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IMPUTATION AND THE LAWS OF ECONOMICS Seeing it is one God, which shall justify the circumcision by faith, and uncircumcision through faith. Do we then make void the law through faith? God forbid: yea, we establish the law (Rom. 3:30-31)
The theocentric focus of this passage is God as merciful, who justifies sinners by means of their faith in His son, Jesus Christ, who died for their sins. God upholds His law, yet He also grants mercy. The gospel of God's sovereign grace through the exercise of faith is not in conflict with the law of God. The law is established by faith.
Before we get to the implications of this passage for economic theory, we must first understand the passage in relation to its context: man's objective legal standing before God.
Objective ImputationPaul clarifies what God has done on behalf of His people. He reminds his readers that the basis of their hope in God is not their personal fulfillment of the terms of God's law, which they have not done and cannot do. Rather, their only legitimate hope is in Christ, who died for their sins. "But God commendeth his love toward us, in that, while we were yet sinners, Christ died for us" (Rom. 5:8).
God has declared His people righteous. That is to say, God has imputed righteousness to them. Here is the meaning of justification: God's declaration of a person's lawful judicial standing before Him. This is a judicial act, sometimes called a forensic act. The early chapters in Romans deal with God's imputation of righteousness to His people. "Therefore we conclude that a man is justified by faith without the deeds of the law" (Rom. 3:28). The Greek word translated here as "conclude" is the same as the word translated "impute." It should probably be translated here as "declare." The translators also translated the word as "reckoned" and "counted."
Now to him that worketh is the reward not reckoned of grace, but of debt. But to him that worketh not, but believeth on him that justifieth the ungodly, his faith is counted for righteousness. Even as David also describeth the blessedness of the man, unto whom God imputeth righteousness without works, Saying, Blessed are they whose iniquities are forgiven, and whose sins are covered. Blessed is the man to whom the Lord will not impute sin (Rom. 4:4-8).
How was it then reckoned? when he was in circumcision, or in uncircumcision? Not in circumcision, but in uncircumcision. And he received the sign of circumcision, a seal of the righteousness of the faith which he had yet being uncircumcised: that he might be the father of all them that believe, though they be not circumcised; that righteousness might be imputed unto them also (Rom. 4:10-11).
And therefore it was imputed to him for righteousness. Now it was not written for his sake alone, that it was imputed to him; But for us also, to whom it shall be imputed, if we believe on him that raised up Jesus our Lord from the dead; Who was delivered for our offences, and was raised again for our justification (Rom. 4:22-25).
God declares a sinner justified in His sight. This declaration is a judicial act. God sovereignly decides not to count a man's sins against him. He announces, "Not guilty." He does this because of the perfect righteousness of Jesus Christ, whose moral perfection God transfers to the redeemed person at the time of his redemption.(1) Jesus Christ lived an objectively perfect life and died under God's objective curse. "For Christ also hath once suffered for sins, the just for the unjust, that he might bring us to God, being put to death in the flesh, but quickened by the Spirit" (I Peter 3:18). God the Father made Jesus Christ to be sin for His people, to suffer objectively on behalf of His people in their place. ". . . God was in Christ, reconciling the world unto himself, not imputing their trespasses unto them; and hath committed unto us the word of reconciliation. Now then we are ambassadors for Christ, as though God did beseech you by us: we pray you in Christ's stead, be ye reconciled to God. For he hath made him to be sin for us, who knew no sin; that we might be made the righteousness of God in him" (II Cor. 5:19-21).
Sin and its consequences are objective. The sinner comes under God's objective negative sanctions because of his sins. Jesus Christ suffered objectively on the cross. Justification is objective: right legal standing before God. Imputation is objective: God's declaration of the innocence of those who have put their faith in Christ's objective atonement as their substitute. Sanctification is objective: the transfer of Christ's moral perfection to the redeemed at the time of his redemption. All of these aspects of regeneration are objective. Yet they are also subjective, in the same sense that God's day-by-day witness to the goodness of His work of creation was subjective (Gen. 1). There is a subjective perception of an objective condition.
