How should we think about our economy as followers of Jesus? Do we accept economic life as "it is what it is?" Or does the way we think about economics make a difference in our discipleship? Co-authors Victor Claar (economist) and Greg Forster (political philosopher) talk about their new book on the most influential economist of our time, Sir John Maynard Keynes, and how his views on economics have shaped how culture sees human beings, morality, consumption and prosperity. Be sure not to miss their critique of Keynes from a Christian world view. Join us for this enlightening conversation.
More About Our Guests
Dr. Victor Claar is Associate Professor of Economics and holds the BB&T Distinguished Professorship in Free Enterprise at Florida Gulf Coast University in Fort Myers, Florida. He is the author of several books on the intersection of Christian faith and economics, including, Economics in Christian Perspective: Theory, Policy and Life Choices (with Robin J. Klay).
Dr. Greg Forster is Greg Forster serves as the director of the Oikonomia Network at the Center for Transformational Churches at Trinity International University, and is a visiting assistant professor of faith and culture. He has a Ph.D. with distinction in political philosophy from Yale University. He is the author of seven books, most recently The Church on Notice and Joy for the World, and the co-editor of four books.
Scott Rae: Welcome to the podcast Think Biblically, conversations on faith and culture. I'm your host, Scott Rae, Dean of Faculty and Professor of Christian Ethics at Talbot School of Theology, Biola University. We're here today with two special guests, authors of a brand new book, and the book is entitled The Keynesian Revolution in Our Empty Economy, subtitled, We're All Dead, and they really wanted the We're All Dead to be the title, not the subtitle, but they got overruled by the publisher.
Our guests today are Economist Victor Claar, who is a Professor of Economics at Florida Gulf Coast University in Fort Myers, Florida. His Co-author is Greg Forster, who has a background in political philosophy, author of a half a dozen different books on the intersection of Christian faith and political philosophy, currently the director of the [inaudible] Network, which is a network of seminaries that are committed to advancing the conversation on faith, work and economics to the next generation of church leaders and pastors.
Guys, thanks for being with me on this, and this is a great chance to talk about your book. It's a terrific new book, but it is not for the faint of heart. It's really involved, it's got a lot of meat to it, so we want to try and bring this to an audience that may not be trained in economics on some of these concepts. It seems to me as I read through it, the book is really about how to think about our economy. Tell us, first of all, why should the average person, working person care at all about how to think about the economy?
Greg Forster: Well, I think the first answer to that is because you live in it every day, and because it shapes your life, and you shape it to some extent through your participation. We have a lot of conversations in the church about culture, but when we talk about culture we're often talking about either political battles, or we're talking about Hollywood movies. That's really a fairly small slice of life as we actually live it. Whereas, if you think about your waking hours, you spend most of your waking hours either working, whether it's work in the home, or work on a job, or work in some other area, or engaging in other economic activity like buying and selling.
In the modern world, especially, the economy is where most of life is actually lived. If we don't think about the moral premises that are embedded in the systems we're part of, and how we either cooperate with them, or resist them, then we're really leaving most of our lives on the table, and not being thoughtful about it.
Victor Claar: Yeah, I agree with Greg completely, this is Victor, and yeah, I think we would like more human beings that we know, our friends and family, and even ourselves to some extent to consider more carefully what it is we're doing when we're at work, or how we're spending our dollars when we're in the store. I think we could all benefit from a reminder about who we are, who we are within the kingdom, and what really matters, because that should influence every aspect of our lives, not just as Greg said, what we think of is culture, but also, all of our actions and relationships within the broader culture and those include economic relationships.
Scott Rae: Yeah. I think, and especially given to how ubiquitous economics is in our lives when we actually sit and think about it, unless you're living on a desert Island somewhere with nobody to trade anything with, that's probably the only scenario where you're exempt from having to think about this, so that's why I appreciate you guys writing this stuff down, and encouraging the average person out there who's not trained at economics, but everybody ought to have an interest in thinking well and thinking Christianly about economics.
