The Creation, Fall, and Redemption of Economic Man

July 1, 2023 from 1:40 pm to 2:20 pm

Speaker: Joost Hengstmengel

Original sin, according to the English writer G.K. Chesterton, is an obvious fact of life. It is the only part of Christian theology that can really be proven. Yet sin is completely absent from modern economics, the supposed “queen of the social sciences.” True, economists have their particular sins (McCloskey 2002; Otteson 2021). And sins themselves can be subjected to economic analysis (Ekelund Jr., Hébert, and Tollison 1992; Cameron 2003; Eisenhauer 2004; Yuengert 2014). But otherwise, the reality of sin has no place in contemporary economic theory. Economic man may have his shortcomings, as behavioral economics emphasizes, but these do not count as trespasses. Similarly, few mainstream economists see problems such as market failure and inflation as manifestations of evil. Original sin, in short, is a hypothesis economists do not need. One might wonder, however, whether it might not be helpful to think of homo economicus as a fallen man (cf. Hollis 1981; Cameron 2009; Tatum 2017). In the 1930s, the largely-forgotten Dutch Christian economist Jan Ridder claimed that there is a striking similarity between the economic view of man and the Calvinist one. Both see self-interest as the dominant drive of human action (in a fallen world). Taking sin seriously, Ridder argued, helps economists combat disharmony in the economy. Following Ridder’s suggestions, in this paper I explore whether the theological doctrine of original sin would be a useful presupposition in economics. To find the beginnings of an answer, I first distinguish between three different homines economici in the history of economic thought. I then turn to the Calvinist view of man, identifying several similarities and differences with the interpretation of homo economicus that prevails today. Finally, I discuss what economists would gain if they considered economic man sub specie aeternitatis and dared to speak in terms of religious transgressions. The paper concludes that integrating the concept of sin into economics brings closer the ideal that economists have been pursuing for over a century: contributing to a broader conception of welfare.

Literature

Cameron, Samuel. 2003. The Economics of Sin: Rational Choice or No Choice at All. Cheltenham: Edward Elgar.

———. 2009. “Sin.” In Handbook of Economics and Ethics, edited by Jan Peil and Irene van Staveren, 493–99. Cheltenham,UK / Northampton, MA: Edward Elgar.

Eisenhauer, Joseph G. 2004. “Economic Models of Sin and Remorse: Some Simple Analytics.” Review of Social Economy 62 (2): 201–19.

Ekelund Jr., Robert B., Robert F. Hébert, and Robert D. Tollison. 1992. “The Economics of Sin and Redemption: Purgatory as a Market-Pull Innovation?” Journal of Economic Behavior & Organization 19 (1): 1–15.

Hollis, Martin. 1981. “Economic Man and Original Sin.” Political Studies 29 (2): 167–80.

McCloskey, Deirdre. 2002. The Secret Sins of Economics. Chicago: Prickly Paradigm Press.

Otteson, James R. 2021. Seven Deadly Economic Sins: Obstacles to Prosperity and Happiness Every Citizen Should Know. Cambridge: Cambridge University Press.

Tatum, Robert C. 2017. “Homo Economicus as Fallen Man: The Need for Theological Economics.” Journal of Markets & Morality 20 (1): 127–49.

Yuengert, Andrew M. 2014. “Sin, and the Economics of ‘Sin.’” Econ Journal Watch 11 (2): 243–49.