When God declares a person "not guilty," He makes a personal judgment. The sovereign Subject declares what is objectively true. The objective truth is assessed subjectively by God. Then He declares the truth objectively. But God does more than declare it; He has predestinated the objective historical conditions that make His declaration possible, beginning with the crucifixion. "And truly the Son of man goeth, as it was determined: but woe unto that man by whom he is betrayed!" (Luke 22:22). "The kings of the earth stood up, and the rulers were gathered together against the Lord, and against his Christ. For of a truth against thy holy child Jesus, whom thou hast anointed, both Herod, and Pontius Pilate, with the Gentiles, and the people of Israel, were gathered together. For to do whatsoever thy hand and thy counsel determined before to be done" (Acts 4:26-28).
There is the story of an umpire who makes a judgment regarding a violation of the game's rules. A player complains against the call. The umpire says one of three things in his defense. "I call them as I see them." This makes the game dependent on his perception; the violation does not have independent existence. This is the approach of philosophical nominalism. "I call them as they are." The violation has objective existence, and the umpire faithfully declares its existence. This is the approach of philosophical realism. "They are what I call them." This places sovereignty in the perception of the umpire. The violation derives its existence from the umpire's categories and his application of these categories to the perceived facts. This is Kantianism.
What is the correct view? When speaking of a declaration by the God of the Bible, the correct view is covenantalism: "I call them as I have foreordained them." The event is what God had originally predestined it to be, and now He accurately assesses it. Then He declares it. When speaking of a declaration by a man, however, covenantalism applies differently: "I call them as I believe God has predestined them, but I am not God. The game, however, must go on." A perfect call is possible only for God, but men can make progressively improved calls when they diligently study God's rule book and gain experience over time by applying the rules to the real world. Even those umpires who have not studied the rule book can make calls sufficiently accurate to keep the game going, for the work of the rules are written on every observer's heart (Rom. 2:14-15).(2)
Paul asks: "Do we then make void the law through faith? God forbid: yea, we establish the law" (v. 31). Faith is a subjective act on man's part, but it has objective results. Through a person's subjective faith comes his objective deliverance from sin. Sin is not merely subjective. It is objective. Men objectively break God's law. They come under objective sanctions because of their sin. Their faith in Christ then objectively redeems them from the worst objective consequences of sin.
The Laws of God and Nature This two-fold aspect of redemption -- subjective and objective -- raises the question of God's law. God's law is more than a category of human thought. It is more than a conventional opinion of men in society. It is not the product of a subjective agreement among men. It is the objective product of subjective agreement among the three persons of the Godhead. God declares His law objectively. This declaration is based on subjective agreement. The declaration by God makes the law objectively true, just as He spoke the universe into existence out of nothing (Gen. 1).
Law is declared by God. He has revealed His law verbally to men in the past, beginning with Adam. "And the LORD God commanded the man, saying, Of every tree of the garden thou mayest freely eat: But of the tree of the knowledge of good and evil, thou shalt not eat of it: for in the day that thou eatest thereof thou shalt surely die" (Gen. 2:16-17). God caused Moses to write down God's law. "And the LORD said unto Moses, Write thou these words: for after the tenor of these words I have made a covenant with thee and with Israel. And he was there with the LORD forty days and forty nights; he did neither eat bread, nor drink water. And he wrote upon the tables the words of the covenant, the ten commandments" (Ex. 34:27-28). God subsequently raised up prophets to declare His law publicly. God's law is therefore both objective and subjective. It has been declared objectively in history by the Creator and Judge of man. But God is simultaneously three persons and one person -- subjective. Law is under His authority. Law has no independent existence apart from God. It has no independent authority alongside God. It surely has no independent existence above God.
