The Faithful Skeptic

Christian Economics?
Is there such a thing as Christian economics? I think there probably is, but obviously people come at it from different perspectives. I'm thinking about this primarily because of Father Jake's recent posts on John Kerry's book. Jake, being a priest rather than an economist, is struggling to find economics interesting. I was also inspired by Hugo's post on his struggles with money, though he was talking about personal finances, rather than macroeconomics.

I am not an economist. I know enough to make me dangerous, but not so much to speak with real authority. If you want a real economist, read Paul Krugman. But anyway, what's a Christian perspective on economics? There are definitely some loonies out there. I blogged before about Christian Reconstructionism here. Gary North, a prominent reconstructionist, founded the Institute for Christian Economics which promotes some absolutely nutty theories. But there are progressive thinkers out there too.

So I'd like to identify what I think are some of the really important economic issues out there for Jake and other progressive Christians who aren't all that interested in economics. I might talk about some solutions later if I get around to it.

So one of the major issues is employment and unemployment. A lot of conservatives (and some liberals) love to bash poor people for not trying harder to find work. But the reality is that 5.6% of Americans were unemployed in June and that only counts the people who were actively looking for work. One concept economists use in discussing unemployment is called the natural rate of unemployment or the non-accelerating-inflation rate of unemployment. Basically it is the idea that some level of unemployment is structurally necessary to prevent inflation and keep the economy running smoothly.

So when you hear about the Federal Reserve adjusting interest rates that's what they are doing - manipulating (or attempting to, anyway) the economy to control prices (inflation) or employment. So the Federal Reserve is actively engaged in a policy of maintaining a natural rate of unemployment. Our government has a policy that actively seeks to prevent full employment! Now, that's not necessarily a bad thing if you believe the economists. The effect of extremely high inflation would be catastrophic (remember people in Eastern Europe around the fall of communism using paper currency as wallpaper because inflation had made it totally worthless?) for the economy.

But here's the Christian perspective - is moral to also have social policies that punish the poor and unemployed when our government is actively working to ensure that a large number of them stay that way? Is it right to send a message a self-sufficiency through hard work when we know without a doubt that there are more workers than jobs? I don't think so. We need social policies that encourage work while recognizing at the same time that some people will not be able to find work, no matter how hard they try.

This is getting long, so I'll cover the other issues more briefly. The way we work is changing dramatically. The blue collar jobs that sustained the middle class through most of the 20th century are disappearing. We're transitioning to an information economy that provides many jobs for knowledge workers and service workers. But its unclear whether those jobs will provide family-wage incomes over the long term. We're already seeing many information technology jobs be outsourced to India - and these were supposed to be "safe" jobs for the future.

The changes in the way we work are affecting other areas as well. Our system (not really a system, more a practice) of employer-based health insurance is failing badly. Non-traditional jobs (outsourced, contracted labor) don't provide health insurance to millions of Americans. In September 2003, the US Census Bureau estimated that 43.6 million Americans don't have health insurance. Families USA estimates that 1 in 3 adults under the age of 65 were without health insurance for all or part of 2003. What is maddening is that most of them work for a living. Further, the dramatically increasing costs of health insurance and care are making it harder for those that are lucky enough to actually have insurance.

There are a lot more issues, obviously. The overriding issue is that it is getting harder for average Americans to make it. I think as Christians we're called to a politics of compassion and care. It is easy to get bogged down in a discussion of capital gains taxes and completely miss the economic reality for a lot of American families. The next step is to consider the effects of American policies on global poverty. Do middle class tax cuts matter that much in a world dealing with a global HIV/AIDS crisis, genocide in the Sudan, crushing poverty across the developing world? I think most discussions of economics in the political system (particularly the Presidential race) are dangerously short-sighted and incredibly myopic.

This is way too long now.

posted by Brian @ 4:53 PM