But if any of you needs wisdom, let him ask for it from God, the one who gives generously and without rebuke to all who ask, and he will give it to him. But let him ask in faith, doubting nothing. For anyone who doubts is like a wave in the sea that is driven by the wind and tossed around (James 1:5–6).
You have survived Part 2. You should be ready to deal systematically with the topics of economic theory. The sea of economic theory should be getting calmer.
You were not starting from scratch when you began reading this volume. You should previously have read Volumes 1 and 2. I hope you had read The Covenantal Structure of Christian Economics. You already understood much of the material that is part of the corpus of economic theory. But you may not have understood this material in terms of the five integrating analytical categories of Christian economics: purpose, allocation, boundaries, imputation, and inheritance. Things should be getting clearer now. As you read the following chapters, you should be able to assess them in terms of one or more of these five categories. This will help you understand them better. It should also help you to remember them better.
I like to think of the covenant model in terms of a hand. The hand has five digits. The key digit is the thumb. The thumb lets us grab hold of objects. Without one, we are hampered. In the ancient world, a warrior without a thumb could not pull a bow string or hold a spear. A big toe is comparable in importance. We are unbalanced without our big toes. “But Adoni-Bezek fled, and they pursued him and caught him, and they cut off his thumbs and his big toes. Adoni-Bezek said, ‘Seventy kings, who had their thumbs and their big toes cut off, gathered their food from under my table. As I have done, even so God has done to me.’ They brought him to Jerusalem, and he died there” (Judges 1:7–8).
The thumb of the biblical covenant model is point one: God. In social theory, this is sovereignty, or at least it ought to be. In Christian economic theory, this is God’s original ownership. But original ownership is primarily a judicial category. From the standpoint of economic analysis, purpose is the thumb. It explains why God created the universe. It also explains why people act one way and not another. When I use the phrase “analytical category,” I mean a concept from which we can draw economic conclusions: “if . . . then.”
The Bible teaches that God is sovereign over nature. He is also sovereign in the affairs of men. Joseph’s declaration to his brothers in Egypt was accurate. “As for you, you meant to harm me, but God meant it for good, to preserve the lives of many people, as you see today” (Genesis 50:20). Solomon wrote: “The king's heart is a stream of water in the hand of the Lord; he turns it wherever he pleases. Every person’s way is right in his own eyes, but it is the Lord who weighs the hearts” (Proverbs 21:1–2). These passages affirm the biblical doctrine of providence: the comprehensive sustaining power of God in history. In Volume 1, Chapter 11, I identified providence as point one of the economic covenant in the era of redemption. But providence is not an analytical category. Rather, it is a conceptual category. Philosophers would call it a metaphysical category: how the world is held together. God’s providence provides the cosmic framework for analysis in every academic field. The doctrine of providence is the theological foundation of Christians’ declaration of the absolute sovereignty of God. This is a presupposition, not an analytical category.
Purpose is the initial analytical category of Christian economics. I say this because the New Testament clearly affirms that God’s purpose preceded His creation of the world. Man is made in God’s image. People have purposes: goals. This must be the starting point of economic analysis. I am not saying this because Mises adopted purpose as the starting point for his deductivist economic analysis. I prefer to argue that Mises adopted purpose as his starting point because he understood the principles of covenantal economic thought better than his contemporaries did. His insight was an aspect of God’s common grace to Mises.
Category two, allocation, is familiar to humanistic economists. They call this resource allocation. More specifically, they call it economizing. Some economists have defined economic theory in terms of this analytic category. This is a mistake.
Category three, boundaries, is better known among economists as property rights. These are legal immunities against invasion by non-owners. Free market economists affirm the private property order as crucial for maximizing economic efficiency. They refuse to invoke morality. Also, category three is associated with limits, including limits imposed by scarcity.
Category four, imputation, is an aspect of exercising judgment. It has to do with economic value. Ever since the publication of Carl Menger’s Principles of Economics (1871), economists have explained economic value in terms of men’s subjective imputation: pure nominalism. In order to keep economic theory from being sunk in a sea of competing subjective imputations, just as value theory (axiology) has been sunk in philosophy, Christian economists must affirm that imputation by the Bible’s Trinitarian God provides the conceptual foundation for identifying objective changes in economic development. For example, price index numbers are examples of such analytical tools. They are widely accepted by economists, yet they are conceptually illegitimate in terms of Menger’s subjective nominalism. They are statistical aggregates. Such aggregates are conceptually valid only if there is an objective scale of economic values, which cannot exist under nominalism.
Category five, inheritance, is clearly a judicial category, but it is also an economic category. It is the basis of humanistic economists’ only widely agreed-upon standard of performance: economic growth, which is measured by statistical aggregation (point four).
With these categories in mind, you are now ready to explore some important themes of economic theory, but from a Christian point of view.
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