Last week I attended a lecture by Professor Charles Munn OBE on banking at Augustine United Church, the last of the series put on to mark Augustine’s 150th anniversary. In it Professor Munn, whose academic career centred on the history of banking in Scotland, made clear that our current problems differ only in scale from the periodic banking crises that have always marked that industry’s activities (and which are a very common plot device in nineteenth century novels) and that changes in regulatory regime designed to favour customers over a perceived anti-competitive cartel are an important part of the story.
In informal discussion after the lecture someone remarked that the Kingdom of God would not be delivered through the market and it struck me that I wasn’t at all sure that was so. Pursuing that line of thought reminded me of a problem with the use made of the Biblical record on economic matters and of my recurrent thought that everyone who wants to think seriously about these matters should read at least one or two of Iain M Banks’ “Culture” novels, a loosely linked series of science fiction books set in the distant future.
I can’t cover all this ground in a single post and have any hope that anybody would read it to the end but I’ll try a brief outline of why I think they’re linked.
One way of thinking about markets is as a way of regulating and distributing access to scarce resources, where scarcity is defined as there being less supply than the maximum possible demand. That is to say when there’s less of something than would be consumed if everybody got as much as they would take if it were freely available then that something is “scarce” in this sense, which means that almost everything is scarce.
Where there is scarcity then some system has to be put in place to distribute the limited amount of whatever it is. Markets fulfil this social purpose by allowing everybody who has something in scarce supply (for most of us for most of the time this is our ability to work) to sell it to somebody who has in turn sold something else to raise the money to buy it. A process of supply and demand sets the levels both of production and consumption via the establishment of an equilibrium price at which the market in that good “clears” (in the technical language of neo-classical economics).
Before the advent of modern capitalism at the end of the middle ages access to scarce resources in Europe was determined primarily through a combination of customary law and naked force.
What should be noted here is that the emergence of capitalism enabled unprecedented and astonishing rises in the levels of productivity in all the factors of production. Through the combination of freedom of economic action and competition (relatively) free and open markets innovation developed techniques that massively expanded what was possible.
Some people doubt that this was altogether a good thing, but I am not one of these doubters. I regard the way we live now as pretty straightforwardly better than the way people lived in the 13th Century and have as little doubt about this as I do about anything,
This explosion of creativity was enabled by the market and as the mechanisms of this began to be understood Adam Smith famously wrote of the market’s “hidden hand” in language surely consciously echoing 18th Century doctrines of Providence. It is very unfashionable now to link Providence and the ways in which the mechanisms of the market operate to discover and exploit opportunities for advance, but maybe there is something in this.
To understand why it’s worth thinking about what Iain Banks is up to with his Culture books, which are consistently intelligent about social theory and deeply concerned with religion (if not always friendly to it). In them Banks makes the most sustained attempt I know of to imagine what a post-scarcity social world would have to look like and how it would operate. He invokes technological advance to create a social world in which nothing is limited in supply, even land.
This possibility relies on the kind of driving of productive power that has only ever come about through the operation of a capitalist economy (of which, incidentally banks are an absolutely indispensable part).
My question is whether the end of scarcity is a necessary characteristic of the realised Kingdom of God? If so the evidence of history would seem to indicate that the market is the only mechanism with any hope of delivering it. (The other way of ending scarcity is through the limitation of demand to meet supply, maybe something to discuss another time but suffice it to say I think it’s a bad idea).
Any properly theological account of all this needs to link these considerations of economics with the Biblical witness, which seems to presuppose a very different vision of economic life and production. The Old Testament mostly seems to presume a view of land as the overwhelmingly central factor and of land ownership as conferred directly by God to Israel and distributed to tribes and families within Israel in patterns of use/ownership that are fixed and unchanging. Change of ownership is only temporary and in principle all land should revert to those to whom God has granted it.
The vision of the Kingdom of God that emerges from this is the famous one found in Isaiah and Micah in which everyone enjoys the produce of their own piece of land in undisturbed and peaceful possession.
Our options seem to be: a) to think seriously about how to make this vision fit with a dynamic and evolving order in which an advanced division of labour is the only way to achieve levels of productivity that can support our population and standard of life; b) to urge a return to levels of population and consumption consistent with subsistence farming; or c) abandon the Old Testament witness.
I think that for any Christian serious about engaging with the problems of the modern world a) is the only acceptable path and for me it may well involve accepting that (using Smith’s hidden hand) the market is indeed the instrument God is using to advance the Kingdom.