Tuesday, January 15, 2008

Normative Economics

Christians have an absolute God, who has revealed his standard of ethics. Since we do have absolute ethical standards, so we should have made Normative Economics our home. However, we have been quite slow to take up the challenge.

Worse still, I find that most Christians approach economics in a pragmatic way. They ask what will work. What will produce the desired outcome? What policies will produce economic growth? However, this is the approach of those stuck in Positive Economics. What will work does not matter for Christians. What matters to us is what is right; even if it does not work well. The fact that a market system is very productive does not make it right. The fact that market system produces inequality does not make it wrong. These are questions about what works. Christians should be asking what is right, according to God’s standards.

I see most economic issues as ethical questions: what should be done. This is Normative Economics. Christians have God’s standard of what is right and wrong, so we are in a great position to do say what should be done. Our question about every economic policy should be this: Is it morally right? Does it comply with God’s word?

A good economic policy is one that complies with God’s ethical standards. The irony is that the right economic policies may not achieve the goals that many politician’s desire: fast economic growth or equal income distribution. However, Christians should always be advocates for the right policies, not effective policies.

In the long term, obedience to God will lead to blessings, so everything will be okay, but it the short term, the right economic policies may make people worse off. However, they are sill the right policies. God’s way is the best way.


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Ron McK said...