Comparing the Marxist economy system, socialist economy system, and capitalism economic system, this article considers which comes closest to the biblical principles of economy.

Source: Australian Presbyterian, 2004. 4 pages.

A Capital Idea There is no “Christian” Economic System. But One Comes Closer

In the 2003/04 Budget the Federal Government said they would spend $75 billion on social security, $31 bil­lion on health, $13.2 on education and $14 billion on defence over the next fiscal year. In recent times they have also flagged their intention to reform the wel­fare system, dilute unfair dismissal laws, lower the minimum wage and reform Medicare.

These decisions reveal the economic problem the government faces — they have limited resources and must decide how best to use them to ensure their re-elec­tion later this year. The question we need to ask is whether the government’s eco­nomic decisions are guided by a biblical view of economics, or are they motivated by self-interest and the desire for staying in power?

Indeed, what constitutes a Christian worldview of economics, and where does one exist?

The study of economics involves assessing the actions and choices of an assumed “rational man” in an environ­ment where man’s wants and needs are infinite, and resources available to meet these demands are limited and unequally distributed. Where most people cannot get access to everything that they might desire, they are forced to make choices about what they will consume now and what they will leave for another day.

Generally, the choices we make will be determined by the utility or satisfaction we get from consuming a particular good at a given time.

In his book Poverty and Wealth: The Christian Debate Over Capitalism (1987), Ronald Nash argues that the choices man makes as an individual are reflected by the “subjective scale of values” of each individual, and that our daily choices are those we rank most highly at the time of consumption. The collective choices made by a society will therefore determine the total demand for any par­ticular good or service which flows on to stimulate economic activity within an economy.

Naturally, there are many issues facing economists. For example, they will argue how the market (where buyers and sellers meet) should best operate and what role the government should have in providing a legal framework for market operations and manipulation to occur. Economists also examine whether it is better for pri­vate individuals or the government to own, process and redistribute resources throughout the economy, and this will be driven by their socio-economic-political worldview.

The worldview of economists will therefore determine their calls for the extension of Marxist/socialist, mixed market/interventionist or capitalist/economic ideals. The individual world view will also influence other issues, such as how he/she explains the best use of resources, why poverty exists and how it can be eliminated, how we should respond to the call for ecologically sustainable growth, and how to respond to the need for greater inter-generational equity in using our resources.

For the Christian, there are differing opinions and interpretations as to what actually constitutes a “Christian world­view of economics” as no such official view exists in practice. Debate continues to rage over which existing economic sys­tem best identifies with biblical standards. Some Christians are passionate in their calling for a greater global shift towards the adoption of Marxist/socialist princi­ples, while others are just as vocal in call­ing for an extension of the true capitalist doctrine to economic policy.

Globally, there is no true capitalist sys­tem for us to examine. Rather, we can only examine and assess varieties of mixed market/interventionist systems and centrally planned Marxist/socialist economic orders.

Most nations have economies that are mixed market/interventionist in nature with differing degrees of government interventionist policies. Within these political and economic structures resources are owned by both the private and public sectors that will determine what, where and how production occurs, and how goods and services are redistrib­uted throughout the economy.

In the centrally planned (socialist) order, the government owns all the resources and makes all economic deci­sions concerning production and distribu­tion. In a capitalist economy the private sector would own resources, and with minimal government intervention (mainly to protect the consumer) the market would determine what/how and where production occurs. From a purely economic perspective the mixed market/interventionist and Marxist/socialist systems do not lead to an efficient use of resources. Within the interventionist order, capitalists are able to influence government to stifle competi­tion and ensure products are more expen­sive to the consumer than they should be. In a Marxist/socialist economy the true cost of production is never determined and it consequently leads to market failure and the mismanagement of resources.

Both Ronald Nash and E. Calvin Beisner — Christian Economics: A System Whose Time Has Come (1989) — claim that differences of opinion among Christians regarding the Christian economic worldview stems from the fact that the Bible is not really an economic manual which can be consulted on every eco­nomic issue. Consequently, argues Nash, this has led Christian scholars to adopt a “deductive approach” to economic analy­sis (where scholars have tried to balance economic principles with biblical truth) which has often resulted in many adopt­ing an unchristian basis for their eco­nomic worldview.

