{"id":6085,"date":"2009-10-28T05:54:14","date_gmt":"2009-10-28T05:54:14","guid":{"rendered":"http:\/\/blog.beliefnet.com\/jesuscreed\/2009\/10\/economics-at-the-jesus-creed-m-6.html"},"modified":"2009-10-28T05:54:14","modified_gmt":"2009-10-28T05:54:14","slug":"economics-at-the-jesus-creed-m-6","status":"publish","type":"post","link":"https:\/\/www.beliefnet.com\/columnists\/jesuscreed\/2009\/10\/economics-at-the-jesus-creed-m-6.html","title":{"rendered":"Economics at the Jesus Creed: Michael Kruse 8"},"content":{"rendered":"

\"WallStreet.jpg\"<\/span><\/p>\n

Today I’m departing some from offering basic economic concepts and interjecting a sociological element into our discussion.<\/p>\n

 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. <\/p>\n


<\/b><\/p>\n

Is family<\/i> a useful metaphor in thinking about economics systems? Is the Christian critique of capitalism, on the basis of family, a sustainable critique?<\/b> <\/p>\n

I don’t think it is and what follows tells why. I’m interested to know what you think.<\/p>\n

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<\/i> meant “household management.” The household was headed by the paterfamilias<\/i>. There are three elements to his authority according to M. I. Finley in “The Ancient Economy”:<\/p>\n


\n<\/p>\n

<\/p>\n

 <\/p>\n

Potestatas<\/i> – Power
\nover children (including adoptees), his children’s children, and his slaves.<\/p>\n

Manus<\/i> – Power over
\nhis wife and his sons’ wives.<\/p>\n

Dominium<\/i> – Power
\nover his possessions. (19)<\/p>\n

 This scheme applied to wealthy Roman estates as well as to common
\npeasant households, but the business of running an estate was more complex. Ancient
\nGreek moral philosophers offered practical instruction on household management,
\nparticularly concerning management of wives, children, slaves, possessions, and
\npolitics. (Similar household management instruction is found in New Testament: Eph.
\n5:21-6:9, Col. 3:18-4:1, 1 Peter 2:13-3:9, and Titus 2:1-15.)<\/p>\n

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

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

Modern “Household Management”<\/p>\n

It is paramount to see the shift of moving from the management of households<\/i> to the notion
\nof management of society as a household<\/i>.
\nEconomic activity in the ancient world was embedded in pyramidal structures of
\nkinship, patronage, and politics, with exchange playing a subordinate role. Modern
\neconomics certainly includes economization, but the central driver in our
\neconomy is exchange. Modern economies are incomprehensibly complex webs of
\nexchange involving an incalculable number of transactions directed by price as determined
\nthrough supply and demand. No one can stay on top of it all. Each of us
\nindividually has a miniscule impact on the economy. Some larger entities like corporations
\ncan have greater impacts. Institutions like the Federal Reserve Bank or the
\nfederal government can have a significant impact. But can anyone actually manage
\nthe economy in the sense of managing a household?<\/p>\n

Many Christians who distrust economists actually share these
\noikonomos<\/i> assumptions. It is said
\nthat we are stewards of creation but what does it mean at a societal level? “Economic”
\nstewardship in the Old Testament was a by-product of obeying the covenant.
\nJesus and other New Testament voices gave ethical instruction about
\nrelationships of people in face-to-face community but there is little guidance
\nfor managing an economy. The idea of some entity functioning as the oikonomos<\/i> of the economy is not in view,
\nyet this mindset is at least implicit in much of the ethical teaching we hear
\ntoday. Thus, many economists and Christian moralist agree there should<\/i> be an oikonomos<\/i>, it is just that the former believes the oikonomos<\/i> should be informed by
\nscientific rationalism, while the Christian believes the oikonomos<\/i> should be informed by Christian ethics … the family
\nmetaphor serving as a guide.<\/p>\n

Face-to-Face Community and Commercial Society<\/p>\n

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

Economist Paul Heyne distinguished between face-to-face
\ncommunity and commercial society. In face-to-face community, people know one
\nanother well. They know each other’s character, proclivities, and shortcomings.
\nThey care for each other. Modern families are face-to-face communities. It is
\npossible to imagine a few families living in some type of communal covenant. Commercial
\nsociety is what integrates face-to-face communities into a larger whole. The
\nentities of commercial society are incapable of treating people on a highly
\nindividualized basis. It is impossible for any person or entity to have sufficient
\npersonal knowledge of hundreds … much less millions … of people. Yet
\ncoordination and integration at this level is essential for a number of
\nreasons, not the least of which is illustrated by the pencil manufacturing
\nexample I gave earlier
\nin this series<\/a>.<\/p>\n

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

Several Christian traditions exhort us to forsake
\nselfishness and individualism for the sake of the common good. But imploring
\npeople to function more like family, to uncritically apply ethics of
\nface-to-face communities to societal decisions, and to seek the common good,
\nare inadequate. They do not sufficiently account for the lack of personal
\nknowledge societal institutions possess in relating to people at such an
\nindividualized level.<\/p>\n

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

 <\/p>\n

Conclusion<\/p>\n

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

I will have more that relates to managing economies in my
\nnext post on capitalism and economic systems. For now, what do you think? Does the distinction between face-to-face
\ncommunity and commercial society ring true for you? What implications do you see
\nfor theological reflection of on economic questions? Is “family” an appropriate
\nmetaphor for directing our behavior in mass society?<\/b><\/p>\n

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