Confidence or Chaos: Toward a Christian View of Economics

Why Economics Matter in Classical Christian Education

This is another installment in my Primer on Classical Christian Education. Admittedly, it will seem a little jarring if you’ve been following the serial release of various sections. This section is still in the rough, incomplete, and out of order, but the crux of the idea should be obvious. The thesis is that like market economies, small decisions in the family often have larger than expected consequences; so, one’s ability to flourish will rise and fall on a proper philosophy of household stewardship. Ergo, economics is an indispensable feature of a robust classical Christian education.

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The proverb, “Money flees chaos,” is as true in family life (the original economy, oikos ‘house’ + nemein ‘manage’) as it is in global financial markets. To make my point, I’m going to do the unthinkable and dissect the frog. That is, I’m going to take this axiom apart so we can understand it better but, regrettably, will kill the beauty of the proverb in the process.

Chaos Theory

Chaos, in this context, refers to what the mathematician, Edward Lorenz, coined as chaos theory (also known as “the butterfly effect”). He framed chaos theory as “when the present determines the future but the approximate present does not approximately determine the future.”

In other words, what seems to be an expected consequence of a particular action often has unintended subsequent consequences through a series of unexpected chained reactions. A similar idea is what the Athenians were getting at when Thucydides famously recorded their warning to the Spartans about starting a war:

Take time then in forming your resolution, as the matter is of great importance; and do not be persuaded by the opinions and complaints of others and so bring trouble on yourselves, but consider the vast influence of accident in war, before you are engaged in it. As it continues, it generally becomes an affair of chances, chances from which neither of us is-exempt, and whose event we must risk in the dark.¹

The Athenians warned the Spartans to consider the vast influence of unanticipated reverberations in wars. Once a war begins, everyone is in the dark as to how it will end. No matter how good a strategist one thinks he is, war is most often an affair of chances, and they should count the unexpected costs before breaking the treaty.

This is the same kind of better-count-the-costs reasoning Jesus was using when he warned “the great crowds” who were following him to think hard before they decided to follow him:

“For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ Or what king, going out to encounter another king in war, will not sit down first and deliberate whether he is able with ten thousand to meet him who comes against him with twenty thousand? And if not, while the other is yet a great way off, he sends a delegation and asks for terms of peace. So therefore, any one of you who does not renounce all that he has cannot be my disciple.” -Luke 14:28–33

To be a disciple of Jesus is to renounce all that one has because we don’t know what the future holds or what the Lord will require of us at any given time. It might cost you more than you initially thought you’d have to sacrifice. So, don’t lay a foundation you’re not prepared to finish building on, Jesus warns. And, don’t commit to war you’re not prepared to fight. But let’s not digress too far from our goal in this post.

Counting the cost in these contexts highlights the idea that in just about every decision we make there are hidden costs. It takes the humility to be honest with ourselves about our real motives and the limits of our competencies, and the wisdom to discern the possible contingencies and subsequent ripple effects to righteously discern hidden costs of our decisions.

As it pertains to economics, the economist, Thomas Sowell, called this “Stage One” thinking. In his book Applied Economics. He notably warned voters to look beyond the immediately obvious consequences of their decisions. He wrote,

Economics requires thinking beyond the immediate consequences of decisions to their long-term effects. Because politicians seldom look beyond the next election, it is all the more important that voters look ahead—beyond stage one— rather than voting for a candidate or a policy that they will end up regretting later.²

Thus, the universal understanding that a small disturbance in a given complex system can yield unexpected and often outsized consequences is baked into sound economic theory. This leaves it up to us to ascertain the best way to plan for and hedge against these contingencies.

The Search for Stability

Having established some understanding of chaos theory as it applies to economics, we can return to our maxim, that “money flees chaos.” This maxim implies that whenever government policies or corporate institutions generate (or seem to generate) disorder, capital is shifted away from the chaos and toward something more stable. It should not be surprising then that for investors, trust and predictability are even more valuable than good interest rates. The desire for stability is the chief reason economists and politicians argue so much about inflated currencies, regulation of trade, and the like. Capital is always in search of stability and finding the best solutions for stabilizing an economy is good for everyone.

To give an example, we might consider the Austrian economist, Friedrich Hayek, who strongly opposed centralized economic planning and advocated for free-market economies because he recognized small, local disturbances often have the larger systemic effects described in chaos theory. In an essay titled, “The Use of Knowledge in Society” published in The American Economic Review in 1945, he argues that information is generally local and tacit and because individuals will act on what they know, those signals will aggregate into a more meaningful price system than an artificial government-regulated price system. Therefore, free-market economies are the best guardians against contingencies and the most effective strategy for fostering stability.

We can conclude that we live in a complex and fluctuating economic world with a sensitive dependence on stability. Markets, policy interventions, and social institutions are not linear machines, so even small perturbations, feedback loops, and dispersed knowledge can have large, unforeseen effects. And, what seems to us to be minor conditions at the outset of a decision can produce unpredictable, complex behaviors in the larger marketplace (i.e., have an inscrutable ripple effect). Thus, stability attracts capital and chaos drives it away.

