The Four: A Survey of the Gospels

Defending Constantine: The Twilight of an Empire and the Dawn of Christendom

From Behind the Veil: The Epistles of John

Deep Exegesis:The Mystery of Reading Scripture

Jane Austen
(A Biography)

Solomon Among the Postmoderns

The Baptized Body

1 & 2 Kings
Brazos Theological Commentary

The Promise Of His Appearing: An Exposition Of Second Peter

A Great Mystery: Fourteen Wedding Sermons

Deep Comedy: Trinity, Tragedy, And Hope In Western Literature

Miniatures & Morals: The Christian Novels of Jane Austen

The Priesthood of the Plebs: A Theology of Baptism

A Son To Me: An Exposition of 1 & 2 Samuel

Against Christianity

From Silence to Song: The Davidic Liturgical Revolution

Ascent to Love: A Guide to Dante's Divine Comedy

Blessed Are the Hungry: Meditations on the Lord's Supper

A House For My Name: A Survey of the Old Testament

Heroes of the City of Man: A Christian Guide to Select Ancient Literature

Brightest Heaven of Invention: A Christian Guide To Six Shakespeare Plays

Wise Words: Family Stories That Bring the Proverbs to Life

The Kingdom and the Power: Rediscovering the Centrality of the Church

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Economics: Pursuing Riches, again

Jim Rogers of Texas A&M writes:

“I’m not as certain as you are that it’s generally true that ‘If there’s one thing that Americans want, it is to be rich.’  This is, presumably, an empirical question, and so my armchair observations are certainly not to be preferred to your own. Nonetheless, while there certainly are people who are desperate to become wealthy – you can feel it in them when in their presence – my own sense is that most Americans seek merely to be comfortable. Most, I ‘think,’ are happy with the house that they live in, with the car that they drive & etc. Contrary to the evangelical bugaboo that lots of folks make an idol out of their career (my suspicion is that we like to talk about that “sin” because it allows us to avoid talking about real sins) it seems to me that most parents spend lots of time with their kids, and with their spouses & etc. (Indeed, it seems to me that more people miss church for child- and family-related activities than they do for income-related activities.) That said, it could be that I travel in rarified circles (e.g., parents who travel a hundred miles so their children can participate in three-day swim meets in which they  watch their children swim competitively for maybe a grand total ten or 15 minutes over the weekend).”

Economics: Distributism and Development

In his book on the Peruvian village of Pomatamba, Adam K. Webb applies the much-mocked Distributism of GK Chesterton and Hillaire Belloc to issues of globalization and development.  In an interview available on the Intercollegiate Studies Institute web site, he answers a question of whether he is a liberal or conservative this way:

“In the usual sense, neither. Obviously I’m concerned with social justice, with a fairer distribution of the world’s goods and with relieving poverty. I think most so-called conservatives are too enamored of an unfettered market. But I’m also a traditionalist, in that I think modern society has lost sight of the time-tested wisdom of the old civilizations, about how to live and what to demand of people. Liberals tend to neglect those foundations. And the radical left, even when it doesn’t cause carnage like the Shining Path did, tends to concentrate power in large bureaucracies. The story of Pomatambo moves me in part because I think communities like it still cling to what more prosperous parts of the world have largely lost: a sense of duty, of small decencies, of belonging. I’d like to see these communities prosper while keeping the best of what they have. I’m encouraged by one fact. My blend of traditional values and social justice may seem odd on the usual political spectrum. But it’s pretty close to what the rural poor in villages like this one want themselves. I’d even go so far as to say that, if you took the pulse of ordinary people in much of the world, you’d find more sympathy for this than for some of the fashionable ideologies of the last century. Maybe we need a political realignment in many countries to reflect that.”

Economics: Forced Free Market

In The Quest for Community, Robert Nisbet – no wild-eyed lefty he – argues, following Karl Polyani, that “Laissez faire . . . was brought into existence.  It was brought into existence by the planned destruction of old customs, associations, villages, and other securities, by the force of the State throwing the weight of its fast-developing administrative system in favor of the new economic elements of the population.”

He adds, “There is, indeed, a sense in which the so-called free market never existed at all save in the imaginations of the rationalists. . . . Most of the relative stability of nineteenth-century capitalism arose from the fact of the very incompleteness of the capitalist revolution,” an incompleteness that left much of the pre-capitalist order intact.

