This post is the fourth in a series about ethics, theology, and critiques of economic methodology. Each post is a portion of an early draft of a paper that is forthcoming in the Journal of Interdisciplinary Studies. Here is a table of contents for the full series:
- The Separation of Facts and Values
- Rationality, Greed, and Reductionism
- Normative Rationality and Economic Culture (this post)
- A Faithful Practice of Economics
A PDF of an early draft of the full essay is available here.
The scientific approach that economists have embraced, including both the positive-normative distinction and rational agents, has two significant problems. The first problem is that economists actually do have a normative framework that is widely embraced. The way economists use the concept of efficiency refers to a state in which all mutually beneficial exchanges have taken place. By extension, an efficient outcome is one in which all resources have been put to the use that has the highest market value, subject to certain limits. This concept permeates microeconomic theory, and is central to the way we evaluate market outcomes, policy proposals, and institutions. While this concept clearly operates as a normative standard, it raises few objections from economists. Even textbooks that teach the positive-normative distinction also proceed to unabashedly advocate efficiency-enhancing policies. Moreover, if an economist wanted to avoid the unscientific practice of making a moral judgement, and decided to avoid the concept of efficiency, many standard economic ideas would have to be rejected. Economic treatments of trade, taxation, regulation, market-failures, government action, competition, and monopoly power all draw upon this conception of efficiency before reaching the standard conclusions.
The fact that economists would allow a small set of moral judgements into the standard toolkit is not mysterious if we examine the philosophic roots of modern economic thought and the sociological explanation for the embrace of a scientific approach. First, Long (2000, p. 224) observes that there is a very short distance between the human behavior that economists believe is “natural” and what we accept as “efficient.” If we think natural economic behavior is for individuals to optimize given stable preferences and constraints, then it is easy to conclude that we should expand the opportunities for individuals to optimize, according to their own preferences. Without a theological reason to reject what appears to be natural, we embrace it. This often takes the form of the “consumer sovereignty” rule of thumb which is common in economic thinking. In short, economists accept efficiency as a vision of progress because it fits with our basic assumptions about the world.
It is also important to note that this vision of progress-as-efficiency fits with the broader technocratic project of the economics profession. In particular, it is consonant with a minimalist libertarian vision of progress. Substantive accounts of the good are ruled out, leaving only the maximization of individual liberty. Because this relegates questions of ultimate value to matters of preference, this ethic allows economists to change the world while remaining “objective” in modern liberal-democratic terms. Thus, economists can advocate free trade, limited regulation, and faster economic growth without ever imagining that we are doing theology or ethics.
This, then, is the second problem with this scientific approach to economics: too little space is left for rational consideration of what would traditionally be ethical or theological concerns. This is the argument made by Husbands (2012), who argues that the fact-value distinction is philosophically suspect and has the consequence of making moral concerns pre-rational. If morality is a matter of preference, and rationality is the process of acting according to these preferences, then rationality is not available to evaluate preferences. Preferences (and thus ethics) become a source of potential conflict, rather than the grounds upon which we could rationally reach agreement. Long (2000, p. 222) makes a similar point, arguing that in standard economic thinking:
Moral philosophy and theology are relegated to evaluation: they are concerned with what ought to be. But in this analysis ‘what ought to be’ is not an intrinsic feature of creation, but rather a function of individual preference. Thus morality and theology are reduced to value consumption. The result is that economics positions the logic of theology within its own fact-value logic.
These theologians are arguing, in short, that theologically-informed economic reasoning cannot start after the economist has finished gathering the economic data. When we use market prices to measure the value of goods, we are already allowing the current distribution of income, through market demand, to influence our measures of costs, benefits, and progress (K. A. Van Til, 2007, pp. 35, 52). If we predict behavioral responses to a policy change first, and then use theology second to help us weigh outcomes, we have already skipped over the opportunity to discuss questions of human virtue or vice.
It is important to note, then, that economists cannot succeed in achieving the kind of objectivity we seek. In many other social sciences and the humanities, many have abandoned all claims to objectivity or neutrality. Economists need not go this far. We must be more nuanced, however in the kind of neutrality we claim, if we are going to be in dialogue with other disciplines with different concerns. It is impossible to contribute to and shape the discussion about human behavior without a theological/ethical framework. Even if we could spend all of our time documenting pure mathematical principles like the law of comparative advantage, we would still have adopted the role of chief technician in a public discussion that privileges this kind of amoral information. When we try to avoid doing ethics by merely describing behavior and cataloging costs and benefits we have already bought-in to the assumption that human behavior can be observed and predicted, and monetary values can be assigned, and possibly, decisions made, without any other knowledge about humanity.
Theological/philosophical accounts of humanity, moreover, have morality built in. An anthropology implies a particular ethics. As a result, when we assume that humans can be known and studied absent a particular ethic we are actually making a strong claim that conflicts with the theological anthropology that most theologians study and embrace. MacIntyre (2007) argues, for example, that ultimate ends and priorities are built into the particularities of existence. He argues that the very concept of a vocation, such as “farmer,” implies a particular set of ends by which we could evaluate whether the farmer was “good” or “bad.” Similarly, there are certain ends built into humans that are part of the factual content of being human. Exemplifying the characteristics that allow us to pursue those ends is what we call “virtue.” While economists could offer a different meta-ethical theory, to reject MacIntyre, or to reject an explicitly Christian theological narrative, is to take a strong position in a heavily contested ethical debate. As such, even if economists were able to excise the discipline’s normative commitment to individual choice, they would not, in fact, be operating in a neutral space.
