Why economic theologies matter

Treasure map

The phrase “economic theology” might strike you as odd. What has theology got to do with economics? What does pondering the divine have to do with supply and demand curves and fiscal policy? 

A few centuries ago, there was a clear connection between the two. The study of economics started as the study of political economy, which itself was a subset of moral philosophy. Moral philosophy had its trajectory set by theology. 

Economics, morality and theology – all in conversation. 

While I would certainly not advocate a return to Christendom and theology regaining its place as “queen of the sciences,” I want to suggest that there is a need for a new and different kind of conversation between theology and economics. 

Firstly, mainstream economics has been the “map” used to inform decision-making at all levels – government, business, organization, personal – for the last 40 years. There are compelling and urgent reasons to critique this map and work together to design a new one. 

Secondly, for those of us from a faith tradition who are intent on seeing our faith inform our practice, it can feel as if our economic practice – how we build organizations, invest, give, make decisions as “consumers,” gain employment, and so on – is more remote and separate from our faith than any other part of our life. 

We know we should be honest and fair in our economic practice – but surely there is more than that.

At Faith+Finance, we think that theology has a contribution for the common good of our economic story, a gift of imagination that can help illuminate a path towards a different and more dignified future. 

For those of us who are part of a community of faith, an economic theology can also guide us as we seek to authentically respond to the complex social and environmental challenges that appear overwhelming. Doing so can integrate our beliefs about what it means to be human with our economic practice – whether as “consumers,” entrepreneurs, investors or funders. 

In need of a new map

The 2008 financial crisis began with the collapse of the housing market, then ensnared financial institutions that had been devising alchemy-like complex financial instruments, and ended up destabilising a number of national economies. Afterward Alan Greenspan was asked to appear before congress and explain what had happened. 

“I found a flaw,” Greenspan said. “I made a mistake in presuming that the self-interest of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and the equity in the firms.”

In other words, people and organizations did not behave in ways he expected them to. This is the former Chair of the Federal Reserve and great ‘high-priest’ of deregulation, basically admitting that his (and mainstream economics’) core assumptions about human and organizational behavior are wrong

Taking another step back and looking at the last forty years, we have seen the growth of the “market” into all areas of life and society. 

As the philosopher Michael Sandel notes, we have “drifted from having a market economy to being a market society.” It is no coincidence that in the last forty years we have seen the most astonishing increase in economic inequality and a dramatic acceleration of climate change. 

While there is a lot that needs to be said (and done) about the financial crisis, economic inequality, and climate change, these interlocking (and overwhelming) crises all share a similar heritage.

They have all been profoundly influenced by a paradigm, a way of thinking that shapes how we imagine, what we see, and what we choose to make and build. This “map” is that of mainstream economics and is based on an understanding of the human person as a rational individual who, when given a choice, will always choose that which maximizes their utility (or happiness). Rational. Individual. Choice. Happiness. 

Very few economists would defend this understanding as a complete picture of human nature, but this has formed the contours of the map from which we have built our economy. If Alan Greenspan thinks we might have got it wrong, then we all need to listen. 

Theology & economics in conversation

So, back to the opening question of this article: what has theology got to do with economics? 

If the crisis of mainstream economics is fundamentally a crisis of our understanding of human nature, then theology does have something to say. 

It has a contribution to make to the wider public debate. It has insight to offer to those who want to design the concepts and practices of an alternative economics rooted in their beliefs.  

If we are fundamentally ‘rational’ beings, what about our bodies, what about our souls?  If we are simply ‘individuals’, why does Christian theology imagine a God that doesn’t just have relationships but is relationships

If ‘choice’ is the fundamental human action, what about desire, what about love? What if the goal of humanity is not happiness but something deeper, something more communal, which some call ‘justice’, others ‘the beloved community’, and others the ‘kingdom of God’? 

If any of these questions ring true, then they stand to make a very important difference for our economics. At Faith+Finance, we’re looking forward to going deeper with these questions in the months ahead and at our May 18–20 gathering in San Antonio.

Mark Sampson is a theologian, practitioner, and connector. He holds a doctorate in theology and economics from Kings College London and serves as director at Transformational Index and Matryoshka Haus.

Want to hear more from Mark about this and other arguments? Check out his Faith+Finance interview.

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