Both Beisner and Nash believe that economic analysis is a division of ethics. They say a Christian economic theory and worldview involves five basic principles according to which our economic views should:

Appeal to Scripture as the supreme ethical standard,

  • Not embrace policies that run contrary to biblical standards,
  • Be based on biblical teaching concern­ing the nature of God and the sinful­ness of man,
  • Adhere to the biblical notion of limited civil government, and
  • Respect the history of Christian thought in ethics.

One major issue Christian economists face in formulating a Christian economic worldview is the state’s (government) role in the economy. Marxists and socialists call for increased government control in a nation’s economic agenda. True Capitalists call for less government inter­vention. Nash provides the example of Saul (1 Kings 8) to show what transpires when government (or an individual within it) has too much power in controlling resources and enforces a political and economic agenda on a people. He also cites Acts 5:29, 1 Corinthians 6:2 and Revelation 13:3, 4, 16, 17 in support of the biblical notion of limited government. He maintains that economic systems should not be manipulated by powerful political forces and argues that government should legislate to ensure “exchange occurs freely with no coercion, no lying, no fraud, no stealing and no violation of contract”. Outside these parameters, government’s role should be limited.

Beisner argues that when judging or formulating an economic agenda from a Christian perspective it is neces­sary to examine the issues from the ethical perspectives of justice, love, liberty, prop­erty and incentives.

The Bible is clear in its call for justice. Exodus 23:3-12 and James 2:1-10 forbid partiality. This means that every Christian economic order must enshrine the notion of “justice”. The question we need to ask is: what is justice?

Nash believes that the redistributive agenda of those who call for “social jus­tice” within the community has no basis in Scripture. He argues that the Old Testament idea of justice is “righteous­ness” — with the example of Noah being provided as a “just” man, one not involved in “dishonesty, fraud, theft, bribery, and exploitation of the weak, poor and power­less”. He stipulates that the formal princi­ple of justice (dating back to Aristotle) demands that one “treat equals equally, and unequals unequally”.

Many Christians who are sympathetic to a Marxist/socialist agenda have a dis­torted view of the concept and believe that “justice” involves treating all equally — something that cannot be achieved. Nash highlights the contradiction of the “social justice” protagonists in Western Mixed Market economies. In their attempt to promote an egalitarian society, liberals continually call for more government-funded programs (with little accountabil­ity) to be provided for the disadvantaged.

However, using the socialists’ defini­tion of justice, a question that must be answered is, is universal justice being served within a community when one group continually receives more assis­tance at the expense of another? Christians should not be against govern­ment funded programmes; however, it could be argued that the material princi­ples of justice which determine criteria for redistribution within an economy should examine more than the assumed “need” factor of man — other factors could include the effort, achievement and merit of the recipients and the presence of accountability measures in the program (do the recipients begin to help them­selves?). A Marxist and socialist approach will not, and cannot, bring justice into any economic system.

A Christian economic worldview must also give expression to the notion of love. Christians are instructed to love others and to give generously (2 Corinthians 8:7). Can a coercive government’s actions be motivated by “love”? Both Beisner and Nash argue that governments cannot act out of Christian love. Both concur that love is a fruit of the Spirit, which is per­sonal and free. Such qualities are not asso­ciated with non-Christian institutions whose ultimate sanction is force. Nash states emphatically that “where force (government action) is present love must leave”. Beisner goes further arguing that “any economic system that attempts to force acts of love, such as charitable living, violates the true nature of love” and is therefore not Christian in its ethos.

In the Australian Government’s 2003/04 Budget $75 billion, or 42 per cent, of its spending has been pledged to social security programmes. Christians with socialist sympathies argue that this is insufficient. However, it is difficult to jus­tify increased expenditures on welfare by appealing to the Christian notion of love, since its application to the state is extremely tenuous. Further, excessive spending on welfare also ensures there is less available to be spent elsewhere (in education and health for example) with­out the government going into debt. In many instances, the welfare state doesn’t encourage people to help themselves, and it has led to moral disintegration within society. Consequently an in-depth appli­cation and extension of the welfare state in both mixed market and centrally planned economies makes no moral or economic sense.

