Tony Emerson reflects on economics, its limitations and why Christians should take an interest.
In many ways, economists operate a bit like the high priests for government and corporate decision makers. Where kings of old would call in their priests and wise men, today’s politicians consult their advisory boards of economists.
For governments, under the spell of these high priests, increasing GDP (gross domestic product) is the heavenly pathway. We need to go on ‘growing the economy’ as they put it – and for ever. This pathway doesn’t have an ultimate destination, so their heaven cannot ever be reached. Similarly, increasing share value is probably the principal heavenly route for the business corporation.
I’m using religious language to describe their influence, but of course many economists claim that it is an objective science. Economists use lots of figures and graphs to create that illusion.
If we as Christians are charged with loving our neighbours and all of God’s wonderful creation, we have an obligation to know what these powerful high priests are advocating. Is what they are recommending going to lead to greater human flourishing on this gift of a planet? Or will it lead to destruction and injustice?
This matters, because there are reasons to believe that this temple of economics is built on sand, without any real world foundations:
1. This priesthood ignores the laws of physics and the natural sciences. These laws tell us that our world is a finite system, that it has limited capacity to absorb greenhouse gases and various pollutants, and that many of our vital natural resources will run out. Especially our forests. Economists want to go on expanding the economy ad infinitum, even though the overall global system which contains it is finite.
2. It ignores what we’ve learned in the other social sciences: About human well-being for instance – that we only need a certain level of material well-being. Beyond that point ‘money cannot buy you happiness’. Roughly speaking that level is about the average income in the UK right now. Only the poorer world needs to grow economically.
Speaking of averages, economics does not treat inequality as a problem. And yet we know that increasing inequality is a serious issue, with luxury yachts and the food banks living side by side. What was that parable about the difficulty of the rich man getting into heaven?
Economists don’t generally distinguish between needs and wants. They celebrate the work of marketers in generating extra demand for luxuries among those who can afford them. Psychologists tell us human physical needs are finite, that enough is enough.
Of course we can go on growing in non-material ways – mentally, emotionally and spiritually, developing our skills at everything from basket work to basketball. But these pursuits barely trouble our bank managers – or our carbon accountants – as very little money changes hands, and so they contribute very little to economic growth. But if lots of people buy expensive cars, this is viewed as economically positive – even more so if they then crash the cars, because this creates further demand for repairs or replacements.
3. The currently dominant school of thinking in economics ignores the basic principles of the scientific method. In the early 2000s economists in universities were explaining how the system was strong and resilient, that it could take any set-backs in its stride. Then came the 2007/8 crash. But did they revise their theoretical model when the evidence contradicted it, like good scientists? No. Many university economics syllabi remained unchanged.
4. Economics often prefers theory to common sense. My favourite – as one who used to teach sums! If you see lots of people still in the dole queue, yet many people in well-paid jobs working very long hours for large salaries, you might think there is a simple solution here. Mainstream economics would disagree.
Or imagine a firm in the high-tech or professional field employing, say, 40 people on £50k average salaries. Each of them works about 50 hours a week. Now suppose they have a good discussion with their workers and end up employing 10 extra staff, so that 50 people are now working 40 hour week average, for £40k average salaries.
You mention this idea to an economist, with all caveats about training, consultation etc. The economist will shake his head (usually it’s a he) and tell you that’s ‘the lump of labour fallacy.’ In their scripture the only way you can boost employment is by growing the economy. And economists take the Word of their scripture very literally.
As Christians, if we’re really serious about loving our neighbours and protecting the wonderful natural world we live in, we need to tell our political and business leaders to listen more to other and better sources of advice. I’m not arguing that all economists be thrown into eternal darkness, just that they only advise on the more technical stuff that they do know about – like describing the flows of goods and money.
To finish with a question for us all: Who should they be listening to? Who do the better governments and businesses listen to now?