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Holy Week resources and reflections

Faith, reason, and the economy

A few years ago Michael Dodd, an attorney and friend, invited me to speak at a seminar he leads in the International Business Fellows Program at The University of Texas at Austin. The interdisciplinary seminar brings together graduate students from the law school, the business school, and the LBJ School of Government. That evening three distinguished economists were making presentations. My assignment was to respond to them. Mike introduced me as a professor of applied ethics. I’m a practical theologian. Close enough for government work.

To say that I felt out of my depth and intimidated would be a gross understatement. After the economists concluded their presentations, I told them so. Economists, after all, deal in hard facts, in numbers, figures, complex mathematical models to predict production and consumption, and so forth. Theologians, I said, construct more or less rational belief systems based on faith assumptions. However, I continued, after hearing their presentations it appeared that economists and theologians have a lot more in common than I had originally thought. We’re both in the business of constructing belief systems based on faith assumptions, and both of us are subject to irrational forces.

One of the three economists laughed. The other two didn’t.

My hunch about economists has deepened into a conviction in recent days, especially since the global economic meltdown that has seen markets and main streets shaken to their cores and sent economic experts scurrying for cover. Some economists are responding in ways that theologians would call theological — though they still don’t use the term.

A book review in a recent issue of The Economist for Justin Fox’s The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street (HarperBusiness) makes this case. The economic models that, in large measure, led to the recent unpleasantness had all the features of religious faith: prophets (like Milton Friedman and Merton Miller) and unquestionable religious beliefs codified into the economic equivalent of creedal statements (such as the “efficient market hypothesis,” which the reviewer refers to as “the Nicene Creed of market rationalists” which “inspired a wave of innovative financial products, such as derivatives and securitized subprime mortgages, that believers claimed would allow users to exploit the wonders of the market”). (The Economist, “Slaves to some defunct economist,” June 13, 2009, p. 87).

The notion that human beings cannot be assumed to act in their best interest, that our behavior is rife with “foibles,” that we act irrationally, and can be at times lazy, lustful, greedy, gluttonous, envious, violent, and prideful, is not the discovery of psychology, however. Whether it is naïveté, ignorance, or superficiality that causes us to fail to factor-in our failings hardly matters in the end. To fail to take reality into consideration when predicting human systems and institutions, including economic ones, is to court disaster. This might be a news story, but it is not a new one.

From the opening pages of Genesis to the Gifford Lectures of Reinhold Niebuhr, from the theologies of St. Augustine and Jonathan Edwards to the ethics of Dietrich Bonhoeffer and Stanley Hauerwas, we find not only the problem and mystery of pervasive, systemic irrationality and self-defeating in-dependence that we have called original sin, but also the insight that compels us not only to distrust ourselves (not even psychology can save us from ourselves!) but to trust that God’s grace trumps even our most phenomenal lapses in being and doing.

It is here, finally, that the self-help mentality fails us utterly, even when it is built on some fairly sane assumptions about human irrationality and applied to money matters (Richard Thaler and Cass Sunstein have co-written a book, Nudge: Improving Decisions About Health, Wealth and Happiness). What we most need we cannot do for ourselves, but remembering this fact may just be the first step into reality.

Karl Barth famously said we ought to do theology with the Bible in one hand and the newspaper in the other. Maybe today we should amend that to say we should read The Wall Street Journal with one eye on the Bible, if only to make sense of what’s going on in its pages.

 

MICHAEL JINKINS is academic dean and professor of pastoral theology at Austin (Texas) Presbyterian Theological Seminary.

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