Connections Between the Austrian School of Economics and Christian Faith
A Personalist Approach
Also published in Journal of Markets & Morality
Introduction
In this article, I will examine these issues in more detail.
First, I will explore the implications of adopting a completely mathematical
methodology in the study of economics. As will be demonstrated, this approach
reduces human behavior to that of any other animal. Second, I will examine the
approach of praxeology that has been taken by the Austrians. Unlike the positivistic
method that is so common today, this approach has the benefit of maintaining
real, human actors whose choices and activities cause economies to develop and
change. Finally, I will consider some important additions that can be made to
this approach by developing several personalist insights about the nature of
self-determination. It is within this context that Christians can more thoroughly
discuss how the people of a society might aspire to live together both freely
and virtuously.
The Problem of Modern Economic Methodology1
This approach to economics developed out of naturalism. Naturalism
itself became more and more a part of scientific pursuits during the Enlightenment.
By “naturalism,” I follow C. S. Lewis and define it as the assumption
that nothing exists but nature and that nature can only be understood in terms
of how each part relates to every other part with nothing else remaining. “What
the Naturalist believes is that the ultimate Fact, the thing you can’t
go behind, is a vast process in space and time which is going on of its own
accord. Inside that total system every particular event � happens
because some other event has happened; in the long run, because the Total Event
is happening.”2 As applied to social sciences generally, and
to economics specifically, naturalism includes mankind in the “Total Event”
and, therefore, it assumes that human action arises from a natural cause-and-effect
relationship. Richard Weaver captured the progression of naturalism in his book,
Ideas Have Consequences. In it he wrote:
[Then came] psychological behaviorism, which denied not only freedom of the will but even such elementary means of direction as instinct. Because the scandalous nature of this theory is quickly apparent, it failed to win converts in such numbers as the others [(materialism, evolution, et cetera)]; yet it is only a logical extension of them and should in fairness be embraced by the upholders of material causation. Essentially, it is a reduction to absurdity of the line of reasoning that began when man bade a cheerful goodbye to the concept of transcendence.3
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A Personalist Approach
Also published in Journal of Markets & Morality
Introduction
One of the main problems of integrating Christian faith and
economic analysis is that most economists approach the subject using an anthropology
that is decidedly anti-Christian. While this is typically done without much
forethought, economists typically reject out-of-hand any approach that deviates
from the one that they deem to be integrally part of their study. Owing to the
work of John Stuart Mill and his progeny, a utilitarian approach to the subject
became dominant. While economic analysis must be grounded in the reality that
the utility people find in goods plays a foundational role in our understanding
of how economies function, what is not needed is the endorsement of utilitarianism.
It is this endorsement that has led the profession to become largely mathematical
and empirical. However, the Austrian School has resisted this tendency because
scholars working in that tradition maintain an anthropology that is much more
consistent with Christianity.
The Problem of Modern Economic Methodology1
There is embedded in the modern approach to economic analysis
an underlying assumption that places it at odds with Christianity. The methodology
used presupposes that each person is essentially a stimulus-response machine.
Theoretically speaking, this assertion is borne out by the assumption that each
person has a utility function that is imprinted on his being. While no assertion
is made that the function is fixed or permanent, there is little discussion
of its changing or of how it might change. In this way, the person’s choices,
if they can be called “choices,” are merely the result of a mathematical
calculation based upon the environmental constraints imposed. In essence, the
person is viewed as a kind of computer who assesses his options based upon the
objective prices that he happens to find in the marketplace.
[Then came] psychological behaviorism, which denied not only freedom of the will but even such elementary means of direction as instinct. Because the scandalous nature of this theory is quickly apparent, it failed to win converts in such numbers as the others [(materialism, evolution, et cetera)]; yet it is only a logical extension of them and should in fairness be embraced by the upholders of material causation. Essentially, it is a reduction to absurdity of the line of reasoning that began when man bade a cheerful goodbye to the concept of transcendence.3
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