The economy
Introduction
Al Mohler in an article in Christianity Today refers to Adam Smith, the great Scottish thinker, and his 1776 classic, 'The Wealth of Nations,' in which he explains that an economy is based upon the transfer of goods and services from one individual to another. Each partner in the transaction must believe that this transfer is in his or her own best interest, or the transfer is not voluntary. Both parties seek to gain something from the transfer. Since no one person can meet all of his or her own needs alone, a vast economic system quickly takes shape. Individuals trade goods and services through the exchange of currency or another agreed-upon form of value.
At every stage, the transfer is made because those involved desire and intend to achieve a gain. The legal entity of a corporation allows individuals to band together in a common economic cause with certain legal protections. A stock market allows individual investors to buy an interest in a company, thus allowing the corporation to use their capital in hopes of future gain. The market works because all concerned hope to gain through the process. The development of vast global economic systems simply builds upon the simple principle that all participants are willing to trade one good for another they want even more and to invest in the hope of future gain.
Does this equate to greed?
Mohler goes on to ask a question. Is this greed? He answers by saying that the desire for a profit, for income, and for material gain is not in itself greed. The Bible teaches that the worker is worthy of his hire and that rewards should follow labor and investment.
Greed only raises its ugly head when individuals and groups (such as corporations or retirement funds) seek an unrealistic gain at the expense of others and then use illegitimate means to gain what they want. Given the nature of this fallen world and the reality of human sinfulness, we should expect that greed will be a constant temptation. Greed will entice the rich to oppress the poor, partners in transactions to lie to one another, and investors to take irrational risks. All of these are evident in the current financial crisis.
Christians and the economy
Christians should think seriously about the economic crisis and ponder what it would mean to come to a Christian understanding of what it means to be participants in this economy. As Adam Smith recognised, the economy is a moral reality. Human beings actualise their moral selves in making economic choices and through participation in the economic system — and we are all participants.
Christians should look at the economy as a test of our values. The Bible values honest labor and dedicated workers, and so should we. The Bible warns against dishonest business practices, and we must be watchful. False valuations are, in effect, lies. Dishonest accounting practices are just sophisticated forms of lying. Insider information is a form of theft.
The Bible honors investment and thrift, and Christians must be wary of the impulse for short-term gains and pressure for instant profit. Over the long-haul, the entire economy must prosper if the vast majority are to do well and realise a responsible gain.
The current crisis sheds light on what happens when things get out of control, when various pressures distort the proper operation of the markets, and when irrational valuations entice investors to make poor investments. Dishonesty enters the picture at many levels, and the individual investor is too often left in the dark. When these things happen the economy is threatened by a lack of trust, and trust is the most essential commodity of all when it comes to economic transactions. Without trust, the entire system collapses.
The government and economy
The Bible is clear that civil government is given by God. There is no authority except from God and those that exist have been instituted by God (Rom 13:1-7). The big debate is over the extent of government intervention. Clearly we need some government regulation to prevent fraud and injustice in business transactions, health and safety control and so on, but the Bible would seem to indicate that the less government intervention, the better. Samuel warned the people of Israel that the King they were calling for would take and take (1 Sam 8:10-18). Adam Smith was confident that a 'hidden hand' within the economy would rectify excesses and punish bad actors.
The free market
The free market is not perfect, but capitalism has brought more wealth to more people than any other system. It rewards investment, labor, and thrift and grows on innovation. Better ideas and better products push out inferior ideas and inferior products. A free market gives you what you want not what the government tells you that you should want. Given the reality of human sin, we should not centralise economic control in the hands of the few, but distribute economic power to the many. A free market economy distributes power to multitudes of workers, inventors, investors, and consumers.
Communism and socialism on the other hand is dehumanising in that everything becomes controlled by the government including the means of production and because ultimate power corrupts absolutely the extreme of this is that the government controls what you can buy, where you can live, what job you can have and how much you can earn. Human liberty is eventually destroyed. Communism enslaves people and destroys human freedom of choice.
The role of civil government in the Bible is to punish evil, reward those who do good, to defend the weak and fatherless, to promote the common good and to enforce order in society - not to control and own everything (Rom 13:1-6; 1 Peter 2:13-14; Gen. 9:5-6). The ultimate Nanny-State is characterised by governmental policies of over-protectionism, economic interventionism and heavy regulation of economic and social aspects. This is suffocating.
The present financial crisis is an opportunity to rethink some basic questions and restore trust. There are no easy ways out of a crisis like this, and no painless solutions. Yet, we would be foolish to trade this system for any other.
Called to be stewards
This current crisis should also remind Christians that we are not called to be mere economic actors, but stewards. Everything we are, everything we do, and everything we own truly belongs to God and is to be at the disposal of Kingdom purposes. This world is not our home and our treasure is not found here. We are to do all, invest all, own all, purchase all to the glory of God.
. . .an economy is based upon the transfer of goods and services from one individual to another. Each partner in the transaction must believe that this transfer is in his or her own best interest, or the transfer is not voluntary. Both parties seek to gain something from the transfer