When is enough truly enough? Taking an economic approach to faith

Bob Goudzwaard
Bob Goudzwaard
The late Dutch economist Bob Goudzwaard’s work has valuable lessons for us all Chris Gousmett writes.

Christians around the world are mourning the recent death of Dr Bob Goudzwaard (1934-2024), a Dutch Christian economist and parliamentarian.

He was noted for the tireless promotion of what he called the "economics of enough".

Many have argued for reduced consumption by consumers in order to limit the impact of their lifestyles on the environment, on scarce resources, and on their own selves (by fostering a sense of simplicity). Goudzwaard extended this to the level of nations.

He argued that nations with significant economic advantages in the international economy should consider slowing down their growth to give less-developed nations a chance to catch up.

One of his earlier books was addressed to "the overdeveloped West". He did not see economic growth as a positive indicator when this resulted in consumption for its own sake and exploitation of scarce resources.

Powerful nations always have an advantage over less powerful ones, and tend to exploit less powerful nations in myriad ways. An example is the use of "aid" to poorer nations which is tied to purchase of goods from the donor nation.

While there may be benefits in this arrangement for the poorer nation, it tends to stifle its economic and political development by sidelining its own perspective on how best to develop.

Goudzwaard used the metaphor of the "blossoming economy" to describe how we should be thinking about economic growth.

Instead of being either pro- or anti-growth, his idea was that since growth in size is appropriate when a tree is small, but inappropriate when it becomes mature, when it should be blossoming and bearing fruit, so with economies. Those of so-called less-developed nations should grow; those of our affluent nations should no longer grow.

This is what he called the "economics of enough". Goudzwaard criticised both capitalism and socialism, as both prioritise use of material resources over the wellbeing of people in all their responsibilities and over community life.

He emphasised the need to understand the underlying structures and dynamics of economic systems, rather than just focusing on short-term events.

There is little to be gained by trying to improve the economy by moving money between different areas of activity, if the underlying structure of the economy leads to perpetuation of poverty and under-employment regardless of efforts to adjust outcomes.

In Goudzwaard’s view, economics is a normative human responsibility by which we seek to give form to the interactions between people, between people and institutions and between institutions. There are good ways this can be done, and bad ways.

Whichever path we choose is not a matter of technical issues — to try to bring down inflation, to adjust interest rates, to levy fair taxes — but a matter of responsibility to do what is right, and accountability for the decisions that we make.

The everyday actions of people as they exercise their respective economic responsibilities — buying groceries, saving for a holiday, buying a new car financed by a loan — are then indicative of their deepest convictions about how our economic opportunities should best be given expression. For instance, he argued that "poverty, for example, is related to the degree of our self-enrichment".

Economic activities are always either enabling, so that fruitful development can take place, or restrictive, leading to a single-minded focus in which our normative responsibilities (discerning what is right and appropriate) are narrowed down to simply producing goods and services at a certain price, to the point where it seems everything is about making a profit and making money.

Goudzwaard argued that the purpose of a business enterprise is not to make a profit but to make serviceable goods and good services. The profit necessary to sustain the enterprise should be an outcome of its activities, not the reason for its existence.

One focus of Goudzwaard’s work was to understand who it is that makes economic choices. In mainstream economics the full-blooded, multi-focused person disappears and is replaced by a "consumer" who apparently has no purpose except to make economic choices.

This is the "rational choice" model of neo-liberal economics which has wrought such damage to economies worldwide, not least in New Zealand. Economic activity is but one part of the life of a person, who has multiple responsibilities and interests: making music for the fun of it; organising social sports; visiting the elderly; teaching their child to read; enjoying listening to birds while on a walk in the sun.

Are these economic factors in a person’s life? No, but economics needs to take account of the fact that such activities form part of our lives.

Goudzwaard’s Christian faith led him to say: "A good market is not just about growth and ‘always more’, but about the flourishing of people".

[I have drawn on material by Bruce Wearne, Andrew Basden and Paulo Ribeiro, with their permission.]

Chris Gousmett is a retired Mosgiel author.