0
0
Chapter 18
THE LAW AND THE PROFITS
Capitalism In The Context Of Biblical Values
FOR A CHRISTIAN to be concerned about economics may seem, at first glance, mundane and worldly. Many Christians spend very little time considering the issues that are involved in economics, yet we are all aware of the contemporary situation of our society. Newspaper headlines and front page stories now deal with aspects of economics. In the past it was normal to read about economics on the business pages of the paper. Now, however, presidential and congressional elections hinge on questions of economic policy.
Economic problems are not limited to the United States, Europe, Asia, etc., but are worldwide in scope. We have been told by the sociologists and historians that, as a result of modern communications, our planet has become a ”global village.” What happens in Afghanistan is read about at the breakfast table the next morning in America. What happens in India affects the marketplace in Indonesia which, in turn, affects the United States. At a personal level, this affects our material well-being.
As Christians, we are called to be profoundly concerned with ethics. The point that is often overlooked is that economics touches heavily upon ethics. Every time we choose .h.) spend a dollar, invest a dollar, or save a dollar, we make an economic decision based on a policy that embraces ethics. When economic policy is legislated by a government, ethical decisions are being made. Why? Because economics has to do with monetary systems and the means of exchange within a given culture. Here we are immediately dealing with the question of value, and value is an ethical matter.
Oikonomia is the Greek word from which the English word economy or economics is derived. In the New Testament the word Oikonomia appears frequently, but is not translated economy or economics. It is translated as stewardship. Christians may not be deeply concerned about economics, but the New Testament certainly is concerned about stewardship. We see the concept on page after page. Stewardship comes from a combination of two words: “oika,” which comes from the Greek word for “house;” and “nomos,” which comes from the Greek word for “law.” Oikonomia has to do with “house law” or “house rule.” The biblical idea is that the steward is the one who is placed in a position of authority over the house. The steward does not own the house, but works for the owner and is given authority to manage the house.
Ultimately, the global house, biblically speaking, is the world, which is our home. God is the One who ultimately owns the world and man is placed in this world as a steward of God’s house. Economics, therefore, has to do with managing the resources that ultimately belong to God. God holds us given us accountable for what we do in that management process as we take care of the world that He has given us.
If we look at two parables from the Gospel of Luke, we see first the Parable of the Prodigal Son (Luke 15:11-32) and the other, the Parable of the Unjust Steward (Luke 16:1-13). Each has different points and different concerns but there is one interesting parallel. The prodigal son, after he received his, inheritance, wasted his substance, while the unjust steward was dismissed by his employer because he wasted the goods of the owner of the house. In both parables, we see the negative judgment of God falling upon waste. To waste one’s substance is an economic problem.
When we go to the Bible, we find allusions such as these to economic issues. The Bible is not a technical textbook on economic theory. It does not present a detailed blueprint for economic policy. That is not the purpose of the Bible. As a result, some Christians have concluded that the Bible is irrelevant to economics. But that is a perilous conclusion, as perilous as it is erroneous. The Bible sets forth vitally important ethical principles that have weighty significance for economic policy and decision making.
The following outline are four principles that are clearly set forth in Scripture. There are more principles touching on economics than these four, it these are the ones that are repeated again and again. They are basic and foundational Christian principles of economics. These are private property, equity, industry, and compassion.
Private Property
It is a popular practice for competing schools of economic thought to appeal to the Bible for support in order to gain an authority base for their programs.
Communism, for example, points to illustrations in the book of Acts where, in the early church, people held things in common. Those who are advocates of communism (not in the Marxist sense) viewed communal living as beneficial and they appealed to the Bible as the platform for their economic policies.
Socialism seeks as its premiere goal the equality of wealth and equality of ownership within a society. To accomplish this, the government must be involved in the redistribution of wealth. Historically, socialism has been very concerned with the plight of poor people and oppressed people. Compassion has been the motivation for most varieties of socialism. The people have desired to redress the wrongs, the inequities, and the injustices that have been perpetrated against the poor. The Bible illustrates a concern for the material well-being of the poor and calls us to redress economic inequities. It also calls us to manifest compassion. We can see how certain strands of the Bible have become important to socialist economic theory and how certain aspects of biblical ethics are incorporated into it.
