relationship of god's providence to market economies
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In this article, we examine the doctrine of providence to see if the market sys-
tem used by the United States and many other industrial nations can be thought
of as part of Gods providential care. The doctrine of providence concerns the
preservation and direction of the universe. Theologians discussing providence
sometimes refer to examples from the natural sciences but not from the social
sciences. However, economists since Adam Smith have used the idea of spon-
taneous order to describe the orderly function of market systems even when no
human agency is directly responsible for its operation. We suggest that this can
be thought of as a part of Gods providential care of humanity.
We discuss the ideas of Smith and Friedrich Hayek relating to spontaneous
order and then examine how the market system works. We focus on the imper-
sonal and anonymous nature of many economic interactions today and how this
differs from the more-personal relationships that characterized the economy of
ancient Israel. The model of perfect competition can be thought of as a tool to
analyze the workings of the economic system when no, one person has any con-
scious power over the plans of any other person. We conclude by examining
whether Christians can argue for the market system when it is based on a notion
of self-interest rather than on altruism.
Markets coordinate billions of individual decisions made daily by workers,
businesses, and consumers. Some moral authorities vilify markets for the role
that they are assumed to play in promoting greed, materialism, and inequality.
Others extol the virtues of markets, such as their ability to create abundance
while honoring the free choices of individual agents and groups.
Robin Klay and John Lunn
Hope College
The Relationshipof Gods
Providence to
Market Economiesand EconomicTheory
Journal of Markets & Morality
Volume 6, Number 2 (Fall 2003): 541564
Copyright 2003
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66. See John Lunn and Robin Klay, The Neoclassical Model in a PostmodernWorld, Christian Scholars Review 24 (December 1994): 14363.
67. See Aaron Director, The Parity of the Economic Marketplace,Journal of Law
and Economics 7 (October 1964): 110; and R. H. Coase, The Market for Goods
and the Market for Ideas,American Economic Review 64 (May 1974): 38491.
Robin Klay/John Lunn