July 6, 2015

Economics: a Divine Harmony

By In Brian Jacobson

(n:)Ec·o·no·mics: the study of divinely created harmonies in mutually beneficial  peaceful interactions of image bearers of God, sustained by common grace even after the fall.

Economics can, and should, be as doxological as anything in creation for the Christian to study. Maybe even more so since while not all Christians are interested in the half-life of certain elements, or stages of photosynthesis for a plant they have never heard of on an Island they have never been to, yet all Christians daily engage in and benefit from the free market. Our gratitude, wonder, and worship is increased when we recognized just how incredible is His provision of our daily bread. As G.K. Chesterton said (and Leonard Reed quotes in I, Pencil) “We are perishing for want of wonder, not for want of wonders.” Economics is part of the all things that “by him were created,  in heaven and on earth, visible and invisible, whether thrones or dominions or rulers or authorities—all things were created through him and for him” (Col. 1:16). In fact, even the agnostic Murray Rothbard comments “is it, then, surprising that the early economists, all religious men, marveled at their epochal discovery of the harmony pervading the free market and tended to ascribe this beneficence to a “hidden hand” [a reference to the God’s hand of providence] or divine harmony? It is easier for us to scoff at their enthusiasm than to realize that it does not detract from the validity of their analysis. Conventional writers charge, for example, that the French ‘optimistic’ school of the nineteenth century were engaging in a naïve Harmonielehre—a mystical idea of a divinely ordained harmony. But this charge ignores the fact that the French optimists were building on the very sound ‘welfare-economic’ insight that voluntary exchanges on the free market conduce harmoniously to the benefit of all” (Man, Economy, and State, 876). Welfare economics (not welfare state) here refers to an early school of economics in which the proponents recognized that each man, in pursuing his own profit and production, furthers the interest of everyone else in free voluntary trading. Since in any voluntary trade it is self-evident that both parties must view the trade as profitable for themselves, and must value what they receive more than what they give.

As Christians they found the image of the Triune God impressed not just on each individual man but even in their peaceful interactions with each other using, transforming, and trading the things of creation. As man divides up labor, dominates and shapes natural resources, and seeks to benefit and serve his neighbor he too is enriched in the process. It is even preserved by common grace after the fall that even those whose motives turn purely on themselves and their increasing love for wealth still benefit and enrich their neighbor and those they interact with so long as they do not steal or commit. In short these early economist saw in the market that the one and the many were divinely orchestrated and designed into a complex harmony reflective of God himself as he exist as Trinity. Like individual music notes and instruments arranged into a masterful symphony. This is why we must reject anything that even sniffs of central planning and why I have always said that Austrian economics is the economics of humility. It was Frederic Hayek in his great article The Fatal Conceit who said “it is the curious task of economics to demonstrate to men how little they really know about what they imagine they can design.” Keynes, on the other hand, and his followers have always been so enamored by their own mathematical and statistical ability that they believed themselves to be the controllers of the masses, the orchestrators of the animal spirits, the mistros.

It has persistently been the Austrians persistently swimming up tide shouting “you who think you are standing firm, take heed lest you fall,” while the rest of stream shouted back “the fundamentals of the economy are sound!” This was the incredible insight of the Leonard Read’s I, Pencil. Forget the macroeconomy, no single person on this earth has the knowledge or ability to create even one pencil. How could one man or a committee build an incredibly complex intertemporally related structure of dimensionally heterogeneous capital, prices, interest rates, and a production structure to provide thousands of goods to millions of people across counties, states, countries, languages, and cultures?
These insights, along with new technology, allowed for a greater increase in living stands in 200 years than had been accomplished in 2,000 years or even more. Yet these insights are quite old, and the rules of the free market are quite unoriginal. Do not Steal. Do not murder or threaten harm. Do not defraud your neighbor, and what anticipates all of these but do not covet your neighbor or your neighbor’s house. Yet all these make up the actions of the socialist-State, the central planning committee is made up of those who collectively covet on behalf of those who put them there. They then threaten at gunpoint those in their district to steal their possessions and of course all done in the name of helping them. They decide where the property markers fall and who may build what and where. What they can’t steal they print, and debase everyone else’s currency and falsify the balance of wealth. They claim God’s providence has failed to distribute the wealth evenly, even as they are the ones who create the distortions and bubbles in the market. Those who followed the rules and acted justly to their neighbor have made an ill gotten gain, and they are here to correct it, those who helped create the bubbles well they need a bail-out. The actions of the central-planning state are theft and murder, the motives are greed and covetousness. It is a demonic disharmony.

I, Pencil: The Movie

 

Written by Brian Jacobson

Brian Jacobson works as a quality technician for a manufacturing company in St. Louis, Mo where he lives with his new bride. He studied biblical and theological studies at Reformation Bible College under R.C. Sproul in Orlando, FL. He’s an Old-School Presbyterian who enjoys the simple means of grace, Machen, and living the high life on a budget. Follow him @briankjacobson on Twitter.