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Aug 17, 2009

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LeVon Smoker

Since you mentioned William Cavanaugh, Here is a link to a talk he gave at the Ekklesia Project's 2009 gathering. I think he nuances some of the things you critique, but doesn't retreat from his own basic critiques of the free-market ideology.

BTW, I wouldn't call him "mainline." He's a Roman Catholic with some Mennonite influences.

Michael W. Kruse

Thanks LeVon. In the opening post I noted that I would be targeting Mainline and Roman Catholic teaching as they frequently share many qualities. That was my reason for including him here.

I'm just now reading Cavanaugh's book.

Jesse Blocher

Another item which you've touched on in a past post but not developed fully is the idea of interest vs. usury, which is another area of theologians and economists speaking past each other.
Thomas Aquinas (I think?) and many of his contemporary Middle Ages theologians deplored usury in all of it's forms, and rightly so. In most cases, it was a mechanism for exploiting people in need when they desperately need the money for food or shelter. Usury, I believe, was originally formulated as the charging of any interest whatsoever on a loan, but has since been reformulated as "too much" interest on a loan.
Most economists look at general situations where there is on one hand, a person or people with excess cash for a given time, and on the other, a person who has a useful idea but lacks cash. Interest is simply a way of compensating the owner for his asset as well as for the possibility that the money may not be repaid in full. That is why banks are discussed as "intermediaries" which basically (in their more vanilla forms) take peoples deposits which otherwise would be just sitting there and put the money to good productive use. In this case, money and interest are a mechanism for innovation, trying something new, and allowing an innovative entrepreneur to fund a clever idea. In my view, this is a gift, because an innovative startup is to me no less creative than the most gifted musician or artist, with commensurate benefit to society. Much of our current lifestyle (the laptop I'm using, blogs, the internet itself) is only available due to innovative risk taking supported by interest-bearing investment.

To the extent that the Church is concerned with usury, we should be advocating and leading the formation of community banks which can perform the same function of loaning to low income people in need rather than taking on the big banks. By offering loans to people in need at lower interest rates, we simply take the big banks customers. Check out www.natfed.org.

Bob Smietana

Hi Michael:

You hit the nail on the head. Most theology about economics is all about distribution, and ignores the issue of scarcity. If we lived in Eden, where we could get all we wanted for free, distribution would be the main problem. But that's not the case, so resources have their limits.

Dennis Sanders

I've never been the smartest guy on the block, but I've always scratched my head when I heard fellow pastors talk about the "myth of scarcity" which contradicted my courses in simple economics.

The fact is scarcity simply means that a resource is finite. A society decides how this resource which is finite will be allocated. This isn't about trying to keep the little guy down, it's just about how to best deliver the goods, so to speak.

Good series so far. I'm look forward to the rest.

JMorrow

Michael,

I think you've summed up alot of my concerns about the conventional wisdom on economics making its way around theological circles. I wonder how they contend with references to very real situations of scarcity that are evident within Scripture and in the context of the ANE world.

Also while I would not at all rule out economic implications of the concept of God's abundance, I'm concerned that with an skewed theology we are subsuming God's abundance under the rubric of our own economic wellbeing, however well intended. God's abundance does have dimensions beyond the economic.

However I have a question for you as one who is defending the practice of economics theologically. What do you make of instances in which scarcity has indeed been purposely created? I think of food crises (like the one in Niger back in 2005) that have been generated more by cartels aiming to control prices than by any lack of food commodities. All things considered, the theologians you cite can rightly point to the abuse and weaponization of scarcity. As the global economy has grown so to has the destruction power that such groups can wield over our world.

Bob Smietana

Michael

Do theologians and prosperity gospel preachers make the same mistake--looking for a spiritual answer to an economic problem.

My take on theologians is that they are right when they point out problems in distribution -- when there are vast gaps between rich and poor--but wrong when trying to address those gaps--that the only way to get more money into poor people's hands is to take it from other people. Not much time is spent on how to help poor people develop the ability to make more money.

Michael W. Kruse

Jesse

An interesting comment. :-)

I just read some history on the development of interest and usury recently. Don't know that I'll get into that in this series but it really is interesting stuff.

I know a group of folks here in Kansas City that are exploring alternative means to get financial services to the poor. It is a challenging task.

Bob

"You hit the nail on the head."

I do that about half the time. The rest land on my thumb. Thanks.

