Pilate then said to him, “Are you a king then?” Jesus answered, “You say that I am a king. For this purpose I have been born, and for this purpose I have come into the world, so that I would bear witness to the truth. Everyone who belongs to the truth listens to my voice.” Pilate said to him, “What is truth?” (John 18:37–38a).
This is a famous confrontation. It is representative of the perpetual conflict between the person who claims to speak the truth and the skeptic who rejects all such claims. Pilate was a committed skeptic. Immediately after invoking the rhetorical question of every skeptic— “What is truth?”— he left the room. He did not wait for Jesus to answer. He was not interested in the answer. He was not about to acknowledge to Jesus that he believed that Jesus was in a position to provide an answer. Pilate was not interested in philosophy. He trusted power, not logic. He represented the Roman state. He possessed the power of life and death.
In a second confrontation a few minutes later, Jesus remained silent when Pilate attempted to cross-examine him. Exasperated, Pilate reminded Jesus of the power he had over him. “Are you not speaking to me? Do you not know that I have power to release you, and power to crucify you?” (John 19:10a). Jesus answered: “You do not have any power over me except for what has been given to you from above” (v. 11a). We see here the age-old confrontation between biblical religion and power religion. This was a recapitulation of the confrontation between Moses and Pharaoh. Jesus made it clear to Pilate how little He thought of Pilate’s authority, i.e., his political office in a hierarchical chain of state command. Moses had made this equally clear to Pharaoh. It cost Pharaoh his life (Exodus 14:26–28). It cost Jesus His life. But Jesus had already told His disciples that this would be His decision, no one else’s. “I am the good shepherd, and I know my own, and my own know me. The Father knows me, and I know the Father, and I lay down my life for the sheep. I have other sheep that are not of this sheep pen. I must bring them also, and they will hear my voice so that there will be one flock and one shepherd. This is why the Father loves me: I lay down my life so that I may take it again. No one takes it away from me, but I lay it down of myself. I have authority to lay it down, and I have authority to take it up again. I have received this command from my Father” (John 10:14–18).
This was a life-and-death decision. The confrontation between Jesus and Pilate was preliminary to Pilate’s highly political decision to execute Jesus. The outcome of the exchange was based on Pilate’s desire to please the Jewish leaders. He thought this would eliminate his problem. It did not. He thought that philosophical skepticism would justify his decision. It did not. He had some trace of conscience. He wanted to evade responsibility. “So when Pilate saw that he could not do anything, but instead a riot was starting, he took water, washed his hands in front of the crowd, and said, ‘I am innocent of the blood of this innocent man. See to it yourselves’” (Matthew 27:24). He thought that making a public declaration of innocence and washing his own hands would relieve him of all legal responsibility. It did not.
Epistemology is the study of knowledge. As I wrote in the Introduction to Part 1, it asks a two-part question: “What can man know, and how can he know it?” Not many people ever ask this question. Certainly, Pilate did not. It is a theoretical question. Most people are not interested in theoretical questions. If there are not practical answers, most people do not want to spend a lot of effort investigating theoretical questions. But this does not mean that people do not make specific assumptions about the nature of truth and how it is known. They have presuppositions about the nature of truth, but they do not give a lot of thought to these presuppositions.
From the early days of the Christian church, there have been philosophical defenders of the faith who challenged the anti-Christian presuppositions and conclusions of their generation. They defended the faith by means of logic, but in virtually all cases, they invoked the ideas and names of the philosophers of their generation who had great prestige among the non-Christian intellectuals around them. They felt compelled to defend Christianity by means of selective aspects of non-Christian philosophies. They assumed that there is a common ground philosophically between non-Christian philosophy and Christian philosophy. To that extent, they compromised the faith. That was the argument of my teacher, Cornelius Van Til. His was a revolutionary defense of the faith. He broke with almost two millennia of Christian philosophical tradition. He refused to invoke a common logical ground between covenant-breakers and covenant-keepers.
This may not seem important to you at this stage of your intellectual career, but it will become important if you decide to accept the calling of becoming a Christian economics scholar. It will be crucial if you decide to become any kind of Christian scholar. In the world of humanism today, Christians are challenged on this basis. “Christians are not logical. They do not argue in the way that humanists argue. They assume that God exists. They assume that the God of the Bible is real. They assume the revelation in the Bible is the foundation of truth. They appeal to the Bible and not to some covenant-breaking philosopher.” Most classroom professors do not invoke the name of a covenant-breaking philosopher. They are almost certainly disciples of Immanuel Kant, but hardly any of them has ever read the major works of Kant. They have never struggled with the philosophical issues that Kant struggled with: the nature/freedom dualism, the science/personality dualism, and the objective/subjective dualism. They are not philosophers. They do not intend to become philosophers. Still, they assume that the Bible is not the doorway to truth. They assume that it is not legitimate to invoke the Bible in establishing truth. This is their presupposition. They cannot defend it intellectually in most cases, but they hold it nonetheless.
Despite the philosophical weakness of anti-Christian critics, Christians have become victims of an epistemological inferiority complex. This has been going on for almost 2,000 years. They take seriously the claims of their critics. They feel compelled to defend the Bible, but they do not defend it on the basis of its own self-revelation and self-testimony. They attempt to defend its teachings by adopting arguments that were developed by some philosopher prior to Kant. For example, they invoke natural law theory. First, they are completely unaware that natural law theory was developed by Roman philosophers who were attempting to justify the rule of the Roman Empire: a judicially unified empire ruling over the local gods, laws, and customs of formerly autonomous subject cultures. They invented a supposedly common logic for political purposes. Second, they are unaware that virtually no one in the modern world accepts natural law theory. Kant refuted it decisively. Christians are attempting to resurrect a dead horse in a world of tanks.
