Soundings

Be involved in affairs of the economic life

Nov 2008    

What is the Christian understanding of the economic order?

THE tumultuous events on Wall Street in recent times and their rippling events throughout the world has led some to lose
confidence in the American economy and its financial system, others to debate the extent of government interventions, and still others to wonder if capitalism itself is in crisis.

Some commentators have even compared this crisis, which resulted in the disappearance of major investment banks, to the Great Depression of the late 1920s.

The devastating crash in 1929 and the slump it resulted did indeed give capitalism a bad name, and it arguably contributed
to the rise of Hitler to power in 1933. The Great Depression plunged America into genuine crisis and economic collapse,
forcing President Franklin D. Roosevelt to introduce the “New Deal” when he took office in 1933. But the current crisis is radically different. Although the financial system clearly needed a dose of realism and reform, the fundamentals of the American economy remain intact.

It is beyond my competence to offer an analysis of the recent crisis. My purpose is to sketch an outline of the theology of the economic order, and to reflect on the ethics and spirituality of economic life.

I find Martin Luther’s theology of the “two kingdoms” very helpful. According to Luther, God rules the world through two modes of sovereignty. By His “left hand”, Luther says, God rules through authorities and “orders” that were meant to establish justice, peace and the common good. These orders are associated with government and economic life, governed according to the “civic use” of divine law. By His “right hand”, God rules by the promise of the Gospel at work in the hearts of individuals.

Thus, while God’s left-hand rule establishes justice, God’s right-hand rule instils love. Christians, of course, live under and serve both forms of the divine rule. They are therefore encouraged to be constructively involved in the affairs of the economic life, which is aimed at serving the good of the human community.

Two important implications can be gleaned from this. Firstly, according to the Christian understanding, God, in His providential grace, has established many orders in human society, all of which are purposed to serve the human community.

The economic order, which of course includes business and investments, is one of the orders God has put in place. But, it is precisely because the economic order is one among many, it cannot be understood apart from the other orders: it does not travel on a separate orbit. Once the economic order is isolated from the others, there is a tendency to absolutise the economy.

We see this very clearly in Frederick Engels’ interpretation of Marxism, adopted by many “orthodox” Marxists, which makes the economic order and its processes the determinant of social, cultural, political and religious life. But this tendency is obviously not confined only to Marxism, but is present in countries that embrace democracy.

Secondly, the economic order is to serve justice and the common good. This means that although profitability is necessary for the survival of businesses, it must be seen as a means to a larger end. Put differently, profitability should never be an end in itself. This means that there are theological and ethical grounds for rejecting the open-ended capitalist system (in whatever form) where the rich get richer and the poor get poorer. This also means that there are strong theological reasons for favouring stakeholder capitalism over stockholder capitalism.

The purpose of business, in other words, is to serve the well-being of its stakeholders – employees and their families, communities, customers, the environment, etc, – not just stockholders.

Here business and government must work together to ensure that the values of the family and community are upheld, and the needs of the less fortunate in society are addressed. By doing this, secular governments and businesses fulfil the divine intention for instituting the economic order.

Some among the legion of articles that have appeared in our newspapers and magazines to analyse the current crisis have addressed the problem of greed. It should not surprise us that some commentators have written eloquently in defence of greed. I hope that the preceding paragraphs have made it quite clear that from the Christian perspective greed can never be defended or rationalised.

However, we must clarify what is meant by greed. The desire for profit, for material gain and for income in and by itself is not greed. It is only when individuals or groups want to achieve unrealistic gains at the expense of others or use illegitimate means to obtain those gains that the legitimate need to generate income becomes greed. In other words, it is only when individuals and corporations seek to make unrealistic gains by disregarding justice and the common good does greed rear its ugly head.

Even Adam Smith, who has been unjustly described as the “high priest of selfishness and greed”, condemns greed as the modus operandi of business and puts a high premium on a system of justice that emphasises fairness and the public good.

What should we learn from this current crisis? It should remind us that we are not merely economic actors, but stewards. In our very materialistic culture, we must remind ourselves that we are not merely economic beings, but social beings. And it is only by ordering our economic activities with our social responsibilities will we find our true vocation and contribute meaningfully to the well-being of our society.

Above all, it reminds us that everything we do and possess– our businesses, our investments, our goods – must be directed at the glory of God.

GREED CAN NEVER BE DEFENDED

‘It should not surprise us that some commentators, in analysing the current crisis, have written eloquently in defence of greed … It is quite clear that from the Christian perspective greed can never be defended or rationalised.’


Dr Roland Chia is Chew Hock Hin Professor of Christian Doctrine and Dean of the School of Postgraduate Studies at Trinity Theological College. He worships at the Fairfield Preaching Point in Woodlands.

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