Theology and Economics - Lesson 1

Why Economics?

In this lesson, you will gain a deep understanding of the relationship between theology and economics, as well as the role of Christians in the marketplace. The document delves into topics such as the biblical basis for economic principles, stewardship of resources, ethical decision-making, and the impact of faith on business practices. By exploring these topics, you will be equipped to navigate the complexities of the marketplace while maintaining your Christian values and beliefs.
Greg Forster
Theology and Economics
Lesson 1
Watching Now
Why Economics?

I. Introduction

A. Definition of Economics

B. Importance of Economics

II. The Christian Worldview and Economics

A. The Biblical Basis for Economics

B. The Importance of Stewardship

C. The Role of Government

D. The Impact of Sin

III. Economic Systems

A. Introduction to Economic Systems

B. Capitalism

C. Socialism

D. Mixed Economy

IV. Economic Tools and Concepts

A. Supply and Demand

B. Market Structures

C. Efficiency and Equity

D. Externalities

E. Public Goods

F. The Time Value of Money

V. Conclusion

A. Summary of the Lesson

B. The Importance of Economics for Christians in the Marketplace

  • Learn about the intersection of theology and economics and the role of Christians in the marketplace, as this document covers biblical economic principles, resource stewardship, ethical decisions, and faith's impact on business.
  • Discover the biblical concept of stewardship and its relation to human flourishing, exploring the parable of the talents, Genesis creation account, and practical applications for business, government, and personal finance.
  • In this lesson on Work and Value, you will gain insights into the nature of work and its inherent value as explained by the concept of the Imago Dei, the influence of the Protestant Work Ethic on Western culture, the role of technology in shaping the modern workplace, and the idea of vocation and how Christians can find purpose and meaning in their work.
  • In this lesson, you will learn how to live out your faith in the workplace by being a good steward of your resources and striving for excellence in your work. The lesson on productivity and opportunity highlights the importance of diligence, setting goals, and eliminating distractions to increase productivity. Ultimately, the course aims to equip Christians to serve God and others in the marketplace.
  • You will gain insights into the role of Christians in the marketplace and the importance of responsible action, which includes understanding economic systems and acting ethically with justice, love, and compassion.
  • This interview provides valuable insights for Christians seeking to integrate their faith with their professional lives by exploring the intersection of theology and economics in the marketplace. Jon Marks offers practical advice for ethical decision-making, discusses the role of money, wealth, and greed in society, and explains how Christians can resist the temptation to prioritize financial gain over moral principles.
  • Gerry Smith discusses the relationship between theology and economics. He argues that a Christian view of economics should focus on the flourishing of all people, not just profit, and addresses issues such as income inequality and the role of government in regulating the economy.

Why connect theology and economics?

We need to connect these two because lives of Christ followers should manifest the Gospel, making it tangible and visible.  In addition to personal holiness, we need to reach beyond ourselves and have an impact on the world around us.

Christians are called to live out God’s creation purposes and be signposts of the glorious future to come. That includes activities like religious works, charity, and volunteering, but these take up only a small fraction of our lives; discipleship must be a whole-life endeavor. If we want to follow God’s call and live into our true identity as his stewards, we have to integrate our faith with the spheres of life in which we invest most of our time: work and the economy.

This course, taught by Dr. Greg Forster will enable you to think clearly about these two issues, their relationship to each other and to all of life.


Dr. Greg Forster
Theology and Economics
Why Economics
Lesson Transcript

[00:00:04] Hi, my name is Greg Forrester. I'm a program director at the Kern Family Foundation and our program on faith, Work and Economics, among other initiatives. I'm privileged to help lead something called the Economy and Network, which is a national network of theological educators and evangelical seminaries dedicated to exploring how our faith and the life of our churches can be reconnected to the sphere of work and economics, which is where most people lead most of their lives. One of the initiatives that I'm very excited about that's connected to our work is something called the Economic Wisdom Project, where we're exploring how can biblical wisdom and historic Christian teaching be translated in a sense, to speak into our contemporary situation, not just in terms of our work, but in terms of economics? A lot of people today in the church are rediscovering the importance of work. There's a very large faith and work movement. There are a whole lot of churches that are starting to get interested in the whole connection to our work. That work is how we serve God and serve our neighbors. That work really shapes the kind of people that we are and that if we don't put our faith into action through our work, then what we call Christianity really becomes a leisure time activity that we squeeze in when we're not working. But Christianity can't be what it claims to be. If it's just something that we do a couple hours in a week when we're not working. So there's there's a growing faith and work movement. And one of the things that we're really convinced of here at the foundation is that work is not enough. Work is centrally important to reconnecting the gospel to our everyday lives, but we can't just talk about individuals in their own work.

