By Lee Soo Ann
(This article is originally published by the Centre for the Development of Christian Ministry of Trinity Theological College, Singapore, in periodical Church and Society, issue 2.1 [1999], pp.1-11, and reproduced at Church and Society in Asia Today website.)
The New year mesdage of the Prime Minister of Singapore emphasised the need of social cohesion during these times of economic uncertainty. There are only the daring few who would predict when Singapore would resume a high economic growth again. The Deputy Prime Minister, Bg-Gen. Lee Hsien Loong, has advised Singaporeans to prepare for a long period of moderate or slow growth at best. It is as if Singaporeans are being exhorted to discover an inner core to themselves and rediscover inner values which would re-instate concern for each other and lead to proper concern for oneself.
Why does it take an economic crisis to shake us to the core? Cannot man be aware of God and his fellow man in times of material prosperity?
Why does it take an economic crisis to shake us to the core? Cannot man be aware of God and his fellow man in times of material prosperity?
An early Christian apologist, St.Augustine stated that the chief end of man is to glom God and enjoy Him forever, a call repeated in the Westminster Confession of the Reformed tradition. Cannot man glom God through material advancement?
The dilemma is particularly acute for the people of Singapore for we are told repeatedly since we tend to forget it, that Singapore is without natural resources, and that her best defence as a small island-state is to grow in economic terms so that other countries will respect us, such growth enabling us also to build up a sizeable portion of reserves to tide us through difficult times like these. As a nationstate, we are committed to material advancement and yet such material advancement is neither good for social cohesion, the test for which is in bad economic times such as these, nor for building up inner-values.
In good economic times, we are in fact told to work hard and invest so as to increase the GNP of Singapore and yet we h e not to enjoy fully the fruits of our labour lest we succumb to the pleasures of materialism. A high proportion of our income is taken from us through provident fund contributiong levies and other taxes so that we have to achieve for the sake of achievement. Such an attitude is not unlike that of the early Calvinists who saw work as a calling from God, so much so Fabian socialism grew around the Protestant ethic of high income but low expenditure, the surplus to be redistributed to the distressed and sick, not forgetting the chronically or cyclically unemployed.
Economic activity contains many paradoxes and in this essay I propose to explain how these arise and conclude on how the Christian can navigate a narrow path in between treacherous shoals. We are living in an age of economic crises. The economist John Kenneth Galbraith entitled his BBC television series "The Age of Uncertainty". Our prosperity is tempered continually with uncertainty. We do not know whether we will get what we strive for, so much so the prophecy of Micah seems to run true:
Economic activity contains many paradoxes and in this essay I propose to explain how these arise and conclude on how the Christian can navigate a narrow path in between treacherous shoals. We are living in an age of economic crises. The economist John Kenneth Galbraith entitled his BBC television series "The Age of Uncertainty". Our prosperity is tempered continually with uncertainty. We do not know whether we will get what we strive for, so much so the prophecy of Micah seems to run true:
"You shall eat, but not be satisfied, and there shall be hunger in your inward parts; you shall put away, but not save, and what you save I will give to the sword. You shall sow, but not reap; you shall tread olives, but not anoint yourselves with oil; you shall tread grapes, but not drink wine."
(Micah 6:14-16)
The Fall of Man, Population Growth and the Change in Economic Structure
The last two centuries have seen very dramatic changes in plant earth. By the year 2000, which is just next year, world population would have reached 6 billion. In 1800 it was only 600 million. How could the same planet sustain ten times its population? If we were to go back to the beginning of the creation of the planet, the same planet is sustaining 3 billion times its first population of only 2 persons- Adam and Eve. Truly God has fulfilled His side of the injunction made to them to be "fruitful and multiply, and fill the earth" (Genesis 1:28).
The Paradox is that this multiplication is taking after the fall of man from a close personal relationship to God his Creator. For his rebellion against God, man was expelled from the Garden of Eden and told that "cursed is the ground because of you; in toil you shall eat of it all the days of your life; thorns and thistles it shall bring forth to you; and you shall eat the plants of the field. In the sweat of your face you shall eat bread.. . . " (Genesis 3: 1 7-19) Physical and spiritual death was prophesied in the words, "you are dust, and to dust you shall return." (Genesis 3:19) Man was however not made from just dust. We read earlier on that though the Lord God formed man of dust from the ground, God "breathed into his nostrils the breath of life; and man became a living being".
The last two centuries have seen very dramatic changes in plant earth. By the year 2000, which is just next year, world population would have reached 6 billion. In 1800 it was only 600 million. How could the same planet sustain ten times its population? If we were to go back to the beginning of the creation of the planet, the same planet is sustaining 3 billion times its first population of only 2 persons- Adam and Eve. Truly God has fulfilled His side of the injunction made to them to be "fruitful and multiply, and fill the earth" (Genesis 1:28).
The Paradox is that this multiplication is taking after the fall of man from a close personal relationship to God his Creator. For his rebellion against God, man was expelled from the Garden of Eden and told that "cursed is the ground because of you; in toil you shall eat of it all the days of your life; thorns and thistles it shall bring forth to you; and you shall eat the plants of the field. In the sweat of your face you shall eat bread.. . . " (Genesis 3: 1 7-19) Physical and spiritual death was prophesied in the words, "you are dust, and to dust you shall return." (Genesis 3:19) Man was however not made from just dust. We read earlier on that though the Lord God formed man of dust from the ground, God "breathed into his nostrils the breath of life; and man became a living being".
After man and woman had rebelled against God, God withdrew his breath .of life so that Adam and Eve had the prospect of no longer being living beings, i.e. they faced eventual death. The Bible however is the good news that men and women can have life restored to them, not just the life that Adam and Eve had, but even more, the life of the new Adam, none other than Jesus, the Son of God. As stated by Paul:
"as in Adam all die, so also in Christ shall all be made alive. But each in his own order: Christ the first fruits, then at his coming those who belong to Christ..."
