Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Tuesday, April 16, 2013

Globalization: Good or Bad?


    It is always interesting to think back in time and see how much the world has changed over the years. The world of our youth (speaking for those of us who are of a certain generation) was very different from the world today. The Cold War is over, the Soviet Union is gone, and Chairman Mao is in his grave.
    But along with this changes have occurred profound alterations in the global economy as well. Trade barriers have fallen. Once underdeveloped countries have industrialized, and a global economy has emerged.

   In this connection we are reminded of an interesting debate that took place thirty years ago over economics and our moral obligations to the poor. Back in 1977 Christian author Ronald J. Sider published a book entitles Rich Christians in an Age of Hunger: A Biblical Study. He furnished an array of statistics to demonstrate what was perfectly obvious at the time, viz., that there was a vast disparity of wealth between the industrialized countries of the western world and the underdeveloped "Third World." He then examined the biblical teachings on wealth and poverty, including Old Testament poor laws and the practice of the 1st Century church. He went on to suggest that the wealthy nations were exploiting the poor ones. Trade barriers, he pointed out, were weighted in favor of the wealthy countries.
    The key question, then, is what to do about all of this. Sider had several suggestions: simple living, increased giving, and efforts to change national policy.
    Sider's book drew forth a vigorous response from David Chilton, a Christian Reconstructionist who once worked closely with Gary North. In 1981 Chilton published a volume entitled Productive Christians in an Age of Guilt-Manipulators. It even had a cover that looked similar to Sider's book. A second edition appeared in 1982 along with a preface from North himself, and the book was dedicated to none other than Pat Robertson, "a 'productive Christian' who is leading God's people to victory."

    Chilton was a very strong advocate of free-market economics and was firmly opposed to almost any form of government interference. What especially drew his ire about Sider's book was its tacit support for government planning and attempts to redistribute wealth. Chiltondid not deny that poverty and hunger were real problems, but strongly disagreed with Sider about the causes. Whereas Sider tended to capitalism for the maldistribution of resources, Chilton cited corruption, government planning, and underlying cultural factors as the causes. His solution: evangelism, Christian schools in poor neighborhoods, and political action aimed at abolishing government interference in the economy.
    Both authors appealed to biblical precepts in support of their ideas, and both called for political pressure to change national policy. On the whole we would have to say that Sider's theology was better than his economics, while the opposite is true for Chilton. But it can be argued that they both shared one common flaw: they were both trying to apply biblical principles to society at large. It is doubtful that the great mass of humanity can ever be persuaded to live by biblical standards, although in Chilton's favor it should be pointed that he was a Postmillennialist – he was convinced that society would get progressively better before Christ returns.
    Both men thought that trade barriers were a major cause of Third World poverty. But while Sider wanted to tip the scales in favor of the developing countries, Chilton wanted to eliminate trade barriers altogether.
    Today we can report that their prayers have been answered, perhaps beyond their wildest imaginations. Trade barriers have come down; countries like India and even China have abandoned socialism and adopted free-market economies. The new global economy has lifted millions of people around the world out of poverty. But it has been a mixed blessing: millions of Americans have seen their jobs get shipped overseas.
    In his book The Audacity of Hope, President Obama tells of a trip he made to Galesburg, IL during his 2004 run for the U.S. Senate. The town had seen several manufacturing plants close their doors. The president of the local machinists' union described the hardships endured by the laid off workers. After winning the election, during a Senate debate over CAFTA (the Central American Free Trade Agreement), Mr. Obama asked former U.S. Treasury Secretary Robert Rubin whether there was any basis for the fears expressed by the workers in Galesburg. Rubin was cautiously optimistic, but noted that "with the pace of technological change, the size of the countries we're competing against, and the cost differentials with those countries, we see a different dynamic emerge." As Mr. Obama pointed out in reply, "the folks in Galesburg might not find that answer reassuring" (The Audacity of Hope, p. 175).
    It is sometimes said that capitalism is a process of "creative destruction." But in this instance we fear that what is being destroyed is the traditional American way of life, and that what is being created is a New World Order controlled by a small number of super-rich plutocrats.
    Is there a better way?

