Economics: Summary Principles
following are arranged in no particular order except some
definitions and basics in the first few sections. At some
points, the reader is directed to other Worldview Areas. As you
go through the various Areas, there is overlap and dependency of
each area to every other area. A review of economics is not
possible without particular attention to Social Justice
and Civil Government because these three areas involve so
many of the same issues. And, virtually every other area
influences to one degree or another.
1. The Bible is a
textbook on economics.
The Bible, especially with a systematic organization of the
subject, is a textbook on economics. As we have seen with
psychology, social justice, and civil government, any activity
that involves relationships and interactions among people, the
Bible is the governing textbook.
That the Bible has not
been seen as such a textbook in these areas, perhaps, stems from
two reasons. (1) The Bible is not written systematically. If a
person takes any subject (especially any of those named here),
and goes through the Bible citing every verse and noting the
context, the result is amazingly detailed and compressive!
Economics may have more applicable verses than any other
worldview area. (2) Christians have not been taught the
comprehensiveness of the Bible on the many subjects to which it
speaks. This second is a derivative of (1), but it also results
from some 200 years of pietism in which the Bible has become
narrowly focused on personal salvation only with a smattering of
personal morality considered.
2. Definition of wealth
Wealth, as it will be used in these principles, is defined as
having the money (resources) to provide for all of an
individual’s or family’s “needs,” and some discretionary money
for at least a few “wants.” Any definition of wealth is somewhat
arbitrary because wealth is more subjective than objective. What
is wealth for one person, may be far short of what another
considers to be wealth.
3. The incredible lure
(lust) of money.
““No one can serve two masters; for either he will hate the one
and love the other, or else he will be loyal to the one and
despise the other. You cannot serve God and mammon” (Matthew
6:24). “For the love of money is a root of all kinds of evil,
for which some have strayed from the faith in their greediness,
and pierced themselves through with many sorrows” (I Timothy
6:10). These and many other verses of the Bible indicate that
money and what it can buy (things and power) is one of the major
temptations to which man is subject. Two things may be commonly
The “love” of money and
the “poor.” (1)
It is the “love” of money, not money itself that is the problem.
Neither a large amount of money, nor the accumulation of
“things,” are intrinsically evil, even though they are a great
temptation to sin. (2) Many “poor” or those without wealth are
as prone as the “rich” to this temptation and sin. It is widely
recognized that the “poor” are the primary buyers of lottery
tickets and other means of gambling, evidence that they will
sacrifice that of which they have little in order to get “rich.”
And, they can envy and want material possessions as strongly as
any “rich” person, even though they will likely never have the
possibility of owing such items.
4. The cycle of
prosperity and righteousness.
There is a cycle that seems to be almost inevitable. The
righteousness of a people brings prosperity (see all that
follows here). Then, as soon as prosperity is achieved,
degradation of morals (unrighteousness) follows until the sin of
a people settles them back into poverty. The challenge of
American Christians today is to become such good stewards of
their wealth as to disrupt this cycle.
The United States
today: good and evil, principalities and powers.
The United States is a nation of great and powerful contrasts.
It has the greatest resources, and it’s the most “giving” nation
on earth. When disasters occur, the United States is there with
the most and best equipment and resources. Her people give three
percent of their income to “charitable” organizations. She sends
more missionaries than any other nation. Yet, she continues to
increase the powers of government and is becoming a nation of
perverse and heinous immorality which has become “politically
correct.” The conflict is great! However, “salt” is a
preservative that may be greatly diluted and still be detectable
Scarcity is defined simply as needs and wants exceeding the
resources available to meet them at the price that people want
them. This term is another one that is relative. Mostly, it is
time dependent, as increased production, discovery of more raw
materials, changing wants and needs, and other factors may
reduce or even eliminate the scarcity. Scarcity often leads to
ingenuity and increased efforts to remedy scarcity. In today’s
world, persistent scarcity usually occurs due to some statist
intervention of tariffs, restriction on production, limitation
of transport, condemnation of a faulty product, etc.
