2010-11-09 Is There a Distinctly Biblical Economics?

Dear Friends:

Can economics be studied from a Christian perspective? Is there a distinctly biblical economics, or is the biblical approach to economic issues only one approach among many? Some might maintain that economics is a “neutral” enterprise where religion in general and Christianity in particular are irrelevant. This, however, is not the Christian view. Economics deals with relationships, the exchange of goods, just weights and measures, just business dealings, contracts, investments, future planning, and charity. How is the individual, family, church, business establishment or civil government able to determine how each will govern its financial affairs? There must be a standard. Will that standard be according to man and his word, or according to God and His word? There is no third way. To say, therefore, that economic matters should be evaluated from a neutral premise is to say that God is not concerned about the economic ordering of society.

While the humanist has reservations about Christian involvement in economics, too often even Christians have reservations about Christians bringing the Bible to bear on economic issues. Of course, their reasons are quite different. The humanist does not want to be confronted with moral absolutes. His economic system is designed to serve himself. An example of a humanistic economic decision to serve the purposes of man is the abolition of the gold standard. Man, through the agency of the State, can now create money at will to fund any governmental program proposed by the State. This humanistic economic policy has been disastrous for our country, with inflation and worthless money as the result.

For the Christian, the subject of economics often is looked upon as solely “secular” or “material” and, therefore, outside the realm of spiritual, and thus, biblical considerations. A dichotomy between spiritual (religious) and material (secular) aspects of reality results, as if the Bible does not speak to both. Such thinking effectually cuts Christians off from important earthly endeavors. The Bible, however, makes no such distinction. Material things are not evil in themselves. When God finished His creative work, He looked upon what He had made and evaluated it: ‘‘And God saw all that He had made, and behold, it was very good” (Genesis 1:31). Gary North, commenting on the goodness of the created order in his economic commentary on Genesis, writes:

The first chapter of Genesis repeats this phrase, “and God saw that it was good,” five times (vv. 10, 12, 18, 21, 25), in addition to the final summation in verse 31. God’s creative acts were evaluated by God and found to be good. They reflected His own goodness and the absolute correspondence among His plan, His standards of judgment, His fiat word, and the results of His word, the creation. The creation was good precisely because it was solely the product of God’s sovereign word. God therefore imputed positive value to His creation, for He created it perfect.

The Apostle Paul reiterates God’s evaluation of the created order with the following value judgment: “For everything created by God is good, and nothing is to be rejected, if it is received with gratitude; for it is sanctified by means of the word of God and prayer” (I Timothy 4:4-5). To declare that matter (the make-up of physical things) is somehow evil, is to call God’s creation less than good. God and His creation are dishonored by those who say Christians should not concern themselves with such material (secular) questions as economics.

There were those in the church at Colossae who were persuaded that by avoiding material things they would avoid sin. Paul’s words bring the subject into proper perspective: “If you have died with Christ to the elementary principles of the world, why, as if you were living in the world, do you submit yourself to decrees, such as, ‘Do not handle, do not taste, do not touch!’ (which all refer to things destined to perish with the using) – in accordance with the commandments and teachings of men? These are matters which have, to be sure, the appearance of wisdom in self-made religion and self-abasement and severe treatment of the body, but are of no value against fleshly indulgence” (Colossians 2:20-23). Material things are not evil. Rather, sinful man’s use of what is created can be sinful. For example, money is not evil, but the love of money is (I Timothy 6:10). Therefore, to take a vow of poverty will in no way eradicate the love for material possessions because sin is not in the things of this world but in the attitudes man holds toward them and their usage (cf. Mark 7:15, 20-23).

The Christian is called to a dominion task, bringing every area of life in submission to Jesus Christ and His commandments (cf. Genesis 1:26-28; Matthew 28:18-20; II Corinthians 10:5-6). This dominion task cannot be accomplished without involvement in our world, including its economic affairs. How can goods be exchanged when there is no concept of value?: “Of how much more value then is a man than a sheep!” (Matthew 12:12).

How can an individual claim ownership and stewardship for his assets without laws to protect property?: “You shall not steal” (Exodus 20:15). How can civil governments be prevented from inflating the money supply without laws to protect against debasement of currency?: “You shall have just balances, just weights, a just ephah, and a just hin” (Leviticus 19:36). How can lawful trade take place if there are no laws to protect the poor, the consumer, and the businessman if, at will, “the bushel [can be made] smaller and the shekel bigger” (Amos 8:5)? How can present-day civil governments, in the name of “social justice,” be prohibited from stealing from the rich in order to supply the needs of the poor?: “You shall not do injustice in judgment; you shall not be partial to the poor nor defer to the great, but you are to judge your neighbor fairly” (Leviticus 19:15).

