Public Square & Theology 101

The Blessing of Giving and the Law of Diminishing Marginal Utility

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Economics tells us that more is always better than less. The world takes this principle one step further and claims that the more wealth and possessions we store up the more satisfaction we have. But what does the Bible have to say about this concept of gathering more for ourselves?

“Take the word of God and apply it to the things you study and the life you live,” a wise friend of mine once taught me. On matters of life, I have consistently seen that biblical principles are not only relevant but also supreme.

The Apostle Paul’s parting words to the Ephesian church leaders seem to contradict worldly wisdom about wealth and possessions:

I’ve never, as you so well know, had any taste for wealth or fashion. With these bare hands I took care of my own basic needs and those who worked with me. In everything I’ve done, I have demonstrated to you how necessary it is to work on behalf of the weak and not exploit them. You’ll not likely go wrong here if you keep remembering that our Master said, ‘You’re far happier giving than getting.’ (Acts 20: 33-35 – MSG)

So, why is it better to give than to receive? Hopefully what follows will decode it for you.

More is Less

There is a well-known and commonly accepted theory in economics known as “the law of diminishing marginal utility.” It simply means that the things we receive beyond what we need slowly become less satisfactory to us. That first ice cream on a hot summer day will be the one that is the most enjoyed, but if you were to continue to eat ice cream, every subsequent one would be less enjoyable until soon it would make you sick.

From multiple accounts in the Bible, we see that when God blesses, he blesses abundantly. However, God doesn’t bless so that we can endlessly store up for ourselves. We are blessed so that we can be a blessing.

When our priority becomes to store up more and more for ourselves, we slowly lose the satisfaction that we get from all those things. Giving reverses that cycle and helps us to walk in greater gratitude and stewardship of the blessing God has given us. However, by poorly stewarding these blessings, we can find ourselves in a place where there is diminished joy in our increasing wealth and possessions.

Our outlook and priority have to be on being a blessing. There will never be a point where we will become “rich enough” to justify giving as a priority. No matter what stage of life we are in or what income level we may belong to, we have the potential to be a blessing to someone. A good indication of whether giving is a priority to us is when we are actively looking for opportunities to be generous rather than opportunities to receive.

Being a good steward of what God has given calls for our focus to be outward rather than on ourselves. As we run after God and strive to bless others, not only do we find ourselves in a place where we have more than enough, but we also find we are more satisfied with the life we lead and the things we have.

The blessing of the Lord makes rich, and he adds no sorrow with it (Prov. 10:22).

Apart from charitable giving, our outlook on being a blessing should continue in our everyday work. As others have written on this blog, one of the chief ways we can love our neighbor is by doing our job well (a key point emphasized by reformer Martin Luther).

The Ability to Bless Others

What is a life worth living? This is a question often discussed by me and my friends. Interestingly, despite the different backgrounds each of us comes from—culturally, socially, religiously, and in every other respect—all of us said that a life that makes a positive impact on others is a life worth living. There is something inside us that knows we ought to be a blessing in any capacity that we can be, whether directly or indirectly.

If the law of diminishing marginal utility holds true, and I believe that it does, we actually increase our satisfaction by benefiting the lives of other people rather than storing up personal possessions with which our satisfaction only decreases.

Being a good steward of what God has given us opens us up to a peace that surpasses every blessing we can try to store up by ourselves.

And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus (Phil. 4:7).

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  • Tate Fegley

    In comparison to the standard neoclassical account of diminishing marginal utility, where it is primarily a fuzzy psychological phenomenon – “that first ice cream on a hot summer day will be the one that is the most enjoyed” – I find the Austrian school account as developed by Carl Menger to be much more precise. That is, the law of diminishing marginal utility is not just “a well-known and commonly accepted theory in economics” that one believes may hold, but a necessary implication of the logic of human action.

    In a world of scarcity, man applies means to satisfy ends and he necessarily acts in such a way to attempt to satisfy the most urgently felt ends first. If he has several units of a certain good (Menger uses the example of sacks of grain), he uses the first unit to satisfy his most urgent want (perhaps satisfying his hunger), his second to satisfy the next most urgent want (feed his animals), the third for the next (plant for next year), and so on. If he loses any of the units, it will be the lowest ranked end that he will now choose to not satisfy.

    Since he satisfies the most urgent end first (the one with giving him the most utility) and then the next most urgent (which gives him less utility than the first), each additional unit of a good necessarily provides less utility than the previous. Thus, the law of diminishing returns is, in fact, a law of human action.

  • Great article. We are blessed to be a blessing. In this way our lives and those of others expand.

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