Tuesday, April 9, 2013

Ron Paul, Gary North and Moses


    Recently a frequent commenter on our blog mentioned Christian Theocracy movements, and we responded, in part, that we were familiar with the writings of some of the leaders of the movement, and mentioned in particular Gary North. As Providence would have it, at about the same time an atheist blogger at Patheos, Libby Anne ( Love, Joy, Feminism) wrote a blog post entitled "The Bizarre Libertarian / Christian Reconstructionist Alliance." She noted that the leading libertarian politician Ron Paul has started his own home-school curriculum, and that the curriculum director is none other than the very same Gary North!
    For those not familiar with Mr. North, he is an economist who became closely associated with the late Rousas J. Rushdoony, one of the founders of the Christian Reconstructionist movement, even marrying Rushdoony's daughter. The basic premise of the movement is that the Old Testament Law is still valid today and should be applied to American society. As Libby Anne pointed out, this means, among other things, stoning adulterers and homosexuals.
    How is it possible, Libby Anne wants to know, to combine libertarianism with theocracy? "I'm having a hard time reconciling the libertarian ideas of freedom from government interference, legal marijuana, etc., with a Christian theocracy based on the Old Testament legal code. Something extremely strange is going on here."
    Something strange indeed. But it should come as no surprise that Gary North is working with Ron Paul. He was first hired by Paul as a research assistant when Paul was first elected to Congress in 1976. The problem, rather, is a jarring disjunction between North's economic philosophy and his professed attachment to biblical ideals.
    Libby Anne tells us that she can "understand how people combine Christian social conservatism with libertarian positions on economics . . ." If she does, she understands more than we do. Rather, we think that North has misunderstood biblical economics.
    North has been committed to the "Austrian School" of economics right from the very beginning. The problem is that when he became associated with Rushdoony he read laissez-faire capitalism back into the Bible. It was Vienna thinly disguised as Jerusalem; Ludwig von Mises masquerading as Moses. But they are actually quite different.
    The real Moses actually had quite a lot to say about economics. While it is true that an essentially free market was allowed to operate, and no provision was made for an elaborate welfare system run by the state, the idea of the private ownership of property was significantly qualified. Every seven years debts were to be forgiven and slaves were to be freed, and every fifty years agricultural land was to be returned to its original owners. Farmers were to leave the corners of their fields unharvested so that the poor could come in and take what they needed. The underlying principle in all of this was "you shall love your neighbor as yourself: (Lev. 19:18; NKJV). ". . . you shall not harden your heart nor shut your hand from your poor brother, but you shall open your hand wide to him and willingly lend him sufficient for his need, whatever he needs" (Dt. 15:7,8).
    Rushdoony, in his landmark work The Institutes of Biblical Law (Craig Press, 1973), insisted that all true law, if it is to be valid and binding, must ultimately flow from the Creator Himself. He rejected natural law concepts and denied the state the power to enact positive law. ". . . revealed law is the need and privilege of Christian society" (p. 10). Yet Rushdoony was capable of using creative exegesis to explain passages that seemed to with his free-market assumptions.
Rousas J. Rushdoony

    In his treatment of the Eighth Commandment ("Thou shalt not steal"), Rushdoony begins with a discussion of "dominion." The concept of private property is rooted in the fact that God created man to have dominion over the earth. Thus, Rushdoony says, "Man has a God-given urge to dominion, to power" (p. 450). He then goes on to discuss theft, which he defines as "taking another man's property by coercion, fraud, or without his uncoerced consent" (p. 452). This, he says, would include "passing a law which steals from the rich, the poor, or the middle-classes, for the benefit of a particular group. The state then becomes the agency whereby theft is accomplished, and a pseudo-moral cover is given by legal enactment."
    But what about those laws in the Mosaic code that require the redistribution of land every fifty years? According to Rushdoony, they have no applicability outside of Palestine. He then concludes by saying that "The purpose of Biblical law with reference to land is to ensure the security of man in his property . . . "(p. 493). Thus it became possible for North to meld the "Austrian School" of economicsd with a professed regard for biblical law.
    They are, in fact, fundamentally different. In a secular legal system there is no sense of moral accountability to a transcendent Supreme Being. Hence the emphasis tends to fall on property rights. What's mine is mine, and I get to keep it. One of the chief functions of the state is to protect my property. But if one looks at human society from the standpoint of God, the Supreme Law-Giver, humanitarian concerns become more important. It is unconscionable that some should starve while others live in luxury. God is less concerned with helping millionaires keep their millions than He is with meeting the basic needs of the poor. "A father of the fatherless, a defender of widows, / Is God in His holy habitation" (Psalm 68:5). Granted, there was no elaborate state-run social welfare system; rather the moral burden for caring for the poor rested directly on property owners, usually through extended family relationships.
    Libby Anne is right: there is a contradiction between libertarianism and theocracy. But it does not appear that Ron Paul has fatally compromised his values. The proposed curriculum says little about Theonomy or Christian Reconstructionism. It does not even contain a Bible curriculum as far as we can see. But it says a great deal about free market economics. It is Gary North who has made the fatal concessions. We do not think that either Ron Paul or Ludwig von Mises pretended to be biblical in their approach. The problem is that neither is Gary North.