God has created the universe to be run by His laws, yet He actively sustains it. Specifically, this is the work of the second person of the Trinity. "Giving thanks unto the Father, which hath made us meet [fit] to be partakers of the inheritance of the saints in light: Who hath delivered us from the power of darkness, and hath translated us into the kingdom of his dear Son: In whom we have redemption through his blood, even the forgiveness of sins: Who is the image of the invisible God, the firstborn of every creature: For by him were all things created, that are in heaven, and that are in earth, visible and invisible, whether they be thrones, or dominions, or principalities, or powers: all things were created by him, and for him: And he is before all things, and by him all things consist" (Col. 1:12-17). Christians should therefore recognize the cosmic personalism of the universe.(3)
Natural Laws
Men speak of the existence of natural laws. The archetype is the law of gravity, first described mathematically by Newton, but recognized and honored by all mankind. There is no record in the Bible of God's announcement of the law of gravity, but there is a description of its operation. "Then the devil taketh him up into the holy city, and setteth him on a pinnacle of the temple, And saith unto him, If thou be the Son of God, cast thyself down: for it is written, He shall give his angels charge concerning thee: and in their hands they shall bear thee up, lest at any time thou dash thy foot against a stone" (Matt. 4:5-6).(4) We say that the law of gravity is a natural law because its operation does not depend on men's opinions. Even today, scientists do not know how it operates; they can only describe some of its effects. Scientists do not know how stars and planets attract each other physically in the vacuum of interplanetary space; they only know that this attraction exists, and that scientists can describe its operations mathematically. Furthermore, scientists do not know why the subjective logic of mathematics should describe the objective, impersonal operations of the natural world. It is unreasonable to imagine that certain subjective, common laws of men's minds should describe so precisely the physical operations of objective physical reality, but this is what science declares.(5)
The debate begins when men seek to defend natural laws as either laws of creation or laws of evolution. Did God create these laws or did they evolve within an uncreated, impersonal universe? Modern science asserts the latter. Darwin's theory of the evolution of all species through impersonal, purposeless natural selection has been widely accepted by scientists because this theory extends modern science's theory of cosmic impersonalism to the origin and development of life. Modern science begins with the assumption of the autonomy of nature: naturalism. "Nature giveth, and nature taketh away. Blessed be the name of nature." Nature has produced mankind. Scientists can discover nature and nature's laws. "Evolutionary scientists giveth, and evolutionary scientists taketh away. Blessed be the name of evolutionary scientists."
The Logic of Economics
When we speak of economic laws, such as the law of supply and demand, we are not describing legislation that has been passed by a civil government. But the law of supply and demand does not exist independently of the opinions of men to the same degree that the law of gravity does. The way this law operates is shaped by legislation and enforcement. Nevertheless, the law of supply and demand is not dependent on government legislation, nor can it be repealed by legislation. In this sense, it is thought by some economists to be natural.
The law of supply and demand is not comparable to the laws of planetary motion, although economists have often adopted the mathematical style of the astronomer or the physicist in formally describing the law's operations. The economist offers a causal explanation for certain perceived regularities in human action. Men recognize these patterns of behavior; the economist offers reasons for these recurring patterns. He does so in part through introspection, although he may not admit this when he presents his explanations. First, he thinks about how he makes decisions; then he extends his discoveries to other men. The astronomer does not look inward in his attempt to understand the laws of planetary motion, which are exclusively physical. Economic laws are not physical. They are the product of human action in a God-cursed world of finite resources (Gen. 3:17-19).
How can men discover the laws of economics? This is the question of epistemology. Economists are not in agreement on the answer. Ludwig von Mises hypothesized a deductive logic of human action. He sought to discover a few universal axioms of human action. From these, he believed, an entire system of economics can be deduced logically. Mises was unique in this defense of axiomatic laws of economics, a science that he called catallactics. Catallactics was a subset of a more general science of the laws of human action, a science which he called praxeology.(6) Few economists have adopted this deductivist approach, and in this century, those who have adopted it have generally been followers of Mises.