Economics: Symbiosis

Jan de Vries comments on the symbiotic relationship between state-building and economic development in the early modern period:

“Looking back, one cannot help but be struck by the seemingly symbiotic relationship existing between the state, military power, and the private economy’s efficiency in the age of absolutism. Behind every successful dynasty stood an array of opulent banking families. Access to such bourgeois resources proved crucial to the princes’ state-building and centralizing policies. Princes also needed direct access to agricultural resources, which could be mobilized only when agricultural productivity grew and an effective administrative and military power existed to enforce the princes’ claims. But the lines of causation also ran in the opposite direction. Successful statebuilding and empire-building activities plus the associated tendency toward concentration of urban population and government expenditure, offered the private economy unique and invaluable opportunities to capture economies of scale. These economies of scale occasionally affected industrial production but were most significant in the development of trade and finance. In addition, the sheer pressure of central government taxation did as much as any other economic force to channel peasant production into the market and thereby augment the opportunities for trade creation and economic specialization.”

Economics: Enforcing laissez-faire

Karl Polanyi (The Great Transformation) notes, “There was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course.  Just as the cotton manufactures – the leading free trade industry – were created by the help of protective tariffs, export bounties, and indirect wage subsidies, laissez-faire itself was enforced by the state.  The thirties and forties [of the 19th century] saw not only an outburst of legislation repealing restrictive regulations, but also an enormous increase in the administrative functions of the state, which was not being endowed with a central bureaucracy able to fulfill the tasks set by the adherents of liberalism.”

Liberals believed “legislation could do nothing directly, except by repealing harmful restrictions,” but government could do a lot: “the utilitarian liberal saw in government the great agency for achieving happiness.  In respect to material welfare, Bentham believed, the influence of legislation ‘is as nothing’ in comparison with the unconscious contribution of the ‘minister of the police.’”  Economic success depended on inclination, knowledge, and power, and the latter two would be provided by the state: “It was the task of the executive to collect statistics and information, to foster science and experiment, as well as to supply the innumerable instruments of final realization in the field of government.”  In short, “Bethanmite liberalism  meant the replacing of Parliamentary action by action through the administrative organs.”

And more broadly, “The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism.”

Economics: Choice Architects

Nudge: Improving Decisions About Health, Wealth, and Happiness, by Richard Thaler and Cass Sustein is about choice architecture: “A choice architect has the responsibility for organizing the context in which people make decisions. . . . If you design the ballot voters use to choose candidates, you are a choice architect.  If you are a doctor and must describe the alternative treatments available to a patient, you are a choice architect.  If you design the form that new employees fill out to enroll in the company health care plan, you are a choice architect.  If you are a parent, describing possible educational options to your son or daughter, you are a choice architect.”  If you work at a cafeteria or retail store, your choice architecture is reflected in the arrangement of the goods you want to sell.

One basic principle of choice architecture is that “there is no such thing as a ‘neutral’ design,” which can be translated as “everything matters.”  Thaler and Sustein cite an example from men’s rooms at the Schiphol Airport in Amsterdam: “There the authorities have etched the image of a black housefly into each urinal.  It seems that men usually do not pay much attention to where they aim, which can create a bit of a mess, but if they see a target, attention and therefore accuracy are much increased.”  ”If a man sees a fly, he aims at it,” says Aad Kieboom (real name!), the economist who designed the Schiphol expansion.  It works: the “etchings reduce spillage by 80 percent.”

Economics: Capitalism as cultural system, 2

Weston Hicks responds to my post on Joyce Appleby’s book on the history of capitalism:

“The state used to be a tool of the powerful to entrench themselves and press their advantage, but Christendom transformed it into an arbiter of fair play, unleashing the dominion-taking potential of everyone instead of only the entrenched.

“In turn, it also transformed dominion-taking itself, from oppressive to service-oriented. Now that everyone’s endeavor is in constant danger of being surpassed by someone else’s, bosses must serve employees rather than coerce them. Power is now, by consequence of good law, used for service-of-others instead of self-service. We increase ourselves by seeking the interests of others (consumer, employee) first.  It’s never existed in any ‘pure’ form, but welcome to the fallen world and the powerful are still on the hunt for ways to press their advantage.

