The Economics of Paradise

The Economics of Paradise

Also by Sigmund A. Wagner- Tsukamoto UNDERSTANDING GREEN CONSUMER BEHAVIOUR HUMAN NATURE AND ORGANIZATION THEORY IS GOD AN ECONOMIST?

The Economics of Paradise On the Onset of Modernity in Antiquity Sigmund A. Wagner- Tsukamoto

Sigmund Wagner-Tsukamoto 2015 Softcover reprint of the hardcover 1st edition 2015 978-1-137-28769-4 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-67091-8 ISBN 978-1-137-28770-0 (ebook) DOI 10.1057/9781137287700 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. Typeset by MPS Limited, Chennai, India. Transferred to Digital Printing in 2014

To my wife and sons, M, M, and N, and to the memory of my grandparents

Contents List of Figures Preface Acknowledgements xii xiii xiv Introduction 1 Prologue: Genesis 2 3 9 1 Why and How to Study the Paradise Story in Economic Terms 13 1.1 Key questions, themes and theses of the book: conflict, anarchy and capital exchange in paradise 14 Questioning the dualism thesis 16 The old unitary thesis for the Old Testament: is a new unitary thesis feasible? 18 Permissibility of economic research on the Old Testament 20 1.2 The constitutional and institutional economic approach to analysing the breakdown of co- operation: a brief introduction 22 Heuristic models of constitutional and institutional economics: dilemma structure and homo economicus 24 Organizational/ group- based conflict model 24 Capitalist problems inside paradise: capital contribution/distribution and capital exchange 25 Contests in paradise: the critical role of economic institutions 27 Costs of economic governance and the generation of mutual gains 29 Constitutional and institutional economic research strategies for the Paradise story 31 1.3 Methodological approach 32 Narrative analysis of the Paradise story 32 The Paradise story and primeval history 36 Finality of the text 38 1.4 Summary and conclusions 39 vii

viii Contents 2 Looming Capital Contests in Paradise: No Land of Cockaigne 43 2.1 Work, human capital and time capital 47 Work and human capital 47 Time capital 49 2.2 Morality and ethical capital: the contest for moral autonomy 51 A capacity for moral reasoning 51 Moral knowledge and the capability for human governance 53 2.3 Knowledge of everything: the tree of knowledge and the possibility of science 55 Knowledge capital in the Paradise story 55 How modern is knowledge creation? 57 2.4 Contested liberty inside paradise 58 Banned capital and the expectation of obedience 59 Democratic ( self-)governance before the theft? 61 The collapse of the obedience model: the Hobbesian war as a starting point for negotiating freedom 63 2.5 Summary and conclusions 65 3 Agents of Paradise and the Rise of Self- interest 70 3.1 Homo economicus as the key heuristic method of biblical economics 71 3.2 Economic agents in the Paradise story: God as homo economicus 77 3.3 Economic agents in the Paradise story: Adam and Eve as homines economici 79 Capital contests and the rise of the homo economicus 80 Genesis (1: 26 30): humans not pronounced good 84 3.4 Economic agents in the Paradise story: the serpent as cataclysmic catalyst 86 A heuristic reading of the serpent 87 Why did God create the serpent? 90 Specific functions of the serpent: re- connections to heuristic readings 91 Re- inventing institutional order through the serpent model 93 3.5 Summary and conclusions 95

Contents ix 4 The Breakdown of Co- operation in Paradise: The Rise of Anarchy 99 4.1 The principal agent problem: a brief introduction 100 Incomplete contracting: information and delegation problems 102 Moral hazard 103 Risk-bearing 105 Residual loss 106 4.2 Sources of anarchy: incomplete contracting, and information and delegation problems in the Paradise story 107 4.3 Sources of anarchy: moral hazard on the side of the principal God and on the side of the agents Adam and Eve 111 4.4 Sources of anarchy: risk- taking on the side of Adam and Eve, enticed by the serpent 113 4.5 Sources of anarchy: how to manage residual loss in the Paradise story 116 4.6 Summary and conclusions 117 5 Outcomes of the Paradise Interactions: Gains and Losses, Winners and Losers, Rational Fools 120 5.1 Prisoner s dilemmas, natural distribution states and mutual losses/gains in the Paradise story 122 Contracting dilemmas as conceptual starting points 122 Normative relevance of situational logic and the prospect of mutual loss/mutual gain 124 5.2 Prisoner s dilemma analysis of the Paradise story 126 Dilemmatic contests in x- goods as starting points in the Paradise story 126 The paradisiacal defection process 128 The paradox of mutual loss unravelled 130 5.3 The forgotten fool: why was the serpent punished? 134 The serpent: between foolishness and altruism? 135 A heuristic ( re-)reading of the serpent 136 5.4 Heuristic echo: the loss of paradise as a meta- heuristic for storytelling 139 Prisoner s dilemma as a heuristic for the Paradise story 139

