The Etymology of Economics, Trust, and the Power of the Simple Contract

John Rankin (October 26, 2009)

So often today we think of economics in the macro sense – the decisions of big government, the Federal Reserve, big business, or big business schools – in the crunching of numbers and algorithms, in fiscal and monetary theories. All this is based on the assumption that proper formulas are the key to economic prosperity.

Not so. Such a view of economics is unhealthy for human relationships. The English word “economics” is rooted in the Greek term, oikonomos – “rule of the household.” In the Hebrew Bible, this concept is represented in bayit, the term for household or family. Economic health begins with the integrity and freedom of the family unit on up, and then with the consent of the governed.

The assumptions of the biblical order of creation are radical, a word that means “root level.” In other words, the understanding of cause and effect – in the matter of economics or any other field of inquiry – needs to begin with foundational realities. Subsequent effect traces back to prior cause, back to the original discernible cause.

When I began my post-graduate studies at Harvard, my first course was with a man who later became my advisor – Arthur Dyck, chairman of ethics in several of the graduate schools. The class was for both graduate and undergraduate students: “Introduction to Ethics.” With some 200 students in the lecture hall, Professor Dyck began with a simple question: “What is the most essential ingredient to a civilized society?”

Perhaps six or eight students attempted to give answer, and in each case, Professor Dyck affirmed their contributions, but they still fell short of what he was aiming for. I had no idea, so I did not volunteer my ignorance.

“Trust,” he said. And we all sat there pondering the inescapable simplicity of truth. Without trust we have nothing.

And where does trust begin? In the social arena, it begins with mother and nursing child, indeed, in the prior in utero nurture of the amniotic sac and mother’s comforting heartbeat. And in the healthiest context, with husband and father right there in full involvement and support. If trust is broken at or near the beginning of a child’s life, if it is broken in what otherwise would have been an innocent childhood, the damage cascades terribly, in every direction.

The biblical order of creation, Genesis 1-2, is unique. It begins with trust and the simplicity that trust alone can produce. In contrast, all pagan and secular constructs of cosmic and human origins start with the assumption of broken trust, the metastasizing nature of increasing circles of distrust, and its ultimate inescapability.

The conclusion of Genesis 1 – the grand design of creation – is that man and woman are equals and complements. The conclusion of Genesis 2 – the covenant of freedom given by Yahweh Elohim – is that the exclusive marriage of one man and one woman is the foundation for trust in the social order. In Genesis 3, this trust is broken, and all human suffering traces itself accordingly. In Genesis 4, this distrust begins to grow as bigamy and murder are introduced. In Genesis 5, Yahweh Elohim reaffirms the equality and complementarity of man and woman, even in the face of a broken world. In Genesis 6, the judgment of the Flood is a direct result of polygamy, the building of harems and the political tyranny and lawlessness that accordingly resulted.

The trajectory of broken trust reasserts itself after the Flood, and reaches an apex in the lawlessness of Sodom and Gomorrah, which is far deeper than sexual brokenness – it involves every form of social and economic brokenness as well.

Thus, a biblical understanding of the household – of economics – is unique in affirming the need for trust beginning with man and woman in faithful monogamous marriage.

In 1994 I addressed a Mars Hill Forum at Smith College, with Patricia Ireland, then president of the National Organization for Women (NOW): “Feminism and the Bible: Do They Share Any Common Ground?” As we touched the question of marriage, I said that there are only three possibilities:

100-0; 50-50; or 100-100.

In the 100-0 option, male chauvinism is operative. Here the man demands 100 percent and gives nothing. It equals economic slavery for the woman.

In the 50-50 option, each party lays claim to his or her 50 percent of the career goals, house ownership, cooking, housework, childcare, savings etc. But if one spouse takes 51 percent, there is war. And the result also increases economic stress.

In the 100-100 option, each party gives 100 percent of his or her best to the other. This produces the greatest economic engine in history, where equality and complementarity are fully affirmed in marriage as the basic institution in society.

The largely feminist audience liked this option, and so did Patricia. But then I raised the question: Who gives the first 100 percent? When Genesis 1-2 is grasped, it is seen that Yahweh Elohim initiates the giving process which fully defines human relationships as they were meant to be.

As I outlined these three options, I suddenly realized I was about to spontaneously say something very simple, never before uttered on my part, but also the trajectory of many years of thought. As I took in the large audience, the television lights, Patricia and the dean of students sitting next to me, and the flow of the evening, I wondered if what I was about to say could be sustained. It was so simple.

“There are two choices in life: Give and it will be given, or take before you are taken.”

And yes, 15 years later, I agree with these very simple words – simple, but not simplistic, for they hold interpretive power for all human relationships, and the health of the social and economic order. The 100-0 and 50-50 marriage equations equal “take before you are taken,” and rooted in distrust. Only the 100-100 option equals “give and it will be given” – rooted in the nature of the God the Father, fulfilled in Jesus the Messiah, and manifested in the power of the Holy Spirit.