Population of the
earth. In the
account of creation, God said, “Be fruitful and multiply; fill
the earth…” (Genesis 1:28). By reasonable measures, the earth
can support far more people than now exist on the planet. New
“resources” are discovered continually, and man has great
ingenuity to make present resources last longer, create new
technologies that require different resources, and use
technology to discover and produce new resources. The greatest
limitation on adequate food, shelter, and clothing is State
controls, tariffs, redistribution, and other measures that
interfere with the free market, individual ingenuity, available
resources, and other means of production to provide these needs.
Overpopulation and the Creation Mandate.
Drought is not the
primary cause of famine.
When one thinks of famine, one envisions dry, dusty barren
fields due to lack of rain. However, in the world’s history and
in modern times, drought is not the primary cause of famine --
man is. Crops are destroyed by invading armies through physical
destruction, disruption of farming, and theft of produce. The
State sets regulations on what farmers can and cannot grow and
when they can grow their crops. In many nations, storage of food
for future consumption in times of hardship is called “hoarding”
and punishable by law. Famine occurs through farmer’s failure to
replenish the soil. In places like India, the predominant
religion, Hinduism, proscribes the practice of eating cows that
could provide meat for many children who desperately need
protein. Modern agricultural methods could actually provide
enough grain for India's entire population and one-third more
could even be exported! (Link)
Thus, famine should be thought of as a much greater problem of
man’s devastation of his environment and whatever religion that
he believes than a lack of rain. Without such devastation, the
earth is capable of feeding many times the current population of
The United States now has laws that punish those who charge
“above market” prices for goods in the midst of a crisis, such
as a hurricane. But, what this law does is stifle the incentive
for entrepreneurs to respond quickly to the disaster. It
actually prolongs recovery and rebuilding in the long run. Our
natural tendency is to abhor those “pirates” who would take
“advantage” of those harmed by a natural disaster. However, they
have sacrificed themselves to get to the site quickly and with
the goods needed. And, no one in the disaster is forced to buy!
6. The tithe.
The tithe of one’s increase in wealth over a period of time is
owed to God (Malachi 3:8-12), whether a person is a Christian or
not. God has promised prosperity to those who tithe (same text).
The tithe is directed to the church for its worship and work to
Kingdom of God.
7. Acquisition of
wealth and the blessing of God.
Generally, hard work and frugal living produces wealth (for
example, Proverbs 8:21; 14:24 . But, finally, wealth is a
blessing of God (Proverbs 10:22). There is a correlation between
one’s being righteous and being wealthy (Proverbs 15:6, 22:4),
and one‘s sins and waste of resources (Proverbs 21:10, 29:3). I
once did a detailed study of the verses in Proverbs that have to
do with the accumulation of wealth. The principle thus stated
was obvious in that book of the Bible. See the second definition
of the “poor” above.
8. Material value is an
entirely subjective concept.
“One man’s trash is another man‘s treasure,” says one proverb.
“Beauty is in the eye of the beholder” is another. Millions of
dollars have been paid for “modern art” by some buyers while
others would throw it in the trash. Within societies, however,
there are consistencies of value. For example, gold and gem
stones are almost always considered “valuable.” However, there
are times of crisis in which these valuables would be traded for
a minimal amount of goods for survival. God placed value on gold
and silver for His temple design, but He is also a Person.
Perhaps, food, shelter, and clothing are the most valuable items
for any person, since they are necessary for the sustenance of
life. But, even with these, there are subjective choices (for
example, gambling) that one values above even these basics.
For more, see
The Theory of Value.
9. Work established
“Fill the earth and subdue it; have dominion over the fish of
the sea, over the birds of the air, and over every living thing
that moves on the earth” (Genesis 1:28). “Then the LORD God took
the man and put him in the garden of Eden to tend and keep it”
The curse of the Fall
on work. Part
of the curse of Adam’s sin is the difficulty of work. Prior to
the Fall, work would have come naturally and more productively.
While we cannot be sure what these differences might be, there
is no doubt that man’s difficulty with production in a fallen
world is greater than it would have been.
The blessing of the
Fall on work: (A)
The difficulty of producing anything under the curse also has
the blessing that men must work together to provide for
themselves and their families. Where there is any concentration
of population, it is usually more beneficial for one man to
concentrate on what is able to produce well and efficiently,
selling those items to others, and using the money to buy food
and other items that he needs. Thus, both he other benefit from
(B) Division of
has created, even under the Curse, such a diversity of
interests and talents among men, that every need and many
wants can be fulfilled through their productive and
cooperative efforts. This division is one of the great
blessings of his Common Grace.