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Economics: Capitalism as cultural system

Joyce Appleby begins her The Relentless Revolution: A History of Capitalism with a discussion of the definition of her subject.  Is capitalism an expression of a basic, immutable human nature (Smith: everyone exerts “uniform, constant, and uninterrupted effort . . . to better his condition”)?  Is it exploitation, the seizure of the means of production from farmers by the new lords of production, and the confinement of the rest to the status of wage laborers (Marx)?

Neither.  Following Weber more than Smith or Marx, Appleby argues that capitalism is not the natural form of human enterprise, nor fundamentally as an economic system, but a “cultural system” that took form in seventeenth-century England.  Through an thorough examination of pamphlet literature of that period, she was able to trace the development of new views of human nature, which amounted to a shift from Calvinist man to economic man.  Capitalism expanded as England did (she nicely notes that for much of the world capitalism, like English, is a second language).

She describes the cultural system of capitalism this way:

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Economics Uncategorized: Conservatism and the Market

Kinneging points out the ambiguous relationship that traditional conservatism has often had with the market: “No conservative will deny that a system of mutual provision of services, based on a range of evil affects residing within man – which are further inflamed by the unrestricted operation of that system – ‘works,’ in the sense that it maximized utility.  Unlike critics from the left, conservatives do not believe that the market fails when measured by its own standard of success: utility maximization.  Conservative criticism is not about whether the market lives up to its promises, but whether the market’s promises are necessarily beneficial.  Desire – or ‘preferences,’ as they are not called – are a fundamental principle of the market that is not open to question in the market philosophy.  To conservatives, on the other hand, desires are the core of the problem.  To be sure, many conservatives are strong advocates of the market economy, beginning with Burke.  But conservatism, unlike many market liberals, are also well aware of the limitations and dangers of the market.”

Economics: Dead Capital

In the “how other people live” category: Hernando de Soto (The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else) argues that the key obstacle to Third World prosperity is the invisibility of their assets, and the assets are invisible because property rights are in chaos.  Poor people in poor countries have a lot of assets and they’re worth a lot, and poor people in poor countries work hard and creatively.  But their assets don’t function as capital because they are not legally secure.

He sites some stunning statistics: “In Haiti . . . 68 per cent of city-dwellers and 97 per cent of people in the countryside live in housing to which nobody has clear legal title.  In Egypt dead-capital housing is home for 92 per cent of city-dwellers and 83 per cent of people in the countryside.”

Cumulatively, Haiti’s poor have a lot of wealth:

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Economics: Dead Aid

Over the past sixty years, writes Dambisa Moyo (Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa), Africa has received over $1 trillion in aid.  Study after study concludes that it has had minimal, or even negative effects on Africa’s economies: One study finds that there is no impact on growth, another that aid is actually inversely related to savings, another that aid is used on consumption rather than investment.  ”Over the past thirty years, the most aid-dependent countries have exhibited growth rates averaging minus 0.2 percent per annum.”

The culprit, she says, is corruption: “aid is one of [corruption's] greatest aides.”  She describes the cycle of aid:

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Economics: Money-Blind

Gifts blind the clear-sighted and subvert justice (Exodus 23:8).  In context, that’s statement about bribery, and the word used for “gift” here is almost invariably used for bribes of one sort or another (Deuteronomy 10:17; 16:19; 27:25; 1 Samuel 8:3; 1 Kings 15:29; 16:8; etc.).

Occasionally, the reference seems a bit broader (cf. Psalm 15:5), and in any case, the principle holds even for those who are not judges and princes: Money and promises of money blind us to injustice, and concern for our self-interest can lead us to subvert justice in our economic, social, and other dealings.

We who are rich and have a lot of interests to protect are particularly susceptible to blinding “gifts.”

Economics History: Medieval economics

Henri Pirenne, in his Economic and Social History of medieval Europe, describes the regulation of economic life in medieval towns during the twelfth and thirteenth centuries. Pirenne is admittedly old news, and perhaps more recent studies have corrected some of his claims.

The town government had two main aims: “publicity of transactions and the suppression of middlemen.” Later, Pirenne adds that economic regulations in the towns were “governed by the spirit of control and by the principle of direct exchange to the profit of the consumer.”

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Economics: Bad Samaritans

Ha-Joon Chang argues in Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism that highly developed economies impose unfair and hypocritical demands on developing economies.  In particular, the nations that control the international trade and monetary agencies require that developing economies open their markets to imports, drop or lower tariffs, and basically structure their economies after the image of developed free-trade economies.

