Updated: 1/13/20
Christian Economics: Teacher's Edition
I am the Lord, and there is no other, besides me there is no God; I equip you, though you do not know me, that people may know, from the rising of the sun and from the west, that there is none besides me; I am the Lord, and there is no other (Isaiah 45:5–6).
Isaiah 45 is a chapter on the sovereignty of God. It is also a chapter on prophecy. Isaiah predicted what Cyrus the Medo-Persian would do to Babylon almost two centuries later. The prophet names him (v. 1). This is the most explicit prophecy in the Bible. Its fulfillment in 586 B.C. stands as one of two things: (1) the greatest historically verifiable announcement of the omniscience of God in all of human history; (2) proof that the passage was written after Cyrus had conquered Babylon: a fake historical document forged by someone in authority in Israel’s priestly hierarchy. There are rival views of sovereignty at work here: God’s vs. man’s. There are rival views of authority: Bible vs. forgery. There is no way to reconcile these rival views. At least one of them is wrong.
Which one is wrong? How can we sort this out? How can we come to logical conclusions? How can we deal honestly with the historical facts?
We come now to a topic that most economists hate: epistemology. Epistemology asks two questions: “What can man know, and how can he know it?” Then it attempts to answer it. But these are tricky questions. “What can man know?” Which man? Is this mankind in general, or merely very smart men? “How can he know it?” Who are we speaking of? A real, live man? If he says he knows something, can other people verify this? How?
Rare is any graduate school program in economics that offers a course on epistemology, even a disguised one on methodology. No one on the faculty wants to teach it. Students do not want to take it. Their attitude is: “Let’s get on with doing economics. Who cares if we know what we’re doing?” No one cares.
I did not raise these questions early in this book. That is because I did not want you to stop reading the book. Ludwig von Mises made this mistake back in 1949. The first three chapters of Human Action are on epistemology. Mises thought this topic was a crucial issue, meaning central to economic theory. He was correct. His problem was this: almost no other economists did. So, this section has kept generations of young economists and graduate students from finishing his book.
If you have read this book carefully, you have a sense that my approach to economic theory is different from whatever you have read in any college textbook on economics, assuming that you have read such a textbook. It is different from general treatises on economics, of which Human Action is the premier example. The presuppositions are different. Starting each chapter with a citation from the Bible is different. But you may not be able to put these differences into words. After you have read Part 6, you should be able to put these differences into words.
There is a war of the worldviews going on. This war affects every area of life. It surely affects economic theory. Part 6 focuses on this war. It shows that, while the conclusions of Christian economics are similar to the conclusions of free market, anti-Keynesian humanistic economics, the logic of the each approach is different from its rival. The differences are radical, i.e., at the root. In terms of the intellectual foundations of economics, the Keynesians and the Austrians are closer to each other than they are to me.
The differences begin with my view of the covenant. Point one of the biblical covenant is the transcendence of God. He is the Creator. Yet He is also present with His creation. This is the theological foundation of the doctrine of the sovereignty of God. “Who’s in charge here?” This question should begin every investigation of every institution or arrangement. Someone in charge decides what is true, what is false, and what is presently unknown. This person is the judge: the final court of appeal.
The second question to ask is this: “Who speaks on behalf of the one in charge?” This person or committee speaks on behalf of the supreme authority, whatever or whoever this supreme authority is said to be. When beginning your investigation, you would be wise to find out well in advance who decides what, and in whose name. This is because there is no neutrality. There may be temporary indifference, but there is no neutrality.
Christian economics begins with the Genesis account of the creation. God made the creation initially out of nothing. This places Him in charge. The Bible speaks for God. That places it in authority. If you are a Christian, your task is to speak for God in terms of what the Bible says: point two of the biblical covenant.
You then announce God’s law, which is point three. Next, you must apply the law to aspects of the creation where you possess authority. You must interpret the Bible and then apply it by bringing sanctions: point four of the biblical covenant. Maybe you bring sanctions as a voter. Maybe you bring sanctions as an administrator. But you must bring sanctions in some areas of your life. This is point four. This is what building the kingdom of God is all about: imposing sanctions.
Then comes point five: inheritance. Who will inherit in history: covenant-keepers or covenant-breakers?
I hope that Part 6 will provide you with an understanding of the confrontation between the two views of economics.
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