Other blog posts you might enjoy:
Wealth Management 
Capitalism and the Sabbath 
The Social Agenda of the Tea Party 
Capitalism and Christianity (click herehere, and here)
Jesus and the Torah 

Wednesday, November 28, 2012

Raised Evangelical: Bob’s Story - VIII


Section 10: Work
    We have been responding to the "Raised Evangelical" series on the atheist blog "Love, Joy, Feminism" by Libby Anne (http://www.patheos.com/blogs/lovejoyfeminism) in which she asks readers to tell their stories about how they were raised in conservative evangelical homes and then became atheists. The respondents follow a standard question and answer format, which we have also tried to follow in our own response.
    Those who have looked at the original series on Libby Anne's blog may have noticed an omission. While she asks her respondents to describe their churches and education, and what they were taught about politics and gender roles, there is scarcely any mention at all of work. She does ask at one point about mothers working outside of the home, but there is no discussion about what it is actually like to work for an employer. This undoubtedly reflects Libby Anne's own personal experience. We gather from her blog that she is a young woman in her 20's, married with two children, and currently a graduate student. A bright, intelligent young woman, apparently what she does not have is significant work experience.
    Herein lies the problem. Her lack of work experience is reflected in her worldview. In describing her own deconversion she says "I have walked beyond the borders of religion and found that the world is still a beautiful place, filled with wonder, love, and joy." A "beautiful place"? "Filled with wonder, love, and joy"? What planet is she living on? What she has apparently done, in effect, is to replace the "evangelical bubble" in which she was raised with the "academic bubble" she lives in now. Thus it is relatively easy for her to imagine that the world could get along just fine without God. She has never been in a truly godless environment.
    Here, then, is what life is really like. It is in the business world where human beings interact with each other economically. It is a place where each person's actions directly affect others. And it is not a pleasant sight. Most businesses exist for the sole purpose of making money for their owners. They hire employees; they buy goods and supplies from vendors; they sell to their customers. Theoretically this can all be done with a measure of integrity, but it rarely is, for it is here that human nature comes into play. Because we are essentially self-centered by nature, we rarely conduct these transactions with any regard for the other person's well-being. We regard them as economic opportunities for ourselves. We misrepresent our goods and services to our customers. We charge as much as the market will bear. We suppress wages. Moral and ethical considerations take a back seat to profits. Caveat emptor ("Let the buyer beware") is the ancient motto of commerce.
    It wasn't quite as bad as it is today. I can remember that as a boy growing up in the Syracuse, NY area most of the banks, department stores and hotels were locally owned and operated. The owners knew most of their employees by name, and many of their customers as well. There was a human receptionist who greeted you with a warm, pleasant "hello."
    It was a time when it was still possible to talk about a "Protestant work ethic." People more or less recognized that if you wanted to run a successful business you had to treat others with integrity and respect. My grandfather, a machine-shop foreman, put it like this: "It does not take much to give a small shop distinction. A few good, steady mechanics, a few reliable customers, a good location, personal contact with the workmen, good management, adequate tools and machinery, and a reputation for service – these things make for success" (H.L. Wheeler, Popular Science Monthly, Aug. 1923).
    Today this seemingly unimpeachable wisdom is largely forgotten. The 1980's saw a wave of mergers and acquisitions, hostile takeovers and leveraged buyouts. The modern corporation is run by MBA's armed with computers and fixated on numbers. The pleasant receptionist has been replaced with an automated voice-mail system ("press 3 for accounting"). Customer service and even recruiting have been outsourced. The customer is now largely invisible to management.
    In this large, impersonal business environment greed and selfishness reign triumphant. The human element is lost. It is the dog-eat-dog world of cutthroat capitalism in which all managers think about is the bottom line. They personally do not care what happens to their customers, their employees, or their employees' families. It is hardly a "beautiful place, filled with wonder, love, and joy." It is rather the harsh world of greed and power. It is the grinding struggle for survival.
    And what does God think about all of this? "Indeed the wages of the laborers who mowed your fields, which you kept back by fraud, cry out; and the cries of the reapers have reached the ears of the Lord of Sabaoth" (James 5:4; NKJV). Remove God from the picture and you have removed any binding moral obligation to treat others equitably. The profit motive reigns supreme!
    It is here that the biblical message is so strikingly relevant. Atheists sometimes accuse the Bible of presenting a false and distorted view of reality. Yet the central themes of the Bible center around sin and redemption. What is unrealistic about that? The presence of evil in the world is obvious. It is the redemption part that must be revealed.  Are we prepared to say that realism demands that we simply accept evil? That the hope for redemption is a mere myth?
    Is there a real difference between right and wrong? Is there real justice? Can God punish sin without destroying the whole human race? Can He forgive sin without appearing to condone it? The answer to all of this is the gospel: "For God so loved the world that He gave His only begotten Son, that whoever believes in Him should not perish but have everlasting life" (John 3:16).