In contrast to Mises, most economists say that they begin with tentative hypotheses regarding how men universally act in their quest to conserve scarce resources. Economists then look for supporting evidence in history. They also predict the outcome of certain market processes. But these predictions are of a peculiar kind. Economists adopt an "if . . . then" logic to make their predictions. "If the money supply increases, and if production does not increase, then some prices will rise." Then they look for examples in history of monetary expansion, stable production, and generally rising prices, i.e., a rising index of prices. But there are times when the money supply increases, yet the official price index does not rise. This in no way disturbs economists. There are several ways around this discrepancy. "Prices would have fallen had there not been an increase in the money supply." Or, "The velocity of money fell, despite the increase in its supply. People held onto money longer, so prices did not rise." Or, "The official index of prices is no longer correctly weighted statistically to reflect the items that most people are buying." Or, "The older definition of money is no longer applicable." Economists remain committed to their theories long after these theories no longer describe what is taking place in the world of entrepreneurial decision-making.
Economists assert a similar "if . . . then" logic to validate their epistemology. "If my 'if . . . then' predictions come true more often than the results of flipping a coin -- random outcomes -- then my hypothesis regarding a particular operation of the laws of economics should be accepted as provisionally true." This methodology is called positivist: descriptive rather than prescriptive. It is also said to be empirical, i.e., ratified by observed evidence. To this extent, economics is said to be inductivist: derived from historical facts.
Both the deductivist (a priori) economic methodology and the inductivist (a posteriori) economic methodology begin with the assumption of the autonomy of man.(7) Economists in both camps insist that any explanation that relies on the assumption of God, providence, or the supernatural has no place in economic science. Supernaturalism is said to be scientifically unverifiable. What economists do not mention is the fact that scientists have adopted standards of verification that exclude God, providence, and the supernatural. Modern science is methodologically naturalistic, a priori. Scientists assume what they need to prove: the autonomy of the universe, i.e., the absence of the providence of God.
Economists believe that the laws of economics are more than social conventions. These laws are said to govern human affairs irrespective of what men believe about them. These laws influence men's social relationships. Some of these laws' effects can be predicted, though not with absolute precision. For example, if civil government passes a law that sets a price of an item lower than the free market price, then shortages of the regulated items will develop at the official, legal price. More of these items will be demanded than supplied at the legal price. This law of economic cause and effect is not found in the Bible. It is also not discovered mathematically, although it is often described by economists with the use of mathematics or graphs. This law's results are sometimes visible, most notably when long lines form in front of stores that sell the price-controlled item.
The Bible records examples of the fundamental economic law of supply and demand. Consider the account of the siege of Samaria in Elisha's day. "And it came to pass after this, that Ben-hadad king of Syria gathered all his host, and went up, and besieged Samaria. And there was a great famine in Samaria: and, behold, they besieged it, until an ass's head was sold for fourscore pieces of silver, and the fourth part of a cab of dove's dung for five pieces of silver" (II Kings 6:24-25). This siege would soon be lifted, Elisha prophesied. Soon after it is lifted, Elisha said, prices will fall. "Then Elisha said, Hear ye the word of the LORD; Thus saith the LORD, To morrow about this time shall a measure of fine flour be sold for a shekel, and two measures of barley for a shekel, in the gate of Samaria" (II Kings 7:1). He was implicitly announcing that an objective increase in the supply of goods would soon produce an objective decline in prices. Elisha's economic forecast implicitly assumed that there would be no objective increase in demand to offset the objective increase in supply. Elisha used the imminent outcome of the law of supply and demand -- lower prices -- to present his prophecy of the end of the siege. He did not say that the Syrian troops would soon leave; he said that the siege-induced prices would soon fall. He knew that his listeners would understand what he was saying about the siege. The law of supply and demand operated in ancient Israel, but a detailed description of the logic undergirding this law -- the logic of the auction -- is not provided in the Bible.
Economic Imputation
According to modern economic thought, prices are the objective result of men's subjective evaluations regarding the value of scarce resources. Economists call this process "imputation." People are said to impute value to a good or a service. Different men impute different value, depending on their individual value scales. This imputation process is purely subjective, but it is applies to objective conditions: supply, demand, and market price. Through objective bidding among sellers, and also through objective bidding among buyers, an objective price appears in the market. The market is a giant, complex auction system. The law of supply and demand therefore operates both objectively and subjectively. It operates in the affairs of men because men objectively bid for scarce resources that they subjectively believe are objectively necessary for them in order for them to attain their subjectively generated goals for the future.