Capitalism has been historically linked with Christian theology, particularly with Protestant theology, and its emphasis on the so-called work ethic. The Bible does issue a strong call to industry. It has also been appealed to in order to support the primary principle of capitalism, which is private ownership. Does the Bible advocate private property? We have seen that the whole world belongs to God and we are His stewards, so, in the ultimate sense, we do not own anything. But in a sense, if we speak in terms of daily living on this planet, God does set forth principles of private ownership. He protects the rights of private property in the Bible. Consider two of the Ten Commandments: ”You shall not steal” (Exodus 20:15), and ”You shall not covet” (Exodus 20:17). Both commandments presuppose private property.
Why, then, do these conflicting economic systems all appeal to the Scriptures for support? Part of the reason is that these four principles have some central importance in Scripture. The capitalist places his emphasis on private property, but private property embarrasses the socialist and the communist. Equality embarrasses the capitalist, but is very important for the socialist. Everybody claims to be industrious and everybody wants to be compassionate.
Equity
If we were to choose any one of these four principles and say that it is most central to the biblical concern for economics, it would most probably be equity. A second choice could be compassion. The Bible again and again reduces the essence of godly behavior to two virtues: justice and mercy. It is very easy to set justice and mercy over against each other, but the Bible refuses to do that. We are called to work for justice and we are also called to work for mercy.
Socialism destroys the equity principle and substitutes in its place a principle that sounds like equity but is not. Instead of equity, socialism presents the concept of egalitarianism in which the goal is to equally distribute the wealth of a society. This would be a noble thing, a marvelous ideal to hope for worldwide participation in the equal distribution of the enormous riches and wealth that this world affords. The problem that socialism fails to consider fully is that we live in a fallen world. In such a world, inequalities will inevitably exist with respect to personal wealth because some people will be more responsible than others. Equity with respect to justice requires that the responsible person not be penalized for being responsible and the slothful person not be rewarded for his slothfulness. If we have a great leveling process where we take from those who are productive and gratuitously assign it to those who are not, we violate biblical principles of justice. If we do that in the name of compassion, we have a one-sided view of compassion. To steal from one person to give to another shows neither justice nor compassion for the victim of theft.
Industry
The Bible presents a strong work ethic that calls us to industry, to production, and to labor. God sanctifies labor. It is important to remember that labor does not come to us as a result of the Fall. It originates from our God who is a working God. God creates through divine industry, and He calls us to mirror and reflect that operation. God assigned labor to man before the Fall. He did not merely put man in a garden of paradise and say to rest for seven days a was called to dress, till, and cultivate that garden. He was called to multiply. In other words, he was called to be productive. Integral to our vocations as human beings is God’s design for us to be productive, to bring forth the fruit of our labor.
According to biblical principle, we are to be able to participate in the ownership of what we produce. The system of law that we find in the Old Testament is designed to protect private property from theft, fraud, and deceit. Numerous laws in the Old Testament are set forth to insure honesty in the business world and in the marketplace. It is unlawful, according to God, to defraud another by use of false weights and measures, to debase the currency of a society, or to renege on contractual promises and obligations. Related to these are the breaking of covenants and of industrial contracts. Equity, with respect to industry, is an important principle of economics. Justice must be done.
The Importance Of Compassion
What do we do with those who lack the means or the opportunity for production? Do we lose our hearts to the poor? God forbid! God has a special concern for the poor. In the Old Testament law He demands that the fields be left at the corners to be gleaned by the poor. Laws are given by God to make sure that the poor are not ignored. Most importantly, the poor are not to be discriminated against at “the gates,” which were the law courts of the land. The poor were not to be exploited or demeaned by the rich and powerful. The Bible also warns a person of the consequences of making the acquisition of riches the supreme goal of his life. The Bible says no to a crass form of materialism and tells us that life is more than wealth. inconsequential. God has created a physical world. He has created people with souls who also have bodies. His redemption includes bodily redemption. God is concerned about shelter, about food, about clothing. The Bible does not provide an exercise in abstract spirituality.
