Does Heaven Have an Economy?

Short answer: no.

Long answer: Heaven has no need for an economy.  Economics looks at scarcity and how humans interact to deal with the problems arising from scarce resources:  Exchange and production, collective action solutions (like firms or governments), rights, institutions, etc.  Things like preferences, budget constraints, opportunity costs, knowledge, etc are all under consideration by the economist.

Heaven is a post-scarcity place.  God is omniscient, which means there are no knowledge problems.  God is omnipotent, which means any resources needed (if any) can be instantly created.  God and Heaven exist outside of the temporal universe, which means problems relating to future knowledge are eliminated.  There are no economic problems in Heaven, and thus no need for an economy.

I bring this up not for some theological discussion on the nature of Heaven, but rather to point out a mistake many policy pundits (even with economic training) make when they discuss economics: they assume away the economic problem.

The most common form assuming away the economic problem takes is assuming in supply and demand curves.  We see this all the time: free trade discussions, market failure discussions, labor market discussions, etc.  Economists and policymakers and pundits just assume away the knowledge problem, forgetting that the very curves the need to make their policies are generated by the very process (market process) they are seeking to disrupt!

Another example, exemplified by this paper, exists in assuming away individualism.  Much of the economic problem (and its subsequent solutions) exist because people are individuals, with their own dreams and desires.  In more technical terms, they have preferences.  If we assume a “representative agent” or assume “identical preferences,” we assume away a major part of the economic problem, which is how we arrive at conclusions that make no economic sense.

The point is this: a lot of these assumptions tend to lead to conclusions economists generally oppose.  The reasoning is simple: If you assume away economic problems, of course economic methods are going to become pointless.