla, 1979), 70 confessional community, 86 Congress on the Church's Worldwide

Mission (1966), 10 I Congress on World Evangelization

(Lausanne, 1974), 101 consumerism, 48 - in Papal Social Teaching, 47--49 consumption, 172 - moral purpose of, 48--49 consumption theory, 96 Copleston, Edward, 53, 57, 59 corruption and national income levels,

119 Cramp, A., III

David, Douglas D., 118 de Lange, Harry, 91-92 - on environment policy, 94 de Tocqueville, Alexis, 160 Dean, James, on creation of normative

social theory, 175-176 Demant, V.A., 61 dependency theory applied to Latin

America, 72, 125, 177 dialectical analysis in liberation

theology, 71-72, 75-76 Diehl, W., 107 Divini Redernptoris (Pius XI. 1937),

on markets, 44--45 Dow, Sheila, on creation of normative

social theory, 177-178 Dutch Reformed Church, neo

Calvinist revival in, 8

economics, 17 - distributive: in Calvinist social

teaching, 87; food in, 21; money in, 17; in Priestly Code of Judaism, 19

- and environment, 91,94, 104, 126, 137

- market, 21, 138; in Calvinist social teaching, 87; in Christian political economy, 57

- misunderstood by theologians, 125, 132,154-156,171-173,177,178, 179-180

- neoclassical, 146; critiques of, 38-39, 125-126; defined, 153-154; and efficiency, 119; ethical agendas of, 115; separability of science and theology in, 127-128; theological reactions to, 34, 124-125; welfare policy in, 93

- paradigm(s): Austrian, 142; New Institutionalist, 142

- as scholarly pursuit: emergence of in Britain, 60; history of, 6-7

- utilitarian, 1 10-112 - value-laden nature of, 4, 124, 130,

167-168 economics and ethics, 124-125 - in evangelical Christianity, 143 - in neoclassical thought, 115 - in Papal Social Teaching, 37, 65 economy, 141 - social role of, 16-17 education - in Anglican social thinking, 55-56,

57 - as outcome of social capital,

120-121 El Salvador - production modes in, 78-80 Ellacuria, Ignacio, 148 - on the common good, 82-83 - and New World Order, 80-83 Elzinga, Kenneth, on creation of

normative social theory, 178-179 encyclicals, papal, 4, 7, 33-50 environment - in Kuyperian social teaching, 94

Index 199

- and stewardship, 143 - SEE A LSO economics and

environment Episcopal Church, 105 Erickson, L., 105-106 Established Churches (Protestant), 51.

SEE Church of England; Church of Scotland; Church of Sweden

ethics and economics. SEE economics and ethics

Evangelical Aid and Relief Fund, 110 evangelical Christianity, 99-11'.2 - agendas of, 100-103, I 12, 115 - anti-secular policy of, 8 - on foreign aid, 109-110, 144 - normative social theory of, 102-1 10,

124 - on sin in economic behaviour,

106-107, 143 - and social sciences, 102 - on stewardship, 143 Evangelical Lutheran Church

socioeconomic theory, 105

fact/value distinction, 4, 66-67, II 1-112,129--130, 150-151, 166, 181

- SEE ALSO knowledge Fontaine, Arturo, 72,73 food in Mishnah's distributive

economics, 2 I foreign aid, 160 - in evangelical Christian thought,

109-110, 144 Frank, Robert, 159 fraud, defined in Rabbinic Judaism, 25 free-rider hypothesis, 116-118 Fukuyama, Francis, on high- ancllow-

trust societies, 119-120

Gaudium et Spes (Vatican II), on private property, 45-46

Gay, Craig, 87-88, 88-89 Goudzwaard, Bob, 91, 104, 137 - on environment policy, 94 government, economic role of - in American Lutheran view, 143 - in Kuyperian view, 92-96 - in Papal Social Teaching, 46

200 Index

- in Southern baptist thought, 107-108

greed. SEE self-interest Guild of St. Matthew (England), 58 Gutierrez, Gustavo, 72

Hart, Oliver, 137 Hawtrey,Kim, 115, 116, 124, 129,

159,162,166,168,170,171,176, 177

- critiqued, 132-133, 142-146, 157, 160, 172-173

- on theological and scientific knowledge, 127

Hay, Donald, 104, 107, 133 - on Pareto principle, 111 hermeneutics, 69 Heyne, Paul, on creation of normative

social theory, 179-180 Hill, M., 103 Hinds, Samuel, 63 Hinkelammert, Franz, 77 Hoksbergen, Roland, 88 Holt, Charles A., 118 Hooker, Richard, 52 Hore-Lacy, I., 107 Hulme, David, 110 Hume, David, 177-178 - on knowledge, 128-129

