Markets and Morality

This is one of those topics where the amount of sloppy thinking or just plain wrong thinking tends to abound. And sadly plenty of Christians can get things wrong here big time. There is a knee-jerk reaction against the free market in many quarters, including many church circles.

Now antipathy to capitalism can sometimes be warranted, as capitalists can do some lousy things. But much of the hatred of the free market is due to deliberate misinformation or disinformation about what markets are actually all about.

Whole books have been penned on this, so here I again foolishly seek to write just the slightest of overviews, just a very quick introduction. But some moral and intellectual clarity is greatly needed in this area, so here goes.

First it must be pointed out that lots of criticism against capitalism is simply done in a most unfair manner. That is, often the worst actual excesses of capitalism are compared to the best ideals of socialism. That is simply mixing apples and oranges and helps no one.

What must be done is to either compare the actual practices of capitalism with the actual practices of socialism, or compare the ideal of capitalism with the ideal of socialism. When these comparisons are made, I believe in both cases the free market comes out the clear winner.

Of course we live in a fallen world, so there can be no ideal, perfect form of capitalism, just as there can be no ideal and perfect form of socialism. We can only move closer to the ideals of either capitalism or socialism. In the real world that is the best we can expect.

A second thing to mention is that lots of criticism of capitalism by believers comes not from a careful examination of the biblical data, but from a mishandling of it. A classic case in point is seeking to argue from Acts 4 and 5 that the early church somehow practiced and endorsed communism.

I have dealt with that particular furphy in great detail elsewhere. See here for example:

Image of The Poverty of Nations: A Sustainable Solution
The Poverty of Nations: A Sustainable Solution by Barry Asmus (Author), Wayne Grudem (Author), Rick Warren (Foreword) Amazon logo

Or consider another case of massacring a biblical text to push a leftist agenda. The temple cleansing episode is cited by lefties as a clear indication of how Jesus disliked capitalism. But this had absolutely nothing to do with some anti-capitalism, pro-socialism agenda. It had everything to do with the misuse of a house of worship.

But believers are surely right to bring moral considerations into economic discussion. How can they not? Indeed, for the Christian, every area of life must be assessed in terms of its moral and spiritual impact. But some might be surprised to know that many defenders of the free market have done so from moral grounds.

Sure, some, like Ayn Rand, championed capitalism and the virtues of selfishness in the same breath. We expect as much from libertarian atheists. But many believers have in fact made the moral case for the free market. Catholic writers such as Michael Novak, Thomas Woods and Robert Sirico, and Protestant authors such as Edmund Opitz, Ronald Nash and Jay Richards have all carefully made the case for the free market.

Many more Christian thinkers can be mentioned here. They all point out that unfettered laissez-faire with no moral considerations is certainly not being proposed. They all acknowledge that excesses and immoral actions can be carried out by capitalists.

But they tend to want to insist, along with Austrian ex-socialist Willi Schlamm, that “The problem with capitalism is capitalists. The problem with socialism is socialism.” And they agree with Winston Churchill that “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

That is, capitalism itself can be a very helpful system indeed, although often abused and twisted by some capitalists. On the other hand, socialism is an inherently unhelpful and even dangerous system, regardless of some well-meaning socialists.

The real test of various economic systems is this: which one really helps the neediest? Which one actually helps the poor? While those pushing socialist and welfare-state economies may speak much of helping the poor, it seems the free market has the best track record for actually helping to lift the masses out of poverty.

Yet many Christians still think that the free market is evil, and they opt for a statist solution. But as Douglas Wilson recently wrote in Rules for Reformers, “Many who claim to love Jesus with their theology hate the poor with their economics.”

Two new books which deal with all this in great detail are The Poverty of Nations by Wayne Grudem and Barry Asmus (Crossway, 2013) and For the Least of These edited by Anne Bradley and Art Lindsley (Westbow Press, 2014). Both books argue that if we really care about the poor, and seek to apply biblical morality into the issue, then the free market is the way to proceed.

The first volume carefully examines how nations can best achieve a sustainable prosperity. The authors argue that big government and even many Christian humanitarian programs do not help, and actually can hinder the poor from breaking out of poverty. There is nothing very moral or spiritual about keeping people trapped in their destitute condition.