I am writing this chapter as a way to immunize you if you are impressed by the argument of anti-Christian economists that the Bible is an unreliable guide for formulating the principles of economic theory. Anti-Christian economists are joined by anti-Christian academicians in every other field of thought. Because you are interested in economics, you deserve to be immunized against the same kinds of arguments that are invoked against Christian academics in every field. I do not want you to do what most Christian academics do, namely, adopt some of the findings of the anti-Christian worldview that predominates in their field, but do so in the name of the Bible. I want you to be confident that the Bible is a reliable guide for solving economic issues that have not been solved by economists, but who nevertheless insist on the autonomy of economic science. It is not autonomous. They are self-deluded.
Epistemology today is a highly specialized field in the academic discipline of philosophy. It is not a popular field of study outside of philosophy. Yet in every academic discipline, scholars and students do their work in terms of the epistemological categories established by philosophers. These bread-and-butter practitioners are generally ignorant of these categories. They have not taken a course in general epistemology. They have not taken a course in the epistemology of their specific discipline. Such courses are not offered. There is a universal lack of interest.
There may be an upper-division college course on methodology in the economics department. This course is very loosely related to epistemology. It covers general principles undergirding the goals and intellectual tools of the discipline. It does not discuss the philosophical foundations of these tools. These courses are not popular with most professors, let alone students. In 1952, Professor Fritz Machlup of Princeton University remarked at a meeting of the American Economic Association: “Usually only a small minority of American economists have professed interest in methodology. The large majority used to disclaim any interest in such issues.” This remains true over six decades later.
An exception to this lack of interest in methodology was Ludwig von Mises. Machlup recognized this. He had been a follower of Mises in Austria before World War II. They were close friends. In 1949, Yale University Press published Mises’ magnum opus, Human Action. The first three chapters were devoted to the logic of economic theory: pages 10–91. First-time readers of the book ever since have struggled to get through this section. This book appeared late in Mises’ career. But this was not the first time he had discussed methodology. In January 1933, his first book on methodology was published in German. This was a collection of essays that he had written in the 1920s. The book was not translated into English until 1960: Epistemological Problems in Economics. It was really not about epistemology. It was about methodology, a narrower subject. In 1962, another short book by Mises was published: The Ultimate Foundation of Economic Science. It surveyed all of the themes that the two earlier books had covered. In the Preface, he declared in his opening words: “This essay is not a contribution to philosophy. It is merely the exposition of certain ideas that attempts to deal with the theory of knowledge ought to take into full account.” I take his words seriously. This was not a book on philosophy. Yet this was as close to epistemology as most economists ever get. I analyze Mises’ writings on methodology in Appendix A. I compare his views with a famous article on methodology by Milton Friedman.
There is a major book on the methodology of economics that interacts with modern physics: Nicholas Georgescu-Roegen’s The Entropy Law and the Economic Process. It deals with the relationship between cosmology’s crucial principle, the second law of thermodynamics, and economic theory. It was published by Harvard University Press in 1971. It is still in print. The text is 458 pages long. Most of it is readable if you pay close attention, but it is not easy to read. I cannot remember ever having seen any economist footnote it. Other economists do not interact with it. Four reviews were summarized in 1973 in a relatively obscure academic journal, The Journal of Economic Ideas, but then it disappeared.
Economists are not different from practitioners in other academic disciplines. They do not have a clear understanding of the relationship between philosophy and their disciplines. They are not interested in discovering such a relationship. They do not think it is important. They go about their academic tasks with varying degrees of diligence, but remain silent on epistemology. They are not criticized for doing this by their peers, who do the same thing. They are not criticized by scholars outside their disciplines, because those scholars also do the same thing. There are no academic liabilities or institutional liabilities for never presenting any discussion about the relationship between their minds and the world around them.
In this era of statistics, econometrics, and mathematics-defended economic theory, economists have adopted the trappings of physics. Here is a crucial question: “How is it that intelligent minds can use mathematics to explain cause-and-effect in the natural world?” Physicists, chemists, and other natural scientists search for such relationships. They are rewarded when they find them. But they do not discuss in detail how it is that they can do this. One of the rare exceptions to this silence was Eugene Wigner, a physicist who won the Nobel Prize in 1963. In 1960, he wrote an article for an academic journal in mathematics. The article had a provocative title: “The Unreasonable Effectiveness of Mathematics in the Natural Sciences.” I quoted from it in the Introduction to Part 1. Here is the problem that Wigner acknowledged, but which his peers choose to ignore, and still do.
It is true, of course, that physics chooses certain mathematical concepts for the formulation of the laws of nature, and surely only a fraction of all mathematical concepts is used in physics. It is true also that the concepts which were chosen were not selected arbitrarily from a listing of mathematical terms but were developed, in many if not most cases, independently by the physicist and recognized then as having been conceived before by the mathematician. It is not true, however, as is so often stated, that this had to happen because mathematics uses the simplest possible concepts and these were bound to occur in any formalism. As we saw before, the concepts of mathematics are not chosen for their conceptual simplicity—even sequences of pairs of numbers are far from being the simplest concepts—but for their amenability to clever manipulations and to striking, brilliant arguments. . . .It is difficult to avoid the impression that a miracle confronts us here, quite comparable in its striking nature to the miracle that the human mind can string a thousand arguments together without getting itself into contradictions, or to the two miracles of the existence of laws of nature and of the human mind's capacity to divine them. The observation which comes closest to an explanation for the mathematical concepts' cropping up in physics which I know is Einstein's statement that the only physical theories which we are willing to accept are the beautiful ones. It stands to argue that the concepts of mathematics, which invite the exercise of so much wit, have the quality of beauty. However, Einstein's observation can at best explain properties of theories which we are willing to believe and has no reference to the intrinsic accuracy of the theory.
