St. Maximos' Hut

I've been reading Bill and Tom's posts on Proverbs with great interest, and thinking about the fact that economic lessons are so easily drawn from an ancient book of "wisdom literature". One of the more striking things about the easy connection between many of the Proverbs and economic thinking is that it suggests to me that human nature is such that an economic approach is natural.

Now, by "natural" I don't mean that we're all consciously solving constrained optimization problems all the time, to maximize our welfare. I'm thinking along more of the Matt Ridley, Origins of Virtue-line; that people are particularly good at trading and reciprocating compared to other beings and that as a consequence of our having those abilities, we got modern market economies.

Which makes me suspect that it is no accident that God gave us a world in which, as Adam Smith noted, "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest." (See EconLib).

1 My son, preserve sound judgment and discernment,
do not let them out of your sight;

22 they will be life for you,
an ornament to grace your neck.

23 Then you will go on your way in safety,
and your foot will not stumble;

24 when you lie down, you will not be afraid;
when you lie down, your sleep will be sweet.

25 Have no fear of sudden disaster
or of the ruin that overtakes the wicked,

26 for the LORD will be your confidence
and will keep your foot from being snared.

I have nothing to add, except ...."that's what I want my life to be like."

[4] Who hath ascended up into heaven, or descended? who hath gathered the wind in his fists? who hath bound the waters in a garment? who hath established all the ends of the earth? what is his name, and what is his son's name, if thou canst tell?

Like Bill, I was struck by the verses about the importance of being not too poor and not too rich. But he has addressed that topic nicely, so I thought I'd put the focus on another issue in the chapter. The rhetorical question posed in verse 4 is useful not only for Christians but reminds economists of some of the paradox and mystery underlying the workings of markets. There is a substantial and growing literature (usually called "behavioral economics") about the ways that people do not behave as predicted by a narrowly constructed rational model. However, this seeming irrationality can actually help someone's long term best interest, usually by allowing them to overcome short term temptations. As Hebrews 11:11 says, "Now faith is the substance of things hoped for, the evidence of things not seen." A rationality that goes beyond human rationality seems like a modern economist's restatement of that Biblical truth.


Compare Isaiah chapter 40 (read this chapter aloud to get the full effect):

[12] Who hath measured the waters in the hollow of his hand, and meted out heaven with the span, and comprehended the dust of the earth in a measure, and weighed the mountains in scales, and the hills in a balance?
[21] Have ye not known? have ye not heard? hath it not been told you from the beginning? have ye not understood from the foundations of the earth?

An Observation
I've spent the last couple of decades in NJ, PA, OH, and MI. Very few people celebrate Texas Independence Day in these states.

My prayer for our friend Tom, who, I'm sure, spends a fair amount of his time with those who are "devious in their ways"...

6 For the LORD gives wisdom,
and from his mouth come knowledge and understanding.

7 He holds victory in store for the upright,
he is a shield to those whose walk is blameless,

8 for he guards the course of the just
and protects the way of his faithful ones.

9 Then you will understand what is right and just
and fair—every good path.

10 For wisdom will enter your heart,
and knowledge will be pleasant to your soul.

11 Discretion will protect you,
and understanding will guard you.

12 Wisdom will save you from the ways of wicked men,
from men whose words are perverse,

13 who leave the straight paths
to walk in dark ways,

14 who delight in doing wrong
and rejoice in the perverseness of evil,

15 whose paths are crooked
and who are devious in their ways.

Actually, the residual Marxist in me has to correct myself...this is really about being "middle income."

Proverbs 30 (I know today is the 2nd, but following Tom's lead I'm finishing "February") says:

7 "Two things I ask of you, O LORD;
do not refuse me before I die:

8 Keep falsehood and lies far from me;
give me neither poverty nor riches,
but give me only my daily bread.

9 Otherwise, I may have too much and disown you
and say, 'Who is the LORD ?'
Or I may become poor and steal,
and so dishonor the name of my God.

Note, it doesn't says "don't give me fabulous riches"...anything beyond my daily bread is likely to lead to trouble. A little wealth may not lead me to RENOUNCE God, but it is likely to lead me to depend on IT rather than God. Also, it may lead me to start to worship myself...mostly by introducing the idea that since I have generated wealth I must deserve ... a new car, a new house, a better type of fish or wine.

I'm not arguing for asceticism (thought there's a place for spiritual discipline) - we should enjoy God's blessings. But this ancient wisdom seems to suggest that maybe the best blessing of all is having "just enough".

I know that today is March 1, but I'm enjoying going through Proverbs, and after tomorrow I'll be off the blog for a while, so I thought I'd keep going through Proverbs in order.

