Academic journal article Journal of Markets & Morality

Connections between the Austrian School of Economics and Christian Faith: A Personalist Approach

Academic journal article Journal of Markets & Morality

Connections between the Austrian School of Economics and Christian Faith: A Personalist Approach

Article excerpt

The aim of this article is to clarify why the Austrian approach to economic analysis provides a good anthropological fit with Christian theology in seeking to develop an integrative science. In doing so, the article affirms and supports the three--volume work of the Acton Institute, which aims to provide a foundational basis for economic personalism.

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.

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 Methodology (1)

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.

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. …

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