Economics and The Bible

Rev Robert Malthus If economists accept the authority of the Bible and lordship of Jesus Christ, they have an epistemological basis for economics. They can derive the ethics from the Bible, they can derive the axioms from the Bible and they can understand the logic of human actions and choices much better. Without Bible, economics would be left with obscurity and economists with anger. With Bible, they will have clarity and hope. By Jerry Thomas.

Why should we study Economics? 

  1. Study of economics is an important part in the word of God.  It is said that there are 1600 verses in the Bible about money. Scholars say that Jesus taught more about money than any other single subject. Bible offers wealth as a blessing “Blessed shall be the fruit of thy body, and the fruit of thy ground, the increase of thy kine, and the flocks of thy sheep” (Deuteronomy 28: 4). Bible teach us about the source of money “But remember the LORD your God, for it is he who gives you the ability to produce wealth” (Deuteronomy 8:18). But Bible also warns about wrong attitude towards money. “For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through many sorrows” (1st Timothy 6:10). Jesus Christ was unambiguous when he said “You cannot serve God and Mammon” (Mathew 6: 24).


  1. It is an essential part of our evangelistic ministry “casting down imaginations, and every high thing that exalts itself against the knowledge of God and bringing into captivity every thought to the obedience of God” (2nd Corinthians 10:5). As we shall soon economics often exalts itself against the knowledge of God.


  1. Nobel Prize winner for Economics, Friedrich Hayek wrote in his essay The Dilemma of Specialization, that “In the study of society, exclusive concentration on a specialty has a peculiar baneful effect. It will not merely prevent us from being attractive company or good citizens, but may impair or competence in our proper field- or at least for some of the most important tasks we have to perform”.

  Economies and Economics

 At the outset, let me differentiate between economies and economics.

 Economies are structures or systems for production, distribution and consumption of goods. We have different types of economies. Feudal system, caste system, socialism, communism, capitalism are some of the examples of economies although some of these are not merely economies. Out of the many existing economies, capitalism is the one that is close to the Biblical principles. The tenets of caste system or communism are in different conflict with the principles of Bible so much so that they don’t deserve any attention from serious Christians except for breaking those. For example, the Biblical doctrines that say that all human beings are born equal sinned equally and have access to salvation equally are in conflict with basic tenets of caste system. Similarly the economic determinism and materialistic interpretation of history by communism are in direct conflict with Biblical understanding of the transcend nature of human beings and theistic interpretation of history. However scholars have argued that the origin of capitalism is in the Christianity itself. Max Weber in his classic book “Protestant Ethics and Capitalism”, Michael Novak in his book “The Spirit of Capitalism” or Francis Woehrling in his essay “Christian Economics” have marshaled many arguments to support this premise. Let me summarize two of the contributing factors: 

  1. The pursuit for money was and is universal. One can find stories for these in every culture. But the work ethics that produces wealth was not universal. In the olden days or even now in many parts of our country, work is not often appreciated. The aristocrats of Rome, Mandarian’s of China and the parasitic culture of upper caste in India are the demonstrations of this wrong work culture. In fact people believed that if one becomes rich, they will not work anymore. Workers were paid low wages so that they will never become rich and the profit was exploitation. But when the Bible became an open book, culture of work also got exalted. Weber records the many sermons in Churches where preachers considered laziness as a sin. Martin Luther taught that there is a ‘calling’ for every Christian- a calling to work. Hard work combined with a pious living made great profits which were invested in further development.


  1. The Bible introduced the concept of person into the pagan antiquity. Individual excellence and enterprise are the results of the triumph of the Christian concept of person. Wilhelm Windelband, a renowned historian of Philosophy states “Hellenism (polytheistic Greeks) sees in personality a restriction and a characteristic of the finite, which would never apply to the Supreme Being but only to the particular gods. Neo- Platonism (philosophical Greeks) saw in personality only transitory product of a life in which as a whole is impersonal. Christianity, as a divine religion, demands a personal relation to the ground of the world conceived as supreme personality and it expresses this demand in the thought of divine son ship of man. It is the essential feature of the Christian concept of the world that it regards the person and persons to one another as the essence of reality.” Applying to Indian context, while the popular polytheism which is the Indian version of Hellenism demeans the concept of person and philosophical pantheism or Advita philosophy which is the parallel to Greek philosophy invalidates it.

 There are many more factors that contributed to the creation of capitalism. As the time does not permit us to go in details, let me move t

o the economics which is the main theme of our discussion. 

