Theology and Economics - Lesson 4

Dr. Greg Forster
Theology and Economics
cm500-04
Productivity and Opportunity
Lesson Transcript

[00:00:04] Hello and welcome back to our class on theology and economics. This is lesson four, and our theme for this lesson is productivity and opportunity. I had mentioned at the end of the last lesson that we were going to look at this concept of value creation, which was the subject of the last lesson as it connects to these broader social systems of culture and even economic systems. This idea that human beings, through their work and through their buying and selling their exchange with one another, they don't just move stuff around, but they actually create value because they transform the world so that there's more value in it for people. This is actually something that is an important and important element in economic systems, but it hasn't always been assumed in in the culture or in that part of the culture that we call the economic system. If you go back in history and you look at a graph of people's income over time all the way back to as far back as we have any evidence, and I want to make sure we remember that money is not the same thing as value. So we don't want to look only at money as if money were the only thing that matters. But like I said in the previous lesson, if you need to measure value, money is just about the only reliable thing we have that allows us to measure value. So just remembering that this is a measurement and not the ultimate thing, if you were to look at a graph of income over time, it's flat all the way back, as far back as we can look until about the 16th century. And it's flat at a very, very low point. It's flat at subsistence level.

[00:01:54] Virtually everyone in society lived either at subsistence level or close to subsistence level for all of human history until about the 16th century. And subsistence level basically means you have enough to survive and you have enough to be relatively secure that that you're going to have something to eat tomorrow. But you don't have luxuries. You don't have, you know, cars or iPads or any of the amazing things that we take for granted today. You basically just have enough to keep your existence going with maybe a few relatively modest comforts. But no modern medicine? No. So you're keeping your existence going on a day to day basis. But but, but life expectancy was much shorter because modern medicine could not exist when people lived a subsistence level or or any of the other things that we take for granted. And then in about the 16th century, the graph begins to grow very slowly in a few European countries. It happens in in England, it happens in Germany later, it happens in a few other places. And then in the 17th century, it begins to grow faster. It's still very low. In the 18th century, there is a real turning point where the momentum of this economic growth, which had been newly introduced for the first time in the 16th century, in the 18th century, it really begins to take off and it bends upward in a dramatic way, and particularly first in the U.K. and then not long after that, the U.S. bends up even more sharply and surpasses the U.K. and becomes the fastest growing economy in the world. And then in the 20th century, other economies around the world begin to take off. Growth begins to happen in Asia. In the 1980s and nineties, there was this famous phenomenon of the Asian tiger economies that made the transition from the ancient economy at subsistence level to the modern economy.

[00:04:02] South America begins to grow and you begin to have real prosperity in South America. And then last but not least, Africa begins to grow. Not all of Africa. There's a large part of of in central Africa, the sub-Saharan region, that has has not really gotten on this upward curve yet and is not yet growing. But many portions of Africa begin to grow as well. So you see a consistent trend. You see that when countries transition from the traditional economy, which we've seen all the way back as far back as we have evidence into the modern economy, growth begins to occur. And once it occurs, that curve begins to go up and up more and more sharply over time. And it generates wealth. And it has really brought a lot of benefits to people. And it's been extremely dramatic in our time, particularly in in the underdeveloped countries that were only just getting on board for the. Economic growth in the last few decades. One very striking example in the in the entire world. Extreme poverty defined as people living on less than a dollar a day, which would be a reasonable a reasonable estimate of subsistence level. Extreme poverty is down 80% from 1972 26. And I have seen a number of different economists analyze these data, and the exact number may vary from analysis to analysis. 80% is just one example, but all of them agree there's been an enormous just collapse of of poverty around the world in most regions. And it's because economies have transitioned from the traditional economy that does not grow to the modern economy, which does grow and which takes people out of subsistence level poverty and into the kind of life that you and I take for granted every day.

