Studying ... Economics?
Cameron Dobbie reflects on his time studying for a degree in economics and offers some thoughts on the difference being a Christian makes to the study of economics.
Economics is the study of resource allocation. Resources (natural, people, financial) are limited and the demands of the world are unlimited causing those resources to become scarce. How do we allocate these resources and understand how to use them?
It took me some years to work out the most succinct way of defining economics but after some trial and error I came up with this: "Economics is a study of decision making". Every single allocation of resources starts and ends with a decision made by an individual; a choice between various alternatives; a consideration of one choice over another; the cost of one option over another; the benefit of one over another.
So in coming to economics it is always important to remember that there is a human at the root of every final decision, and as humans we bring our own nature to these decisions; generosity, kindness, greed, selfish ambition, love, altruism and stupidity.
Is economics of no value then? Quite the opposite! It is abundantly clear that since the West embraced the discipline of economics circa 18th Century, and with a little help from an industrial revolution, standards of living have increased exponentially in many parts of the world in comparison to centuries gone by. There must be some merit in studying it, mustn't there?
Most crucially when we approach economics we must always remember that the study of economics is not a '2 + 2 = 4' pure science; it is a social science where the variables in the equations are made up of people, not numbers and often 2 + 2 = 5 or 48!!!!
We are humans and have the ability to think and act freely making choices that are often irrational, spontaneous and unpredictable.
So – we have an impure science trying to solve the allocation of the world's scare resources, run by fallible humans dealing with trillions of £ / $ / € / ¥ all at the same time!
Decisions, decisions, decisions
I spent 4 years studying Economics at the University of St Andrews and from here on I would like to share with you my personal reflections as a Christian studying economics, offering tips, highlighting challenges and sharing benefits.
I now work for CARE (www.care.org.uk), a Christian social policy charity which seeks to communicate biblical truth into the formation of our laws and governance, focusing specifically on the value of the human being from its natural conception to its natural end. Alongside this we work to equip the church to be light and salt in areas of social justice across the nation.
Tips for Studying Economics – 3 vital things to remember!
1. Think rationally
To study economics we have to be ready to think rationally and logically about decision making. For example, our income is limited and our wants are unlimited. We need to be able to see which combination of spending will satisfy clothing, food, heating and travel needs at the lowest cost. We need to maximise personal benefit and minimise personal cost. This is the basis of consumer theory which is applied to any person in the economy.
2. We are interdependent
We have to be ready to understand the concept of interdependence; the decision one makes affects the decision of the other.
For example, you notice that the price of your train ticket, weekly shop and heating bill has increased. The decision taken by the train company, the supermarket and the gas company to raise their price will most likely affect your decisions on spending, saving and in the longer term, your wage demands. Over time this leads to a higher wage demand to cover these increased costs so that standards of living do not fall.
We are all interlinked and the decisions of one group always affect the decisions of another. In economics, no man is an island.
3. This is not Pythagoras
Economics is still a fast developing subject and what we learn may be changing under our feet. This is perhaps the most alarming part of studying economics and one which thankfully does not apply as broadly across other subjects!
Economists tend to disagree with one another and there are endless, often inconclusive, debates surrounding growth theory, employment habits, trade patterns and stock prices. Economics is not an exact science and in some cases too many cooks may spoil the economic broth.
When Pythagoras proved his famous theorem that 'in a right angled triangle the square of the hypotenuse is equal to the sum of squares of the other two sides' circa 530 BC, the job was finished. His discovery was a fact that has been central to mathematical geometry ever since; it will not change.
We are not dealing with Pythagoras. Be ready to know that you are studying an imperfect science which is continually evolving and adapting to the world as it too changes. Theories and models rarely fit for eternity.
Challenges of Studying Economics as a Christian – a clash of conscience
It is often difficult to have the correct mind set to study economics which I hope the above demonstrates. There are however much deeper challenges to someone, like myself, who approaches studying economics as a Christian.
The Greatest Command
The Christian faith teaches us to love the Lord our God with all our heart, soul and mind and to love our neighbour as ourselves. Economics teaches us love our source of income with all our heart, soul and mind and only help our neighbour if it makes economic sense.
This presents a Christian studying economics with a difficult task; we have to immerse ourselves in pattern of thinking that is in many ways selfish and unkind.
'Me, me, me'
Another popular assumption in economics is that we as consumers go out into the 'market' with the primary aim to maximise our own happiness, whatever it takes, even at the expense of others. If everyone is out to simply help themselves, where does that leave room for community, cooperation and family?
In reality however this assumption is lukewarm. We know that parents give to children, individuals donate to charity and governments send aid. Perhaps it is not 'me, me, me' all of the time but in studying economics you will be surprised how often you have to think along those lines. This assumption leaves little room for the type of sacrificial kindness that we are called to display in response to Jesus.
