HISTORY-ECONOMIC THOUGHT 125 (001) (Fall 2020)
QUESTION 1
- Describe the difference between Chrematistics and Economics in Aristotle’s thought. How does Aristotle’s disdain for Chrematistics relate to the notion of evil we discussed with respect to the Garden of Eden Story?
QUESTION 2
- Discuss the differences between the Stoics, Epicureans, and Cynics. How do their views compare to modern views of “rational Self-interest?
QUESTION 3
- From the Karma Theorems reading, how different was the conception of markets different in medieval times than in microeconomics today?
QUESTION 4
- Thomas Aquinas developed a notion of “the just price” that could be charged for a good. According to him, what made some prices “just” while others were not.
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THE KARMA THEOREMS
Craig B. McLaren
University of California, Riverside
“Give and it will be given to you… For with the
measure you use, it will be measured to you.”
Luke 6:381
1) Introduction
Since publication of Adam Smith’s Wealth of Nations, political economists have been fascinated
by his notion of the invisible hand. It has been popular to interpret the first and second welfare
theorems as indicating that self-interested behavior on the part of individuals enhances aggregate
wellbeing. The theorems of course say only that such behavior will produce a Pareto efficient
distribution of goods and services. Frank Hahn is quick to remind us that any “claim to this
efficiency for any actual economy would be a singularly weak claim in an argument designed to
persuade us that the economy is also in some sense to be morally approved”2.
The weakness in the connection between self interested behavior and aggregate wellbeing
derives from how economists have traditionally interpreted “utility”. One might intuitively presume
that the term “utility” as used in the definition of Pareto efficiency refers to wellbeing, per the
thought of by Jeremy Bentham. In Bentham’s view however, utility was a philosophic principle by
which laws could be judged3. The utility, which individuals are assumed to maximize is a
completely different concept. As introduced by Wm. Stanley Jevons, the utility that one
maximizes was understood to be psycho-physiological stimulus to which agents respond4. Since
Paul Samuelson’s Foundations of Economic Analysis Utility has been seen by many as a
mere formalism, a “hypothesis that places definite restrictions on demand functions and price-
quantity data”5.
Since such abstract formalisms are devoid of welfare implications, we have no basis for asserting
that a Pareto superior allocation is more welfare enhancing than one inferior to it. We may say
only that it is “better” when judged according to the objectives pursued by the agents themselves.
Scholars such as Pattanaik6 and Sen7 have pointed out that individuals do not always choose
alternatives that enhance their wellbeing. Not only might they not understand which option is
most welfare enhancing; there are numerous reasons why they might reject it even when its
nature is known.
1 Bible, NIV (1985) p.1550
2 Hahn (1973) p.4
3 Warnock (2003) p.4
4 See Blaug (1996) p.293
5 Samuelson (1961) p.92
6 See Pattanaik (2009)
7 See Sen (1987)
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The welfare theorems may thus be as profound in what they do not say as in what they say. The
welfare theorems tell us only that, for good or ill, markets will efficiently hand us the fruits of our
own decision-making. They take no responsibility for insuring our welfare. This insight is not at
all new. It is implicit in the works of those who first began to speculate on economic matters
millennia ago.
This paper will begin with a discussion of difficulties with the assumption that utility maximization
necessarily determines individual choice or enhances well-being. It will conclude by revisiting
those who founded our discipline, and who sensed the necessary partnership between positive
analysis and moral philosophy.
2) Utility as it Originated With Bentham
For a description of utility, we will turn to its author, Jeremy Bentham. Though his work is
considered a bit antiquated, it still provides a canvas against which the objections of modern
thinkers can be hurled. Bentham was a quintessential maverick; one who challenged the
authority of lawmakers, and helped found the University of London as a haven for academics at
odds with the Church of England8. According to Cambridge Scholar Mary Warnock, Bentham
was indeed one of the first to challenge the validity of law from an ethical standpoint. His project
was to found a system of “scientific jurisprudence”. This would require a criterion by which an
observer could evaluate the performance of an institution. Warnock, in her introduction to a
volume containing Bentham’s Introduction to the Principles of Morals and Legislation9,
points out that his life’s work was twofold: He was concerned first with providing a theoretical
foundation for legal systems, and second, with criticizing existing systems in light of that
foundation. “In practice, this programme amounted, in large measure, to a testing of existing
systems of law by the criterion of the ‘principle of utility’ “10. This principle was inspired by a
maxim found in Joseph Priestley’s Essay on Government. Priestly regarded government as
“good” if it provides “the greatest happiness for the greatest number”11. As his interest was in a
theory of government, not of individual behavior, Bentham was not interested in explaining why
an individual might behave in such a manner; only how such a behavior might impact the well-
being of others and thus be of concern to lawmakers. Bentham would have defined the action of
an individual intent on improving his own happiness at the expense of society, as “mischief”, the
opposite of utility12.
Bentham begins his Principles with a flamboyant depiction of mankind forever chained between
the pillars of pleasure and pain13. His style leads one to believe that his concept of utility is both
simpler and more sensual than he actually intends. He spends the entirety of Chapter 5 of his
Principles describing the different aspects of utility, which he defines as “interesting
8 See Warnock (2003)
9 Bentham (2003) p. 45
10 Warnock (2003) p.4
11 Warnock (2003) p.1
12 Warnock (2003) p5
13 Flamboyance consistent with having his remains preserved by a taxidermist to be ever present at board meetings at the
University of London.
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perceptions”14 of various pleasures, and the absence of their opposing pains. The pleasures he
describes can be grouped into Physical Satisfactions, and Psychic Satisfactions as shown in
Figure 2-1. The physical satisfactions can be broken into additional categories that include
Satisfaction of Wants, and Bentham’s Pleasure of Relief. The satisfaction of wants include
Bentham’s Pleasures of Sense; the gratification that follows from consuming food, entertainment
and the like; and the Pleasures of Wealth15 which include the security one enjoys from
possessing the means of insuring his own safety and comfort. Modern psychologists such as
Abraham Maslow would regard this as satisfaction of a basic human need that goes beyond mere
sensual experience16.
Figure 2-1) A Simplified Taxonomy of Bentham’s Utility
Bentham’s Pleasure of Relief is an “interesting perception” indeed. It is the “pleasure which a
man experiences, after he has been enduring pain of any kind for a certain time, when it comes to
cease, or to abate.”17 This is a temporary experience, resembling what Sen calls the “small
mercies” that the battered wife, the hopeless beggar, and the hardened unemployed enjoy.18 Sen
questions the efficacy of such a transient sensation as an indication of the person’s long-term
welfare.
The Psychic Satisfactions are among Bentham’s more subtle pleasures. These can be grouped
into three categories. The Pleasures of Thought, which include Bentham’s Pleasures of Good
Memories, Pleasant Expectations of the Future, Pleasant Associations Between Objects
and Past Happy Experiences, and Pleasures of the Imagination19. Among Bentham’s
14 Bentham (2003)
15 Bentham (2003) p. 45
16 Maslow (1943)
17 Bentham (2003) p. 47
18 Sen (1987) p.45
19 Bentham (2003) p. 47
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Psychic satisfactions his Pleasures of Benevolence, and Pleasure of Malevolence are of
particular interest.
Bentham’s Pleasures of Benevolence include the pleasure one obtains from the knowledge that
one has acted compassionately or ethically. This of course relates to what Pattanaik refers to as
ethical, as opposed to subjective, preferences20. As Ian Little put it: “one might prefer a
distribution is that is more to his personal benefit; yet oppose policies leading to that distribution if
he finds them unjust”.21 It is unclear to what extent either of these preference-types would be
expected to influence either the agent’s choice, or her well-being. In order to make a choice, she
would need to have a “preference over preferences”: Does she “prefer” to act according to self-
interest or justice? Intuitively, one would expect the former “preference” to provide her greater
well-being than the latter.
