The heresy of orthodox economics

Orthodox free-market economics, rooted in principles of self-interest, individualism, and limited government intervention, has often been criticized for its perceived divergence from Christian values. This critique stems from several key areas of conflict between the two ideologies, including the primacy of self-interest, the neglect of communal well-being, and the potential for economic inequality. By examining the Bible’s teachings and the underlying assumptions of economics, we can better understand why some perceive a tension between orthodox free-market economics and Christianity.

Self-Interest vs. Selflessness

One of the fundamental tenets of orthodox free-market economics is the pursuit of self-interest. This idea is based on the assumption that individuals act rationally to maximize their own utility, often through financial gain. However, Christian teachings emphasize selflessness, compassion, and love for others. The Bible frequently encourages believers to prioritize the needs of others over their own desires (Philippians 2:3-4), which runs counter to the individualistic focus of free-market economics. The conflict arises when economic policies prioritize self-interest over the well-being of the collective, potentially leading to ethical dilemmas.

Communal Well-being vs. Individual Gain

Christianity places a strong emphasis on community and the well-being of all members. The Bible teaches that believers should care for the poor, vulnerable, and marginalized (Matthew 25:31-46). In contrast, orthodox free-market economics often prioritizes individual gain over the broader societal good, assuming that the pursuit of self-interest will ultimately lead to overall prosperity. This can lead to a neglect of group interests, as economic policies may not adequately address the needs of the less fortunate. Some critics argue that this disregard for communal well-being contradicts the Christian call to care for those in need.

Economic Inequality and the Love of Money

Economic inequality is another point of contention between orthodox free-market economics and Christian values. While free-market principles argue that unequal distribution of wealth can incentivize productivity and innovation, the Bible warns against the love of money and the potential negative consequences of wealth disparity (1 Timothy 6:10). The pursuit of wealth for its own sake can lead to moral degradation and the exploitation of others. Stiglitz (2015, 2018) (amongst others) argues that unfettered capitalism can perpetuate a cycle of inequality and poverty. This contradicts the Christian mandate to strive for justice and equality.

The Role of Government and Stewardship

Free-market economics often advocates for minimal government intervention in economic affairs, assuming that market forces will naturally regulate themselves. However, Christian principles of stewardship and justice suggest a responsibility to ensure the well-being of all members of society, particularly those who are vulnerable. The Bible speaks to the importance of just laws and leaders who prioritize the needs of the marginalized (Proverbs 31:8-9). This tension highlights a divergence between the limited government approach of orthodox economics and the call for responsible governance grounded in compassion.

Consumerism and Materialism

Orthodox free-market economics can inadvertently promote consumerism and materialism, where personal worth is often equated with material possessions and wealth. This is contrary to Christian teachings that emphasize the value of spiritual riches over material ones (Matthew 6:19-21). Some argue that an economic system driven by constant consumption can lead to environmental degradation, waste, and a distorted sense of human value (e.g. Mazzucato, 2023). The focus on acquiring more goods and services can also detract from the pursuit of spiritual growth and meaningful relationships.

Concluding remarks

It is essential to recognize that these tensions do not necessarily render free-market economics inherently anti-Christian, but rather highlight the need for a nuanced conversation that considers both economic and ethical implications. By engaging in dialogue and seeking to address the ethical concerns raised by the conflict between these two systems, it is possible to develop economic policies that are more aligned with Christian values, promoting social justice, compassion, and the well-being of all members of society. For instance, curious readers may consider picking up books written by authors following the German Historical School such as Joseph Alois Schumpeter (1883 – 1950) or Richard Werner in more recent times.

Dr Plamen Ivanov is lecturer in Banking and Finance at the University of Winchester, and soon to be a programme leader at the Higher School of Insurance & Finance in Sofia, Bulgaria. His doctoral thesis looked at the origins of the Bank of England.

Header image: El Greco, “Christ Driving the Money-Changers from the Temple”. National Gallery of Art, Washington, D. C., online collection, Public Domain, https://commons.wikimedia.org/w/index.php?curid=3373066