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Economic Theory and Theology

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Jyl Smith

on 1 February 2016

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Transcript of Economic Theory and Theology

A Biblical Theology of Economics
Faith and Wealth
2350 scriptures?
Fundamental to any survey.
This presentations develops a theology of caring for the poor in the American context.

The American Context and the Global Economy
Jesus time: poverty, disenfranchisement, subsistence living

Our time: citizenship to the most powerful nation in modern times.

- By virtue of this citizenship individuals belong to an upper economic strata of 1-2% of the world. Even the poorest 5% in America are richer than 70% of the rest of the world.

- Massive inequalities between world Christians.
Economic Theory
- Adam Smith “competition constrains self-interest and prevents it from becoming destructive to the interests of others.” Classic economic liberalism, with laissez-faire politics. - David Ricardo: efficiency highest good.

- The poor will be addressed providentially through the market because the pursuit of self-interest by uncoordinated individuals miraculously works out to the benefit of all. The great economic machine of society is driven by people’s wants. Elul: Adam Smith’s theory would be fine if human nature is neutral, but it is not.

-John Stuart Mill: the way that society is ordering itself was creating injustices. He saw the breakdown of the free markets in things like unfair child labor.

- Following Mill into the 20th century was John Meynard Keynes. After depression. Boom/bust cycles. Economic bail out.

- Friedrich Heyak who developed a reiteration of Smith’s legacy and laid the foundation for modern neoliberalism. Austrian School. Reaganomics. Libertarianism.

- Friedman. Most influential in modern construct. All that matters is that individuals have real wants and can pursue them without the interference of others, especially the state. Economic adviser to Reagan, father of Chicago school of economics.
A Theology of Economics
There is an absence of biblical ethics when we promote an unregulated economy.

Due to the nature of poverty and economy today a macro solution at the policy level is the best development solution to poverty, and one that should involve Christian’s participation.

In the same way that the government protects its citizens from murder, theft and the like, citizens should also be protected from the empirical harm caused by economic injustice.

Israel most oppressed people group.

God came at their lowest point as a fledgling nation. Establishes covenant, and repeats historical prologue to covenant all throughout OT. (“This is a day to remember forever -- the day you left Egypt, the place of your slavery. For the LORD has brought you out by his mighty power.” NLT Exodus 13:3)

Our own salvation into the Kingdom of Christ is a fulfillment of the metaphor of covenant built on the nation of Israel’s experience.

Unmarried woman
Most likely poverty
In the greatest act of humility and self-sacrifice ever, Jesus stoops low in order to ratifies the divine covenant with man through his very own blood.

“But you are a chosen race, a royal priesthood, a holy nation, a people for his own possession, that you may proclaim the excellencies of him who called you out of darkness into his marvelous light. Once you were not a people, but now you are God's people; once you had not received mercy, but now you have received mercy.” (ESV 1 Peter 2:9-10)

Why does God call us to care for the poor?
Because it is who we are.

OT vs. NT
Structural solutions to poverty in the OT, but not the NT?
Does Jesus call us to non-participation?
We have to consider the context.
A re-narration of what really counts…sermon on the mount…give your coat. Tithe? How about giving everything, or half? Or leaving your family, or your status behind? It is clear that economic matters touch everything.
Jesus expects us to be generous with all of our available capital in generosity and love to others —which would include citizenship, particularly for an American.

Is the economy personal?
Corbett and Fikkert in their book
When Helping Hurts
call the phenomenon of Christians separating the sacred from the secular in their public life evangelical Gnosticism.

Though Jesus clearly cared about personal holiness, he also was radically social.
Rich Christians in an Age of Hunger?
• Almost half the world — over three billion people — live on less than $2.50 a day.

• At least 80% of humanity lives on less than $10 a day.

• The poorest 40 percent of the world’s population accounts for 5 percent of global income.

• In 2005, the wealthiest 20% of the world accounted for 76.6% of total private consumption. The poorest fifth just 1.5%

• According to UNICEF, 22,000 children die each day due to poverty. And they “die quietly in some of the poorest villages on earth, far removed from the scrutiny and the conscience of the world. Being meek and weak in life makes these dying multitudes even more invisible in death.”

• Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

• Half of the world’s children live in poverty. One in three children are without access to shelter, one in five without access to clean water, one in seven without access to health services.

It is clear that failing governments are central to poverty. If governments fail, economic solutions fail. For example, if you look at the very poorest countries such as the Democratic Republic of the Congo, Liberia, Zimbabwe, Burundi, Eritrea, Central African Republic, you will find either a complete lack of government or extremely poor governance . North Korea is another example where the government is clearly the problem when it comes to poverty.
Blind Privilege?
The danger of being unaware of unearned social, economic, and political advantages leaves the participant in the position naively enjoying the benefits of one’s privilege while taking advantage of others who are members of the same socioeconomic system, but without any of the benefits.

