Economics 101 & Theology 101

You Don’t Know What You Don’t Know: Knowledge, Understanding, and Wisdom

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The fear of the Lord is the beginning of knowledge; fools despise wisdom and instruction.

-Proverbs 1:7

In our first post on thinking biblically about faith, work, and economics, we suggested five tools, or mental models, that should shape and support our thinking and decision-making, as well as help us build a holistic biblical worldview. By using these tools, we can take biblical principles and apply them to various situations that we encounter in our daily lives.

We have looked at the first two, “personal vision” and “gifts and talents,” now we want to turn to the third tool, “wisdom and knowledge.”

At first glance, it seems that the authors of the Bible use the words “wisdom,” “knowledge,” and a third term, “understanding,” almost interchangeably. A closer examination shows a difference in the way the three terms are used. This difference is very important for our understanding of this third mental model of “wisdom and knowledge.”

Simply put, these gifts as they are called in the Bible are defined as:

• Knowledge – the facts (Proverbs 9:10, Proverbs 18:15, Colossians 2:8, 1 Timothy 2:4).

• Understanding – ability to translate meaning from the facts (Psalm 119:130, Proverbs 3:5-7, 18:2, Philippians 1:9-10).

• Wisdom – knowing what to do next, given an understanding of the facts and circumstances (Ecclesiastes 8:1, James 3:17).

Those with knowledge are able to collect, remember, and access information. But, it is possible to have knowledge and lack understanding and wisdom. Someone might have the facts, but not know what they mean or what to do next.

Those with understanding are able to extract the meaning out of information. They “see through” the facts to the dynamics of what, how, and why. Understanding is a lens which brings the facts into crisp focus and produces principles.

Those with wisdom know which principle to apply in a given context. Understanding without wisdom can appear contradictory (Proverbs 26:4-5). For example, the statement, “He who hesitates is lost,” is true, but so is the idea that “haste makes waste.” Which principle to use depends on the context. Those with wisdom know what actions to take next. They do the right thing in the given situation. In contrast, there are many who have great knowledge and understanding but who consistently do the wrong thing.

Charles Spurgeon once wrote,

Wisdom is the right use of knowledge. To know is not to be wise. Many men know a great deal, and are all the greater fools for it. There is no fool so great a fool as a knowing fool. But to know how to use knowledge is to have wisdom.

The following table may help you visualize the difference between these three terms:

Knowledge

Understanding

Wisdom

Facts

Meaning

What to Do Next

Information

Principles

Application

Memory

Reason

Action

Scholars

Teachers

Practitioners

In any given situation, God rarely gives all three gifts to any one person. We need to cooperate and assist each other with our particular gift in order to accomplish what God has called us to do, especially in our vocational work.

This is what economists call the “knowledge problem.” No one person or group can have absolute knowledge or know all the facts, though we are all supposed to work towards developing and acquiring knowledge, wisdom, and understanding in our lives. God is the only one who does not have a knowledge problem.

We will return to the interplay between these three terms— “knowledge,” “understanding,” and “wisdom”—in a later post. But first let’s look closer at this idea of knowledge.

The New Testament word “disciple” literally means “a learner.” Christians are called to a careful study of the Bible. This will help us acquire the knowledge that we need in order to do what God has call us to do. Jesus said,

If you abide in My word, you are My disciples indeed. And you shall know the truth and the truth shall make you free (John 8:31–32).

R.C. Sproul writes in one daily devotional that,

Our Lord calls for a continued application of the mind to His Word. A disciple does not dabble in learning. He makes the pursuit of an understanding of God’s Word a chief business of his life.

It is clear that Christians are to study God’s word to learn his revealed knowledge (wisdom and understanding can also be learned from Scripture, too). But are there other places to seek knowledge as well? I will answer that question in my next post.

  • Jonathan M

    I read with interest this post on the interplay between knowledge, understanding and wisdom. I concur with the principles you outline, but fear that your definitions of each leave out the relational aspect of our faith. We serve a relational God – no other God is relational within His own being as is our triune God (cf. John 17:3). For example, we cannot extract wisdom from its relational basis. Both Proverbs 1:17 and Proverbs 9:10, quoted in the article, base each of these three terms in the fear of the Lord. Yet I wonder out loud if the definitions and further explanation inadvertently leave out the “fear of the Lord” or the relational knowledge and right orientation toward a relational God. We read Scripture to know God in a relational sense, not just to extract principles which establish priorities for our lives.

    I am anxious to read further articles and see how you unpack these thoughts. I am grateful for IFWE and its efforts to point believers to a biblically integrated life.

    • Hugh Whelchel

      Jonathan, thanks for your comments and words of encouragement. This is exactly where we are planning to go with this discussion. – Hugh.

  • Tjmanyaka

    wow thank you so much for this transforming enlightenment…
    i have a question tough….why is wisdom referred to “her” female?

    • Jamele Henry

      It’s referred to as her because it’s being used almost as a metaphor.. The way a man pursues a woman is the way you should pursue getting wisdom.. Hope that helps 🙂

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