King's Evangelical Divinity School

6 November 2010

Economics - Pretty Powerful Stuff!

This week Britain and France signed a unique defence cooperation pact that will see, of all things, the sharing of aircraft carriers for many years. Given  aircraft carriers represent important mobile extensions of sovereign territory, providing important and economic presence and permitting expeditionary warfare far away from our own coasts, this is quite a major long-term pact. It is significant, too, because it is unlikely to end there. Sharing major pieces of kit like this will likely lead to military cooperation between the two countries at lower levels too.

The reason for this remarkable pact? Economics, pure and simple. With a massive deficit, a Coalition government coming to power and finding no money left in the kitty, and a global austerity drive, this kind of pact saves money, big money. After all, it makes sense economically (though not so sure it will do so militarily further down the road). Ironic, too, that it is a Conservative-led government which has delivered it. Thus, the European Coal and Steel Community eventually gave way to the EEC, the EC and finally the EU. But far less known in the process was the attempt to establish a supranational European Defence Community (EDC) in the 1950s. Yet this new pact between two of Europe's biggest military powers could, conceivably, result in resurrecting the aims of the original EDC, that is, closer EU military cooperation, and who knows, maybe a precursor to an EU army. If the demise of the Cold War and the waning importance of NATO made it possible, the economic situation is the trigger that makes a future EU army quite likely. But who would have thought so, and especially the UK's involvement, less than a decade ago? In short, as with nearly everything, it all comes down to economics.

Which, EU armies and politics aside (and regardless of one's views concerning the feasibility of an EU defence force), the power of economics to change everything isprecisely what I'm getting at. Whether espousing Marxist materialism, Clinton's famous soundbite which pointed out  how ultimately it is economics that wins - and loses - elections ("It's the economy, stupid!"), economics is a powerful determinant of human behaviour. As such, it represents a fundamental challenge to Christianity and a Christian worldview. Whether anti-Christian Marxist materialism, the worse excesses of Capitalism such as greed and exploitation, or issues such as poverty, and so on, I suggest it is impossible for Christians to avoid this central plank of modern culture, society and human behaviour. It drives human endeavour, while its excesses are the cause of all manner of sinful activity ("the love of money is the root of all evil"). This is why it is essential for Evangelical Christians seeking to engage the public square to give considerable thought to developing a biblical theology of economics. After all, how can we challenge society and claim to have imaginative answers to pressing issues unless we do? There is a lot in the Bible about economics, and there are some theological books out there dealing with this very issue, but far too few. Interestingly, it has taken an economic downturn to create a more widespread interest in this topic, and I think we are going to see more publications in this field in due course.


Anonymous said...

Hi Calvin,

[part 1 of 2]

A very thought provoking post indeed [and a subject that greatly interest me too!!]. I agree that economics has the power to change everything but I wonder if an even greater power of persuasion is that of the spin and presentation put upon the economic reality. Here in the UK we have recently had a general election largely dominated by economic issues generally and that of deficit reduction specifically. It appeared to me that the issue so central to the economic argument at the time of the election was that of whether to raise £6 billion this year via a universal NI increase and thus defer addressing deficit reduction until at least next year [New Labour’s position], or whether to begin cutting the deficit this year [Conservative position]. I appreciate that this is a simplified generalisation of the arguments held during the election but it serves to frame the current political situation whereby we are now presented by the Mainstream Media with the prospect of almost barbaric levels of public spending cuts hitherto unknown to mankind. In recent weeks for example, such is the dominance of the ‘cuts’ narrative that I have read comments by The Guardian’s Polly Toynbee comparing the annual cap of £24,000 per Housing Benefit claimant to a ‘final solution’ for the poor, whilst the BBC’s World Affairs Editor, John Simpson has compared the new BBC licence fee deal with the torture tactics of waterboarding. This is not the sort of kneejerk and uninformed journalism I wish to read.

Perhaps I could supply a little analysis of my own here that may suggest the ‘cuts’ narrative is not all it is presented as. According to OBR estimates [yes I am sad enough to read parts of it!!] government spending is forecast to be approx £695 billion this financial year, rising incrementally over the next 4 years to £737 billion in 2014-15. Much of this increase in spending will of course be interest on the huge deficit Britain now has, yet in spite of this the size of Britain’s net public sector debt is set to increase and not decrease every year from approx £930 billion now to around £1.3 trillion in2014-15, so paradoxically whilst the annual deficit reduces, the total interest charges on the debt will increase over the next 5 years. In effect all that will be achieved is a slowdown in the rate of increase of government borrowing.

Now let’s place the above in some context. Think back to the general election of 2005 and Mr Blair and Mr Brown, hoping to win another term of office, promised to spend approx £520 billion on Britain’s public services (of this, approx £25 billion was interest payments, thus a net spend of £495 billion). Compare this with the current year’s prediction of £650 billion (£695 billion minus £45 billion interest payments) and even after adjusting for inflation we are hardly in ‘final solution for the poor’ or ‘waterboarding’ territory are we? In fact the Coalition is spending more in real terms than New Labour did in the election year of 2005.

David Williams

Anonymous said...

[Part 2 of 2]

It seems to me that we are being sold an incomplete narrative about the economic situation we face here in the UK. This narrative is of course politically driven and whilst it is highly persuasive, it fails to reveal the truly perilous nature of the British economy. We have of course in Britain become accustomed to the message that the years of ‘boom and bust’ are over and that economic paradise beckons. This message encourages the casting off of all financial restraint and stewardship at every level of society – personal, corporate and governmental. You don’t need to be a rocket scientist to see that when you spend what you do not either earn of have saved, the ultimate outcome will be unpleasant. As evangelical Christians it is imperative that we strive to challenge some of the narrative intelligently, coherently and biblically. It is an ideal time to really rediscover gospel truths, to trust in the Word of God as never before and to be a people who reach out to a world that has no ultimate answers, to show that our faith whilst tested is truly more precious than gold. Finally we should realise that real faith rejects any daft notion that the Bible was written to improve our own temporal prosperity and investment portfolios.

I hope that you are correct in saying that we can look forward to more publications in the field of economics from a biblical perspective in due course. I certainly look forward to reading such publications.

David Williams

Stephen Kneale said...

I am thoroughly intrigued how those who push a 'prosperity gospel' will deal with the global economic downturn given that it affects those who purportedly have enough faith to warrant great wealth just as it affects those supposedly lacking sufficient levels of faith to bring monetary rewards? I envisage some fudge along the lines of the collective lack of faith in society at large causing the global economy to take a nosedive.

Calvin L. Smith said...

Ben Witherington has just published a book entitled Jesus and Money which (among other things) explores precisely the prosperity gospel in the wake of the economic crisis.

Stephen Kneale said...

It would be interesting to hear how they interpret a collective economic downturn - I suspect a fudge along the lines I mentioned before. It would also be interesting to note if there are m/any high profile prosperity preachers who, having made a mint, found that they have hit the skids themselves. If there are do they continue to preach the same gospel and highlight themselves as evidently lacking faith or do they recant shortly after losing their wealth?