But, I think most people don't think of economics as having much to do with morality, but you guys both make a pretty strong claim that that there's a moral fabric to economics that we ignore that at our peril. How do you support that claim?
Greg Forster: Well, let's begin with, you have to make moral assumptions even to make observations about facts. An example we use in the book is we constantly measure the economy in GDP per person. That's gross domestic product per person. Our national productivity per person, but why per person? Why do we care about persons as opposed to something else? We could just as easily measure the size of the economy per yak, because you know China's catching up quickly, but China has lots of yaks whereas America has very few yaks so we might look much better on that.
Victor Claar: Because their figures look pretty good.
Greg Forster: Right, yeah, we can look... Whereas the small city state of Monaco has no yaks at all, and so their GDP per yak is infinity because it's divided by zeros. If we measure the economy in terms of wealth per person, or income per person, we are assuming that human beings matter, and that's a moral assumption and that's before we even talk about rules of exchange, when we're buying and selling with each other we are under rules for how we do that, and where do those rules come from? How are they justified? That's a moral conversation.
It's wrong to defraud people, it's wrong to take their stuff. These moral rules are the basic structure of the economy. With no rules for economic exchange there's no economic system, but those rules are all justified in moral terms.
Victor Claar: Yeah, and I think it speaks to how powerful this way of thinking about the human person in relationship to economics is because all the things that Greg describe, normally if you want to have a conversation about people would go, "Well, of course, we measure GDP per person." And, of course being a charlatan in business is wrong, but we don't necessarily reflect on where that sense comes from, but the fact that we do have that sense matters a lot, because these are transcendent ideas and understanding how powerful they are, and that we do have these feelings about them, it speaks to how important it is to understand who we are in our relationships within the economic sphere.
Scott Rae: Well, yeah, and not to mention in addition to the rules, Greg, that you described, the virtues that are necessary for any kind of reasonably flourishing economy, and you can see what happens in other parts of the world where those rules are not in existence, and those virtues are not cultivated. Yeah, I used to assume that I can trust you when you say you're going to be here at a certain time, and all those things relate to a flourishing economy. Now a little closer to your book, do you want to add something to that?
Greg Forster: No.
Scott Rae: Okay. Well, closer to your book you described in the book that our economy isn't empty economy that's produced a hollow prosperity. I read that at first glance, because I know both of you guys, I know you're not like this, but I first thought this is a couple of grumpy old guys that are just... Had their noses at a joint about the economy.
Victor Claar: Well, we got a grumpy old.
Scott Rae: I was trying to cut you a little slack because I know you, but what do you mean by those terms? The empty economy producing a hollow prosperity?
Greg Forster: Well, I think people have a sense that our affluence is not morally grounded, and you see that, for example, in the assumption that people who get ahead must be doing something wrong. If people have gotten ahead there's a sort of suspicion of that. It used to be, we would say work hard and play by the rules, but increasingly, I think there's a sense that working hard and playing by the rules is for suckers now that the economy's rigged.
The clearest sign of this is the unprecedented success of previously marginalized extreme economic ideologies on both the left and the right in our political competition that people who are espousing either socialism, or nationalism, who are rejecting just the basic foundational tenets of modern economic life, they do this, and they get ahead, and the reason they're able to get ahead is people have lost the sense that the affluence we enjoy in the modern world is morally grounded and legitimate.
I think that's a major problem. It requires us to rethink where have we gone wrong, so that we can get an economy that's morally grounded, and where have we maybe misunderstood the real moral basis of the economic systems that had been bequeathed to us, so some combination of either better understanding, or reform of things that are wrong is needed because it's really not sustainable to have a society where people feel like economic success has no relationship to virtue and rule following.