[00:01:54] We have to take a step back and look at the cultural system that our work is a part of. And that means talking about economics and the economy. So that's what we're going to be looking at in this in this class, in the lessons that we're doing here. And the thing I want to start with is what is the economy? Because I think if you want to look at why we need to talk about economics, you have to start by understanding what we mean by the economy. Unfortunately, we tend to have a materialistic outlook. Many times we tend to focus only on what's material, what's tangible, what we can see and feel and what we can count. So that leads to a tendency to think that money and power is the ultimate reality, because that's the material. That's what the material world seems to consist of. And when we begin with a materialistic understanding, we tend to define the economy in terms of numbers on spreadsheets. So we we look at those graphs and supply and demand curves and long complex equations that economists often deal with. And we think that's what the economy is. Those numbers or we'll look at who has how much money and who has how much stuff and how does the money and stuff move around. And we want to see it. This person has this much and that person has that much. And I want to know, do I have as much as I ought to have? And does this person have more than he should have? And so we are looking at money and stuff and how it's distributed, and we tend to focus only on that sometimes. Or a third thing that we can focus on is public policy controversies, because they're in the news very frequently and they generate a lot of heat.

[00:03:38] And so we look at public policy and we think that's that's what economics is all about. Well, all of those things are very important. Numbers are very important. Spreadsheets are very important. They can they might not seem that way sometimes. And money and stuff are important things. They're a part of our world and we need to take account of them. And public policy is is an important thing. There's there's nothing wrong with being concerned about public policy, but we have to step back and not be guided only by material things. Material things matter a lot, but spiritual things are just as real as material things. And our tendency is to think that what is material, what we can really put our hands on or what we can count is more real than spiritual things that we really can't treat so tangibly. But spiritual things are just as real. And if we want a an approach to economics that takes seriously a Christian anthropology, a Christian understanding of humanity, that includes both our material aspect and also our spiritual aspect, it takes equally seriously the fact that we are material creatures and also that we are transcendent creatures with a spiritual nature. Then I think we need to look at the economy in a different way. I define the economy. As the social system through which people exchange their work. And that means it is spiritual as well as material. I mentioned before there's a large faith and work movement out there and what the faith and work movement is reminding us of is that work is a spiritual thing. In addition to being a material thing, Wolf, work is spiritual as well as materials, and economics is spiritual as well as material, because economics is that social system that our work is a part of.

[00:05:33] You know, you show up to work and you make car parts or you cut hair or sweep floors, or you do medical research or you manage a division of a company. Or maybe your work is to preach sermons. If you're a preacher or whatever your work is, it takes place as a part of this large social system where people are exchanging their work with each other. And so if your work is spiritual, then that system of exchange has to be spiritual as well in order to see that the economy is a system for exchanging work. I think what we have to understand is that people exchanged their were primarily by exchanging the fruits of their work. They exchange the products that they make, the services they provide, and the money that they that they make when they do their work. So take an example. Let's say I make shirts and you make shoes so I don't make the shoes that I wear. I don't make all the things that I use. But I go to a job all day where I make shirts and I make tons of shirts. And the company that I work for goes and sells those shirts out in the marketplace and it gives me a paycheck in exchange for my work making those shirts. And then I take that paycheck and I go to the company you work for, and I buy the shoes that you made. So what's ultimately happened here is I have contributed my work making shirts and I got some money for doing that. And then out in the marketplace, I was able to get in exchange for that work, the shoes that you made and you in turn made shoes and you went and bought shirts.

[00:07:11] And then there are people who made all the other things that we use from the the tables and chairs in our houses to the houses themselves, to the computers we use to all the, you know, the roads and the cars and the telephone systems and everything we use all day long. We are constantly embedded in this enormous social system where everyone is working along with everyone else, and it's a great system of exchange. And that's what the economy fundamentally is. And the the numbers on spreadsheets or the the movement of money and stuff through the economy or the public policy controversies that economics can often create, all those things are only there as a result of human work because people are doing work that that accomplishes these tasks, making products and services. That's why the numbers are there on the spreadsheets. The numbers all represent somebody's work, people's work, and that's why the the money and stuff is all there. None of that money and stuff will be there if people were not working. That's where it all that's where it all comes from. And that's where public policy's come from. Because as human beings, we have to manage our lives together and we end up we end up disagreeing about some aspects of our lives together. And that's why there are controversies over economics. And I just think it's important not to lose sight of the more basic reality that stands behind all of these things and to see that system of exchange that we're all deeply involved in now. Work, by its very nature, is drawing us together into these relationships of cooperation and interdependence. If you think about your work, you go to your work and you work together with coworkers. So your work has immediately brought you into a relationship of cooperation where you are working together to accomplish a task and you are interdependent.