Having spent much time grappling with and studying economics it seems hard to intertwine with one of the bible's key concept: sacrificial love.
1 John 4:10 says: "This is love: not that we loved God, but that he loved us and sent his Son as an atoning sacrifice for our sins".
The sacrifice of Jesus's life for us is the definition of love, the sacrificial act of one person doing what cost them the most to benefit another. This is personal cost maximisation and personal benefit minimisation! It cost Jesus his life to give us eternal life. What may seem a defeat, a bankruptcy perhaps, was actually the greatest act of love of all time and for the complete maximisation of everyone's benefit. Sacrificial love changes lives and changes the way we view loving and serving others.
Studying economics, we may experience frustration at the lack of love and the challenge is to not let these selfish assumptions undermine our belief in the value of sacrifice.
Benefits when studying economics as a Christian – 4 insights
Studying any subject at university will most likely bring challenges to our Christian faith – even theology – and the same with economics. The few that I have explained above will leave you scratching your head and that's without entering into the world of tutorials, essays and exams!
I also want to encourage us, however, of the great benefits of studying economics as a Christian, benefits which I believe make us more equipped to handle the subject better than those who don't follow Christ.
1. Jesus makes us whole
Some would argue that the true goal of economics is the increase in the collective standards of living in a nation, or even the entire world: the pursuit of a continual higher rate of income per capita. As each person's wellbeing is looked after their lives will be ultimately satisfied, so the thinking goes.
Here is the first area where we can interject as we know that there is only one way that our wellbeing can be satisfied: a loving relationship with Jesus Christ. It is the only thing that will truly satisfy and make us as whole as we can be this side of heaven. This is obvious as we look to our brothers and sisters in parts of Africa who literally 'own nothing but have everything' because of their relationship with Jesus. We do not need a higher standard of living to be more complete as a person. If this is news to you, please go and speak to someone who has been a missionary in Africa.
As Christians we can explain why the ultimate goal of economics misses the mark.
2. Buried treasure
Many Christians believe that money is a gift from God and therefore use it to build his kingdom and not their own. They tend to give their money to areas of ministry and spend it in ways that will honour God rather than burying their 'treasure' into the kingdoms of this world.
Jesus teaches us, as recorded in Matthew 6: "Do not store up for yourself treasures on earth, where moth and rust destroy and where thieves break in and steal. But store up for your selves treasures in heaven where moth and rust do not destroy and where thieves do not break in and steal".
Money is a gift from God that he has given to us to use to build his kingdom, not our own. We can therefore understand and explain why individuals, companies and government are continually disappointed as they use money to try and build their own little kingdoms. Money was not designed to help us build our own kingdoms, it has not been given to us for that purpose as God knows our ability to idolise 'treasure' and hoard it. As Christians we have a more healthy understanding of what the gift of money is.
3. Relationships matter
As Christians we will (hopefully) place a higher importance on relationships. Our God by definition is a relationship: Father, Son and Holy Spirit together loving one another make up our God.
Economics often considers the individual person, company or nation and does not always take into account the interdependent relationships in an economy. We have a need as humans for family and community and at the heart of this is our desire for right relationships. Any economic model that seeks to correctly understand people must take this into account.
As Christians we already have an advantage in this field and I would encourage everyone to dig deeper into an emerging branch of economics called Relational Economics or the Economics of Mutuality. For example, I recently attended a conference run by the European Economic Summit that discussed this area; Bruno Roche, Chief Economist and Managing Director of Catalyst, a think tank of Mars Corp, and Dr Michael Shluter CBE, Chief Executive of Relational Research, were for me a highlight.
4. Brokenness and value
Finally, if we are Christians we most likely have accepted two very important things. Firstly that we are sinful, broken beyond our own repair and secondly that we are so precious to God that he would send his only Son to die for us. These are massively important in understanding human nature as we accepted both our brokenness and our value at the same time and as such we have a more realistic view of human life. Bringing this insight into a world of 7 billion people can only help us understand better what it means to be human. We can speak into all kinds of economic situations upholding the value of every single person communicating that everyone needs Jesus to make them whole again.
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Humans are at the root of every economic decision and, as Christians, we understand human nature and the needs of man in a different way to the world. We have an appreciation of the inner elements of the economic machine and we must be ready to speak love and truth into this fascinating social science as it continues to evolve before us.
Wayne Grudem & Barry Asmus, The Poverty of Nations
George Cooper, The Origin of Financial Crisis
Michael Shluter & David Lee, The R Factor
John Stott, Issues Facing Christians Today
Ovey, Chaplin, McIlroy, Lawrence & Grudem, Good News for the Public Square
Breton & Largent, The Soul of Economies
© 2015 Cameron Dobbie