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Recovering the Moral Foundations of Economics

During the summer of 1980, I met weekly for breakfast, prayer, and study with a minister friend of mine. A warm-hearted, intelligent man, Bob Hager kept challenging me to broaden my interest from the biblical studies, theology, and apologetics that were my great loves to include social concerns. One week, he told me of a book he’d read recently – Ronald J. Sider’s Rich Christians in an Age of Hunger. “Cal,” Bob said, “you’ve simply got to read this book. It’ll change your life.“

“Who, me? Read a book on economics and poverty?” I thought. “No interest.” But Bob shamed me into reading it, insisting that I learn to demonstrate the love I professed.

And, yes, reading Rich Christians in an Age of Hunger changed my life. As I read it, I kept thinking, “I know nothing about economics, but I know about logic, theology, and biblical interpretation, and if what this author does to economics is anything like what he does to those, following his prescriptions means disaster. We’ll all be equal, all right: equally poor.”

So I took on the task of learning economics, reading textbooks, journal articles, and major treatises, all with the intent of exploring what the Bible, Christian theology, and sound economic study can teach us about how to help the poor, hoping to offer the Christian public an alternative to Sider’s vision. (I’m pleased to say that today, despite continued strong differences of opinion, Ron and I have become friends and respect each other as fellow believers.)

The first major fruit of that study was a master’s thesis in economic ethics written under the able tutelage of Russell Kirk. Before long I became national chairman of the economics committee of the Coalition on Revival, an interdenominational group of Christian scholars, pastors, and laymen committed to fleshing out a Christian world view and applying it carefully to every major area of human activity.

That work led to an invitation to write for the Turning Point Christian World View Series. In what became Prosperity and Poverty: The Compassionate Use of World Resources in a World of Scarcity and Prospects for Growth: A Biblical View of Population, Resources, and the Future (Westchester, IL: Crossway Books, 1988 and 1990), I developed what I believe are biblical and theological foundations, coupled with solid empirical support, for a thorough-going free-market view of economics that contrasts strongly with the socialist and interventionist views that have dominated much Catholic and evangelical writing on economics in the past fifty years or so and that were so prominent in Sider’s book, which, despite fairly low sales, has been tremendously influential among evangelicals since the mid-1970’s. Let me suggest here just a few of the ideas developed there.

Economics and the Image of God in Man

Economics will be rescued from the malaise of socialism, bureaucratism, and econometrics only when its roots as applied moral philosophy are restored. Adam Smith, after all, was first a moral philosopher, and The Wealth of Nations (1776) was largely an empirical demonstration of claims he made about economic relationships based on his moral philosophy in The Theory of Moral Sentiments (1759). The center of economics’ root system consists of our understanding of the nature of man and of sin, justice, and grace.

In contrast to the materialism underlying both the Marxist and the Secular Humanist notions of economics, Christianity begins with the recognition that man is made in the image of God. That image, if we pay attention to Scripture, consists of intellectual and moral elements and works itself out in practical ways.

For instance, the first thing we learn about God in Scripture is that he is a creative, productive worker: “In the beginning God created the heavens and the earth“ (Genesis 1:1). And He made light, and land, and sea, and sky, and fish, and plants, and birds, and beasts, and creeping things – a vast assortment of things! Starting with nothing, He made – everything. (If that is not profit, I don’t know what is!) Intelligence, imagination, and power worked together in God to make everything.

“Then God said, ‘Let Us make man in Our image, according to Our likeness; let them have dominion over the fish of the sea, over the birds of the air, and over the cattle, over all the earth and over every creeping thing that creeps on the earth’” (Genesis 1:26). Before we’ve seen anything of the holiness of God, before we read anything of the spiritual aspect of man (Genesis 2:7), we learn that God made man in His image. And what was that image? The image of an intelligent, creative, productive worker.

