A very famous line. Though not untroubled by modern concerns. The critical word, obviously, is "fear."
Let me confess that it can be a bit wearying to constantly rehabilitate the Bible in response to the Oedipal anxieties of progressive Christians. And yet, it is understandable. If a person was raised to fear God, and this fear has curdled into internalized shame and guilt, it needs to be dealt with. But the fear of God as experienced in conservative and high-control sectors of evangelicalism isn't the same fear that is being described by the Psalms.
As we all know, or should know, by "fear" the ancient Hebrews meant something like reverent awe. True, that awe is tinged by anxiety. Not for fear of getting zapped. Just the simple animal response of being in the presence of an unimaginably huge power or facing a vast mystery.
Why is this experience of awe the beginning of wisdom?
In The Shape of Joy I describe how awe creates what psychologists call a "small self." When we encounter a reality greater than our own we resize our egos. Our tendencies toward self-absorption expand the territory of the self, the imprint of self-regard upon the inventory of my cares and concerns. The ego grows large and outsized. As the ego inflates, the concerns of others and the world are displaced, shoved aside by the expanding territory of the self.
In the encounter with a reality larger and other than my own, my growing self-preoccupation is checked. The boundaries of my ego are pulled back so that I might accommodate myself and find my place within a greater whole. This is why I'd prefer to call the "small self" the "relational self."
In The Shape of Joy this discussion about awe and the small self is connected to a conversation about humility. This connection with humility is what Psalm 111 sets before us. Humility is the first step toward wisdom, a proper understanding of how the self relates to and fits within the Real. Humility isn't about self-denigration, it is, rather, a recognition of our glad dependance upon God.
Living within this glad dependence, the fear of the Lord, is the beginning of wisdom.