The fact that there is never enough of anything for all
people at one time at the prices that they want to pay means
provides incentives for this division of labor to
work towards the provision of goods and services at prices
that others will pay.
(From Latin, vocationem, “spiritual calling.”) With the
Reformation came the Biblical understanding that everything
“under the sun” is under God’s Providence. While there is a
sense in which “secular” is applicable to ideas that are not
Biblical, strictly speaking no work in which man is engaged is
“secular.” Every activity of man should be consciously brought
under Biblical scrutiny and its direction. Within this purview,
all activities of man, especially his primary occupation should
be consciously recognized and pursued as being administered
under God’s hand. The particular focus of this activity should
be that this work is directed by the applicable Biblical
Christian’s neglect of
learning and applying Biblical principles in their work.
One of the great tragedies of Christians today is their failure
to understand Biblical principles that govern their profession
or area of work. For example, I spent over 20 years working in
medical ethics from a Biblical perspective, in spite of the fact
that the word “physician” is only mentioned seven times in the
Bible. While Christians achieve college level educations in the
liberal arts and sciences, they function through life on a First
Grade level of Bible and theological understanding. Thus, they
have no clue how to reform their work under God’s mandate to do
11. The private
ownership of property is a clear mandate of the Bible.
Primary to this mandate is the Eighth Commandment, “You shall
not steal.” For theft to occur, prior ownership must have been
established. Many laws of the Old Testament protected property
from seizure or damage from others. Property belonged to the
family and was passed from one generation to the next. This
property also was protected by various laws in how it was to be
passed within families and who had specific claims on it.
Blessings and cursings accompanied these laws. Many of Jesus’
parables were implicit or explicit on the ownership of property,
for example, the one that ends with “Is it not lawful for me to
do what I wish with my own things?” (Matthew 20:15).
Fact of history.
While empirical evidence is not necessary to prove the truth of
Scripture, such evidence does illustrate its truth.
experiments of history have failed miserably or have been local
Acts 4:32-5:11 - The
early Christian church, communism, and Ananias and Sapphira.
This passage is not an example for all churches. (1) One
hermeneutics is that
historical passages must be interpreted by the didactic. Or,
what is recorded as history is not necessarily to be considered
to be doctrine (principled teaching). (2) Giving of one’s goods
was voluntary. Ananias and Sapphira were judged, not
because they held back some of the proceeds of their sale, but
that they “lied … to God” (5:4). (3) This period of time was
unique in the history of the church. Nowhere else is communal
property remotely suggested. Likely, the members of the
Jerusalem church were anticipating the destruction of Jerusalem
that Jesus had forecast and selling their possessions to prevent
their assets being destroyed. (4) Communal property would negate
the Eighth Commandment that ownership of property was not the
norm. By necessity, some property might have to be communal, for
example, roads, rivers, and seas. However, most communal
properties are abused and not preserved or developed over time
(for example, the Boston Commons of early Massachusetts).
12. The role of the
State in economics.
The primary role of the State in economics is to insure that the
free actions of men may take place without fear for their lives
or their property being stolen.
The State is to have no
disrupts the free exchange of goods and services around the
world except as may be required to disrupt or destroy the trade
of declared enemies in a just war. Tariffs, property tax,
subsidized costs of production or research, payment for
non-production, minimum wage standards, price controls, etc. are
not the Biblical duties of the government. All these favor one
person or industry over another, interfering with market forces
that determine prices that are acceptable to the buyer and
Licensure of services, for example of physicians and realtors,
provides a state-sponsored monopoly of these professions,
distorting the free trade of goods and services.
Interference by the State in the above ways will eventually
cause shortages and inflated prices of those goods and service
That the State has no role in regulating an economy or the free
exercise of trade, simply, but powerfully, eliminates these
employees, and trade unions.
Trade unions distort the relationship of the employer and
employee. An employer hires a person for a specific job at a
wage/salary that is agreeable to them both. Each evaluates their
ongoing relationship over time. The employer evaluates the
performance of the employee, whether it matches the wage/salary
that he is paying the person. The employee evaluates the
wage/salary that he receives and his working conditions.
Weighing their respective interests, the relationship continues
or is dissolved at some point. Each is free to evaluate and
negotiate with the other.