[00:09:11] Your coworkers count on you to do your job and they and you count on them to do their job. And then taking a step back from that, your workplace, wherever it is, will be cooperative and interdependent with its customers and its vendors and all the other people that it's in contact with. You know, the customers depend on the company to do its job, and the company depends on the customer to pay. And that means the customer has to be doing his job somewhere else in order to have a paycheck. So we're all cooperating together and we're interdependent with one another. And if some people are not doing their jobs, then everyone is going to feel the impact of that. I'll take a concrete example again. Think about the chair that you're sitting on right now. Assuming you're sitting in a chair, the chair that you're sitting on right now. Is the product of work by hundreds and probably thousands of people possibly around the world. Each individual part had to be made and the raw materials for those parts had to be mined or harvested in some way and then processed before they'd be ready. And then the transportation of the raw materials to the places where the parts are made. Then the parts have to be assembled. And once the parts are assembled, there has to be quality control. Then it has to go to a wholesaler and a retailer. There have to be people who sell the chair. There have to be people who buy the chair on behalf of either your a household or a company. There has to be a huge system of a huge social system of people working together, doing thousands of jobs. You couldn't even name them all just to make one chair so that you can sit and I hope sitting comfortably while you're watching this video.

[00:10:59] And those people did not even have to know each other in every case. Many of them do know each other. The guy who makes one part of the leg might work right next to the guy who makes the other part of the leg, and they work next to the guy who puts those two parts together. But there are hundreds or thousands of people involved and they don't all know each other and they don't all know what each other's jobs are. But the economy gives us the system that allows us to work together, even even when we're not in a media contact with one another. So if you can think of the chair that you sit on or every other product or service that you get is the result of these huge networks of interdependence and cooperation. We often think too much. I think about competition in the economy now. Competition is important and competition can serve important values. So if Coke and Pepsi were not competing with one another, then they would not have incentives to perform well and they might well neglect their customers. They might produce a shoddy product. And the fact that you, as the customer can go buy the other company's product gives you an opportunity to hold the company accountable for doing its job. But that competition between Coke and Pepsi or whoever it is, is not the most fundamental reality. The fundamental reality is all the people at Coke are cooperating with one another, and then they cooperate with you, the customer, in order to deliver the product. That's assuming you're buying from them. Or if you buy from the other company, you'll cooperate with them. It's the cooperation that matters most fundamentally, and that's how human work comes together in order to create all this.

[00:12:36] Create all this. Serving one another that we do in the economy. So competition is good when it's rightly ordered, and it can accomplish important goals. But really, it's this vast web of cooperation and interdependence that I think we want to keep our attention on. The ideal for this system is that people support themselves in their households through their work by serving other people. We want individuals, we want households, we want businesses, we want coworkers, we want customers. We want everybody to be busy serving one another and through their service to one another, they earn the support for themselves in their households that they need in order to take care of their own needs so that we all we all work together. And each of our needs is cared for, but it's cared for not through selfish action, but rather through providing for the needs of others that my work contributes to you and your work contributes to me. And because each of us is making a contribution to someone else, we each then get to take home. At the end of the day, the paycheck that we need in order to provide for our own needs as well. And I think it's important for people to see this system. We don't want people to get trapped into a small world where they only think about themselves and they think of their paycheck as something that they they just take home for selfish reasons in order to provide for themselves. It is important to provide for yourself in your own household and support your own household. But we want people to see that larger system that they're a part of so that they can think about how their work is serving the needs of others. And we really want to help people take satisfaction and find meaning and significance in the fact that their work serves others and not simply in the fact that they can bring home a paycheck and take care of their own needs.

[00:14:29] And that's why in general, economies flourish when people trust each other and they're in right relationship with one another. You know, when you walk into a store and you put some money down on the counter and order a product or a service or whatever it is, you do that because you trust that the company is going to deliver what they say they're going to deliver. And the company, in turn, is trusting you to make good on your end of the bargain by paying once a product or service is provided. If people don't trust each other, if people are not in right relationship with one another, whether that's in the workplace or in homes or in in the marketplace or anywhere, then the economy breaks down because those exchanges, those transfers, those buying and selling and exchanging our work can't happen if we don't trust each other. And that's why people having integrity and being in right relationship with one another is absolutely essential to the success of any economy. Now, what I think that shows us once we see that point is that the economy is really a moral system. I've been describing the economy in terms of human relationships, that the economy is relational. But really, if the economy is relational, then the economy is also moral. It embodies our shared assumptions about what is good. So if the if I'm trusting the store to provide what they said they're going to provide, and the store is trusting me to hold up my end of the bargain, then we need to have a shared understanding of what our responsibilities are. I and the store need to agree about what the store is responsible for. And similarly, coworkers in a workplace need to have a shared understanding of what their responsibilities to one another are that each of us needs to be making our proper contribution to the whole.