He concluded his readable essay with these words: “The miracle of the appropriateness of the language of mathematics for the formulation of the laws of physics is a wonderful gift which we neither understand nor deserve. We should be grateful for it and hope that it will remain valid in future research and that it will extend, for better or for worse, to our pleasure, even though perhaps also to our bafflement, to wide branches of learning.” (http://bit.ly/WignerMath) The use of the word “miracle” is rare in academic circles.
Modern economics, as revealed in the most prestigious academic journals, uses formal mathematics extensively. Indeed, it seems as though economists believe that only by imitating physicists can they begin to approach economic truth, and even more important, sufficient academic respect to gain tenure. Mises opposed the use of mathematics in economic theory from the beginning. He argued that the logic of mathematics does not apply to the logic of making decisions. But he was not followed in this rejection of mathematics by members of the economics profession.
I remember clearly a discussion that I had with a professor of economics at the University of California, Riverside, probably in the spring semester of 1965. His name was Carl Uhr. He was the best-known economist in the department, which was not well-known. He had written a book a few years earlier on the economics of the Swedish economist, Knut Wicksell, an influential, non-mathematical economist who wrote early in the twentieth century. It was the only thing that Uhr ever wrote that gained attention from his peers. A Google search reveals little else about him. I mentioned my skepticism regarding the use of mathematics in economics. He responded as follows: “We are mowing down with machine-gun precision those economists who do not use mathematics.” Yet he used no mathematics in his book. He taught the history of economic thought, the non-mathematical corner of the economics curriculum. So, when he said “we,” he did not mean himself. He had escaped the machine-gun nest, which had been sporadic in his pre-Keynesian graduate school days, so he was safe and secure in his tax-funded tenure. Nevertheless, his machine-gun metaphor was a memorable image. It accurately summarized what was happening in the economics academic guild. (A major economist who escaped this machine gunning was Ronald Coase, who won the Nobel prize in 1991. His deservedly famous essay, “The Problem of Social Cost” [1960], is probably the most widely quoted economics journal article ever written. His handful of articles written before that one also did not use mathematics. Coase used verbal logic.)
When I critique economic science’s epistemology, I survey the fundamental issue of epistemology: “What can men know, and how can they know it?” I do not discuss Kant in detail, whose philosophy undergirds almost all modern thought. This is because economists never discuss Kant in detail. They avoid epistemology like the plague. I have long relied on the writings of Van Til to guide me through the minefield of epistemology, especially Kant’s. But my brief survey here is not a crippling liability. The most self-conscious of the handful of economists who discuss epistemology occasionally invoke Kant’s name, but they do not cite his Critique of Pure Reason (1781) or his Critique of Practical Reason (1787). I am unaware of any secondary sources of Kantian logic that those few economists who discuss epistemology rely on. I doubt that there is such a book. For better or worse, I have relied on Richard Kroner’s book, Kant’s Weltanschauung (1914), which was translated into English in 1956.
By dualism, I mean an irreconcilable logical contradiction. I mean two hermetically sealed-off positions, both of which are said to be true, but which are logically contradictory. I am speaking of the fundamental dualism of humanism: the hypothetically unchanging logic of the mind vs. the constant flux of the world around us. I have in mind the world of nature, organic and inorganic. I also have in mind the flux of human history. How are theory and history related? How are they connected, thereby enabling man to say anything coherent about anything outside his mind?
Van Til described this as the dualism of Parmenides and Heraclitus, a pair of sixth-century B.C. Greek philosophers. Parmenides argued that logic is consistent and unchanging. Heraclitus argued that the world is always in flux. This raised a question: “What does unchanging logic have to do with constant flux?” It was this question: “What is the point of contact between them?” According to Van Til, Plato attempted to reconcile the two positions, but he failed. He could never show how the hypothetical realm of unchanging Ideas or Forms could influence or even connect to the constantly changing matter that constitutes history. Western philosophy ever since has been unable to reconcile them. Eastern philosophy does not try. This is the problem that Wigner raised with respect to the connection between the logic of mathematics and certain operations in the physical realm around us.
This is the problem of every theorist. He attempts to find continuities in the world around us, continuities that can be discovered by means of the observation of facts and then assessment by logic. But if logic does not change, and the world around us is in constant flux, how does unchanging logic intersect with constant flux? Next question: “Should new facts force the theorist to revise his theory?” If he does not revise his theory, will his theory become irrelevant over time? Mises argued that his theory of economics, being deductive, would not change over time. But his most famous disciple, F. A. Hayek, was a consistent evolutionist. He concluded that, under some future evolutionary social conditions, it may be mandatory to revise what we regard today as irrefutable logical analyses of the market. (I discussed this in Appendix B of my 2012 book, Sovereignty and Dominion. I discussed it first in 1982 in Appendix B of the original version of that book, The Dominion Covenant: Genesis.)
Here is the biblical solution. There is ethical and judicial constancy in the world. This constancy comes from the constancy of God. “God is not a man, that he should lie, Or a human being, that he should change his mind” (Numbers 23:19). “For I, the Lord, have not changed; therefore you, sons of Jacob, have not come to an end” (Malachi 3:6). “Every good gift and every perfect gift is from above. It comes down from the Father of lights. With him there is no changing or shadow because of turning” (James 1:17). [North, Epistles, ch. 34] God is not surprised at any turn of events. He is sovereign over events.
In contrast is modern philosophy. It is unable to provide a systematic explanation of how the logic of men’s minds, or at least very smart men’s minds, understands the flux around us. The humanist believes that there is an interconnection. His seemingly best example is mathematics. But if the mathematician is also incapable of solving this issue, as Wigner argued is the case, then the humanist is in trouble.
The humanist is in very big trouble.