This means that intelligent, creative, productive work is an element of the image of God in man. To the extent that we develop our intelligence, creativity, and productivity, and to the extent that we exert ourselves diligently in work, we are not merely doing but also being what we are meant to do and be. We are expressing the image of God. And in so doing, we are growing in spiritual and personal maturity.

Here is the fundamental reason why all poverty relief programs that create or perpetuate dependence, that reward sloth, that level those who work hard and smartly with those who work hardly or not at all, or work stupidly, must be opposed–not merely because they are economically counterproductive (they are) but because they strike at the heart of what is to be human. They rob their “beneficiaries” of their dignity as bearers of the imago Dei, thrusting them down to the level of the brute beasts. Rather than enabling recipients of “aid” to exercise a godly dominion, they dominate the recipients with a form of oppression every bit as deadly to the soul as any political tyranny.

At bottom, such programs and the systems that embody them fail because they neglect the reality of sin, both in the “beneficiary” (whose propensity to sloth is catered to by the assurance of handouts) and in the “benefactor” whose propensity to abuse power feeds on the increasing dependency of his charges).1

Here also is the fundamental reason why contemporary fears of resource depletion and environmental disaster are unjustified. The Malthusian theory that underlies them is precisely opposite this Christian view of man. Malthusianism sees man as primarily a consumer, not a producer; it thus, like socialism, views people as brute beasts, unable to produce more than they consume without direction from above (which is why environmentalism and socialism readily go hand in hand and environmentalism may turn out to be the last best hope of socialists to gain control over the world’s economies).

But true Christianity casts aside this dark and foreboding view of man and his role in the world. With all its recognition of the sinfulness of man due to the Fall, it also recognizes that God made man to be, like Him, creative and productive. To put it simply, the average mouth born into this world connected to two hands – and, more importantly, a mind capable of discovering a myriad of ways to make more with less. With this mind and those two hands (or even without the hands), the average person produces far more than he consumes in a lifetime, which is why, by and large, each generation is wealthier than its forebears. Christianity also recognizes that God has given man responsibility not only to cultivate (till) but also to guard (keep) the earth (Genesis 2:15), and it recognizes that man’s increasing material wealth can alleviate his concerns for survival, freeing him to act increasingly for the betterment of his environment (which, historically, is precisely what we see as countries grow richer).2

An economic system consistent with the Christian world view, therefore, must reward people according to the intelligence, creativity, and diligence of their work. Only the free market does that.

Moral Criteria of Economics

But these are not the only criteria. A moral economy must look also at the moral quality of work. In Christian ethics, two virtues stand supreme: justice or righteousness, and love or grace. The moral economy will take both of these into account. It will not reward injustice or hate, but it will reward justice and grace.

There are, of course, many expressions of both justice and love. Love expresses itself chiefly in service to others, especially self-sacrificial service (Christ “loved me and gave Himself for me,” Galatians 2:20). It is not enough that I do something brilliant or difficult or time consuming; I should not be rewarded unless what I do benefits others. And the chief practical indicator of that is their willingness to pay for it in the marketplace.

This does not mean, of course, that Christianity supports complete laissez-faire. Murder, Inc. has no place in the moral economy, and the Christian world view requires the legal exclusion of such enterprises (Romans 13:1—7). The freedom of the market is not licentiousness (compare Romans 6) but freedom from tyranny and freedom to choose among options permissible according to God’s moral law, best summarized in the Ten Commandments. It is the freedom expressed in the market’s showing, by the price mechanism, what services people want, and what prices they are willing to pay for them. The genius of Adam Smith was his recognition that the market also provided incentive for the non-loving to act in sacrificial service to others; only those who know nothing of Smith think that he made a virtue of selfishness or claimed that the market somehow forces people to love.3

Coupled with love is justice, which, if we look carefully at what we find in Scripture, means rendering impartially and proportionately to everyone his due in accord with the right standard of God’s moral law. Commutative justice requires the honest exchange of value for value; distributive justice institutionalizes commutative justice on the wide scale, ensuring that those too weak to defend their rights are not victimized by the stronger (and thus it is not the distribution of wealth or any other good but justice itself). And so justice necessitates different rewards for different actions. Economic policies designed to equalize economic condition are therefore inherently unjust.