The Pleasures of Malevolence are what one enjoys when seeing harm come to “one who is the
object of the observer’s malevolence”22. This pleasure is one that might be derived from
witnessing a public execution. For our purposes, we include Bentham’s Pleasure of Power, i.e.
the “being in the condition to dispose people by means of their hopes and fears”23 among the
Pleasures of Malevolence.
From the preceding discussion, one can easily see how such perceptions can influence one’s
decision making. One can also see how the experience of such sensations can often indicate the
state of one’s welfare. Problems arise however when we presume that such always determine
ones choices and well-being, or that they are the only determinants of such. If both such
presumptions are made, the circumstance one is observed to choose must be taken as the one
which best enhances his well-being. Should a man choose a greasy hamburger and an order of
fried chips over a vegetable plate, an economist following Pareto’s lead24 would have to assume
the burger and chips are the better option, although it is doubtful that a cardiologist would agree!
20 This distinction is taken from Harsanyi. see Pattanaik (2009) p.336
21 Little (1952)
22 Bentham (2003) p. 46
23 Bentham (2003) p. 46
24 To an addict, Pareto would regard morphine as economically useful, “even though it is unhealthful, because it satisfies
one of his wants” . See Pareto (1971) p.111
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Figure 2-2 Utility contributes to both a consumer choice and his well-being but uniquely
determines neither.
The argument against this strict use of utility is shown diagrammatically in Figure 2-2.
Maximization of utility is shown as contributing to both an agent’s choice and her well-being, but
not uniquely to either. Pareto was among the first to criticize the notion that such perceptions
imply well-being. Pareto dismissed utility as being “simple ophelimity”, a measure of an
individual’s arbitrary passions. Amartya Sen carries that argument even further. According to
Sen: “Well being is ultimately a matter of valuation, and while happiness and fulfillment of desire
may well be valuable for a person’s well being, they cannot – on their own or even together –
adequately reflect the value of well-being.”25
When utility maximization is taken as the sole source of one’s well-being, Pattanaik identifies two
classes of problem: one of inclusion and one of exclusion. Problems of inclusion occur when
the assumption of utility maximization would cause choices to be included that should not be
considered as welfare enhancing26. An example would be pursuit of Bentham’s Pleasure of
Malevolence. This can be seen as a special case of the pleasure one might derive from being
“nosey”. In Collective Choice and Social Welfare, Sen asks if the welfare of an agent is
really enhanced if his neighbor sleeps on his side as opposed to his back, should have
such preference over ’s behavior27. Extension of this argument to the enjoyment one might
obtain from discrimination against minorities is quite apparent.
Pattanaik’s problem of exclusion occurs when the assumption of utility maximization might cause
options to be excluded, which should be considered as welfare improving. An example Pattanaik
25 Sen (1987) p.46. See also Sen (1980 and 1985)
26 Pattanaik (2009) p.328-334
27 Sen (1970) p. 79
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discusses is the case where one may not prefer classical music if one is not so educated28. If
one is deprived of opportunities to hear such music, are we to consider his loss of well-being the
same whether or not he has been taught to appreciate such music? A less subjective example
would be that of an aboriginal tribesman who has no access to, or knowledge of, western medical
care. We would clearly regard such an individual as deprived, whether he was aware of his
deprivation or not.
Both Pattanaik and Sen comment on the need for a standard of well-being that is determined
objectively by expert observers, rather than subjectively by the agents themselves. Sen’s version
of such is a broadly defined set of capabilities that the individual may achieve. These include
longevity, freedom from morbidity, access to education, and the like. While individuals may
naturally desire capabilities such as longevity, the choices necessary for their achievement (such
as the foregoing of fried chips) may not bring happiness to the individual in the short term.
While it is now clear that utility, no matter how broadly defined, cannot be considered
synonymous with well being, one might still argue that utility maximization is what drives an
agent’s choices. Bentham’s Satisfaction of Wants and his Pleasures of Thought clearly
motivate consumer behavior. Marketing managers have long recognized that Bentham’s
Pleasures of Memory motivate one’s purchase of photographic equipment, while his Pleasures
of Association motivate the purchase of souvenirs and memorabilia. Bentham’s Pleasure of
Expectation is recognized by Revlon Co., which defines its business as selling “hope” rather
than cosmetics29.
To answer the question of whether utility is the only motive that drives a consumer’s choice, we
compare what Bentham calls the Pleasure of Benevolence, to what Sen calls Commitment. If
one could make the argument that people behave ethically because it gives them pleasure to do
so (or pain in the form of guilt if they do not), then one might be able to assert that utility
maximization is the sole motivator. Sen does not accept this. He leaves open the possibility for
agents to make choices based on ethical commitment, which he defines as involving ”the
counter-preferential choice”, of an option that is not “…better than (or at least as good as) the
others for the person choosing it”30. Sen distinguishes between commitment and benevolence or
sympathy. The well-being of a sympathetic person is directly impacted by the well being of
another. For example, “If knowledge of the torture of others makes you sick, it is a case of
sympathy; if it does not make you feel personally worse off, but you think it is wrong and you are
ready to do something to stop it, it is a case of commitment.”31 If we allow for the possibility of
committed behavior, we can no longer consider utility to be the sole determinant of an agent’s
choices.
28 Pattanaik (2009) p.336-337
29 Kotler (1994) p.69
30 Sen (1977) p.328
31 Sen (1977) p.326
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3) Utility as it Descended From Jevons
Consumer theory concerns itself with the assignment of economic value rather than
measurement of well-being. Specifically, it is concerned with the means by which market values
of goods and services are derived from the values assessed such by individuals32. Though the
term theory of value is not often used in discussions of consumer or general equilibrium
theories, it appears in the titles of several seminal papers on these topics33.
Equating value with a single, identifiable force that we may call utility is an artifact of history rather
than a theoretical necessity. While Jevons gets credit for making such equation, it follows from
assumptions made by John Stuart Mill. Mill’s hypothesis which has since come to be known
pejoratively as homo-oeconomicus34 “considers [man] solely as a being who desires to
possess wealth, and who is capable of judging the comparative efficiency of means for obtaining
that end” 35. Mill was of course aware of, and emphatic about, the fact that this is a simplifying
abstraction “…not that any Political Economist was ever so absurd as to suppose that mankind
are really thus constituted, but because [the making of such assumptions] is the mode in which
science must necessarily proceed”36. Some of his colleagues however were not so similarly
enlightened37.
It was a next logical step for Jevons to explain the thought process of wealth seeking in terms of
his biomechanical model of utility maximization. The results of his theory however do not require
that utility be interpreted in so strict a manner. The great contribution of the marginalist approach
was of course its explanation of relative prices in terms of marginal changes in the values
assessed goods by their respective traders. Utility could just as easily have been defined as the
integral of marginal utility rather than vice versa38. All that is required of utility is that it represent
assessed value in terms of a mathematical function, meeting the technical requirements needed
to insure that the constrained maximization problem has a solution.
The founders of the marginal revolution were not in agreement as to what utility actually was.