Van Til emphasized throughout his long career that modern thought is plagued by an epistemological dualism that can be traced back to Kant. Kant divided reason into two radically separate realms, the phenomenal and the noumenal. The phenomenal realm is the realm of scientific calculation, of measurable cause and effect. Effects have specific causes. In this sense, effects are determined by their causes. It is this determinism of the phenomenal realm that is the basis of all scientific investigations (except in the subatomic world of quantum mechanics, where there are crucially important effects which have no known or knowable causes—in fact, which are believed by scientists to have no physical causes).
In the phenomenal realm there is no choice. There is no responsibility. Everything is determined. Yet Kant proclaimed the legitimacy of ethics. He did so by affirming another realm, which he called the noumenal. But he could not show how the two realms were related. They were autonomous. Van Til called this the science/personality dualism and the nature/freedom dualism. If nature’s causation is governed by unbreakable law, then so is man. Man is the product of nature. But if man is determined by scientific cause and effect, he does not possess freedom. Kant put the problem this way in The Critique of Pure Reason: “We have, therefore, nothing but nature to which we must look for connection and order in cosmical events. Freedom—independence of the laws of nature—is certainly a deliverance from restraint, but it is also a relinquishing of the guidance of law and rule. For it cannot be alleged that, instead of the laws of nature, laws of freedom may be introduced into the causality of the course of nature. For, if freedom were determined according to laws, it would be no longer freedom, but merely nature.”
Man loses his freedom, which is swallowed by impersonal nature. Man can claim to be free only by claiming to be somehow outside of the laws of nature, meaning outside of nature’s deterministic laws of cause and effect. Kant put it this way: “We must understand, on the contrary, by the term freedom, in the cosmological sense, a faculty of the spontaneous origination of a state; the causality of which, therefore, is not subordinated to another cause determining it in time.” But if man is in some unstated and undefinable way distinct from nature, and therefore not completely determined by nature’s unbreakable laws of impersonal, purposeless causation, there is no way to explain logically how man can control any aspect of nature from outside of nature. There is no point of contact. There is therefore no lever of control. He loses power. On the other hand again, if he does somehow gain power over nature, then he is in principle subject to other men’s power over him, since they may be able to manipulate nature more efficiently than he can. It’s “damned if you do, damned if you don’t.” This is Kant’s legacy to modern man.
In a world of predictable and therefore inescapable physical cause and effect, human freedom disappears. So does the reality of ethical behavior, given the worldview of humanism, for such behavior is based on the independent (autonomous) existence of freely determined human choice. Responsible men are regarded as more than mere biological counting machines. Calculating machines are neither moral nor immoral. They do not choose; they simply respond to inputs according to their humanly designed programs. How can personal responsibility exist in a world of determinism? Kant attempted to salvage both freedom and ethics by positing the existence of an independent (autonomous) noumenal realm of the human personality, or human spirit, which he argued is also the realm of ethical choice. This realm is not under the strict physical determinism that governs the phenomenal realm. The noumenal realm is marked by human freedom and responsibility.
The crucial intellectual problem for the humanist is this: neither Kant nor any philosopher, neither the psychologist nor the social theorist, has been able to describe or explain the link between these two realms. To the extent that the noumenal can be classified, defined, and described rationally in terms of the phenomenal realm's logic, it loses its character as a realm of pure indeterminism. Yet Kant said that this pure indeterminism must be present in order for there to be a realm of human choice, of human action as distinguished from determined human response. For all post-Kantian thought, man without the noumenal becomes an automaton. He does not act. He merely responds to stimuli.
Without the ability to think coherently about cause and effect, including ethical cause and effect, man is left adrift in a sea of irrationalism. How can personal responsibility exist in a world of irrationalism? Madmen who break the law or ignore conventions are generally treated as outside the law, and are incarcerated. Thus, the total freedom of the noumenal leads directly to the literal straightjacket of phenomenal judgment and the loss of freedom. The key unanswered problem is this: “How is the life of man's spirit related to his visible walk?” Humanist thought has no solution.
This problem is not merely a speculative exercise of philosophers. It has inescapable consequences in every area of life, including the science of economics. A crisis in general epistemology produces crises in specific epistemologies. Ultimately, of course, it is a crisis in ethics, for ethics in the Kantian worldview is governed (yet somehow not determined) by the noumenal.
Virtually all modern humanistic scholarship relies on two foundations: the philosophy of Immanuel Kant and the evolutionary worldview of Charles Darwin. This fact is never discussed at the beginning of a college-level textbook in any academic discipline. There is no mention of philosophical foundations. There is no mention of the presuppositions undergirding these foundations. Students are introduced to the field on the assumption that there is no debate over the reliability of these philosophical foundations. I would not call this a self-conscious strategy on the part of the textbook authors. Rather, it is part of the ongoing comprehensive naïveté of modern scholars. They are never taught the basics of epistemology in their college careers. They are also not taught the connections between these foundations and the methodological assumptions of their academic discipline. They naïvely assume what they need first to prove. They are incapable of proving it, but they get away with this because no one calls their bluff.
I have introduced this material in order to strengthen your self-confidence in pursuing the field of economics as a Christian scholar. Humanistic economists are like Goliath facing David. They look invincible. But they have a weak point in their armor. Their reliance on the philosophy of Kant is this weak point.
In his 1969 book, The Historical Setting of the Austrian School of Economics, Mises criticized the German economist Gustav von Schmoller for not having read these scholars: Wilhelm Windelband, Henrich Rickert, and Max Weber. Windelband was a Kantian. I have read Rickert’s Science and History: A Critique of Positivist Epistemology, and I have read several books by Weber. I wrote a graduate school paper for Robert Nisbet on Weber’s Kantian dualism, which I reprinted in the book I edited, Foundations of Christian Scholarship: Essays in the Van Til Tradition (1976). Mises did not cite Kant’s writings, only his name. I am not saying that he had not read Kant. He just did not think it was important to discuss Kant.