Some of the biblical concerns expressed about righteousness, justice, and compassion are concerns that touch the economic situation of men, women and children. The term poor is used figuratively in some verses in the Bible to refer to those who are poor in spirit, but its primary use is to refer to those who are poor in material goods. The Apostle Paul, at the heart of his teaching, says, “If your enemy is hungry, feed him; if he is thirsty, give him something to drink” (Romans 12:21). What is Paul saying here? He is saying, in the simplest way, God cares about your physical well. He cares that we have enough to eat; that we are protected from the elements; that we have clothes and a place to live. These are economic matters. In essence, a person’s material welfare is a major concern of God and therefore it must always be a major concern of God’s people. The biblical ethic is one of stewardship. The principles of stewardship demand certain principles that capitalism also embraces. However, capitalism can be construed as a license for crass materialism with no consideration for the poor. Capitalism is based upon production of goods and services. How these goods and services are used and produced are matters of ethics.
Virtually every significant effort aimed improving people’s standard of living Invented by socialistic or communist theories of economics has failed miserably. A case in point is China. Since the communist revolution there in 1949, the production , the standard of living, and the per-capita income of the people of China have declined to levels worse than they were before the revolution. Taiwan, in the free region of China, has over 18 million people; mainland China has over one billion people. Yet the per-capita income on Taiwan five times higher than on mainland China. During the decade of the seventies, the 18 million people of Taiwan exported fifty times more goods than the one billion people from communist China. To be sure, recent trends in China show an upturn in industrial output due in large measure to a growing toleration of private agriculture and private merchants.
The Principle Of Production
Without production we do not have the food to feed people, the clothes to clothe them or the houses to shelter ooo them. It is simple. The single most important factor to increase the material well-being of people is production. The greater the quantity of things produced, the lower the cost per unit for those things. Within limits, the more that is produced, the better the standard of living.
Increased production can benefit the poor the most because the goods they need are then more accessible to them. If a nation produces 100 shirts, the price of shirts tends to be high — too expensive for the poor. If a nation produces one billion shirts, the price of shirts tends to be low. This reflects the law of supply and demand. Increases in production lower prices. But what if the poor have no money? What difference does it make to them if a shirt costs five dollars or a hundred dollars? Here is the difference. In a situation of high productivity, employment also rises. The greater production of shirts provides a better opportunity for the poor to enter the work force and increase their standard of living. Even if they fail to find work their chances of getting a ”free” shirt are better if there is a surplus of shirts. People tend to be more charitable with five-dollar shirts than with hundred dollar shirts. The workers in the Salvation Army are keenly aware of that.
The Principle Of Tools
A second important principle is highlighted when we ask, ”What is the single most ingredient for production?” Karl Marx understood the answer to this question. The single most important factor for increased production is tools. Why is it that peasant in Colombia cannot produce as much food as a farmer in America? Is it because the American farmer is more intelligent or physically stronger? No, it is because someone with mechanized tools can produce a hundred times more than someone with wooden implements. Tools are what have revolutionized the world in terms of the production of material goods. At the turn of the twentieth century, 80 percent of the population of the United States were farmers. Today, it is about three percent, and this three percent produces more food than the 80 percent of the last century could produce. Why? Cause modern techniques of production are based upon modern tools. Tools are crucial to production. They are labor-saving devices. More goods can be produced with less effort.
Changing Times
Now, as we’ve entered the twenty-first century, robotics are becoming the new tools of production. Companies are already applying them in the areas of assembly and manufacturing, medicine and logistics. The introduction of electronic sensors, GPS (global positioning system), and AI (artificial intelligence) has already revolutionized the automotive industry. While this may be having positive affect on production, it is also having a negative affect on the employment sector of the labor market. These are the new elements of change that current and future generations will now need to address, in order to find the right balance for productivity and living.
The Principle Of Profit
Taking one step farther back, what is the one thing on which capital depends? The answer is called an obscene word by some. The word is pnfit. Profit is the goal of all economic exchange. We can theorize all we want and declare that profit is obscene or that profits are too high, but every time an economic transaction takes place where goods are exchanged, the goal in that exchange is profit. The goal is profit, whether it happens in a communist country or in a capitalist country. Every time we are involved in an economic transaction, we are looking for a profit. The very basis for commerce is profit.