Karl Menger and the French scholars, upon whom Leon Walras drew, held much broader notions
of utility than did Jevons. Menger’s position was strongly influenced by Aristotle39. Menger
defined use-value as “judgments economizing men make about the importance of the goods at
their disposal for the maintenance of their lives and well being40”. In Menger’s definition the key
32 The scholastics saw the process as bringing about a consensus as to the value of the goods considered. According to
Bernadine of Sienna (1380 – 1444), “Price is a social phenomenon and is set not by the arbitrary decision of individuals
but by the community.”32 The phrase communis aestimatio used of “community estimation” was used interchangeably by
the scholastics with aestimatio fori or “market valuation”. See De Roover (1958) p.424
33 For example Hicks and Allen (1934a), (1934b), and Debreu (1959)
34 Mill (1874) pp.137-9
35 Mill (1874) pp.137-9
36 Mill (1836)
37 Nassau Senior is an example. He commented that “In short, it [the pursuit of wealth] is in political economy what
gravitation is in physics…the ultimate fact beyond which reasoning cannot go, and of which every other proposition is
merely an illustration.”. See Senior (1965) p.28
38 To be done in a concise and intuitive manner when multiple variables are involved, this requires the techniques of
vector analysis as the author discusses elsewhere. See McLaren (forthcoming).
39 Hands (2001) p.39
40 Menger (2003) p.446
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term is “judgment”, implying that humans are homo-agens41, the purpose-seeking creature.
External forces do not determine human behavior. From the time of the Physiocrats, French
political economists avoided speculating about human motivation. Turgot commented: “I do not
wish to investigate how pleasure and pain…influence the determination of the will. I merely say
that we find in experience only one principle productive of movement, and that is that the will of
intelligent beings is not primitively determined but determines itself.42”
Paul Samuelson sought to banish utility from consumer theory entirely with his theory of
Revealed Preferences. Though the consumer is “revealed” to have preferences over available
alternatives, there is no need to know why she prefers one option to another. Consumer behavior
is thus accepted as given, with no necessary connection to pleasure, happiness, or sensation.
Humans pursue goals of their own choosing.
4) The Welfare Theorems and Classic Wisdom
To the extent that such goals are considered to vary arbitrarily between individuals, the social
implications of the welfare theorems are quite weak. If however, such goals are on average the
product of a cultural consensus, the welfare theorems say that markets will reward a society with
the fruits of whatever value system it holds, its “social karma”, so to speak. To a society that
values instant gratification, the market will provide obesity and indebtedness. As European
history has shown, nations that pursue military prowess may well be rewarded with bankruptcy
and decline43. This reinforces the hand and glove partnership between positive science and
moral philosophy. Positive science may provide insight as to how well-being might be achieved,
once its nature is understood. Any definition of well-being however ultimately requires a value
judgment. This position is implicit in the teachings of the Greek philosophers and the Scholastics
who followed their lead. They challenged the populace to think through whatever might constitute
well-being. The method of Socrates was to train one’s judgment through exposure to different
problems and viewpoints.
4.1) Classic Descriptive Economics
It has been popular among authors with viewpoints as diverse as Robert Heilbronner44 and Jacob
Viner to dismiss writers of this period as pre scientific “anticipators” of economics theory. This is
unfair. While they may have lacked the scientific methods that have since come into use they
had considerable savvy as to how the marketplace worked. With respect to Aristotle’s era, Barry
Gordon points out in Economic Analysis Before Adam Smith:
“Almost all the phenomena associated with modern market economies were
present: commercial agriculture, manufacturing, business consortiums and
41 This term actually appears in the work of Mises but is implicit on Menger’s work as well. See Hands (2001) p.42 and
p.39
42 Ingrao and Israel (1990) p.49
43 Though pre revolutionary France, or Spain at the fall of the Armada may not have been market economies in the
modern sense, they relied on the sale of goods on international markets to finance their military.
44 See Heilbronner (1999) pp.22-23
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monopoly trading.” Commodity speculation was a feature of economic life in the
port cities as banking companies “exerted powerful influence”. Such banking
firms “received deposits, made payments for clients, undertook debt recovery,
issued letters of credit, and invested in business ventures.”45
With regard to economic theory, it is evident that Aristotle understood the interplay between use-
value and scarcity, and possibly the so-called law of diminishing marginal utility. In Rhetoric,
Aristotle poses a version of Adam Smith’s Water-Diamond Paradox. “What is rare is a greater
good than what is plentiful. Gold is a better thing than iron though it is less useful: it is harder to
get and therefore better worth getting. Reversely, it may be argued that the plentiful is a better
thing than the rare, because we can make more use of it. For what is often useful surpasses
what is seldom useful, whence the saying, ‘The best of things is water.’”46 In 1905, Oskar
Krauss47 suggested that Aristotle realized that use-value diminishes marginally. For this he relies
on Aristotle’s Topics, 118: “A thing is more desirable if, when added to a lesser good, makes the
whole a greater good. Likewise, you should judge by means of subtraction: for the thing upon
whose subtraction the remainder is [made] a lesser good may be taken to be a greater good.”
Aristotle as well as Scholastics certainly understood that through the process of exchange, the
market values48 of goods are aggregated from the use values assessed by the respective traders.
According to Bernadine of Sienna (1380 – 1444), “Price is a social phenomenon and is set not by
the arbitrary decision of individuals but by the community.”49 The phrase communis aestimatio
used of “community estimation” was used interchangeably by the scholastics with aestimatio
fori or “market valuation”. 50
In his Nichomachean Ethics Aristotle introduces the notion of reciprocity or the “exchange of
equals.”51 Here Aristotle actually defines exchange-value in terms of the use-values of the
respective traders. Exchanges take place between unequal individuals with complementary
talents. “For it is not two doctors that associate for exchange but a doctor and a farmer, or in
general people who are different and unequal; but these must be equated.”52 It is quite apparent
according to Soudek and Spiegel53 that what must be equal is the degree of want satisfaction the
exchanged goods provide. “All goods must be measured by some one thing…now this unit is in
truth need or demand 54, which holds all thing together.”55 In commenting on Ethics, Thomas
Aquinas said that the criterion “which measures all truthfully is need, because it embraces all
exchange goods insofar as they are related to need. … The price of saleable things does not
depend on their rank in nature … but on their usefulness to man.” 56
45 Gordon (1975) p.11
46 Spengler (1955) p.376-77
47 See Footnote #2 in Spengler (1955) p.371 for the citing of the German language text of Krauss’ work.
48 The exchange value or market value of an allotment of a good is understood to be market price times the quantity of the
good.
49 De Roover (1958) p.423
50 De Roover (1958) p.424
51 Aristotle (2003b) p.14
52 Aristotle (2003b) p.14
53 See Soudek (1952) p.46 and Spiegel (1991) p.32
54 The word for “need” used here is which can also be translated as “demand”. In this case Soudek feels that
“need” is a better translation. See Soudek (1952) p.60
55 Aristotle (2003b) p.15
56 See footnote 41 in Gordon (1975) p.176
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4.2) Classic Prescriptive Econommics
Pursuit of well-being was the focus these scholars, their understanding of human nature and
market processes enabled them to prescribe pursuits for individuals as well as to advise
policymakers. In Henry Spiegel’s Growth of Economic Thought, Aristotle’s position is
interpreted as saying that “People can be changed by the proper environment, by suitable
institutions, and by the power of persuasion, and if they become better men, the economic
problem of pervasive scarcity of material goods will be less oppressive.”57
Lionel Robbins points out that Aristotle’s most significant discussions of economic principles were
made in context of their relevance to the rest of society. His most significant writings on the
subject appear in his Politics,58 which, like Bentham’s Principles, was intended to be a guide for
good government. Aristotle regarded the state as an extension of the household. What
contributes to good household management also contributes to good government. The term
Oeconomicus, from which the word “economics” is derived, literally translates as household
management. The term, which comes from two Greek words (house) and
(rule) refers to the art of arraignment of the family’s material goods for providing “the good life”.