Victor Claar: Yeah, and Greg, as you were speaking, I was reminded of a recent tweet because we get all our important information in society now from tweets. Former secretary of labor, Robert Reich had a tweet that I've actually cited in the paper recently, and the tweet said, "If you're an American, and you have over $1 billion..." And, he uses more words even in the tweet, but he says, "... you must have done something morally wrong in order to make that happen."
Now, I'm convinced there are plenty of people who have billions of dollars who did in fact do lots of things wrong, but I find it troubling that the baseline assumption for Robert Reich is that if you're a rich person, you could have voluntarily made that happen through doing something that was wrong.
Greg Forster: And, notice that that kind of discourse no longer is on the margins. There have always been people on the margin saying anybody who gets ahead must have done something wrong, but now Robert Reich is the epitomy of respectable economic responsibility as a former cabinet secretary in an economic department. That's about as respectable as you get when the people whose job is to be guardians of the system are saying the system is rigged, you've really abandoned any pretense of moral legitimacy. In one way or another that's not a sustainable situation.
Scott Rae: Now, to get into the books details a little bit more, you give your readers a really good economic history lesson, and you show how a lot has changed about how we think about our economy over the centuries that the classical Greeks had sort of one view, medieval Christianity had a bit different take on that and even the secularizing enlightenment was quite a shift, but all of those three still had some sort of moral underpinning for our economic life.
But, it seemed to me the main point you're arguing in the book is with the advent of our 20th century economic theory, mainly the work of John Maynard Keynes, that all underwent a seismic shift. Okay, so tell our listeners a bit who was this guy, John Maynard Keynes, and how did he revolutionize the way we think about the economy?
Victor Claar: John Maynard Keynes is a legendary British economist, and he published a famous book that changed everything about how we do economics in the 20th and 21st centuries. He published it in the middle of the Great Depression, 1936, and it's called The General Theory of Employment, Interest and Money. He called it The General Theory, because he wanted it to be a book like a general theory of physics. He really wanted to explain everything about economics in about 390 pages.
The book was terse. It was difficult to get through. There are moments when you wonder as you read it, whether Keynes himself knew what he meant to say as he was writing that sentence, and he was in fact critiquing an earlier book by one of the classical economists, a guy named Arthur Pigou, that was also a book that was very difficult going, but it was a more free market oriented traditional book, so you had a challenging writer critiquing a challenging book by another challenging writer.
And, the argument that he made there was pretty straightforward. It was this, the classical economists who proceeded Keynes, they really thought like Greg, and I think that prices, and the price system, it's part of God's created order, prices send signals to people about how to invest their time, how to spend their day, how to be of service to each other. When the price of something goes up, people leap in to make more available, because they really need this. This happens in natural disasters, prices rise, and what happens, people rush into address that need and the price goes back down. It's great.
But Keynes thought that this happy outcome, that over time prices direct resources, we have full employment in the economy and eventually there's long term growth. He really thought that that story, the classical as we're telling was a special case that was almost never true, so it was this idea of it's the best of all possible worlds. Keyne saw a world where on average that's true about what happens to an economy, but have you seen the unemployment rate in 1933? It's 25%. This is unprecedented unemployment in the period following the industrial revolution, and so, Keyne said to his credit, because he positioned himself as a moral theorist.
He said, "If we've got resources today to get people who are hurting today back to work, well, why wouldn't we want to do that? It's the right, it's the moral thing to do." He wanted to not focus on the longterm trajectory of the economy. Instead, he wanted to focus on short term movements of the economy, away from full employment, so recession, expansion. He wanted to make sure that we stayed not on average on track for longterm growth, and prosperity, and long term flourishing, but the day to day we made sure that most of the people had jobs, and we were in fact less concerned about how valuable those jobs were [inaudible] society, and we were more concerned about whether they had paychecks in order to make ends meet.
