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August 07, 2013
Do You Know Why Economics Is a Moral Issue?
Every liberal economic policy is predicated on the assumption that coercive governments are morally superior to free markets. But how would progressives react if they realized the exact opposite is true?
Bad economic ideas lead to bad — and immoral — economic decisions. As the Acton Institute’s Dr. Samuel Gregg puts it in Becoming Europe, quoting economist Arthur Brooks, the goal of a free market system of economics is not “the endless acquisition of wealth.” Rather, it is human flourishing1 — our ability to, inasmuch as we can after the fall, be fruitful and multiply, fill the earth, and rule over creation (Genesis 1:28).
The Bible doesn’t instruct us on specific tax policies. Nowhere does it prescribe what percentage of gross domestic product the federal government ought to be spending. But it does give us a framework from which to orient our economic thinking: people are made in the image of God and carry inherent dignity and the ability to produce good things. Economic systems that affirm these truths lead to human flourishing. It’s for that reason that the free market system, when coupled with personal virtue and community responsibility, better aligns with a biblical worldview than any other economic system. Christians ought to learn to articulate this: what is immoral is not the free market system, but the diminishment of opportunity and dignity when it is corrupted by greed or destroyed by power.
As New York Times bestselling author and Summit faculty member Jay W. Richards recently said in an interview with Summit, “If we, as Christians, care about people, economic reality is something that impinges on people in a thousand different ways. We need to learn something about it.”
Our Economic Responsibility Includes Learning Basic Principles
Aside from basic economic principles like the law of supply and demand or the function of price in a market, two key principles can help us rightly order our economic thinking.
As Richards says in Money, Greed, and God, “Prudence means to ‘see reality as it is and to act accordingly’ to conform your mind, and then your actions, to reality.”2 Elsewhere in the book, Richards recounts the story of Bob Geldof, who helped organize movements in the 1980s to fight poverty in Africa, including Live Aid and Band Aid. Those movements have done little to lift struggling nations out of poverty, mostly because they misunderstand what creates prosperity. Geldof’s take: “Something must be done, even if it doesn’t work.”3
Well, his plan didn’t work. Unthinking aid creates lifelong dependence and stamps out the entrepreneurial spirit of whole nations. Though his intentions were good, the outcome was deeply immoral. “We spend too much time focusing on what we mean to do and what we like to do instead of putting serious empirical work into what’s actually going to work,” Richards said in an interview.
The principle of subsidiarity goes back to medieval thinker Thomas Aquinas. Subsidiarity claims that it is wrong for a “larger or higher association” to step in and try to fix a problem when an institution closer to the issue can act.4 So, for example, when a young family finds itself in trouble, it’s inappropriate — even unjust — for the state or federal government to provide aid when extended family members, a local church, or neighbors can help the family in need.
This principle has significant implications for fighting poverty. In the face of federal welfare, poverty rates in the U.S. have remained between 12 and 15 percent for the last fifty years. Prior to President Lyndon Johnson’s welfare programs, local communities were primarily responsible for taking care of the poor. Poverty was actually on the decline in the years leading up to Johnson’s War on Poverty; federal welfare halted that decline.5
Economic Responsibility Also Means Having the Right Cultural Values
In Becoming Europe Gregg pinpoints the differences between European economies and that of the U.S., demonstrating how the U.S. can avoid plunging into the sort of economic crises in which Europe currently finds itself. At the root of Gregg’s argument is a study of the cultural values that undergird economic realities. As Gregg puts it, “. . . any given economic setting . . . is influenced by a range of value commitments, ideas, and movements.”6 In other words, economies serve as cultural barometers for their respective countries:
A market economy, for example, relies on processes such as market prices and the exchange of goods and services, institutions such as private property and rule of law, as well as actions such as innovation and economic entrepreneurship. Note, however, how every single one of these economic processes, actions, and institutions assumes a commitment to freedom.7
As Gregg explains, top-down economies necessarily restrict freedom, ignoring prudence and subsidiarity and thus denying essential truths about humans and the imago Dei. Ignoring these realities, in turn, creates a negative view of entrepreneurship. A biblical view, on the other hand, begins with God as creator. Bearing his image, we too know how to create. God wants abundance; bearing his image, we are by nature equipped to produce more than we consume.
Thus, coercive economic policies have the effect of suffocating the entrepreneurial impulse. In the European Union 45 percent of citizens preferred to be self-employed, while 46 percent preferred to be an employee. What happens in a nation when a majority of the citizens expect others to take care of them instead of taking responsibility themselves? Interestingly, too much economic despotism may actually cause people to wake up to their servitude. In China, where citizens have lived under severe state planning, entrepreneurship is much more highly valued: 71 percent of Chinese citizens preferred to be self-employed, as opposed to 28 percent who said they wanted to be an employee.8
So is it possible to avoid Europe’s path? Gregg says yes, but only if we affirm five values that stave off an immoral economic despotism and create an environment for freedom and flourishing:
- Wealth Creation Over Wealth Redistribution. History — and the principle of subsidiarity — shows us that people benefit when they can work to improve their lots themselves. This value affirms the fact that God made people to be co-creators of culture, not passive consumers.
- Accountability and Transparency: Truth Over Falsehood. In a true market economy, people are held accountable for poor economic decisions by the outcomes of those decisions. A culture of bailouts and corporate welfare undermines this value.
- Justice: Rule of Law Over Rule of Men. None of these values will amount to much if the government fails to enforce just laws. In addition to protecting the innocent and punishing wrongdoers, securing justice provides a climate of stability in which wealth creators can reap the rewards of their risk and create greater abundance.
- Property Rights Over “Dirigisme.” Dirigisme is simply the government stepping into the private sector to directly manage wealth. Leaders who regularly threaten to diminish private property rights create uncertainty, diminish investment, and generate a climate of fear.
- Hope Over Fear: Openness vs. Defensiveness. Productive people are not the bad guys, and our government ought to stop portraying them as such.
So how do we reclaim the moral high ground from those advocating leftist policies? Bill Whittle thinks he knows. Bill is the “Virtual President” whose mock presidential addresses have gone viral on the Internet for articulating what our president should say. Whittle suggests using simple questions to communicate three central components of free market morality: freedom, private property, and virtue:
- On freedom: ask, “Are you the kind of person who wants to be left alone, or are you the kind of person who likes to tell other people what to do?” Leftists assume that they are so smart that they deserve to coerce the rest of us. But very few people will admit to wanting to be a busybody.
- On private property: ask, “If you believe in ‘From each according to his ability, to each according to his need,’ are you willing to donate your smart phone and other possessions to charity? How can you justify eating every day when others are starving?” Why do they expect others to make their sacrifices for them?
- On virtue “Do you believe it is okay to hit someone and take their stuff if they have more stuff than you do?” If it is not okay on a personal level, it’s not okay for governments to do it either. Obviously we all must pay taxes. But to base tax policy on jealousy is to institutionalize theft.
People may not have a clear idea of what freedom, private property or virtue are, but when you put these simple questions to them, you’ll leave them thinking. You might even get them to see the moral basis of the free enterprise system.
- Samuel Gregg, Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future (New York: Encounter Books, 2013), 300.
- Jay W. Richards, Money, Greed, and God: Why Capitalism is the Solution and Not the Problem (New York: HarperOne, 2009), 46.
- Ibid, 45.
- Ibid, 51.
- Ibid, 47.
- Gregg, 41.
- Ibid, 8.
- Ibid, 19.