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Theologians and Economists in Dialogue

By November 1, 2010 No Comments
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Discussions between theologians and economists can dissolve into a great mass of frustration and confusion. Since the subject matter often involves issues of public policy, like globalization, health care, recession, finance, workers’ rights, or corporate wrongdoing, it is tempting to compare these episodes to the dysfunctional dialogues between the Republicans and the Democrats in Washington. At best, we attribute the problems to a simple failure to understand the academic discipline of the other party. I think it is more common, however, to tend to overlook the limits of our own disciplines.

I’ll start with my own field, economics. We economists are fond of saying (frequently in introductory textbooks) that economics is just a science, an engine of analysis. Economists have no more purchase on the issue of how things ought to be than any other citizen would have.   Theologians are only offering the normative advice that the economists of the textbooks requested, but they don’t understand that they are taking sides in a scientific dispute within the economics community.   We seek advice on normative matters from social ethicists and even theologians, who have some expertise in that area. Tell us what social outcomes you want to achieve, and we can use our science to show you how to get there.

That’s for the textbooks. In practice, economists love to give advice on what ought to be done, and resist input even from elected policy-makers, let alone academic theologians. Embedded in mainstream economic theory (and in all the other flavors too) are assumptions about human nature: how people behave, what they value, what is worth pursuing, and what is the meaning of life. Most economists find these assumptions so natural and compelling that they don’t even seem to need discussing. It’s just how things are, and how they ought to be.

The mainstream assumptions are that people naturally pursue their own material advantage (or to stretch it, maybe their families’) without bothering much about anybody else. Society progresses as individuals pursue and achieve more of their personal desires and goals. Economic growth is always a good thing, because it enables people to achieve more of their goals, whatever they may be. Economic inequality is of no consequence as long as growth is making ever yone better off in absolute terms. These assumptions both drive economic analysis and inform mainstream economists’ policy preferences.

So when theologians come along and insist that distributional equality and ecological sustainability are more important than economic growth, the instinct of mainstream economists is to respond that, the theologians just don’t understand economics. If people want things like social insurance and clean air, they can use economic growth to buy them. But if people do not maximize their own wealth, they will be stuck forever in a society too poor in absolute terms to think about anything other than basic food, shelter, and clothing.

The failure of understanding here is mostly on the part of economists. They don’t understand that the theologians are only offering the normative advice that the economists of the textbooks requested, and they, the economists, don’t understand the normative dimension of their own scientific theories.

That leads us to the problem for the theologians. They don’t understand that by endorsing the importance of sustainability and justice, they are taking sides in a scientific dispute within the economics community. There are schools of heterodox economists who have long been working to move economic science off its individualist and hedonist foundations and on to more communitarian grounds. Because such theories are less amenable to being mathematized on the natural science model, they tend to be ignored by the professional mainstream. (Precise, quantitative forecasts are worth money.) So it is natural for most economists to marginalize theologians who favor heterodox economics.

What makes the matter even more contentious is that the theologians sometimes want to give these heterodox economic theories theological weight, even “confessional status.” By essentially calling mainstream economists heretics, theologians greatly and unnecessarily raise the stakes in this debate. No economic theory (or natural science theory either) should ever be given “confessional status.” Justice and care for creation are important biblical norms for Christians, but we have to be open-minded about how to achieve them.

Mainstream economists do the same kind of thing when they implicitly give scientific weight to the views of (a minority of?) theologians who endorse the norms of individualism and economic growth. By claiming that these normative positions have been validated scientifically, economists make exactly the mistake the textbooks warn of: confusing “is” with “ought.” The economists here are wandering into a theological dispute and taking sides without quite knowing what they are doing.

The debate over the Accra Confession is a contemporary example of these problems. The Accra document, endorsed by the World Alliance of Reformed Churches at its meeting in the capital of Ghana in 2004, aims at bringing a Reformed perspective to issues of international economic relations and economic development.   The world of the gains-from-trade theorem does not correspond to the real world of globalization.   The Confession’s characterization (in paragraph 9) of what “neoliberal economic globalization” espouses (which it then rejects as unjust in paragraph 19 and following) mixes normative (theological) and analytical (economic) statements: namely, the notions that “unrestrained competition, consumerism, and unlimited economic growth and accumulation of wealth is best for the whole world… [and that] the unrestricted movement of capital will achieve wealth for all….” This is sometimes called the ideology of globalism, as distinct from the economic (and social, cultural, and political) phenomenon of globalization.