When the marriage covenant is broken, social order is broken. And historically, this largely proves to be a matter of male chauvinism and/or irresponsibility. Indeed, the greatest social evil in human history is “the chosen absence of the biological father.” To wit:

  • Imagine Ishmael, son of the broken marriage covenant as Abraham slept with a concubine – forced to become “a wild donkey of a man.”
  • Imagine the children of divorce who blame themselves when daddy leaves.
  • Imagine the forsaken women who feel no choice but abortion.
  • Imagine self-identified promiscuously heterosexual and homosexual persons who suffered abuse in childhood because their real fathers were absent.
  • Imagine seventy percent of Black Americans whose fathers were absent.
  • Imagine the children of polygamy whose fathers have split loyalties.
  • Imagine the children of donor sperm who ask: “Who is my daddy? Where is my daddy?”
  • Imagine the economic havoc all this has wreaked; Ishmaelite economics versus Hebrew economics; the privation of unmarried or divorced mothers and their children; the cost of the abortion industry; the cost of STDs and counseling for the promiscuous and dispossessed; walk through Detroit, give a listen and take a look; the infighting over inheritance between many sons of the same father but different mothers (e.g. Osama bin Laden); lawsuits over donor sperm paternity; lawsuits over everything related to broken sexual relationships.
  • Are dispossessed women and children thus forced to flee to a big daddy government?
  • And is not this big daddy government the true sucking sound of the nation’s economic health, as bureaucracies multiply, and taxes consume ever fewer private jobs to sustain an upside down system?
  • When will it all crash, and can we recover?
  • Now, imagine a man being a real man, imaging his heavenly Father in how he treats women and children.
  • Also imagine a constitutionally limited federal government that serves the unalienable rights of life, liberty and property for all people equally, as rooted in the consent of the governed.

What is money? It is merely an exchange of trust – the value placed in a coin, or piece of paper, or electronic bit, to make exchange of goods simpler than bartering. Its only worth is the trust placed in it, or the government or bank that backs it up, or system that assures honest accounting.

In our economic crash of the last year, how often have we heard the need for “trust” to be restored to the markets? And yet the “take before you are taken” model persists, ever stronger.

How many of us know how to trust in others, and have earned the trust of others? How wide or narrow are our circles of trust? How can trust in the Government, U.S. dollar or Wall Street be restored if it is not first restored in our marriages and families, then our local communities on outward?

My best attempt to address this issue is in two books, The Six Pillars of Biblical Power and The Six Pillars of Honest Politics. The latter depends on the former.

The six pillars of biblical power are these:

  • The power to give: We believe that the Creator, Yahweh Elohim, the Lord God Almighty, our heavenly Father, employs his unlimited power to give to and equally bless all people as image bearers of God. The power to give is modeled in the faithful marriage of one man and one woman, in parenthood, and is the basis for trust in human society.
  • The power to live in the light: We believe that the Lord God said, “Let there be light,” and there was light. As darkness and the prince of darkness flee the light, we embrace the power to live in the light of God’s presence, open and accountable to all people in all we believe, say and do.
  • The power of informed choice: We believe that the Lord God gives us all the power of informed choice, to say yes to the good of freedom and life, and no to the evil of slavery and death.
  • The power to love hard questions: We believe that the Lord God gives us the freedom and power to pose hard questions of him, and of one another in Christian community. This is the power of sanctifying integrity.
  • The power to love enemies: We believe that the Lord Jesus loved the world when we were yet enemies of the truth, drowning in a sea of broken trust. Now, as believers, we are empowered by the Holy Spirit to love those who are, at present, enemies of the Gospel.
  • The power to forgive: We believe that the power to give is restored to the broken world through the power to forgive, purchased in the life, death and resurrection of the Lord Jesus. Thus, we as believers are called to extend this forgiveness to the broken world, by the power of the Holy Spirit, and in celebration of the mercy that triumphs over judgment in the second coming of Jesus.

The six pillars of honest politics are these:

  1. The power to give affirms that the unalienable rights given by the Creator belong to all people equally, and leaders in human government should serve such a gift.
  2. The power to live in the light means that leaders in human government at every level should be as fully transparent as possible.
  3. The power of informed choice is rooted in an honest definition of terms in political debate, providing a level playing field for all ideas to be heard equally, apart from which political freedom is not possible.
  4. The power to love hard questions is in place when political leaders honor and answer those who pose them the toughest questions.
  5. The power to love enemies recognizes that even the harshest of political opponents share a common humanity and are to be treated with respect.
  6. The power to forgive recognizes the need to address our individual and societal transgressions against one another, and to work toward justice and reconciliation.

These six pillars of honest politics are by definition pre-partisan. In other words, they set the foundation for healthy partisan debates over public policy, in service to the consent of the governed. The deepest partisanship is the creation of a level playing field for all partisan ideas to be heard equally, where the pursuit of truth in any and all matters becomes possible.

In The Six Pillars of Honest Politics, a foundation is established, then tested and applied variously, and as I arrive at the end of the book, I take Occam’s razor (“reduce needless redundancies”) to state and federal law. In my home state of Connecticut, I simplified 17,000 pages of the Constitution and statutory laws to 33 pages; with the U.S. Constitution and U.S. Legal Code, I simplified them from 48,000 pages to 25 pages. It was simply a matter of getting rid of multiplied distrust, and returning to simplicity and trust as protected by minimal but firm checks and balances.

In the matter of state business regulation, I boiled it down to a few sentences. There would be only three types of legal contract:

  • The “simple open contract” is 50 words or less;
  • The “regular open contract” is 51-300 words; and
  • The “closed contract” is 301 or more words.

The law would only require that all legal contracts be specified as to which type they are.

It is very hard to lie in less than 50 words, and thus the marketplace would drive businesses to do the “simple open contract” perhaps 90 percent of the time. The “regular open contract” is suitable for more details in certain cases, and the “closed” contract is suitable for large business deals where lawyers and accountants are represented on both sides.

If we think about it, and imagine every contract we ever sign, from credit cards to cell phones to used cars to property leases to stock sales, we would not be in the mess we are today if such a law had been the norm. The dishonesty of top-down government and top-down business would be overcome quite largely. Burdensome government bureaucracy would disappear, and the marketplace would explode with new jobs. If one state made this law, it would become a nationwide magnet for new businesses, and other states would then compete.

All that is needed are biblically accountable legislatures. And this means people in the legislatures who are biblically and constitutionally literate, who understand the etymology of economics and the nature of trust. The idea of the “simple contract” would have broad and eager support among the voting population.