In promoting liberty as a Christian ideal for an economic system, one does not have to advocate a total freedom that will lead to anarchy and disorder. Beisner suggests that any Christian economic order should provide liberty for individu­als to behave “within the bounds of God’s law” in their economic decision-making. Nash says that socialist and Marxist eco­nomic systems cannot provide this ideal. He argues that in these systems there is no individual freedom for individuals to make rational economic decisions for themselves. In Marxist regimes the state owns the means of production and deter­mines what, where, how and for whom to produce. With individuals having limited choice in what they can own, produce and consume, there is limited liberty.

Nash advocates what he calls “true cap­italism”. He argues that a true capitalist system provides a “system of voluntary relations within which people exchange freely within a framework of laws that prohibit acts of force, fraud, theft, and violations of contract”. He believes that minimal state involvement provides the liberty people need to make their own economic decisions within a Christian economic order.

The issue of private property owner­ship is also central to any study of a Christian economic worldview. Many Christian socialists have stated that the concept of private property leads to the development of an unjust society that is unchristian in nature. They cite Leviticus 25 (Jubilee Year concept) as evidence of the unbiblical practice of private property ownership.

Nash counters this claim by pointing out that the Jubilee Year principle never applied to property within the walls of a city, and nor did it apply to capital ven­tures (fishing vessels, restaurants, hotels). Instead, he argues that the Bible promotes the idea of private property ownership, which we see in Abraham’s purchase of land (Genesis 23) — an “exchange which occurred freely with no coercion, no lying, no fraud, no stealing and no viola­tion of contract”. There is no question that in owning property and other factors of production, there is a responsibility on the capitalist to treat employees fairly and justly (James 5:1-6). There is also a need for those who profess faith in Christ to regard themselves as stewards who are accountable to God for the resources He has given them (Luke 16).

Seeing ourselves as stewards also raises the long-term consequences (for man and the environment) of economic action. Keynesian economic thought and prac­tice, which was at the forefront of many international mixed market government policies for much of the 20th century, encouraged continual government spend­ing to stimulate economic growth. The result has been the accumulation of public and private debt that future generations will inherit and have to pay — “spend up big and let the kids pay for it”. This is hardly a biblical ideal.

Further, in using resources Beisner argues that,

man was created to rule over the earth, not to be its slave, and an economic system that puts nature above humanity — as do some moderns environ­mentalist movements — is therefore sub-biblical.

Finally, any Christian economic system must consider the issue of incentives — of how to get people to respond to the pro­vision of goods or services that are being marketed. Within a true capitalist “free market” economy where minimal government interventionist policies are the norm, Nash argues that capitalists will provide incentives in order to convince consumers to purchase their product. Within this structure, capitalists will also be required to behave with integrity and accountability — lest they lose market share or are punished for hurting others.

There is also evidence to show that where incentives exist for people to work, they will do so.

Scripture is clear that those who can should work (2 Thessalonians 3:7-13).

Conversely, in many cases the welfare state provides people with little incentive to work and to achieve self-sufficiency. Certainly, when people begin to rely com­pletely on the state for continued, unac­countable support, they will assume there is no cost for their actions as others are providing for them. This creates a self-perpetuating culture of dependence.

Amongst the present economic sys­tems that we see in the world, it is appar­ent that there is no definite Christian one. However, based on the criteria of justice, love, liberty, property ownership and incentives, the free-market capitalist economy is more “consistent with biblical ethics than a controlled economy” (Beisner), or indeed a mixed market/interventionist economy. Nash is quite clear that he believes capitalism to be “the superior economic system ... and that more have benefited from the capitalist approach even within mixed market/interventionist nations, than anyone ever did under Socialism”.

The reality is that all current economic systems fall short of God’s standard for a moral and practically efficient outcome in the way in which we use the resources we have been given for the benefit of all. Until larger numbers of decision-makers around the world adopt a Christian worldview, little will change in the practi­cal outworking of today’s economic sys­tems.

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