Tag Archives: #devil

The Economic Devil

There is one great flaw in economic analysis and that it that it has no theories that explain generalised wrong doing within the economy. Instead it recognises that there may be individual wrong doers but that wrong doing can be systemic throughout a particular sector the economy. Unlike Christianity it lacks a devil, Christians can account for wrong doing by referring to the malign influence of the devil, whereas in economics the assumption is that there are only occasional examples of wrong doing. There is on earth an economic Garden of Eden that is the free market system ensures no evil practices will prosper. Competition will force all businesses to adopt the highest standards of conduct through fear of losing sales to more ethical competitors.

Christians would have no difficultly in understanding that the greed of bankers was a key factor in precipitating the crash of 2008/9. It was their desire to accumulate larger and larger bonuses that encouraged them to undertake increasingly risky investments, investments that offered the possibility of greater and greater profits and bonuses. Self restraint was a characteristic absent from the traders and bankers money in the City of London. When it is phrased in these words the Christians seem to have a better explanation for the crash of 2008/9 than do economists. Fundamentalist Christians might suggest that the devil who had corrupted the behaviour of bankers and that this corruption directly led to the crash. Faust sold his soul to the devil in exchange for the love of Helen of Troy and as such was committed to a life of sin. It could be argued that the bankers sold their souls to the devil in exchange for untold wealth. Certainly there behaviour in that time suggested that they were little more than the servants of the devil.

Fortunately economists don’t have to re-invent the devil to explain the wrong doing that takes place within the economy. The corruption of the spirit comes from the belief that the main purpose of all human activity is the accumulation of wealth. It is the quest to maximise income and profit that will lead to the adoption of unethical behaviour. Adam Smith (The Wealth of Nations 1776) stated that when a group of businessmen are gathered together their purpose is not to promote the common good but to further their own selfish interests. He was familiar with the practices of 18th century merchants who would divide a market between themselves; where each would be guaranteed a local monopoly so they could charge the highest possible price for their goods without having to worry about being undercut by a low cost rival.

Today there is a report in the newspapers that house builders are restricting the supply of houses so as to force up the price of houses. The former Mayor of London Ken Livingstone produced a report that claimed that house builders in London made a profit of 26% on each house sold at a time when the average company profit was 10%.

While there is no devil in economics but there is the devil like ethos which is summed up in the words profit maximisation. Any behaviour is deemed acceptable if it results in increased profits for the business. A practice demonstrated when international firms operating in the developing countries hire mercenaries to eliminate local politicians and trade unionists that might campaign for better wages or environmental protections that would increase their operating costs.

Bad behaviour amongst business executives is not unknown to economists, its just that the current generation of economists assume that such behaviours have only a small impact on the economy and its host society. Yet a recent writer on the Italian mafia asserted that London was responsible for facilitating the activities of the various Italian drug cartels through money laundering, which gave the gangs clean money with which to finance their corrupt practices in Italy and other European countries. The very opaqueness of the banking system makes it impossible to know the extent to which such bad practices are common in the London financial markets, whether it is one or two bad apples or the whole barrel that is rotten.What evidence there is suggests the latter.
What I am arguing for is a recognition that there is a devil in the economy, there is an ethos that perverts its workings so as to favour the selfish interests of small groups at the expense of the majority. I would suggest that Gresham’s law needs updating, in its original form it states that bad money drives out good. Gresham was thinking of Henry VIII and his constant debasement of the currency. A contemporary Gresham’s law would state that bad economic practices drive out the good. I do have some experience of this as when I worked in the City of London in the 1960s, new sharp practices began to creep into the city. At first the old established city firms resisted employing these sharp practices, but when it was clear that these new practices were very profitable the old ethical behaviours were soon abandoned.