As with Windelband, Mises was a Kantian. Mises did not escape Kant’s nature/freedom dualism. He wrote the following early in Human Action.
Reason and experience show us two separate realms: the external world of physical, chemical, and physiological phenomena and the internal world of thought, feeling, valuation, and purposeful action. No bridge connects—as far as we can see today—these two spheres. Identical external events result sometimes in different human responses, and different external events produce sometimes the same human response. We do not know why.In the face of this state of affairs we cannot help withholding judgment on the essential statements of monism and materialism. We may or may not believe that the natural sciences will succeed one day in explaining the production of definite ideas, judgments of value, and actions in the same way in which they explain the production of a chemical compound as the necessary and unavoidable outcome of a certain combination of elements. In the meantime we are bound to acquiesce in a methodological dualism (I:3).
Natural scientists will never succeed in explaining the production of ideas, value judgments, and actions as precisely as they explain causal connections between physical events. People are not machines, nor are they digital algorithms. They are made in God’s image. They are uniquely personal, just as God is. The Bible offers a different explanation for historical causation, animate and inanimate: God’s sustaining providence. Mises rejected the idea of God’s sustaining providence. “The scientific theory as developed by the social philosophy of eighteenth-century rationalism and modern economics does not resort to any miraculous interference of superhuman powers” (VIII: 2) He rejected the Bible’s concept of cosmic personalism. His viewpoint is echoed throughout the world of social scientists. This is why there is a need for the reconstruction of all social science by Christian scholars.
1. Knowing and Doing
The Apostle Paul wrote this to his disciple Timothy: “All scripture has been inspired by God. It is profitable for doctrine, for conviction, for correction, and for training in righteousness. This is so that the man of God may be competent, equipped for every good work” (II Timothy 3:16–17). This declaration of biblical authority was not merely a declaration regarding the final earthly authority of truth: Scripture. His was a declaration of service. The focus of Paul’s concern was on thought and action. This was also James’ focus. “Be doers of the word and not only hearers, deceiving yourselves. For if anyone is a hearer of the word but not a doer, he is like a man who examines his natural face in a mirror. He examines himself and then goes away and immediately forgets what he was like. But the person who looks carefully into the perfect law of freedom, and continues to do so, not just being a hearer who forgets, this man will be blessed in his actions” (James 1:22–25). Both men affirmed, as did Leviticus 26, Deuteronomy 28, and several Psalms, that there is a predictable connection between biblical ethics and economic outcomes. The connection applies to individuals. “Blessed is the man who does not walk in the advice of the wicked, or stand in the pathway with sinners, or sit in the assembly of mockers. But his delight is in the law of the Lord, and on his law he meditates day and night. He will be like a tree planted by the streams of water that produces its fruit in its season, whose leaves do not wither; whatever he does will prosper. The wicked are not so, but are instead like the chaff that the wind drives away. So the wicked will not stand in the judgment, nor sinners in the assembly of the righteous. For the Lord approves of the way of the righteous, but the way of the wicked will perish” (Psalm 1:1–6). [North, Psalms, ch. 1] It also applies to collectives, such as nations. Moses spoke to the assembled generation of the inheritance just before the conquest of Canaan.
He fed you in the wilderness with manna that your ancestors had never known, so that he might humble you and test you, to do you good in the end, but you may say in your heart, ‘My power and the might of my hand acquired all this wealth.’ But you will call to mind the Lord your God, for it is he who gives you the power to get wealth; that he may establish his covenant that he swore to your fathers, as it is today. It will happen that, if you will forget the Lord your God and walk after other gods, worship them, and reverence them, I testify against you today that you will surely perish (Deuteronomy 8:16–19).
How can men know what God requires of them, both individually and corporately? They must go to the Bible in search of God’s laws. They must then learn to apply these general laws to specific ethical circumstances: casuistry. This includes economic circumstances.
2. The Covenantal Connection
How is casuistry possible? How can men grasp the connection between written laws in the Bible and history, which is always changing? By the exercise of their God-given judgment: point four of the biblical covenant. Paul wrote: “For it is not the hearers of the law who are righteous before God, but it is the doers of the law who will be justified. For when Gentiles, who do not have the law, do by nature the things of the law, they are a law to themselves, although they do not have the law. By this they show that the actions required by the law are written in their hearts. Their conscience also bears witness to them, and their own thoughts either accuse or defend them to themselves and also to God. That will happen on the day when God will judge the secrets of all people, according to my gospel, through Jesus Christ” (Romans 2:13–16). [North, Romans, ch. 3] He did not say that the law is written on the hearts of covenant-breakers. He said that the actions required by the law are written in their hearts. The author of the Book of Hebrews, citing Jeremiah 31:31–34, said that Jeremiah’s prophecy is fulfilled in the New Covenant. Jeremiah had prophesied that God would write the law on the hearts of redeemed people. The author concluded: “By calling this covenant ‘new,’ he declared the first covenant to be old, and what has become old and obsolete will soon disappear” (Hebrews 8:15). The Old Covenant order disappeared with the fall of Jerusalem in A.D. 70.
Paul spoke of the Holy Spirit and the mind of Christ. “The Spirit interprets spiritual words with spiritual wisdom. The unspiritual person does not receive the things that belong to the Spirit of God, for they are foolishness to him. He cannot know them because they are spiritually discerned. The one who is spiritual judges all things, but he is not subject to the judgment of others. ‘For who can know the mind of the Lord, that he can instruct him?’ But we have the mind of Christ” (I Corinthians 2:13–16). [North, First Corinthgians, ch. 2] Here is the foundation of Christian epistemology. There is an original ethical unity in principle between God’s laws and the minds of grace-redeemed people. This unity was fulfilled by Christ in history. This unity is established by God’s judicial transfer of Christ’s completed righteousness to redeemed people. Then they work out these principles in their lives. Paul wrote: “So then, my beloved, as you always obey, not only in my presence but now much more in my absence, work out your own salvation with fear and trembling. For it is God who is working in you both to will and to work for his good pleasure” (Philippians 2:12–13). [North, The Epistles, ch. 20:C] Our ethical sanctification, i.e., our being set apart by God, is transferred definitively at the time of our conversion. We develop it progressively through our lives. It is announced finally by God at the final judgment.
