Principal Agent

As part of my job in Hull I get to study for an MSc in Public Management in Birmingham (where I am currently in a fairly ropey hotel room). This is a wonderful opportunity but not necessarily one I’m always enthusiastic about (I need to work on cultivating an attitude of gratitude). Before we came down for some lectures on research methodology today and tomorrow I was completing an essay on the insights that the principal-agent theory has in terms of performance management. And it got me thinking.

Before I continue I ought to explain what the principal-agent theory is. Don’t run away at the thought of economic theory I’ll keep the explanation brief and hopefully straightforward.

If I employ you to do something that makes me the principal and you the agent. I want to minimise the inputs I give you in exchange for a maximum level of effort that ensures I get what I’m looking for from you. You, on the other hand, want me to give you as much reward as possible in exchange for less effort. What we both want is an outcome that suits us both – I want my interests to be maximised, as you do yours.

The principal-agent theory then lets people work out how to design performance incentives or measure effort in order to get the best outcomes for everyone concerned. And it struck me that there’s a school of thought about Christianity that looks at us within this framework (even if they don’t know it).

On the one hand are those who unwittingly make us the principal and God our agent. That’s those who think we’ve made him up to make us feel better (it’s certainly a remarkably complex and well fleshed out crutch that’s the product of invention, must be the work of some Machiavellian genius). And there are those who turn to God when the chips are down or when they need something. An ATM saviour who responds to our needs.

Not to suggest that God doesn’t answer prayer of course but that we are not the principal in this relationship, it’s to refute the suggested that he’s an on-call deity should we need a favour. God is obviously the principal, but recognising that doesn’t stop the misconceptions from floating about.

I don’t know when it was that the church dropped the ball but we seemed to have done so in a big way when it comes to an understanding of the motivation behind our Christianity.

This lens of God as principal and me as his agent means I must be performing because of something God is doing. My motivation for dancing to a Holy tune, perhaps, is fear, a fear of hell, a fear of damnation and a fear of being judged a failure by God. It’s an understanding that says I have to comply with a stated norm in order to be accepted as good enough for God. I’m sure there are plenty of people who love God, seek Him and serve Him that reckon that’s the nature of our relationship with Him. By my reckoning it’s a bit brimstone heavy and grace light which is a tragedy.

Alternatively, if not fear of consequence, then clearly it’s all about reward. Heaven is the carrot dangled under our noses that we will get if our behaviours make it possible. Like imagining the God of fear, this God of prizes forms another theological construction that squeezes grace to the margins.

And that’s because whilst it is possible to see elements of principal-agent theory in how the world understands us it totally skews the nature of our relationship. It’s not a transactional or contracted situation. Our performance is not measured, there are no proxy indicators suggesting whether we are pleasing God or achieving salvation. God loves us for who we are, as we are and irrespective of what we have done or ever will do. It’s not contingent upon fulfilling stated aims or meeting certain goals (beyond the having a relationship in a first place which, if it exists, suggests that reconciliation has happened).

The reality of Jesus’ sacrifice is that it breaks the idea of principal versus agent and makes them one and the same. Perhaps we’ve lost sight of that behind the veneer of something transactional because we’ve seen relationships move away from being selfless in their search for a unity of one flesh and themselves becomes something principal-agentesque. Maybe the church is responsible for advertising this idea of family that places man at the head of a house and wife as subservient to him.

The thing is that’s not what I see when I read the oft trotted out Ephesians 5:21-32.

Submit to one another out of reverence for Christ. Wives, submit to your husbands as to the Lord. For the husband is the head of the wife as Christ is the head of the church, his body, of which he is the Savior. Now as the church submits to Christ, so also wives should submit to their husbands in everything. Husbands, love your wives, just as Christ loved the church and gave himself up for her to make her holy, cleansing her by the washing with water through the word, and to present her to himself as a radiant church, without stain or wrinkle or any other blemish, but holy and blameless. In this same way, husbands ought to love their wives as their own bodies. He who loves his wife loves himself. After all, no one ever hated his own body, but he feeds and cares for it, just as Christ does the church— for we are members of his body. “For this reason a man will leave his father and mother and be united to his wife, and the two will become one flesh.” This is a profound mystery—but I am talking about Christ and the church. However, each one of you also must love his wife as he loves himself, and the wife must respect her husband.

