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Economics, Eternity, Family, Governance, Investing, Proverbs

Biblical Principles of Economics

Biblical Principles of Economics
by Steve Elwart

“Not that I speak in respect of want: for I have learned, in whatsoever state I am, therewith to be content.”   Philippians 4:11

The economies of the world are in crisis. It seems as if every country is in debt to every other country. How has the world gotten into the state it is in?

Economists will talk about economic theories. They will discuss the superiority of the Keynesian1 vs. the Austrian2 Schools of Economics. All of them seem to miss the point. They talk about economics and labor but miss the spiritual aspect.

Economics is defined as, “The principles that control the production, distribution, and consumption of the material means of satisfying human desires.”

Nothing in this definition talks about the God “from Whom all blessings flow.”

The question of how to organize the economic life of society has occupied the world’s leaders and thinkers since at least the time of the patriarch Joseph in Egypt. Economics also was a matter of concern to Moses and Solomon.

 Over time, Biblical themes have formed the development of Western ideas of fair weights and measures, fiduciaries, usury, property, stewardship, and charity, to name a few of the concepts.

 However, modern economics from Adam Smith’s Wealth of Nations and Karl Marx’s Das Kapital to the modern economic theories of John Maynard Keynes and Ludwig von Mises has separated religion from the “economic sciences.”

This leaves economics as seemingly cold and heart-less, a “science” that does not consider the religious roots of business activity.

In truth, economic life is not separate from religious influence nor can it exist without the principles God has laid out for us.

The Family

The earliest economies were centered on the family and household (oikos). The oikos included not only the nuclear family, but also the clan and tribe—Abraham’s clan being a good example. This extended family was the primary center of production, distribution, and consumption.

Over time, in some cultures, the center of economic activity shifted from the family and clan to the state (polis), in any of its forms. Joseph, taking control of Egypt’s grain supplies during the seven years of plenty to sell back during the seven lean years is an example of the polis controlling the economy. This was a model for some of the modern forms of economy.

The Corporation

By the time of the Middle Ages, the concept of the corporation (persona ficta) was formed through the Church. The Church was an entity that was separate from both the family and the state and had its own status in the area where it was located. Each ecclesiastical unit, be it a church, monastery or religious order, was independent of both family and princes. Each also had corporate rights and responsibilities.

This type of economy altered the economic roles of both the family and the state. Membership in the Church’s economy was not always tied to family, status or class. This new economic unit was more closely tied to religious beliefs than by blood or citizenship.

The Church refused to be subject to the family or the state, especially in matters of economics. In fact, the Church believed it was sovereign to the other two. The Church, in other words, became the first “transnational corporation.” Church scholar Thomas Aquinas (1225–1274) ad-dressed questions concerning private property, private groups holding property, and contract law within a Christian context. Over time, his writings on private property, corporate management, and common law came to be accepted by society.

The Church economic model gradually became secularized and developed into other collectives (free cities, universities, and guilds). The state-sponsored trading companies of Spain, Portugal, England and the Nether-lands adopted this model to colonize the world.

The Free Enterprise System

Economic theory remained fairly static from the Middle Ages until the 18th century when Adam Smith (1723–1790) published his book, The Wealth of Nations.3

In this work, Smith developed the concept of “The Invisible Hand,” a concept where he stated that the marketplace was self-regulating. The marketplace consisted of privately owned capital and the economy operated on a combination of self-interest, competition, and supply and demand.

The Wealth of Nations is now widely recognized as summarizing the modern Free Market System and is considered the beginning of modern economic thought.

Socialism

Socialism is a system where all goods produced are owned and distributed by the State. It is a system that is based on the elimination of private property and an anti-Christian philosophy of ownership and labor.

Modern socialism originated from an 18th-century political movement that criticized the effects of the free market and private property on society.

It was Henri de Saint Simon (1760–1825) who coined the term socialisme, and he advocated technocracy4 and industrial planning to run the economy.

The modern Humanist Movement, conceived by John Dewey5 and others, was formed to promote Socialism and was as much a religious movement as a secular one.

A series of three manifestos outlined their beliefs. The first manifesto outlined a 15-point belief system, which opposes “acquisitive and profit-motivated society” and proposed a purely secular society based on mutual cooperation and ownership. As the first manifesto states:

The humanists are firmly convinced that our existing acquisitive (desire to gain) and profit-motivated society has shown itself to be inadequate and that a radical change in methods, controls, and motives must be instituted. A socialized and cooperative economic order must be established to the end that the equitable distribution of the means of life be possible.

Humanist Manifesto I, 19336

Forty years later, the second manifesto expanded on the Socialist / Humanist concept:

It is the moral obligation of the developed nations to provide (through an international authority that safeguards human rights) massive technical, agri-cultural, medical, and economic assistance, including birth control techniques, to the developing portions of the globe. World poverty must cease. Hence extreme disproportions in wealth, income, and economic growth should be reduced on a worldwide basis.

Humanist Manifesto II, 19737

This second manifesto itself begs the question, “How did ‘developed nations’ become developed?”

This is a question that Humanists do not like to con-template because they know that a country does not become rich by taking from one segment of society and giving it to another.8 Capitalism is needed to accumulate the wealth that Socialism needs to distribute.

Socialism had been proposed for several centuries and had been practiced starting in the Middle Ages through a system called Feudalism.9 Marx’s writings en-ergized this movement.

Marxism

One hundred years later, another economist/philosopher came onto the scene. His name was Karl Marx.10 Marx introduced his own brand of socialism to the world.

