Aquinas and the Market: Part 2, Values, Policies, and Staying in Your Sandbox

Early in her book Aquinas and the Market: Toward a Humane Economy, Hirschfeld reviews D. Stephen Long's Divine Economy to contrast three approaches of theological economics. We'll review the first two types in this post.

The first approach is characterized by theologians who "tend to accept global capitalism and the culture it produces." Both liberal and conservative theologians can be in this stream, mainly disagreeing about "the extent to which markets should be free to operate without government intervention."

As Hirschfeld points out, the prospects of this approach for theological economics is poor as theology is being used to justify, support, or endorse the existing economic system, liberal or conservative. The problem, Hirschfeld notes, is that "such theology risks being seen as an effort to adorn prior political commitments with theological dressing." There's not much for theology given this approach. The economical dog is wagging the theological tail. So we'll quickly move on.

But before moving on, let's just stop and say that we see this at work everywhere. There is little critical engagement between our faith and our politics/economics. Jesus doesn't bother Republicans, because Jesus is a Republican. And Jesus doesn't bother Democrats, because Jesus is a Democrat. Jesus doesn't bother capitalists, because Jesus is a capitalist. And Jesus doesn't bother socialists, because Jesus is a socialist. Everywhere you look, prior political commitments are adorned with theological dressing.

The second approach to theological economics is to work in the area of normative economics. By and large, economists sees themselves as social scientists, describing, modeling and predicting human behavior. Questions about values, norms, and ethics--not what humans do, but what humans should or ought to do--economists leave to ethicists, moral philosophers, and theologians.

The role of values in markets is called normative economics. Normative economics asks questions about what a good and just economy would look like. Economically, what values to we want to pursue? For example, do we want to reduce poverty? Do we want to protect the environment?

For the most part, economists don't care about those values. Or at least their models don't. Economists leave the values to others and set themselves the task of evaluating the various means by which we can realize our values, mainly through evaluating the various trade-offs, incentives, and unintended consequences at work in any concrete policy proposal.

Basically, economists see their work as "value-free." Welding their models, economists say to the theologians, "Just tell me what your preferences are, and I'll tell you how best to accomplish that goal, along with all the trade-offs you'll have to make and consider."

According to Hirschfeld, the trouble with this division of labor--values for the theologians and concrete policy recommendations for the economists--is that no one is staying in their sandbox. Theologians, along with any Christian with a Twitter account, frequently slip from values (Reduce poverty!) to policy recommendations (Raise the minimum wage!). Economists then step into the debate by pointing out that certain policy proposals (like raising the minimum wage) have a variety of trade-offs and unintended consequences. Sometimes to the point where the policy being recommended actually undermines the value it is supposed to be realizing. As Hirschfeld comments:

Economists who disagree with the proposition that we should raise the minimum wage, for example, are not arguing that we should be unconcerned about the working poor. On the contrary, they are arguing that out of concern for the working poor we should be cautious about adopting policies that might well result in fewer of them having jobs. The same sort of point can be made about macroeconomic policies...Economists who argue against government policies to boost employment do so on the grounds that such policies are either ineffective or actively counterproductive.

The point here is that we think we're talking about values when we're actually talking about trade-offs. We assume that questions such as "Are you for or against a minimum wage increase?" and "Are you for or against a guaranteed minimum income?" are moral questions, questions about values. Thus, people who are against these things are, by definition, bad people. But these questions aren't moral questions, they are questions about trade-offs. And these trade-offs can be empirically evaluated, and perhaps reveal that the policy being recommended actually undermines the value it is supposed to realize. A policy aimed at helping the poor could end up hurting the poor.

The upshot of all this is that theology, again, gets effectively marginalized. At the end of the day, there really is no serious debate about what values we all hold in common. There is a broad consensus among economists and theologians about what values we should be pursuing. Hirschfeld quotes Partha Dasgupta:

I have yet to read an economic document which does not regard as given that involuntary unemployment should be reduced wherever it is extensive, or that destitution should be a thing of the past, or that it would be a tragedy if the rain forest were to disappear. But there are many disagreements about the most effective ways to reduce involuntary unemployment, destitution, and the extinction of rain forests.

Dear theologians and Christians on Twitter, we already agree with you! So step aside, and leave the policy proposals to the experts. You don't really know what you're talking about.

So that's how theologians drift into the sandbox of economists. But it's also true that economists drift into the sandbox of theologians. How that happens goes to the point of Hirschfeld's book, which we'll get to later.

Lastly, there's a third approach to theological economics, but I'll leave that for the next post.