Academic journal article Journal of Markets & Morality

Does Current Economic Theory Impose a Materialistic View of Work?

Academic journal article Journal of Markets & Morality

Does Current Economic Theory Impose a Materialistic View of Work?

Article excerpt

Introduction

Economic modeling has proven to be very useful for understanding the behavior of individuals and broad movements in markets. In labor economics--the subfield that focuses on the behavior of labor markets, wages, jobs, and education--the basic economic frameworks do an excellent job describing much of the most important phenomena. We know why some professions are more richly compensated than others. We know a lot about the impact of investments in education and the movement of immigrants.

The usefulness of these models does not, however, always allow us to draw useful ethical conclusions about behaviors or institutions. In particular, economic modeling tends to provide a good vocabulary for talking only about the material elements of labor market behavior. Work is described only in terms of time, productivity, and compensation. Empirical observations are framed by a body of theory that posits that the preferences of consumers and workers drive decisions about how much to work and how much to value the output. Businesses are reduced to organizations that focus narrowly on maximizing profit. Because this approach explicitly leaves out questions of purpose, virtue, relationships, and the common good, nonmaterial elements of work are rarely given significant attention in economic discussions. We argue that, as a result, economic analysis overemphasizes material considerations when thinking about work and leisure and thus ill-informs ethical thinking about labor markets and work.

In contrast, the growing literature on the theology of work offers a fine corrective. While leaving much of the empirical analysis of material production to the disciplines of economics, management, and engineering, this body of work includes a coherent and robust literature that explores the ultimate significance of work and leisure. In many of these accounts, daily work in the commercial realm can be genuine service to God and neighbor, can be guided by the Spirit, and can be used by God in bringing about a new creation. In short, humans are created and called to serve God in productive material ways.

When integrated with economic analysis, this theology lends itself to a much richer ethical account of labor market participation, which can be used to illuminate and add depth to significant public policy debates. We summarize three ethical principles from this literature and conclude with brief applications to the discussion of the minimum wage, trade, technology, universal basic income, and the measurement of economic progress.

Standard Economic Framework

Economists think about human work in two ways. (1) From the perspective of the worker, labor is purely a means to an end. People are assumed to get pleasure from leisure and consumption. (2) Time spent working diminishes leisure but is rewarded with wages that allow for the purchase of goods and services. This sets up the central trade-off for the worker: labor, which funds consumption, versus leisure, which is good for its own sake. This simple framework, while incomplete, allows economists to explore many common economic phenomena: job search behavior, time spent working, retirement, and responses to income taxes and means-tested government programs.

The second way that economists think about work comes from the perspective of an employer. Workers offer time and skills that can be obtained in order to produce a good or service for a firm. The goal for the firm is to produce goods of high value at low cost in order to maximize profits. Labor is thus evaluated in terms of the productivity (value produced) and the cost (wages). This framework is important for understanding how firms invest in new training and machines, how many workers they hire or lay off, and the impact of immigration and wage regulations.

In both of these models, work is valued in material terms. For the worker, labor is valued as a way to get wages and ultimately purchase and consume desired goods. …

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