I. The Modern Attitude Forwards Economics

Today problems of economics are pressing hard upon all of us. We do not require the tables of a Federal Bureau of Statistics to tell us that the price of living is rising. All one has to do is go to the grocery store for his food, and discover how much less the dollar will buy now than it would in 1939, to realize how vital “economics” is to our welfare. At the same time there are many theories and ideas about how the problem should be met; and these are being set forth in books, pamphlets and papers on all sides. The Communists, the Socialists, the Liberals, the Conservatives all have their own ideas. Each one condemns the other, while exalting his own position. The result is that everybody is somewhat confused about what should be done. But just because of our present situation, and because of this confusion it is desperately necessary for us to do some clear thinking, thinking which will bring to light the basic problems of the whole of our economic thought.

         

           

To see the nature of these basic problems it is necessary to see the changes which have come over economic ideas in the past two hundred years. Economics has changed from being a branch of moral philosophy and ethics to being a “social science,” what ever that may mean. In the days of Aristotle, throughout the Middle Ages, even down into the eighteenth century, economic thought usually held the position of a branch of thinking closely related to morality. Since economics dealt with the action of men in society it was involved in questions of ethics and social conduct.

Yet there were always some who were trying to deal with economic problems or some aspects of them on a more non-human, scientific basis. Jean Bodin, William Petty and William Davenant, and others all worked at statistics, discussed the question of the movement of money in and out of countries and examined bills of mortality. Yet even they never accepted completely the idea of a mechanical economic organization. The man who really laid the ground work for such a concept was Adam Smith, professor of Moral Philosophy at Glasgow. He took over a good many ideas already developed, particularly in France, and laid down the principle that economic affairs operated pretty much on a mechanical basis. Let individuals seek their own particular interests and all would be well, the natural harmony of all things would take care of everything. If all government controls were removed each individual would act in economic affairs, in the best possible way for all. A professor of Moral Philosophy had made economics a “science.”

19th Century Development

This point of view continued and increased during the nineteenth century. Malthus, an Anglican parson who should have known better, and Ricardo a banker, who would not know better, worked out various principles dealing with population and wages. These principles became “iron laws” against which it was useless for men to strive. Others followed in their footsteps, although some deviated so that man·was given credit for having something to do with the control of his own economic destiny. The climax, of “scientificism” however, was reached with Karl Marx, who laid

down certain very definite principles. He held that all history, culture, imd thought were determined by the form of economic production current at the time. Economics in this way became the basis of all human action, the explanation of all human achievement or failure. Man became to a very large extent the tool of material forces. The economic man about whom Smith had talked now became the only type of man who had ever existed. This point of view has fitted in so well with the whole materialistic outlook of our day, that most economists have followed the same line of reasoning. Not long ago a prominent economist said to the author, that even religion was the product of economic forces. Man is the product of economic factors which rule his life.

Since this is the situation of man, and since economics deals entirely with material wealth, materialism is the dominant approach to economic problems. Economics is today a science. Its findings and ideas are based upon stacks and stacks of statistics. In some cases economists feel that the only way in which they can explain their reasoning is by the use of calculus, entering into the realms of higher mathematics. Anything which is essentially human is left out. The important thing is that one should be scientific in dealing with economics which means in dealing with men. Let us scientifically settle our economic problems and we shall then solve all others: social, political or religious. This is by and large the modern attitude.

II. The Christian Attitude Towards Economics

To the Christian economic activity is human activity. It is something which is carried on by men in their search not only for the necessities of life, but in their search for ease, wealth and, frequently, power. It is not something which is a matter of physical laws. For instance the Scriptures tell us that “the love of money is the root of all evil.” This is not a scientific statement in the same sense a chemist says that water is made up of two parts of hydrogen to one part oxygen. Nevertheless it is a statement which has very strong economic overtones and is undoubtedly scientific, in that it is true. It brings out very clearly the fact that economic action neither arises from, nor results in purely economic phenomena. The human will, intellect and emotions are all involved. Therefore, one can hardly say that the study of economics is a scientific study, unless we use an altogether different meaning for the term scientific from that which is current.

The real reason for economics not being a science is that in studying economics one does not merely study a catalogue of physical facts whose mutual relationships can be tested and measured. Rather one is studying the action of man which from the human point of view is so frequently completely unpredictable and completely irrational. It is hard to make a science out of such material. How often do manufacturers put a certain commodity on the market with high hopes, but there is no sale. On the other hand, another manufacturer with small hope puts a certain goods out for sale, and is immediately swamped with orders. Very frequently there is no logical or scientific explanation for the difference. It may turn on the coining of a happy advertising phrase or something like that, which really means nothing, except that it catches one’s attention. We laugh it off by saying that “that is human nature.” If that is the case, it is necessary, if one is to know anything about economics, to know human nature.

Materialistic Humanism and Christianity

It is at this point that the basic division between modern materialistic humanism and Christianity must come to light. The Christian sees man as a being created by God as the lord of creation. As originally constituted he was made in the image of God, with true knowledge, righteousness and holiness. Summed up in one phrase he was made with the inherent knowledge that his chief end in life was to glorify and enjoy God. What is more, it was not only his knowledge, but also his desire for he had true obedience in his heart. Consequently at the beginning he obeyed God gladly for this was his covenant obligation. He was truly oriented to his proper point of reference and all was well, even in the economic sphere.