Iannaccone, Laurence R., 119 ideology, purpose of, 74-75 incentives, 158 - human response to, 116, 119 individualism vs. collectivism, 161 Industrial Revolution, 39 information. SEE knowledge Isaac, Mark R., 118

John M. Olin Foundation, 70 John Paul II - on consumerism, 47, 48 - on social justice, 46-47 Joyce, Michael, 70 Jubilee 2000 Campaign for

International Debt Remission, 109 Judaism, Rabbinic, 7-8, 13-32, 125,

134,151

- Mishnah, 13-22,24-32, 125, 158-159; economic theory of, 14, 20-21, 134

- Priestly Code, 19-21; economic prescriptions of, 20-21

- Yerushalmi, 23-32,125,181; commentary of on Mishnah, 23-26; transforms Mishnah's economic philosophy, 26-32, 125; Cain and Abel (Biblical story), 27-28

justice, 46-47, 143, 145-146 - in evangelical Christianity, 109-110 - in Kuyperian social thought, 92

Keynes, John Maynard, 56, 61,132. - on uncertainty, 129-130 Keynes, IN., 63, 136 Klay, Robin, 88 Knight, Frank H., 65,150,161,166 - on consumer decision-making, 48 knowledge, 126-130, 143 - in Calvinist thought, 128, 180 - fact and value in, 4 - Hume's analysis of, 128-129 - in liberation theology, 127 - in Papal Social Teaching, 127 - SEE ALSO fact/value distinction Kolakowski, Leszek, 65--67, 150-151,

166-167 - on knowledge, 126 Kristol, Irving, 139 Kuyper, Abraham, 85-86, 136 Kuyperian social theory, 85-98,

136-137,148-150,156,178,180 - on business and management

behaviour, 90-92, 149 - on labour rights and relations, 87,

92-93, 149-150

Laborem Exercens (John Paul II. 1981),172

- on the just wage, 41 - on materialism, 37 - on meaning of work, 39-40 - on unemployment, 40 - on unions, 42 labour relations

- Kuyperian social teaching on, 87, 92-93, 149-150

- Papal Social Teaching on, 39-42 land (real estate) - Mishnah's prescriptive definition of,

20-21 - as non-wealth in Yerushalmi, 31-32 - in Priestly Code of Judaism, 20-21 - a~ wealth in Mishnah, 19-20 language in science/religion

discourse(s),65-67,150-151, 166--167

La Porta, Rafael, 119 Lausanne Convenant, 101 Leo XIII (Pope), 7 liberation theology, 7, 69-84, 178 - analytical methods of, 71-80, 84,

147-148; dialectical analysis, 71-72,75-76; empirical analysis, 74, 77-80; ideology critique, 74-78; for social institutions, 74-75

- on capitalism, 72, 77-78, 155-156 - criticized, 72-73, 76--77, 155-156 - dependency theory in, 72, 125, 177 - preferential option of for the poor,

70-71,83, 147 - and social sciences, 72-75, 155-156 Lipford, Jody W., 118 Locke, John, 160 Lucas, Dick, 99 Lutheran Church (American) - criticizes capitalism, 105 - on government and economy, 143 - SEE ALSO Church of Sweden

Malthus, Thomas R., 53, 56, 166 market theory, 96--97 markets, free, 159, 169 - in Calvinist social teaching, 87 - in Christian political economy, 57 - Papal Social Teaching on, 43-47 Marshall, Alfred, 60, 171 Martin-Bar6, Ignacio, 77 Mater et Magistra (John XXIII.

1961),38-40,42,44-46 - on autonomy of workers, 40 - on human nature, 38 - on the just wage, 40, 42

Index 201

- on markets, 44-45 - on relations of labour and capital, 39 - on sociocultural change, 46 - on state intervention in economy, 46 - on worker ownership, 42 Maurice, F.D., 58-59 McChesney, Fred - on creation of normative social

theory, 180-·181 McGrath, Alistair, 99 McKee, A., III Mead, Lawrence, 107 Medecins Sans Frontieres, 160 mediation, hermeneutic, 69 mediation, socio-analytic, 69-·70 Menger, Carl, 171 Milgrom, Paul, 137 Mill, John Stuart, 171 Mishnah (Judaic philosophical

system). SEE UNDER Judaism, Rabbinic

Moll, W.E., 59 money - in distributive economics, 17 - in Rabbinic Judaism, 24-25 Montes, Segundo, 135 - on Salvadoran modes of production,