According to Aristotle, “Property is part of the household, and the art of acquiring property is a
part of managing the household; for no man can live well, or indeed live at all, unless he is
provided with necessaries.”59
Mill’s assumption of homo-economicus is one that Aristotle and his colleagues would have
soundly rejected. Aristotle was keenly aware of the distinction between the pursuit of wealth and
the pursuit of well-being, Aristotle scorned chrematistics, the art of acquiring wealth for its own
sake, as “unnatural” 60 since one’s need is finite, one’s greed is not. Solon (Chief Magistrate of
Athens c. 590 BC) cautioned his citizens against the destructive power of greed as follows:
But men of the city themselves, hearkening to the call of wealth, are minded by
their folly to destroy a mighty city…For they no not know how to check their
greed or to order the good-cheer that they have, in the quiet enjoyment of the
feast61.
Even Epicurus, who was considered and an anticipator of Bentham’s calculus of pleasure and
pain recognized the distinction between well-being and desire fulfillment. Epicurus taught his
followers to discipline their minds so as to temper their desires with judgment. “If you wish to
make a person wealthy, do not give him more money, but diminish his desire.”62
The Aristotelian view of economics was later to be given a Christian ethical twist by the
Scholastics. According to Sir Alexander Gray, the scholastic position was that: “We are all
brothers and should behave as brothers, respecting each other’s right and position in life. Each
57 Spiegel (1991) p.25
58 Robbins(1998) p.18
59 Aristotle (2003a) p.7
60 Spiegel (1991) p.25
61 Gordon (1975) p.8
62 Spiegel (1991) p.38
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should receive that to which he is entitled. … No one under any circumstances should take
advantage of his neighbor.” To Gray, “this is the sum and substance of medieval teaching.”63
In his Summa Theologica, Aquinas reflects the ethic behind Aristotle’s “exchange of equals”.
There he writes; “Purchase and sale are seen to have been introduced for the common utility of
both parties, since one needs the goods of the other … but what was introduced for the common
good ought not be more of a burden on the one than the other; and so the contract between them
ought to be established according to an equality.”64
As Schumpeter points out, Scholastics such as Aquinas were the academic experts of their time.
As such policymakers sought their advice. The Scholastics proposed regulations intended to
protect the marketplace from speculative trading practices, and to insure price stability in times of
famine or glut65. Attempts to manipulate the market were a common problem during that period.
There are many recorded prosecutions of traders who engaged in practices such as
“engrossing, forestalling, and regrating. Engrosing refers to the accumulation of a
commodity in attempt to corner the market, while forestalling is the purchase of stocks of goods
before they reached the market for which they were intended. Regrating is speculative buying in
a given market with the intention of selling the same commodities in the same market at a higher
price.”66 The scholastics were unanimous in their condemnation of any form of conspiracy to fix
prices above or below the competitive level.67 They also condemned the craft guilds for their
tendency to set prices “for their singular profit and to the common hurt and damage to the
people.”68
Violent price swings were a major source of hardship. J. Gilchrist cites the price of wheat in
England as rising ten fold between 1287 (a good year) and 1315, which marked the beginning of
a famine. Additionally, Gilchrist cites that in 1497 the price of wheat in Florence nearly doubled,
then returned to its original price within the space of a single month.69 Such price fluctuations
could have a catastrophic impact on the poor, many of whom were reported as committing
suicide over inability to buy bread at the prevailing price.70
The stabilizing policies, which the scholastics advised were set at the township level. Each
township functioned as an independent economy with its own sets of tariffs and trade
regulations.71 In time of dearth, town officials stepped in to place price ceilings on staples as a
means of preventing riots. Occasionally, public stores of grain were stocked in times of plenty, for
resale to the poor in times of famine72.
63 Gray (1959) p.46
64 Summa Theologica II-II, Q77, art. 1, quoted in Gordon (1975) p.174
65 In so doing the Scholastics have been criticized for imposing a set of “just prices” which are not market determined.
This criticism is incorrect. According to Aquinas, the just price is “the [price], which at a given time, can be gotten from
buyers, assuming common knowledge and in the absence of all fraud and coercion.” See De Roover (1958) p.423
66 Gordon (1975) p.220
67 De Roover (1958) p.426
68 De Roover (1958) p.432
69 Gilchrist (1969) p.87
70 Gilchrist (1969) p.87
71 Spiegel (1991) p.52
72 Development economists in recent years have advocated this practice in third world countries.
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Maintaining price stability for the protection of tradesmen was more important than a modern
observer might think. This is due to factor immobility, particularly that of labor. Peasants were
tied to the land, and an artisan’s occupation was chosen by tradition. Generally, one’s trade was
the same as his father’s and of his father’s father regardless or the misfortunes the marketplace
might bring him. Aquinas’ assertion that the just price should cover “labor and costs” is a policy
prescription, lest “the arts …be destroyed if prices are not so determined” 73.
Debates of this period over the effectiveness of regulation bear resemblance to the debates of the
present. On one side was British theologian John Duns Scotus (1265 – 1308) who taught that the
just price should be sufficient to compensate the producer for his costs, including, transportation
and risk undertaken in bringing his goods to market. 74 Duns Scotus was later denounced by
Francisco Vitoria (c. 1480 – 1546) of the School of Salamanca. According to Vitoria, “inefficient
producers or unfortunate speculators should simply bear the consequences of their
incompetence, bad luck, or wrong forecasting.”75 In an argument that anticipates the view of the
Chicago School, Martin Azpilcueta (1493 – 1587), also known as Navarrus opposed price
regulation as he found it “unnecessary in times of plenty and ineffective or harmful in times of
dearth”76
5) Conclusion
There is no “magic” to the marketplace. The welfare theorems tell us of the power of market
forces and also of their blindness. Such forces propel a society towards whatever ends its
members choose to pursue. Whatever wellbeing those ends provide will depend on the wisdom
by which they were chosen. From the example set by the Greeks and Scholastics, we see that
there is a considerable active role for welfare economists to assist in determing which activities
will enhance well-being, once the nature of such has been agreed upon. To abdicate, by claiming
that positive scientists must abstain from normanitave decision-making, is itself a normanitave
decision. The fruits of moral abdication will be handed us by the marketplace.
73 Summa Theologica II-II, Q77, art. 2 and 3, quoted in Gordon (1975) p.176
74 Gordon (1975) p.223
75 De Roover (1958) p.424
76 De Roover (1958) p.426
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REFERENCES
Aristotle Politics (Benjamin Joett trans.) in The History of Economic Thought: a Reader (S.
Medema, & W. Samuels ed.) Routledge NY (2003)
Aristotle, Rhetoric reprinted in University of Chicago Great Books Vol.9 Encyclopedia
Britannica (Chicago 1952)
Bentham, J. An Introduction to the Principles of Morals and Legislation in John Stuart Mill –
Utilitarianism and On Liberty (M. Warnock ed) Blackwell Publishing (Oxford 2003)
Bladen, V. Introduction to Mills Principles of Political Economy Univ. of Toronto Press
(Toronto 1965)
Blaug, M. The Methodology of Economics Cambridge (UK 1992)
Clarke, R. Einstein, The Life and Times World (NY 1971)
Debreu, G. Theory of Value: An Axiomatic Analysis of Economic Equilibrium Yale Univ.