(I Cor.15:23)
At the time that Jesus was on earth, the population of the earth was about 300 million. It stayed at around that figure for about 1,000 years. Famine, war and disease kept world population stagnant but over the next 800 years, world population rose to about 600 million with improvements in food production. The last two hundred years however has seen dramatic strides not only in food production but also in transport and communications and in health. Food produced in one part of the world could be transported to another part to avert famine, while the level of food production itself increased. Health improvement led to the eradication of many epidemics while improvement in communication enabled the knowledge obtained in one part of the world to be shared with other parts of the world. No wonder world population could increase ten times in two centuries! To some extent, the improvements in food production, health, transport and communications also averted the mass destruction of wars centering around food and health. If one could share, why conquer?
Today however much of the 6 billion people live in acute poverty. Many millions are living at the edge of starvation and many thousands are dying from lack of food, though world population is still growing. How does economic thought explain this paradox?
More precisely, it is the change that has taken place in economic structure that explains this and other current paradoxes. No longer do people produce what they need. People produce what others need, while others produce what certain people need, in a complex chain of interdependence characterisedby specialisation. Not only is there specialisation by product, but there is also specialisation by process, so much so people are hardly aware of for whom or what they are producing.
More precisely, it is the change that has taken place in economic structure that explains this and other current paradoxes. No longer do people produce what they need. People produce what others need, while others produce what certain people need, in a complex chain of interdependence characterisedby specialisation. Not only is there specialisation by product, but there is also specialisation by process, so much so people are hardly aware of for whom or what they are producing.
What people are concerned for now is the income they earn, with which they can buy what they need. They purchase what is a finished product or service, so that they in turn are hardly aware of who iroduces for them. Hardly anybody looks at th6 label to see where a product comes from, and even then it may not be strictly accurate, for although something may be manufactured in China, the decision to produce there by a particular process may have been made by a firm in the USA!
The impersonality of the whole system is such that decisions can be made to enrich or impoverish many hundreds and thousands unknowingly. Decisions are made to produce or not to produce on the basis of profits to be made, based on certain processes to be adopted in order to rninirnise costs in locations which are sheltered by tax incentives or market barriers. The system is driven by functional considerations, not considerations about people or places. In a crude sense money lubricates the whole system but more than money is at stake. If profits are not made, firms can be driven out of existence but if profits are made, firms can be made even larger, increasing the impersonality of the whole system even more for in a large firm, the individual person counts for less and less.
The impersonality of the whole system is such that decisions can be made to enrich or impoverish many hundreds and thousands unknowingly. Decisions are made to produce or not to produce on the basis of profits to be made, based on certain processes to be adopted in order to rninirnise costs in locations which are sheltered by tax incentives or market barriers. The system is driven by functional considerations, not considerations about people or places. In a crude sense money lubricates the whole system but more than money is at stake. If profits are not made, firms can be driven out of existence but if profits are made, firms can be made even larger, increasing the impersonality of the whole system even more for in a large firm, the individual person counts for less and less.
The impersonality of the market which links thousands and millions of people are producers and consumers who have brought about the impersonality of the production unit as well. No longer is the production unit the family, where one knows each other well and where authority is based on intimacy, but it has become the firm or the multinational corporation, where few know each other well and where authority is based on the distance of functional hierarchy. Large disparities in incomecan develop because of such a hierarchy,.and the decisions of those at the top of such a hierarchy can affect hundreds and thousands of working adults at the stroke of a pen during a merger or acquisition.
The family was not only a production but also a consuming unit, and members of the family who earned more could transfer income to those who earned less on the basis of need. The firm however is now only a production unit, and transfers of its income or those who are highly paid within it, to those who earn less but whose needs are great, are often done by yet another impersonal institution, the government (or by slightly less impersonal institutions such as voluntary welfare organisations). Taxes are levied on companies and also on highly paid individuals, in order to finance government expenditure which can alleviate the needs of the poor if properly constituted. However the larger the country and/or the more the people, or the more authoritarian the political system, the more impersonal the government, so that basic needs can be left unsatisfied. No wonder the rich get richer, and the poor poorer! It is tempting to blame everything on the accumulation of profits by firms, but that is only half the explanation.
The Rise of Objective Knowledge and of Capital
Firms accumulate profits (= corporate saving) in order to invest in physical capital (=investment) which in turn embodies technological innovation. The driving force is not profits as such, although that may at times be the case, but the need to remain competitive in order to remain in existence. A firm which can innovate new products or produce existing products by new manufacturing technological processes which are more efficient, can hold its own against other less innovative firms. If a firm cannot earn profits to pay for such investment, it can borrow from the savings of individuals or other firms through financial intermediaries such as banks, finance and insurance companies, or better still through the issue of shares, whether privately or publicly placed (initial public offerings). Such is the scope of "economic technology."
People and f m s holding stocks of monetary wealth are always on the lookout for investment opportunities provided by competent entrepreneurs. Those who are not so adept at identifying such opportunities may "play" the bond or share market or as the saying goes, use money to make money through various methods of "economic technology". Ultimately however the chain which starts at the savings of income ends at the investment of such savings in the future earning of income. Fume earnings of income in turn depends on manufacturing technology being able to obtain even more from the same amount of resources that the earth has, as it was on this basis that the world population could grow by ten times in the last three centuries. The sale of output in turns depend on marketing and transport technology.
Whether it be manufacturing technology, or economic technology, or marketing and transport technology, what has changed is the growth of objective knowledge about what there is on the earth and its resources, so that from the same amount of land and sea, more can be obtained to feed, clothe and shelter people. Such objective knowledge when applied to the production of goods and services, economic processes, marketing and transport technology, takes concrete form as an addition to physical capital or what economists call physical investment. What really counts is the growth of objective knowledge about the earth and about its people.
