Economics for the Poor

How moral is the market? This question has long been the source of heated debates that all too often degenerate into shouting matches. One side decries poverty, exploitation, environmental destruction, child labor, races to the bottom, and the like; the other side fights back with claims about the foolishness of government interventions and the horrors of socialism. Among the more informed scholars in these debates are, on one side, philosophically and religiously trained social ethicists who tend to be critical of the market, and, on the other, economically trained social scientists who are more inclined to think highly of the market’s ability to bring about good, even for the poor.

Shouting matches aren’t the only possible rhetorical style for these debates. Constructive conversation may also arise when the two sides make good-faith efforts to really engage each other. Sometimes that happens in interdisciplinary gatherings, such as when several other Christian economists and I were invited this past spring to join a Presbyterian Church (USA) consultation on globalization. Other times it occurs when a single scholar delves with serious resolve into both ethics and market theory. Such is the case with Kent Van Til’s Less Than Two Dollars a Day: A Christian View of World Poverty and the Free Market, a book that results from Van Til’s doctoral studies in ethics at Marquette University. Van Til’s knowledge of the market comes from a master’s degree in business from Northwestern University, several years of experience in the advertising industr y, and a close relationship with an ethically minded economist who ser ved on his dissertation committee.

Less than 2 dollars a day

Van Til’s interest in the topic of poverty was inspired by his mission experiences in Central America. Like many people who have encountered poverty face to face, he responded first with shock and shame and then with a commitment to get to the bottom of the problem. Hence the present book. Van Til begins his explorations harboring the suspicion that the market and its failings are the likely culprit behind the world’s unequal distribution of economic benefits and burdens. What he discovers is that markets are indeed fundamentally flawed, not because real world markets are “necessarily” (he uses this word a lot) bad, but because mainstream economic theory has intentionally and somewhat disingenuously failed to embed moral considerations in its structural framework. The reasons for this failure are both philosophical and historical (the positive-normative split and all that), but for Christians aware of the Bible’s intense interest in matters of economics, it remains a serious fault.

Turning to Scripture and mainstream Christian intellectual traditions for insights on the ethics of economics and poverty, Van Til finds compelling and widespread support for “at least one norm about how the goods of this world should be distributed: that they be distributed in such a way that all humans have basic sustenance” (84). Translating this norm into contemporary rights language, he argues that every individual has a right to basic sustenance and that the responsibility for meeting claims based on these rights rests with society at large. If markets are indeed to be moral, then certainly economic theory and the real-world markets based on this theory must incorporate at least this one biblical norm.

Having made this fundamental point, Van Til takes on a major additional task, which is to identify what basic sustenance really is and to include that in a working theory of justice. Drawing on Amartya Sen’s capabilities approach to conceptualize human need, Abraham Kuyper’s ideas on sphere sovereignty, Michael Walzer’s notion of “spheres of justice,” and David Miller’s depiction of three types of human relationships (solidarity, instrumental, and citizenship), Van Til ultimately argues for social arrangements that take into account notions of justice based on three distinct sets of rights: human need, equal treatment, and reward according to contribution. Van Til then argues for the following definition of distributive justice: “A state of just distribution occurs when all members of humanity receive their basic needs, when citizens receive equal treatment, and when producers receive proportional reward on the basis of their contribution” (143). In such a society, everyone has rights and everyone has responsibilities to others. According to Van Til, mainstream economic theory honors two of these rights, equal treatment and reward according to contribution, but fails to account for the right of everyone to basic sustenance. For Christians this is clearly not good enough.

Having shown that mainstream economic theory is ethically unacceptable, Van Til is left with the huge questions of how economic theory ought to be reconceived and how society can or ought to be restructured to actually achieve such a just distribution of benefits and burdens. But this is where the book essentially ends. Does the market still have a role to play? How about the state? Civil society? Business leaders? Private citizens? Van Til says the answer to all these questions is yes, but though he ushers us to the job site, he leaves the heavy lifting to others. Van Til claims periodically that he does not oppose markets or (that word again) necessarily support redistribution, communalism, or handouts. Instead, he argues that he “cannot pretend to answer a host of such policy questions” (156). He simply encourages us to build economic theories that, unlike the current version of mainstream economics, intentionally include justice considerations in their basic orientations. Maybe the reason Van Til stops here relates to his contention that poverty would be easy to resolve if we really wanted to resolve it.

As an economist, I have no argument with Van Til that poverty is a moral issue, and he is certainly correct that those of us in positions of power have not taken our responsibilities seriously enough. But surely Van Til is wrong in saying that we “already know how to effectively improve human welfare,” and that “the problem…is not a technical one” (161). His brief ly defended suggestion that increasing foreign aid will do the trick rings hollow. I just read an inter view in Der Spiegel with a right-wing Kenyan economist entitled “For God’s Sake, Please Stop the A id.” James Shikwati is not alone in arguing that foreign aid has brought more harm than help. True, some well known economists like Jeffrey Sachs argue for a big push of aid to help A fricans escape their various poverty traps, but other equally well respected economists, like William Easterly, heartily disagree.

Other “technical” issues are just as controversial. Globalization and its attendant outsourcing are defended by some, attacked by others. Do neoliberal economic programs help or hurt the poor? People of good will argue the point strongly, but on both sides. Nor is there an easy or obvious fix for ethnically or religiously divided nations like Kenya, Iraq, Guatemala, Nigeria, and so many others. In the United States we are likewise divided over how to ethically address health care, immigration, education, housing and credit policies, the environment, and on and on. For those of us who agree with Van Til’s argument that we have a moral obligation to the poor, the technical questions continue to be daunting.

Van Til is also right that mainstream economic theory is morally challenged, but perhaps he makes more of this point than is warranted. In January I attended the annual convention of the American Economic Association, a gathering of thousands of (mostly mainstream) economists. Many, many sessions addressed how to improve poverty programs, income distribution, environmental stewardship, and other ethically laden social goals. Five headliner sessions were styled “Better Living through Economics,” with the keynote paper entitled “Using Economic Research to Improve the World We Liv
e In.” It is true that most of this research takes what Van Til calls an instrumental approach, employing tools that economists believe to be ethically neutral, but it is overly simplistic to imply, as Van Til seems to, that mainstream economists are ethically agnostic.

For all that, Van Til has shed some light on the question of the morality of the market by reminding economists and others how central it is to conduct our theoretical and practical work with a marked preference for the poor. He is right that we need a more enlightened will. We also need more light to show us the way.

Roland Hoksbergen is professor of economics at Calvin College in Grand Rapids, Michigan.