The old city insurance firms were very conservative in their practices they never employed aggressive selling techniques, such as cold calling. New comers to the market employed much more aggressive tactics and took an increasing share of the insurance market forcing the old established insurers had to follow suit. This had one unfortunate consequence as life insurers competed with each other by offering more and more generous end of term policy benefits. To finance these generous payouts the insurers had to raid their cash reserves. This had two effects the first was to reduce the viability of the company forcing a wave of mergers as these firms sort tried restore their viability through consolidating into a few large companies so building up their depleted reserves. The second was that the life insurance industry was unable to pay such large end of policy benefits and were guilty of overselling their products. This led to the pensions scandal when it was revealed that the many millions who had on exchanged their occupational pension for one provided by an insurance company believing that their promises of a much higher pension, discovered that their private sector pensions generated a pension far less than that offered by their former occupational pensions. What has happened is that the old conservative but financially sound companies of the past have been replaced by more aggressive but less viable businesses. The trusted figure of the man from the Pru is now a figure from the past as he has been replaced by the salesman eager to win your custom.

Christianity has another lesson for economics, according to Christianity mankind is tainted by original sin and only an outsider untainted by human corruption can save them, that is God. Similarly the market system is tainted by an original sin, greed or perhaps more accurately original greed. The economic devil an integral part of the free market, this devil is ever ready to corrupt the participants in the market with the promise of riches. The business ethic, that is the desire to maximise profits is all too often little more than a disguise for this primal greed. Personalising the faults of the market system in form of the devil (even if it’s a metaphor for greed) has one important role it will constantly reminds politicians that the free market is not the solution to all problems, but is yet another flawed human creation that is corrupted with all the sins of its makers. The unregulated free market is a threat to social order as all manner of unethical behaviours are made possible, if there are no laws or regulations to prohibit them. The behaviour of the bankers and traders in the financial markets in 2008 and since demonstrates the folly of leaving the market and its members to set their own rules. Once this is accepted the government will return to its former function of legislating to stop powerful players in the market from abusing their power at the expense of other members and outlaw the most undesirable of economic behaviours. What politicians fail to realise just are there are crimes against the person and property, there also the economic crimes, which are also a threat to the person and property.

Note. A more sophisticated version of the threat that an unregulated market poses to the social order is to be found in Michael Polanyi’s ‘The Great Transformation’.


How a knowledge of the devil can aid in the understanding of economics and government policies.


Manchester University economics students are campaigning for a change in the teaching of economics at their university. They are discontented with a curriculum whose content is limited to Neo-classical economics and mathematical modelling, a curriculum that fails to adequately address the issues of the day. They have called for a broadening of the curriculum to include other subjects such as psychology and economic history so as to develop a more reality based subject. One subject not included in their list was theology, so as a theologian I am going to demonstrate how theology can contribute to economic analysis. I want to show how using what many consider an out dated concept ‘the devil’ aids our understanding of economics.

Satan or the devil does not really figure in religious iconography until the last century BCE. In the Old Testament Satan is but one of the angels. He is one of the angels that are involved in inflicting pain and suffering on Job. With the rise of the new religious beliefs and practices of the last century BCE, the new religious world view was increasingly at odds with reality. There was the problem of how to reconcile a good God, who created a good world with the cruelties and suffering of the contemporary world. A problem that became more acute with the Roman persecution of Christians in the 1BCE. How could a world ruled by cruel Roman governors who used crucifixion as the punishment for dissent be part of a world created by a good God? The answer they found was in the devil a fallen angel, a malevolent being who introduced sin into creation and worked unceasingly to corrupt God’s good world. The old Olympian Gods who were cruel, licentious and deceitful were redefined as demons. St. Augustine portrays a world in which these demons (whose bodies were made of air) circle around the earth in the atmosphere looking for opportunities to lead men astray. One of the most ruthless persecutors of Christians in the Roman Empire, the Roman a Emperor Diocletian is shown in medieval pictures in companionship with demons. The actions malevolent spirit explained why the world did not fit with the Christian world view.

