The Capitalism Project

Economics Today: A Christian Critique

-Donald Hay

By Michael Crook

In his book, Economics Today: a Christian critique, Donald Hay demonstrates “…that  Christianity has much to contribute to the analysis of…major economic issues.”   In considering this book and offering a critique of its contribution, this paper will use the categories of context, aim, method and content.

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Beginning with the context of the book, Hay identifies himself as an academic economist and as a Christian.  The book is shaped by the broad economic debates in evangelical Christianity.  On this topic, two points are made.  First, “the major issue of concern for Christian economists in the 1970s and early 1980s was whether one form of economic system was more or less appropriate than another.”   This pre-occupation also affects Economics Today. The most substantial treatment is given to the comparative merits of capitalism and socialism as economic systems. Second, the debate was characterized by three ideological streams: the evangelical left, the evangelical right and the evangelical centre.   Within these categories, Hay has been identified as centrist, recognizing problems in the capitalist system without rejecting it completely. To Hay’s credit, throughout the book, he goes to great lengths to avoid ideology and maintain strong methodological integrity.

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Hay’s aim in writing Economics Today is to “bring a Christian mind to bear on the discipline of economics.”   Writing in the preface, he confesses that he is motivated by the absence of satisfying work which accomplishes this goal.  He identifies two problems in the available literature: work which is “deficient in [its] understanding of economic analysis”  and work that tacks theology on to economic work “more or less as an afterthought.”   He admits that “most of the application is quite abstract, looking at general principles rather than specific cases.”   Instead, Hay hopes to give the reader “arguments and principles” which can be applied to a wide variety of dynamic economic problems.
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Hay has in mind “a university student with some training in economics.”   He hopes to offer a way of thinking like a Christian about economics, taking into account its epistemological, methodological and philosophical flaws.  Yet he does not want to limit the book to this subset of Christians.  He hopes “…that the book is also accessible to intelligent non-economists[.]”   This attempt at a dual audience is a weakness of the book.  In remaining open to the non-expert, Hay cannot push too far into technical elements.  On the other hand, he leaves the non-expert readers to fend for themselves where a more extensive explanation might bore the experts.

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Hay seeks to be a critical voice, what Kenneth Elzinga describes as a “Christian Political Economist”, one whose “…economic analysis [is] a device to criticize or praise economic systems or particular policies based on their inconsistency or consistency with Christian teachings.”   Hay is not seeking to define a Christian economic system, believing that such a project would be doomed to fail.  He writes: “there can be no hope of a fully Christian Economy…[r]ather a Christian’s concern for justice in the economic sphere will be a persistent identification of areas of disorder…and then the attempt to get things put right[.]”

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Reading the book, one senses a pervading hesitancy.  Hay is an expert economist and an able writer, yet for all the heavy lifting in the early chapters of the book, he goes out of his way to emphasize the provisional nature of the conclusions.  It is true that he could not be definitive or exhaustive and he is right to consider his limitations.  However, he could go farther than he does.  This point is made clearly by Goudzwaard in his review of the book: “…Hay looks like a swimmer at the edge of a pool, who distrustful of his own ability to swim, decides to be lowered into the water by a kind of external apparatus with a life-belt instead of simply jumping in, which he is certainly a good enough swimmer to do!”

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The book’s method seeks to avoid being insufficiently theological but also hopes to avoid letting economics as a discipline off the hook by being insufficiently engaged with its substance.  There seem to be two incommensurable domains, Christian social ethics and the world of modern economics.  Writing in a later article, Hay makes this problem clear, “The fundamental problem for Christian economic ethics is how to make the transition from fundamental doctrinal or ethical insights to the complex world of economic phenomena.”

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For this reason, Hay begins with scripture, develops a theological framework and seeks to apply this framework to the methodology of economics and to a number of case studies.  Where the secular literature contributes to his enterprise, Hay is not shy from enlisting it.  While this method is sufficiently grounded in a theological framework, the question is open whether the theological framework is appropriate to the task.  This is an important distinction and a discussion of these issues lies outside the scope of this paper.  It is raised as an important question to be addressed if one hopes to fully evaluate the conclusions reached in the book.  The remainder of this paper will describe the content of the book and will conclude with a discussion of some general observations.

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The first two chapters of the book are dedicated to Hay’s development of a limited systematic theology which is crystallized into “derivative social principles”  (or DSPs) which serve as the basis for his critique of economics.  Hay’s thematic survey includes creation, the fall and judgment, and God’s covenants (with Noah, Israel and the Church). In his subsequent development of the DSPs “[t]he idea of stewardship is the organizing concept[.]”  He distinguishes between the ideal of God’s new covenant and the idea of a Christian “second best,” concluding that in a secular society, the latter is the only achievable aim.    Hay emphasizes the provisional nature of any set of DSPs, which “may come as a disappointment to any who hoped that we might be able to give ‘Christian answers’ to economic problems.”  Hay also includes a defence of his method from a number of objections.  One objection that Hay accepts but which he feels can be overcome is that “the derivation of principles is a subjective enterprise.”   He also includes a cursory discussion of political authorities’ role preserving justice within a society.

