Members of the clergy and those who work as economists have formed their understandings of the world by examining it through different windows. Yet, the social objectives of both are remarkably similar, even though their windows on the world suggest different approaches to achieve those objectives. The differences between them are in their emphasis on how to achieve their common objectives. These differences in approach are important and should not be understated, but neither should they be overstated as they almost always are.
While the clergy and economists emphasize different paths to their common objectives, those paths complement each other. Yet they are commonly discussed as if they represent morally irreconcilable differences in objectives because people tend to confuse means with ends.
My hope is that members of the clergy, in their desire to achieve a better world, will begin to see economists as allies instead of adversaries. This hope may be dismissed as preposterous by some since, as an economist, I argue that market incentives are the most effective way of achieving many of the social outcomes most of the clergy favor. But those most opposed to market incentives for achieving desirable objectives have the most to gain by taking a look through the economic window. Much of the skepticism, indeed hostility, towards markets is based on distorted and mistaken views of how markets operate and what they accomplish.
Religious differences notwithstanding, most people respect the clergy for their noble objectives and effort to achieve those objectives by encouraging and celebrating “the better angels of our nature” mentioned in Abraham Lincoln’s first inaugural address. Most approve of the clergy’s concern with encouraging behavior such as sharing with, and serving the interests of, others; helping the poor; sacrificing for the good of the wider community; acting as good stewards of the earth’s resources; being concerned with protecting the environment; and generally living a life that promotes social cooperation and harmony.
Such a claim on behalf of economists would be met with incredulity and probably derision. The common view is that they are primarily interested in money and financial success; more likely to celebrate economic competition than social cooperation, with little regard for those left behind; prone to see profit and private property as ends in themselves, with little regard for the unfortunate consequences that can result from their pursuit, including the harm imposed on the environment and future generations; and more concerned with how greedy individuals can secure more for themselves than with how they can share with, and promote the general well-being.
This view of economists, and their objectives, is a caricature. Like most caricatures, it may contain an ounce of truth. But it also contains several pounds of distortion. Economists are indeed interested in money, competition, profits, private property, and the influence of self-interest on human action. But they are interested in these things not as ends, but as a means of achieving more social cooperation, service to others, and better stewardship of the environment and our resources.
The Narrow and the Noble
It is useful to consider two broad approaches to improving the world. The first is to improve people so that they do the right things out of a sense of moral duty. The second approach is to improve incentives so people are motivated to do the right things because it is in their interest to do so. A reasonable generalization is that the clergy emphasizes the former approach to improving the world, while economists emphasize the second.
While improving incentives lacks the sense of moral uplift provided by improving people, better incentives can, and often do, lead to a better world. The point is not that improving the world by improving people is futile. Looking through their window may result in economists being too dismissive of the possibilities and benefits of improving people. But looking through their window may cause the clergy to be too dismissive of better incentives as a sorry substitute for morality improvement. A more reasonable view is that both improving incentives and improving people complement each other. This was recognized by Dennis Robertson, a colleague of John Maynard Keynes at Cambridge University (but not a Keynesian himself), who observed:
There exists in every human breast an inevitable state of tension between the aggressive and acquisitive instincts and the instincts of benevolence and self-sacrifice. It is for the preacher, lay or clerical, to inculcate the ultimate duty of subordinating the former to the latter. It is the humbler, and often invidious, role of the economist to help, so far as he can, in reducing the preacher’s task to manageable dimensions.
In addition to Robertson’s recognition that the clergy and economists have, in their different ways, joint responsibilities in working toward a better world, it is important to note that he also recognizes that human nature consists of both the acquisitive and the benevolent. This is an obvious point, noteworthy only because so many people assume that economists believe human behavior is motivated entirely by self-interest, or more pejoratively, greed. That is not true now, and never has been. Economists have always recognized that people are motivated by some mix of the narrow and the noble. Indeed, Adam Smith, who is often mistakenly dismissed as an apostle of greed, begins his first book, The Theory of Moral Sentiments, with the sentence, “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”
Economists do commonly assume that people are motivated solely by self-interest to better understand what social institutions, and the incentives they embody, best motivate widespread cooperation among those who have no direct knowledge of, or concern for, each other.
I am not trying to convince members of the clergy to forsake the perspective from their window on the world and shift their allegiance to the economists’ perspective. First, I couldn’t succeed even if that was my purpose. People invest serious effort in achieving an understanding of the world, and this understanding, along with an accompanying belief system, provides a valuable sense of coherence and meaning to our lives not easily given up.
Just as I cannot imagine giving up my economic understandings, and the beliefs informed by them, I certainly don’t expect to convince members of the clergy to give up their understandings and beliefs.
Second, I have no desire to convince members of the clergy to shift their perspective to that provided by the economic view of the world. The window that informs the clergy is an important one. The clergy have insights and understandings that are useful in improving our lives and our world in ways that cannot be clearly seen, if seen at all, through the economists’ window. And by specializing in helping people improve themselves through spiritual and moral teachings, I believe the understandings of the clergy complement those of economists in achieving the noble objectives we have in common.
My desire is to convince members of the clergy that they and economists really do share common objectives and have complementary approaches for achieving them. When economists talk about such things as private property, exchange, market prices, money, and financial profits and losses, we honestly believe we are talking about social arrangements that make the world a better place - a more humane and prosperous place, where billions of people cooperate through a global network of communication, service and sharing to reduce poverty, feed the hungry, care for the sick, protect our environment, conserve and expand our resource base, and promote a host of other noble objectives. Some members of the clergy, along with others, will disagree with this economic understanding of the world. But please don’t conclude from this, as many do, that economists are not committed to achieving these noble objectives.
Dr. Dwight R. Lee is the William J. O’Neil Endowed Chair in Global Markets and Freedom at Southern Methodist University. This commentary is adapted from an article to be published in the Journal of Markets & Morality (Vol. 12, No. 2; Fall 2009).