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Faith and Politics After Christendom
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Comment: Doing the Right Thing
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Review: No Longer Strangers
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Interview with Fr Mariusz Dabrowski: Meet the neighbours
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Questions & Answers: Reader survey responses
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Review: Mark: Gospel of Action
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Bible Study: The Common Good
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Difficult Conversations: Let's talk about tax...
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New Resource
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In his letter to the Philippians, Paul writes, “Each of you should look not only to your own interests but also to the interests of others” (Philippians 2:4 (NIV)). In his 1776 book, The Wealth of Nations, Adam Smith, commonly regarded as the founder of modern economics, states, “I have never known much good done by those who affected to trade for the common good”.¹ Is there a contradiction between Paul – and, indeed, Jesus – and mainstream economic theory? This is a question I have struggled with for some time – since becoming a Christian in 1981 and then beginning to study economics in 1983.

Economics
and the Common Good

ON THE ONE HAND, in moral philosophy we have an emphasis, perhaps going all the way back to Aristotle’s ethics, that the right thing to do is to pursue the general or common good. This seems to chime with the Christian emphasis on “putting the other first”. On the other hand, economic theory tells us that most people most of the time put themselves first and that such self-interest can produce socially desirable outcomes. In fact, we can tell at least three stories about the relationship between Christian love/common good and economic self-interest.

STORY 1: Greed-ridden utilitarian economics
According to this view there is certainly a contradiction between economics and the common good. Jesus and Paul have been proven right and that Smith and company (all the way up to “Reaganomics” and Mrs. Thatcher’s “There is no such thing as society” ²) are a bunch of godless upstarts. This view argues that selfish economic agents expressing themselves in the limitless pursuit of more consumption and more profit will not realise the Enlightenment’s goal of social perfection. The conclusion is that what we are in fact witnessing today is collapse in the form of individual stress and environmental over-heating. It might well be asked why today’s record levels of income and employment in the UK are paralleled by major growth in depression and other mental illness.

The London-based political philosopher John Gray provides a striking example of someone who has in disillusionment turned against the market economics’ emphasis on individual choice and limitless growth.³ Interestingly, he sees the fatal flaw in contemporary confidence in the market economy and growth without limits as having arisen from a secularism which has adapted the Christian idea of heaven and progress but ditched any concept of original sin.

Evaluation of this story:
Yes, mainstream economics (especially some of the often unnuanced stuff taught at A level and to first year undergraduates) can be pretty utilitarian (assuming that individuals want ever more and are always “rational”, i.e. they make consistent choices regarding that consumption). However, Smith’s original vision was a good deal more subtle. Smith gave a high place to virtue and benevolence, “How selfish so ever man may be supposed there are evidently some principles in his nature which interest him in the fortune of others”.⁴ Moreover, for him the whole point about the market economy was that the mass of individuals and firms would be “guided” to an outcome which would approximate to the “common good”.

Consider the example of a crisis in the Middle East leading to a reduction in oil supplies to the West. As prices rise households and families here in the West will be inclined either to economise on fuel usage or to switch to cheaper alternatives. In the longer term, the higher oil price will promote greater exploration for alternative fuel supplies or competing energy technologies. The critically important point is that none of this requires central direction or a government plan. And Smith went so far as to describe the way in which people respond to the market price as an “invisible hand”. It seems, albeit in a deist sort of way, Smith was reflecting his Scottish Calvinist background.

STORY 2: Humanity liberated from silly scholastic notions
I have met plenty of clergy and other Christians who subscribe to Story 1 and think market economics greedy and godless. That said, there are other views of the economics-Christianity relationship. What I put forward here as Story 2 portrays the idea of the common good as a largely unworkable medieval or scholastic notion. The common good, regarded as “the sum of those conditions of social life which allow social groups and their individual members relatively thorough and ready access to their fulfilment”,⁵ along with related ideas such as the promotion of a “just price” and a ban on “usury”, could only be applied as long as Western Europe had one church and that church had considerable political and social authority. However, the downside of such medieval scholasticism and Catholicism was (a) practically zero economic growth⁶ (which was no environmentalist paradise, given recurrent famines) and (b) a quenching of human creativity. Luther and Calvin were not political radicals but their emphasis on how the individual sinner could get right with God helped to smash up that over-arching church and its social control. Through the resultant gap slipped the modern market economy.