[00:06:07] So this is a unique turning point in history. Looking back at this economic growth that began to emerge very slowly in the 16th century and then really shot off like a rocket starting in the 18th century and is now spreading around the world in various ways. In some ways, this is almost as important a turning point in history as the introduction of the gospel into the broader world in in the first century, as the gospel spread from from the Middle East, where it had been, where it had been cultivated into the Greco-Roman culture and had a transformative impact on on Greco-Roman culture, the emergence of the modern economy is almost as important a turning point in world history. So it really I think we need to look carefully at it and understand it if we want to connect our faith to to the economy. And what I want to stress in this lesson is that the benefits of the modern economy are not just material. The material benefits are very great people around the world now who used to have nothing and live on subsistence from day to day can now begin to have a little more security and eat better and have better health care and education and all of the things, all the material benefits of that growth. But much more important than that is the spiritual benefit of the modern economy, the spiritual benefit of a growing economy, that it helps us to become a different kind of person. It makes us into better people to have these these opportunities available to us and to be set free, to be productive and help the world grow. Now, that can be very challenging for people to to wrap their heads around and accept.

[00:07:52] So I want to just unpack it a little in this in this lecture, step by step. So let's start by looking back at the ancient economy and the economy that carried forward from the ancient world, even into the medieval world, and and didn't change very much until the 16th century. Well, why did it not grow? Why why are people living at subsistence level century after century after century, you know, with with relatively little variation? Well, it's because their culture built on the assumption that most people do not create value with their work. There was a tiny, elite class of political rulers and religious officials and artists and educators. This very, very small 2% or less of the population who are engaged in these extremely elevated cultural activities like politics and religion and art and the culture, said that those people create value and transform the world through their work, but most people do not. That's that was the assumption. And because they built their culture on an assumption that most people don't create value through their work, people didn't have the opportunity to create value through their work. People didn't even know that they could create value through their work. It was it was assumed that you couldn't. And this cultural assumption is really very clear and explicit in the leading figures of of ancient Greco-Roman culture, as well as in other cultures and other parts of the world. And even after the rise of Christianity for a very long time, the Christian message was never really critically applied, not enough, at least, to these inherited pre-Christian Greco-Roman assumptions from people like Aristotle, who talked about work in ways that really denied that it could create value for people. Now, why is it that this ancient assumption took it for granted that you didn't create value with their work? Well, it's because they had a dualistic separation between work.

[00:10:04] And cultural life, moral life, the things that shape the kind of people we are. They said that work is a physical thing. Work is about moving stuff around. You remember in the previous lesson I said, Our work does not just move stuff around. Well, the reason I emphasize that so much is for four centuries, for for just thousands of years, there was this cultural assumption that the nature of work was to move stuff around. And that's all it did. And the moral life and the cultural life was located not in the physical activity of moving things around, but in mental activity. And that was understood as not work. These activities, like political or religious or artistic ideas and and create creative work, which was understood to be something very limited. There was a badness to the physical world and a goodness to the mental world and a a no non transformative view of physical activity and work was understood to be a physical activity. So a non transformative view of work and a transformative view that was confined to this very narrow set of activities that were said to be morally formative and culturally formative. Now this dualism between work and moral formation, this dualism between material things and spiritual things is really a very broad and general feature of human culture wherever we look, except where Christianity has had an influence on the culture. Christianity is unique in challenging the dualism between the material and the spiritual, in challenging that separation, that strict separation between physical things and mental things and emotional spiritual things, and saying that the two are united, the two are integrated, and that there may be a distinction between the material and the spiritual, but we don't want to separate them and say they're different.

