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Economics at the Jesus Creed: Michael Kruse 8

Economics at the Jesus Creed: Michael Kruse 8

Last updated on: October 28, 2009 at 5:54 am by Scot McKnight

Economics at the Jesus Creed: Michael Kruse 8 2009-10-28T05:54:14-05:00 Scot McKnight

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Today I’m departing some from offering basic economic concepts and interjecting a sociological element into our discussion.

There is considerable energy to today around the idea that Christians need to resist impersonal capitalism and Western individualism. The most common characterization of relationships in the church in the New Testament is family so the conclusion is made that we need to function more like family. As long as we understand the New Testament family in context I’m inclined to agree.

Is family a useful metaphor in thinking about economics systems? Is the Christian critique of capitalism, on the basis of family, a sustainable critique?

I don’t think it is and what follows tells why. I’m interested to know what you think.

ON the Origin of Economics…. It might be surprising to learn that “economics” gets its name the world of the Greco-Roman household … the New Testament context. The Greek word oikonomia meant “household management.” The household was headed by the paterfamilias. There are three elements to his authority according to M. I. Finley in “The Ancient Economy”:

Potestatas – Power
over children (including adoptees), his children’s children, and his slaves.

Manus – Power over
his wife and his sons’ wives.

Dominium – Power
over his possessions. (19)

This scheme applied to wealthy Roman estates as well as to common
peasant households, but the business of running an estate was more complex. Ancient
Greek moral philosophers offered practical instruction on household management,
particularly concerning management of wives, children, slaves, possessions, and
politics. (Similar household management instruction is found in New Testament: Eph.
5:21-6:9, Col. 3:18-4:1, 1 Peter 2:13-3:9, and Titus 2:1-15.)

Xenophon’s Oikonomikos,
written in the Fourth Century B.C.E., is a prime example of this genre. Treatment
of topics we think of as economics was rudimentary. It focused on economizing …
being thrifty. The abstract idea of a “market” as the exchange of a product by
all buyers and sellers according to prices generated by supply and demand
curves was not in view. Finley writes that modern economic concepts like labor,
production, capital, investment, income, circulation, demand, entrepreneur, and
utility, cannot be translated into Greek or Latin. (21) There was no separate
economic sphere of life. Everything “economic” was bound up with kinship and
politics. Two thousand years later, Enlightenment philosophers resurrected the
ancient Greek concept of household instruction in moral philosophy, updating it
with modern insights. Thus was born the field of political economy.

An important development by modern thinkers has been the
conceptualization of society (even the globe) as a household supervised by an oikonomos … the household manager. The oikonomos was a trusted servant to whom
the paterfamilias trusted day-to-day
management of the estate. Moving into the Nineteenth Century, the drive to
apply scientific rationalism to the study of political economy resulted into
the fracturing of the discipline into subfields like sociology, political
science, and economics. Not until the publication of Alfred Marshall’s Principles of Economics in 1890, did the
modern discipline get its present name. But at is core, economics was born out
of the Enlightenment’s quest to control and improve the world through
scientific-rationalism. Scientific-rationalism would allow human experts to
become the oikonomos.

Modern “Household Management”

It is paramount to see the shift of moving from the management of households to the notion
of management of society as a household.
Economic activity in the ancient world was embedded in pyramidal structures of
kinship, patronage, and politics, with exchange playing a subordinate role. Modern
economics certainly includes economization, but the central driver in our
economy is exchange. Modern economies are incomprehensibly complex webs of
exchange involving an incalculable number of transactions directed by price as determined
through supply and demand. No one can stay on top of it all. Each of us
individually has a miniscule impact on the economy. Some larger entities like corporations
can have greater impacts. Institutions like the Federal Reserve Bank or the
federal government can have a significant impact. But can anyone actually manage
the economy in the sense of managing a household?