78-80 morality. SEE economics and ethics Mosley, P., 110 Munby, Denys L., 61, 62-63, WI Munro, D. - on Third World poverty, 109

needs and rights in Papal Sociall Teaching, 37, 40

Neusner, Jacob, 151, 153, 158, 162-163,168,169,176,178

- compares Aristotle and Mishnah, 126

-critiqued, 134-135, 157-158 New World Order. SEE Ellacuria,

Ignacio Niebuhr, H. Richard, 85 Nirvana fallacy, 159 normative social theory, 4-6 - of British Establishment, 62-67 - of Calvinism, 85-86, 124 - of Catholicism, 36, 37, 65, 124, 138

202 Index

-creation of, 175-181 - of evangelical Christianity,

102-110, 124 - of liberation theology, 83-84 - of Rabbinic Judaism, 13-32 - SEE ALSO positive social theory normative/positive conjunction in

political economy, 56-57 normative/positive disjunction in

social theory, 34, 35-36, 138, 147, 153-154,156-157,158,177-178, 179

normative/positive statements, 35, 169 North, Douglass, 142 Novak, Michael, 77-78, 80

Octogesima Adveniens (Paul VI. 1971)

on moral aspects of economics, 37 - on social sciences, 38 - on social welfare, 42 Olson, Mancur - on neoclassical economics, 119 Opportunity International foundation,

110 Orthodox Churches and economic

policy, 7 ownership, 181 - SEE ALSO property, private

ownership of Oxford Declaration on Christian Faith

and Economics (1990), 102, 108, 142-146

Paley, William, 53, 55-56, 56-57, 166 Papal Social Teaching on economics,

33-50,115,146-147,162,180 - and ethics, 65 - goals of, 43-44 - on government role, 46 - on its own primacy, 36-38, 37, 138 - and Kuyper, 87 - on scientific knowledge, 127 -on work, 39-41 Pareto principle, 111 Personal Responsibility and Work

Opportunity Reconciliation Act (U.S. 1966), \07

Pesch, Heinrich

- influence on papal encyclicals, 38 pluralism, 5 Polanyi, Karl, 18-19 political economy, Christian

(England), 54-63 Poor Laws (England), 160 Populorum Progressio (Paul VI.

1967),43 - on consumerism, 47-49 - on universal expertise of Catholic

Church,37 positive social theory, 5 - SEE ALSO normative social theory praxis, 71 Preston, R.H., 61 Priestly Code. SEE UNDER Judaism,

Rabbinic production, Salvadoran modes of:

78-80 production, means of, as wealth in

Rabbinic Judaism, 22 production unit, 18 productivity differences among

nations, 119 profit as usury in Mishnah, 18 property, private ownership of - in Calvinist social teaching, 87 - in Papal Social Teaching, 42, 45-46 - in Rabbinic Judaism, 20-21, 24-25 Protestant churches, Established,

51-67 Protestant reformation and relations of

Church and State, 51-52 public choice theory, 93, 161

Quadragesimo Anno (Pius Xl. 193 I), 4,40,172

- on consumerism, 49 - on government and economy, 46 - on inequality of wealth, 43 - influence of H. Pesch on, 38 - on the just wage, 41-42 - on labour relations, 39 - on moral aspects of economics, 37 - on primacy of own normative social

theory, 36-38 - on social justice, 46

rank. SEE status and rank

Reformation, Protestant, 51-53 religion, defined, 5 religion/economics conjunction, 3--4 Remenyi, Joe, 110 Rerum Novarum (Leo XIII. 1891), 7 - and Abraham Kuyper, 87 - on class unity, 40 - on economic goals, 43-44 - on human nature, 38 - on the just wage, 41 - on labour relations, 39 - on rights of workers, 40 - on worker-employer relations, 37 Richard, J. David, 133 rights. SEE needs and rights Robbins, Lionel, 63, 136 Robcrts, John, 137 Robinson, Joan, III Roman Catholic Church - economic public policy of, 7 - SEE ALSO liberation theology;

Papal Social Teaching Romantic movement (England) - reaction against political economy,

54, 58-59, 63 rulc of law in Latin America, 148 rule(s) of cconomic behaviour, 145 Ryan, John A. - on consumer decision-making, 48

