relationship of god's providence to market economies

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In this article, we examine the doctrine of providence to see if the market sys-

tem used by the United States and many other industrial nations can be thought

of as part of Gods providential care. The doctrine of providence concerns the

preservation and direction of the universe. Theologians discussing providence

sometimes refer to examples from the natural sciences but not from the social

sciences. However, economists since Adam Smith have used the idea of spon-

taneous order to describe the orderly function of market systems even when no

human agency is directly responsible for its operation. We suggest that this can

be thought of as a part of Gods providential care of humanity.

We discuss the ideas of Smith and Friedrich Hayek relating to spontaneous

order and then examine how the market system works. We focus on the imper-

sonal and anonymous nature of many economic interactions today and how this

differs from the more-personal relationships that characterized the economy of

ancient Israel. The model of perfect competition can be thought of as a tool to

analyze the workings of the economic system when no, one person has any con-

scious power over the plans of any other person. We conclude by examining

whether Christians can argue for the market system when it is based on a notion

of self-interest rather than on altruism.

Markets coordinate billions of individual decisions made daily by workers,

businesses, and consumers. Some moral authorities vilify markets for the role

that they are assumed to play in promoting greed, materialism, and inequality.

Others extol the virtues of markets, such as their ability to create abundance

while honoring the free choices of individual agents and groups.

Robin Klay and John Lunn

Hope College

The Relationshipof Gods

Providence to

Market Economiesand EconomicTheory

Journal of Markets & Morality

Volume 6, Number 2 (Fall 2003): 541564

Copyright 2003


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66. See John Lunn and Robin Klay, The Neoclassical Model in a PostmodernWorld, Christian Scholars Review 24 (December 1994): 14363.

67. See Aaron Director, The Parity of the Economic Marketplace,Journal of Law

and Economics 7 (October 1964): 110; and R. H. Coase, The Market for Goods

and the Market for Ideas,American Economic Review 64 (May 1974): 38491.

Robin Klay/John Lunn

relationship of god's providence to market economies

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