Many Christians who distrust economists actually share these
oikonomos assumptions. It is said
that we are stewards of creation but what does it mean at a societal level? “Economic”
stewardship in the Old Testament was a by-product of obeying the covenant.
Jesus and other New Testament voices gave ethical instruction about
relationships of people in face-to-face community but there is little guidance
for managing an economy. The idea of some entity functioning as the oikonomos of the economy is not in view,
yet this mindset is at least implicit in much of the ethical teaching we hear
today. Thus, many economists and Christian moralist agree there should be an oikonomos, it is just that the former believes the oikonomos should be informed by
scientific rationalism, while the Christian believes the oikonomos should be informed by Christian ethics … the family
metaphor serving as a guide.

Face-to-Face Community and Commercial Society

Is this Christian vision possible? Anthropologist Robin
Dunbar claims the maximum number of people an individual can have sustainable
relationships with is 150 people. It is also interesting to note that nearly
every movement that has embraced communal living has unraveled in one or two
generations because of the consequences of size. As a community becomes larger
than a few dozen people, accountability that comes from constant interaction
brakes down. Loafers begin living off the work of others. Trust dissolves.
Differing visions of how to live emerge. (The Hutterites are an exception to
this dynamic. When their communities reach 120 people, they divide the
community and start a new one.) To treat others as family means being close
enough in proximity to know each other’s character and shortcomings, to learn
to love and cherish each other, and to know each other well enough to respond
to each other on and individualized basis. This type of community is only
possible in small groups and cannot be extended to society.

Economist Paul Heyne distinguished between face-to-face
community and commercial society. In face-to-face community, people know one
another well. They know each other’s character, proclivities, and shortcomings.
They care for each other. Modern families are face-to-face communities. It is
possible to imagine a few families living in some type of communal covenant. Commercial
society is what integrates face-to-face communities into a larger whole. The
entities of commercial society are incapable of treating people on a highly
individualized basis. It is impossible for any person or entity to have sufficient
personal knowledge of hundreds … much less millions … of people. Yet
coordination and integration at this level is essential for a number of
reasons, not the least of which is illustrated by the pencil manufacturing
example I gave earlier
in this series.

Heyne suggests that face-to-face communities are ethically governed
by the Golden Rule “Do for others what you would like them to do for you.” Action
is taken on a personalized basis. Commercial society is governed by the Silver
Rule, “Don’t do to others what you would consider unfair if they did it to you.”
Action is taken on an impartial standardized basis.

Several Christian traditions exhort us to forsake
selfishness and individualism for the sake of the common good. But imploring
people to function more like family, to uncritically apply ethics of
face-to-face communities to societal decisions, and to seek the common good,
are inadequate. They do not sufficiently account for the lack of personal
knowledge societal institutions possess in relating to people at such an
individualized level.

Furthermore, many decisions at the societal level are made
in contexts of considerable uncertainty. Opportunity costs are often
significant. For example, every dollar spent on climate change mitigation is a
dollar unavailable to spend on health care, poverty alleviation, or to be left
at work growing the economy. Overspending on climate change mitigation relative
to its threat means many other opportunities will be needlessly lost. Yet, under
spending relative to what is needed may mean serious harm for humanity and the
environment. What dollar amount, and which program of mitigation, equates to
the common good? Frequently, economic questions are less about right and wrong
and more about assessing and managing risk. It is one thing to proscribe
selfishness but quite another to prescribe the common good.

Conclusion

In closing, I don’t want to suggest that the implausibility
of having a global household manager means that economics can’t give us very
useful information for tackling economic challenges. There is considerable
difference of opinion on how much economic performance can be enhanced by
interventions. What separates most liberal economists from conservative
economists is not the belief in the necessity of markets … they are needed …
but in how well the markets function. The libertarian folks see markets as imperfect,
but functioning well enough that interventions will only create distortions.
Liberals see markets as much less efficient and believe societal outcomes can
be improved through a variety of interventions. There are folks in between. (More
here.)

I will have more that relates to managing economies in my
next post on capitalism and economic systems. For now, what do you think? Does the distinction between face-to-face
community and commercial society ring true for you? What implications do you see
for theological reflection of on economic questions? Is “family” an appropriate
metaphor for directing our behavior in mass society?

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