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Economics 101: Is there a Christian Perspective on the Economy?

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ECONOMICS 101: IS THERE A CHRISTIAN PERSPECTIVE ON THE ECONOMY?

Could there be a missing dimension in modern economic science? Might there be an inseparable link between morality and economic prosperity? by Dr. Judd W. Patton Many students of the Bible have observed that God often refers to economic topics and concepts. For example, money, interest rates (usury), profit and loss, wages, entrepreneurship, and contractual obligations are used by Christ to make spiritual points in the parables of the pounds (Luke 19:12-26), of the talents (Matthew 25:14-30), and of the workers in the vineyard (Matthew 20:1-16). Other scriptures deal with economic problems most 20th century individuals are still confronting: inflation and the debasement of money (Haggai 1:6; Isaiah l:22), creditor-debtor difficulties (Proverbs 22:7; Psalms 37:21), unemployment (Matthew 20:3), and even big government with its high taxes (I Samuel 8:11-18). Nevertheless, it seems clear that the Bible per se is not an economics textbook. God has not systematically expounded economic principles as one might expect to find in a modern day text on economic principles. That leaves Christians with an intriguing dilemma. If we do not have our own unique understanding of economic principles - Biblical economics - does this mean we must relief on secular sources for economic knowledge? If so, which of the many competing traditions should we embrace? Thankfully, the answer is that there is a Christian perspective on economic matters. There is a science of Biblical economics, albeit an almost untouched field of study for academic economists today. It is

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almost untouched field of study for academic economists today. It is not, however, a patchwork of Christian ethics combined with a preferred economic theory or applied to specific economic problems, as some have perceived it. Rather, it is a comprehensive, unified body of moral and economic principles that are inexorably interrelated. It is a body of knowledge, without which, humanity will never achieve its economic potential. Let's prove that there is, in fact, a science of Biblical economics. Then notice the missing dimension that reveals the solutions to mankind's economic difficulties.

Two Kinds of Economics

In the 1960s physicist Thomas S. Kuhn brilliantly demonstrated that each and every science rests on generally unquestioned premises that condition the nature of human thinking and scientific investigation. He called this body of foundational premises a paradigm. The essence of Kuhn's insight is that there are no such things as "brute facts" - facts apart from a definite paradigm. What is a "fact" and what is a "non-fact," or what is a "cause" or what is an "effect," depends on the specific framework, or paradigm, the information is placed within. Today there are many economic schools of thought, each with its own unique paradigm or worldview. By analogy, each tradition has its own eyeglasses with very different lenses to view the economic world. The result is that there is no agreement on the "facts." What, for instance, caused the 1930s Great Depression? Ask five different economists, and one will likely get five (or perhaps six) different answers! But God is not the author of confusion (1 Corinthians 14:33). He has given us our foundation - His Word - that includes a paradigmatic premise: "The fear of the LORD is the beginning of knowledge" (Proverbs 1:7) and "wisdom" (Proverbs 9:10). And He has made it perfectly clear that we should not rely on any worldview of men, "Beware lest anyone cheat you through philosophy and empty deceit, according to the tradition of men, according to the basic principles of the world, and not according to Christ" (Colossians 2:8). The Greek word for basic principles means "primary and

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Economics 101: Is there a Christian Perspective on the Economy?

The Greek word for basic principles means "primary and fundamental principles of any art, science or discipline." While the apostle Paul was specifically warning the Colossians against gnosticism, his admonition applies to all areas of scientific endeavor. For the discipline of economics, Christians must build on the ultimate foundation, God's Word, the Bible, not on any worldly paradigm. Our basic principles must come from the Bible. The Bible reveals, then, that there are only two broad worldviews or paradigms - God's and man's. In economics, therefore, there is only Revelational or Biblical economics and man's economics. The latter, we know from experience, has fractured into many competing traditions. In the book of beginnings, Genesis, God revealed just how man's paradigm began. Most of us know the story very well. Adam and Eve ate from the tree of the knowledge of good and evil. They disbelieved and disobeyed God. In doing so they took to themselves, and for all humankind after them, the discovery of knowledge apart from God. Humanism, or man and his reasoning as the sole source of knowledge, was born! As a consequence man has constructed his own economic systems and generated his own diverse and numerous economic schools of thought that seem right to him (Proverbs 14:12).

Biblical Paradigm
God gives Christians three foundational building blocks for developing economic science. The first premise, to repeat, is that God's Word is the foundation for all knowledge. Christian knowledge, understanding, and wisdom originate from fearing (respecting) God by striving to keep His commandments, hating evil, and living by His every word (Ecclesiastes 12:13; Proverbs 8:13; Matthew 4:4). All other knowledge and wisdom is prophesized to come to nothing (1 Corinthians 1:19-20). The second premise, central to the discovery of economic principles, is that man is a purposeful being endowed with a spiritual essence, the spirit in man, that gives him human mind and free will. Man alone of God's creatures possesses the inner self of volition, selfawareness, and the ability to choose goals and the means to fulfill them (1 Corinthians 2:11). With the Holy Spirit man has the capacity to build Godly character in choosing right and resisting the wrong (2 Corinthians 4:16; 10:4-5). Man acts; he values, prefers and chooses

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Economics 101: Is there a Christian Perspective on the Economy?

