The Beginning Of… Economics Series

Scripture Introduction

How much is a person worth? I read that the average human body is: 65% oxygen, 18% carbon, 10% hydrogen, 3% nitrogen, 1.5% calcium, and smaller amounts of things like phosphorous, potassium, sulfur, iron, zinc, and copper. These elements can be bought for about four dollars.

How much is a person worth? A recent magazine article claimed that on the black market you could sell your bone marrow for $23 million, your DNA for $9 million, and the antibodies you carry for about $7 million. A lung or kidney might fetch $100,000, and a heart over $50,000. Selling all of your body parts at top dollar might bring $40 million. So are you worth $4 or $40 million?

How much is a person worth? If the recession turns into a depression so that I could not sell my house for what I owe, I might have a net worth less than zero. So I am worth either $4, or $40 million, or <-$40,000>?

But maybe none of those answers is correct. 1Peter 1.7 says that the faith we have through Jesus Christ is “more precious than gold.” And Lamentations 4 tells us that “The precious sons of Zion [are] worth their weight in fine gold.” If the average son of Zion weighed 170 pounds, they would be worth about $2.5 million.

Economics has to do with value. What is it worth? We may think this a modern science, but valuations actually began in the Garden of Eden, before the fall. Our text is Genesis 1.31-2.14 as we consider The Beginning of… Economics.

[Read Genesis 1.31-2.14. Pray.]

Introduction

When my kids were much younger they sometimes asked questions like, “Dad, is two feet a lot?” Of course the answer depends on what we are talking about. A two-foot stack of gold coins is worth a lot, about $150,000. But a two-foot deep swimming pool is not really enough to swim in. And yet, a two-foot stack of gold coins is not a lot when compared to the national debt; and two feet of water is very deep for a toddler who can’t swim.

Economic valuations are often relative. The answer to the seemingly simply question, “Dad, are we rich?” depends on what we value and whom we are compared to. We are certainly rich in God’s blessings. And we are rich compared to most everyone in Zimbabwe, Congo, and Burundi, which all have a per-capita GDP of less than $500. But I read somewhere that to be rich is to be debt-free, to have more than enough to cover your needs and reasonable wants, and having the resources to help the people in life that you care about.

Is two feet a lot? It depends. Are we rich? It depends. Economics is a tricky subject.

What is value and how is it decided? I entitled this message “The Beginning of… Economics,” but my topic is more narrow; it is where economic theory begins, with the relationship between intrinsic and

imputed value.

Some suggest the value of a item is intrinsic—its worth is one of the basic and essential features that make it what it is, rather than because of its associations or consequences. Different theories suggest how value gets into something—maybe the labor which made it or the aggregate opinion of society. But in some way, either because of its usefulness or its necessity, it has inherent economic value. In various forms, Karl Marx, John Stuart Mill and (on some days) Adam Smith, taught that economic value was intrinsic. Mill, for example, wrote that playing chess is intrinsically more valuable than playing checkers because it requires more intellectual effort, so it is more useful. This is the economics of utilitarianism.

There is some truth here. Heaven has intrinsic value—God is there. The Scriptures have intrinsic value—they are God’s very words. And in an agricultural economy, especially with significant scarcity of the necessities of life, the intrinsic theory seems to work. But it fits less well the economics of urban and wealthy societies. If value were only intrinsic, then a glass of water (necessary for life) should cost more than a glass of diamonds (which have very little use). Yet as Marilyn Monroe sang, “Diamonds are a Girl’s Best Friend.” We impute value to them, in part because of their scarcity.

The progress of capitalism pushes an alternative theory of economics, that value is imputed. According to this theory, all markets must be free so that cost is dictated by what people want. If I want diamonds, they become valuable to me; if enough people want diamonds, the price rises correspondingly. Enoch Powell (a member of the British Parliament in 1967), said: “If people value it, it has value; if people don’t value it, it doesn’t have value; and there is no ‘intrinsic’ about it.” (Quoted in North, The Dominion Covenant, 41).