This three-stage process—definitive, progressive, and final—applies to individuals. It also applies to covenantal collectives: local churches, nations, and economies. That was what Moses declared in Deuteronomy 8:18. [North, Deuteronomy, ch. 21] There is positive feedback between covenant-keeping, economic blessings, and more covenant-keeping. “But you will call to mind the Lord your God, for it is he who gives you the power to get wealth; that he may establish his covenant that he swore to your fathers, as it is today.” [North, Deuteronomy, ch. 22] The blessings had a purpose: to confirm God’s law-based national covenant. There was a covenantal system of positive feedback between national obedience and visible national blessings. This has not changed in the New Covenant era.
3. The Humanists’ Non-Connection
Humanistic economists agree on little. They do agree on this: there is economic scarcity. They define scarcity as follows: “At zero price, there is greater demand than supply.” They also agree that it is the goal of all people to overcome economic scarcity in their lives. People want economic growth personally. So, the vast majority of economists affirm economic growth as a legitimate goal of society. Most of them see this as the supreme economic goal of nations. Adam Smith affirmed this in his famous book, which had this title: An Inquiry into the Nature and Causes of the Wealth of Nations (1776). No critic argued against this national goal, but economists have disagreed greatly on the correct policies, individual and civil, to attain this goal.
Non-Christian economists face two major epistemological questions. First, on what ethical basis can they legitimately affirm the legitimacy of any collective goal? Second, how can they prove that there is a connection between specific government policies and economic outcomes?
What about this first goal, i.e., establishing the legitimacy for adopting the goal of national economic growth? Economists ever since 1871 have insisted that economic value is imputed subjectively by individuals. There is no such thing as intrinsic value, they insist. There is only subjectively imputed value. They have broken with the classical economists on this point. Classical economists had argued that value is infused into goods and services by either human labor or the cost of production. Post-classical economists began with a denial of this connection. In his book, Principles of Economics (1871), Austrian economist Carl Menger argued that economic value does not go from labor to goods. It goes from subjective imputations by individuals, who then compete against each other by bidding up prices, back to the goods required to produce consumer goods. This new view was the triumph of nominalism over realism.
Nominalism is a philosophy that goes back at least to the early fourteenth century. It argues that individual evaluation is the basis of our understanding of the world around us. Individuals name objects. Objects do not have intrinsic characteristics. The opposite view is realism. Realism holds that objects possess inherent characteristics. Men perceive these characteristics and name them accordingly.
Let me give an example. Consider the forbidden fruit. Adam was told not to eat from the forbidden tree. He disobeyed God. Why did this matter? Why was God so concerned about this? Was the forbidden fruit poison? No. But Adam died. So do we. Blaming poison or some physical aspect of the fruit would be the preferred argument of a realist. So, was the fruit merely a symbol? Did eating from the tree involve merely a symbolic violation of God’s law? That would be the argument of the nominalist. I reject both approaches. I am a covenantalist. I argue that the tree was important judicially. There was a legal boundary around property owned by God. So, when Adam violated the boundary, he broke God’s covenant. He stole from God. The result was God’s judgment on his body and also on the creation that was under his authority (Genesis 3:17–19). [North, Genesis, ch. 12]
I wrote in Chapter 2 about the debate between realism (labor theory of value) and nominalism (imputed value) as it applies to economic theory. Neither position holds up. Menger moved economic theory away from realism. But this raised a major problem for economists. It is a philosophical problem. It is also a practical problem. Different individuals impute different values to specific goods and services. There is no legitimate way scientifically for nominalist economists and policy-makers to declare that any policy affecting the collective is beneficial to all residents in the commonwealth. There is no solution to this issue in a world of pure nominalism. Economic value for a nominalist is subjective and individual. There is no objective measure of economic value or any other corporate value. There is no common measure.
This conclusion was affirmed by Lionel Robbins in his 1932 book, An Essay on the Nature and Significance of Economic Science. There is no way to make scientific comparisons of subjective utility. Subjective utility is based on individual preferences: this rather than that. But my preference for this may not be your preference. There is no way that any government official can decide, based on the science of economics, which of us is correct.
In the rough-and-tumble of political struggle, differences of opinion may arise either as a result of differences about ends or as a result of differences about the means of attaining ends. Now, as regards the first type of difference, neither Economics nor any other science can provide any solvent. If we disagree about ends it is a case of thy blood or mine—or live and let live, according to the importance of the difference, or the relative strength of our opponents. But, if we disagree about means, then scientific analysis can often help us to resolve our differences. If we disagree about the morality of the taking of interest (and we understand what we are talking about), then there is no room for argument. But if we disagree about the objective implications of fluctuations in the rate of interest, then economic analysis should enable us to settle our dispute (p. 134).
The debate over economic value is always a debate over ethics. Economic value is not objective, says the nominalist. Therefore, there is no way to get from subjective individual valuation to what Robbins called the “objective implications.” Robbins concluded: “Faced with the problem of deciding between this and that, we are not entitled to look to Economics for the ultimate decision. There is nothing in Economics which relieves us of the obligation to choose. There is nothing in any kind of science which can decide the ultimate problem of preference” (p. 136). But when he said “us,” he meant individuals. Individual valuation does not solve the epistemological problem of identifying the collective valuation. There is no collective valuation in the nominalist’s world. No economist has offered a scientific solution to this problem of aggregation of individual subjective valuation. I contend that no economist ever will.