The Confession’s authors make it much too easy for an economist to respond to their theological critique of market ideology by offering a mathematical proof of the gains-from-trade theorem (free international trade in competitive markets enriches both countries). Such a response is the natural instinct of an economics professor, but in this case it really misses the point. Most economists would not realize that, because they believe that they are not making any normative assumptions in the course of their proof. The gains-from-trade theorem can be part of a globalist defense of a market economy; this accounts in part for the interest of economists in this piece of theory. But to make such an argument, additional normative (social-ethical) premises are required. It is these premises that the authors of the Accra document want to challenge. While it undoubtedly is difficult to sort the basic worldview assumptions of the economic theory from its analytical conclusions, the focus here should be on the parts of neoliberal doctrine or globalism that have normative content.

A challenge to globalism based on economic analysis would take a different tack. It would point out that in the world of the gains-from-trade theorem there is perfect competition–a level playing field with no inequalities of economic power. This does not correspond to the real world of globalization. Such a challenge rests on the construction of an alternative, heterodox economic theory and its empirical validation. Though there are normative assumptions and worldview issues involved in this challenge, raising them is not a task for theologians unless they are also unusually well versed in economics. The sociology of the economics profession makes advocacy of such heterodox theories tough going.

Another dysfunctional tendency in both disciplines is to ignore problems that the other discipline thinks are important. Many theologians believe that economic inequality is a very important issue, especially as inequality in the U.S. and other western countries has increased over the last forty years. Economists tend to have very little to say about inequality, either its causes or its effects. Many of them think it is not important, and mainstream economic theory is ill equipped to answer questions about it. These two considerations are not unrelated, of course. On the other hand, the current economic crisis has raised many questions about business ethics that theologians seem reluctant to address. For example, when does a bank have a fiduciary responsibility to look out for its customers’ interests? Economic theory suggests that in competitive markets banks will act as fiduciaries because that attracts more customers, but expectations, mores, and legal standards in the real world seem to be changing rapidly. What are the appropriate moral norms?

As an interested lay observer, let me compare this situation to the dialogues between theologians and natural scientists. I see the origins of faith-and-science problems as being very similar to the faith-and-economics problem. In the past, faith-and-science problems seem to have arisen because scientists felt obliged (or were socialized) to adopt a set of normative naturalist assumptions that amounted to taking a position in a theological dispute. The theologians adopted heterodox scientific theories built on alternative normative foundations and gave them theological standing, but mainstream science found them very unsatisfactory. This has largely been resolved by the recognition of categorical distinctions that separate the disciplines, so that theologians are careful not to make scientific claims and scientists abjure easy resort to normative naturalism. For example, the academic discussions over climate change have been relatively fruitful because the scientific, cause-and-effect issues have been kept separate from the questions of economic distributional impact and appropriate public response. I do not think it is likely that the disputes between economists and theologians can be resolved in a similar way. This is because, unlike the natural sciences, the social sciences are inescapably normative because they deal with human behavior, and in particular how people treat each other. Natural and social scientists are all obliged to make some normative, worldview assumptions in the course of seeking explanations of the phenomena they are investigating. (What is worth investigating? What is a good theory?) But social scientists also have to reckon with the moral commitments and motivations of the people whose actions they are seeking to understand. This complicates the discussion with theologians because it is easy to confuse explaining bad behavior with excusing it.

Once we understand the limits of our own disciplines, we need also to understand what the other offers. Theologians and economists need to do more study of each other’s disciplines. Economists need to read what theologians have to say about social ethics, starting perhaps with a basic textbook, but going on to other books and articles by professionals in the field, written for other professionals. Theologians need to do the same with economics. Consult with knowledgeable friends about good things to read. Don’t only read the people you might agree with, but sample a variety of views. This is going to be difficult. Economists tend to perceive theology as an elaborate word game in which you have to guess which words are connected to which other words. They keep looking for a mathematical model that isn’t there. Theologians tend to see economics as a bunch of mathematical puzzles with no visible connection to any interesting reality.

Communication is important. Both economists and theologians need to be clearer. This often means beginning by acknowledging the concerns of the other side, and restating them so that everybody is clear that they have been understood. Then that concern has to be incorporated into the intellectual framework of the speaker. The concern has to be valued and examined, not ignored. We have to avoid demonizing the other side of the discussion, or setting up straw figures to be knocked down.

The gains-from-trade idea applies to academic specialties, too. Every academic discipline has its own specialties: questions it is adept at answering, and analytical methods it is skilled at using. One of the big ideas (maybe the big idea) in economics is that with specialization comes interdependence. When you specialize in your area of comparative advantage, you have to rely on others to supply the rest of what you need. Economists need theologians, and vice versa. But specialization and interdependence bring prosperity. We will all be better off.

John P. Tiemstra teaches economics at Calvin College in Grand Rapids, Michigan.