Press. (New Haven,CT. 1959)
De Roover, R. The Concept of the Just Price: Theory and Economic Policy The Journal of
Economic History Vol. 18, No. 4 (Dec. 1958) 418 – 434
Gilchrist, J. The Church and Economic Activity in the Middle Ages Machmillan (London
1969)
Gordon, B. Economic Analysis before Adam Smith, McMillian. London (1975)
Gray, A. The Development of Economic Doctrine Longmans, (London 1959)
Hahn, F. On the Notion of Equilibrium in Economics: An Inaugural Lecture Cambridge
University Press (Cambridge 1973)
Hands, D. W. Reflections Without Rules: Economic Methodology and Contemporary
Science Theory. Cambridge (UK 2001)
Heilbronner, R. The Worldly Philosophers 7th ed. Touchstone (NY 1999)
Hicks, J. and Allen, R. A Reconsideration of the Theory of Value, Part I, Economica, New Series
Vol. 1, No.1, (Feb. 1934), 52-76
Hicks, J. and Allen, R. A Reconsideration of the Theory of Value, Part II, Economica, New
Series Vol. 1, No.2, (May. 1934), 196-219
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Kotler, P. Marketing Management (8th ed.) Prentice Hall (NJ 1994)
Maslow, A. A theory of Human Motivation Psychological Review 1943 50 pp.370-96
Mill, J.S. On the Definition of Political Economy in Essays on Some Unsettled Issues in
Political Economy. Longmans (London 1874)
Pattanaik, P. Limits of Utilitarianism as the Ethical Basis of Public Action in The Handbook of
Rational and Social Choice (P. Annand et al eds.) Oxford (NY 2009)
Robbins, L. Lectures in the History of Economic Thought. (S. Medema and W. Samuels
eds.)
Samuelson, P. Foundations of Economic Analysis Harvard Univ. Press (Cambridge MA 1961)
Senior, N. An outline of the Science of Political Economy Agustus M Kelley reprints (NY
1965)
Sen, A. K. Rational Fools Philosophy and Public Affairs Vol. 6, No. 4 (Summer 1977) pp.317-
344
Sen, A. K. On Ethics and Economics Blackwell Publishers (Cambridge MA 1987)
Spiegel, H. W. The Growth of Economic Thought (3rd ed.) Duke Univ. Press (Durham NC
1991)
Spengler, J. Aristotle on economic Imputation and Related Matters The Southern Economic
Journal (April 1955)
Soudek, Aristotle’s Theory of Exchange: An Inquiry into the Origin of Economic Analysis
Proceedings of the American Philosophical Society Vol. 96 No. 1 (1952) pp.45 – 75
Warnock, M. Introduction John Stuart Mill – Utilitarianism and On Liberty (M. Warnock ed)
Blackwell Publishing (Oxford 2003)
THE GENESIS PARADIGM:
CREATION, EXPLOITATION, AND THE INVISIBLE HAND
Craig B. McLaren
University of California, Riverside
“Economics is a “dismal” science
because it assumes man to be selfish
and money grubbing1”
Milton Friedman
“No one can serve two masters . . .
You cannot serve God and money.”2
Matt 6:24
0) Abstract
This paper treats the twin creation stories in Genesis (Genesis 1:1 – 2:3 and Genesis 2:4 – 3:24)
as separate parables that define humankind’s intended role within creation. The main points
made by the parables are: 1) The universe is the product of an intentional design, over which
humankind has been given agency. Our species has the ability to manipulate nature. Along with
such ability comes the responsibility for using such to maximize the wellbeing of creation as a
whole. 2) Humans betray their agency when they exploit nature (and each other) for their own
ends. Such betrayal explains the hardship that befalls civilized humanity.
From the concept of intentional design, this paper argues that Christ’s “golden rule” is the
standard of “rational behavior” under which human institutions work most efficiently. It is further
argued the concept of “self love” originally put forth by Adam Smith is in agreement with the
“golden rule”. Finally, this paper is argues that “rational self interest”, popularly interpreted by
economists as selfishness, is a gross misinterpretation of Smith. It is in essence “the fall of man”
and hence is socially destructive.
1) Introduction
The biblical creation story stands as an anathema to many in modern society. To a scientific
audience, it represents a dogmatic account of historical “facts” which one must accept on faith,
along with blind superstition that shackles its believers to fear of the unknown. To many raised in
the Christian Church, the story of Adam and Eve is a source of shame. With dismay, they ask
why a loving God would have created humankind in a depraved “fallen” state that should require
blood sacrifice to be acceptable to himself. What I shall argue is that the twin creation stories in
Genesis are most productively read as a parables describing who humankind is, and his/her
1 Friedman (1953) p.30
2 Matt 6:26 NASV Bible (1973)
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relationship to nature, including human nature. From this come its concepts of good and evil, two
words that are extremely difficult to define, though most of us have held intuitive understandings
of them since childhood.
For economists, a thorny question is whether pursuit of self interest, often thought of as evil, can
bring about public benefit. In his Economics of Good and Evil Thomas Sedlacek illustrates the
question with a vision of the legendary Czech Saint Prokop harnessing the devil to a plough3.
The answer of course turns on the perspective from which good and evil are defined.
Sedlacek begins with perhaps the most primitive perspective from which good and evil can be
viewed. He sees it as the struggle between humankind and the (perceived hostile) forces of
nature as presented the Epic of Gilgamesh, perhaps the oldest work of fiction yet discovered.
King Gilgamesh (the hero) begins by building a city fortified against outside forces. He later
plunders land belonging to the gods for resources that will make him wealthy. Humankind’s
natural instincts are portrayed in the character of Enkidu, a wild creature that Gilgamesh tames
and befriends.
Sedlacek proposes that the individual’s self interest is a base instinct that can be tamed by the
market mechanism. Quoting Michael Novak, he states: “…only democratic capitalism accounts
for how deeply sin is rooted in the human soul and can bring down its power by transforming its
energy into a creative force4”. The problem however is in defining what “good” is. It is unlikely
that the conquest of nature as seen in Gilgamesh, or the conquest of the American west with the
“taming” of the American Indian, can be considered “good”. In spite of our scientific achievement,
our ability to define what is “good” is elusive.
From the standpoint of positive economics, the only measure of “goodness” that has been
definable so far is Pareto efficiency, a technical term with little or no ethical meaning. Normative
economists often define “goodness” in terms of aggregate wellbeing interpreted as “happiness”.
Economic philosophers however have questioned whether the individual’s happiness, however
defined, can be equated with her wellbeing or the choices she is willing to make. If word of
suffering by a despised minority reaches the ear of a bigot, should his satisfaction with such be
counted as an increase in his wellbeing5? In his critique of Arrow’s seminal work in social choice6
Ian Little recognized the problem when he observed that one may well prefer a distribution is that
is more to his benefit, yet oppose policies leading to that distribution if he finds them unjust.7
Answers to these questions require value judgments based on criteria that are outside the realm
of empirical science. As Amartya Sen commented: “Well being is ultimately a matter of
valuation, and while happiness and fulfillment of desire may well be valuable for a person’s well
being, they cannot – on their own or even together – adequately reflect the value of well-being.”8
The Libertarian begs the question of defining “goodness” entirely, to him such task should be left
to each individual. His (or her) greatest good is achieved by the maximization his or her own
3 Sedlacek (2011) pp.37
4 Novak (2002) quoted in Sedlacek (2011) pp.37-38
5 See Sen (1970) p.79
6 Arrow (1951)
7 Little (1952)
8 Sen (1987) p.46. See also Sen (1980 and 1985)
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preferences. To a libertarian, evil defined as any social entity that might restrict ones freedom to
perform such a maximization. In keeping with the enlightenment concept of a noble savage, a
libertarian might argue that there is no base aspect of human nature that must be tamed. They
might argue that “sin” is nothing more than bounded rationality. In their article Christianity and
Hayek, Elzinga and Givens argue that sin is merely a “disappointment of expectations”. They
quote Hayek as arguing that the free market is a natural (or created) process that compensates
for this weakness by facilitating: “…the human conversation , a process through which we
overcome the limits of our minds and exchange in cooperative behavior to create, produce, and
exchange.9” Elzinga and Givens go so far as to argue that “God orchestrates the economy for
His purposes because no one else has enough knowledge to do so”10.