Firms accumulate profits (= corporate saving) in order to invest in physical capital (=investment) which in turn embodies technological innovation. The driving force is not profits as such, although that may at times be the case, but the need to remain competitive in order to remain in existence. A firm which can innovate new products or produce existing products by new manufacturing technological processes which are more efficient, can hold its own against other less innovative firms. If a firm cannot earn profits to pay for such investment, it can borrow from the savings of individuals or other firms through financial intermediaries such as banks, finance and insurance companies, or better still through the issue of shares, whether privately or publicly placed (initial public offerings). Such is the scope of "economic technology."
People and f m s holding stocks of monetary wealth are always on the lookout for investment opportunities provided by competent entrepreneurs. Those who are not so adept at identifying such opportunities may "play" the bond or share market or as the saying goes, use money to make money through various methods of "economic technology". Ultimately however the chain which starts at the savings of income ends at the investment of such savings in the future earning of income. Fume earnings of income in turn depends on manufacturing technology being able to obtain even more from the same amount of resources that the earth has, as it was on this basis that the world population could grow by ten times in the last three centuries. The sale of output in turns depend on marketing and transport technology.
Whether it be manufacturing technology, or economic technology, or marketing and transport technology, what has changed is the growth of objective knowledge about what there is on the earth and its resources, so that from the same amount of land and sea, more can be obtained to feed, clothe and shelter people. Such objective knowledge when applied to the production of goods and services, economic processes, marketing and transport technology, takes concrete form as an addition to physical capital or what economists call physical investment. What really counts is the growth of objective knowledge about the earth and about its people.
Today it is widely acknowledged that it is the growth in such objective knowledge as embodied in physical capital which explains how the same earth which once had only two people in it, can now support six thousand million people, and perhaps even more in the future. For much of the history of humankind, land and labour have been the principal factors of but in the last two centuries, physical capital embodying technological and economic innovation which explains why food production has grown so much, why disease has been held in check, why there is now more rapid and more widespread transport and communications, and also why there is so much waste. The capital is deployed not only to produce but also to "consume" output, by those people and institutions who can be induced to buy the output produced. Even labour has to be trained to use physical capital since these embody technological knowledge. Hence the emphasis not only on physical but on human capital. In the process, broad-based education has become specialised training as processes are themselves specialised.
The abolition of man in the midst of his numerical growth
As man continues to dominate the earth in order to unlock the secrets of its resources, and consume the output produced thereby, he is himself in danger of being dominated into becoming just a functional being, able to accumulate capital and objective knowledge, enough to support many more millions of people but himself unable to attain "mature manhood, to the measure of the stature of the fullness of Christ" (Ephesians 4:13).
As man continues to dominate the earth in order to unlock the secrets of its resources, and consume the output produced thereby, he is himself in danger of being dominated into becoming just a functional being, able to accumulate capital and objective knowledge, enough to support many more millions of people but himself unable to attain "mature manhood, to the measure of the stature of the fullness of Christ" (Ephesians 4:13).
Whether one is rich or poor, one tends to be subject to the ovemding need to be impersonal in order to participate in the impersonal working of the market through impersonal firms which provide jobs that involve impersonal workprocesses. Even the activity of buying to meet our needs becomes impersonal. People are subjected to peer pressure, the advertising of mass media and the very standardisation of goods and services all of which,make the act of expenditure into an irnpersonai process itself. Perhaps this explains why a lot of buying is on pleasurable impulses. There is always the alternative of creatively making what one needs, such as home-cooking or baking but then so much time is taken with absorbing information about new products and processes, or in training to prepare oneself for a second or third workplace skill, that there 'is no time to indulge in what is more edifying than picking up the processed and packaged item from the supermarket shelf! Money is so terrifyingly convenient to use.
In this context, the statement that "the love of money is the root of all evils" ( I Timothy 6:l0a) takes on a second meaning. It is not only the love of a stock of money but also the love of the convenience of using even a small amount of money which explains why "some have wandered away from the faith and pierced their hearts with many pangs" ( I Timothy 6:l0b). Through not only the use of money but also technical gadgetry of all kinds, we seek the conveniences of life rather than its challenges.
True, the world produces a level of output many times that what it was two centuries ago, but have we paused to reflect on its composition? There is now greater variety of goods & services but only in a "technical" sense. Firms compete on the basis of marginal cost for goods which are homogeneous (what economists call the structure of perfectly competitive markets) but through packaging and other means of product discrimination, they are able to move on to a different market structure (what economists call the structure of imperfectly competitive markets) where they are able to charge the buyer more than the marginal cost of production, and are less likely to be driven out of production through inter-firm competition.
The consumer consequently faces an almost infinite variety of goods and services in such imperfectly competitive markets which is not a "real" variety. The products vary in packaging, in brand-name propagated by advertising, but only very little in what constitutes the substance of the product. The customer is deluded into thinking that he or she is enjoying variety, when the reality is that the generic counterpart is just as good!
The consumer consequently faces an almost infinite variety of goods and services in such imperfectly competitive markets which is not a "real" variety. The products vary in packaging, in brand-name propagated by advertising, but only very little in what constitutes the substance of the product. The customer is deluded into thinking that he or she is enjoying variety, when the reality is that the generic counterpart is just as good!
The problem of value versus price is more acute when firms constitute an oligopoly. In an oligopolistic market structure such as we find in the retail market for petrol, cars and many consumer durables, prices can bear little or no relation to the cost of production. In such a market structure, firms strive to keep out potential rivals by price-cutting and other barriers to entry measures, only to raise prices at some subsequent period. Prices end up with little or relationship to value. Even the wage earner (wages being the price of labour) suspects that his wage does not reflect the proper value of his services. After all, the labour market is also subject to market structures!
After a while, the saying comes through that a person may go through life knowing the prices of everything but the value of nothing! True economic value is hidden through the mask of market structures, there being no way to compel market structures to reflect true value since competition is the nature of the game. Market structures in turn are based on the competitive behaviour of firms and individuals. Could not one abstain from markets?