Consider this scenario. A shoe store owner pays twenty — five dollars for a pair of shoes. He then sells the shoes for forty-five dollars. Who profits? Most people answer “the shoe store owner.” That answer is only half right. To be sure, the owner profits. But so does the customer: if the purchase is voluntary.
When going to the store to buy a pair of shoes, what motivates us? It could be the price or that our feet are cold or because we want to look nice for the dance. An ironclad principle is that we will never, of our own will, pay more for that pair of shoes than that pair of shoes is worth to us. Every time we enter into an economic transaction we are looking for a profit. In our mind, we decide that we want those shoes more than we want the surplus money we have in our pocket. We have a surplus of money, but we don’t have a surplus of shoes. On the other hand, the shoemaker has a surplus of shoes, but he doesn’t have a surplus of steak; and he wants some steak. The only way he is going to get steak is to sell part of his surplus of shoes so he can make the money he needs to buy steak.
On the surface, in the above scenario it seems like only the storekeeper profits. This is because money is used in the exchange. As a medium of exchange money is less direct than bartering. When we state the scenario in different terms, we nay answer differently. Consider this scenario: One man is a shoemaker. He makes 100 pair of shoes. Another man is a cattle rancher. He has a freezer full of meat. The shoemaker has more shoes than he needs, but no meat (he doesn’t want to eat shoe leather). The rancher has more meat than he can eat, but his feet are cold. The two men get together and make a deal. They barter, trading meat for shoes. Now who profits? It is obvious that both profit.
People survive by the division of labor. From the earliest chapters of the Bible we find society based on a division of labor. Cain was a tiller of the soil while Abel raised livestock. They needed each other. Barter was always for mutual profit. Mutual profit is the motive for all free trade, for all voluntary business transactions. Remember this formula:
Material welfare depends upon production.
Increased production depends upon tools.
Tools depend upon surplus capital.
Surplus capital depends upon profit.
We can chart it:
Material Welfare
Production
Tools
Surplus Capital
Profit
If we attack profits we destroy the foundation of society’s material welfare. Biblical ethics sees two grave vices as threats to stewardship. They are covetousness and greed. Greed acts as the motivating force behind exploitation and waste. We tend to think of ’greed’ as the sin of the rich and ’coveting’ as the sin of the poor. Yet these sins are found in both groups. No one is so rich that they are incapable of wasted. In a free market, an “invisible hand” helps restrain some of these evils. If someone is a crass materialist, avidly pursuing riches out of greed, even their greed can work for the general welfare. How? Suppose someone makes a billion dollars. What can they do with it? They can’t eat a billion dollars worth of food. They may hoard their money by putting it in the bank, but even banks lend to others. They can waste their money on self-gratifying extravagances. They can buy ten Rolls Royces, three Learjet, and have five plush condominiums in Florida. Who benefits? The automobile industry, the Learjet people, and the condominium builders. It takes people to make Rolls Royce automobiles. Learjet airplanes, and condominiums. Even in someone’s opulence the division of labor is served.
Yet, what if they are cantankerous enough to hide their money in the basement. They have just taken a billion dollars out of circulation, causing deflation. Now everyone else’s dollar is worth proportionately more and the prices of goods decline.
The worst thing that can happen to someone’s money is to have it taxed heavily by government. Why? Governments are not producers. They produce nothing. To be sure, they redistribute money, but at a terrible waste of administrative overhead. Government-controlled economics are notoriously less efficient in raising national standards of living than is the marketplace of voluntary exchange of goods and services. Christians must work for a free market regulated by just laws. They must oppose the debasing of currency, unjust levels of taxation, and bureaucratic waste.
Previous: Chapter 17: In The World, Not Of It
Chapter 18: The Law And The Profits
https://discerning-Islam
Last Updated: 12/2022
See COPYRIGHT information below.
[…] Chapter 18: The Law And The Profits […]
[…] Next: Chapter 18: The Law And The Profits […]