[00:12:09] They operate on different principles. We need to see the integrated ness of them in the in the creation that God has given in both those realms together, that they work together. It's not it's not necessarily that only Christians have ever said this, but Christianity has been the only cultural force that has successfully infused this idea of bringing those two things together into the life of a culture in a sustained way. That Christianity has been the source of that. Breaking down the wall and bringing together work and moral and cultural formation and seeing them as as seamlessly integrated. Now, the reason that that the ancient economy was spiritually very, very bad for people, that it was it was very bad for people's moral character. Is this strict social hierarchy between the relatively small group of people, these leisured elites, And they were called leisured because they didn't work for a living. That was the that was the idea. These leisured elites were the morally worthy people because they had the opportunity to cultivate their character and become good people, to develop virtue, develop intellectual excellence and moral excellence and artistic taste, and all of the things that were said to go into the good life. Only those small group of people had the opportunity to do that because their life was not taken up with work. Whereas people who worked for a living were said to be unworthy. They were morally unfit to be stewards of their own lives. Stewardship had to reside with those worthy people who had the opportunity to develop their character. You could not be a steward of your own life if you worked for a living. And in fact, that's almost a verbatim quote from Aristotle. Aristotle says People who work for a living should be tools of people who don't work for a living because he has this very degrading and dehumanizing view of anyone who works for a living, because in his view, they're not morally worthy because they're working rather than developing virtue.

[00:14:21] So you have the 98% of people living in these in these societies are sent this cultural message that you are unworthy, that you don't have stewardship over your life, you don't have responsibilities. You are not here to make a contribution. You're here instead to move stuff around in the ways that your cultural betters dictate to you that you need to do. And this was very degrading to people and encouraged them to be shallow and superficial because nothing was their responsibility. Stewardship did not rest with them, so they didn't have that message. You matter morally and spiritually that it matters what? Kind of person you are not just to God in some other world, but it matters to our culture here in this world what kind of person you are. Contrast all of that with the modern economy. The modern economy is built on the assumption that we all create value through our work and through our exchange. When we buy and sell that all of these activities we engage in, in the economy are value creating. And so the total amount of value in the world can go up over time, and that's why it has the opportunity to increase over time, as this assumption has been proven valid more and more by by economic growth, we invest more in it. We and the modern economy emerged as more and more social systems began to come into alignment with this understanding of how we work and how we exchange. I call it a stewardship mindset, a cultural mindset that says people are stewards. Everyone is supposed to be creating value through their work and we are all supposed to be working together through economic exchange to create value for one another. And this affirms an equal dignity for all people.

[00:16:16] And admittedly, it took a long time for that cultural assumption of equal dignity to be realized in practice. It took a long time for all of the old ways of thinking that were paternalistic and hierarchical and said some people are just more human than others. Some people are just better than others by birth, by their social position. It really took a long time for that equal dignity to be to knock down all of the old barriers, the assumptions that only people of a certain class or only people of a certain race or only people of a certain nation are really able to be contributors, to be value creators and should be a part of the economic system. But this this idea that value creation is for everybody and that we all have equal dignity. And these paternalistic hierarchies are bad for us, as it has been more and more realized over time. It has really brought brought tremendous benefits to us not only materially as everyone's work and exchange have been liberated from the constraints they were under so that we are all free to work and make value for each other. It's brought all this tremendous economic growth in addition to the material benefit. We gained a culture that affirmed all people. We gained a culture that taught people that their character mattered. We gained a culture that said honesty and diligence and self-control and generosity and concern for the needs of others are something that we all need to be doing every day. Now, there were a lot of things that happened in the 16th century that contributed to that. There are a lot of things that happened before the 16th century. It's a long story. It goes all the way back to the first century, really.