A trade union
interferes with this freedom on both sides. A trade union
sometimes assumes that all workers produce the same output which
is patently false by any measure. A trade union severely
restricts the options of a person who is not in the union
through “closed shops” and wage controls. A trade union severely
handicaps all employers who must monitor the cost of production
so that he makes a sufficient profit to stay in business. In
essence, the trade union becomes a barrier for a business to be
successful and against the creation of more jobs. The more that
a business is successful, the more employees that it can hire
and pay them their negotiated wage.
14. The family, child
labor laws, and the State.
The family is an institution ordained by God which is to be
governed without any outside interference from the State except
where there is good evidence that severe bodily harm or murder
has occurred. This restriction seems harsh and antiquated in
modern times, but the family must have that God-ordained freedom
to perform its responsibilities under God’s commandments. For
example, children have different talents and mature in different
degrees. Who can best tell when they are ready to be employed,
the family or the state? Obviously, the family is best able to
make that discernment because they have observed the child from
birth to the present. The State can only assume that all
children are the same, a patently false notion.
Without doubt, in the past and present, children have been
severely abused in the work place. However, for the State to
interfere is for the State to provide “foster care,” placement
agencies, restrictions on businesses, police powers over the
family, and violation of the integrity of the home, to name a
few. Whenever the State steps outside of its God-prescribed
roles, it creates a myriad of agencies and bureaucracies that
try to emulate what the family unit is capable of doing with
only a mother and a father. That families abuse their children
is accepted. But, far greater abuses of children will occur with
and by State interference. For example, the State now
investigates spanking of children (a God-instructed
responsibility) and will remove children from the homes of
Christians on this basis alone.
No goods or services have intrinsic value. For example, a man
might pay an ounce of gold to buy one loaf of bread in a time of
crisis. That same ounce of gold would buy dozens of loafs of
bread in times of stability. Relative to services, a man may be
willing to pay only an ounce of silver to be ferried over a
quiet stream. Yet, if he is in danger of losing his life due to
flooding, he may pay a bagful of silver or even his lifetime of
Value is an entirely
Value lies within the heart of a person or group of persons. For
example, gold is valuable because of its beauty and certain
natural properties. Even so, certain people will kill to get
more of it while others do not care whether they ever have any.
It is this subjectivity
of value that makes any sort of regulation of the market place
impossible. No man can determine what another is willing to pay
or sacrifice for a particular item. Any outside influence
interferes with the negotiation of the value that the seller
places on his item and that buyer is willing to pay. The buyer
does not have to buy and the seller does not have to sell until
they reach an agreement. Any outside interference gives an
unjust advantage to one over the other.
“A person imputes
value to an article or a good because he forms an opinion about
the potential desirability or usefulness. This is true whether
we speak about the food we eat, the wood that we burn, the
paintings that we enjoy, or the women that we love.” (Rose,
Economics: The American…, page 159)
While value does reside
across groups to a large extent, for example, most people value
gold, and the market place determines a fairly standard price
for an ounce of gold. However, as stated above, individuals
within those groups will value gold more or less than that
determined price. So, not even the market place can determine
the subjective value that a person places on gold or any other
For more, see
The Theory of Value.
Money is simply a designated and denominated medium of exchange,
ideally tied to a bimetallic standard.
17. The gold standard.
Since money is simply a medium of exchange, there must be come
way to determined its value. And, since value is inherently
subjective (see above), in a worldwide market the monetary base must be
something that all people value and the supply of which does not
change rapidly. If the supply of the medium of exchange were to
change rapidly, then the value of families’ possessions in
monetary price would change with the supply. Of all the possible
items that fit this criteria, gold or silver are surely the
best. To increase the supply of either of them, a considerable
effort of mining and purification is necessary. There is not
going to be a sudden increase in production of these items. And,
there is a built in safeguard in the cost of production. If the
supply did suddenly increase, the value of the gold or silver
loses value. As it loses value, there is less incentive to
continue mining and processing (expensive procedures), so
production falls off and the market again begins to level out.
The American dollar.
