Truth That Matters

"What will it profit a man if he gains the whole world, and loses his own soul?" - Jesus Christ

BIBLICAL ECONOMICS

This website is not about economics or politics, but about God - as He has revealed Himself in the Bible. However, the Bible does mention certain things that have a bearing on governance, economic policy, and so on, and so it is worth understanding these principles. The benefits of such a study are:-
  • A better understanding of God and His ways - that is always a benefit of studying God's word.
  • For those of us in decision making positions, we will learn how to make decisions consistent with the Bible.
  • When we vote, we will be able to make informed choices. When we pray for our country and government, we will learn to pray for the right things. When we see our governments taking decisions, we will be able to evaluate those decisions in the light of God's word.

What the Bible says

First let us list down some Biblical principles that have a bearing on economics, and then we'll see a model for governance and economic policy that is based on these principles. While this model is based on the Bible, everyone who endorses it need not be a Christian. Moreover, some Christians may endorse other models that (wrongly) appear to be in agreement with scripture.
  • Man is sinful (Romans 3:23)
  • The earth is cursed (Genesis 3:17)
  • Stealing and extortion are not right (Exodus 20:15, 1 Corinthians 5:11)
  • People naturally work for themselves and their needs (Proverbs 16:26)
  • Punishing murder (and by extension, other crimes) is a human responsibility (Genesis 9:5-6).
  • God has appointed the nations (Genesis 10:32, Acts 17:26). It is appropriate to defend ourselves when attacked by another nation.
  • Whoever is not willing to work should not eat either (2 Thessalonians 3:10)
  • The worker is worthy of his wages (Luke 10:7)
  • Charity is good but it should be voluntary. The directive in Deuteronomy 24:21 was not enforced by any human agency.
  • Money answers all things (Ecclesiastes 10:19)
  • Each person has a conscience and is free to choose but is responsible for what he or she does (Romans 2:14-15). It is not right for one human being to make choices for another human being who is not related to him/her.
These Biblical principles can be used to deal with certain issues that will lead us to our economic model.

Issue 1: Ownership

Should people own personal things? John Lennon (who hated the Bible) wrote a song in which he espoused his suggestions for an utopia: "Imagine there's no heaven...no possessions...and the world will live as one". However, in April 2008, his wife Yoko Ono sued Premise Media for using the song in their film "Expelled: No Intelligence Allowed" - she apparently believed in the copyright laws that said the song was her possession! What does the Bible imply?
  • People (unlike animals) are sinful - so there is the tendency to grab, to use resources irresponsibly, to be lax in work, etc.
  • Needs are individual - my thirst is not quenched if you drink water
Logical fallout: private ownership is necessary, in fact desirable. If all of us own a common toilet, everyone will want to use it, but no one will want to clean it. But if each of us has his own house with a toilet, everyone will keep their toilets clean. If the entire village owns a farming machine, everyone will want to use it, but when it stops working, no one will want to repair it. But if each farmer has his own machine, he will promptly get it repaired when it develops a problem. It is therefore not surprising that the Bible endorses individual/(nuclear) family ownership: When God brought his people Israel into Canaan, each man was to get an inheritance (Numbers 26:54, Numbers 27:8-11). During the golden age associated with Solomon, private ownership is mentioned as one of the hallmarks (1 Kings 4:25). When Jesus Christ restores Israel in the future, private ownership is again specifically mentioned (Micah 4:4). 

Issue 2: The mode of exchanging goods and services

Every society consists of individuals who exchange goods and services, whether it is employees working for an employer, or consumers buying goods and services from vendors. According to the Bible, how is this to be done?

Since no one has a right to anything for free, and since forced charity is wrong, and since it is money that "answers all things" (Ecclesiastes 10:19), the appropriate major mode of exchanging goods and services is PAYMENT. A person or group of persons (A) provides a good or service to another person or group of persons (B). So the payment is to be made by B to A.

How to decide the price of a good or service? In keeping with the freedom of choice that God has given every person, here's how to do it:-
  • A puts his sweat and labor into his product, so he should have a say on the price. In fact, A will bother to do a good job only if he has the assurance that his remuneration will be commensurate with the quality of his product or service.
  • B is going to use the product - so he should have a say in the price.
  • So they negotiate. If the price is mutually agreeable, a sale is carried out.
  • If A quotes a price which B thinks is too high, B and other customers do not buy. This prompts A to reduce the price. Similarly, if the price quoted by A is very small, he will have a lot of sales, giving him and other merchants the freedom to increase their price. Economists call this the LAW OF SUPPLY AND DEMAND.
Logical Fallout: All goods and services should be exchanged only by payment decided by the forces of supply and demand.