I’ve obviously missed the bit of that which is about servitude or subjugation. Is it not a recognition that both parties give of themselves to the other out of love. Submit to one another out of reverence for Christ. And so, if you’re in submission through reverence to Christ then as women submit to their husbands so their husbands are submitting to them. Not a transaction, not a greater or lesser role, no one thing making something else happen as a result. Just love.

The problem in much of my public management MSC is that the language is transactional. It’s not relational. You won’t find love being spoken about when it comes to understanding the interaction between the public and its governing agencies or a contractor and his staff. You won’t find love entering the equation when it comes to maximising sales or minimising costs. Yet in the economy of grace the greatest value is to lose, the biggest joy is in giving away. Freedom comes not from the what but from the who. The who of our friends, the who of our family, the who of our communities, churches and colleagues.

If the principal and the agent submit to one another, simply because they want to maximise the interests of the other then greed, self interest and the negativity of desire vanish. So, if the principal agent theory tells the church anything at all it reminds us that our principal does that – God lives in us, trusting us to be His hands and feet and empowering us with the same spirit that created the universe.

I’d like my effort to look like it’s the work of an agent responding to the most generous, over-the-top, outrageous contractual arrangement from the principal. Economic theory says that the agent is always looking for the principal to ‘reward’ them hugely. It says that any principal making the kind of commitment our saviour has they’d be after a commensurate level of response. The magnitude of our riches in Christ are incomprehensible, there’s no way that (even if we tried harder) we could come close to matching them with our efforts. Thankfully we don’t have to. But I don’t want to rock up and meet St Peter saying I never tried to respond to God’s grace cos I didn’t have to. I’d like to be able to say I could come close. Not because I’m scared of hell, not because if I do God might answer my prayers, not because I want to go to heaven but because I don’t want to forget that what God has done for me as I was, continues to do with me as I am and has in store for who I could be isn’t for my benefit but is to bless him, those around me and the world.

Interesting thing economics…

About Benjamin Welby

Hi, I'm Benjamin Welby. I'm a displaced northerner currently living in Croydon, I church with a group of Christians who meet in a Soho nightclub on Wednesdays and I support Bradford City. I've an academic background in History, Politics and International Development. I work for the Government Digital Service but I left my heart in local government. This blog is infrequently updated and may feature any, all or none of these things...

  • Dave Burton

    >Have you read my post from yesterday, perchance? It seems, as ever, that we’re being led down very similar discursive paths. Except you’re getting an MSc for yours :PI wasn’t aware of principal agent (should that be hyphenated?) theory, but you’re absolutely right, that’s how we think about things. Interaction is transaction, preferably to be as monetised (ie: as cut and dried) as possible, with little residual space or resource to fuel ongoing relationship (with all its non-monetary benefits).It robs us of us. We are not commodities. We are profoundly miserable when we act like them. So I wonder what model of management can be warmer than principal agent theory without being open to abuse?perhaps trust is central to such a relationship, and the possibility of abuse is the price we pay for the possibility of managing our endeavours towards more than coldly calculated, Thatcherite-individual ends.I’m waffling. But I love that you quoted the bible verse I was clearly reaching for but failing to land on, too – I think it’s still clear which of us has a vicarage in his future…

  • Wellers

    >I had seen your ruminations but although I posted this after you I actually wrote it on the way into work on Wednesday.With the toing and froing and learning about epistemology (because I have no idea how to design research, clearly) I hadn’t got round to commenting on how God-incidental this was 🙂

  • misterbunbury

    >Hmm, interesting. This will be your third degree, yes? Are you trying to get one up on Mrs Wellers?