As they state in their introduction:

The goal of this book is to provide a sustainable solution to poverty in the poor nations of the world, a solution based on both economic history and the teachings of the Bible. We use the word sustainable because this solution addresses the long-term causes of poverty in nations. If those changed become long-term causes of prosperity, the solution will last. Our solution does not claim that everyone can be equally well-off. Some people will always be richer than others, and therefore some will be (relatively) poorer. But the solution we proposes explains practical steps that any poor nation can take.

The second book features 15 experts who discuss a wide array of subjects: who are the poor; how does poverty arise; what does Scripture teach on these issues; true biblical compassion; the nature of the free market; morality, justice and the market, etc.

Image of For the Least of These: A Biblical Answer to Poverty
For the Least of These: A Biblical Answer to Poverty by Bradley, Anne (Editor), Lindsley, Art (Editor) Amazon logo

It is well worth getting and carefully digesting. It covers all these issues quite carefully, looking at biblical, theological, economic and political concerns. It contains a wealth of information and careful biblical and economic assessment. As Jay Richards writes in the conclusion of the book:

Whether we like it or not, no culture has emerged from absolute poverty through government-to-government aid or even private relief efforts that did not enable recipients to create wealth for themselves and others. Private charitable giving and even some government actions have an important role to play in our response to poverty…. [But] an aid culture of redistribution and neo-colonial dependency does not, and never has, worked to lift whole cultures out of extensive poverty.

With each of these books being 400 pages in length, I have only begun to scratch the surface of what they have to say. I encourage you to get each volume and give them a thorough read. They combine the best of economic thinking with vital biblical and theological concerns.

At a time when so much thinking about wealth and poverty by Christians is so very mistaken and confused, it is good to see these solid, biblically-based authors helping to set the story straight. For all its shortcomings, nothing has helped the poor more than the wealth creation brought about by free markets.

As Robert Sirico puts it in his chapter in the second volume: “The free market is not inherently moral; what it produces is not inherently moral; and those operating in it are not necessarily virtuous. Something that is potential is not guaranteed; it merely contains the capacity to do something. All the same, a free economy is better suited to promote human well-being and flourishing than its alternatives.”

To really help the poor, we have to go beyond rhetoric and theory, and utilise that which best works to help not just individuals but nations get out of grinding poverty. That is the sensible approach. That is the moral approach. And that is the biblical approach.

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13 Replies to “Markets and Morality”

  1. When governments pass laws to protect capitalists from capitalism the problems start. These capitalists are called ‘rent-seekers’. They successfully lobby governments to pass laws to protect them from competition. Examples of this abound.

  2. I have come to the view that Capitalism is based on greed and Socialism is based on envy. Both are destructive to the society and the individual.

    I believe the Christian view is a free market with a moral base and that moral base is the Bible. When the Bible is the moral base, then greed and envy are dealt with and the wealthy contribute to the poor and vulnerable. But also as it says in 2 Thess 3:10, that he who does not work shall not eat.

    Both the wealthy and the poor have responsibilities and obligations.

  3. Thanks Scott. Greed is of course inherent in all economic systems, since it is inherent in all individuals. Properly understood, the free market is more correctly based on self-interest, which is rather different from greed.

  4. Yes, this is a vexed and complicated issue fraught with man’s sinfulness.

    I believe free market is the way to go, because it includes the vital incentive of value for work, and more value for more/smarter work. Without this incentive it is so easy to be lazy and do the minimum to get by. Without an incentive to do better, there is no improvement to anything except misery.

    I am encouraged when I see that in some refugee camps, there are small businesses springing up. Even if it is hairdressing, it adds to the morale as well as the economy in the camp.

    I have recently been again to an Australian Aboriginal community. I was able to meet some of the people who were there when I visited in about 1969. The cessation of the mission work in 1975 saw the beginning of a decline of many good things including the economy. The aboriginal elders that I spoke to are supremely sad at what is now nearly a 100% welfare society. I asked them to sign my book, and it was a revelation about better earlier days to see that both of these women had beautiful writing.

    In regards to Acts 2: 44-45 & related scriptures, I agree that there is no compulsion here. There may have been some peer pressure. I have often wondered if they were too enthusiastic about this, and sold too many assets that were income producing. We may ask the question; Did their enthusiasm here contribute to the later poverty that gave rise to the need for contributions from Macedonia etc?
    We may never know.

    I am not aware of any church that has successfully followed the Acts 2:44ff & etc. pattern for an extended time. Neither would I recommend any church try it. There needs to be a discernment about when it is time for outrageous generosity, and the refusal to give anything.

