Sunday, December 11, 2011

Seeking economic wisdom

Recently, I read two contradictory opinion pieces in the same edition of a newspaper. One called for Britain to continue its current austerity policies, confident that following in the footsteps of former Prime Minister Margaret Thatcher is the best policy to re-establish fiscal soundness and prosperity; the other advocated just the opposite, claiming that austerity is a failed policy.

The articles caught my attention for two reasons. First, newspapers and other modern media infrequently feature meaningful debate about important issues.

Second, the sharply divergent assessment of economic policies underscored that economics is as much an art as a science when it comes to prescribing which set of policies will lead to a desired outcome. If economics could provide specific policy guidance, surely nations would more consistently adopt policies consonant with that guidance to reduce unemployment, balance budgets, eliminate balance of payment deficits, and cure other economic ills. However, economists (like their cousins, investment advisers) are much better at analyzing past performance than at predicting future outcomes.

I read those articles a couple of days after reading Gov. Perry’s commentary on President Obama’s economic policies. Perry believes that the New Testament mandates capitalism with little or no role for government regulation of economic forces or resources (businesses, unions, environment, etc.).

The New Testament, indeed the Bible as a whole, is no more of an economics textbook than it is a science textbook. Neither subject attracted the attention of any of Scripture’s authors. Instead, the Bible offers principles by which we should shape economic policy.

The goals of a biblically rooted economic policy are clear: to promote abundant flourishing for all life. This requires both the fullness of peace (freedom, justice, and prosperity for all) and lifestyles congruent ensuring that life is sustainable.

The means of attaining those goals are less evident. For example, the Old Testament bans charging interest on loans. Christians for centuries adhered to that proscription, hypocritically borrowing money from Jews who would loan money to non-Jews at interest when no Christian (quite reasonably) would loan money with zero interest. From an economics perspective, interest is simply the cost of “renting” somebody else’s money. Today, I know of no Christian group that objects to loaning money at interest. However, the charging of excessive interest, known as usury, is illegal in most jurisdictions. The underlying moral principle is that exploiting people in a time of financial need is wrong.

What are other biblical principles that shape morally sound economic policy and activity?

2.    Limiting the amount of economic inequality transferred from one generation to the next. This motive underlies the Old Testament concept of a Jubilee year in which Israel was to return land to its original owner every fifty years. Then, as now, concentrating wealth across generations accelerates and magnifies the gap between rich and poor. Instead of a Jubilee year, practices such as heavy inheritance taxes and free public education for all are contemporary efforts to sustain a level playing field across generations.

3.    Rewarding individual effort and initiative as a means to generate income. The New Testament Book of Acts records a disastrous early attempt at socialism; one of the Pastoral Epistles warns that young widows should remarry or work rather than rely indefinitely upon the community’s generosity.

4.    Caring for the poor is a theme in both Testaments. Many people are poor for reasons beyond their control, whether natural disaster (often a famine in the Bible) or having been victimized by unjust proprietors or rulers (a constant theme in the prophetic literature). Consequently, providing a trustworthy social welfare safety net that guarantees a minimum standard of living, sometimes described as a preferential option for the poor, is a foundational premise of any economic system shaped by biblical values and principles.

5.    All wealth and property belong to God; people are merely God's stewards or tenants. This understanding denies that people have an absolute right to do what they will with their wealth or property (that right may serve useful legal purposes but is theological nonsense). Instead, being God's stewards or tenants emphasizes care for the earth (God's good creation) and for all living creatures (also parts of God's good creation), but especially humans (whom God created in God's good image).

These principles and values (which may not be an exhaustive delineation of relevant Christian ethics) give wide scope in shaping an economic system. By this standard, the United States’ capitalist system, like that found in most other countries, falls woefully short of the mark (i.e., is sinful).

Radical change seems improbable. But incremental change is possible. In deciding for which candidate to vote, in weighing policy alternatives, and in making personal financial decisions these five principles provide practical guidance that, if consistently followed, will establish a more just and therefore more perfect economic system.

1 comment:

Scoop said...

I very much doubt that Rick Perry has read the Old Testament-- some fundamentalists believe it is an obsolete testament. And I would like to see what verses he cherry-picks to support this bizarre claim.