Mere Economics: The Extended Edition

Perhaps surprisingly, economic theory suggests that ancient Christians weren’t necessarily better than you. It’s easy to remember “heroes of the faith,” but many names didn’t make it into Foxe’s Book of Martyrs. It’s also easy to get dejected because our ancient ancestors or people on the other side of the world seem more dedicated to the faith. And it's easy to condemn “kids these days” for spending so much time on mobile devices and so little time doing more valuable things like their holier ancestors did. We think you can relax for a few reasons. For one, it’s not as if our ancient ancestors had our options but chose something holier. Illiterate peasants scratching the ground didn’t forsake Call of Duty for nobler things. They just didn’t have much else to do.

Moreover, we can explain “social” or “cultural” Christians in a society with a lot of religious freedom. In the United States, right now, identifying as a Christian and attending church is easy and won’t cause you trouble. In many contexts, it’s an advantage. The marginal adherent, therefore, is not especially enthusiastic and might just be there for the sense of community or business networking. In other countries, persecution means someone like this wouldn’t join up, and the only people meeting will be those who really mean it. Realize your constraints, and ask for his grace to push them further up and farther in as you are transformed into the likeness of the Son.

Wishing a public policy will help addicts or “get drugs off the streets” won’t make it so. 

One big question we didn’t address in this chapter, due to that pesky constraint called scarcity, is why production tends to happen in capitalist firms with distant shareholders and close-by managers. A lot of people have a gut feeling that the world would be better if (say) workers owned their firms, and indeed, there are many instances of worker cooperatives, such as law firms. However, very few workers choose this arrangement because it’s not usually better for them. Among other issues, it’s difficult for workers to agree on how to slice up the profits.

Congressman Barney Frank (supposedly) once said, “Government is simply the name we give to the things we choose to do together.” We think “government” is probably a better word for the things we do to one another. After all, 100% of government decrees rely on the threat of violent force. If we’re looking for an apt description for the things we do together, why not “company” or “corporation”? In English, “corporation” has the benefit of sounding like “cooperation,” which is a defining characteristic of business firms.

A bit of indigenous wisdom enjoins us to make our decisions with the seventh generation out in mind. A wag might be tempted to ask, “Why not the eighth, ninth, or tenth generation–or the hundredth? Or the heat death of the universe?” It’s probably just an expression, though. The gist is: Don’t be selfish. Care for those coming after you. Taken literally, however, it’s an invitation to a cognitively impossible feat. Yet, someone evaluating prices is implicitly weighing the effect of his action on future generations even if he is not explicitly thinking, “How will this affect people three hundred years from now?” With preferences and beliefs embodied in prices and the wisdom of the ages embodied in traditions, we can have unarticulated conversations with the past, the present, and the future.

Discard the idea that we have environ​​mental problems because bad people do bad things. “Pollution” is a matter of perspective. When your family cat relieves herself in her litter box, it might be gross but it’s not pollution. When someone throws aluminum cans in the backseat of their car, it’s not pollution. When your family cat relieves herself in your neighbor’s flowerbed, it is pollution. When someone throws aluminum cans in your front yard, it is pollution. We can say the same thing about industrial effluent.

A meme we’ve seen compares the careers of WNBA superstar Sue Bird and NBA legend LeBron James. Despite similar championships and comparable MVP awards, Bird’s annual income was a tiny fraction of James’s. We’re supposed to conclude that Bird is outrageously and unfairly underpaid–discriminated against by a patriarchal society. If she is, however, it means people are leaving money on the table. Economics explains LeBron James’s enormous earnings and Sue Bird’s more modest (compared to whom?) haul better than a conspiracy theory about the patriarchy.

Sometimes people balk at the idea of a society based on “abstract,” “cold,” and “impersonal” rules. Why not, they say, run society like a family? The church is the family of God, and after all, no (good) father charges his children for food or diapers. A well-functioning family runs on a principle of deliberate action for another’s sake. Markets run on one’s own interests, and in the marketplace we’re all strangers, even if members of the same church! Why don’t we reject the market and embrace families and small communities? Why not discard the market for the intimate model of the apostolic church? Intimacy, unfortunately, is costly. There is only so much we can know about so many people. Anyone who is married with children knows how hard it is to get along with the people you love most. The farther you get from people, the harder it is to get along with them based on intimacy and the more important it is to rely on rules. Carden can be very flexible with his wife and kids because he knows them better and loves them more than anyone on the planet–and there are only four of them. It is much harder to rely on an “intimate” model with a class of forty strangers, and if we had to make each relationship with our students as close and finely-tailored as our relationships with our families, we would never get anything else done.

Germany after World War I is one tragic instance of society in freefall due to money mischief. The German government printed new money like mad in an attempt to pay down war debts. As a result, average prices quadrupled every month, and businesses began paying their workers daily. Housewives collected their husbands’ salaries with wheelbarrows. There are stories of thieves assaulting these women for their valuable wheelbarrows, dumping out cash to facilitate a faster escape. We didn’t learn from history and have repeated it, for instance, in Zimbabwe in 2008, where average prices increased 231 million percent per year. In that kind of environment, chaos is king. Producers can’t determine whether they made a profit or a loss. Planning is impossible. People either switch to a foreign currency or society collapses. 

Imagine a scenario where you’re waiting in line to buy a half-gallon of ice cream from your local Walmart Supercenter. Upon arriving at the cash register, you reach into your wallet for what we call “money” only to have the cashier look at you funny. “We only take shirt buttons here,” she says. You look around hopelessly. Shirt buttons? You begin bargaining with the man behind you, who says he’ll rip the buttons off his shirt if you find him an ivory hair comb. You begin to despair, and your ice cream is melting.