  5. Thanks Damien. He was for some time a Presbyterian, but more recently converted to Catholicism. So we are both right, at least in terms of the long haul!

  6. Good article Bill.

    Believe it or not, I am actually having this very argument with someone from my Church at the moment. It is amazing that so many who call themselves Christian are happy to destroy and pull down, with sadly nothing to replace it with besides poverty and misery.

    Neil Waldron.

  7. Bill, Thanks for your article. You always seem to hit the heart of what I believe is Biblical. Below are some of my experiences and observations.

    Many of the people I know who support the “Free Market” ideal believe “Free” means no oversight. History has shown that lack of oversight causes the unethical and/or immoral greedy to prey on the poorer people, or to exclude from their decision making any moral consideration. The most recent example is less than 10 years ago with the “housing bubble” that nearly sent us into another great depression.

    When the bottom line is the only consideration, people or the environment or social structure suffers. Protection of people is why monopoly laws and anti-predatory laws for instance are put in place. Protection of the planet is why environmental laws are put in place. And, political lobbying laws are put in place to protect out social structure. Still some companies/individuals are able to purchase legislation for their own benefit at any cost. The bottom line takes precedent over the survival of the planet, people or the future.

    Russia is in a state were we have been in the past, with violent manipulation of people and the market running rampant. China is in a state where we have been with horrible pollution destroying the planet. Venezuela is a perfect example of how socialism destroys a country. Socialism doesn’t make things even. It makes things less even putting despotic people and organizations in such a powerful position they can completely destroy a country and it’s people under the ‘guise of social equality.

    We are in a state of Capitalism (Free Market) with regulation. And it seems to work the best of any system. Somewhere in the middle, between Socialism and a Totally Free Market is what seems to work best. Our country has always swung between these two ideals; somewhere in the middle with each swing of political party power. Some cry foul with the current swing towards regulations forcing people to do the right thing. Much of it has started out a mess such as the affordable health care system but at least it’s something. Now, lets fix it into a workable system and not throw out the baby with the bath water.

    Don’t mistake my beliefs for me being an Obama supporter. I never could vote for him because of his position on abortion, among others he has. There are plenty of other reasons to want a change of leadership such as his anti-Israel, Anti-Christian pro-left actions which are moving us toward destruction of the fabric of our society’s Judeo-Christian morals. Requirements for God to be on our side.

    But, let’s not go to any extreme concerning free markets vs. Socialism. The only extreme we should have is our passionate love for God and others and our submission to his word.

  8. One irony is the fact that the increase in wealth has partially been due to the access to cheap electricity, which many leftists and green groups are trying to deny to the poor. It is amazing how the “well intentioned” do gooders are the most harmful to those who need help the most.

  9. I believe the “free market” economic system is not only one of the best approaches to helping those in need, but also as a way for nations to live in general. This economic system is even more enhanced for the better when seasoned with the moral and ethical precepts of the Bible.

    The global powers that be, do not believe this way. Hiding in plain sight, they are using both Capitalism and Socialism as nothing more than stepping stones to usher in their “economic model”….Technocracy.

    Technocracy is rising. Scientism is rising and it’s tenants have already infiltrated the Christian church.

  10. Pro_11:1 A false balance is abomination to the LORD: but a just weight is his delight.

    2Th_3:10 For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

    Jas 5:1 Come now, rich ones, weep and howl for your hardships coming on.
    Jas 5:2 Your riches have rotted, and your clothes have become moth-eaten.
    Jas 5:3 Your gold and silver have corroded, and their poison will be a witness against you, and will eat your flesh as fire. You heaped treasure in the last days.
    Jas 5:4 Behold, the hire of the laborers reaping your fields cry out, being kept back by you. And the cries of those who have reaped have entered into the ears of the Lord of hosts.
    Jas 5:5 You have lived luxuriously on the earth, and lived wantonly. You have nourished your hearts, as in a day of slaughter.

  11. Bruce Knowling, you said:

    In regards to Acts 2: 44-45 & related scriptures, I agree that there is no compulsion here. There may have been some peer pressure. I have often wondered if they were too enthusiastic about this, and sold too many assets that were income producing. We may ask the question; Did their enthusiasm here contribute to the later poverty that gave rise to the need for contributions from Macedonia etc?

    Another possible view is that the early Jerusalem believers were on the right track, because the city and nation were destined for judgement, and the believers were soon to be scattered by persecution, so they liquidated assets which would be worthless in a few years, in favour of supporting their brethren.

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