Economics and the Bible  

Economics and Bible are related in many ways. Biblical theology provides the basis for many of the theories of economics. As we have seen without the biblical theology, there would not have been a value of labor. Then gospel of Jesus converts the hearts of the people so that they will become trustworthy in the market. Apart from these, there is another way that Economics and Bible are related to each other. That is the relationship between ethics and economics. If economics is not related to say to ethics then there is very little relationship between economics as a discipline and Bible except in providing theological abstractions to some of the concepts. But if economics is related to ethics then at every turn of the economics, Bible has a voice to make. Let us see some of the definitions of economics. Someone who was not so fond of economics defined economics as the painful elaboration of the obvious. J M Keynes, a towering economist of the last century is said to have defined economics in this way: “Economics is what economists do”.  Now those who see a relationship between ethics and economics define it as the body of propositions concerning the logic of human choice. This definition tries to make economics as an interdisciplinary subject.  Whereas others who consider economics as value-free and see it as define it as the scientific study of the choices made by individuals and societies in regard to the alternative uses of scarce resources which are employed to satisfy wants. 

Economics as a part of the Bible Pre-Smithian Economics

·         Aristotle treated economics as a part of Ethics. His treatment of economics is found in the books Nichomachean Ethics and the Politics.

·         From about 1240 AD, the scholastics used Nichomachean Ethics as one of the standard textbooks and it was through the study of moral philosophy that scholastics economics emerged.

·         In the European Universities of the 1700’s, economics was an integral part of the ethics. In fact Adam Smiths teacher, France Hutcheson taught economics as a part of ethics.

·         St. Thomas Aquinas taught economics as a part of the theology.

·          But there were mercantilists who opposed the integration of economics and ethics. They with their imperialistic ambitions found ethical considerations in economics as a stumbling block. But overall, economics was a part and parcel of theology and ethics.  

Economics with the bible Adam Smith:

Adam Smith’s “Wealth of Nations” is considered as the founding document for economics. Adam Smith was a professor of philosophy and according to his student John Millar this book was a part of a large series on philosophy. Adam Smith’s lectures are divided into four parts.  

  • Natural Theology
  • Ethics ( The Theory of Moral Sentiments)
  • Justice ( Lectures on Jurisprudence)
  • Political Regulations ( The Wealth of Nations)

 Again according to James E Alvey the intellectual framework for the Wealth of Nations is morality. Adam Smith discusses three kinds of virtues in his book “The Theory of Moral Sentiments”- Justice, Prudence and Benevolence. Wealth of Nations can also be divided into three sections corresponding to these three virtues. Justice and Free Trade, Prudence and Capital Accumulation and Benevolence and No Alienation correspond to each other.   

After Adam Smith, there were two great economists; Reverend Thomas Malthus and David Richardo.  Reverend Malthus as his profession suggests considered economics as a part of moral science. But his contemporary Richardo considered economics as a strict science like mathematics. Reverend Malthus criticized Richardo saying that Richardo’s position would convert economics “from a science that I have always considered as the most practical and useful into one which would merely serve to gratify curiosity.” After these two great economists came the next great economist John Stuart Mill. J S Mill tried to synthesize between Re

verend Malthus and Richardo’s positions. Mill considered moral sciences as backward but advocated the use of methods from Physical Science. While trying to synthesize Mill introduced the “utilitarian theory of ethics”. With Mill the classical economics came to end and by and large it was dominated by ethics.   

Let me summarize the important points:  

  • Economics was a part of ethics and theology for many of the classical economists. As Checkland points out, “All the early economists among the greatest university names- Whately, Whewell, Sedgwick, Newman and Arnold- were clergymen. Each believed economic truth to be a part of the divine order. Each had integrated his attitude to economics with theology”.
  • Economics dealt with only with a part of human life. They never tried to explain the entire life.
  • Economics accepted a broader definition of ethics till the “utilitarian theory of ethics”

  Economics without the Bible After J S Mill, the next great economist was William Stanley Jevons. Jevons in his book “Theory of Political Economy” tried to dichotomize the ethics and economics, introduced mathematical approach and insisted that “Economics, if it is to be a science at all, must be a mathematical science”. Jevons adopted a different type of morals which closely resembles hedonism. Jevons also argued for an independent science rather than an interdisciplinary approach. Jevons was followed by Alfred Marshal. Marshal supported the Jevons arguments and fought for an independent discipline which he finally achieved with the establishment of a separate school of economics at Cambridge in 1903.  Although Economists still had ethical considerations, economics as a science was established as an independent discipline devoid of ethics. Then there was happened another change which changed the nature of this discipline. Although Economics was established as an independent discipline in Cambridge, scholars from Chicago school of economics took over as the mainstream economics.  