The Mint Act of 1792 established the dollar and tied it to
designated weights of gold and silver. Except for the period
that began with the Civil War until 1878 and with minor changes
in the weights of precious metal, the bimetallic standard was
continued. In 1900, the link to silver was abandoned. In 1933,
gold coins were withdrawn from circulation and the unit weight
of gold tied to the dollar was markedly reduced. In 1975, all
linkage of the dollar to gold was abandoned, allowing the dollar
to “float” on international markets. Click
here for more a more
Why have a gold
of the reason for a gold standard is reasoned above. The biggest
reason for the gold standard is to prevent governments from just
printing money for whatever reason that they conjure. When
governments print money, they steal from those who hold that
unit of currency because it will buy less than before the supply
was increased (inflated). Another reason is to allow citizens to
retain monetary power that the government cannot easily change.
Artificially created money also entices people toward unwise
investments by stimulating an unsustainable set of wants.
The problem of inflation is the problem of a monetary standard
divorced from the gold standard or a government policy that
continually decrease the amount of gold that a unit of currency
represents. Apart from a government being able to simply print
money, all other methods that could cause inflation are slow and
ponderous. We have seen how difficult is the production of gold
and silver, and even that its cost of production is a natural
safe-guard against inflation. If the demand of an item results
in its inflation, that higher price attracts suppliers who want
to profit on that item. This increased production, then, brings
the price down. While market forces cannot always prevent supply
or monetary crises, such forces will correct the situation in
the shortest period of time that is required to produce the
products and move them to the place of need.
18. Love and social
Principles of economics necessarily include principles of love
and social justice. Christians as individuals, families, and
churches are called of God to minister to the poor (defined
below). First, there is evangelism to the “poor in spirit,”
regardless of economic status. Second, we are to minister to the
economically poor.” This administration is not automatic, as it
requires discerning who are those who are the “deserving poor”
and “undeserving poor.” These actions fill in the gaps of those
who temporarily or permanently are unable to provide for
themselves economically. Social justice is more complex than
just giving handouts.
The Summary Principles of Social
Justice and the discussion there are necessary to
understand the concept of love and social justice within the
parameters of economics.
Definition of poor
Bible defines the “poor” in three ways. (1) Those who are “poor
in spirit” (Matthew 5:3) whether they have earthly needs or
great prosperity. (2) Those who are destitute of earthly needs
and possessions, yet who are willing to work and better
themselves, “those who are bowed down… the righteous” (Psalm
146:5-9) Also, see Job 5:11-16; Psalm 10:17-8, Psalm 103:6,
Psalm 109:30-31, 140:12. These could be called the “deserving
poor.” They are to receive charity and help towards responsible
provision of themselves and their families. (3) Those who are
destitute of earthly needs and possessions who are not willing
to work and better themselves. They “waste opportunities
(Proverbs 6:9-10), bring poverty on themselves (Proverbs 10:4),
are victims of self-inflicted bondage (Proverbs 12:24), and are
unable to accomplish anything in life (Proverbs 15:19.” While
these should be given every opportunity and assistance to
change, “subsidizing sluggards is the same as subsidizing evil.
It is subsidizing dependence… slavery.” (Quotes and ideas are
from George Grant, In the Shadow of Plenty, [Thomas Nelson,
Inc., 1986), pages 52-55.) For more on the “unwilling to work”
poor, see Dalrymple under Endnotes. (Transferred from Summary
Principles of Social Justice.)
19. The family is the
primary unit of economics.
In the Old Testament, property (land) belonged to the family and
was passed from generation to generation. Fathers are to provide
other forms of inheritance for their children (Proverbs 13:22).
A father who fails to provide for his family is “worse than an
unbeliever” (I Timothy 5:8). Thus, family economics is both
present and future, intended to be
This centrality of the
family is not to disparage the roles of single men and women in
an economy, especially those who are called to singleness (I
Corinthians 7:6-8). However, an individual is not a functioning
unit, as the family in which there is a head, a wife and
children. There are mutual roles within the family of education,
training, and provision. Even as one generation lives their
lives as God’s stewards on earth, they are making provision for
the next. A major weakness of Christians and churches on their
culture has been the loss of belief from one generation to the
next. This loss is not part of God’s preceptive design.
20. The Eighth
The Eighth Commandment has a broad and general application
towards both the duties and sins that it encompasses. This
application is clearly seen in the Larger Catechism of the
Westminster Confession of Faith which summaries a large number
of other Biblical principles.