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In the third chapter, Hay’s attention turns to the methodology of economics and a survey of relevant developments in the philosophy of science.  One of the major points of this survey is that “[t]he search for a unique rational scientific method within the hypothetico-deductive tradition seems to have failed.”   This tradition represents the search for “the fewest general principles from which all the uniformities in nature can be deduced.”  On the basis of these developments, Hay evaluates economic methodology, highlighting problems in the underlying assumptions and approach. His critique on these grounds is well argued but not without important weaknesses.

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If fact, Hay’s search for universal DSPs relates to one of the major weaknesses of the book.  Hay’s critique of economic methodology can be applied to his own treatment of scripture.  His ethical method seems to presuppose a “scientific epistemology” whereby observations (biblical texts) are generalized into universal laws (DSPs) which are held provisionally so long as they explain the observations.  If this description is accurate, then his search for DSPs is subject to the same critique he marshals against economics.  Hay seems to be aware of this and appeals repeatedly to the provisional nature of the conclusions developed by this method.  However, it may be that this approach to scriptural ethics is flawed and the method cannot provide strong enough footing for a Christian economist to proceed.  N.T. Wright claims that this kind of approach to scripture “involve[s] a certain procedure which ultimately seems to be illegitimate[.]”   In a sense, Hay’s failure is that he does not interact with scripture on its own terms.  The narrative structure of scripture and the missiological thrust of its story (with its relational view of God in Jesus Christ) does not permit any rigor regarding universal principles that one might abstract from its content.  In Wright’s words such a view implies, “that God has, after all, given us the wrong sort of book and it is our job to turn it into the right sort of book.”   This weakness in Hay’s methodology presents a way into exploring whether Hay’s theological framework is sufficient for the task of his book.  The scope of this paper only permits that the issue be raised here and further exploration be left for now.

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In the fourth chapter of the book Hay turns to the capitalist system.  He describes a modern capitalist economy based on the two pillars of private property and market exchange.  In the course of this summary a number of distinctive features of capitalism are identified.  For example, he notes the inequality of incomes between households and the systemic advantages which accrue to households with higher incomes.  A number of weaknesses are also highlighted: imperfect competition, externalities, underinvestment, the need for regulation, and the requirement of a moral basis on which the economy operates.  While Hay’s discussion is abstract, he includes as much of the complexity found in real economies as possible.  In the application of the DSPs, a number of elements are challenged: excessive individualism, lack of accountability, the divorce between work and ownership and the problem of poverty.

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In the following chapter, Hay summarizes and critiques socialism in its wide variety.  The discussion includes: the role of the state, public ownership, central planning, limits on freedom and the promotion of equality.  In attempting to draw conclusions, Hay notes that the diversity in socialism makes it difficult to be general.  His conclusions can be summarized by saying “that a communist system is definitely incompatible with biblical criteria, but that a social democratic system need not be.”

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The remaining chapters address macroeconomics, international development and economic growth.  In discussing macroeconomics, Hay deals with the technical and philosophical diversity in the field, yet he is limited in what conclusions can be drawn on the basis of the DSPs.  He settles for making the point that systemic unemployment is inconsistent with the DSPs.  In contrast, the subjects of development and growth are where Hay draws some of his strongest conclusions.  He very effectively makes the case for international aid as a way of providing developing nations with means to meet their needs and to spur equitable reforms.  On the subject of economic growth, he argues persuasively for sustainability as an important criterion for economic justice and provides valuable frameworks for Christians thinking about resource management, environmental stewardship and the dangers of excessive consumption.

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By way of concluding this paper, some general observations are offered.  The first is the peripheral role given to questions of political economy.  The important links between political and economic questions come up frequently.  Unfortunately, these spheres are generally separated in modern discourse and Hay fails to integrate them. This forces Hay to back away from political questions, even when they are integral to the economic critique he is trying to advance.

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There is also an issue arising from Hay’s strength as a technical economist attempting to do ethics.  He does not sufficiently engage the ethos of modern capitalism and does not treat the underlying moral view. Rather, he simply proposes institutional reforms.  Hay’s method does not give him the tools to explicitly critique the moral dimension of the market system.

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Finally, a major omission in the work is the poverty of its ecclesial imagination.  The Church as an institution is almost entirely absent from the discussion.  While he may be right to avoid questions of how the church might order its own economic affairs, there is great scope for discussion of the role of the Church as a prophetic witness in the broader society, her vocation to teach people how to live and her witness to the eschatological reality of the world.  That these points do not figure in Hay’s work is disappointing.

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If he were to revise the book today, Hay has said he would “clarify what [he] mean[s] by principles,” omit any discussion of socialism, address the question of climate change and address the current literature on happiness.   Yet despite these casualties to the passage of time, the book was and remains a significant contribution to the discussion of Christian economics.  Despite a number of flaws, it represents a powerful example of a Christian mind at work and continues to be of significant value.