Thursday, June 9, 2011

Jay Richards: Money, Greed, and God

When I was fourteen, I was hired as an intern at for a public-policy think-tank based in Seattle. I was encouraged by my supervisor to pursue policy-related work, particularly in my area of expertise: economics. This is how I eventually came to work as an assistant for Dr. Jay Richards, one of the Vice Presidents, who was looking to develop an accessible book on economics.

"Money, Greed, and God" was first developed as an autobiography. Dr. Richards originally intended to cover the course of his life and how his thinking on economics developed from a youthful Christian Marxism to a more mature pro-market paradigm. This kind of content is retained in many of the chapters, but the overarching framework (the organizing principle) of the book is slightly different. Dr. Richards organizes the material around eight myths that Christians believe about capitalism and the market system. They are, in order:

1) The Nirvana Myth.
Many people, especially Christians, tend to contrast capitalism with an unrealizable utopian ideal, rather than with the actual alternatives. Everything is bound to fall short of paradise, so the point is irrelevant. What is relevant is what is actually achievable in this reality.
2) The Piety Myth. 
Many people, especially Christians, tend to focus on the good intentions behind reforms rather than the actual outcomes. This is why the Greek philosophers understood prudence to be the centerpiece of wisdom: it's not enough to want to do good, it's vital that we understand how. There are many cases where the unintended consequences of economic reform were disastrous to all involved.
3) The Zero-Sum Game Myth. 
Many people, especially Christians, have an aversion to capitalism grounded in an aversion to inequity. They understand competition to be fundamentally anti-Christian, for my gain would be your loss. Suffice it to say that this is predicated on a woefully inadequate understanding of how markets work and what 'economic value' actually means. This error is highly correlated to the next myth:

4) The Materialist Myth. 
Many people, especially Christians, have this notion that wealth cannot be created but only transferred. In other words, the cake I have is the cake you can no longer eat. The zero-sum game fallacy is particularly pernicious because it either undermines our hope for economic production and thus creative progress, or it elevates greed as a practical necessity of the market. 
5) The Greed Myth.
From the 1987 fairy tale "Wall Street," the mid-century Objectivist ramblings of Ayn Rand, and even Bernard Mandeville's 1714 "Fable of the Bees," many people in the modern West have this concept of capitalism as a greed-driven enterprise. Naturally, it hasn't helped the public understanding that even some defenders of capitalism admit as much and seek to defend it. Many people, especially Christians, have lost the foundational understanding of capitalism as a virtue-driven enterprise, predicated on the rule of law and on our ability to sympathize with others, so that we might understand their needs and supply what they demand.
6) The Usury Myth. 
This is the more historical of the chapters, based on an ancient prejudice against money as an essentially sterile instrument. Unlike agricultural products, gold didn't grow -- more might be found, but there was only a finite quantity of it. Thus, the idea that money could be fruitful -- that it could create a return if loaned at interest -- struck many in the classical and medieval world as profoundly unnatural. When it became understood that money was itself a form of capital and thus was a means for production, the opprobrium against usury was gradually eliminated.
7) The Artsy Myth. 
Though the title doesn't quite work, the concept is dead-on: many people, especially Christians, have a tendency to subsume economic policy to aesthetic considerations. This is the foundation for the many complaints against our 'consumerist' society, the accolades of the 'small is beautiful' movement, the contempt for large corporations, and the preference for organic food rather than agribusiness. There are legitimate arguments for each of these, but the reasons are often inspired by aesthetic judgment. This relates back to the first myth -- the idea that we can contrast modern capitalism with some utopian paradise -- since in many cases our consumerist culture developed as a means of more effectively distributing basic goods to everyone. Suburbs are better than slums, even if we no longer boast of quite so many mansions.
8) The Freeze-Frame Myth.
The chapter generally covers the idea of environmental stewardship, and is a really effective discussion of the issues in question. The myth itself is unfortunately quite common: many people, especially Christians, have a tendency to treat the present moment as a microcosm of the past and future. They forget that life is by natural dynamic, and both economy and ecology tend to have pretty effective safeguards against Armageddon. If the supply of oil starts running low, the price will rise and demand will drop, which will encourage alternative sources of energy. The same applies for most of the other apocalyptic predictions, from the "population bomb" of Malthus and Ehrlich, to the current cause célèbre of global warming/climate change.

Dr. Richards concludes the book with a brief discussion of how to optimize the market system, with emphasis on human virtues and human rights. He also adds a brief appendix correlating the "spontaneous order" of the market (cf. Friedrich Hayek) to the Providential understanding of the Christian God. This latter point actually appeared as the subject of one of my research articles.

"Money, Greed and God" is a splendid summary of economic thinking, and a warning call to those who are content with common misconceptions. The book is particularly well suited for Christians who are distressed by the "greed is good" school of libertarianism, and who are searching for an ethical defense of markets.

Full disclosure: for my research assistance in the early development of the book, I receive a brief mention in the Acknowledgements section of this book.

To purchase this book, check out
Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem

Jay Richards is currently a Contributing Editor of The American, and writes for The Enterprise Blog, of the American Enterprise Institute. Check out his posts!

This review was originally posted on my book review blog, Worthy of Note.

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