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In the Orthodox Church, in Eastern and Latin Catholic churches, and in the teaching of the Church Fathers which undergirds the theology of those communions, economy or oeconomy (Greek: οἰκονομία, oikonomia) has several meanings. The basic meaning of the word is "handling" or "disposition" or "management" or more literally "housekeeping" of a thing, usually assuming or implying good or prudent handling (as opposed to poor handling) of the matter at hand. In short, economia is discretionary deviation from the letter of the law in order to adhere to the spirit of the law and charity. This is in contrast to legalism, or akribia (Greek: ακριβεια)—strict adherence to the letter of the law of the church.
As such, the word "economy", and the concept attaching to it, are utilized especially with regard to two types of "handling": (a) divine economy, that is, God's "handling" or "management" of the fallen state of the world and of mankind—the arrangements he made in order to bring about man's salvation after the Fall; and (b) what might be termed pastoral economy (or) ecclesiastical economy, that is, the Church's "handling" or "management" of various pastoral and disciplinary questions, problems, and issues that have arisen through the centuries of Church history.
According to the Catechism of the Catholic Church,
The Fathers of the Church distinguish between theology (theologia) and economy (oikonomia). "Theology" refers to the mystery of God's inmost life within the Blessed Trinity and "economy" to all the works by which God reveals himself and communicates his life. Through the oikonomia the theologia is revealed to us; but conversely, the theologia illuminates the whole oikonomia. God's works reveal who he is in himself; the mystery of his inmost being enlightens our understanding of all his works. So it is, analogously, among human persons. A person discloses himself in his actions, and the better we know a person, the better we understand his actions.
The divine economy, in the broadest sense, not only refers to God's actions to bring about the world's salvation and redemption, but to all of God's dealings with, and interactions with, the world, including the Creation. In this sense, economy, as used in classical Orthodox doctrinal terminology, constituted the second broad division of all Christian doctrinal teaching. The first division was called theology (literally, "words about God" or "teaching about God") and was concerned with all that pertains to God alone, in himself—the teaching on the Trinity, the divine attributes, and so on, but not with anything pertaining to the creation or the redemption. "...The distinction between οικονομια and θεολογια ... remains common to most of the Greek Fathers and to all of the Byzantine tradition. θεολογια ... means, in the fourth century, everything which can be said of God considered in Himself, outside of His creative and redemptive economy. To reach this 'theology' properly so-called, one therefore must go beyond ... God as Creator of the universe, in order to be able to extricate the notion of the Trinity from the cosmological implications proper to the 'economy.'"
As noted above, economy also refers to the Church's "handling" or "management" or "disposition" of various pastoral and disciplinary questions, problems, and issues. Here again, "economy" is used in several ways.
In one sense, it refers to the discretionary power given to the Church by Christ himself to manage and govern the Church. Christ referred to this when he gave the apostles the authority to "bind and to loose". This authority was transmitted to the bishops who came after the apostles. In this sense "economy" means, as already noted, "handling", "management", "disposition". In general then, "economy" refers to pastoral handling or discretion or management in a neutral sense.
An example in the New Testament of the application of lenient economy, or "economy according to leniency", is found in Acts chapter 15, where the Apostles decided to limit the number and degree of Jewish observances that would be required of Gentile converts. An example in the New Testament of the application of strict economy, or "economy according to exactness (or, strictness, preciseness) [akribeia]", may be seen in Acts 16:3, when St. Paul set aside the usual rule to circumcise Timothy, whose father was a Gentile, to placate certain Jewish Christians. In both instances, economy was exercised to facilitate the salvation of some of the parties involved.
In Orthodox Church history, examples and instances of economy abound. Since ancient times, converts to the Church who were coming from certain heretical groups were not required to be baptized, even though the normal path of entrance to the Church was through baptism. Thus the Church, guided by the Holy Spirit, decided that under specific conditions, the application of economy (i.e. according to leniency) would be the norm in this matter. But since the usual rule is baptism, such leniency can easily be, and sometimes has been, suspended (usually in periods when the heretical groups in question were actively opposing the Church). In these cases, the Church returned to her customary usual rule of "exactness," not applying economy (or not applying economy according to lenience). In calling for the reception of converts into Orthodoxy through means other than baptism in certain cases, the Ecumenical Councils made no determination regarding the existence of sacraments outside of Orthodoxy, but only addressed the situation of the convert to Orthodoxy.