However it is through competition that some firms gain ascendancy over others, and who does not want to belong to an ascending firm? Or ascend as an individual worker even if the firm or industry is not ascending? In so moving however, one is in danger of losing one's rootedness as a person, in a certain family or culture or heritage.
Once again, it is back to the objectivity of what constitutes the physical, that seems so important, just as the objectivity about resources is so important in technology. Man should be concerned about the objectivity of not just the physical but also about the values concerning where he came from, whom he is destined to be, and what he should be doing and for what reason. It is this absence of objectivity about a hierarchy of values which is the focus of the seminal essay by C.S.Lewis on 'The Abolition of Man'. In that essay, Lewis deplored the tendency in the England of his time to regress to the supremacy of temporary individually centred values at the expense of a core of eternal values. Manhood does not lie in what man thinks he is, but who he is intended to be. In that essay, Lewis deplored the tendency in the England of his time (this was in the 1930s) for the people to regress to the supremacy of temporary individually-centred values at the expense of a core of eternal values. Manhood surely does not lie in what a man thinks he is, but who he is intended to be.
Although the recent rapid growth of population means that more than half of all mankind may be living in the world today, what matters is the kind of man.
Lewis suggests that there is a "hollowing out of man, that man is less than man. Man was created as the last and the best in the order of God's creation, so much so God said, "it was very good" in the evening of the sixth day of creation. Today when we want to run down a person, we say that he or she is behaving like an animal. However even lower animal is inanimate life. We often say among ourselves that we are becoming like digits in the computerised world of today. Yet hardly anybody takes offence at such a statement. It is as if we have assimilated ourselves to a functional world dominated by capital and technological processes to a functional world dominated by physical capital and technological processes as fish assimilate themselves to water! Far from bringing heaven on earth, we may be bringing hell on earth!
After a while, the saying comes through that a person may go through life knowing the prices of everything but the value of nothing! True economic value is hidden through the mask of market structures, there being no way to compel market structures to reflect true value since competition is the nature of the game. Market structures in turn are based on the competitive behaviour of firms and individuals. Could not one abstain from markets?
However it is through competition that some firms gain ascendancy over others, and who does not want to belong to an ascending firm? Or ascend as an individual worker even if the firm or industry is not ascending? In so moving however, one is in danger of losing one's rootedness as a person, in a certain family or culture or heritage.
Once again, it is back to the objectivity of what constitutes the physical, that seems so important, just as the objectivity about resources is so important in technology. Man should be concerned about the objectivity of not just the physical but also about the values concerning where he came from, whom he is destined to be, and what he should be doing and for what reason. It is this absence of objectivity about a hierarchy of values which is the focus of the seminal essay by C.S.Lewis on 'The Abolition of Man'. In that essay, Lewis deplored the tendency in the England of his time to regress to the supremacy of temporary individually centred values at the expense of a core of eternal values. Manhood does not lie in what man thinks he is, but who he is intended to be. In that essay, Lewis deplored the tendency in the England of his time (this was in the 1930s) for the people to regress to the supremacy of temporary individually-centred values at the expense of a core of eternal values. Manhood surely does not lie in what a man thinks he is, but who he is intended to be.
Although the recent rapid growth of population means that more than half of all mankind may be living in the world today, what matters is the kind of man.
Lewis suggests that there is a "hollowing out of man, that man is less than man. Man was created as the last and the best in the order of God's creation, so much so God said, "it was very good" in the evening of the sixth day of creation. Today when we want to run down a person, we say that he or she is behaving like an animal. However even lower animal is inanimate life. We often say among ourselves that we are becoming like digits in the computerised world of today. Yet hardly anybody takes offence at such a statement. It is as if we have assimilated ourselves to a functional world dominated by capital and technological processes to a functional world dominated by physical capital and technological processes as fish assimilate themselves to water! Far from bringing heaven on earth, we may be bringing hell on earth!
The restoration of man by man
Economic activity and technological innovation in themselves may not be intrinsically evil but they have become increasingly man-centred. As man is a fallen state, the evil lies in the fact that man does not know when to stop being man-centred. The concept of consumer sovereignty for example, assumes that the consumer knows what is best for himself. However the nature of some goods and services leads to market failure.
Markets can best provide goods and services which are exclusive in nature and rival in usage. Goods and services not having these characteristics are law, order and defence. Hence a public sector is needed to correct market failure. When Adam Smith wrote The Wealth of Nations in 1783, he did not anticipate the problem of controlling market activity. He advocated the liberalisation of markets as a means to bring about increased output, at a time when output was largely agricultural and supplemented by handicrafts.
Subsequent capital accumulation created new problems which had not been anticipated. So much were the demands for profit, partly greed on the part of entrepreneur-employers and partly the need for financing technological innovation, that workers felt they were "underpaid." Such was the sowing of the seeds for social revolution, precipitated by the writing of another book on wealth less than a century later by Karl Marx called Das Kapital. Using Hegelian philosophy, Marx argued that though the exploitation of workers would continue, ultimately the working class would triumph. While Smith saw the multiplication of output, Marx saw the reduction of workers to a class. The use of money, though making possible more output through myriad markets linking even larger numbers of people, also reduced the meaning of effort. The digit representing wages when compared with the digit representing profits can make individuals feeling aggrieved against firms, although these digits are expanded in different ways into consumer and capital goods respectively. Such is the reductionist efiect arising from the use of money.
Economic activity and technological innovation in themselves may not be intrinsically evil but they have become increasingly man-centred. As man is a fallen state, the evil lies in the fact that man does not know when to stop being man-centred. The concept of consumer sovereignty for example, assumes that the consumer knows what is best for himself. However the nature of some goods and services leads to market failure.
Markets can best provide goods and services which are exclusive in nature and rival in usage. Goods and services not having these characteristics are law, order and defence. Hence a public sector is needed to correct market failure. When Adam Smith wrote The Wealth of Nations in 1783, he did not anticipate the problem of controlling market activity. He advocated the liberalisation of markets as a means to bring about increased output, at a time when output was largely agricultural and supplemented by handicrafts.