T hen came sin. It wrecked even if it did not completely efface the image of God in man. The Covenant broken, self became man’s god. The result was that his dominating outlook on life was one of grasping and taking for himself. He had lost all idea of his Covenant with God, thinking instead of his own kingship and his desire to glory in his own liberty. The result in the field of economic action has been continual conflict. Having for all intents and purposes ushered God out of the universe, men have thereafter turned the world into a sort of economic Donnybrook Fair. It is only the grace of God which has prevented complete and total chaos, not only economic but also political and social. By his restraining power he has held back the full outworking of sin, through what is theologically known as Common Grace. By his special redeeming grace through the influence of the church he has influenced men in the direction of altruism and humanitarianism. As one looks back through history one sees this only too clearly, for it is only where Christianity has been really preached that there has been some sort of economic equilibrIum. Where there has been no Christianity, the economic chaos and conflict have been so serious as to undermine whole civilizations.

Thus when one turns to modern explanations of economic phenomena, one usually has a feeling that with the current scientific approach they are not really reaching down to the roots of the problems. True, much has been discovered about the question of the influence of the amount of money in use upon the price of commodities. Much has been discovered about the influence of investment upon employment and production. And so one might go on. But after all those are questions which lie on the surface. When one begins to ask fundamental questions about economics no answer is forthcoming. The economist, whether consciously or unconsciously, has assumed the existence of economic man, controlled solely by material forces. But the hypothetical economic man explains little. In given circumstances why do some men act one way and some another? Why do, men follow any particular pattern of action? To this there is no economic explanation.

Business Cycles

From the present writer’s point of view one of the most interesting questions in this connection is that which strives to find the reason for business cycles. Why are there business cycles? This is a question about 100 years old. Many answers have been given, from Mal thus down to Keynes, but they only seem to scratch the surface. After considerable study of the business cycles in Britain during the nineteenth century, certain facts have become apparent. In the first place a boom seems generally to have commenced with overly optimistic promotion which soon developed into straight dishonesty. This was true whether the boom was in Mexican mining stocks, railways, foreign government bonds or home industry. For a while the rise continued, everybody trying to buy themselves into the profits, and many doing so on a gambling basis of a very wide margin. Then suddenly someone, or some group, becomes afraid, or calculatingly decided that it was time that things should slump. They threw their stocks on to the market, which thereupon started to slip, and a panic began with a resulting crash. In most of the cycles there seems to have been little in terms of economic forces involved. The dominant factor was dishonest, greedy and naive human nature.

It seems that many of our other economic problems find their explanations in exactly the same type of action. To understand them we have to go back to human nature, rather than to some abstract economic laws. Economic action is not governed by mechanical principles, nor are human beings by any means always motivated by primarily economic desires and objectives. The human will, the human intellect, the human emotions, tainted by sin, are ultimately the explanation of economic action. This is the Christian position, the Christian explanation of economics.

III. Economic Reform

It is fairly generally admitted today that something is wrong with the contemporary economic organization. In the words of Eddie Cantor’s old song: “The rich get richer and the poor get poorer.” Prices are rising without stint, men who can make money are making it hand over fist. On the other hand, those who are not increasing their wealth are sinking into greater poverty and difficulty. The need is for reform. But what form is the reform to take?

The Communist says a revolution of the proletariat is needed whereby the working men band together, overthrow the rich, and divide everything equally. Then peace and plenty will result for everyone, for the means of production will have passed into the hands of society and this will make everybody good. This of course is the old materialistic line of argument. The free world’s rulers have another plan. They are opposed to price controls and regulations. What they want is taxes, more and bigger taxes, which will bring money to the government and will reduce spending. Consequently they clamp taxes on necessities, on luxuries, on incomes, and on profits. At the same time they urge people, albeit sotto voice, to work harder and produce more. In this way they hope that the problem will solve itself. The socialists and other groups call for taxes on wealth, price controls, and other legislative enactments. By law the whole problem will be solved.

The fact of the matter is, we have no guarantee that anyone of these plans can work; and by the look of them they are all accomplishing little or nothing. Each plan is being tried in different parts of the earth. The trouble is that the world economy today is desperately complex. It is like a very complicated clock, in which one slipping cog will throw everything out of line. Therefore to the Christian there is nothing which can be done to bring about a cure which is complete and total. Human nature, being what it is, selfish and greedy, and set in a complex economy, it cannot attain to entire economic stability. The optimistic supporters of economic man, on the other hand, although they know that the situation is difficult feel that it can be cured eventually by a number of simple reforms.

We would not deny, of course, that something can be done to help straighten out our economic tangles. Instruction, legislation, and persuasion can all playa part. We saw the part played by price controls and rationing during the War in the effort to obtain a fair share of civilian goods for all. But even these are not enough. The outcome of regulation is usually a black market of some sort or other. Human greed very quickly raises its ugly head bringing trouble and difficulties. The real need is that the hearts of men must be touched. We must get down again to human nature itself.

The Need for the Gospel

At this point the Gospel becomes of very great importance. What is necessary is the removal of the greedy desires from man’s heart. This cannot be done by education, by propaganda, by better economic and social conditions. It can be done only by the power of God. Only as men come into vital, living, covenant relationship with the Lord Jesus Christ so that they are prepared to serve him, giving a fair days work for a fair days wages, and alternately giving a fair days wage for a fair days work, that a change will come. That it is effective can be shown by hundreds of examples in history. When the Gospel is really believed and really applied to life, it makes all the difference in economic as well as in ecclesiastical affairs.

The church is still the salt of the earth. If it will but faithfully preach the Gospel, applying it unto men and to their everyday problems, it can do much to help even the economic situation. The church is not to spend its time setting forth economic theories. It is, however, to preach the Gospel so that men realize that they are not merely the victims of economic determinism, but that most of their problems stem from human nature itself from a human nature that can be renewed and regenerated by the grace of God alone.