Economics 101 & Public Square

Economics, Politics, and the Kingdom of God

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The journey we are on in life matters for the future we are building. It matters for the work God has called us to accomplish.

Using our skills and talents, we are making contributions to the flourishing  of individuals and society, both now and in the new heavens and new earth, where we will spend eternity. We are contributing to the Kingdom of God, the rule of the eternal sovereign God over all his creation. As Hugh Whelchel explains in How Then Should We Work?,

We understand that it is God, through his providence, who is establishing his Kingdom here on earth. Yet this does not imply that we lack responsibility for the part God has called us to play. Much of what God accomplishes, he does through secondary means, and frequently his people are those secondary means. 

Given the importance of our work to God’s Kingdom-building, it is important that we serve as wise and scrupulous stewards. The goal of my blogs is to bring economics into this calculus of whole-life stewardship. Understanding the benefits of exchange, comparative advantage, and the gifts of markets has been a large part of our discussion here.

In addition to understanding basic economic principles, we must also consider the economics of public life – decisions made outside of markets and inside politics – because we know that all choices bring costs, regardless of the arena in which we make them.

Economics & Public Choice

The “economics of politics” is a discipline known as public choice. It is critically important for Christians to understand public choice theory, as it can help us in our quest to bring about human flourishing.

Economist William Shugart describes public choice this way in an article for the Online Library of Economics and Liberty:

As James Buchanan artfully defined it, public choice is “politics without romance.” The wishful thinking it [public choice] displaced presumes that participants in the political sphere aspire to promote the common good.

Public choice theory relies, knowingly or not, on two fundamental Christian principles:

1. We are fallen sinners (Genesis 3, Romans 3:23). Taking a job as a public official doesn’t override the temptation to sin and indulge ourselves at the expense of others.

2. We as individuals are the source of all action. When God created us, he created us as unique individuals, with our own distinct gifts, motivations, and tastes. We were not created as a “state” or “culture” or “town” or a “city.” We are born, we act, and we are motivated by our individual preferences.

Shugart elaborates on this second insight economists gained from public choice. “The individual becomes the fundamental unit of analysis,” he writes. Individuals are the organic decision makers, not abstract groups like “the people,” “the community,” or “society.”

The challenge of public choice, Shugart writes, is

How to model the ways in which the diverse and often conflicting preferences of self-interested individuals get expressed…when decisions are made collectively.

Economics, Public Choice, & Politics

As we discussed earlier, markets are tough disciplinarians. They weed out greed and corruption, and harness selfishness into service. If you are not serving your customers with lower prices and better quality, you will fail.

Politics has no mechanism for weeding out corruption and greed. The reason is because there is no profit/loss constraint. Profit no longer becomes a motivation; re-election does. Powerful special interest groups form and pressure politicians with votes and money to serve their small, localized interests.

Public choice theory reminds us that all these decisions and actions come at a cost. When politicians vote in favor of one group, they do so at the expense of another. The result is the increasing formation of powerful interest groups and well-paid lobbyists whose job it is to sway political agents to their narrow interests.

The Founders were wise in that they foresaw this problem, and worried about developing a sound political setting that protected against the tyranny of factions. Unfortunately, we haven’t been able to thwart the rise of interest group politics.

So what can we do? Christians can re-engage the culture. We must be aware of the issues surrounding interest group politics and the dangers of the cronyism it produces. The only way to have a lasting, positive impact is if we count the costs in all decision-making, and ensure that we are an active part of a culture which can bring about positive change. Public choice theory can help us think through all these things.

Next week we will talk further about the principles of public choice theory and why they are important for Christian stewardship.

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  • I recently re-read John 3. In his discussion with Nicodemus Jesus uses the term “Kingdom of God.” But in verse 12 He makes an amazing statement: “”If I have told you earthly things and you do not believe, how can you believe if I tell you heavenly things?” The “earthly things” Jesus is referring to is the Kingdom of God. The Kingdom is a here-and-now thing.
    How we are to walk out the Kingdom, how we are to participate in the Kingdom Invasion of earth, must be concentrated on its peculiarities.
    What is peculiar over the course of history is to work for constraining arbitrary power, and to forfeit privileges accrued to us in order to benefit others. Jumping headlong into our work advances the Kingdom in that it paves the way for Common Grace to generate greater human flourishing. The market system, with Christians engaged as catalysts for trust, honesty, productivity, and long run time horizons, provides the greatest path to flourishing, and the strongest impediment to the exercise of arbitrary power.
    Doing normal things like working hard, getting married, and investing in our kids, goes a long way in this regard.
    But most of these behaviors can be motivated by individual self-interest. What makes being a Christian peculiar? It must be the willingness to sacrifice, and to take risks, hoping to have a transformative effect on those we come into contact with.

  • Nathan

    The deleterious influence of lobbyist and special interests groups is intuitive and satisfying when explaining why the political system appears to be broken. However, I believe the ignorance of the population is an even more powerful influence. Whether the ignorance is in the area of economic, the structure and workings of the government, or current events and the actual track record of politicians – ignorance can both passively allows governments to do harm and actively encourage bad decisions.

    Happily the best solutions to this type of ignorance are usually on an individual level via a renewal of the culture. This is consistent both with Hugh Whelchel’s observation about God working through “secondary means” and Shugart’s insight concerning individuals.

Further readings on Economics 101 & Public Square

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