Dennis

"Good series so far. I'm look forward to the rest."

Thanks. I hope I'll be able to earn your interest for the rest of the series.

Michael W. Kruse

JMorrow

You are absolutely right. Abundance frequently is blocked by manipulation of economic structures by people with power. I'm about to move into a discussion of markets. "Free market" means all parties to transactions enter into them without coercion and without fear of arbitrary violation of their property rights.

Over the last thirty years or more, no country with democratic government and relatively free markets has experienced a famine. Cartels block markets from functioning and that indeed can generate all kinds of suffering.

I would agree these theologians that abundance is not well shared. Where I would disagree is that it is primarily an issue of a funds transfer. You can pour all the water you want on plants planted in rocky soil; they still won't grow well. You need to treat the soil from which the plants grow and then add water. The way to spread the abundance is for poor nations to develop the basic institutions and values (the soil) that allow for prosperity, and then integrate them into (water them) dynamic system of internal and international trade.

Michael W. Kruse

Bob

"Do theologians and prosperity gospel preachers make the same mistake--looking for a spiritual answer to an economic problem."

That is a fascinating comparison. I need to think on that some more.

PG preachers are saying that abundance is bestowed by God absent any participation in our own provision. Our lack of participation in God's abundance is our lack of faithfulness ... a spiritual deficiency.

Mainline theologians are saying that abundance is bestowed by God absent any participation in our own provision. Our lack of participation in God's abundance is our lack of sharing ... a spiritual deficiency.

Very interesting ...

Travis Greene

I get the gist of this series so far:

Mainline theological perspectives are to economics what creationism is to science. Wooden literalism and lack of attention to context lead to inappropriate applications of the biblical text.

Is that a fair summation?

But are not the creationists, in their wrongheaded way, rightly recognizing that there is a real danger in uncritical acceptance of science, the sometimes underlying and pervasive materialist and atheistic philosophy?

So isn't it possible that there is a valid critique of prevailing economic theory? What is the appropriate use of the Bible and theology in economic discussions? Because the idea that the Torah, the prophets, and the New Testament are simply not applicable because the modern world is oh so complicated is disturbing to me.

Michael W. Kruse

"rightly recognizing that there is a real danger in uncritical acceptance of science, the sometimes underlying and pervasive materialist and atheistic philosophy?

So isn't it possible that there is a valid critique of prevailing economic theory?"

Absolutely. I'm crawling toward that discussion. :-) What I coming to requires an unfolding of a couple more issues.

The issue isn't that the scriptures are inapplicable. I think it is more akin to asking what do the scriptures tell us about genetic engineering? A great deal, but very little directly. I think Scripture has a great deal to say to us directly in our face-to-face communities but the application to mass society is foreign to biblical context.

sam carr

This promises to be a most useful discussion!

LeVon Smoker

Doh!

Here is the link to Cavanaugh's talk:
http://ekklesiaproject.podbean.com/2009/07/18/grounded-creation-and-economic-crisis/

Jim

“God put macroeconomists on earth not to propose and test elegant theories but to solve practical problems. The problems He gave us, moreover, were not modest in dimension.” Greg Mankiw (impishly stolen from an actuary posting on my blog, thief I am).

Michael Kruse, nice job in summary. And an even better job in contrasts.

The ketch full of distributionist focus makes you think that Christian economists have gone fishing with their nets on the wrong side of the boat, and hog-hauled a load they can’t distribute. As if a Brinks truck blew up at the feeding of the 5,000, flinging fishy fragments of green into unlimited distribution with faces of Jefferson.

Stunning how texts originating in the ancient near east, bearing all the marks of famine ad nauseam, incorporating narratives of slaves making bricks without straw (think of the Pareto effect there!), and foiling on propositions of ecological curses and starvation, brokered by histories of the nation proving these curses – can lay foundation to pollyannaish theology.

Where I went to school, Milton was god. Not the poet. Friedman.

I’m far from Catholic, though my catholic sensors view Pope Benedict’s encyclical “Caritas,” as fair (but imperfect) Christian realism – grounding theology in economic solidarity with moral conservatism, linking dignity of labor to marriage, nodding elvishly to the redistribution of wealth (but not for stupid non-scarcity reasons), and decentralized governance. Weberian, Benedict’s not. But he’s in the conversation.