Salvadoran Social Security Institute, 79

Samaritan's dilemma, 159-160, 180-181

scarcity, concept of, 56-57,141-142, 156--157

- in Anglican social thinking, 55, 57, 62-63, 125, 177

Schubeck, Thomas L., 125, 162, 168, 171,176,180

- on concept of the common good, 115-116

- critiqued, 135, 147-148, 155-156, 157,158

Schumpeter, Joseph A. - on economics, 14 Scitovsky, Tibor, on status and rank,

III secularism, 5

Index 203

self-interest, 141-142, 145 self-sufficiency - Aristotle on, 19 - disincentives to, 159-160 Senior, Nassau, 63, 136 sin, 158 - in evangelical Christian thought,

106--107, 143 - in liberation theology, 71 - in religious thought, 130 - in socioeconomic theory, 170 Sirico, Robert, 77, 80 Smith, Adam, 156--157, 171 social sciences, the - and evangelical Christianity, 102 - and liberation theology, 72-75,

155-156 - in Papal Social Teaching, 38 social theory, normative. SEE

normative social theory socialism, Christian, 58-59 Solicitudo Rei Socialis (John Paul II.

1987) - on consumerism, 47 - on expertise of Catholic Church, 37 - on human nature, 38 Southern Baptist churches, 143 - on role of government, 107-108 Sowell, Thomas., 180 - on normative/positive distinction,

156--157 Stamp, Josiah, 61 State and Church, relations of. SEE

Church and State statements, normative and positive,

35, 169 statements, positive. SEE statements,

normative and positive status and rank as economic goals,

III Steedman, Ian - on creation of normative social

theory, 181-182 stewardship, 143, 168 - in evangelical Christianity, 102, 143 - in Kuyperian social teaching, 87 Stockholm School, 53 Storkey, Alan, 104, 149 - on consumption theory, 96

204 Index

Stott, John, 99, 101 - on meaning of work, 108-109 Sumner, J.B., 53, 57, 59

Tawney, R.H., 60 taxcs, sacerdotal, in Rabbinic Judaism,

20-21 Temple, William, 60-62, 101, 136 theology, liberation. SEE liberation

theology theology, transformative goals of, 126 Tiemstra, John P., 124, 168, 171, 176,

177,180 - critiqued, 136-137, 148-150, 156,

158,161,172-173 - on ethical agenda of neoclassical

economics, 115 - on incentives, 116 - on theological knowledge, 127 tithes and tithing, 28-30 trust in societies, 119-120 Tucker, Josiah, 53, 56-57 - Christian political economy of, 55

uncertainty/certainty disjunction, I 29-l30

United Methodist Church, 105 utilitarian economic theory, critiqued

by evangelicals, 110-112

value, intrinsic, 18, 25 value/fact disjunction. SEE fact/value

distinction Vickers, Douglas, 149 - on market theory, 96-97 - on value-free inquiry, 112 von Hayek, Friedrick A., l35 von Nell-Breunig, Oswald, influence

on papal encyclicals, 38

wages, Papal Social Teaching on, 40--42

Walker, James M., 118

Waterman, A.M.C., 121, 123,131, 153,162,169-170,176

- critiqued, 135-136, 149-150, 165-167

- on Kolakowski, 166-167 - on scarcity in Anglican theology,

125,177 - on secularization of economics, 126 - on uses of economics for theology,

116 wealth - Aristotle on, 18 - in Kuyperian social theory, 156 - in Papal Social Teaching, 43 - in Rabbinic Judaism, 18, 19,20,

21-22 - redistribution of, 160-161 - as source of sin, 28-30 - Yerushalmi on, 25-26, 30-32 welfare policy - in evangelical Christian thought, 107 - in Kuyperian social teaching, 94-95 - in neo-classical economics, 93 - in Papal Social Teaching, 42 Welty, Eberhard, 37 Whately, Richard, 7, 53, 57, 59, 63,

162, 166 - on value-free economics, l36 Wheaton Consultation on. the Church

in Response to Human Need (1983), 101-102

Wheaton Declaration (1966), 101 Wicksteed, Philip Henry, 171-172 Williams, Arlington W., 118 Winch, Donald, 58 Wogaman, Philip, 104, l32 work - in evangelical thought, 108-109 - in Papal Social Teaching, 39--41 workcrs, rights of, 171-172 - Papal Social Teaching on, 37,

40--41,42 World Congress on Evangelism

(Berlin, 1966), 10 I

World Council of Churches, 105 World Vision, 110

Yerushalmi. SEE UNDER Judaism, Rabbinic

Yuengert, Andrew M., 115, 124, 162, 168,171,175-176,177,179-180

- critiqued, 138-139, 146-147, 157, 158,172

- on normative/positive relations, 179 - on Papal Social Teaching, 170

Index 205