In order to examine the economic system in which we participate, we look to its historical development.
Who benefits from neoliberalism?
- The economic majority in America because it works in their favor.

- Story from Guatemala.

- Neoliberalism is the economic equivalent of social Darwinism, a truly ungodly ethic.

- The creation of this system has resulted in a few banks running the finances, and four hundred of the wealthiest Americans have as much money as the entire bottom half of America.

- Totalitarian economics have ensued where financial monopolies are considered ethically neutral by the Right.

- Video

Neoliberalism Internationally

- Washington Consensus mandate utilizing IMF and World Bank

- The great failure of neoliberalism is that it has created horrifying economic inequalities and actually slowed overall economic growth
Hallmarks of the Chicago school of economics: total deregulation, no anti-trust laws, no minimum wage, and no safety standards in work environments.

Friedman directly opposes Keynes in his writing, as they have two different views on how to make a capitalist market succeed.

(illustration of Keynes vs. neolib)

The literal injunction of neoliberal economics is that you cannot resolve scarcity by sharing , this is against biblical principles.

It also doesn't work: debt vs. growth.
When did the change begin?
Regulation is important. Regulation prevents totalitarian economics that prevent the small businessman from succeeding, the very thing capitalism claims to support. (story about FDIC).

An economic theory of capitalism, with regulation, and a regulated social welfare system, is more likely to fall under the heading of Keynesian rather than neoliberal/neoclassic economics.
Policies that that protect family structures include:
Enforcing a living wage that forces employers to pay employees a salary that can sustain a life
Comprehensive prison reform to address the overpopulation of the prison system by young black males.
Ending economic systems that reward the rich and punish the poor--creating undue stress on families
Supporting for single mothers—the best abortion preventative that there is.
Family Values
Arguments Against
Why should the non-working poor get my hard-earned money?

A look at how taxes break down: http://www.whitehouse.gov/2012-taxreceipt

What about military?


What should we give overseas?

Story from U.S. PIRG

Isn’t it Socialism?
- Mob rule, totalitarian economics, or democracy?
- Instances of the political process working.
What about Charity?
Echoing the words of Jesus to the Pharisees in Luke 11, Longenecker and Liebengood note that, “charitable initiatives should have little place in the rectification of economic injustice; countering poverty requires measures that operate at the level of deep economic structures, rather than at the surface level. Charity is the strategy of the pseudo-satanic, it might be said, because it leaves the benefactor feeling justified while the fundamental problem goes unaddressed. Charity cannot plumb the depths of economic injustice, but it can all too easily distract us from the urgent task of implementing essential solutions. Only the reconfiguration of economic structures has any real hope of introducing equity into economic social relations.”
If we view the economy from a worldly standard of it being a zero sum-game we can develop a tragic resignation to the world’s poor.

- The Lord’s Supper

- When we consider the biblical mandate to justice and mercy for the poor, there is no way to understand this within an American context that it does not include our citizenship.

- Both consumer response and responsible civil action has the power to change things in America.

- Like Jesus, we are all unavoidably incarnated into political lives. It is part of our stewardship and sanctification to use our citizenship to honor God.

- Godly political participation creates an ecology of redemption, mercy, and justice in a broken world.
Jesus is dining with Pharisees and he reprimands them for attempting to correct him in regards to a religious law. He notes their knee-jerk reaction regarding hand-washing is indicative of their character.

He is specifically addressing them because of their position of privilege, spiritually and politically. Jesus remarks that they are careful to give ten percent of all their possessions, but neglect the justice that this giving is supposed to enjoin. In fact, the giving serves to further their religious position and social status, rather than representing the kindness of their heart.

Jesus is speaking most forcefully into stewardship of power and financial resources when he addresses the political privilege of the Pharisees.

Luke 11: 37-52
If we are to take our heavenly citizenship seriously, including the requirement to generosity to the poor, we are implicated in these statistics when we consider that our American citizenship puts at our disposal great wealth.

Beyond the mandates of our faith, we are implicated from any standard of human rights in these statistics, because we own a large part of the resources.

So the question becomes not only how generous we will be personally but as a community in this time and age.
As Christians is that we bear responsibility in how we participate in economic structures.

From our position of privilege it is easy to believe that we operate as individuals. However, Americans do not live as subsistence farmers.

The Travels of a T-Shirt in the Global Economy
by Pietra Rivoli
For Further Reading


"claims that free markets will enrich all sections of society are palpably false, while the traditional European welfare state appears to penalize innovation and wealth-creation, thereby locking the poor and unskilled into institutionalized poverty and unemployment.

Thus in the new age of globalization, both ideologies create the same phenomenon: an underclass caught between welfare and low wages, a heavily indebted middle class increasingly subject to job and pension insecurity and a new class of the super rich who escape all rules of taxation and community."
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