A basic principle of modern economics is that all economic behaviour is motivated by self-interest. Self-interest is a powerful motivator of economic activity, but it seems to be contrary to Christian morality. Capitalism has lifted economic well-being in an amazing way, but capitalistic economic theory seems to require people to pursue their self-interest exclusively. The pursuit of self-interest supports economic growth, but it does not fit well with Christian morality. This is a conundrum that needs a solution.
Some economists advocate dropping traditional morality and encouraging people to think only of themselves. Christians cannot accept this option, so we need a better solution. We need a theory of economic behaviour that does not contradict Christian morality. The solution is not to drop Christian morality, but to understand that modern economic theory is incorrect in assuming that all economic behaviour is motivated by self-interest.
The self-interest assumption only explains some economic behaviour. For example, most people care for their families. Many people show amazing generosity to people in need.Sometimes it is self-serving, but often it is not. Economic thinking has to go beyond self-interest to explain altruistic behaviour.
The insight I gained from scholastic economics is that everything we do is for a person. Things are means to achieve ends, which are persons. The big question is which person. The New Testament specifies five categories of person our actions can serve.
God
God is so amazing that everyone on earth should love him.Love the Lord your God with all your heart and with all your soul and with all your strength and with all your mind (Luke 10:27).
Jesus said we are to love God with all we are. God must come first in everything. We must love him, because he is worthy. Love of God should drive all our actions and behaviour. Love of God takes priority over love of self and love of neighbours, but it does not contradict them, because he has not commanded us not to love ourselves.Self
Loving yourself is normal. Most people seem to do it naturally.Love your neighbour as yourself (Luke 10:27).
When Jesus said we should love our neighbour as our self, he recognised that it is natural for humans to pursue their self-interest, ie to love oneself. There is nothing wrong with that. We are expected to nurture our bodies (Eph 5:29). We are to seek God's blessing (Luke 6:21). We love ourselves naturally, because that is the way that God has created us.Family
Husbands and wives are required to love each other and to love their children.Husbands ought to love their wives as their own bodies (Eph 5:28).
We must love our family and have a responsibility to provide for them and care for them.Neighbour
Jesus commanded us to love our neighbour.Love your neighbour as yourself (Luke 10:27).
This command extends beyond our immediate family to those who live close to or work with us. Jesus radicalised this command by extending the boundary of who is our neighbour to include all the people we encounter during everyday life. His definition includes people from different ethnic and social groups that we meet up with in various ways.Others
The "Others" group includes all the other people in the world, beyond our neighbours. Jesus said,Do to others as you would have them do to you (Luke 6:31).
The thieves working on the road from Jerusalem to Jericho were others, not neighbours of the Good Samaritan. People living in other countries are others in this context. We should treat others as we would like to be treated.We are not required to love others as ourselves, or as our neighbour, as that would be impossible. Rather we are required to do to others what we would have them do to us. We do not expect others to love us, because they do not know us. However, we would like them not to harm us. We would like them to exchange their surplus production with us. We would like them to sell their expertise, if we have need of it. We do not expect them to provide stuff to us for free, because they do not know us. If they have skills that would benefit us, we would like them to supply them to us in return for an appropriate payment.
Making Choices
Augustine of Hippo explained that our behaviour ranks people according to their significance to us. We do more for those that we love the most. We give the most to those who have the greatest significance to us.
In all our activities, we must constantly make decisions about whom our actions will benefit. Sometimes we will do things for ourselves. Sometimes we will do things for our neighbour. In other situations, we will decide to do things for others. In other words, we must constantly decide between loving ourselves, loving our families, loving our neighbours, or doing to others what we want done to us.
We have limited resources and limited time, so we cannot do all of these all of the time. If I give help to my neighbour, I will have less for myself. If I keep more of what I own for my family, I have will less for my neighbour, and for others. If I spend more time serving others, I will have less time for myself. Economists call this scarcity. Scarcity means that I do not have the resources to do everything that I might want to do. I have to make choices, between keeping things for myself, giving things to my family, giving things to my neighbours, and supplying things to others in exchange for what I need.
Although it might be simpler, we cannot choose one category of person, and ignore all the others. God has given us a duty to them all.
The Bible does not give rules for deciding how to prioritise between loving ourselves, loving our family, loving our neighbour, and supplying others. We learn how to make these choices by listening to the Holy Spirit and learning from the scriptures. Some decision will be quite hard, with no easy options.
Economic Activity
Applying the various love commands to economic behaviour has the following implications.
Our first priority is to serve God. He has a purpose for each one of us. Every person should find their calling and pursue it to God glory. If our calling is to business, then we should take it just as seriously as if we were called to be an evangelist.
Self-interest requires that we produce food, clothing and shelter to sustain our lives. This is legitimate activity for everyone, as we will not be in a state to make economic decisions, if we do not sustain our body and soul.
Self-interest is dangerous if it gets out of control and dominates our lives. We must not live just for ourselves. The man who built barns to hold his surplus crops is an example of someone who did this.
Then he said, "This is what I'll do. I will tear down my barns and build bigger ones, and there I will store my surplus grain. And I'll say to myself, "You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry." But God said to him, 'You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself'" (Luke 12:18-20)?
Taking things easy is not the goal of human life. Eating, drinking and being merry is not a meaningful calling. The person who ignores their calling and lives for themselves is a fool.We are all required to care for our families. Each person needs to produce enough to provide food and shelter to sustain them.
Most of us will not be capable of producing everything that our family needs. It will usually be more effective for us to focus on something we are skilled at, and sell some of what we have produced to buy what our family needs. This is sensible.