Q. 141. What
are the duties required in the eighth commandment?
A. The duties required in the eighth commandment are, truth,
faithfulness, and justice in contracts and commerce between
man and man; rendering to every one his due; restitution of
goods unlawfully detained from the right owners thereof;
giving and lending freely, according to our abilities, and
the necessities of others; moderation of our judgments,
wills, and affections concerning worldly goods; a provident
care and study to get, keep, use, and dispose these things
which are necessary and convenient for the sustentation of
our nature, and suitable to our condition; a lawful calling,
and diligence in it; frugality; avoiding unnecessary
lawsuits, and suretiship, or other like engagements; and an
endeavor, by all just and lawful means, to procure,
preserve, and further the wealth and outward estate of
others, as well as our own.
Q. 142. What
are the sins forbidden in the eighth commandment?
A. The sins forbidden in the eighth commandment, besides the
neglect of the duties required, are, theft, robbery,
man-stealing, and receiving anything that is stolen;
fraudulent dealing, false weights and measures, removing
landmarks, injustice and unfaithfulness in contracts between
man and man, or in matters of trust; oppression, extortion,
usury, bribery, vexatious lawsuits, unjust enclosures and
depredation; engrossing commodities to enhance the price;
unlawful callings, and all other unjust or sinful ways of
taking or withholding from our neighbor what belongs to him,
or of enriching ourselves; covetousness; inordinate prizing
and affecting worldly goods; distrustful and distracting
cares and studies in getting, keeping, and using them;
envying at the prosperity of others; as likewise idleness,
prodigality, wasteful gaming; and all other ways whereby we
do unduly prejudice our own outward estate, and defrauding
ourselves of the due use and comfort of that estate which
God hath given us.
21. The Fifth
Commandment: superiors, inferiors, and equals.
The Larger Catechism of the Westminster Confession of Faith has
some interesting discussion of the economic relations of what it
calls “superiors, inferiors, and equals.” The answer to Question
124, “Who are meant by father and mother in the
fifth commandment?,” is “By father and mother,
in the fifth commandment, are meant, not only natural parents,
but all superiors in age and gifts; and especially such as, by
God's ordinance, are over us in place of authority, whether in
family, church, or commonwealth.” Then, the Q/A’s go on to
elaborate. For example, “It is required of superiors, according
to that power they receive from God, and that relation wherein
they stand, to love, pray for, and bless their inferiors; to
instruct, counsel, and admonish them; countenancing, commending,
and rewarding such as do well; and discountenancing, reproving,
and chastising such as do ill; protecting, and providing for
them all things necessary for soul and body …” (Answer to
Question 129). The reader is invited to review these Q/A’s, as
they give moral instruction to all that is beyond just the
“letter of the law” in economic transactions and everyday
interactions among all peoples of a culture. See the
Catechism, Q/A’s 123-133.
Capitalism is a natural tendency of mankind. In one of God’s
most amazing providences, man’s self-interest and selfishness
works for both his own good and that of society relative to
economics. To increase his own possessions, he must produce
goods or services that others want and for which they are
willing to give up a portion of their own wealth to acquire what
he produces. And, he must have a good product at a price that
others are willing to pay or he will lose business to his
competition. Capitalism is a win-win (producer-consumer)
The American War of Independence was war over economics,
“taxation without representation.” This war illustrates how
closely free trade is linked to other freedoms. From that
experience, limited government, especially concerning free
trade, caused the United States to become the most prosperous
and powerful nation on earth. Now, as we destroy virtually every
God-ordained foundation of our country, we are losing not only
our world power status, but our economic freedoms, as well. That
we have continued to prosper until now testifies to the power of
the free market, even with the restrictions now placed upon it.
But, this power will not last forever, as these foundations are
Perhaps, the place
where this self-interest and “common good” are most clearly seen
is the “black market” of regimes in which a State has restricted
trade through tariffs, fascism, favored industries, etc. At the
risk of severe punishment, and even death, entrepreneurs will
produce or acquire items or services that others want.
Entrepreneurs strive to produce and provide what others want in
the most difficult of circumstances.