Other blogposts you might enjoy:
Boom and Bust 
Capitalism and the Sabbath 
The Social Agenda of the Tea Party 
Wealth Management 

Friday, September 7, 2012

Boom and Bust


    One of the characteristic features of a free market economy is the "business cycle" – alternating periods of expansion and contraction. During the Nineteenth Century America went through this cycle on a regular basis, with a "panic" every twenty years or so (1819, 1837, 1857, 1873, 1893). The biggest one of all, of course, was occasioned by the stock market crash of 1929, followed by the Great Depression of the 1930's. The question is, are these "panics" normal, the inevitable way the market works, or can they somehow be avoided?
    There are obviously a lot of factors that influence the economy: weather conditions, wars, political developments, foreign competition. But in the American experience, at least, there are certain recurring patterns that are especially interesting. There would typically be a period of prosperity with a rapid expansion of the economy, often driven by some new technology – the railroad, the automobile, the computer. Convinced that the prosperity would go on forever, people would engage in speculation – in land, commodities or stocks – hoping to make a quick profit. There was an expansion of credit, accompanied by loose lending policies. And then, unfortunately, there was crime, sometimes in the form of embezzlement at a bank. Then the whole thing would collapse. Stock prices fall, banks fail, credit dries up, investors are ruined, and someone goes to jail. The human tragedy of all this is that millions of hardworking people lose their jobs and suffer real privation and want as a result. It would then sometimes take years for the economy back on its feet.
    In a modern industrialized economy a banking system and a stock market are probably necessary; otherwise it would be nearly impossible to raise the amount of capital necessary to expand business. Unfortunately, however, both banks and the stock market lend themselves to abuse. It is all too easy to "create" money by fiat through the use of credit, and to make a "profit" through speculation. But it is all fake. Paper profits are not real profits and dept is not wealth. Eventually reality catches up with the markets and the false prosperity disappears. Debt financing , in particular, exacerbates the boom / bust cycle by creating an artificial demand which drives up prices, and then choking the expansion off suddenly when credit dries up.
    What is often overlooked in the discussions about the economy is the underlying psychology of the market. Economics is, after all, a form of human behavior, and human behavior is driven by psychology. Economics is all about the way individual human beings make financial decisions. And what is often overlooked in particular is the ugly fact of sin. We are fallen creatures by nature, and as a result our decisions are not always rational, nor do they always work for the common good. Greed, in particular, often manifests itself in excessive debt, speculation, and outright fraud.
    The Bible does, in fact, have something to say about all of this. "But those who desire to be rich fall into temptation and a snare, and into many foolish and harmful which drown men in destruction and perdition. 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 Tim. 6:9,10; NKJV). Here we have the autopsy of a financial crisis. The problem starts with ambition ("those who desire to be rich"), which leads to risky and unethical ventures and greed ("many foolish and harmful lusts," lusts being self-centered desires of whatever sort), and ends in ruin ("destruction and perdition," or "ruin and destruction," as it might also be translated. The ruin and destruction might be either financial or spiritual).
    Paul then goes on to make a general observation: "For the love of money is a root of all kinds of evil . . ." (v. 10). Greed is an aggressive primal urge which, if unrestrained, will wreak havoc everywhere. It will destroy others and will eventually bring ruin to ourselves.
    Alexis de Tocqueville once observed that "a native of the United States clings to this world's goods as if he were certain never to die; and he is so hasty in grasping at all within his reach that one would suppose he was constantly afraid of not living long enough to enjoy them. He clutches everything, he holds nothing fast, but soon loosens his grasp to pursue fresh gratifications" (Democracy in America, I.II.XIII). In reality mammon is the idol we bow down and worship.
    "For what will it profit a man if he gains the whole world, and loses his own soul?"
                            (Mark 8:36).