Subsequent capital accumulation created new problems which had not been anticipated. So much were the demands for profit, partly greed on the part of entrepreneur-employers and partly the need for financing technological innovation, that workers felt they were "underpaid." Such was the sowing of the seeds for social revolution, precipitated by the writing of another book on wealth less than a century later by Karl Marx called Das Kapital. Using Hegelian philosophy, Marx argued that though the exploitation of workers would continue, ultimately the working class would triumph. While Smith saw the multiplication of output, Marx saw the reduction of workers to a class. The use of money, though making possible more output through myriad markets linking even larger numbers of people, also reduced the meaning of effort. The digit representing wages when compared with the digit representing profits can make individuals feeling aggrieved against firms, although these digits are expanded in different ways into consumer and capital goods respectively. Such is the reductionist efiect arising from the use of money.
Only one century was needed to pit man against man on the basis that physical and economic capital, though embodying innovation of one sort or another, have a reductionist effect. Using the arguments of Man, Lenin inaugurated communism in which it is desirable to replace the private ownership of capital by public ownership. Today the heyday of communism is over because man has discovered that complete "public" ownership of capital by the few individuals who have public control, can be as disastrous as private ownership of capital by many individuals. We now find instead, "mixed" ownership of physical capital by the public and private sectors.
More recently, in the last half century, another economic crisis took place over the income-expenditure equation. From the collective viewpoint, there should be no problem over the goods & services which have been produced being bought up. After all, income is earned by those producing such output, who can then spend on buying up such output. Why should output be produced if there is no market for them?
However more and more of the goods and services being produced tend to be durable in nature, whether consumer or producer durables. People may choose not to replace them. Hence the problem arising from the inadequate aggregate demand which surfaced during the Great Depression of the thirties. This time the revolution is not over class but over fiscal and monetary policy, the economist Keynes advocating fiscal deficits in order to overcome the problem, while the economist Friedman argued for better monetary institutions in order to improve aggregate demand.
Today there is an economic crisis arising from the inadequate global credit to sustain global demand. International credit is less soundly based as before since the principal currency used in international trade, namely the US dollar, is no longer linked to monetary gold as it was before 1973. The prices of other currencies in terms of the US dollar is also not fixed. The majority of currencies now "float" against each other, the exchange rate being capable of being "managed" through government intervention of one sort or another, as reflected in different interest rates for example. Money has changed from being the debt of one person to another, to debts of one country to another, there being no overriding supranational authority. Currencies can appreciate and depreciate with no fundamental reason. Once again, one ends up knowing the price of everything but the value of nothing! It is as if there is no more assured reference point.
Yet how can there be an assured reference point if man-centred activity and institutions is the point of reference. Man is truly in a fallen state having been "hollowed out" by the impersonality of economic activity, firms and national governments. Yet man never ceases to strive to correct the working of economic processes and institutions whenever they show signs of failing. It is as if "hollowed-out" man wants to be a real man again. The faint image of God still in him prompts him to see the possibility of goodness re-emerging again. Perhaps heaven can be on earth!
The continual capacity of the earth to support yet more and more people is one root of such shallow-based humanism. The pace of technological innovation seems to continue unabated, there being always people willing to apply such innovation to products and processes. Perhaps there can be agreement on what should be done so that it is done!
More recently, in the last half century, another economic crisis took place over the income-expenditure equation. From the collective viewpoint, there should be no problem over the goods & services which have been produced being bought up. After all, income is earned by those producing such output, who can then spend on buying up such output. Why should output be produced if there is no market for them?
However more and more of the goods and services being produced tend to be durable in nature, whether consumer or producer durables. People may choose not to replace them. Hence the problem arising from the inadequate aggregate demand which surfaced during the Great Depression of the thirties. This time the revolution is not over class but over fiscal and monetary policy, the economist Keynes advocating fiscal deficits in order to overcome the problem, while the economist Friedman argued for better monetary institutions in order to improve aggregate demand.
Today there is an economic crisis arising from the inadequate global credit to sustain global demand. International credit is less soundly based as before since the principal currency used in international trade, namely the US dollar, is no longer linked to monetary gold as it was before 1973. The prices of other currencies in terms of the US dollar is also not fixed. The majority of currencies now "float" against each other, the exchange rate being capable of being "managed" through government intervention of one sort or another, as reflected in different interest rates for example. Money has changed from being the debt of one person to another, to debts of one country to another, there being no overriding supranational authority. Currencies can appreciate and depreciate with no fundamental reason. Once again, one ends up knowing the price of everything but the value of nothing! It is as if there is no more assured reference point.
Yet how can there be an assured reference point if man-centred activity and institutions is the point of reference. Man is truly in a fallen state having been "hollowed out" by the impersonality of economic activity, firms and national governments. Yet man never ceases to strive to correct the working of economic processes and institutions whenever they show signs of failing. It is as if "hollowed-out" man wants to be a real man again. The faint image of God still in him prompts him to see the possibility of goodness re-emerging again. Perhaps heaven can be on earth!
The continual capacity of the earth to support yet more and more people is one root of such shallow-based humanism. The pace of technological innovation seems to continue unabated, there being always people willing to apply such innovation to products and processes. Perhaps there can be agreement on what should be done so that it is done!
The reconciliation of man to God by God's initiative
The gospel message of the Christian faith is that:
The gospel message of the Christian faith is that:
"The heart is deceitful above all things, and desperately corrupt; who can understand it? I the Lord search the mind and try the heart, to give to everyman according to his ways, according to the fruit of his doings." (Jeremiah 17:9-10)
Only God can set things right, and He has done it through Jesus His Son. Only when man realises that all his efforts can be doomed to failure, will he turn to God for wisdom from above, the promise being that when all men do likewise, there will be something better than heaven on earth, there being instead a new heaven and a new earth (Rev.21:l).