The Family Economy

So, what does this mean for the family economy? It means the same is true at home as it is in the wider marketplace. If a family lives reactively or impulsively—has a consumer mentality, seldom thinks about tomorrow, isn’t purposeful about creating financial cushion and time margins, etc.—in a relatively short time, their financial life will reflect the chaos of their habits.

Interestingly, while a lot of modern Christian families assume the Bible portrays a negative view of the accumulation and possession of wealth, the Scriptural position is quite the opposite. Consider the wisdom literature of Proverbs: “In the house of the righteous there is much treasure, but trouble befalls the income of the wicked” (Proverbs 15:6).

The word righteousness here means one who “maintains the right and dispenses justice” or one who possesses “just judgment.” Another way of articulating this is to think of one who is prudent or wise in their discernment of what is not only right and wrong but what is good, better, or best. Again, Proverbs:

“Blessed is the one who finds wisdom, and the one who gets understanding, for the gain from her is better than gain from silver and her profit better than gold. She is more precious than jewels, and nothing you desire can compare with her. Long life is in her right hand; in her left hand are riches and honor. Her ways are ways of pleasantness, and all her paths are peace. She is a tree of life to those who lay hold of her; those who hold her fast are called blessed.” -Proverbs 3:13–18

““I, wisdom, dwell with prudence, and I find knowledge and discretion. The fear of the Lord is hatred of evil. Pride and arrogance and the way of evil and perverted speech I hate. I have counsel and sound wisdom; I have insight; I have strength. By me kings reign, and rulers decree what is just; by me princes rule, and nobles, all who govern justly. I love those who love me, and those who seek me diligently find me. Riches and honor are with me, enduring wealth and righteousness.” -Proverbs 8:12–18

Righteousness and wealth are hand and glove in the Scriptural view of human flourishing. It is the love of money that is problematic, not money itself or the righteous accumulation of it. Ironically, the love of money is a specific kind of unrighteousness that pierces or wounds a person’s ability to flourish—craving (i.e., greed or lust). Paul tells Timothy, “For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs” (1 Timothy 6:10).

And, again he reminds his Hebrew readers: “Keep your life free from love of money, and be content with what you have, for he has said, “I will never leave you nor forsake you”” (Hebrews 13:5).

Greed, and the lust for money, is a kind of unrighteousness that brings ruin to a person’s soul and subsequently to his ability to flourish. But what is most interesting is both of God’s books: Scripture and the natural order of the world (i.e., economics) teach us that unrighteousness (i.e., imprudence or foolish discernment), also chases wealth and honor away. Solomon warns:

“The backslider in heart will be filled with the fruit of his ways, and a good man will be filled with the fruit of his ways. The simple believes everything, but the prudent gives thought to his steps. One who is wise is cautious and turns away from evil, but a fool is reckless and careless.” -Proverbs 14:14–16

Where righteousness and good discernment exists in a household, there is stability—and except for some unique circumstances, wealth and honor naturally flow into it. Where unrighteousness (i.e., chaos or greed) exists, however, wealth and honor flee from that house. One way to think of this, practically, is to recognize that, generally speaking, families that order their days (i.e., they rise at fixed hours, plan their meals, steward their income, delay gratifications, are of one mind in Christ, properly discipline their children³, etc.) tend to see their wealth and honor grow.

Of course, no one is immune from unexpected circumstances (i.e., shocks and accidents), which is why I wrote “general speaking” in the previous paragraph, but the righteous families provide stability in which wealth is invited and can rest. Just as capital in international markets avoids nations wracked by disorder, so also money flees households that are ill-governed. Order is an economic good because it is also a moral good. Unsurprisingly, the two are not unrelated.

Some Christians are fond of saying they do not care about money. But this position is unrighteousness because in the natural course of things, and as Scripture also asserts, the earning and accumulation of money is a signal of stability and prudence. Again, like all humanity, the Christian is fallible and also susceptible to market shocks and accidents, but the Christian has the added benefit of the Lord’s care and supply when finances fail due to market chaos (Proverbs 11:28).

From this we can conclude a proper study of economics is essential for an educated human being because chaos (i.e., market fluctuations) are not meaningless. It is a reminder of our humanity, our finitude, of our need for humility, virtue, and rational civic discourse. Similarly, Christian households are called to prudent living, to refrain from foolish attitudes about money, whether it be the love of money or the neglect of humble stewardship. One foolish act, one impulsive decision, can, via unimaginable interactions, lead to outcomes far beyond what we originally imagined when we made it.

Or, as another maxim says, “Sin will take you further than you wanted to go, leave you there longer than you wanted to stay, and cost you more than you wanted to pay.”

1. Thucydides, The Peloponnesian War, 1.78

2. Thomas Sowell, Applied Economics, vii.

3. Proverbs 17:21.