x Contents Putting the Paradise story in heuristic perspective: a normative programme for building society 142 Augustine s original sin: is a heuristic reading possible? 144 5.5 Summary and conclusions 146 6 Why Was Paradise Lost? And Is This a Cause for Lament? 150 6.1 Conventional starting points and conventional solutions to the theft: where is liberty? 152 Traditional views on the pre- theft situation: the happy, original state and freedom to obedience 152 Sin, original sin and pessimistic readings of the outcomes in the Paradise story 154 Traditional resolution of sin and disobedience 157 6.2 Shifting towards a constitutional economic platform for assessing liberty 159 Missed opportunities: upholding the dualism thesis 159 Questioning dualism: an institutional and constitutional economic approach to the Paradise story 160 6.3 Lamenting the loss of paradise? Or why contest for liberty is valuable 163 The authoritarian starting point in the Paradise story 165 From imposed authority into the natural state: How to gain citizen sovereignty? Is the natural state valuable? 168 Constitutional rule change: Wicksellian exceptions or Buchanan s unanimity 175 6.4 Summary and conclusions 180 7 Concluding Remarks: How Modern Is Religion or Is it a Road to the Past? 185 7.1 Foreclosing love and the Song of Songs 187 The Song of Songs as an answer to the Paradise story? 187 The Paradise story as an alternative to the Song of Songs 191 The heuristic loss of love and the heuristic organization of the possibility of conflict 192 Make love, not war: institutional pre- conditions of modernity 194 7.2 The etiological story: a story about conflict in the initial state of nature 197 7.3 How modern is antiquity? 200 When did modernity begin? 200 A modern reading of the Old Testament 203

Contents xi 7.4 An institutional economic theory of religion: on the rational fabric and the capitalist ethics of religion 205 The pervasiveness of religion over time 206 Rational religion 209 7.5 Summing up 212 Appendix 1: The Prisoner s Dilemma Concept: A Brief Introduction 215 Appendix 2: The Breakdown of Co- operation in the Paradise Story 217 Appendix 3: Abstract, Mathematical- Logical Sensitivity Analysis of the Paradise Story 223 Appendix 4: Prisoner s Dilemma Analysis of the Paradise Story 228 Bibliography 233 Author/Name Index 252 Subject Index 257

List of Figures A1.1 The Prisoner s Dilemma 216 A2.1 Theft from the Tree of Knowledge 219 xii

Preface This book searches for the origins of modern thinking, identified in one of the best- known stories of our cultural heritage. I reconstruct the Paradise story through a new approach to biblical interpretation: institutional and constitutional economics. The book traces in the Paradise story, in economic terms, a looming contest: on the one hand, the rise of homo economicus, escalating principal agent conflicts, and the emergence of a prisoner s dilemma predicament; and on the other, the political and economic ideals of liberty and freedom. I contest suggestions that the old, conceptual dualism between economics and theology/philosophy should be upheld. In the book, economics, in the tradition of the Scottish Enlightenment, is interpreted as modern ethics ; and the book reconstructs such ethics for the Paradise story, drawing in particular on concepts of institutional and constitutional economics. As a result, the claimed dualism between ancient ethics and modern economics as ethics is rejected. The book pioneers a complementary new unitary thesis for the Paradise story and for the Old Testament: that economics can provide a unified, conceptual, scientific structure to the biblical text. On this basis, not only is the Paradise story illuminated through economic reconstruction but also a new, institutional economic theory of (Old Testament- based) religion is proposed. It is part of an ongoing research project on the institutional and constitutional economic reconstruction of the Old Testament. In this respect, it sets out theses and questions for future research, and discusses conceptual ways in which such theses can be investigated. May 2014 SIGMUND A. WAGNER- TSUKAMOTO xiii

Acknowledgements I thankfully acknowledge the financial and other support given to this project. I am very grateful that I was given the opportunity to write this book, which was, to a considerable extent, written during a period of sabbatical leave/study leave granted by the School of Management of the University of Leicester, UK, during the academic year 2013 14. I thank the Japan Society for the Promotion of Science for an Invitation Fellowship (L13510) at the Kanazawa Institute of Technology (KIT). This enabled me to travel to Japan for various research projects during the latter part of 2013, and I continued to write up the present study during my research stay there. Thanks go to everyone at the University of Leicester and at KIT. I greatly appreciated the editorial support provided by Palgrave Macmillan. I want to thank especially Peter Baker, Caitlin Cornish, Taiba Batool and Ania Wronski. Special thanks go to Lionel Paulo for his diligent reading of the manuscript. For the final copy-editing, many thanks to Keith Povey, and Rachel Sangster and Laura Pacey at Palgrave Macmillan. Many thanks go to my friends, wherever they are based, for their constant support. Finally, thanks go to my wife and family for their love, understanding and encouragement, and for allowing me the time to write. The author and publishers are grateful to the following for granting permission to reproduce material: Front cover image Henri Matisse, Femmes et Singes, Museum Ludwig, Cologne, Germany, Succession H. Matisse/DACS, London. All Scripture quotations in this publication are from the Holy Bible, New International Version NIV Copyright 1973, 1978, 1984, 2011 by Biblica, Inc.. Used by permission. All rights reserved worldwide. The NIV and New International Version are trademarks registered in the United States Patent and Trademark Office by Biblica, Inc.. Use of either trademark requires the permission of Biblica, Inc.. Copyright University of Chicago Press, excerpts (approx. 700 words) taken from James M. Buchanan, 1975, The Limits of Liberty. Between Anarchy and Leviathan, Chicago, USA, and London, UK. Copyright The Old Testament Society in South Africa (OTSSA), Entire manuscript/or unlimited excerpts from Sigmund A. Wagner- Tsukamoto, 2012, After the Theft: Natural Distribution States and Prisoner s Dilemmas in the Paradise story, Old Testament Essays 25 (3): pp. 705 36. ISSN1010-9910 (Print). Electronic access through www.journals.co.za/ collections/ or www.journals.co.za/ej/ejour_oldtest.html. xiv