Economics 101

Why Understanding Economics Is So Important for Christians

LinkedIn Email Print

We all think economically, Christians included, whether or not we know it. We all make choices about how to obtain and spend scarce resources. Most of us also care deeply about how to deal with scarcity, distribute wealth, and maximize prosperity throughout our society. The only difference is how clearly we think through these choices and valuations.

One of my economics professors in college used to make the point that even Mother Teresa was “greedy” in the sense that she constantly chased after the next convert, the next opportunity to serve, or the next prospect for expanding her ministry. She always wanted more.

We all want different things and we each pursue them with zeal. That makes us inherently economically-minded creatures.

Economist Paul Heyne expressed this sentiment beautifully in his landmark book, The Economic Way of Thinking:

I like to summarize the economic way of thinking in a short sentence that states its basic assumption: All social phenomena emerge from the choices of individuals in response to expected benefits and costs to themselves.

Christians possess a special calling to understand economics more deeply. Understanding economics provides important benefits for Christians as they minister within the Church and to society at large.

First, understanding economic principles can help Christians within the Church to prioritize their own goals, balance their resources, and maximize their ministry effectiveness. Individual Christians only have so much time and money. Local churches have finite budgets. Jesus’s observation that the “harvest is plentiful, but the laborers are few” rings true for virtually all active Christians.

Clergy, lay leaders, and disciple-making Christians can begin applying the principles of economics by realistically assessing whether expected benefits will outweigh expected costs. But the economic way of thinking has much wider applications than cost-benefit analysis.

Economic applications for church ministry and Christian living abound. Understanding specialization and comparative advantage helps Christians can use their gifts wisely. These concepts teach us humans are more productive when working together and everyone focuses on doing what they are relatively best at. Paul illustrates this beautifully in 1 Corinthians 12:14 by comparing the church to a body and Christians to its parts, like eyes, hands, and feet:

For the body does not consist of one member but of many.

Second, a sound understanding of economics can inform the church’s efforts to minister outside its walls. Clergy, lay leaders, and average church members can discover how to advocate for effective social justice.

Given president-elect Donald Trump’s recent electoral victory, issues like immigration and trade will remain hot-button advocacy concerns for the foreseeable future. But of course, there are other practical concerns which Christians will likely encounter on a regular, first-hand basis, and economic literacy can help inform activism in these arenas.

Take the minimum wage as an example. Many assume raising the minimum wage helps the poor and alleviates poverty. Coalitions like the Labor-Religion Coalition of New York State lobby for a $15 minimum wage in their localities. But these efforts fail to account for the harm that raising the minimum wage would cause for low-income demographics, young people, and minorities.

“While alleviating poverty is a widely shared goal, raising the minimum wage is unlikely to achieve that end,” San Diego State University economist Joseph Sabia wrote for the Cato Institute. “In reality, it is more likely to result in making many low-skilled workers worse off.”

Economics also ought to inform how Christians minister to the poor. World magazine Editor-in-Chief Marvin Olasky recounted this history of American charity in his book, The Tragedy of American Compassion. Before the days of pervasive government welfare, private Christians and churches worked in tandem with the free market by deploying their resources to assist the needy across the country. This type of charity focused on enabling poor Americans to pursue economic independence, maximizing community involvement, and discerning which individuals truly needed help.

“Many lives can be saved if we recapture the vision that changed lives up a century ago, when our concept of compassion was not so corrupt,” Olasky wrote.

Ultimately, understanding economics helps the Church to minister effectively both within its walls and to the outside world. Among other benefits, congregations can be better stewards of ministry resources and Christians can serve their communities more effectively, and the Church can advocate for wise public policies. Just like any science (whether “social” or “hard” science), economics explores truths invented by God and profitable for advancing his kingdom.

For a limited time, we’re offering IFWE blog readers a special price of $3.99 on Love Your Neighbor: Restoring Dignity, Breaking the Cycle of Poverty. That’s more than 30 percent off the current offer price! Use code: LYNBLOG (Offer expires 12/16/16). Click here to order. Like IFWE booklets? Get the whole set! Order The IFWE Booklet Bundle today for just $44.99.

Have our latest content delivered right to your inbox!

Further readings on Economics 101

  • Economics 101
  • Theology 101
Conclusion: An Overview of Usury in the Bible

By: Dr. Chad Brand

7 minute read

This is the final blog in our series on usury. Today we have the task of what John Stott calls…

  • Economics 101
Conversations about Atheism in America

By: Dr. Anne Bradley

4 minute read

Editor’s note: Dr. Anne Bradley was featured in an interview with Praxis Circle. Below are a few highlights of that…

Have our latest content delivered right to your inbox!