How can citizens be assured that their currency is backed up by a commodity (gold or silver) and not a promise (paper money)? Our nation’s money system had gold and silver as the standard of value. It was written into our Constitution. Paper “money” only “represented” owner-held gold or silver. Noah Webster, in his American Dictionary of the English Language (1828), gives us some of the practical reasons: “Gold and silver, containing great value in a small compass, and being therefore of easy conveyance, and being also durable and little liable to diminution by use, are the most convenient metals for coin or money, which is the representative of commodities of all kinds of lands, and of everything that is capable of being transferred in commerce.” The Bible informs us that “gold…is good” (Genesis 2:12a).

An economic system of some kind will prevail in a society. Economic dominion will be instituted and followed according to some standard. When an economic system is formulated, based on certain religious presuppositions, the next step is implementation of that system. If the system is rooted in the unchanging law of God, the process of implementation must also be biblically based. Conformity to the biblical system comes from within, based upon the regeneration of the heart (self-government under God). Conformity to a humanistic economic system comes from without, usually in terms of violent revolution and eventual governmental tyranny. David Chilton writes:

Men have always had to choose between two methods of social change: regeneration and revolution. The Christian first seeks to discipline himself to God’s standard. He then publishes the gospel and attempts to peacefully implement the laws of God into the life of his culture, trusting in the Spirit of God for the success of his efforts. He knows that there is not, and never will be, a perfect society in this life. He knows that the Kingdom of God spreads like leaven in bread not by massive, disruptive explosions, but by gradual permeation. He knows that justice, righteousness and peace result from the outpouring of the Spirit in the hearts of men (Isaiah 33:15, 18); a nation’s legal structure, is therefore, an indicator, not a cause, of national character. Law does not save.

Economic principles derive their authority from religious principles. Socialistic economic systems see the State as messianic, and therefore, given authority to disrupt any “unequal” social order by whatever means deemed necessary. This usually occurs through State ownership of the means of production. When this process is viewed as too slow, violent revolution usually follows. Contrary to Socialism, a biblical economic system puts the power of economic decision making in the hands of individuals who transact millions of economic decisions every day. The exchange of goods happens freely. If a man wishes to purchase an automobile, he may do so. The automobile dealer freely exchanges his product for the consumer’s money. Each believes he got the better deal. There is no coercion to buy or sell. Economic power remains with the many. If the consumer does not like the deal, he can take his business elsewhere. A free economy allows for competition between automobile manufacturers. In a socialistic system there is little if any competition.

Christians, however, must be aware of those who want to create a “free” market without the unchanging economic laws of God that really govern our freedom. Any economic system that omits God, not only as a factor in production and economic prosperity, but also as the key to economics and economic prosperity, is a false system no matter how anti-statist it may be. The espousal of freedom carries with it certain responsibilities. For example, our Constitution guarantees freedom of speech, but it does not guarantee freedom to bear false witness or to yell “Fire!” in a crowded movie theater. There is no such thing as unrestricted, autonomous freedom, every man doing what is right in his own eyes, as long as an action does not hurt others (cf. Judges 17:6). While the Christian should be opposed to all forms of Socialism and Marxism because of their collectivistic policies (making the State sovereign), the Christian also should steer clear of unbridled freedom where individual relativism reigns (making the individual sovereign). The Bible is the Christian’s standard, not the independent voice of the individual or the collective voice of the majority.

Respectfully,
Mark

Austerity in America: 22 Signs That It Is Already Here and That It Is Going To Be Very Painful

Dear Friends:

In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided. Austerity policies are often used by governments to reduce their deficit spending while sometimes coupled with increases in taxes to pay back creditors to reduce debt.

Over the past couple of years, most Americans have shown little concern as austerity measures were imposed on financially troubled nations across Europe. Even as austerity riots erupted in nations such as Greece and Spain, most Americans were still convinced that nothing like that could ever happen here. Well, guess what? Austerity has arrived in America. At this point, it is not a formal, mandated austerity like we have seen in Europe, but the results are just the same. Taxes are going up, services are being slashed dramatically, thousands of state and city employees are being laid off, and politicians seem to be endlessly talking about ways to make even deeper budget cuts. Unfortunately, even with the incredibly severe budget cuts that we have seen already, many state and local governments across the United States are still facing a sea of red ink as far as the eye can see.

Most Americans tend to think of “government debt” as only a problem of the federal government. But that is simply not accurate. The truth is that there are thousands of “government debt problems” from coast to coast. Today, state and local government debt has reached at an all-time high of 22 percent of U.S. GDP. It is a crisis of catastrophic proportions that is not going away any time soon.

A recent article in the New York Times did a good job of summarizing the financial pain that many state governments are feeling right now. Unfortunately, as bad as the budget shortfalls are for this year, they are projected to be even worse in 2012….

While state revenues – shrunken as a result of the recession – are finally starting to improve somewhat, federal stimulus money that had propped up state budgets is vanishing and costs are rising, all of which has left state leaders bracing for what is next. For now, states have budget gaps of $26 billion, by some estimates, and foresee shortfalls of at least $82 billion as they look to next year’s budgets.

