Irrational Exuberance? You Got That Right!

Of all the Delphic utterances of Alan Greenspan over the course of his time as Fed Chief, his observation that various market investment mechanisms might possibly be overvalued, and thus suggesting that folks might be motivated by an "irrational exuberance," was my favorite. Some would say the observation was prescient in light of subsequent events in the global economy. Of course, the observation that someone is acting with "irrational exuberance" need not be limited to Greenspan's application. I want to explore another, but related, application in the following few paragraphs. Let me say that I am at least conceptually indebted to Harvey Cox's well-known essay entitled "The Market as God."

If there is anything that continues to enjoy a high degree of "irrational exuberance," it has to be the belief that an unrestrained, free market holds the answer to all of our economic woes and uncertainties. One would think this would be less the case, given current circumstances. Even Greenspan commented that his confidence in people doing the right thing in a free market was misplaced. Yet we continue to hear free market ideologues telling us that if we would but free markets so that they were governed merely by free associations between free individuals, all would be well. Go figure!

Consider some of the language that free marketers use in regard to the market. We are told that free, unrestrained markets would just "do the right thing," that they are able "to determine the correct value for goods and services," that they will "self correct" when errors occur, and that there is an "invisible hand" that directs markets in wise and beneficent ways. And, following Cox, consider some of the ways we personify the market (to hear these on a daily basis, pick any financial news show). We say that the market "liked" or "disliked" certain actions, that the market was "upset" with a particular corporation, and that the market "punished" a corporation for daring to violate one of its self-evidently true principles. If one ponders these ways of thinking of the market, one has to wonder why in the world Christians would be comfortable with this way of thinking. After all, some of these concepts, as Cox suggests, are ones that Christians would normally not be inclined to apply to any entity other than God, much less to something as abstract and indeterminate as "the market."

Perhaps the deepest problem (beyond the minor issue of idolatry!) becomes evident if we take the time to ask exactly what we mean when we deploy the term "the market." First, "the market" is merely a rhetorical construct that we use to reference a set of relations that obtain between individuals and groups in a variety of contexts. Second, since these relationships exist between humans (sinful humans, on Christian accounting), there is no reason to assume that these relations will be carried out in a moral, and more importantly, Christian manner. Of course, history bears this out. One thinks of the abuses under the laissez faire capitalism of the early 20^th century. Third, we have to recognize that there is an irremedial tension between this exaltation of the market and Christian faith. At the core, the free market ideologists believe that it is the coming together of persons to engage in free economic relations, each pursuing their own interests, that makes them work in the long run. However, all of scripture in general and Jesus in particular tell us that, to be imitators of God, we are to be motivated not by our own self-interest, but rather by the interests of others. As long as we intend to be followers of Jesus, we cannot embrace systems that sanctify self-interest. In fact, some of the church's great theologians have connected sin most essentially with being motivated by self-interest. Is it irrational exuberance to put such faith in markets? You betcha, and it is well time that we Christians stand up and say so!

Chuck Gutenson is the chief operating officer for Sojourners.