[20] Seest thou a man that is hasty in his words? there is more hope of a fool than of him.

When someone tells you something and waits for a reply, how long should you wait? If you answer too quickly (the extreme version is to interrupt), you risk being thought glib, rehearsed, or even rude. If you answer too slowly, then you risk being thought stupid, distracted, or even rude. The various electronic opportunities available to us magnify the possibility of answering too quickly by lowering the price of responding quickly. I am all too frequently in a situation where I am counseling people not to magnify the error caused by a too-hasty pressing of the "send" button by quickly following up with another message. As with most of my observations, all too much of my learning has taken the form of experience (learning from my mistakes) rather than wisdom (learning from the mistakes of others).

This question has taken on a legal dimension in Illinois, where some professors were sanctioned for completing a required online ethics test too quickly. Their response was, essentially, "We're fast readers." This is reminiscent of a wonderful passage in Neal Stephenson's novel Snow Crash in which a government employee must spend a closely monitored amount of time reading a memo. I often tell people that I read science fiction because it prepares me for the day's news, and here's another example.

It's tempting to focus on v. 1 today, which is the key to one of the better (in my opinion) Black Widower stories by Isaac Asimov. But because this blog is about the intersection of faith and economics, not Biblical references in science fiction mysteries, let's turn instead to verses 20 and 22.

[20] A faithful man shall abound with blessings: but he that maketh haste to be rich shall not be innocent.

[22] He that hasteth to be rich hath an evil eye, and considereth not that poverty shall come upon him.

Yesterday the Dow Jones Industrial Average dropped by over 400 points. If I were trying to accumulate a retirement fund in a week, then this fact would have been very troubling (or very good, depending on how I was betting). However, instead of trying to accumulate a retirement fund in a week, I'm doing so over a long period of time. Thus, I am able to look on these daily vicissitudes with some equanimity, because I realize that I might be wrong at any given time, but I have not overcommitted to a degree that could lead "poverty to come upon me." Similarly, I invested almost a decade in college and graduate school before beginning full time work for pay. That is a long time and a lot of money given up. Why? Because the skills developed during that time are durable and allow for me to adjust to various changing situations.

My daughter is now old enough to notice the various quick-fix credit schemes advertised during the sporting events I like to watch. They make for a marvelous opportunity to discuss savings, debt, and long-term versus short-term thinking.

Humility, Signalling, and Peer Review

[1] Boast not thyself of to morrow; for thou knowest not what a day may bring forth.
[2] Let another man praise thee, and not thine own mouth; a stranger, and not thine own lips.

One of the powerful lessons of Christianity to me is humility. These two verses are excellent reminders. There is also a signalling issue, to bring us to the intersection of faith and economics. It is more credible to have someone else praise you, particularly if that someone is at arm's length. Notice that verse 2 emphasizes that the praise should come from a stranger, which is consistent with signalling theory.

A challenge in a world of specialization is that people with sufficient professional expertise to judge your work are also likely to be connected to you via a social network. This raises the challenge of finding a credible stranger to evaluate and praise (or condemn) your work. Academic peer review attempts to circumvent this difficulty by the use of "blind" processes where the reviewer is not given the name of the author.

Morning People are Annoying?

[14] He that blesseth his friend with a loud voice, rising early in the morning, it shall be counted a curse to him.

As someone who rises early and is cheerful in the morning, I would appreciate some exigetical assistance on verse 14 from the blog's more theologically adept members. Here's my concern. The verse doesn't condemn loudly blessing my friend at other times of day, so it seems to be something specific to the morning.

Given that Andy set this site up as a site dedicated to "the intersection of faith and economics" I would be remiss in failing to point out that today's reading includes perhaps the first statement of the law of decreasing marginal utility:

7 He who is full loathes honey,
but to the hungry even what is bitter tastes sweet.

The Book of Proverbs contains many other pearls that can be seen as equivalent to modern social scientific discoveries. Further evidence for Ecclesiastes 1:9:

9 What has been will be again,
what has been done will be done again;
there is nothing new under the sun.

This chapter opens with 11 verses excoriating the fool, including the famous v. 11, "As a dog returneth to his vomit, so a fool returneth to his folly."

Ah, but be careful before getting too comfortable in assuming that the verses are talking about someone else. We feel superior to the fool for 11 verses, only to find the sting in verse 12.

[12] Seest thou a man wise in his own conceit? there is more hope of a fool than of him.

Oops, is it too late to sign up for the role of fool? Given the namesake of this blog, this chapter and particularly v. 12 struck me this morning.