Perhaps the most compelling picture of the world as imagined by the Christians of the early centuries CE, is the picture of St. Anthony in the desert being tortured and tempted by devils. Frequently a subject for medieval and renaissance artists. Despite its apparent dissimilarity the Christian obsession with the devil and contemporary economic thinking, it does provide the perfect analytical tool for understanding the latter.


Economists have created through ‘thought experiments’ the perfect economy. Yet whenever they put their precepts into practice it inevitably fails. Why does the free market economics as practised in the developed West so frequently fail? Why in this perfect world did the financial crash of 2008 happen? Their mathematical modelling of the economy showed that the free markets economic systems were those ideally best suited to maximise human welfare. If there models were correct what was going wrong in this perfectly manufactured economic system? There had to be some extraneous malevolent force interfering which made the system malfunction. Economists needed their own devil to explain the failures of their policies. Fortunately it was not hard to find this new devil, it had to be government. Neo-Liberal economists set about rewriting history to prove their case. There were sufficient horror stories from the Social Democratic era to demonstrate why the government should be excluded any management role in the economy. Perhaps the most striking of these stories of failure is that of DeLorean sports cars. DeLorean persuaded the government to fund the construction of a factory to make futuristic stainless steel sports cars in Belfast. Unfortunately there was no market for these cars and the business collapsed, losing the government millions of pounds. Now not only had economists found their devil they could demonstrate the horrors of his work to unbelievers.

There is a parallel between the preaching of early Christian missionaries and that of modern Neo-Liberal economists. Both could demonstrate the horrors of a life lived in thrall to the devil. For the first it was a life which ended in eternal torment in the fires of hell, for the second it was a life lived in the hell of social democracy as witnessed through the winter of discontent in 1979. Who would not want a life free from the horrors of the winter of discontent 1979 or the Great Society and LA riots associated with Lyndon Johnson’s occupancy of the White Hose.

Once the devil had been discovered a whole host of minor devils could be found to be working to frustrate the free market. NGO’s by campaigning for aid to help the most troubled of developing countries, were through the provision of aid undermining local economies and preventing the development of a local agricultural market that would feed the people. A profitable and thriving farming sector could only develop if they were not undermined by the distribution of free food. Saving lives now was misguided as it only laid up troubles for the future.

Just like the evangelical Christians who have to co-exist with the devil as he is part of God’s creation and economists have the accept the existence of government as it part of society, without which there could be no social order. Evangelicals rely on prayer, missionary work and political campaigns to profit abortion etc, to minimise the influence the devil has over people’s lives. Economists endlessly proselytise on the benefits of the small state on the assumption that the smaller the state the less damage it can do. Consequently there has been the constant privatisations and out sourcing of government activities to make this happen.

Free market economists are similar to fundamentalist or evangelical Christians in the horror in which they regard their own devil. One prominent Christian Republican politician advocated the killing of those who had claimed to have encountered aliens. His reasoning was that as aliens don’t exist they must have encountered devils and the only way to prevent these dupes of the devil spreading corruption in society would be to eliminate them. Grant Shapps the Conservative Party Chairman reacted with horror when the Labour Party suggested some modest regulation of the housing market. The most vile term he could come up with to describe it was ‘Venezuelan’ . For him their could be no greatest horror than living in the socialist state of Venezuela. Similarly in the US Congress a similar revulsion attaches to the word socialist.

Obviously it can be no surprise that there is an overlapping between membership of fundamentalist evangelical Christian organisations and the right wing political parties which are populated by believers in the free market. In the USA the Southern Baptists are Republicans and in the UK those Christians who oppose contemporary mores such as gay marriage are to be found disproportionately in the Conservative Party. What cannot be denied is the popularity of the belief in the devil, perhaps because its offers reassurance. In a world that seems alien or hostile too them it is easy believe that the cause is an external malevolent force, it explains everything.

What I can conclude by saying is that contemporary economists and first century CE Christians share a similar dilemma, how to explain a world that does not accord with their world view. For the Christian it was the Roman government dominated by the Satanic ethos and for the economist it is a malign government dominated by a similarly destructive ethos.