We Need to Reclaim the Language of Economics

As we begin to move past the craziness of the holiday season and into the New Year, now is the perfect time to pause and reflect on what we just went through. We were bombarded with advertisements showing how happy our family would have been if we had bought the newest widget for them. People would smile, kids would laugh, babies would giggle – you get the picture. But, now that the novelty of the frenzy has worn off, is this really what happened or what we should be valuing? What about family, community, love, and – most of all – joy? Did all of our consumption really satisfy these basic human needs? Not really, but both the left and right in America believe that through consumptive economics, we can try and satisfy ourselves.

The Republican Party, for the last century, has been the party of free-markets and open trade. The Democratic Party has been the party of labor relations and the working classes. Even as the parties undergo shifts in their electorate, their underlying understanding of economics doesn’t change. Both parties have bought into the consumerist and materialist understanding of economics. This is because, ever since the beginning of the country, our economic paradigm has laid on a single foundation. The Enlightenment thinkers of the late 18th and 19th Centuries have pervaded every aspect of policy imaginations. While there seems to be a myriad of economic philosophies, they all stem from this rather small group of thinkers. To put this in perspective, both Adam Smith and Karl Marx are figures within the world of classical Enlightenment economics. Even though these thinkers disagree about policy, they all adhere to a purely materialist philosophy. However, this is not the only way to look at economics. From the ancient Greeks, through the medieval world, and into the 20th Century, there have been people that have sought to create a more humane understanding of economics. Their work, while still a minority opinion, is beginning to be dusted off and re-read as a viable third option to the prevailing economic narrative we live with today. In this article, I will explore the history of economics, the dissidents to the prevailing orthodoxy, and seek to lay out principles for a more humane way of thinking about economics.

First, let us define our terms. What is economics? Economics is the study of scarcity and choice. This is a very simple definition and could bear some expansion. The best explanation I have heard for modern economics (from my 11tth grade History teacher) is finding a way to satisfy the unlimited wants of society through the efficient allocation of scarce resources. Interestingly, both of these definitions, while being technically correct, deal with human beings only as consumers, defining us by our wants rather than other aspects of ourselves. In order to understand economics, we must look deeper than the modern definition.

The etymology of economics has at its root the Greek word oikos, a noun meaning home. True economics should then be grounded in the home. Well, who lives in a home? Nowadays, a home can have a multitude of definitions. It could be a tiny apartment, or a lonely mansion. Either way, home does not necessarily mean family. But, in the time of Ancient Greece, people lived together communally in extended homes. A home centered economics then revolves around the family. This understanding was compared by Aristotle to the term chrematisike, that is, the want of money. Which form of economics do we have in our lives today? Oeconomia, focused on hearth, home, and the flourishing of the family? Or, chrematisike, where money is the central aspect of every economic interaction? I think that, clearly, we live in a society where money is paramount.

This is not necessarily the fault of the classical economists themselves, but their thinking does lend itself to this philosophy. Money as the end all be all economic activity is a relatively recent phenomenon. While money has been a medium of exchange for millennia, the focus on currency itself as a means of economic growth is a product of 20th Century financialization. For most of its history, money has been tied to some form of commodity, where you could trade a certain amount of money in for a certain amount of the commodity. Most currency was backed by or made of gold, since gold is a universally recognized valuable metal. Even the Americas, separated from Europe, Asia, and Africa, valued gold as a precious metal. Societies have always valued it, and as such, it can be seen as a universal medium of exchange. This changed with the end of the Bretton Woods Agreement in the 1970s, where the American dollar and most of the world’s other currencies were converted to fiat currencies. This means they were backed only by the full faith and credit of the countries that issued them. Since these currencies were not backed by any commodity, exchanging money, or investing it was much easier. But, there was a cost. Large financial firms invented new ways to increase the value of the money they had without contributing to the economy. Traditional economists had always viewed investment as an exchange of currency for capital or labor, where something was physically changed. Now however, investments can be purely financial, with no actual value being created.

One example of this is the impact of the 2017 Tax Cuts and Jobs Act. This tax reduction falls squarely in line with classical economic thinking. By cutting taxes, companies would take that excess revenue, and invest in building up their companies to beat out their competition. They would invest in new capital goods, and workers. However, companies took the cuts and bought back their stocks. The financial sector of the economy can make them a quicker dollar than slowly building up their actual business. This reality has manifested itself in the disparity between the financial economy, which is currently experiencing one of the longest running bull markets in history, and the plight of the middle and working classes, where wages have not risen even as productivity has skyrocketed, and other costs of living have increased. The signals being sent through the economy due to this focus on money, and its unbounded and unlimited acquisition is destabilizing and harmful. Despite this new orthodoxy, there are still a wealth of resources to pull from to counter it.