Such good news seems foolishness in the light of a possible collapse of the global economy. Should not one seek a more immediate solution?
If we look at things from God's perspective however, why should there be a better "solution" than the turning of man's hearts to God, even if this means the collapse of the global economy? The earth may be supporting 6 billion people now, but one fifth of them are consuming four-fifths of its resources. Should such injustice be further tolerated by God? The turning of hearts to God appears more difficult but it is more just. Man needs to be driven by economic crises to realise that much of the income he earns goes to "useless" items. In the present Asian economic crisis, much of the middle class which emerged during past economic growth has been wiped out but then, much of this growth has led to gross materialism. Many testimonies now being given by the now impoverished newly rich testify to what they can do without what they once thought were necessary items of expenditure.
The humanist may argue that we can take steps to reduce gross income inequality. However income inequality is built into the very structure of market-oriented activity. Firms are only rational in seeking to move into less competitive market structures, in order to be assured profits for the further capital expansion so necessary for further production. Even the consumer wants the product differentiation of imperfect markets!
Economic activity and technological innovation need to be held in check by an increasing awareness of God-centredness. The more there is of economic activity and of innovation of all sorts, the more necessary it is to increase the awareness of God. The irony is that such an increasing awareness of God may lead to a decline in such activity and innovation, unless there has been this awareness all along.
It should not need an economic crisis to drive people to their knees. The gospel message merely needs to be preached continually, more so in times of prosperity than in times of adversity. The good news is not that there will be economic recovery this year or next but that God has reconciled man to &self so that we always have the inner core of values which make up our true selves as having been made in the image of God.
We should not confess the "hollowing-out" of ourselves through having over-indulged in man-centred economic activity and seek a "filling-out" of ourselves not through trivial goods and services but through God-given graces. As the apostle Peter wrote in 2 Peter 1:5-6, "make every effort to supplement your faith with virtue, and virtue with knowledge, and knowledge with self-control, 'and self-control with steadfastness, and steadfastness with godliness, and godliness with brotherly affection, and brotherly affection with love."
Economic activity and technological innovation need to be held in check by an increasing awareness of God-centredness. The more there is of economic activity and of innovation of all sorts, the more necessary it is to increase the awareness of God. The irony is that such an increasing awareness of God may lead to a decline in such activity and innovation, unless there has been this awareness all along.
It should not need an economic crisis to drive people to their knees. The gospel message merely needs to be preached continually, more so in times of prosperity than in times of adversity. The good news is not that there will be economic recovery this year or next but that God has reconciled man to &self so that we always have the inner core of values which make up our true selves as having been made in the image of God.
We should not confess the "hollowing-out" of ourselves through having over-indulged in man-centred economic activity and seek a "filling-out" of ourselves not through trivial goods and services but through God-given graces. As the apostle Peter wrote in 2 Peter 1:5-6, "make every effort to supplement your faith with virtue, and virtue with knowledge, and knowledge with self-control, 'and self-control with steadfastness, and steadfastness with godliness, and godliness with brotherly affection, and brotherly affection with love."
Does this mean that we do not pay attention to economic matters when we are deep in an economic crisis? Surely this is the height of social irresponsibility, when large numbers are being unemployed! And thousands nearby are dying of food shortages?
There is a role for Christians who are in positions of economic 'responsibility, whether as workers, managers, savers, investors, scientists or entrepreneurs exploring the next production frontier to be pushed out. It is a role however which has to be tempered by a proper appreciation of God's grace. Economic activity is less than God's redemption.
There is a role for Christians who are in positions of economic 'responsibility, whether as workers, managers, savers, investors, scientists or entrepreneurs exploring the next production frontier to be pushed out. It is a role however which has to be tempered by a proper appreciation of God's grace. Economic activity is less than God's redemption.
The restoration of man to God by God's continuous presence
However so massive are the nature of economic problems that the individual person cannot help but feel overwhelmed by it all, as if there is nothing that can usefully be done if one were to modify one's behaviour as a worker, manager, etc. Market-oriented economic activity is so reductionist in its effect that one cannot help but feel that one is only a digit. The person in a proper relationship to God however is not that downcast.
Perhaps there is no real difference to aggregate demand if the individual decides to spend more, or spend less. On the other hand, the Christian will put away the "useless" things he has accumulated over the years during this economic crisis! And promise not to take up such accumulation if there is an economic recovery! What enters into his motive are the cultivation of the virtues of thrift and prudence consistent with self-control as mentioned in the above passage from 2 Peter.
If one is a manager or entrepreneur, the present crisis is a good time to evaluate whether what one is doing is necessary or useful. Is the product or process helpful to someone somewhere? Is the price more than marginal cost? Many people justify the high incomes they are earning by the fakt that they can later give away the money earned. Andrew Carnegie tried to do that but found that his earnings multiplied faster than he could give it away! Such a situation requires honesty to oneself for if one cannot give away what one may have excessively charged, one should give up one's privileged position by allowing competition to replace oneself. This gives rise to the question of what the "normal" rate of profit should be. Should it be just what is necessary to keep oneself in the business so to speak, or should it be higher so as to enable capital accumulation in higher technology to emerge? Again one should be honest to oneself and ask why we want higher technology. Is there a benefit to future generations that we want to see transmitted?
Limits to even public sector activity can also be set by those concerned about. their Christian role. When is enough enough? Small is beautiful, as argued by Schumacher. If every person is to be restored to God and is aware of God's continued presence, it would be apparent that there would be a downsizing of profit-oriented economic activity. This does not mean that total economic activity would be reduced. Much more non-profit oriented activity may be undertaken, there being many areas of human need which cannot be met through the market system.
A century ago, the cooperative movement was born as an alternative to economic activity based on the profit-oriented firm. In a cooperative, surpluses are also earned through the excess of revenue over costs, but these surpluses are then distributed according to the use made of the cooperative by its members. A limit is placed on the rate of dividend payable to owners of shares in the cooperative. The emphasis in a cooperative is on activity but not profit.