The law of supply and demand is objectively true. It governs the economic decisions of men even though they may not understand it. Those who heard Elisha's forecast were expected by the prophet to understand it. His prophecy was a prophecy regarding the siege far more than it was a forecast of prices, but it is was presented as a forecast of prices. He expected his listeners to deduce from this forecast that the siege would end before the next day was over.
Conclusion God subjectively assesses a person "guilty" because of the objective guilt of the sinner. God objectively declares a redeemed person "not guilty" because of the objective innocence of Jesus Christ, which is then by grace transferred by God to the sinner. God's imputation is subjective, but it is based on objective conditions.
A man subjectively imputes value to one additional unit of a scarce economic resource in terms of his subjective perception of objective conditions: his existing supply of the good and the estimated objective supply held by other owners. His scale of values is subjective. He decides what is important to him, from most important to least important. But his scale of values is not autonomous. It does not exist independent of God, who has made man in His own image. The common image of God in all people makes possible socially objective agreements about what is important.(8)
The laws of economics are objective because man's image is objective, and God's curse of man's work and his environment is objective. Subjective imputations by men who live in an objectively cursed, finite environment lead to their objective decisions, which in turn establish objective market conditions: supply, demand, and prices. A man's subjective imputations make him objectively responsible before God, even before he takes objective action. "Ye have heard that it was said by them of old time, Thou shalt not commit adultery: But I say unto you, That whosoever looketh on a woman to lust after her hath committed adultery with her already in his heart" (Matt. 5:27-28). He is also responsible for the actions that result from his subjective decisions. "But those things which proceed out of the mouth come forth from the heart; and they defile the man. For out of the heart proceed evil thoughts, murders, adulteries, fornications, thefts, false witness, blasphemies" (Matt. 15:18-19). God imputes meaning to each man's subjective imputations, his objective decisions, and the objective outcomes of his decisions. God does this in terms of His own subjective scale of values -- moral values. These divine values govern God's establishment of analogous values that are to govern men, who are made in God's image. These analogous values become objective for men, either because of the work of the law objectively written on their subjective hearts (Rom. 2:14-15) or the law objectively written on their subjective hearts (Heb. 8:8-13; 10:15-17).(9)
Humanistic economists deny that a supernatural realm affects the operation of the market. While men's subjective opinions about the supernatural realm may influence the array of prices, the supernatural is said by economists not to be an objective factor in economics. There is no divine objective scale of values, nor is the image of God in man a relevant issue for economic theory -- so economists assume. There is no theoretically valid appeal beyond the realm of the creation, which is said to be autonomous. Man calls things as he sees them, or calls them as they are. Ultimately, things are what man calls them, the modern humanist insists. But which man? The sovereign individual or the sovereign State that represents collective man? On this, economists disagree. So do political philosophers.
Footnotes:
1. John Murray, "Definitive Sanctification" (1967), in The Collected Works of John Murray, 4 vols. (Edinburgh: Banner of Truth Trust, 1977), II, ch. 21.
2. Chapter 2, above.
3. Gary North, The Dominion Covenant: Genesis (2nd ed.; Tyler, Texas: Institute for Christian Economics, 1987), ch. 1.
4. Gary North, Priorities and Dominion: An Economic Commentary on Matthew, electronic edition (Tyler, Texas: Institute for Christian Economics, 2000), ch. 2.
5. Eugene P. Wigner, "The Unreasonable Effectiveness of Mathematics in the Natural Sciences," Communications in Pure and Applied Mathematics, XIII (1960), pp. 1-14. Wigner won the Nobel Prize in Physics.
6. Ludwig von Mises, Human Action: A Treatise on Economics (New Haven, Connecticut: Yale University Press, 1949), chaps. 1-3.
7. Gary North, "Economics: From Reason to Intuition," in North (ed.), Foundations of Christian Scholarship: Essays in the Van Til Perspective (Vallecito, California: Ross House, 1976).
8. Chapter 1, above.
9. Chapter 2, above.
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