“What would a family centric, more agrarian, and widely property distributed economics look like?”

There have always been voices advocating for a more physical economy focused on real things, not just money. Interestingly enough, this style of economic distribution developed within the medieval economies of Western Europe. After the fall of the Western Roman Empire, Western Europe was largely cut off from the wider world. While trade and economic production continued in the Eastern Mediterranean, a new localism grew, to meet the needs of the communities cut off from the former economic norms found in the Roman world. This nascent economic system was protected by the still extant Eastern Roman Empire in Constantinople, and the end of Muslim incursions into Europe following the defeat of the Moors at the battle of Tours in 732. Lacking broad access to the wider world of organized trade, local markets and agricultural production became the normal mode of existence for people. The world both shrank and grew at the same time. Even though people were most likely to never travel very far from where they were born, they could encounter the entire cosmos in Church through participation in the eucharist. Monasteries served as hubs of knowledge and trade, ensuring economic exchange was more than just material. Following the Crusades, the West entered a new phase in development history, and the settlement of the Byzantine scholarly and administrative elite in the West following the fall of Constantinople led to a centralization of power in a strong monarchy, as well as the nationalization of economics. This shift culminated in the imperial mercantilist system, best exemplified by the economics of France under Jean-Baptiste Colbert in the late 17th Century, where European powers sought to grow their wealth through the acquisition of colonies and international trade. However, there was dissent to this shift.

In the 18th century, one such school of thought were the Physiocrats. Their basic thinking was that all economic activity was tied to land and not gold. As such, physical land and property ownership was the most important factor when building healthy and sustainable economies. This school emerged, along with classical economics as a reaction to the mercantile school which emphasized the national accumulation of gold as the best pathway towards national prosperity. But, while the classical school focuses on the introduction of market competition, the physiocrats focused instead on the flow of money between three classes of people: landowners, agricultural workers, and the merchant and artisan classes. This system was designed to be harmonious, with one person’s needs and another person’s desires intersecting to produce a net benefit outcome. However, this system all began with the landowning class, because the other two classes sell their goods and services to this class. In the nineteenth century, Henry George came to much the same conclusion, and developed his single tax model based upon a land tax, that is, taxing the economic rent of the piece of property and making that the single tax charged by the public sector. However, neither his model, nor the model of the physiocrats advocate for widespread property ownership. They recognized the value in agriculture production, but didn’t call for the producers to own the land. This would be addressed in the next group of land centric economic thinkers.                                                                            

In the early 20th Century, a collection of authors began to gather around an idea of economics coined, quite awkwardly, distributism. This theory analyzed the plight of the people in the modern era and compared it to the history of feudal Europe through the lens of the Papal encyclical Rerum Novarum. Hillaire Belloc fired the first shot across the bow of the current economic paradigm in his widely lauded book, The Servile State, saying that the Capitalist State and Socialist State would give way to slavery in the Servile state.

The prolific author G.K. Chesterton picked up on Belloc’s hypotheses and began to champion the cause of distributism, becoming the target of a comic with the unofficial motto of the movement, “three acres and a cow.” Some even tried to live out the principles of distributism, with the artist Eric Gille being one of the more famous examples. These thinkers build upon the foundation of feudal Europe, as well as the landed reaction to mercantilism in the 18^th Century before the establishment of classical economics, to advocate for an economic system of widely distributed property as a means of combating the centralizing tendencies of both capitalism and socialism. All of these economic theories build upon and engage with each other. Given this, we are still left with the question, what would a family centric, more agrarian, and widely property distributed economics look like?

For one, it would be local.

