Summary of Chapter 2: WHAT IS ECONOMICS? by Ronald Nash


In chapter two, What is Economics?, Ron Nash argues that economics studies the choices people make with regard to scarce resources which is an unavoidable feature of human existence.  Economic choices often have nothing to do with money, but with what people value most (e.g., goods, plus time, plus priorities=choices presented).   “Stand in line for a ticket or pay someone to do it for me?” the former option may cost less money, but the latter one reveals that my time is more important.  Hence, the two main ingredients in any economic study are scarcity and choice.

When we are talking about Micro and Macroeconomics the former concerns smaller individual persons, households and businesses, whereas the latter examines the aggregate of the micro economic choices, it studies a nation’s economy as a whole.  Here, to best understand how the whole functions, one must understand how the particular human choices are made.  When considering Positive and Normative economics we must understand that each has its place.  The former is descriptive, it tells us what is, the latter is prescriptive, it tells us what ought to be.  When policies intended to help the poor—again define?—actually hurt them, it’s time to re-consider the positive/normative angle being used.

Economics as a Way of Thinking considers the issue of incentives.  The key to economic growth are the incentives people have presented.  The critical factor here is whether or not the incentives given actually empower or enslave people.

Involved here is the benefit to cost ratio (e.g., are unemployment programs more lucrative than getting a job?).  The greater the benefits people expect to receive from the alternatives the more people are likely to choose that option.  The greater the costs expected from an alternative, the fewer people are likely to select it.

Moreover, everything has a price.  Scarcity demands cost for everything.  Again, scarcity, choice and personal value are reflected in people’s decisions where the need to make choices and the relative value placed on given options is seen (i.e., one man’s trash, is another man’s treasure). Perhaps the most alarming issue is that of antipoverty programs that don’t work and remain intact which perpetuate the poverty.  When long-range impact is not considered in any given policy, it’s merely putting a bandage over a cancer.  See quote pg. 21 second  paragraph.

 Summary of Chapter 1: The Christian War Against Economics from “POVERTY and WEALTH: THE CHRISTIAN DEBATE OVER CAPITALISM” by Ron Nash

51i-aB7ZPIL._SL500_SX331_BO1,204,203,200_The topic of economics is both fascinating and often confusing for the average person.  All of us have a position on what economics is and how wealth is to be used even if we are not immediately aware of it.

In this book, Ron Nash offers some insight into what economics is, how it can be either used or misused, and how a Christian worldview ought to shape minimally professing Christians.

In chapter one, The Christian War Against Economics, Nash shows that to truly help the poor—which he has not yet defined—believers must use good intentions with guided insight concerning economics and what makes for a good or bad economic strategy.  To be in the dark concerning these twin pillars only perpetuates the unwitting darkness being embraced by well-intentioned people.  Moreover, believers must understand that Scripture is often used to propagate a Godless position (i.e., liberation theologians use the Bible to show that God is a Marxist).  Nash purports that “Evangelical publishers like Eerdmans and InterVarsity produce a steady stream of books recommending socialism as the only economic system that is consistent with the Bible.” [pg.11] It seems that at the time of said writing the facts argued contrary to the aforesaid view.