In contrast to the dominant way of thinking in economics, in which economics is seen as a positive or neutral science, this paper argues that economics is a discipline that has its own normativity. This economic normativity should be distinguished from what is usually considered as ethics, which normally has a broader scope (e.g., stewardship). This paper further argues that the budget constraint is a key source of economic normativity, although it is not the only source. Economic-theoretical and philosophical aspects are discussed, and consequences for economic life and policy are assessed.
In 1998 the book The wealth and poverty of nations was published, written by David Landes, a retired professor in economic history from Harvard. Within a few months more than 50.000 hardcover copies were sold of this best-selling book. In that book, with its 544 pages, Landes tries to answer the question why in some countries and regions the economies are performing well and why others remain backward. Differences in economic performance are subsequently explained by differences in culture and religion. With the West- Europeans and their descendants in the US, Canada and Australia yielding the best performance, his answer is that the capitalist values and Calvinist religion are the main explanatory factors.1 In fact these are the old stories of Adam Smith and Max Weber, but now told by a good writer. Recalling the theme of our session, say ‘Economics within the context of Cultures and Christianity’, I expected a paper which would re-examine (and criticize) the Landes story from a christian philosophical perspective.
8-9 January 2013 at the Vrije Universiteit Amsterdam, a seminar took place bringing together people from various parts of the world, various disciplines, and various academic and non-academic professions — philosophers, economists, theologians, historians, social scientists as well as bankers, businessmen, investors and others — to analyze and discuss the economic crisis as it developed in the aftermath ofthe American financial crisis of 2008. An explicit goal was as well to bring together people from various generations, to facilitate and promote a true ‘intergenerational dialogue’. The title of the seminar was ‘Economics, Christianity & the Crisis: Towards a New Architectonic Critique’. More specifically, the aim of the seminar was to develop Christianly inspired reflections on the crisis. An insight that was foundational for the seminar was that the 2008 credit crisis not only was a crisis in the (financial and real) economy (as they may occur every two decades or so), but implied also a crisis in the basic concepts and assumptions that underlie our contemporary thinking about economics, economics as a science as well as economics as a social domain. The crisis, as it erupted and evolved, simultaneously raised urgent questions at the macro- or system-level, at the intermediate level of behavior of banks and corporations, and at the level of personal morality, the vices and virtues involved in business transactions.