While Smith would have affirmed the Scottish doctrine of “spontaneous order” i.e. that markets,
language and the legal system are the product of social evolution11, he would not have affirmed
that such institutions were immune from exploitation by “evil” individuals. He comments that
whenever three or more who are in the same profession meet, their discussion inevitably
gravitates toward how they might profit at the expense of others. Capitalism is not strictly a
product of the enlightenment as libertarians might imagine. The free market is as old as the
written word12. Its potential for abuse, and the need for public policy to restrain the greedy, goes
back to the third millennium BC at least13.
The problem with the above viewpoints is that define good and evil with respect to human reason
alone. They presume humankind, be it in the form of the individual or of the collective, to be
incorruptible judges of what is good. The creation stories in Genesis reject such a presumption.
In the Genesis paradigm, good and evil are defined with respect to creation as a whole. While
all things are the product of a single organized creative mind, God does not define good and evil
with respect to his own whim. “Good” is defined to be that which allows his creation run most
efficiently. As created “in God’s image” humankind is both part of, and separate from, the rest of
creation. With humankind’s ability to observe, understand, and manipulate nature, comes the
responsibility for acting as God’s agent. Humankind “sins” when it betrays its agency, and
exploits creation (i.e. nature and his/her fellows) in pursuit of his/her own desires.
2) Historical Context
As I have mentioned before, there are two distinct creation stories in genesis that I argue are
separate parables that make different points. The first story is of the “seven day” creation. This
comprises Genesis 1:1 – 2:3 and emphasizes God’s role in ordaining the universe. In so doing, it
emphasizes the unity and purpose of creation along with humankind’s role within it. The second
story, that of the Garden of Eden, comprises Genesis 2:4 – 3:24. This story places stronger
emphasis on humankind’s agency, and ends with the consequences of humankinds betrayal of
that agency.
9 Elzinga and Givens (2009) p.59
10 Elzinga and Givens (2009) p.59
11 Blaug (1996) p.57
12 See footnote 18
13 Kraemer (1962) p.52
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Historically, how these stories came to be written is a matter of intense scholarly debate. All that
can be agreed upon is that they were assembled together into Genesis’ final form, during or
shortly after the Judean captivity in Babylon14. By that time, Sumerian – Babylonian worship
practices had infiltrated Hebrew society and had become “an abomination” 15. Clarification in the
people’s minds of the distinction between Hebrew and Babylonian beliefs would have become an
issue.
Carr cites the first story as likely coming from a “priestly” (P) set of documents, while the second
story comes from a “non-priestly” (non-P) set that may have been written much earlier.16 Both
stories directly refute the views of their Babylonian captors, and indirectly the more modern
libertarian view. With this respect, the timing with which the Genesis stories were first penned is
irrelevant, since the Babylonian’s viewpoint had been standard among the Hebrew’s neighbors
since long before the time of Abraham.
The Babylonian’s viewpoint is articulated in the culture and literature of the Mesopotamian region,
which originated with the Sumerians a millennium or more before Abraham. The Akkadian
language in which Sumerian literature was ultimately written, had become the scholarly lingua
Franca for the entire region17. The Babylonian and Assyrian cultures that descended from the
Sumerians, adopted the substantial body of their literature en toto, while the Canaanites, Hittites,
Amorites, and possibly even the Greeks adapted the Sumerian works to their own needs18.
According to Kramer, the Hebrew scribes would undoubtedly have been able to read Akkadian
and would have been at least somewhat familiar with this literature19. Furthermore, the city of Ur,
from which Abraham emigrated had been a Sumerian Capital and a main archeological site from
which Sumerian documents have been recovered. Abraham would certainly been familiar with
Sumerian lore. One might speculate that since he had sufficient resources to resettle westward,
he would likely have come from the wealthier classes. Hence he or his kin would have studied
these texts in a Chaldean eduba20.
The Sumerian economy was free market, with fairly sophisticated institutions for recording the
ownership and sale of property21. Following an argument used by Temin in his analysis of the
Roman economy22, the presence of large urban city states would indicate that Sumerian markets
must have been well developed. Support of an urban population consisting largely of tradesmen
and professionals would require at least some long distance trade in agricultural products.23 The
Sumerians would thus have understood “rational self interest” in the commercial sense. Samuel
Kramer, one of the leading translators of Sumerian writings, likened the individualistic and
14 For a discussion of these texts see Carr (1996) p.62-68, See also Blum (1998) p.32-33
15 Reference to the women weeping for Tammuz (Ezekiel 8:14) refers to worship of the Sumerian “dying-god” Dumuzi.
Ezekiel’s vision of men prostrating themselves towards the sun (Exekiel 8:16) might well refer to worship of Utu, the
Sumerian sun-god.
16 Carr (1996) p.67,68
17 Kramer (1963) p.166
18 Kramer (1963) p.166
19 Kramer (1963) p.166
20 Kramer (1963) p.292
21 Kramer (1963) pp.74,75
22 Temin (2013) pp.2,3 See also Kramer (1962) p.73
23 Since urban professionals often had plots of land outside of town, this argument does not as strongly as it does for
Rome. See Kramer (1962) p.76
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competitive nature of Sumerian culture to that of modern America24. Kramer notes a Sumerian
tendency to eye one another with suspicion, from which he concludes which that their competitive
nature led to the frequent inter-city wars that led to their downfall25.
Sumerian theology had little impact on their social ethics. A Sumerian’s acts of worship were a
form of transaction motivated by self interest. The Sumerian gods were invisible, quasi-immortal
beings with superhuman powers and all-to-human temperaments26. Collectively they
administered the universe, each god with a particular area of responsibility. Humans were
created for the sole purpose of providing the gods with shelter in the form of temples, and food in
the form of sacrifices. In return for their service, humans would be rewarded with good fortune27.
The gods provided little moral guidance for mankind, having no apparent sense of moral direction
themselves. While the gods usually preferred justice and compassion to their opposites, their
motivations were generally unclear28.
The Sumerian gods had little, if any real concern for the wellbeing of humans. Each Sumerian
prayed to his/her “personal god”, the one assigned jurisdiction over that individual’s family or land.
The purpose of such prayer was to motivate the individual’s “personal god” to plead his case
before a heavenly council. As Kramer points out: advice to a prospective Sumerian Job would be
to lament his case more loudly, so as to catch his personal god’s attention29. In the end, it was
the individual’s responsibility to insure his own wellbeing to the best of his (or her) ability.
The self sufficient, man against nature view of the Sumerians is evident in the Epic of
Gilgamesh, the best known and most widely circulated piece of Sumerian literature. Themes of
the Epic are humankind’s struggle against the gods. A more detailed discussion of the dichotomy
between Gilgamesh and Genesis will be given shortly. For the mean time, note that the hero,
King Gilgamesh sees nature as a source of plunder. To inhabitants of a land essentially devoid
of trees30 the cedar forests near the Mediterranean cost were a potentially valuable natural
resource. Such forests however, were the sanctuary of the god Shamash. Like Genesis’ angel
with a flaming sword31, Humbaba the epic’s personification of evil, stands sentry over this “Eden”.
As Sedlacek describes it: “Gilgamesh intends to stand up to the gods himself and turn a holy tree
into mere construction material32.
3) The Genesis Paradigm
In contrast, the Hebrew’s religion was heavily centered on social ethics. A Hebrew philosopher
once described Hebrew theology as centered on a relationship triangle connecting a man, God,
and the man’s neighbor. This emphasis follows from the Hebrews’ understanding of who God is
and what his intentions are. I will discuss the points made by the twin creation stories in turn.