Greg Forster: I think a clear way of showing the distinction between the way Keynes taught us to think about economics, and the previous ways, whether they were classical, Greco, Roman or Christian or enlightenment where... so Victor has emphasized the shift from long term to short term. Keyne said it's not enough to tell people that in the longterm the price system will work these problems out, because their problems are acute, and people are suffering, and we shouldn't wait, and this is where the famous statement comes from where people told him in the long run the price system will work out these problems.
And, he said, "Well, in the long run we're all dead." Which really encapsulates the short term thinking that he's moving to the center, because that attitude shows that there's no concern for what we leave our grandchildren. In the way Keynes has taught us to think about economics, and this is true now for all the major schools of economics, not just the Keynesian School. Keynes has spread this idea to all the major schools of economics. We don't think about economics in terms of what kind of economy do we want to leave our grandchildren, we think of a year at most. One year is the longest window usually you can get people to think about economically.
And, if that, quarterly reports are often the focus, so it's a shift from longer, and for short term. Connected to that is a shift from what are we producing to how much are we consuming? All of the old paradigms, whether they were classical, or Christian, or enlightenment, they all emphasized are we producing good things? Is the economy producing things that are morally valuable? Things that are the right things for people to produce? Since Keynes we have put not production at the center, but consumption at the center.
The concern is how much are people able to consume with the assumption that more consumption is always good, that you want to maximize consumption, and a third thing that goes along with this is we're no longer able to think economically about human dignity, because if people are short term consumption oriented creatures, it's very difficult to take them seriously as moral agents. Once you adopt this anthropology of human beings as short term consumption oriented creatures, it's really hard to justify limits on what you're allowed to do to them.
They become essentially like cogs that you can move around, and just exercise power over without much constraint, because they're consumers. They don't have human dignity in this anthropology. It's very difficult to justify treating people with human dignity in this, so that means business, FXR unstable, it means that it's difficult to maintain limits on the use of political power, and so on.
Scott Rae: It sounds like two major things have come out of this, and we'll take them one at a time. First that our view of a human person has changed really dramatically, and it sounds to me like Keyne says, enshrined consumerism as the order of the day. How specifically has the view of the human person changed?
Greg Forster: Well, I think in the older paradigms human beings are related to nature in one way or another that connects them in a productive way that gives them stewardship over the natural order, and that this production and stewardship gives them dignity that needs to be respected. For example, in the classical Greco Roman world, human beings were the only part of the natural world that possessed reason, and virtue, that we could think rationally, and we could make choices with moral agency, and this made us superior to the rest of nature, because we were able to think, and because we were able to be responsible for our behavior in ways that animals couldn't.
And, because of that, it was the responsibility of human beings to manage the rest of nature, and to manage it rightly so that nature would reach its potential, and that therefore people had to be treated as managers of nature. In that paradigm, however, there was an assumption of hierarchy that people with greater capacities would be at the top, and would have more power than others. One of the major changes when Christianity comes along is that people are not part of nature, just the part of nature that happens to have reason and virtue.
Now, human beings, they're part of nature, but also supernatural because they have souls, and they're made in the image of God, and so, human beings have a mandate from God that places them over nature, not just within nature, and that has an egalitarian effect, human dignity is more equally distributed, and that took time to work out socially. They didn't all just suddenly recognize that in the first century and immediately reformed society, but over time in the Christian world, the equality of human dignity worked itself out.
Scott Rae: And, the view that Keynes at least assumed if not popularized is really quite different than that.
Greg Forster: Right, it's the human beings are consumers rather than producers. That what's significant about human beings is that they consume resources, and that in order to be happy they have to have resources. Interestingly, Keynes himself is part of this Bohemian group called the Bloomsbury Group, which is a bunch of sort of Bohemian artists, and philosophers, and some of them are scientists, and they look down on the consumption oriented masses, but this kind of elite perspective that we are the few artistic, and philosophical elite who knew better comes along with an assumption that everybody else is just a consuming drone, right?
