Broadly speaking, economics is the study of the choices that human beings make in the face of scarcity and the factors that contribute to that decision-making process. However, each human is a complex and unique being who deals with different constraints and preferences when making decisions about how to use scarce resources. Since the Industrial Revolution in Europe, economists have developed models to help find patterns of decisions within this complexity, such as supply-demand models and utility-maximization functions. While these models do not comprehensively capture the human experience, their value lies in that they simplify and generalize the choices presented to and chosen by human beings.
In recent years, these simple models have been criticized for the way they simplify human beings and the choices those humans make, and some people argue that economists should develop new models that explicitly capture the complex nature of the human experience (see Dr. Richard Thaler and his ideas about homo economicus). I partly agree with these economists: the simple models used by economists do not fully encapsulate all the facets of human choice and human nature. However, I claim it is less effective to sacrifice generally accurate simple models for (perhaps) more realistic, but significantly more complex models. In other words, the marginal benefit does not equal the marginal cost of creating and using these more complex models. Drawing evidence from the Creation story in Genesis, Paul’s reflections on suffering in Christ, and the Greek roots of “economy,” I argue that a more effective and holistic study of economics includes the traditional simple models paired with a theologically robust understanding of the human person.
To understand the complexity of human nature, one can first look to the Biblical origins of the creation of human beings. God created man in the image of himself as an expression of himself and his goodness,1 giving them an intellect, a will, and the capacity to be good. He provided humans freedom over those capacities and charged them with the responsibility to willingly choose to follow and love him. Unfortunately, the first humans, Adam and Eve, chose to use their freedom to disobey the command of God which allowed sin and death to enter the world through that choice.2
This plague of sin broke the direct connection between God and man leaving Adam and Eve in a fallen state of their world and their relationships. Subsequently, Adam and Eve’s choice corrupted all human nature and left people disconnected and broken from their creator, their fellow man, and from themselves. One of the critiques of simple models is that they imperfectly represent the human person; therefore, they should be replaced by a model that does so perfectly. However, because of the reality of human nature, human beings cannot create perfection, nor achieve perfection themselves.
With this reality in mind, it is clear that no matter the model that economists develop, the model will not change the choices and behavior of the corrupt beings it represents; changing the model will not change the nature of the people. If humans alone cannot achieve the perfect model, economists must base the merit of their models on a standard that is achievable in the current reality, such as universality or simplicity.
By understanding the limited capacities of human beings, economists can recognize the value of their simple models for yielding generalizable and accurate predictions concerning human behavior instead of trading them for more complex, less general, and equally imperfect models. This does not mean that economists should not work to improve their use of the existing simple models, but the reality of the Fall emphasizes human fallibility and requires economists to be realistic about the inherent nature of any man-made models.
Another critique modern economists have for simple models is that the models reduce a human’s value to one’s reflection of productivity in the marketplace. In place of this idea, some economists want to develop models that capture the value of the human person for one’s contributions within and outside market activity. While these economists are correct to argue that a human being is more than that represented by a simple model, this critique misses the value of the ability of these simple models to break down human behavior into observable and generalizable patterns. With the addition of a theological understanding of humanity, economic models can remain simple because economists can supplement them with a foundational awareness that the human person is much more than the model’s portrayal.
One model in particular that faces a lot of criticism is the utility-maximization model. In economics, utility broadly means something like a measure of a person’s overall satisfaction or happiness. The traditional model posits that rational people will always do whatever maximizes their utility. For example, a person will consume a good or service until the point when the person is not better off by consuming one more unit of that good or service.
Some modern critiques assert that describing human beings as either utility-maximizers or happiness-maximizers does not model the human being as a whole person. While I agree with this notion, these economists would do well to remember that a person’s utility, and a person’s maximization of their utility, encompasses so much more than that person’s individual happiness.
When God created the first human being, he said, “It is not good that the man should be alone.”3 He sent the man to name all the creatures in the world in order for him to find a suitable partner to help him take care of the garden.4 When no helper was found among the animals, God created the perfect partner, another human being, from the side of the first man.5 The Truth of this history is essential to a full understanding of the utility model: people are made to be in community with one another. This means that each person’s utility function is interconnected with his or her community
“Just like Christ demonstrated when he walked the earth, Christians must embrace both suffering and healing to complete the body of Christ.”