This is unfair, Chang argues, because developing economies simply cannot compete.  Koreans don’t have the technical skills to compete in an open computer market, say, with American or Japanese companies, and if the government doesn’t protect Korean companies in some fashion they will never have a chance to develop those skills.  Trade barriers are necessary “training wheels” for developing economies, keeping them profitable until they are ready to compete in a global marketplace.

More tellingly, Chang argues that these demands are hypocritical, since every developed economies did precisely what developing economies are doing when they were in the early stages of development.  American and European companies developed behind the protective barriers of trade restrictions and tariffs until they were able to flourish in an open global market.  Chang asks that the same courtesy be extended to immature economies today.

Economics History: Byzantine economics

Economics: Tight Fists, Open Hands

David L. Baker’s recent Tight Fists or Open Hands?: Wealth and Poverty in Old Testament Lawis a thorough and judicious introduction to the Pentateuch’s teaching on economics.  The book has a limited scope.  Baker largely ignores the contemporary economic situation, and gives comparatively little attention to recent works in theology and economics, and does not go into detail on prophetic texts.  He focuses instead on economic texts in the law, and compares Israel’s economic regulations to those of surrounding Ancient Near Eastern peoples.  His large topics are land and property, marginal groups, and justice and generosity.

He sticks close to his texts.  He recognizes, for instance, that the law does not outlaw slavery outright, but instead “establishes various principles to ameliorate the condition of the poor and needy, emphasising the individual worth of every human being and treating slaves as persons rather thyan property.”

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Economics: Merchants

Angeliki E. Laiou has another revealing article in the Wealth and Poverty volume cited earlier.  She notes the regular warnings and even condemnations of commerce in the patristic literature, and goes on to examine medieval and Byzantine hagiography for the same themes.  She is surprised to find a fairly positive view of merchants.  

Saints use the marketplace for their charitable work – selling produce to raise money for the poor, securing loans which the poor then use to pay rent or buy necessities.  The lives of the saints also celebrate cities for their commercial dynamism: Nicaea in 886 is “full of all good things, which attracts those who deal in money/merchandies, for it well placed for commerce.”  Trebizond has “very numerous and wealthy merchants.”  Pious professional merchants appear with some frequency.

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Economics: Poverty and Splendor

An article by A. Edward Siecienski (in Wealth and Poverty in Early Church and Society (Holy Cross Studies in Patristic Theology and History)) raises the question of the balance between liturgical splendor and poverty relief in the early church.  He points out that even John Chrysostom, who thundered so vigorously against the exploitation of the rich, preached in a cathedral in Constantinople and paraded the city behind silver crosses he had received as a gift from the empress.

Virutally no one, even the most severe ascetic, said that the use of gold and silver and marble was inherently wrong.  Jerome did not “blame” people who built churches with marble, large columns with gold capitals, silver doors and jewel-crusted altars: “Everyone must follow his own judgment.”  But he went on to tell his friend Demetrius that his particular calling was to “clothe Christ in the poor, to visit Him in the wick, to feed Him in the hungry, and to shelter Him in the homeless.”

Chrysostom expressed this “priority of charity over liturgical splendor” in similar Christological terms in a sermon on Matthew:

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Economics: Economies, Advanced and Primitive

Christopher Caldwell ends an intriguing article on William Bagehot (Weekly Standard, 12/22) with this: “To be blunt, credit is successfully reestablished when financial elites say, ‘When.’  Credit is close to a synonym for the mood of the ruling class.  To say an economy is based on credit is to say it is based on animal mysteries.  Glamour, prestige, elan, sprezzatura, cutting a figure . . . that is what the economy is made of.  It is a rather terrifying thought.  Viewed as Bagehot viewed it, from the perspective of a central bank in crisis, an advanced economy looks an awful lot like a primitive economy.”

Economics: Markets and People, II

Reader Jay Horne writes in response to my earlier post quoting Charles Morris, “After working on mechanical trading systems for the past several years (and having some success), I would suggest that it is the lumpiness, the human factors, that exactly create the opportunity for success with a mathematical system. I believe Mr. Morris has it exactly backwards. And mathematics is too broad, we’re talking about repeatable, identifiable trades that have a statistical edge of some sort that can be exploited. It is human greed, fear, and folly that create such opportunities, not some completely random, costless, gaseous system. Humans, on the edge of their emotional range, become remarkably predictable.”

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