So, although they look down with contempt on consumption oriented society, they did think that a consumption oriented society was the only thing fit for most people, and so, they actually implemented... Keynes in his economics implements a consumption oriented society for the masses, even though that's not what he thinks is worthy for the best and brightest.
Scott Rae: It's quite a low view of a person. What about the consumerist part? I think, is that fair to say that Keynes enshrined consumerism?
Victor Claar: Keynes was very influential in framing the ways that modern Americans think about themselves, and their economic life, and some of that happened with Keynes, but a lot of it came along a couple of decades later in the 1960s, so popularizers of these ideas for the masses in the United States were people like John Kenneth Galbraith, who through his book The Affluent Society, got people super focused on consumerism. In The Affluent Society, John Kenneth Galbraith frustration was with Madison Avenue Advertising, and he made the argument that Americans in the 1960s during the Madman Era, they in fact were helpless, automatons who were going to the store, and buying Cocoa Puffs, not because they really needed them, or really liked them, just because they thought they did through powerful advertising.
Now, my response to that sort of claim would be, well this would be great. Let's get people to really think about whether or not they need Cocoa Puffs, and whether there are other life choices they can make that would be more valuable. John Kenneth Galbraith said, "No, we need government to intervene in the advertising space, and in the production space as well so that we have better consumption goods available to us, and we're not as drawn away by fancy advertising."
Scott Rae: Okay, so in light of that, what do you guys make of the critique that we often hear that market economies are producing unhealthy consumerism? We've seen on the surface that, that might have some merit to it.
Greg Forster: I think the question is what do you mean by a market economy? Does respecting human rights produce consumerism? Would be another way of putting it, but once you respect people's property rights, you have said some sort of market economy is what you're going to have, because if people have basic rights to own property, and not have it arbitrarily taken away from them to enter into contracts, and not have those contracts arbitrarily abrogated, or messed with, then you're saying you want some sort of market economy.
It's one thing to say the market economy produces consumerism. It's another thing to say respecting human dignity and human rights gives people the freedom to make their own choices, which they often use in consumeristic ways, but I think we can go beyond that. I think, we can go beyond that, and say we didn't have this consumerism before the rise of systems of thought like Keynes's and like Thorstein Veblen's, and others, which kind of encouraged us to think in this way, and it's not just by... Let me put it this way. It's true that by giving people the right to control their own lives you are creating space which can be used wrongly, and people will have some level of vise, some level of crassness regardless, because if you give people freedom, people will sometimes use it wrongly.
But, we've also had the rise of these systems of thought that have encouraged people to think consumeristic, to think of themselves as consumers that have told people you will be happy if only you consume the right things, or the most things, and those systems of thought are not closely connected to the rise of protection of property rights, and protection of contract rights in the historical emergence of markets. It is logically possible to have a market economy without a consumerous culture. We haven't seen it for a while because we've been under the domination of these consumers ways of thinking for about a century now.
Scott Rae: Maybe it'll be more accurate to say Keynesian market economy consumerism.
Victor Claar: Right, it is. Consumerism is endemic to that. Well, and I [crosstalk 00:26:19].
Scott Rae: Is that fair?
Greg Forster: I think it is. I think if we think about economics the way Keynes taught us to think about economics, I think, no one's getting away from consumerism within that paradigm, and I would add that not only Keynesian's think this way, but other schools of thought in economics that are critical of Keynesianism have absorbed this way of thinking, so we can't escape from this by leaping from the Keynesian's to the Chicago school of economics, or the Austrian school of economics, which are critical of Keynesianism, but have also assimilated this Keynesian consumer mentality. We need a much more radical rethinking.
Scott Rae: So, something that's, is much more clearly grounded in a Christian worldview?
Greg Forster: I would say as Christians we want something grounded in a Christian worldview. We also live in a pluralistic world where we don't have the right to assume that everybody's going to be Christian. What we call for in the book is what we call moral consensus, that as Christians participating in a pluralistic society, we want to operate where we can find overlap with our neighbors on moral affirmations that we believe in, but they also believe in, so that we aren't simply reduced to a sort of crass consumerism with no moral content.