In Chapter 3, I discussed a debate that took place between Robbins and Keynesian economist Roy Harrod in 1938. The debate was published in the scholarly journal that Harrod edited, The Economic Journal. Harrod pointed out that if Robbins was correct about the inability of economists to make interpersonal comparisons of subjective utility, then there is no role for the economist as an advisor to policy-makers. Harrod’s point was accurate: every recommendation to a policy-maker involves aggregating individual valuations. The advisor is saying that, in the balance between winners and losers, it is better for society to pursue a particular policy objective. But if Robbins is correct, it is impossible to make this aggregation. He backed off from his position, but he never explained philosophically why his original position was incorrect. It was not incorrect. It is an inescapable implication of all forms of nominalism. This was as true in 1938 as it was in 1300. It is still true today. It will be true until the end of time.
The archetype of authoritative neutral logic is mathematics. I have already mentioned Wigner’s assessment. There is no way to explain how the logical coherence of mathematics is relevant to the world of nature. This is the mind/matter dualism. But there are other anomalies in the logic of mathematics. Some of these were described in a 1976 article by Vern Poythress, who earned a Ph.D. in mathematics from Harvard University, and who taught theology at Westminster Seminary in Philadelphia for four decades. The article is titled “A Biblical View of Mathematics.” It appeared in Foundations of Christian Scholarship. He showed, first, that there is an inherent dualism within the logic of mathematics: a replay of the Parmenides/Heraclitus dualism. Second, he showed that mathematics is not neutral. Third, he showed that mathematicians do not agree on a theory of mathematics, i.e., epistemology. My point here is this: if mathematics is not immune to the accusations of dualism, non-neutrality, and logical incoherence, then more mundane, less rigorous forms of logic are equally vulnerable.
1. Law vs. Chance
I begin with the issue of stability over time. This is the issue that Parmenides raised. We need a source of stability in our thought processes. Our logic must be stable. So must parts of the world around us. Our truths must be universal: in our minds and also in the world around us. But how can we prove that they are universal? Why do we believe that they are? After all, we live in a constantly changing world. That was what Heraclitus said so long ago. Poythress wrote:
Suppose that one emphasizes the a priori character of mathematical knowledge. Then ‘2 + 2 = 4’ is some kind of universal, eternal truth. But why, in that case, should two apples plus two apples usually, in experience, make four apples? Why should an admittedly contingent world offer us repeated instances of this truth, many more instances than we could expect by chance? If the external world is purely a chance matter, if anything can happen in the broadest possible sense, if the sun may not rise tomorrow, if, as a matter of fact, there may be no sun, or only a sputnik, when tomorrow comes, if there may be no tomorrow, etc., can there be any assured statement at all about apples? Why, for instance, do not apples disappear and appear randomly while we are counting them? If, on the other hand, the external world has some degree of regularity mixed in with its chance elements, why expect that regularity to coincide, in even the remotest way, with the a priori mathematical expectations of human minds? Such questions can be multiplied without limit. Once one has made the Cartesian separation of mind and matter, of a priori and a posteriori, one can never get them back together again (p. 169).
This is not academic quibbling. With respect to subatomic physics, there really are no known answers to these questions. There is no causation such as Newtonian physics postulates. There are only statistical patterns. Physicists find that cause and effect (unity over time) does not operate at the subatomic level in the same way that it does “up here.” Causes can produce effects over distance simultaneously in the subatomic world. Physicists have known this since the mid-1960s: Bell’s theorem. You and I do not spend time thinking about Bell’s theorem, but physicists do. The stable world of Newtonian physics has not been with us for many decades. We may think that it is with us, but only because we operate up here. But down there, it is long gone.
Why does Newtonian physics operate up here? Why do we think of our world in terms of the metaphor of the machine? Is the world more like a machine or like an organism? Or is it really like neither one? These are not trick questions.
2. The Myth of Neutrality
Most people think of mathematics as neutral. There is this faith in an equation: 1 + 1 = 2. Isn’t this neutral? Isn’t this independent of any religious support? According to Poythress, the correct answers to these rhetorical questions are no and no. He discussed some of these issues. “So, first of all, what differences have arisen in mathematics in connection with religious belief? Differences have arisen over arithmetic truth, over standards for proof, over number- theoretic truth, over geometric truth, over truths of analysis, over mathematical existence—not to mention the long-standing epistemological disputes over the source of mathematical truth” (p. 160). What epistemological disputes is he referring to? Here are a few of them. “Mathematicians, like other scientists, have a certain confidence in their convictions. This needs to be justified. How do we come to know that 2 + 2 = 4? By internal means (a priori; independent of existence) or by external means (a posteriori; derived from experience)? Do we gain the knowledge by introspection? By reminiscence (Plato)? By logical argument (Russell)? Or do we gain it by repeated experience of two apples and two apples (John S. Mill)? Or some combination of these? Or is ‘2 + 2 = 4’ not real ‘knowledge’ at all, but simply a linguistic convention about how we use ‘2’ and ‘4.’ (A. J. Ayer)?” (pp. 168–69)
3. The Conflicting Foundations of Humanistic Mathematics
Poythress described something that most people are unaware of. Mathematicians do not agree on what the foundation of mathematics is. Most people presume that there is agreement. Here is philosophical reality.