If economists are operating with an unacknowledged ethical grounding, an economist might ask, why is it so hard to recognize? James K. A. Smith addresses this point most directly, arguing that:
the theologian is suggesting that what the economists take as a given, even as natural, is in fact deeply contingent, could be otherwise, and perhaps should be otherwise. For example, too often economists treat the current configuration of commerce and exchange as if it were natural, a veritable “given.” If the theologian then criticizes the capitalist order of commerce, then it would seem that the theologian is rejecting economic life per se.
Smith, 2010, p. 8
Long extends the point further, arguing that economists end up – perhaps inadvertently – acting as defenders and “spokespersons for the present distribution of social and political power” (2007, p. 38). According to this argument, the kind of rationality that economists have inherited from Weber serves as the intellectual foundation of the liberal political and economic system. Economists since Adam Smith have almost always worked within this tradition, and so our theories are reflective of, and reinforce, liberalism.
Long illustrates this point by exploring traditional theological conclusions about the economy, like the usury proscription or just wage theory. He argues that these explicitly moral economic goals have not been made obsolete by new knowledge, as economists sometimes imagine. Instead, they have been rejected because the reasoning and justifications that once made them important cannot even be translated into modern economic language. A just wage cannot be justified if we don’t start with a common assumption that economic exchange should be oriented toward the virtue of the participants (2001, pp. 249–250). Similarly, both Cavanaugh and Bell lament the conception of individual freedom that undergirds economic thought, arguing instead for an Augustinian conception of freedom, which is oriented toward the good (Bell, 2012, pp. 97–99; Cavanaugh, 2008, Chapter 1). This kind of freedom does not sound like freedom, however, to a population without a unified conception of the good.
While much ink has been spilled arguing about the fact-value distinction and rational choice modeling, most theologians are motivated to examine these issues because the logic of economics is culturally pervasive. These theologians see troubling applications of a minimalist economic rationality everywhere. Cavanaugh sees consumers embracing an empty materialism (2008, Chapter 2), and a global corporate supply chain that cares little for the poor (2008, Chapter 4). Bell observes an excessive individualism, a celebration of self-interest, and insatiable consumer desires (2012, Chapter 4). Long sees corporations ascending to positions of cultural authority and bringing with them a quest for profit (2007, Chapter 5). While all of these observations could be contested, the animating concern is that the world we live in increasingly reflects the kind of materialistic reductionism that economists are accused of encouraging.
While it is tempting for these theologians to assume that it is enough to show that capitalism and economics share a set of common sins, a good social scientist might demand better evidence. A representative sample of these economic behaviors would help, as well as some clear evidence of a causal relationship between economic theory and greed. Unfortunately, such evidence is usually limited, and providing it would be satisfying to the economists, but might be unconvincing to an audience of theologians.
This does not allow us to reject this concern, however. We should be wary that by pushing explicitly moral concepts out of economic work we are also marginalizing those same concerns when they come up in public debate. The evidence of an over-reliance on materialistic economic logic is everywhere. In the corporate world, arguments about public health concerns, sustainability, and even charity are often framed explicitly in terms of investment and profit. Choices about education are too often reduced to an explicitly material calculation: “Is this college degree going to get me a good job?” We should not be too surprised if, after years of exposure to our arguments, people talk about marriage as if it were fundamentally an economic relationship, or if we find ourselves unable to convince someone that pornography should be curtailed. None of these phenomena can be clearly blamed on economists, but our discipline is certainly part of the social movement that makes these phenomena possible.
 “Consumer sovereignty” is the presumption that individuals know best how to achieve their own well-being, and thus should be given wide latitude for choice.
Bell, D. (2012). The Economy of Desire: Christianity and Capitalism in a Postmodern World. Grand Rapids, MI: Baker Academic.
Cavanaugh, W. T. (2008). Being Consumed: Economics and Christian Desire. Grand Rapids, MI: Wm. B. Eerdmans Publishing Company.
Husbands, M. (2012). A Reconsideration of “Fact” and “Value” and the Moral Space within which Theologians and Economists may share Common Objects of Love. Faith & Economics, 60, 24–31.
Long, D. S. (2000). Divine Economy: Theology and the Market. New York: Routledge.
Long, D. S. (2001). The Goodness of God: Theology, Church, and the Social Order. Grand Rapids, MI: Brazos Press.
Long, D. S., Fox, N. R., & York, T. (2007). Calculated Futures: Theology, Ethics and Economics. Waco, TX: Baylor University Press.
MacIntyre, A. (2007). After Virtue: A Study in Moral Theory, (3rd ed.). University of Notre Dame Press.
Smith, J. K. A. (2010). The “Ecclesial” Critique of Globalization: Rethinking the Questions. Faith & Economics, 56, 5–19.
Van Til, K. A. (2007). Less Than Two Dollars a Day: A Christian View of World Poverty and the Free Market. Grand Rapids, Mich: Wm. B. Eerdmans Publishing Co.