Note four important things:-
  1. The price of the good or service is decided between A and B (not the government)
  2. The payment is from B to A.
  3. The choice to buy lies exclusively with B and the choice to sell lies exclusively with A - this is part of the freedom that God has given every human being.
  4. The Law of Supply and Demand can operate only when there is complete freedom for anyone to provide, avail or refuse goods and services.

Issue 3: The role of the government

The government should confine itself to the following:-
  • Law enforcement: it is the government's job to ensure that murder, abuse, cartels, financial fraud, etc. are prevented as far as possible, and heavily punished when they occur. This requires a strong police force and a judiciary. According to the Bible, the punishment should be commensurate with the crime or the damage caused by the crime (Exodus 21:24). For instance, if a drunk driver mows down someone, he must die. This is in absolute contrast to the modern practice of viewing criminals as victims of their own genes or upbringing.
  • Defense: Each country needs to defend itself from foreign attacks, and it is the government's responsibility to ensure the security of the nation. That's what the judges of old in Israel did. That's what kings were for (1 Samuel 9:16).

Conclusion

Thus, we have our Biblical economic model:- private ownership, market determined prices, freedom to engage in business facilitated by a government that confines its activities to law enforcement and defense. History has shown that countries that have followed this model (or something close to it) have prospered. Those that have followed contrasting paths have languished. However, this model is not popular because it demands the following which most humans hate:-
  • personal accountability and responsibility
  • paying for oneself rather than benefit from others' resources or efforts.

Questions

You and the system you advocate are ruthless.
I may be harsh, but not any more harsh than God when He cursed the ground (Genesis 3:17). It is an inescapable fact that this is a fallen world - there is no free lunch, and there are sinful people out there wanting to grab lunch. So the best system is one in which everyone pays for whatever he or she takes from others. What is the kindness that you expect?
  • If you want freebies, are you not being ruthless to those from whom the money for the freebies will have to be acquired?
  • If you want job security, does it not mean that you want pay without adequate work? If your salary is worth the work that you put in, your employer will not fire you. If he tells you that you need to go because there is a recession, it does not mean that he is nasty - it only means that your work is no longer beneficial to other human beings (clients), and thus, you need to change the work you do (or wait till your clients find it useful again).
  • To want to remain in your job when your employer does not want you demonstrates an un-Biblical sucker attitude.
 
The whole tenor of the Bible involves reaching out to the weak and under-privileged. Jesus was a socialist. You seem to be advocating the opposite.
No I'm not. It's not about whether the poor should be helped but how. On the basis of the Bible, I say that having a massive government bureaucracy whose objective is to rob the rich and give freebies to the poor is not the right approach. The poor can be got out of poverty if government policy allows business to flourish, enabling the poor to get jobs and send their kids to school.

The Bible speaks highly of philanthropy and I agree with it. But philanthropy must be done by individuals of their own free will - not forced on them by the government. There are many Bible verses that mention our responsibility to the poor. But this is a personal responsibility, according as each man's conscience dictates, not the responsibility of politicians and bureaucrats. Philanthropy is  not the same as socialism. Jesus was not a socialist (he did not say a word about economic policy). He preached philanthropy as part of loving one's neighbour.
One of the fundamental mistakes to make in macroeconomics is to think in terms of DISTRIBUTION OF WEALTH. If you read the Bible, you see that wealth can be GENERATED through human effort coupled with natural resources (see Nehemiah 9:37, Proverbs 14:4, Proverbs 24:30-34, Proverbs 10:5, Proverbs 20:4, etc). So instead of thinking in terms of robbing those who have wealth (because they generated it) to give to the poor, we should be thinking in terms of enabling the poor to generate wealth.
 
Didn't the early church have common possessions? Does that not show that socialism is right?
Note the following:-
  • First of all, the early churches did not have common possessions. Paul speaks about those who are rich (1 Timothy 6:17). It was only the Jerusalem church which held things in common, but that was because of an emergency. This church was made up of Jewish diaspora that had come on pilgrimage for the feast of Pentecost, and stayed back at Jerusalem. Such people would not be able to practice their trades right then; also there were no ATMs then - these things meant that many people would be greatly in need of all of a sudden.
  • Secondly, true Christians are far less likely to loaf around expecting to eat out of the labors of others than atheists and other non-believers. So there is a big difference between a church having one purse and a country having one purse.