God and the Problem of Order: The Role of Perfect Information and Absolute Power in Economics, Religion and Law
RIMCIS - International and Multidisciplinary Journal of Social Sciences
The “problem of order” is resolved idyllically in Arrow-Debreu general-equilibrium modelsthrough the assumption of perfect information, where each actor is god-like, omniscient, andwhere this omniscience results in the veracity of the first theorem of welfare economics,where an equilibrium is Pareto efficient, where no actor, given her original endowments ofalienable and inalienable capital, can improve her position. Analogously, in many religions,God is understood to be omniscient; order emerges through God’s ability to sanctionmalfeasance costlessly. Ideally, a comparable order would likewise be the consequence of theassumption in both economics and religion of an omnipotent principal. In both economics andreligion, equilibria serve as idealized, transcendent, critical standards. In the real, immanent,world, where information is imperfect and no power is absolute, the institutionalization of lawis necessary to maintain order. Religion has bequeathed to the legal order moral principlesthat may legitimate the law and make it binding, while economics, as a theory of incentives inthe immanent world, models the imposition of legal sanctions, which penalize actors whoapproach and violate the law strategically. The law is an institutional order, where bothconstitutive norms and legal rules are legitimated through “religious” values and supported by“economic,” situational sanctions.
Gould, M. (2013). "God and the Problem of Order: The Role of Perfect Information and Absolute Power in Economics, Religion and Law." International and Multidisciplinary Journal of Social Sciences, 2 (3), 257-272.