Corinthians 4:16; 10:4-5). Man acts; he values, prefers and chooses (Proverbs 15:22; 2 Corinthians 9:7). The third premise is that God as Creator and Lawgiver (James 4:12; Isaiah 33:22) has set in motion inexorable laws governing human behavior, in whatever realm humans may interact - social, political, or economic. These spiritual laws, when followed, generate and produce "...life and prosperity" (Deuteronomy 30:15-20; Exodus 20:3-17). For individuals and societies to internalize these eternal principles, the Ten Commandments, is to cause a way of life that leads to harmony, peace, economic prosperity, and liberty (James 1:25). Virtue bears spiritual and material fruit! Many verses attest to this relationship between moral behavior and economic well-being. "And whatever he (the righteous) does shall prosper" (Psalms 1:3). "Blessed is the nation whose God is the LORD" (Psalms 33:12). "If they (the righteous) obey and serve Him, they shall spend their days in prosperity, and their years in pleasures" (Job 36:11). "This Book of the Law shall not depart from your mouth, but you shall meditate in it day and night, that you may observe to do according to all that is written in it. For then you will make your way prosperous, and then you will have good success" (Joshua 1:8). From these three foundational building blocks a vital insight is discovered: the moral realm and the economic realm of production, consumption, and exchange are somehow interconnected. They are not hermetically sealed from one another as assumed by humanistic science.

Economic Principles
Let's back-up for a moment. The subject matter of both morality and economics is human action. Moral principles provide the knowledge to help us choose the right course of action. In a similar manner, economic science endeavors to show "how the world works" and therefore helps us to choose the right and necessary course of action, or policy, to attain economic goals. That is, economic principles provide the knowledge of how to achieve economic growth, price stability, full employment, etc. It follows then, since both morality and economics deal with proper human choices - and God reveals they are tied together - that any economic action or policy that violates moral law is inherently flawed. In other words, any action or policy that is based on moral law is inherently bound

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action or policy that is based on moral law is inherently bound to succeed. Alternatively, any action or policy in defiance of moral law is inherently bound to fail. This is the missing dimension provided by Biblical Economics, and necessarily absent from humanistic schools of economic thought! In short, only moral action leads to success. Humanity's economic difficulties and dilemmas are, in fact, spiritual in nature. Current day upheavals, such as the Asian financial turmoil, price inflation (Russia just knocked three zeros off the ruble on January 1, 1998), chronic balance of trade problems, huge and rising national deficits and debt, and so on, tell us that moral and economic principles are being violated. We know God's moral principles, the Ten Commandments as revealed in Exodus 20 and Deuteronomy 5, but how can economic principles be discovered? Surely it is not the scientific method of trial and error that excludes revealed knowledge. To even suggest that moral principles could be relevant in the study of economic phenomena would be rejected out of hand today as a serious breach of scientific method and purity. Moreover, continuous experimentation and hypothesis formation cannot produce anything but "tentative principles." The only method, then, for discovering timeless economic truths or principles, must be to build on the premise that mankind acts purposefully, then by the rules of logic, deduce that A is true; if A then B; if B then C and so on. No experimentation is necessary to confirm these economic principles (A, B, C). Since God's word is truth (John 17:17), we arrive at universal principles that are true for all people at all times (unless a logical mistake was made in the reasoning process). Amazingly, a little-known tradition of economics, known as the Austrian school, has built their analysis by borrowing, if you will, this biblical premise of purposeful human action. As a result they have developed and lucidly expounded a body of inexorable economic laws - God's economic laws! Our readers are encouraged to study the works of Ludwig Mises, Henry Hazlitt, Murray Rothbard, Hans Sennholz, and Gary North. However, only the latter two individuals of the Austrian school have begun to explore the fundamental relationship between moral laws and economic laws, that is, Biblical

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relationship between moral laws and economic laws, that is, Biblical economics. (We recommend two books: Three Economic Commandments by Hans Sennholz and Introduction to Christian Economics by Gary North. The Sennholz book is available from The Foundation for Economic Education, Irvington-on-Hudson, NY 10533. Phone: (914) 591-7230. E-mail: iol@fee.org. North's book can be obtained from the Institute for Christian Economics, P.O. Box 8000, Tyler, TX 75711.)

Conclusion
"What a science does, or should do, is simply to allow the average man ... to command the heights of genius," said James Buchanan, the 1986 Nobel laureate in economics. That's precisely what Biblical economics does! Through moral and economic principles, along with any additional scriptures God provides on a given issue, Christians, supposedly the "foolish" of the world, can understand the causes and the solutions to mankind's economic problems. That genius can never be found in the "wisdom of this world" (1 Corinthians 1:20). There is indeed a Christian perspective on the economy. It's fundamental insight, the missing dimension, is that there is an inseparable link between morality and economic well-being. When individuals or nations break moral laws, they simultaneously break economic laws, and vice versa. If an economic action or policy is right in principle, it will produce good fruit in the marketplace. It will work! On the other hand, if it is wrong in principle, in defiance of God's moral and economic laws, it will harm economic progress. When God's Kingdom is established (Revelation 11:15), there will at last be only one kind of economics on the earth, God's economics! It will be known fully and taught (Isaiah 30:20-21). All humanistic traditions will abruptly end. Humanity will finally be given the "lenses" to understand Joshua 1:8: "This Book of the Law shall not depart from your mouth, but you shall meditate in it day and night, that you may observe to do according to all that is written in it. For then you will make your way prosperous, and then you will have good success." Biblical economics is the wave of the future! Here are two outstanding Web sites on Biblical Economic principles: Sound Economic Solutions Christian Financial Concepts

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