In every culture or nation, government at every level has tried
to restrict trade in various ways (as just mentioned). Such
intervention has always harmed everyone over time by limiting
the expansion of production and trade. Even those who benefit in
the short term will lose in the long term because when the laws
of God are violated before they will eventually cause the
destruction of the violators. People will leave a country,
establish “black markets,” revolt, assassinate, destroy, and in
many other ways seek to correct violations of their freedom.
Unfortunately, those coming to power rarely have better
solutions than those that they overthrow. God’s laws are
as certain to destroy, as they are to build up, when they are
ignored or flagrantly violated. God’s laws only bring prosperity
and the good fortune of all who abide by them.
A modern example in the
Through thousands of minute laws, the American government has
tried to increase its revenue by taxation. For decades, studies
have shown that the income to the federal government, as a
percentage of Gross Domestic Product, has not significantly
changed over the last several decades. The creativity and
ingenuity of mankind (in this case, Americans) will always far
exceed the legislative powers of a State.
24. Abuses of
Capitalism has been much maligned, even by conservative and
Christians. What is often portrayed is the vision of the “robber
baron,” charging exorbitant prices for the “common man” and the
poor. However, this image is mostly a myth. As we have seen
immediately above, entrepreneurs (even when restrained in many
ways) have a creativity and ingenuity to get around these
restrictions. The same is true for so-called monopolies.
Industrious men will establish alternatives. Then, there is the
price of the product. A “robber baron” or monopolist cannot just
charge whatever he wants because the consumer will make his own
evaluation of the price that he is willing to pay. Market forces
with any degree of freedom just regresses to the needs and wants
of buyers and the prices that they are willing to pay. See the
Myth of the Robber Barons.
Many monopolies are
created by the State today, for example, the Federal Reserve
System and regulation of utilities and insurance. These are
problematic and are proscribed by previous principles that do
not allow the State to be involved in economic enterprises.
25. How much profit is
too much? The
answer is determined solely by the seller and buyer. The seller
can make as much profit as the buyer is willing to pay for the
product. The Bible is quite clear from cover to cover that God
encourages, even demands, profit in man’s economic undertakings.
The parable of the talents is a great example. Large profit is a
lure of entrepreneurs to “get in on the action,” so market
forces “even out” the situation over time. In a free economy,
the buyer is never forced to pay for what he does not want to
Risk of the
Those who are critical of capitalism value the risk that the
entrepreneur takes. “The latest statistics from the Small
Business Administration (SBA) show that ‘two-thirds of new
employer establishments survive at least two years, and 44
percent survive at least four years.’" The entrepreneur places
his present and future (a loan) capital at risk, as well as the
welfare of his family. And, there are considerable costs to any
business. Thus, profit is necessary, if for no other reason than
the bills (costs of business) have to be paid. Also, the
prospect of “bettering” oneself and his family provides an
incentive for entrepreneurs. Profit is the motive to take
risk. Without it, there would be no economy!
Lessons of history.
Price controls of the early 1970s in the United States during a
period of “high” inflation led to shortages and a recession.
Price controls anywhere and everywhere have always produced such
scarcity. The great experiment of Communist Russia led only to
bare shelves and failed crops. The sale of grain to Russia by
shiploads from the United States is well known. God’s laws of
economy cannot be thwarted in the long run!
26. Usury and interest.
There has been and is much misunderstanding about the difference
between charging interest and usury. “Usury in the Bible means
any increase in the amount of repayment above the principle,
but only in the case of charitable loans.” Old Testament
lenders were not to charge interest to a Hebrew brother. (North,
Inherit the Earth, page 88-89). But, in common use since
the Middle Ages, “usury” has been defined as “exorbitant
interest rates,” those above common or legally proscribed
limits. However, the Hebrews were to “lend to many nations”
(Deuteronomy 28:12). That they were not to charge interest would
have been an unreasonable expectation. Their capital would be at
risk of non-payment, so interest pays for that risk.
Someone in need and
Herein, we have discussed that Biblical Principles of Social
Justice give balance to market forces. Here, too, “For an
individual to be merciless to someone in need when he does have
the extra assets available to help that person is, in effect, to
deny that he too is a debtor to God and is also in desperate
need for God to intervene and repay his own debt” (North,
Inherit the Earth, page 89). Again, social justice includes
careful judgment on the part of the helper, not just an
automatic hand out. Social justice is not helping everyone who
comes along, but helping in a careful, Biblical way.