Foundations of a Christian Response to Poverty

Neither can such policies be defended by an appeal to charity (Latin caritas, love; Greek cháris, grace). Why? Because while love may go beyond the demands of justice, it never goes contrary to them. In Christian thought, the moral law of God is the standard of justice, and love, insists the apostle Paul, summarizes that law. “Love does no harm to a neighbor; therefore love is the fulfillment (Greek pleroma, full complement, fullness from which nothing is missing) of the law“ (Romans 13:10). Furthermore, while justice may be enforced, love (charity) cannot be; it must spring from a willing heart, or it is not charity at all. ”So let each one give as he purposes his heart, not grudgingly or of necessity; for God loves a cheerful giver“ (2 Corinthians 9:7). Coercive redistribution of wealth, therefore, violates both of these primary Christian principles for it transgresses property (protected by the eighth commandment, ”Thou shalt not steal“) and attempts to force what must be free.

But if a Christian perspective will not permit us to turn to the coercive institutions of the state to help those in need, how are we to help the poor? Some immediate handouts are good and necessary, although Scripture treats them more frequently as beneficial to the givers’ souls than to their recipients. What is more important is that we find ways to release people from dependency, to help them express the image of God in intelligent, creative, productive work. In part, this means simply that we contribute to the growth of the market by saving and investing so that more capital is available by which to employ those presently unemployed.

It also means that we reach out as churches and families and individuals, to our neighbors, helping them by direct personal action to gain the knowledge, skills, and habits that make them profitably employable. Churches can do far more to help the poor by conducting literacy training, job placement services, and instruction in such day-to-day skills as getting up on time to get to work, budgeting, balancing a checkbook, comparison shopping, and planning and preparing nutritious meals than by handing out warm bowls of soup.

Churches and individuals can also help by putting into the hands of low-income and poor people the capital they need to employ themselves. Many of these people, especially in less-developed countries, exhibit a great genius for turning a profit in micro-enterprise if only they can get the initial tools with which to ply a trade. Lend money to a Bangladeshi woman to buy a simple, pedal-driven sewing machine, and she will pay back the money promptly and at high interest (necessary to cover the high proportionate cost of administering such small loans), and will build a small business in which she employs herself and others, providing food and other necessities for years to come.4 More important from the Christian perspective, she will be released from the degrading dependency generated by constant handouts, and her dignity as a person will be affirmed – along with the accountability that goes with bearing the image of God.

Notes:

  1. See Graham Hancock, Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business (New York: Atlantic Monthly Press, 1989).
  2. See E. Calvin Beisner, Prospects For Growth: A Biblical View of Population, Resources, and the Future (Westchester, IL: Crossway Books, 1990); Julian Simon, The Economics of Population Growth (Princeton: Princeton University Press, 1977), The Ultimate Resource (Princeton: Princeton University Press, 1981), and Population Matters (New Brunswick, NJ: Transaction Publishers/Hudson Institute, 1990); Max Stigler, Passage to a Human World: The Dynamics of Creating Global Wealth (Indianapolis: Hudson Institute, 1987).
  3. See E. Calvin Beisner, “Biblical Incentives and Economic Systems,” in Biblical Principles & Economics: The Foundations, ed. Richard C. Chewning (Colorado Springs: NavPress, 1989) pp. 168-86.
  4. Many relief agencies around the world have met with great success with programs like this. Generally called “micro-enterprise investment programs” or “income-generation programs for the poor,” the programs focus on capitalizing micro-entrepreneurs so that they become self-supporting. Two organizations making good use of this method and on whose advisory boards I serve are Transformation International Enterprises, 1730 North Lynn Street, Suite 500, Arlington, Virginia 22209, and International Church Relief Fund, P.O. Box 5366, Santa Rosa, California 95402-5366.