While many people call Marx’s economic system “Communism,” it is, in fact, a form of socialism. A true communistic system holds all possessions in the collective possession of a group. Marxism deals more with state control of an economy and the means of production.

Karl Marx (1818–1883) and Vladimir Lenin (1870–1924) were political and economic philosophers who advanced the theory that all of society’s ills were the result of “imperfect means of production.” Marx argued that capitalism creates different economic classes in a society. These classes are at odds with each other with the “bourgeoisie”11 owning the factories, farms, and other means of production and the “proletariat” working for them.

Marx and Lenin believed these two classes would always be at odds with each other, causing a perpetual “class struggle.” Marxists believe that the bourgeoisie must be eliminated and the proletariat, the working class, must be the only class in the society with every-one sharing equally in all the benefits of society.

In short, Marxism is a belief in equality of outcomes rather than equality of opportunity.

What the Bible Says About Economics

A Biblical worldview is at direct odds with the Socialist and Marxist worldviews. 1 Corinthians 12 says that each of us has different giftings and callings that are unique to each of us and that all of the gifts contribute to the glory of God. In order to be consistent with Scripture, it is impossible for the Christian to hold a classless view of life.

Occasionally, some Christians point to actions of the early church (as recorded in Acts 2:42–47) in an attempt to make the case that socialism is the desired type of economic policy. They especially point to the passage, “… And all that believed were together, and had all things common…” (Acts 2:44).

This argument does not differentiate between charity and communism. The individuals in the early church (and in modern communes) made voluntary decisions to share their possessions and labors with one another; these conditions were not imposed on them by a faceless State.

Countries that have implemented Marxism (i.e. the former Soviet Union) have found that any attempt to eliminate the distinction between the “haves” and the “have-nots” will unavoidably lead to one very small class of “haves” and one very large class of “havenots.”

According to Scripture, the goods and property you own cannot be taken from you by another person, state, or government bureaucracy. Capitalism is the opposite of socialism. Capitalism has at its center private ownership while socialism is theft.

There is ample Biblical support for free-market economics: the free-will exchange of goods and services between consenting individuals.

Men shall buy fields for money, and subscribe evidences, and seal them, and take witnesses in the land of Benjamin, and in the places about Jerusalem, and in the cities of Judah, and in the cities of the mountains, and in the cities of the valley, and in the cities of the south: for I will cause their captivity to return, saith the LORD.

Jeremiah 32:44

The Biblical passages of Leviticus 25:15, Deuteronomy 2:6, Jeremiah 32:10-12, and Acts 5:1-4 also demonstrate Biblical support for free-market economics.

Few people know the Biblical principles that are be-hind economics. Principles such as work, rest, property ownership, wealth, and trade are explained in the Scriptures, yet rarely studied by pastors or their flock.

Economic difficulties and arguments over finances are the number one cause of trouble in a marriage, yet couples will spend more time planning a two-week va-cation than on their personal finances. Part of our spiritual growth as Christians needs to be to think Biblically about our personal and social economic responsibility.

God Owns Everything

As Creator of the Universe, God owns His creation. This principle is repeated throughout the Bible. Since He created the universe, it is His to do with it as He pleases. This includes the wealth of individuals and nations. As God’s creation, we do not own anything, not even our own bodies. Having been made in God’s image and likeness, we have a delegated ownership.

It is also important to realize individuals own things, not governments nor societies. The Tenth Commandment is very clear about this. We are cautioned not to covet (to long for, desire earnestly, or lust after) what belongs to others. Individuals are not the only ones who can covet. Governments can covet as well. Confiscatory taxes collected under the guise of making people pay their “fair share” amounts to covetousness by society.

God Has Given You Work To Do for His Glory

We are all workers in the Lord’s vineyard. A wise person works not just for money but also to glorify God by exercising dominion in His image. We find fulfillment in pursuing our vocations with wisdom and excellence.

Steve Elwart can be contacted at  Steve.Elwart@studycenter.com

Notes:1. For a discussion of the Keynesian School of Economics,
see: http://en.wikipedia.org/wiki/Keynesian_economics
2. For a discussion of the Austrian School of Economics,
see: http://en.wikipedia.org/wiki /Austrian_School
3. http://en.wikipedia.org / w i k i / The_Wealth_of_Nations
4. For an example of Technocracy in China, please see
Mary Miller’s article, “China Update, Part 3”, October
2008 Personal Update: http://www.khouse.org/articles/2008/812/
5. R e a d m o r e about John Dewey
at : ht t p : / /en.wikipedia.org/wiki/John_Dewey
6. http://www.americanhumanist.org/Who_We _ A re /About_Humanism/Humani st_Manifesto_I
7. http://www.americanhumanist.org/Who_We _ A re /About_Humanism/Humanist_Manifesto_II
8. The Third Humanist Manifesto moved almost completely away from economics and into pure Humanism. The sixth point in the manifesto only mentions economics in passing by stating that one maximizes their own happiness when they work to benefit society.
9. Read more about feudalism at :http://www.middle-ages.org.uk/feudalism.htm
10. http://en.wikipedia.org/wiki/Karl_marx
11. Pronounced: borzhwa-zee’

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About steveblizard

Steve Blizard commenced his financial planning career in 1988 from a background of life insurance broking, a field in which he still works. He is a member of the Financial Planning Association and the Responsible Investment Association. His experience ranges from administration of Superannuation to advice regarding insurance, retirement, remuneration and investment planning. Steve is an accredited Remuneration Consultant, specialising in salary packaging. He is a columnist for the Swan Magazine and the WA Business News

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