Classical economic theory tells us that, if left to their own devices, markets will balance themselves out — supply meeting demand — because the humans in those markets are rational beings who will behave in their own self-interest by making decisions based on reason. It amazes me that anyone who has actually met another human being could espouse such a theory in good conscience and with a straight face, but somehow or other this idea has managed to hang on more or less up until the present age.
In my opinion, classical economic theory is more useful as a model you can hold up against actual economies to see just how far off the mark you are about people acting rationally. Personally, I’m much more interested in behavioural economics, as developed in the 60s and 70s by Israeli psychologists Amos Tversky and Daniel Kahneman. Tversky and Kahneman developed a number of concepts that describe the ways in which people make irrational choices. The availability heuristic, for example, says that people tend to believe things they’ve heard stories about are more common than they really are. Like if you hear a story about a shark attack, it sticks in your mind, and you think shark attacks must happen all the time. But you’re not stacking up the story you heard against the thousands of people who go into the ocean every day and aren’t attacked by sharks. We are much more moved by a good story than by data.
Jesus in Luke chapter 6 is giving us his speech as the chief economist of the Kingdom of God. If rationality states that when someone punches you in the eye, the fair thing is for them to stand still while you return the favour, the economy Jesus is describing here is based on a principle of abundance, not balanced ledgers. “Love your enemies. Do good to those who hate you. Bless those who curse you. Pray for those who mistreat you. If someone slaps you on the cheek, turn to them the other also.” I ask you, is this rational? Is this an example of supply balancing with demand?
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