The philosophers of mathematics in the past have tried in turn to reduce mathematics to (a) linguistics (“mathematics is the science of formal languages”— the formalists), (b) to psychology (“mathematics is the study of mental mathematical constructions”—the intuitionists), (c) to logic (“mathematics is a branch of logic”—the logicists), (d) to physics (“mathematics is generalized from since experience”—the empiricists), (e) to sociology (“mathematics is a group of socially useful statements”—the pragmatists). The form of the supposed reduction of mathematics thus gives us a rough and ready catalog of the major schools of the philosophy of mathematics.As we might expect, such attempted reductions never really succeed. At some point, they do not do justice to the distinctive character of mathematical truth, as over against physical, linguistic, psychological truth. . . . They each refute the others, by showing up a side of the picture that the others have not sufficiently acknowledged (pp. 174–75).
If there is no agreement among mathematicians about the nature of mathematics, then why should we expect that there would be agreement among other schools of philosophy? There is no agreement. There is only agreement on this: God did not create the universe out of nothing, and he does not providentially sustain it today.
A consideration of epistemology is important for Christians primarily to give them confidence in their worldview (covenantal) and also their assessment of the world around them. Covenant-breakers are confident about their rejection of the epistemological relevance of the God of the Bible and the authority of the Bible. They presume that their understanding of their own logic and also their understanding of the relationship of their logic to the changing world around them are reliable. They are confident that the world cannot be what the Bible says it is. Therefore, they presume that they do not have to go to the Bible in search of permanent principles of interpretation that will govern both their imputation of economic value and their understanding of the world around them. They presume that they can safely rely on their own good judgment.
Point four of the biblical covenant is about judgment. It is therefore about imputation: imputing meaning and also imputing economic value. It is about evaluating the world around us in terms of fixed principles: moral, judicial, ethical, and epistemological. The covenant-breaker presupposes that his logic is correct, and he also presupposes that it correctly assesses the world around him. These are his presuppositions, usually unstated and never defended publicly. They are not the product of his careful research into the issues of epistemology. He cannot show how or why his logic is consistent over time, but he presumes that it is. He cannot show how or why his logic connects closely to patterns in the world around him. He also cannot explain the patterns. That was Wigner’s point about the relationship between mathematics and physics. This connection is an unreasonable assumption, yet it works. He called this a miracle. It is not a miracle. It is covenantal.
Mises raised this same question with respect to economic logic and the external world. In a 1951 lecture, “Acting Man and Economics,” he raised the issue of the logic/reality connection.
The way in which economic knowledge, economic theory, and so on relate to economic history and everyday life is the same as the relation of logic and mathematics to our grasp of the natural sciences. Therefore, we can eliminate this anti-egoism and accept the fact that the teachings of economic theory are derived from reason. Logic and mathematics are derived in a similar way from reason; there is no such thing as experiment and laboratory research in the field of mathematics. According to one mathematician, the only equipment a mathematician needs is a pencil, a piece of paper, and a wastebasket—his tools are mental.But, we may ask, how is it possible for mathematics, which is something developed purely from the human mind without reference to the external world and reality, to be used for a grasp of the physical universe that exists and operates outside of our mind? Answers to this question have been offered by the French mathematician Henri Poincaré [1854–1912] and physicist Albert Einstein [1879–1955]. Economists can ask the same question about economics. How is it possible that something developed exclusively from our own reason, from our own mind, while sitting in an armchair, can be used for a grasp of what is taking place on the market and in the world?
He asked: “How is it possible that something developed exclusively from our own reason, from our own mind, while sitting in an armchair, can be used for a grasp of what is taking place on the market and in the world?” He refused to answer his own penetrating question. He referred to a pair of mathematical experts, but he did not explain here or anywhere else what they said or how they solved this crucial epistemological problem. He invoked reason. Invoking the word “reason” is not an explanation. Wigner invoked the word “miracle” rather than offer an explanation. Wigner was closer to the truth on this point than Mises was, but they both missed the point. The point is this: the connection is covenantal. We live in a providential world. A sovereign God has provided man, who is made in His image, with understanding of external cause and effect.
As a Christian, you must use your God-given logic and your God-given power of observation to make judgments regarding the world. This is your covenantal assignment. Remember: Adam had to name the animals of the garden before he was given Eve (Genesis 2:19–22). Work is basic to your covenantal life. You may also choose to accept an additional assignment: to become a scholar. This will mean added work and added responsibility. There may be no earthly rewards. Count the cost. But also count the benefits.
I end with this observation by Van Til in his book, An Introduction to Systematic Theology (1961). “The gift of logical reason was given by God to man in order that he might order the revelation of God for himself. It was not given [to] him that he might by means of it will legislate as to what is possible and what is actual. When man makes a ‘system’ for himself of the content of revelation given him in Scripture, this system is subject to, not independent of, Scripture. Thus the idea of system employed by the Christian is quite different from the idea of system as employed in modern philosophy” (p. 256). If you are interested in investigating this issue in greater detail, I recommend his book, A Survey of Christian Epistemology. If you read this book and Greg Bahnsen’s book, Van Til’s Apologetics: Readings and Analysis (1998), you will be in a good position to assess the implicit presuppositions by academic economists, which are usually devoid of any pretense of proof, regarding the intellectual foundations of economic theory.
Very few economists have read even one book on epistemology. They have not read Kant’s major works, Critique of Pure Reason and Critique of Practical Reason. They have not thought about what Kant wrote about the connections between man’s logic and the external realm beyond logic. They have also not thought about how and why what Kant taught has affected what they believe about economic logic and its connection with economic causality. When it comes to epistemology, they are faking it. They are presuming what they need to prove. They are not even self-conscious about their presuppositions. They may occasionally say to themselves, “Everyone knows this.” But not everyone knows it. Some of us emphatically reject it.
Mammon is not God. Mammon’s epistemology is not reliable. A word to the wise is sufficient.
________________________________
The full manuscript is posted here: https://www.garynorth.com/public/department196.cfm
© 2022 GaryNorth.com, Inc., 2005-2021 All Rights Reserved. Reproduction without permission prohibited.