[00:18:09] But but the pivotal moment is the 16th century. And the most important single factor was Christianity's cultural influence. There were other factors. You know, development of technology accelerated this, and there were other things going on as well. And I don't want to trivialize those other things, but really, I think the most important catalyst among all those other factors was the Reformation dramatically unleashed the power of Christianity to transform the culture because the Reformation challenged the dualism that kept Christianity locked up inside the church building and in religious works. And there had been other movements to challenge that earlier. So I don't want to say nothing. Nobody had this idea before the Reformation, but the Reformation was the most dramatic unleashing of this idea that the gospel is for all of life and that God cares about all of life. So our moral character needs to be improved. Our moral character needs to be shaped for God in all of life. So it brought morality out of these special activities in the church building where you go do religious works in order to build up your character for God. And it brought it out into the economy. It brought it into work so that people's work everyday was where they shaped themselves for God, and they followed the calling of God in their work. The whole idea of vocation, of calling that God has a calling for your work and that calling is not just for the pastor, but it's for everybody. And in all of your work, this really dramatically transformed the cultural assumptions that that shaped our understanding of what work was for and also what economic exchange like buying and selling were for. So there was a gradual emergence of economic institutions. And cultural assumptions that affirmed value creation and moral formation in work and in the economy all the time.

[00:20:12] Because that dualism between the material and the spiritual, between the physical and the mental, between work and culture was being broken down and that seamless integration was being promoted and pushed and advocated by the by the cultural forces of the Reformation. Now, it's very difficult to summarize what were the cultural bases of this new modern economic culture and its assumptions about human work. And I don't want to oversimplify it, but a good starting point is to look at these two things of productivity and opportunity. I think it provides a good starting point for seeing in focus a couple of the key ideas about human work that are central to this modern economic system. First is productivity. This idea that every individual and every household and every business and every community and every nation and, you know, at every level from the individual up through institutions all the way to nations and people group, we all need to produce more than we consume. We need to leave the world better than we found it. We need to contribute rather than consume. We need to we we need to find our meaning and our dignity in what we contribute to others rather than in what we can get our hands on and grab and accumulate and consume for ourselves. Now, there are exceptions to the rule. Obviously, there are some people who are not able to produce more than they consume, and we don't want to trivialize that and we don't want to exclude them. And in the next lesson, we're going to be looking at some of those particular issues in more detail. But the general social expectation is that we all need to pull our own weight. We all need to be net contributors rather than net consumers.

[00:22:10] And the reason for that is not a sort of legalistic browbeating that, you know, we need you know, we don't want you to be a sloth. We don't want you to be, you know, just sponging off other people. You know, that was an important element. But I think the deeper element is we value you as someone who has something to contribute. You know, we see you the individual or the household or the business or the neighborhood community or the nation. We see you as a person or a group as having something to contribute that you have the power to create and the power to produce, and you're made to do that. So there's a really positive and constructive view of human nature at both the individual level and at the social level. That's really at the deeply at the bottom of this imperative to productivity that we view people as contributors. We think that you have something to give, something to make and create. There's a there's a very important view of human nature at the bottom of this. And if you saw the earlier lessons on stewardship and flourishing, you can see how the Christian view of humanity is at the heart of this, that we are workers who create and workers who work for flourishing and have stewardship over the creation order. And then the other key theme is opportunity. This idea that society and the stewardship over our lives is not just in the hands of this tiny elite and that they have responsibility for everything. And the rest of us are just kind of here to serve them and do what they tell us and move stuff around the way they tell us to move stuff around that we all have equal dignity.

[00:23:56] We all come into the public square as human beings with an equal standing and equal ability to produce or membership, equal membership in the human race, and maybe not an equal ability to produce in the sense of economic value. So one person might be able to produce something that's worth more in dollar terms than another person. But the fact that we are all producers, the fact that we're all contributors, the fact that we all have this equal standing and status as members of the human race and as members of the economy means that the elites and the tiny group of people at the top cannot be allowed to simply arbitrarily control everyone else's work and control access to economic systems and economic exchange. This paternalism is very degrading and it and it teaches people not to take ownership of their own lives and work with God to create a life that's worthy of God and a life that's worthy of the human person and of our humanity. But because it's a fallen world, this idea that the elite should be in control and the elites know better than everyone else what should be done. And because they're smarter and they're better, and because of their standing and their position, they have the opportunity to know and to plan and to be in control, that they should tell us what work to do and that they should have. They should control access to who is allowed to buy and sell what, who is allowed to start, which businesses? Who is allowed to open a business? In what neighborhood? All of those restrictions and rules that are paternalistic in nature, they they they're constantly reemerging because it's a fallen world. We're always backsliding and we're always we're always finding this comfortable dualism that says we can compartmentalize our moral imperatives from our daily work because that's so much easier for us.