Some people will sell their labour to someone else to earn enough to provide for their families. This is legitimate too, but less ideal, because anyone who is employed by another, loses some freedom. This makes it difficult for them to serve God with all their heart, soul and strength, because their employer wants some of our soul and strength for his purposes.
Using our Surplus
If a person fulfilling their calling produces more goods and services than they need for themselves and to support their family, they have three options. They can:
keep it for themselves (love yourself).
give it to their neighbours (love your neighbour).
sell it on the market (do to others what you would want them to do to you).
The selfish option of keeping all we produce for ourselves and our family will often be wrong. There will be situations where it makes sense to save our resources, so we can make or buy capital equipment that will make us more fruitful in the future. However, keeping everything for ourselves, so that we take life easy is usually wrong. This is confirmed by the parable of the "barn man". Jesus said that he was a fool.
Sometimes we will give some of what we have produced to our neighbours. This is what God requires. We are to love our neighbour as ourselves. We must do this wisely, because none of us will have sufficient to give every neighbour all that they need. If we tried to do this, we would end up with nothing left for ourselves and our families. Loving our neighbour does not take priority over loving ourselves. We are not required to give everything that we have produced to our neighbours. Everyone in the world is not our neighbour. Some will be "others" who need some of the goods and services that we have produced, even though we are not required to love them.
Most of what we produce beyond the needs of our family will be sold on the market. This is legitimate, because it is doing to others what we would have them do to us. We all need goods and services from other people. We want them to exchange what we need from them for what we have that they need.
I do not know how to cut my hair, so I need the skill of a hairdresser. There are no hairdressers in my family or among my neighbours, so I am happy to pay someone to cut my hair. I want a person I do not know to cut my hair in exchange for a reasonable payment. That is what I want this person who is an Other to do for me. That means that I must be prepared to do the same for Others, because God says I should do for Others, what I expect them to do for me. I must be prepared to provide my skills to others, in exchange for payment from them. If I am not prepared to do this for Others, I cannot expect others to do things for me.
Balance
The balance between these types of activities will be different for different people. The balance for each person will vary from season to season.
A woman with a young family may spend most of her time serving her children, and a bit of time serving her neighbours.
A man called to be a pastor will spend most of his time serving people who are his neighbour.
A young woman studying to be a doctor will have to devote most of her time to serving self.
A man called to be in business will spend most of his time serving Others. The common view that a person has to be selfish to succeed in business is wrong. Success in business means serving others. Totally selfish people usually fail in business, because they are incapable of doing to others what they want done to themselves. They want others to do for them what they will not do for others.
Each person must balance their life between loving self, loving family, loving neighbours and doing to Others what they want others to do to them, under an overall love for God. Loving God will manifest in a different mix of loving self, loving family, loving neighbours and serving others for each person. The most important thing is that we are all accountable to God and live our lives in obedience to him.
We should be careful about judging others. It is easy to look at a successful business person like Bill Gates and say that he spent too much times serving himself and not enough to time serving others, but we do not know what God required of him. We do not know what God put him on this earth for. We cannot look into his heart and know his motivation. What looks likes loving self may often be doing to others what we want others to do for us.
Christian faith does not contradict business activity. It actually requires it from most of us. God requires different things from different people. Some people will fulfil their calling by engaging full-time in business activity.
Economics
Economists like to simplify the world to make their models easier to manipulate. Optimising one variable is much easier than optimising five variables with variable weighting between them. Therefore, they have chosen to ignore love of family, love of neighbour and responsibilities to others. They focus exclusively on love of self, and their models concentrate on optimising self-love. That makes their models easier to estimate, but it means they no longer reflect reality. For some purposes, this might not matter, but in many situations, it will make their conclusions unrealistic.
This simplification of reality means that economists tend to attribute all economic growth to people pursuing self-interest. The emphasis on self-interest has caused Christians to worry that their morality is inconsistent with economic development. Their worries are unjustified. The emphasis on self-interest is a distortion of reality, so we do not need to change our morality to fit with economics. Christians values deal with economic reality. Economics needs to adjust its theory to fit with economic reality. Not the other way round.
Institutional Sectors
A modern economy consists of five institutional sectors. Each one is motivated by a different love.
Household Sector
This sector consists of family activities. In the western world, the household sector focuses on consumption, but in other parts of the world, households engage in production. The household sector owns assets and supplies labour to the market sector. The motivation in the household sector is love of family.Market Sector
Most people can improve their situation by supplying what they are most efficient at producing to the market and buying what they need from the most efficient producers. In a modern economy, the market sector is the largest sector in the economy. The motivation for the market sector is love of self and doing to others what you want others to do to you. The market sector functions better if there is more of the latter than the former.Shared Services Sector
Some of the services that people need are not available from the market, so groups will get together to provide them for themselves. The services are provided by a subscription or membership fee. Sports clubs and horticultural societies are examples. The motivation for this sector is love of neighbour and love of self. The sector is more effective if there is not too much love of self.Philanthropic Sector
Charities and other philanthropic groups provide goods and services to people in need. Income in this sector comes from donations. In a strong society, this sector will be effective. The motivation in this sector is love of neighbour and love of others.Government Sector
This sector uses coercion to change people's behaviour. It provides shared services like defence and justice. Love of self is a strong motivator in this sector, because those with government power assume that they know better than others what is good for them. They are willing to take other people's money to do what they think is good.
Modern economies tend to be dominated by the Market and Government Sectors. This makes them unbalanced. The other three sectors are equally important in a strong society.
In a free economy, these three sectors can develop without any need for government intervention. All that is required for them to emerge is people who love their families, love their neighbours and love others. Sharing and cooperation should be strong in a Christian economy, so the household, shared services and philanthropic sectors should be strong too.