27. Loans and
borrower is servant to the lender” (Proverbs 22:7). The Bible
permits loans at interest, but it adds cautions and conditions.
Gentiles could be charged interest (Deuteronomy 22:20). A loan
generally should not be taken out for more than seven years, as
it was to be cancelled at that time (Deuteronomy 15:1-2).
Collateral should be used to guarantee loans,, but not without
consideration of excessive harm to the borrower (Exodus 22:26).
We saw above that the very poor and brothers should not be
charged interest which would be “usury” (Exodus 22:25; Leviticus
25:35-38). Perhaps, many of these laws are not to be taken
literally, but certainly the principles that they represent
should be implemented, even in modern times (the equity of the
Loans should always
Borrowing without collateral increases the money supply of a
culture, thereby inflating the denominated cost of all items.
Inflation is theft, as the same amount of money will no
longer purchase what it would before inflation occurred. The
result is the same as though that percentage of inflation had
been stolen by a thief who broke into and stole from every
28. “Fiat” money is an
even worse form of theft.
When a bank loans money beyond its resources on deposit, “fiat”
money has been created, that is, money that does not really
exist. Such practice causes great potential disruption for
economies, as has been seen in “bank runs” in recent history.
Further, that increase in the money supply is inflationary,
virtually stealing from anyone who holds assets of any kind.
29. The Sabbath.
“Remember the Sabbath day, to keep it holy. Six days you shall
labor and do all your work, but the seventh day is the Sabbath
of the LORD your God. In it you shall do no work: you, nor your
son, nor your daughter, nor your male servant, nor your female
servant, nor your cattle, nor your stranger who is within your
gates. For in six days the LORD made the heavens and the earth,
the sea, and all that is in them, and rested the seventh day.
Therefore the LORD blessed the Sabbath day and hallowed it”
There is far too much
in this Commandment to unpack here. However, the person who
would understand and apply Biblical economics must seriously
consider its fullness. Sometimes overlooked is “Six days you
shall labor and do all your work.” Almost universally throughout
the world today, a work day week is five days or less. The
implications of a six day work week should be contemplated.
Work” may be understood more broadly than one’s employment (see
Vocation herein). For the Christian, “work” should be considered
any activity that advances the
Kingdom of God. In fact, the Christian’s
primary work may be to that end, rather than his employment (as
the Apostle Paul made tents).
Far and away, the
intent of the Sabbath is “rest,” worship, and contemplation of
God and His Word. For our purposes here, we will focus on
“rest,:” which is the primary focus of the Commandment itself.
Any activity which prevents “rest” on the Sabbath is a
violation of this commandment.
Now, the Westminster
Confession of Faith (XXI:8) and other teachings allow for “works
of necessity and mercy.” Jesus briefly discusses this issue in
Matthew 12:1-14. My argument in this regard is two-fold. (1)
The emphasis is on “rest.” In today’s fast paced society,
most individuals and families do not get enough rest. The
Sabbath, now Sunday, is that opportunity. Many “works of
necessity” are just excuses to “catch up” on both
employment-related and personal tasks. Even physicians who care
for patients often cover-up work that is not truly a “necessity”
with this excuse.
(2) The idea of
“rest” should be extended to an every day application. My
impression is that Christians are governed as much by the
“tyranny of the urgent,” as non-Christians. That is, their lives
are one frantic attempt to meet a schedule of activities that is
difficult, if not impossible to fulfill. A pattern of both
vigorous work and rest should be characteristic of a Christian’s
life. (See Matthew 11:28-29.) A practical gauge of whether there
is rest is the hour or so before bedtime in the home. Do adults
and children begin to wind down calmly and deliberately or is
there a frantic rush to get last minute things done and jump
into bed? (See
There is one caveat.
Life is quite unpredictable, and none of us is perfect, so many
days and nights may be unavoidably frantic. However, in the
main, the latter part of all evenings are a gauge for the
fulfillment of work and rest in an individual or family’s life.
www.freebooks.com Go to bottom of home page,
click “Page Two.” At the top of the page, click “Main Area.”
Look in the left margin column for “Books by… subject.” Scroll
down to Economics. I suggest for basics, these books by Gary
An Introduction to
Inherit the Earth
in the Sheaves
Shadow of Plenty
Books by Tom Rose,
Tom Rose used books at