24 Kramer (1963) pp.74,75
25 Kramer (1963) p.268, 295.
26 Kramer (1963) p.117
27 Kramer (1963) p.123,294
28 Kramer (1963) p.117
29 Kramer (1963) pp.125,126
30 Kramer (1963) p.3
31 Genesis 3:24
32 Sedlacek (2011) p. 24
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3.1) The Seven Day Creation Story: Creation, Order, and Efficiency
The opening passages of Genesis would have first of all reminded its audience that there is but
one God. Monotheism, with its implied omnipotence and omnipresence was a new concept. It
redefined humankind’s relationship to God and the purpose of worship. Though the form of
worship; (ritual ceremony, singing of hymns, sacrifices, etc.) had been adopted in some form by
the Hebrews, the purpose of Hebrew worship is of necessity different. An omnipotent god has no
need of being fed” with sacrifices, does not “dwell in temples made with hands33”, and does not
need to have his ego stroked with praise. What it would mean to serve so radically different a God
is also of necessity different. More will be said regarding that shortly.
The emphasis of the this story is on the order and purpose of creation. From the syntax of the
Hebrew text of Genesis 1:1,2, Towner translates these verses as:
“In the beginning when God created the heavens and the earth, the earth was
formless and void and darkness was on the face of the deep, while a wind [spirit]
swept over the face of the waters.34”
Towner’s addition of the word “when” implies the pre-existence of substance in chaotic form,
which would have been a carryover from Sumerian stories. The primary point is made by the
statement: “Let there be light.”35 Since the sun and moon were not created until later, we
presume that “light” here is a metaphor for order.
Creation’s “goodness” (or efficient function) is emphasized when “. . .God saw that it was good”36
at the end of each day of creation. This unity of creation would many years later be emphasized
by the gospel writer John, when he equated Christ with the logos “through whom all things came
into being”37. Nature operates efficiently when done so according to God’s design. The psalmist
recognized that God’s law was intended to be a guide for efficient behavior, in effect “a lamp unto
[his] feet and a light unto [his] path”38.
The unity of creation is also reflected in the fact that Hebrew social ethics reduce to the form of
general principles. Kramer points out that while social protections for the widow and orphan39
existed in Sumerian law, Sumerian society never developed the ethical principles such as are
contained in Micah 6:840 or Psalm 24:441.
Jesus would later summarize the Hebrew commandments into a standard of efficient behavior:
“. . . in everything, do to others what you would have them do to you, for this sums up the law
and the prophets.”42 As I will argue elsewhere, Adam Smith likely envisioned this sort of
33 Acts 17:24
34 Towner (2001) p.15
35 Genesis 1:3
36 Genesis 1:12, 18, 21, 25
37 John 1:3
38 Psalm 119:105
39 Kramer (1962) p.82
40 “What does the lord require of thee? To do justly, love mercy, and walk humbly with thy God”
41 “Who shall ascend to the hill of the LORD. . . he that has clean hands and a pure heart.”
42 Matt. 7:12 NIV
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behavior as necessary his “invisible hand” to function properly. Smith’s “self love” reflects the
clause: “…what you would have them do to you”. Smith argued in affirmation of the Stoics, that
self preservation is the first task committed to us by nature and that prudence is a virtue so long
as it does not injure others43. It is to be remembered that in his Theory of Moral Sentiments,
Smith argues on behalf of sympathy as the root of ethical behavior. He introduces his impartial
spectator analogy saying:
We suppose ourselves the spectators of our own behavior, and endeavor to
imagine what effect it would, in this light, produce upon us. This is the only
looking-glass by which we can, in some measure, with the eyes of other people,
scrutinize the propriety of our own conduct.”44
In his “invisible hand” reference, Smith admonishes his audience to appeal to the butcher’s and
baker’s self love rather than to his charity. In exchange for what they need, Smith’s hearers are
admonished to be sympathetic and to serve, as they would wish to be compensated were they
in the butcher or baker’s position. The invisible hand, understood in terms of Christ’s golden rule
can be interpreted an observation that humans were in fact created to interact most efficiently
according to that rule. When we do so, we achieve the kingdom of God.
3.1.1) Agency
Genesis 1:26 defines humankind’s agency within creation. Based on the Hebrew syntax, Towner
argues that this passage should be translated “Let us make humankind in our own image so that
they may have dominion over the fish of the sea…”45. Towner notes that the Hebrew preposition
translated as “over” is not adversarial but gentle, and better translated as “among”. As result,
Towner argues that “dominion” implies “husbandry” or “nurture”46. Having been created in the
image of God implies that humankind has agency that other creatures do not. “Dominion” is
therefore the responsibility such agency entails. Genesis 1:26 implies that proper worship of God
entails proper exercise of one’s agency. As St. Paul would later proclaim: “make of yourselves a
living sacrifice, which is your spiritual profession47.”
As God’s spokesman, prophet Amos had criticized his contemporaries’ worship saying:
“Away with the noise of your songs!
I will not listen to the Music of your harps.
But let justice roll on like a river,
And righteousness like a never-failing stream!”48
43 Smith (1976) p.8
44 Smith Moral Sentiments (1853) p.164 Quoted in Sedlacek (2005) p.197
45 Towner (2001) p.28
46 Towner (2001) p.28
47 Romans 12:1. I have used the term “profession” in place of “service of worship” based on Wm. Barclay’s commentary
on this passage. See Barclay (1975)
48 Amos 5:23-24
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Economic behavior can be defined as the means by which humans meet their survival needs
through organizing for the production and distribution of goods and services. As I have
already claimed, such organization is most efficient when its participants follow Christ’s “golden
rule”. Genesis 1:26 carries this a step further. Agency requires that humans go beyond
maximization of the interests of parties to a transaction. This is illustrated in the proactive
responsibility taken by Jesus’ “Good Samaritan”49. Jesus mandates such responsibility from his
followers in the parables of The Rich Man and Lazarus 50 and the Parable of the Last
Judgment51. This is precisely the behavior that popular writers such as Ayn Rand ridicule.
Acceptance of such responsibility on the part of society as a whole was mandated by the Hebrew
law. The body of tithes required to support the temple, state, and Levites, amounted to 22%.
This would place ancient Israel in the “large government” camp. The poor tithe in particular was a
direct redistribution to the poor from those with adequate means. It is doubtful that a Hebrew
would have dared criticize his God for reducing productive incentives with such tithes.
When the poor were abused, and society failed to restrain the behavior of those that took
advantage of them, prophets such as Amos rebuked the entire nation, threatening them with
destruction as a group. Ultimately, it was the entire nation that was punished through captivity in
Babylon.
3.2) The Garden of Eden Story: Creation, Agency and its Misuse
The stories of Adam and Eve52 and of The Fall53 constitute a second creation story54. The acts of
creation are essentially summarized in Gods planting of the Garden of Eden55. Its “goodness” is
manifest by virtue of the fact that it is a paradise, containing all that is needed to sustain human
life abundantly56. Humankind’s agency is established when “Got took Adam and placed him in
the garden to work it and take care of it”.57 It is to Adam that all the animals are brought to be
named58.
This second story reflects Sumerian culture more directly than does the first. It places the Garden
of Eden geographically in Sumer, in proximity to the Tigris and Euphrates rivers. Its mention of
Adam being created out of the dust of the earth, and by God’s breathing breath into his nostrils59,
is in the tradition of Sumerian creation stories. As Sedlacek points out, the Epic of Gilgamesh
contains numerous parallels to this second story, but with meanings reversed. This emphasizes
the contrast between Hebrew and Sumerian beliefs.
49 Luke 10:25-37
50 Luke 16:19-31
51 Matt 25:31-46
52 Genesis 2:4 – 2:25
53 Genesis 3:1 – 3:24
54 This is evident from Genesis 2:4
55 Genesis 2:8
56 Genesis 2:9, 11-12
57 Genesis 2:15
58 Genesis 2:19
59 Genesis 2:7
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There was no paradise in Gilgamesh. the closest thing to it was the walled city built at the order
of despotic King Gilgamesh. To thwart him, the gods created Enkidu, whom Sedlacek argues is
the equivalent of Adam. Enkidu is at one with nature as is Adam, but in a very different sense.