[00:25:57] We don't want to all have stewardship when we're when we're not living up to that more. Moral call on that spiritual call that God has for us in those worst moments. We don't want to have stewardship. We don't want to be responsible. We don't want to be active. And that really needs to be challenged. We've got to leave that behind. We've got to get it out of our hearts and we got to get it out of our cultural assumptions. We've got to challenge that paternalistic dualism and say people need the opportunity and the expectation that they're going to be stewards of their own lives and they're going to take ownership and be active and entrepreneurial, that they're going to be liberated from just free riding on somebody else, and that the elites themselves have got to be liberated from their addiction to power because they're slaves to their power just as much as the rest of us can be slaves to their to their systems of control. The elites have got to be called to walk out of their systems of control and say that they need to be productive. They need to take their position of prominence and use it for the good of others to serve and create value for others instead of using their elite positions for power and control. So you can see, I hope, how these cultural assumptions of productivity and opportunity provide the connection point between Christianity historically and particularly the Reformation, understanding of the calling in our work, and that emergence of the modern economy, which which liberates us to be workers and exchangers who have the dignity and the moral formation in our work and in our buying and selling and in our investing and hiring and entrepreneurship.

[00:27:44] So I think it's important for us to stand for cultures and economic systems that treat people as stewards, that that don't view people as tools to be manipulated, which is Aristotle's formulation, but view people as stewards who can be liberated to be stewards of their lives and also to work together as fellow stewards so that it's not individualistic and it doesn't become selfish and self oriented. But everyone becomes a steward and we all work together to steward with one another by exchanging our work and exchanging our the fruits of our work and exchanging value with each other, we all create flourishing together. These systems are these these cultural assumptions. And these economic systems are essential to to cultivate good people, honest people, diligent people, people who are self-controlled, people who are concerned for others, people who are generous, people who have a sense of solidarity with each other and a respect for the equal dignity of other human beings instead of systems that rely on cronyism and dependency, which which cultivates a pattern which is based on a paternalism that cultivates bad character, cultivates selfishness and shallowness, and just all all of the vices that we as Christians and as people who are informed by biblical witness really need to stand against. These systems are also in addition to being spiritually beneficial. They're materially beneficial. When we give people this expectation that they are stewards and they can create and that they can find their dignity and their meaning and their satisfaction in life, in serving other people and creating value for other people. People respond to that by working. You know, it's really funny if you set the expectation for people that Christianity tells you to expect, the world does respond the way Christianity tells you it should respond.

[00:29:51] If you set that expectation that Christian anthropology tells us human beings ought to to respond to, in fact, they respond to it. If you give people this idea that that that they are value creators and you liberate them for that, they generally respond positively and they can need help and we should help them. We shouldn't just say, you know, pull yourself up by your own bootstraps. We should help people, but we want to help people come into a stewardship role where they are empowered and dignified as creators rather than helping people by creating a dependency on our help. The most effective way to turn around poverty, the most effective way to turn around economic distress, the most effective way to turn around even economic injustices is by developing people's ability to work, calling them to that value excuse me, that value creation and particularly entrepreneurial activity that creates new opportunity for people so that people have the opportunity to put their put their talents to work in there in jobs. People have the opportunity to get to work creating value for one another. And this the church has a leading role to play in that kind of entrepreneurial solution to poverty and injustice and the role of the church and the particular calling that we have not only as members of our culture, but as people of faith and as Christians, is something we're going to talk about in the next lesson.