Scott Rae: One or two other questions. Let's say that we have an economy's only purpose is to create prosperity and satisfy consumer preferences. I could see people saying, "What's wrong with that? So, it is what it is, and we don't rely on other institutions to do, which is to shape and frame us morally. We rely on churches and volunteer organizations to do that." What's wrong with that view of economic life?
Victor Claar: Well, I think part of the legacy of Keynes is the legacy of Keynes's been so broad and sweeping, that it hasn't changed just the way that economists do economics. It's really changed the way that a typical person sees himself in relationship to the economy, so if we reminded ourselves of some guiding principles, some tried and true guiding principles that we should leave things better than the way we found them, that we should be good stewards because we want our grandchildren to have better lives than we ourselves have had.
If we could sort of take back the discourse, take back the way of thinking about ourselves and these economic ideas, then we could change the entire nature of the conversation that we have as a society. I think right now everybody is so focused on having a better car, having a bigger house, and we've been told by not only advertising, but also by our reference groups in society who are also informed by the Keynesian legacy.
We've been distracted by these things that are transcendent, so I agree with you Scott, the church and the family are instrumental in reminding us of what economics is for, and that is deeply rooted in moral theory, but I also think that Greg is correct that we need to have conversations in which we also remind ourselves about these things that we all agree on. My sense is if we went out in Grand Rapids, Michigan today and interviewed 50 people on the street, and you said, "Do you think that a human life has intrinsic human dignity?"
You would probably get 50 out of 50 individuals to say, "Yes, that's true." And, if we could begin to identify simple things like that upon which we agree, then having conversations about what consumption is for, what production is for, what work is for those become much easier and less contentious and more productive conversations.
Greg Forster: I would say you may not be interested in economics, but economics is interested in you. I mean, what Victor is pointing to is the role that institutions play informing us that human beings are not just autonomous moral agents who make their choices in a vacuum, that we're shaped by the institutions that we participate in. If we have an economy that's purely materialistic we will be shaped into materialistic people by our participation in the economy. That's why it's not optional to raise these questions in every area of life, including the economy.
Scott Rae: Now, I think that's a good place to stop this. I mean, I realized we've just scratched the surface with the book, and I think this calls for a follow up conversation at some other time on this, but I think these are really good admonitions, I think to recognize how Keynes' view of economic life has shaped our own sense of who we are as persons, and who we are as consumers, and to reclaim that, and to reshape that from a, I think, for us being Christians, a distinctly Christian worldview, but recognizing that we need to have common ground with a wide variety of worldviews.
I think your point is right. I think there is a sufficiently deep reservoir of shared values and virtues to be able to do that fairly well when it comes to something as ubiquitous as our economic life, so I would highly commend your book The Keynesian Revolution in Our Empty Economy, Victor Claar and Greg Foster. Maybe for some of our listeners that might want maybe a little lower shelf introduction to Christian faith, and economics, Victor, your book, remind me of the title [crosstalk 00:32:07].
Victor Claar: It's Economics in Christian Perspective.
Scott Rae: Economics in Christian Perspective published by University Press. It Would be a really great place to start as well, so guys, thanks for being with us, thanks for bringing what you've done, a great piece of work on in a highly technical subject, but made it accessible and understandable to people who are not trained in economics, so much appreciated for your good work on this.
Victor Claar: Thank you, Scott.
Greg Forster: Thanks for having us.
Scott Rae: This has been an episode of the podcast Think Biblically, conversations on faith and culture. To learn more about us, and today's guest, Dr Greg Forster, and Dr. Victor Claar, and to find more episodes go to biola.edu/thinkbiblically. That's biola.edu/thinkbiblically. If you enjoyed our conversation today give us a rating on your podcast app, and share it with a friend. Thanks so much for listening and remember, think biblically about everything.