Enkidu is a fearsome wild creature who disrupts the efforts of Gilgamesh by terrorizing the food
producers outside the city. He fights off the hunters, destroys their traps, sets the captured
animals free.
Gilgamesh’s solution is to engineer Enkidu’s “fall” by using the Harlot Shamhat to tempt him.
After his “encounter” with the harlot, which lasted nearly an entire week, Enkidu found that his
“body so pure”60 had been defiled and the wild animals now rejected him61. In Genesis,
Gilgamesh is transformed into the serpent while Shamhat becomes Eve. At Towner points out,
no devil ever appears in the Garden of Eden, only the snake. At that time, the snake was not
considered a symbol of evil but of sophisticated knowledge62. This explains why the serpent
appears in ancient symbols such as the Caduceus and the Rod of Asclepius, which are both used
to represent medical knowledge.
The serpent’s promise to Eve is that: Your eyes will be opened and you will become like God,
knowing good and evil.”63 Eve proceeds to eat the fruit, seeing that it was “a delight to the eyes
and that the tree was desirable to make one wise”64.
Hebrews writers often portrayed civilization as the source of sin65, and it was to civilization that
Shemhat had introduced Enkidu66. Following his week-long encounter with Shamhat, Enkidu by
analogy arose to find “he had acquired judgment, had become wiser.67” “Though his legs that
used to keep pace with his cattle were at a standstill”68 The beer, and pleasures of civilization to
which Shamhat introduced Enkidu, are further symbolized in Genesis by knowledge of good and
evil69.
The knowledge acquired by Adam and Eve however, had an immediate disruptive effect. When
they eat the forbidden fruit, the text emphasizes that “their eyes were opened”. What they
discovered however was their nakedness, and that such implied vulnerability. It was because of
their discovery and fear of their nakedness that God knew they had disobeyed. Obviously, there
can be nothing evil about the human body or human sexuality. They are part of God’s creation as
Genesis makes quite clear. Genesis 2:18-25 characterizes the purpose of sexuality as
relationship. Eve is flesh of his flesh and bone of his bone. She provides him companionship as
no other creature of the earth can. It is the order of creation that “A man shall leave his father and
mother and cling to his wife, and they shall become one flesh”70.
60 Sedlacek (2011) p.27
61 Gilgamesh Tablet I quoted in Dalley (2008) p.54-56 This rather explicit account is likely the earliest known example of
porn!
62 Towner (2001) pp.42 and 43
63 Towner (2001) pp.42
64 Towner (2001) pp.42
65 Sedlacek (2011) p.34
66 Sedlacek (2011) pp.27-30
67 Gilgamesh Tablet I quoted in Dalley (2008) p.56
68 Gilgamesh Tablet I quoted in Dalley (2008) p.56 NOTE: An epic hero’s stamina must be magnificent, not infinite!
69 Genesis 2:9
70 Genesis 2:24
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Their nakedness never became a matter of shame until “their eyes were opened”. Then for the
first time, each saw the other as an object to be exploited, and reciprocally their own sexuality as
currency that could be used to exact favors or social status. As result of realizing their ability to
exploit, they realized that they in turn were vulnerable to exploitation and hence they covered their
private parts.
It should be noted that at among the ancient peoples of the middle east it was all too common for
a young girl’s beauty to be viewed as money in her father’s pocket if he could sell her to a rich
man to be his concubine. It is perhaps for this reason that Mohammad would, centuries later, lay
it down that women (and men) should be substantially covered when in public. Human sexuality
becomes the first example of how humankind’s creativity and reason allows one to exploit God’s
creation for their own desires. As the story closes, we see the first couple driven out of paradise,
not merely because they had disobeyed God, but because of the knowledge they now
possessed71.
3.3) Economic Reflections
Aristotle recognized economic processes as a created or “natural” phenomena. In common with
several of his Greek predecessors, he also recognized humankind’s proclivity to exploit such with
“unnatural” practices that he deemed destructive. Prevention of such exploitation is the motive
that underlies the so called “market unfriendly” policies of the Scholastics, who had merged
Aristotle’s ideas with Christian ethics.
The term Oeconomicus, from which the word “economics” is derived, literally translates as
“household management”, since “Property is part of the household, and the art of acquiring
property is a part of managing the household; for no man can live well, or indeed live at all, unless
he is provided with necessaries.”72 In keeping with his distaste for greed, Aristotle scorned the art
of acquiring wealth for its own sake, or chrematistics, as unnatural73 since one’s need is finite,
one’s greed is not. In Politics, Aristotle’s condemnation of chrematistic behavior falls on retail
trade which, to a modern reader would seem quaint. From his reasoning however his ire would
more aptly fall on speculators, or rent seekers, as defined broadly by Joseph Stiglitz74.
The purpose of the market interventions advocated by the scholastics was generally to protect
the economically week from being exploited by those with market power. They understood full
well that the “just price” was simply the market price that would prevail when markets were
functioning well. Aquinas is interpreted as defining the just price to be: “the [price], which at a
given time, can be gotten from buyers, assuming common knowledge and in the absence of all
fraud and coercion.”75 To Aristotle’s concepts, they applied Christ’s Golden Rule. According to
Sir Alexander Gray, the scholastic position was that: “We are all brothers and should behave as
71 Genesis 3:22-24
72 Aristotle (2003a) p.7
73 Spiegel (1991) p.25
74 Stiglitz (2013) pp.35-64
75 This is De Roover’s interpretation of Aquinas. See De Roover (1958) p.423
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brothers, respecting each other’s right and position in life. Each should receive that to which he is
entitled. … No one under any circumstances should take advantage of his neighbor.” To Gray,
“this is the sum and substance of medieval teaching.”76
4) Conclusion
What then is the chief end of humankind? Simply put, we were created
“to work the garden and take care of it.” The knowledge of good and evil has allowed the would
be Gilgamesh’s to turn it into a source of plunder. What is the result? The present state of the
cities of Sumer are a bleak case in point. They have crumbled into indistinct mounds of barren
earth, completely devoid of visible signs of life77. They lie near the city of Mosul78, which at the
time of this writing is battered and bleeding. It is presently a place from where the beheadings of
journalists are witnessed by a world that fights back with flying robots that drop bombs.
The reality of sin renders the dream of a libertarian utopia a naive fantasy. The existence of sin
guarantees that individual’s perceptions of their own best interest cannot be relied upon to align
with what is in the best interest of society. Our eyes have been opened. Like Gilgamesh, we see
how God’s creation may be plundered for personal gain. According to Jesus, such gain is at odds
with what we have been created to serve. They constitute two conflicting masters, between
which we must choose79.
While public interference in the marketplace is what Hayek feared, it is the reality of sin that
makes such interference both necessary and difficult. Society’s responsibility to protect the
economically week from the strong is mandated by scripture80. Such protection was to be one of
the hallmarks of the promised messiah81. Unfortunately, public officials are no less corruptible
than the rest of us. Public institutions must be held accountable by the very individuals they are
called to regulate. The reality of sin means that no clean solution is humanly possible. That, as
they say, is the hell of it.
Ghost Ranch – Abiquiu, NM
September 2014
76 Gray (1959) p.46
77 See figure in Kramer (1962) p.64
78 Kramer (1962) pp. 7,15
79 Matt 6:24
80 A prime example is Amos 1:2 through Amos 2:8. Throughout Chapter 1 and the beginning of Chapter2, God’s
condemnation is proclaimed against the peoples surrounding Israel. Such condemnation implies that as societies, these
peoples betrayed their responsibilities to God. In Amos 2:6-8, similar condemnation is proclaimed against Israel for
allowing the disadvantaged to be exploited.
81 Luke1:52,53
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