What’s whack is that economics at Norte Dame jettisoned heterodox econometrics (mixing theometrics - applied empirical theology to economics) because Norte Dame is selling out to neoclassical economics. Leaving the pope’s “Caritas” hanging like a Vox Clamantis in the desert of economic discourse.

Norte Dame bows down to the god of rational choice market. The Friedman shrine. Sainthood, next.

And what else can we say: Friedman’s econometric of rational choice is insinuated into consumer theology itself. Consumers we are. Buying a theology of choice. As if Jesus “fashioned” a whip to cleanse the Temple, but sold it for a better offer. And some were sawn in half. And some wandered in caves.

The Temple today: I love Freeman Dyson. Maybe he’s correct in saying that the new religious ecumenism will emerge and hold in Temple environmentalism (my phrase, not his). I’m not so sure. Our history under the Environmental Protection Act may have us sell out our new ecumenism of Temple environmentalism as our best “rational market” choice. Selling pollution rights.

Because pollution rights – are scarce.

Make sure to make them so.

Though I’m not a buyer of ecological holism, Lynn Margulis has said that “Gaia Is a Tough Bitch."

What pollyannaish theologians of distribution may not know is how hard she can slap. Distributions, that is, of natural evils.

All due respect to Sen’s Nobel showing scarcity is also a Machiavellian product, I'd say "scarcity" in technical econometrics is benched in part to limited (non-unlimited) ecological supply.

Whether theology will ever emerge from its graveyard of econometric irrelevance (or, should) is hard to say.

For now, theometrics as an equal partner with econometrics, is Lazarus. Many days dead. Stinking. ...

LeVon Smoker

Glancing at this post again, I decided to comment (foolish person that I am)...

I've read the bulk of what Cavanaugh has written, and he is not at all interested in advocating a top-down, state-backed redistribution of wealth. Maybe you are or are not implying that. It seems like you might be - correct me if not.

I also know that Cavanaugh's (and Brueggeman's) first concern is the Church (not in a sectarian way, but as a light to and critique of the fallen world) as a place where everyone has enough - not everyone has an exactly equal share.

Michael W. Kruse

"...he is not at all interested in advocating a top-down, state-backed redistribution of wealth."

A state-backed redistribution of wealth is an option some have taken who have this "distribution only" view. Others are suggesting things like gift economies. Others don't seem to offer a specific remedy but clearly process things through a "distribution only" lens. I haven't finished his book but from what I know I about him I've never heard him advocate for a top-down, state-backed redistribution of wealth. I didn't mean to imply that. I don't yet know how he would propose to address the distribution problem.

Eric

I don't know if you've successfully refuted these theologians in this post. The definitions of "scarcity" that I've always seen is something along the lines of "what everybody desires is more than what there is." For example, Mankiw writes that scarcity means that "society has limited resources and therefore cannot produce all the goods and services people wish to have."

Scarcity is not synonymous with "limited" (as you seem to imply throughout your post). Resources could be limited and - in theory - everybody could have everything they want or desire. It's when the wants and desires exceed the limits when we have economic definition of "scarcity." It's in this sense that I don't think you've addressed these theologians concerns. They seem to be saying that in a just world, people's wants/desires wouldn't exceed our limited resources. They are saying that God has in fact provided an abundance but our unjust desires cause us to want more than he has given.

Michael W. Kruse

"They seem to be saying that in a just world, people's wants/desires wouldn't exceed our limited resources. They are saying that God has in fact provided an abundance but our unjust desires cause us to want more than he has given."

The theologians are making a valid theological point that fallen human beings crave more they need or at least crave things they don't need. But are they understanding scarcity in the sense that economists use the term. If there is to be honest interdisciplinary dialog then care needs to be taken to be sure core terms are are understood.

Scarcity doesn't just apply to material possession. At any given moment, which is more important? Staying at work to earn an income? Playing with your child? Taking your spouse on a date? Doing your daily workout? Preparing a meal to eat? Serving meals at the homeless shelter? Reading a good book? All are legitimate desires, yet they can't all be done at once. We "pay" for any one of the above options by forgoing the other options because we are finite and our time is scarce (i.e., we can't do everything we want at the same time.)

And the truth is that most of us have legitimate aims in life that require financial expenditure. Our personal resources are scarce compared to all the legitimately good things we could spend them on.

This is what economists are mean by scarcity and is being misrepresented by these theologians.