Evaluation of this story:
We cannot reverse history; we cannot go back to pre-1500 Christendom. However, the supposed antithesis between the old notion of the common good and economic theory since the 18th century may not be complete. If one holds to a strong theology of Providence and common grace⁷ – a loving God makes his rain fall on the unrighteous too – then it is possible to believe that God uses the market mechanism (Smith’s “invisible hand”) to achieve “least worst outcomes” in a Fallen world.

STORY 3: Economics and the common good held together in tension
I suppose at various times in the last twenty years I have held to either Story 1 or Story 2. But is either completely adequate? Where are we at? If we are fortunate enough to live in the West we today enjoy the fruits of two centuries of economic growth, unprecedented in human history. Even in the developing world, globalisation post-1950 has been associated with generally rising living standards, higher nutrition and literacy and less use of child labour, etc.⁸ True, we still face the moral scandal that about one billion people must attempt to survive in the direst form of extreme poverty and a further billion are not far from that particular miserable poverty line. That all said, the proportion of humanity in such poverty has never been lower so the market mechanism and globalisation have accomplished something. And yet, can we simply rely on self-interest full stop?

CONCLUSION: The need to hold to both economic self-interest and the common good.
Utilitarian economics, as taught to generations of students, “works” to an extent. Neither Smith himself nor mainstream economic theory post-1950 were naïve enough to say that the invisible hand would always work well; there are a number of notable exceptions. Many readers will be all-too-familiar with the problems created by attempts to mimic market-like mechanisms (e.g. through targets and bonuses) in areas such as health care and education which were previously self-regulating professions.⁹ However, in general it does yield the desired outcomes so, for example, when governments determine to reduce carbon emissions they will rely not on moral exhortation but the price mechanism. Instead of simply telling people to, say, fly less or drive smaller cars, certain taxes will be increased. Testament to the pervasive influence of market mechanisms is given by the fact that in 2007 Northern Ireland’s largest political party proposed a system of cash fines against potentially rebellious elected representatives!

At the same time, it does seem that Smith himself assumed that, in addition to the pursuit of self-interest, benevolence as guided by a strong moral conscience formed part of human motivation. Smith was right to assume this, even if his moral philosophy did perhaps rely too much on a sub-orthodox theology. Smith was taught moral philosophy by the Saintfield-born cleric Francis Hutcheson, viewed by some of his Ulster Presbyterian colleagues as having a heretical confidence in fallen human nature!¹⁰ Adam Smith was of course theorising in the 18th century, not the early 21st, and so he could afford to take for granted a pervasive Christian influence throughout society. We cannot do that.

About fifty years after Smith, another Scot Thomas Chalmers, who was both a great theologian and economist, saw the excellence of a working market economy as just one more evidence of the divine order in the world; “Political economy is but one grand exemplification of the alliance which a God of righteousness hath established between prudence and moral principle on the one hand and physical comfort on the other”.¹¹ The question has been asked whether his “Christian political economy”, with its natural theology of confidence that for society the price mechanism was the God-given equivalent to what gravity was for the cosmos, was proofed against the impact of catastrophic events.¹²

It is notable the degree to which, historically, economics and theology have informed one another. Karl Marx sarcastically noted how many economists around 1800 were also “parsons” (apart from Chalmers, also Thomas Malthus and Richard Whately, later Anglican Archbishop of Dublin).¹³ For example, B. Hilton sees the Irish Famine of the 1840s as drastically reducing Christian confidence in the market. Though, whether the calamity of the famine was really caused by market economics is unclear. Hilton also intriguingly argues that those who held to Calvinist and post-millennial theology were much more likely to believe that the market could deliver the common good whereas those evangelicals who from the 1830s onwards were opting for pre-millennial or proto-pentecostal approaches were inclined to favour government intervention to promote the common good.¹⁴

