Dragas Reappointed
Health Care Redux

The Shepherd and the Hired Hand

Jonathan B. Wight

The Bible contains lots of economic directives and insights. Some of it is quite interesting for maintaining social order and some of it quite objectionable in light of 21st century moral norms (e.g., the tacit endorsement of slavery and polygamy).

Part of my passion for justice in markets was aroused as a teenager by reading the accounts of Jesus in the book of Matthew. I guess (but have no evidence) that some of this also rubbed off on Adam Smith, who initially trained for the clergy. Smith thought hard about justice for the poor, and it was almost always the focus of his interest (on average he returns to the word justice about once every other page in TMS and once every 7 pages in WN).

My initial Jesus-inspired inclination was definitely toward socialism, and many Christians in Latin America followed Liberation Theology which seemed almost communistic. It was not until graduate school, however, when I had returned to Brazil to gather data for my dissertation, that the deeper meanings of justice through policy came to be appreciated. The Brazilian government's wholesale manipulation of prices and incentives seemed politically motivated to help elites, and even when done to supposedly help the poor, was often ineffective. That opened my eyes to the deeper virtues in markets—if, as Smith noted, the correct pre-conditions existed.

Not all Bible passages lean socialistic. Here's one passage (of many) on the meaning of ownership and incentives (the principal-agent problem):

The hired hand is not the shepherd and does not own the sheep. So when he sees the wolf coming, he abandons the sheep and runs away. Then the wolf attacks the flock and scatters it. 13 The man runs away because he is a hired hand and cares nothing for the sheep.

    --John 10:12


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