[00:16:17] Well, that means we all need to have an understanding of what you're supposed to be contributing and that you have a responsibility to contribute. So what kind of economy we have is ultimately going to come down to what kind of people we are? Are we people who value moral character? Are we people who value right relationships with one another? Where we support one. Where we support ourselves by serving one another? Or are we the kind of people who value having money and stuff? Are we the kind of people who think that the good life is the life of getting your hands on more money and stuff, or what's good for other people is to get them more money and stuff? If we focus on those materialistic values, we're going to be a certain kind of person. And if we're if we're that kind of person, then it's going to affect our economic relationships. So ultimately, the success or failure of an economy is going to be rooted in the success or failure of character formation in the individual people and in the economy. And yet, while the economy depends on the character of individuals, the reverse is also true to some extent that the character of individuals is shaped in part by the economy, by the economic system. So just as what kind of economy we have is going to be based on what kind of people we are, also what kind of people we are is going to be based to some extent on what kind of economy we have, that if we have an economic system that takes for granted that people should be supporting themselves and working to make a contribution to others. We have an economic system that embodies the belief that people have these moral responsibilities and that right relationships with one another are critical to human life.

[00:18:03] Then that's going to encourage people to develop character traits like honesty and diligence and self-control and concern for the needs of others and solidarity with other people and generosity and all the other positive qualities that we want people to have in their moral character. Because economic systems will send the signal that that is valued and that that is good and important. Whereas if we have an economic system based on the assumption that what's good for people is to get their hands on money and stuff, we're going to have an economic system that runs on cronyism and manipulation and fraud and dependency and client patron client relationships and all kinds of all kinds of things that are really not about productive work that makes a positive contribution. And that kind of economic system is going to result in people who are shallow and selfish and greedy and materialistic and prioritize the satisfaction of their own desires. It's going to produce an ethical and ethical shallowness at the top of society with lots of cronyism and shortcuts and trying to make a buck off of somebody else rather than making a buck by serving somebody else. And at the bottom of society, it's going to result in dependency. It's going to result in more and more people thinking that they don't have anything to contribute, that they don't have anything that they're supposed to be contributing to the economy, that their job is to get get a handout from the people above them and to to to live in dependency on them. And it's really it's it's it's it's a moral issue for people at every level of society, from the top to the bottom and on both sides of the political aisle. It reaches all of us right where we live that our economic system is either going to be helping us become better people or helping us become worse people, just as our character is going to be helping the economy to succeed or fail.

[00:20:02] What this is really demonstrating is that we are social creatures, that we're made for culture. We're made for relationships with one another. We're made to be people who are members of a culture, members of households, members of businesses and members of society at large. Members of our community locally and members of our nations. And people groups. And that means that membership in these things are is all all going to be impacted in our daily life and in our character. Now because it's so central to the kind of people we are and to our well-being. The Bible speaks extensively to economics. The Bible speaks a great deal about our economic realities. And it stretches everywhere from our daily life, in our work, and how my work intersects with the work of other people through the way that I not only perform my tasks in the workplace, but also buying and selling. Hiring people, investing, creating, you know, entrepreneurs who create new economic activity. All these things are talked about in the Bible, and there's a great concern right from the beginning to the end. You find this in the Old Testament lore. You find the prophets talking about it constantly, you find it in the parables and and in many of the teachings of of the epistles. But we shouldn't we need to pause before we rush in and just take these teachings directly out of the Bible and try to implement them directly in our own culture. Because the teachings, the economic teachings in the Bible are aimed at the cultural context of their day. They presuppose an ancient economy that works in a certain way an agrarian economy, an economy with a certain kind of presupposition about the way society works. And in in some ways, it actually implicitly challenges those those ancient assumptions as we're going to see later in some of our lessons.

[00:22:01] So instead of simply taking things out of the Bible and just trying to re-implement them today where the context is very different, our job is to take the basic moral commitments of Christianity, which are shaped by the Bible and by the history of Christianity and by the faith community in the church. As we all work together with God in one another in our faith lives, to take the basic moral commitments of Christianity and infuse those into the modern economy, to infuse them into our own cultural context. And that requires some some challenging thinking. It requires us to carefully think through, all right, how what is the modern economy? How does the modern economy work? How would this Christian moral teaching apply in the modern economy? It might not be the way that we first think before we start going through these these careful reflections. That's why, as I said, I'm so excited about this economic wisdom project that we're developing. Our national network of theological educators is working together in all kinds of conversations and activities and research and and conversations to wrestle with these issues. And as a as a first step, we've identified four central themes that we think are critical to begin thinking about how we can take that historic Christian wisdom, that biblical wisdom, and apply it in a way that will have real legitimate meaning for the modern economy and help us in our own time to be people who do fruitful work and have wisdom about the economy and businesses and economic systems. So that's what we're going to be looking at in the next few lessons to take these key themes and unpack their Christian history and how they intersect with the economy today.

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