Economics Instead of The Bible

 The Chicago School: The cardinal faith of Chicago school is that human beings are driven by self-interest economic rationality. Under Chicago School, economics which began as a part of ethics, which tried to explain only a part of the human activity became a worldview. If Marxism tried to interpret life from a materialistic point of view, Chicago School although belonged to Capitalism began interpreting from life from another materialistic point of view. Such that one scholar differentiated the Marxism and Chicago version of capitalism as a difference between the pre-millennium and post-millennium theology. If Marxism expects a new world after a violent revolution, Chicago version of capitalism thinks that new world order has already begun. To illustrate the Chicago way of interpretation, let me give two quotes from the leading  

  • Gary Becker, a leading economist from the Chicago School said this in acceptance speech for the 1992 Nobel Prize says “ The economic approach to the family assumes that even intimate decisions such as marriage, divorce and family size are reached through weighing the advantages and disadvantages of alternative actions”.
  • Richard Posner says in book “Sex and Reason”: “In describing prostitution as a substitute for marriage in a society that has a surplus of bachelors, I may seem to be overlooking a fundamental difference: the mercenary character of the prostitute’s relationship with her customer. The difference is not fundamental. In a long-term relationship such as marriage, the participants can compensate each other for services, so they need not bother with each pricing each service, keeping books of account, and so forth. But in a spot-market relationship such as a transaction with a prostitute, arranging for reciprocal services is difficult. It is more efficient for the customer to pay in a medium that the prostitute can use to purchase services from others.”     

  The Problems With Economics without Bible and Instead of bible  Much of the criticisms for the mainstream economics have come from another school of economics – the Austrian School of Economics. I should note here that the Austrian school of economists is trained economists and most of them are thoroughly atheistic in their persuasion. Friedrich Hayek was a Nobel Prize winner in Economics. Similarly there are other schools of economics which criticizes the mainstream approach. Amartya Sen, the surprising winner of 1998 Nobel Prize winner, is one of those critics. Amartya Sen’s ‘On Ethics and Economics’ is a must read in this regard. I will try to summarize some of those criticisms which I consider as important.

  1. A shallow understanding of the human choice and human action:

 Chicago School of Economics understanding about human choices and actions are very shallow. Human beings in fact do not have a choice at all. If one goes by Chicago school, all our choices and actions are guided by or even determined by economic considerations. But as Amartya Sen has pointed out sometimes even public policies which are supposed to be derived from economics are not guided by economics rather they are guided by ethics. For example, the recent announcement of insurance of one to girl child is more of an ethical consideration. Or to illustrate this point with an extreme example, to eradicate poverty why should not we kill all the poor people. It is our morality that often guides our choices. But morality transcends the naked eye and it is a problem for all who swear by empiricism. 

  1. Unpardonable missing of the human enterprise:

  It is quite surprising that the mainstream capitalist economists have missed the entrepreneurial nature of human beings. Maybe in their eagerness to replicate physical sciences, they might have overlooked this particular factor. Once they include entrepreneurial nature of human beings, the discipline becomes quite unpredictable. Who can predict what a business man, a scientist or a researcher will come up tomorrow? In the real world, we have often seen this happening. But the mainstream economists have missed it. 

  1. Lack of an epistemology to do the discipline:

        Although the previous two criticisms are articulated and appreciated by the Austrian School and Development School, the fact of a fundamental lack of an epistemology in economics does not get the attention it deserves. If human beings are guided by non-economic considerations and often by morality, if human beings have the creative entrepreneurial potential then the discipline of economics needs to make prescriptive statements. It needs to account for the transcend nature of human beings. It needs to have axioms outside the subject upon which the discipline can be based. These factors need to have a bases upon which they can be rightly claimed.  May I ask you how can a secular subject account for the transcendal nature of human choices and actions? How can a secular subject make ethical prescriptive statements? From where can a secular subject derive axioms to study the logic of human choices and actions?       

Gunnar Myrdal, the Swedish socialist Nobel laureate in economics, summarized it well. He wrote “Every economist is painfully aware that there exists wide-spread doubt about the supposed ‘scientific character of economics. The distrust is indeed well founded. A branch of knowledge which works with a whole set of premises missing is hardly reliable”.  A branch of knowledge which works with a whole set of premises missing is hardly reliable. John Kenneth Galbraith, Professor of Economics at the Harvard University confessed this “Complexity and obscurity have professional value. They are the academic equivalents of apprenticeship rules in the building trades. They exclude the outsiders, keep down the competition, and preserve the image of a privileged or priestly class. The man who makes things clear is a scab. He is criticized less for his clarity than for his treachery. Additionally, and especially in the social sciences, much unclear writing is based on unclear or incomplete thought. It is possible with safety to be technically obscure about something you haven’t thought out. It is impossible to be wholly clear on something you do not understand. Clarity thus exposes flaws in the thought. The person who undertakes to make difficult matters clear is infringing on the sovereign right of numerous economists, sociologists, and political scientists to make bad writing the disguise for sloppy, imprecise, or incomplete thought. One can understand the resulting anger”.

 We have heard one of the leading economists confessing about the unreliability of the discipline and the other about the resulting anger. But economists need not be in despair and disappointment.  If economists accept the authority of the Bible and lordship of Jesus Christ, they have an epistemological basis for economics. They can derive the ethics from the Bible, they can derive the axioms from the Bible and they can understand the logic of human actions and choices much better. Without Bible, economics would be left with obscurity and economists with anger. With Bible, they will have clarity and hope.



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