Economics 101

Taking ‘Human Action’ into Account Is Important if You Desire Flourishing

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Earlier this week, Dr. R. Albert Mohler Jr. wrote about twelve theses for a Christian understanding of economics, making this assertion:

Regrettably, many American Christians know little about economics.

Many American Christians know little about economics or disregard it altogether because economics seems remote and aggregated. Much of the economics profession has moved toward more sophisticated mathematics over the past century. The problem with modern economics is that it has forgotten that economics starts with people like you and me. And so many people, not just Christians, tune out.

People Act with Purpose

One economist Christians shouldn’t tune out is Ludwig von Mises. He took economics beyond mathematics. In Human Action, his seminal work, Mises defined economics as the science of purposeful human action. In a Christian context, think of economics as the science of making God-pleasing decisions.

If economics is about human action, what drives humans to act? Three things need to be in place for people to act with purpose.

  • We must feel some current state of uneasiness that propels us into action. The presence of sin makes it apparent that the world is not how God intended. Further, God has designed his people with hearts that desire peace and flourishing.
  • We need to see a future state where that uneasiness is reduced. The biblical picture of Restoration gives us a vision for what the world will one day be, when all pain, suffering, and tears will be wiped away (Rev. 21:1-4).
  • We need to believe that we can get to that future state. God did not command us to fulfill impossible tasks. He has given his people the necessary tools, gifts, and talents to bring about flourishing.

Mises, while not a believer, understood human nature. He observed the intricacies of God’s design for man and creation. He saw men not as preprogrammed automatons but as individuals with a purpose.

The Historical Context of ‘Human Action’

Human Action appeared at an important time both in global history and inside the economics profession. The Bolshevik revolution had occurred in 1918. Communists were in control. Simultaneously, elite academic economists were advocating for central planning, a system where the state owns the means of production and directs economic activity. At the time Mises wrote Human Action, central planners had exercised control for twenty-two years. The Soviet empire still had not crumbed. Central planning seemed feasible.

Mises saw that even with the best intentions, central planning disregarded vital elements of human nature. Central planning advocates ignored the very elements Mises saw as critical to human choice. History proved Mises right.

Communism as the world saw it unfold in the Soviet Union failed forty-nine years after Human Action was released. Its seventy-one year reign tried to divorce humans from their God-given purpose, killed millions, and impoverished many more. Genesis makes it clear that this was not God’s original desire for humanity. Genesis presents a pre-Fall picture of spiritual and material abundance. The Soviet Union pitted humans against themselves by denying human nature. It its wake of horror, a godless and poor society worked hard for survival.

The Soviet Union provides a profound example of suffering that occurs when people are hindered from living into their God-designed roles. People are limited in their ability to respond to needs, use their gifts to fill voids, and creatively solve problems. When this happens across society, we see a gray picture of despair. People struggle to survive and cannot thrive as much as they should if things worked as God intended.

Mises developed an economic theory with extraordinary explanatory power because he understood human nature. People are purposeful in their actions. They desire something better. They take action to remedy their current conditions. Without this understanding, we’ll find it hard to bring about true flourishing.

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  • Thanks so much for promoting Mises! I earned an MA in mainstream econ from a good state school and discovered Mises only a decade ago. I am convinced that Christian economics must begin with the Austrian school and advance from there. Mainstream has so many un-Biblical assumptions: humans are automatons that merely react to stimuli; entrepreneurs are unnecessary; all change is random; all agents are infallible and omniscient. Only the Austrian economists assume real humans with desires, reason, the ability to learn and improve but are fallible and often ignorant.

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