So what is the solution? Well, for state and local politicians from coast to coast, the answer to these financial problems is to impose austerity measures. Of course they never, ever use the term “austerity measures”, but that is exactly what they are.

The following are 22 signs that austerity has already arrived in America and that it is going to be very, very painful….

#1 The financial manager of the Detroit Public Schools, Robert Bobb, has submitted a proposal to close half of all the schools in the city. His plan envisions class sizes of up to 62 students in the remaining schools.

#2 Detroit Mayor Dave Bing wants to cut off 20 percent of the entire city from police and trash services in order to save money.

#3 Things are so tight in California that Governor Jerry Brown is requiring approximately 48,000 state workers to turn in their government-paid cell phones by June 1st.

#4 New York Governor Andrew Cuomo is proposing to completely eliminate 20 percent of state agencies.

#5 New York City Mayor Michael Bloomberg has closed 20 fire departments at night and is proposing layoffs in every single city agency.

#6 In the state of Illinois, lawmakers recently pushed through a 66 percent increase in the personal income tax rate.

#7 The town of Prichard, Alabama came up with a unique way to battle their budget woes recently. They simply stopped sending out pension checks to retired workers. Of course this is a violation of state law, but town officials insist that they just do not have the money.

#8 New Jersey Governor Chris Christie recently purposely skipped a scheduled 3.1 billion dollar payment to that state’s pension system.

#9 The state of New Jersey is in such bad shape that they still are facing a $10 billion budget deficit for this year even after cutting a billion dollars from the education budget and laying off thousands of teachers.

#10 Due to a very serious budget shortfall, the city of Newark, New Jersey recently made very significant cuts to the police force. Subsequently, there has been a very substantial spike in the crime rate.

#11 The city of Camden, New Jersey is “the second most dangerous city in America”, but because of a huge budget shortfall they recently felt forced to lay off half of the city police force.

#12 Philadelphia, Baltimore and Sacramento have all instituted “rolling brownouts” during which various city fire stations are shut down on a rotating basis.

#13 In Georgia, the county of Clayton recently eliminated its entire public bus system in order to save 8 million dollars.

#14 Oakland, California Police Chief Anthony Batts has announced that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

#15 In Connecticut, the governor is asking state legislators to approve the biggest tax increase that the state has seen in two decades.

#16 All across the United States, conditions at many state parks, recreation areas and historic sites are deplorable at best. Some states have backlogs of repair projects that are now over a billion dollars long. The following is a quote from a recent MSNBC article about these project backlogs….

More than a dozen states estimate that their backlogs are at least $100 million. Massachusetts and New York’s are at least $1 billion. Hawaii officials called park conditions “deplorable” in a December report asking for $50 million per year for five years to tackle a $240 million backlog that covers parks, trails and harbors.

#17 The state of Arizona recently announced that it has decided to stop paying for many types of organ transplants for people enrolled in its Medicaid program.

#18 Not only that, but Arizona is so desperate for money that they have even sold off the state capitol building, the state supreme court building and the legislative chambers.

#19 All over the nation, asphalt roads are actually being ground up and are being replaced with gravel because it is cheaper to maintain. The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have transformed at least some of their asphalt roads into gravel roads.

#20 The state of Illinois is such a financial disaster zone that it is hard to even describe. According to 60 Minutes, the state of Illinois is six months behind on their bill payments. 60 Minutes correspondent Steve Croft asked Illinois state Comptroller Dan Hynes how many people and organizations are waiting to be paid by the state, and this is how Hynes responded….

“It’s fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state.”

#21 The city of Chicago is in such dire straits financially that officials there are actually toying with the idea of setting up a city-owned casino as a way to raise cash.

#22 Michigan Governor Rick Snyder is desperately looking for ways to cut the budget and he says that “hundreds of jurisdictions” in his state could go bankrupt over the next few years.

But everything that you have just read is only the beginning. Budget shortfalls for our state and local governments are projected to be much worse in the years ahead.

So what is the answer? Well, our state and local governments are going to have to spend less money. That means that we are likely to see even more savage budget cutting.

In addition, our state and local politicians are going to feel intense pressure to find ways to “raise revenue”. In fact, we are already starting to see this happen.

According to the National Association of State Budget Officers, over the past couple of years a total of 36 out of the 50 U.S. states have raised taxes or fees of some sort.

So hold on to your wallets, because the politicians are going to be coming after them.

We are entering a time of extreme financial stress in America. The federal government is broke. Most of our state and local governments are broke. Record numbers of Americans are going bankrupt. Record numbers of Americans are being kicked out of their homes. Record numbers of Americans are now living in poverty.

The debt-fueled prosperity of the last several decades came at a cost. We literally mortgaged the future. Now nothing will ever be the same again.

Respectfully,
Mark