However so massive are the nature of economic problems that the individual person cannot help but feel overwhelmed by it all, as if there is nothing that can usefully be done if one were to modify one's behaviour as a worker, manager, etc. Market-oriented economic activity is so reductionist in its effect that one cannot help but feel that one is only a digit. The person in a proper relationship to God however is not that downcast.
Perhaps there is no real difference to aggregate demand if the individual decides to spend more, or spend less. On the other hand, the Christian will put away the "useless" things he has accumulated over the years during this economic crisis! And promise not to take up such accumulation if there is an economic recovery! What enters into his motive are the cultivation of the virtues of thrift and prudence consistent with self-control as mentioned in the above passage from 2 Peter.
If one is a manager or entrepreneur, the present crisis is a good time to evaluate whether what one is doing is necessary or useful. Is the product or process helpful to someone somewhere? Is the price more than marginal cost? Many people justify the high incomes they are earning by the fakt that they can later give away the money earned. Andrew Carnegie tried to do that but found that his earnings multiplied faster than he could give it away! Such a situation requires honesty to oneself for if one cannot give away what one may have excessively charged, one should give up one's privileged position by allowing competition to replace oneself. This gives rise to the question of what the "normal" rate of profit should be. Should it be just what is necessary to keep oneself in the business so to speak, or should it be higher so as to enable capital accumulation in higher technology to emerge? Again one should be honest to oneself and ask why we want higher technology. Is there a benefit to future generations that we want to see transmitted?
Limits to even public sector activity can also be set by those concerned about. their Christian role. When is enough enough? Small is beautiful, as argued by Schumacher. If every person is to be restored to God and is aware of God's continued presence, it would be apparent that there would be a downsizing of profit-oriented economic activity. This does not mean that total economic activity would be reduced. Much more non-profit oriented activity may be undertaken, there being many areas of human need which cannot be met through the market system.
A century ago, the cooperative movement was born as an alternative to economic activity based on the profit-oriented firm. In a cooperative, surpluses are also earned through the excess of revenue over costs, but these surpluses are then distributed according to the use made of the cooperative by its members. A limit is placed on the rate of dividend payable to owners of shares in the cooperative. The emphasis in a cooperative is on activity but not profit.
Other types of non-profit activity are carried on by societies and companies limited by guarantee. One can also envisage some economic activity migrating back to the families from where they had originally come from. The family is a production unit. However, many types of home-care and family upbringing are now "monetised" because it seems to pay the home-maker to work for money outside the home, and then pay others to do certain aspects of home-care and family upbringing. This makes sense from the "money" perspective but not from the "holistic" perspective since crucial aspects of home-care and family upbringing cannot be brought under market parameters.
For that matter, many community services are also "professionalised" into working for pay. Care for the sick, for the elderly, and for the disabled is frequently being undertaken by those specially trained for certain tasks, even in non-profit centred institutions, more so in profit-centred institutions. However if more and more people are being restored to God in a right relationship, such institutional activity may diminish. People may prefer to give, and receive, personal care rather than functional care.
It is true that very often only a firm, whether profit-oriented or not, can raise the funds necessary for the purchase and maintenance of the necessary appliances and tools needed for functional care. However for many persons, it is intimacy rather than functionality that is often more important. A person may value more highly the care by a loved one rather than by a professional. The more important question is, are we still persons?
Often we are so "hollowed-out" by the scale and nature of economic activity that we want to be treated like digits! We may even want machines, rather than persons, to take care of us! After all, our entire working life may have been spent more in the company of computers than of persons! Yet underneath the veneer of all of us is the faint image of a person made in the image of the Person of God, who wants to be treated uniquely as a person since God is Himself a unique Person.
When automatic teller machines were first installed in New York city, they were not a success because the persons who would withdraw cash from banks did not like being given cash by machines! Deep down, people preferred being able to talk to a bank teller than a machine! God is still at work in human hearts for Jesus came down as God in human form and is today at God's right hand, interceding for the persons He died and lived for. Our desire for personhood is increased by His very intercession!
For that matter, many community services are also "professionalised" into working for pay. Care for the sick, for the elderly, and for the disabled is frequently being undertaken by those specially trained for certain tasks, even in non-profit centred institutions, more so in profit-centred institutions. However if more and more people are being restored to God in a right relationship, such institutional activity may diminish. People may prefer to give, and receive, personal care rather than functional care.
It is true that very often only a firm, whether profit-oriented or not, can raise the funds necessary for the purchase and maintenance of the necessary appliances and tools needed for functional care. However for many persons, it is intimacy rather than functionality that is often more important. A person may value more highly the care by a loved one rather than by a professional. The more important question is, are we still persons?
Often we are so "hollowed-out" by the scale and nature of economic activity that we want to be treated like digits! We may even want machines, rather than persons, to take care of us! After all, our entire working life may have been spent more in the company of computers than of persons! Yet underneath the veneer of all of us is the faint image of a person made in the image of the Person of God, who wants to be treated uniquely as a person since God is Himself a unique Person.
When automatic teller machines were first installed in New York city, they were not a success because the persons who would withdraw cash from banks did not like being given cash by machines! Deep down, people preferred being able to talk to a bank teller than a machine! God is still at work in human hearts for Jesus came down as God in human form and is today at God's right hand, interceding for the persons He died and lived for. Our desire for personhood is increased by His very intercession!
The Chief End of Man as chief among all ends, even economic
When an economic crisis strikes, the first reaction of the men hurt by it is for the status quo to be restored. No matter how hollowed out they may be, men want to retain their hollowness. It is as if their hollowed-out nature has been revealed, but they want it to be "covered" by what is consistent with it, so that it does not appear "unnatural".