The emphasis of place is an important aspect of a more humane-economics. A local-economics is one built upon relationships rather than mere exchange. People who know each other and want to support each other by meeting their needs use their special talents and vocations to create the physical and emotional bonds necessary to enable human flourishing. I am not emotionally invested in a stock option I buy beyond my hope it continues to rise. I am emotionally invested in my friend’s new business. These modes of interdependence help create the “village” atmosphere necessary to produce healthy, stable families. Everyone looks out for everyone, and if a problem is seen, it is addressed at the lowest level necessary to solve it (subsidiarity). Additionally, in a local economy, people aren’t only investing in each other, they are actively participating in the cultivation and stewardship of the place they live in. We aren’t exporting the management of where we live to a faraway and often unaccountable bureaucracy (either public or corporate), but to officials who live in and are accountable to the communities they claim to represent. Strong communities can resist corporate takeovers. Weak ones can’t. The towns where the local associations have dissolved are the ones where Walmart has driven local owners out of town. Smaller communities are also better at managing the land on which they live. Someone living in a city can hypothetically write policy for people in the country, but shouldn’t policy be written where people are to be impacted? One of the better moves of the Trump Administration was to attempt to relocate the Bureau of Land Management (BLM) to the West, where they administer a significant portion of the landmass from Arizona to Washington. From a localist perspective, it is rather unfortunate that the Biden Administration has reversed course and brought them back to Washington. Local administration of land promotes stewardship. No one wants to live in a wasteland, and empowered communities can ensure they have a say in what happens where they live. Proper stewardship of the land as well as the investment in human happiness and flourishing is the bedrock upon which prosperity can grow.

Second, economics would be seasonal.

This may seem to be a strange addition to a reclamation of economics, but historically, human existence has been tied up in different seasons. The most basic seasons we find ourselves subject to are the seasons of nature: winter, spring, summer, and autumn. In some places, this seasonality varies, but these are the main four that can be seen in the northern hemisphere. Humanity though, has always created seasons that are more than weather centric. Every major religion around the world has seasons of feasting and fasting throughout the year. Secular states have a myriad of holidays that focus on particular people and events. Christianity has a very complicated calendar of fasting during certain days or seasons, as well as commemorating numerous people and events throughout the year. The United States has created many holidays that echo this way of looking at the world, including Thanksgiving. Commercial entities have attempted to turn these celebrations of remembrance and reverence into ones of consumption. However, people are starting to fight this trend. Thanksgiving historically has been followed by Black Friday, a melee of overindulgence and consumption. Some companies even began opening on Thanksgiving night in an effort to gain an advantage on their opponents. Now however, more and more companies are promising to close on Thanksgiving, and the #optout movement has been growing throughout the country. REI, a consumer owned co-op, is a major proponent of opting outside instead of shopping, and other major companies such as Best Buy, Costco, and Target are starting to close their doors on Thanksgiving. This allows people to properly orient themselves towards that which matters most: family and community. Seasons provide the time and space necessary for reflection, something modern society doesn’t focus enough attention on.

Finally, economics would be limited.

This may seem hypocritical, coming from someone typing this essay on a laptop made in China, and drinking coffee grown in Ethiopia, writing for an exclusively online magazine. I do not necessarily mean no trade should be allowed. Here, I mean that economics shouldn’t be the all-consuming factor of our lives. If you look at the vast array of public and private enterprises, they are dedicated to shaping the economic future of the world. We have a Treasury Department,  a Department of Commerce, a Small Business Administration, the Federal Reserve, etc. etc. etc. All of these are dedicated to increasing GDP in the country. We have bought into a shallow vision of economics, grounded in purely materialist underpinnings. Marx and Lenin would be proud. Economics has its place, but, especially in its current form, it cannot satisfy the human needs that go beyond quantifiable measures. What connects community, family, and faith? They cannot be quantified in monetary terms. Yet, they are the essential building blocks of a human being. Being grounded in a purely materialist economics, entities would seek to quantify these in monetary terms and sell you a product to increase what they feel you lack. It happens all the time. Christmas, the season of family and reflection, is a season of consumption and greed when viewed in purely economic terms. By limiting economics to its proper place in our lives, we can all flourish. 

The language of economics has been co-opted in modern American life. Both the left and the right are grounded in a purely material understanding of economic growth and exchange. However, there is a long history of a more humane tradition, grounded in the family and the home. If we can reclaim this tradition, and spread it further, we can truly begin the task of becoming more human.

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Josh Williams is a graduate of Colorado State University with a BA in Political Science and Economics and currently works in nonprofit development. He is also a contributor to Front Porch Republic. Josh loves Star Wars to the point of obsession, a fact you cannot escape if you ever visit his office. He is a Colorado native and can be found out hiking, fishing, reading, or napping when not on the job.