I have come to feel that the bottom line in this Fallen world is that we need to use the profit motive, but at the same time we cannot neglect society’s moral capital because the absence of some moral constraints that motivate will not produce anything approximating to the common good. Indeed, a high degree of trust is necessary to allow markets to work.¹⁵

Finally, back to the apparent contradiction – between the Apostle Paul (writing to the Philippians) and Adam Smith – I noted at the start of this article. Paul was not saying neglect your own interests, but look to the interests of others as well as to your own. After all, did not Jesus tell us to “love your neighbour as yourself”? (Matthew 22:39, my italics). Similarly, Smith probably meant to recommend enlightened self-interest constrained by conscience and ethical standards, rather than rampant selfishness. The challenge for modern economists is to realise that they cannot be morally blind and neglect ethics. The challenge for modern Christian leaders is to reconnect to the heritage of thought created by men such as Chalmers and realise that they cannot be economically naïve. Whilst they are entitled to make statements about economic matters these need to be informed by a sound understanding of economic theory and statistics.

DR ESMOND BIRNIE is Senior Lecturer in Economics at Queen’s University Belfast and was a Member of the Northern Ireland Assembly 1998-2007.

1 Smith recently displaced Sir Edward Elgar on Bank of England £20 notes!

2 Mrs Thatcher’s (in)famous response to a question on Jimmy Young’s radio show (in context she probably did not mean what many have taken her to have said).

3 See J. Gray (2004), Heresies Against Progress and Other Illusions, Granta Books, London.

4 Smith’s other great book The Theory of Moral Sentiments (1759).

5 See M.Velasquez, C Andre,T Shanks and MJ Meyer (1992), “The Common Good”, Issues in Ethics, also available on the web at the Markkula Center for Applied Ethics.

6 The economist Angus Maddison has “guesstimated” that there was next to no growth in average income per head (our modern concept of GDP per person) from the time of the Roman Empire through to about 1750.

7 Apart from his particular blessings which lead to the salvation of some, he showers down more general blessings on all – the degree of social order, cultural progress and prosperity which we can enjoy even in this sinful world is this common grace (W. Grudem (1994), Systematic Theology, IVP, Leicester, pp. 657-665).

8 For contrasting views of globalisation see M. Wolf (2005), Why Globalization Works, Nota Bene, Yale, and J.E. Stiglitz (2002), Globalization and its Discontents, Penguin Press, London.

9 Similarly, where cash payments have been introduced for blood donations the quality of the blood given has actually declined. See S.D. Levitt and S.J. Dubner (2005), Freakonomics A Rogue Economist explores the Hidden Side of Everything, Harper Collins, New York, pp. 23-24).

10 J. Barkley (1992), “Bottled in Ireland Uncorked in America”, in “Free Thought in Ireland”, Fortnight Supplement, no.297, pp. 3-4.

11 Chalmers writing in 1833, cited in B. Hilton (2006), A Mad, Bad and Dangerous People England 1783-1846, Oxford University Press, Oxford, p. 337.

12 For Christian political economy see M. Atherton (1992), Christianity and the Market, SPCK, London pp. 99-109.

13 B. Hilton (1988), The Age of Atonement The Influence of Evangelicalism on Social and Economic Thought 1785-1865, Clarendon, Oxford.

14 Hilton (1988) op. cit., 176.

15 F. Fukuyama (1995), Trust, Hamish Hamilton, London. The sorry state of Russia since 1992 exemplifies that freer markets will not work well unless there is an adequate cultural and moral background though this is in no way to recommend a return to the 1917-1992 regime!

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