It is like the people of Israel in the wilderness longing for the meat and fish in Egypt, the cucumbers, the melons, the leeks, the onions and the garlic (Numbers 11 :4-5) although in the wilderness they had God with them and they were free from oppression by the Egyptians. It was as if the people of Israel did not want the manna although it was provided by God Himself. In the same way, God may be speaking now
to the many hurt by the crjsis but they are not listening! Singapore and many other Asian countries are now going to a wilderness experience where God is revealing Himself in new ways. More important than the physical provision of manna in the wilderness was the indication that God loved the people of Israel. Moses reminded the people of Israel after they had crossed the wilderness and were about to enter the promised land that "God humbled you and let you hunger and fed you with manna, which you did not know, nor did your fathers know; that he might make you know that man does not live by bread alone, but that man lives by everything that proceeds out of the mouth of the Lord" (Deut.8:3)
More was going to proceed out of the mouth of the Lord in their stay in the promised land, as is found in later stages of the history of the people of Israel, the word of God becoming flesh eventually in the person of Jesus the Son of God. Today we need to pay even more attention to what God is saying than what manna God is providing, in order to give God's words their appropriate attention. One of God's word is food for the body, but there are other words of God which are stimulus for the mind, inspiration for the imagination and satisfaction for the soul, to which we need pay appropriate attention.
God's words which speak to the person are crucial given the impersonality of the economic system, the prevalence of objective knowledge and the dominance of physical capital. What deadens the human soul is not only the mere surfeit of material goods and services but the separation of production from consumption, investment from saving, lending from saving, buying from selling, processes from products and the rich from the poor, which distorts the heart of the individual. It is as if the individual is hollowed-out in knowing only one thing and not another at any point of time. If individuals are viewed as a large entity, such as in the economy of a country, "wholeness" is restored and paradoxes removed, as in the unity of the human body. However not many can see the relationship between various parts, neither is there experiential unity, since there is loneliness in crowds. It takes ideals and emotions to bring together people, and it requires reflection and renewal to give them a higher purpose than impersonal existence.
In other words, only God can give purpose, direction and unity to disparate groups and individuals, companies and families, scientific experiments and poems, economic activity in profit-oriented firms and non-profit organisations. God does this by the persons whether alone, or in institutions and families, acknowledging that their chief end is to glorify Him. When they continually do this, God responds by sending the Holy Spirit to comfort, to direct, to convict, even without the know.ledge of the persons affected.
When persons acknowledge that their chief end in all activity is to glorify God, they are open to what God will say and they will obey what is commanded. Such is the power and unity of God Three-in-One for besides God the Father, and God the Holy Spirit, God the Son in Jesus did come on earth to reconcile man to God, so that today God can speak directly to every man himself, every person having been declared holy by the life, death and resurrection of Jesus. All this may sound very abstract but it is very real when we bear in -mind how God has provided for the massive growth of population through the innovation which has enabled man to tap the resources found in the same plsnet size. Innovation itself is a gift from God, and the same God can provide other gifts which make personal praise possible, an awareness of God as great as His material gifts.
It is like the people of Israel in the wilderness longing for the meat and fish in Egypt, the cucumbers, the melons, the leeks, the onions and the garlic (Numbers 11 :4-5) although in the wilderness they had God with them and they were free from oppression by the Egyptians. It was as if the people of Israel did not want the manna although it was provided by God Himself. In the same way, God may be speaking now
to the many hurt by the crjsis but they are not listening! Singapore and many other Asian countries are now going to a wilderness experience where God is revealing Himself in new ways. More important than the physical provision of manna in the wilderness was the indication that God loved the people of Israel. Moses reminded the people of Israel after they had crossed the wilderness and were about to enter the promised land that "God humbled you and let you hunger and fed you with manna, which you did not know, nor did your fathers know; that he might make you know that man does not live by bread alone, but that man lives by everything that proceeds out of the mouth of the Lord" (Deut.8:3)
More was going to proceed out of the mouth of the Lord in their stay in the promised land, as is found in later stages of the history of the people of Israel, the word of God becoming flesh eventually in the person of Jesus the Son of God. Today we need to pay even more attention to what God is saying than what manna God is providing, in order to give God's words their appropriate attention. One of God's word is food for the body, but there are other words of God which are stimulus for the mind, inspiration for the imagination and satisfaction for the soul, to which we need pay appropriate attention.
God's words which speak to the person are crucial given the impersonality of the economic system, the prevalence of objective knowledge and the dominance of physical capital. What deadens the human soul is not only the mere surfeit of material goods and services but the separation of production from consumption, investment from saving, lending from saving, buying from selling, processes from products and the rich from the poor, which distorts the heart of the individual. It is as if the individual is hollowed-out in knowing only one thing and not another at any point of time. If individuals are viewed as a large entity, such as in the economy of a country, "wholeness" is restored and paradoxes removed, as in the unity of the human body. However not many can see the relationship between various parts, neither is there experiential unity, since there is loneliness in crowds. It takes ideals and emotions to bring together people, and it requires reflection and renewal to give them a higher purpose than impersonal existence.
In other words, only God can give purpose, direction and unity to disparate groups and individuals, companies and families, scientific experiments and poems, economic activity in profit-oriented firms and non-profit organisations. God does this by the persons whether alone, or in institutions and families, acknowledging that their chief end is to glorify Him. When they continually do this, God responds by sending the Holy Spirit to comfort, to direct, to convict, even without the know.ledge of the persons affected.
When persons acknowledge that their chief end in all activity is to glorify God, they are open to what God will say and they will obey what is commanded. Such is the power and unity of God Three-in-One for besides God the Father, and God the Holy Spirit, God the Son in Jesus did come on earth to reconcile man to God, so that today God can speak directly to every man himself, every person having been declared holy by the life, death and resurrection of Jesus. All this may sound very abstract but it is very real when we bear in -mind how God has provided for the massive growth of population through the innovation which has enabled man to tap the resources found in the same plsnet size. Innovation itself is a gift from God, and the same God can provide other gifts which make personal praise possible, an awareness of God as great as His material gifts.
Lee Soo Ann is an Economist at National University of Singapore.
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