Eric

I guess I just don't see that the theologians are misusing the term in the way you say. For example, how does the definition of scarcity that I gave above conflict with the fact that our legitimate desires can't all be done at once? The claim of the theologians doesn't seem to be that they can all be done at once, but rather that our legitimate desires can be met by the resources God has given us.

It may be true - as you seem to be suggesting - that God hasn't given his creation the resources we need to meet our legitimate desires. But I don't think you've shown this to be the case. And until you do, I think we have to be open to the possibility that the theologians may have a point.

Michael W. Kruse

Eric, I don't think I getting my point across well.

The question I'm asking here is, Have the theologians understood what the economist means by scarcity?

Economists aren't analyzing a world of sinless humanity. The world is corrupted by sin and will be until the consummation of the new creation. Legitimate needs are there alongside the illegitimate ones and the economist has no means for distinguishing the two. Not all those legitimate and illegitimate needs can be met. Therefore, the starting point for studying human behavior is scarcity while the starting point for studying Christian ethics may well be abundance.

The closer we live toward Kingdom values the less scarcity we will see but this side of the new creation it will not be eliminated.

Eric

Michael,

With your last sentence, you now seem to be agreeing with the theologians that scarcity is caused by injustice. I see the theologians as saying that scarcity is a result of the fall, not of our finitude. In your opening post I took you to be saying that scarcity is a result of our finitude (when you kept equating scarcity with being being limited), but with your recent clarifications it seems (to me, anyway) that your position isn't as far from the theologians as I first thought.

But, to answer your question - No, I see no reason to think that they have misunderstood what economists mean by scarcity.

Michael W. Kruse

Biology begins with the idea that we are living organisms that experience disease, pain and eventually death. Human beings live their lives attempting to keep all bodily systems in balance and thriving. Nevertheless, disease, pain and death are universal to the human experience. The biologist begins with assumption that is normative to the human experience.

But biologists are deceivers. After all, God created humanity without disease and pain. That reality is the hope of the Kingdom of God as well. We should begin any study of biology with the presumption of abundant and perfect health, not with the struggle of the human organism to thrive as it deals with decay and ward off disease.

Is that a fair critique of biology?

Michael W. Kruse

I will also add that both our finitude and illegitimate needs are part of what of scarcity.

We are immortal beings who die. Our days are limited and our hours in the day are limited. The time we have to spend with family, to invest in creative efforts, to hike the mountain trail, to do all the wonderful things the world has to offer are limited. Thus, the time we have to spend in this existence prior to the final resurrection is a scarce. That is the sting of death. The fact we know we have a resurrected life coming shapes how we prioritize what we do in this life but it does not negate the reality of scarcity.

Thus, transforming lives away from illegitimate needs will bring us closer to the Kingdom of God but it will not eliminate scarcity. Only the consummated new creation will do that.

Eric

I know next to nothing about biology so I will have to pass on your question and leave it to somebody less ignorant.

I find your first sentence to be in conflict with your last two sentences in your previous post. We will still be finite creatures in the new creation. Finitude is part of what it means to be a creature. ( So if both finitude and illegitimate needs are involved in scarcity, as you say, then the consummated new creation will not eliminate scarcity (because humans will still be finite creatures).

Rick McGinniss

Given the heavy theological/ethical issues from a macro-viewpoint, maybe this is too simplistic but I'll give it a go.

The gas gauge in my car says I am near empty. In a few more miles (assuming I don't stop at a gas station), I will be a victim of scarcity and won't be able to make a hospital visit. Therefore, I desire more gasoline.

Is that desire a reflection of my fallenness? Or is it simply a value-neutral reality of the physical existence in which I find myself?

The idea that 100% of the cases of "scarcity" are somehow a reflection of fallenness just doesn't make sense to me on a practical level.

Michael W. Kruse

Eric and Rick,

Thanks for your interaction both here and at Jesus Creed. Right now, I'm the one about to run out of gas. ;-)

ViNZ de la Fuente

Since you're clearly a Seeker of Truth like I am, there's a new web resource you might want to check out.

It's called "The Illusions and Truth Show" and it was created by a fellow Seeker of Truth named Robert Scheinfeld. Details are here: http://illusionsandtruth.com

Scheinfeld is a real renegade who has the courage (and the personal experience and wisdom) to take a brutally honest look at the typical paths offered to experience abundance, expose lies, illusions and stories, and help us see and experience The Truth.

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