For example, a person’s satisfaction in life is likely fundamentally dependent on the happiness of that person’s friends and family, not simply his or her own utility. Misunderstanding and oversimplifying the idea of utility misses this essential part of the human experience and mischaracterizes the nature of utility as it has been traditionally understood. Though these critiques are correct that the whole person is not defined by maximizing his or her utility function, utility does capture the fundamental interconnectedness of a human being in a beautifully simple, effective, and universal way.
Analyzing the utility of Christians reveals an even more interesting Truth about the nature of the human person. After the Fall, Adam and Eve were punished with the burden of work and labor, destined to pass down their suffering and fatigue to all their children.6 Similarly, when Jesus came to reconcile the human soul to God in death, he also experienced suffering on earth because he came to the world as fully man. However, Jesus’ suffering was different from that of Adam and Eve’s because Jesus’ suffering changed the call and purpose of suffering for all human beings in the body of Christ.
Just like Christ demonstrated when he walked the earth, Christians must embrace both suffering and healing to complete the body of Christ. It sounds unusual, but Christians are called to recognize the value of suffering along with Christ. Paul writes that all Christians should even rejoice in their sufferings for one another, “In my flesh I am completing what is lacking in Christ’s afflictions for the sake of his body, that is, the church.”7 Christians recognize the experience of participating in the suffering of Jesus Christ and their opportunity to respond in a Christ-like way so that suffering is an explicit part of their interconnected utility functions. This theological understanding of the human person as it relates to the body of Christ expands the understanding of utility to encompass much more than just a person’s happiness.
Lastly, the etymology of the word “economy” itself reveals the need for a theological understanding of the human person in the discipline of economics. “Economy” comes from the Greek word “oikonomia” which is a combination of the Greek words for house (oikos) and marriage (nemein). Taken together, the root of the word “economy” means the management of a household. Therefore, in order to fully understand the role of simple models in economics, I must discuss the nature of home and the management of the human home from a theological perspective.
Pope John Paul II outlines the nature of the human home in an important way in his Theology of the Body.8 Carl Anderson and Jose Granados summarize his insight into the human body as a home in their book Called to Love. Pope John Paul II asserts that human beings are their bodies and their bodies act as “a witness to creation as a fundamental gift, and therefore a witness to Love as the source.”9 However, “the Fall inclines them to forget that they are their bodies; they no longer regard their bodies as a home or a temple but flee as from a prison or even as from a tomb.”10
Because of this, the human body, the human sense of “home” ceases to feel like a home. The authors point to three relationships and three aspects of home that became broken with the Fall: the relationship of the soul with the human body, the relationship between creation and the body, and the relationship between people’s bodies.11 The human home and all its manifestations are broken in the world and need management but, because human beings are also broken, they cannot manage their households on their own.
From this result of the Fall, it is evident that economics, “management of the household,” fundamentally requires guidance and reliance on God. Complex models assume that humans can manage their homes perfectly and account for every variable that contributes to the human home. However, the brokenness of the human experience is messy and cannot be encapsulated by a model, no matter how complex it may be; often, those additions can actually distract from the more general patterns and behaviors that simple models draw out. Simple models “declutter” the human home and help economists to see human beings as they are, in relation to the Creator and in need of a perfect Guide to manage the human home.
“Management of the household fundamentally requires guidance and reliance on God.”
The human person is a broken being that tries to manage a broken home. Simple models allow a theological understanding of this brokenness to accompany the study of human choice within the brokenness, and creates a deep richness in the discipline that would otherwise be lost with a more complex model. Modern economists want to place more complex models at the foundation of economics; however, models are not a firm foundation. It is important for economists to base their understanding of economics on the True reality of human nature and God’s love rather than a fallible and inherently imperfect model. Thus, it is important for us to be followers of Christ first and economists second to stay true to the perfect order of this pursuit.
Camryn Zeller ‘21 majored in Economics and minored in
Political Science and Math. She lives in Arlington, TX.
We thank Dr. Jared Ortiz (Religion) for his involvement
with Camryn’s piece.
1 Gen. 1:26.
2 Gen. 3.
3 Gen. 2:18.
4 Gen. 2:18–20.
5 Gen. 2:21–23.
6 Gen. 3:16–19.
7 Col. 1:24 (author’s emphasis).
8 John Paul II, Man and Woman He Created Them: A Theology of the Body, trans. Michael Waldstein (Boston: Pauline Books and Media, 2006).
9 John Paul II, Theology of the Body 183, referenced in Carl Anderson and Jose Granados, Called to Love: Approaching John Paul II’s Theology of the Body (New York: Image, 2009), 108.
10 Anderson and Granados, Called to Love, 108.
11 Anderson and Grandos, Called to Love, 104–113.