Money and belief

A worthwhile conversation with Philip Goodchild (author of Capitalism and Religion and Theology of Money) on economics and money, and what these things mean in a world where trust in the objective value of money seems perilous. He asks: “What can we put our faith in that gives us confidence in one another?”

“People talk about the law of comparative advantage, as though it were like the law of gravity and always applies. But it might be a principle that different countries are better at doing certain things, and would be better served if they did their different things. But that doesn’t mean that at all times and in all places and in every case, it’s best to keep to what you’re good at and not do a full range of other things.

“It’s one thing to take a principle, or talk about a tendency, or say ‘In general there is this economic force or phenomenon.’ It’s another thing to understand how that has a bearing on each individual situation, and [judge] whatever other forces are at work.

“In general, I would say that most economic laws are simply tendencies. But they become ideological when people call them laws, and they become belief systems that [people] live by and reconstruct their lives by. So the idea that markets are efficient is one that’s structured a lot of economic behavior over the past decades.”

A problem in thinking of laws as “simply tendencies” is that so much of quantum physics seems to suggest the same thing about laws of nature—that these things are “tendencies” too. But if things work as expected in most cases, they’re as good as law. The same may turn out to be true of capitalism—that these tendencies are the closest thing to law as we can get this side of heaven.