Thursday, May 08, 2014

Capitalism is the Only Divinely-Sanctioned Economic System

“You shall not steal.”
~ Ex 20:15

Methodist minister and blogger Morgan Guyton wrote an April 22, 2014 post in his blog Mercy Not Sacrifice called “Six Ways that Capitalism Fails the Church.”  He takes a common tack among modern Christian writers, from the pope to popular evangelicals of both the right and the left, that capitalism is bad for Christianity, if not inimical to our faith. 

He could not be more wrong.  In fact, capitalism is the only biblical economic system.

The seventh commandment is: “You shall not steal” (Ex 20:15).  This is the basis for capitalism.  Without the seventh commandment, there is no civilization, but only barbarism, the law of the jungle, and the ethical principle of “might makes right.”  By contrast, God’s Law recognizes private property as not only a nice thing, but a commandment to be obeyed.  Respect for private property lays down the capitalist economic system.  No other system respects the seventh commandment.

By divine revelation, private property is a given, and it follows that non-aggression against that private property is God’s Law.  And by definition, property can be freely used by the owner in whatever way he does not aggress against his neighbor.  As we would like to maintain our own property, so we should do unto others (Luke 6:31).  The seventh commandment is the basis of the rule of law at home and of treaties abroad, of respected borders and is manifested in Scripture by stone markers laying out property lines (e.g. Prov 22:28).  It is the foundation of trade, in which property-owners barter with one another, or use a common medium of exchange (money) to affect mutually-beneficial transactions.

This is capitalism.  Nothing more, nothing less.

But there are rules in capitalism.  “You shall not steal” precludes fraud.  For selling something under false pretenses is not only theft, it is also a breaking of the eighth commandment prohibiting “false witness” against one’s neighbor (Ex 20:16).  Compelling the buying or selling of something at bayonet point is a violation of the fifth commandment against murder (Ex  20:13), that is, aggression against one’s neighbor in his body.  Scripture is replete with trade and price negotiations (e.g. Gen 23:4-16).  In capitalism, a transaction only happens voluntarily when both buyer and seller reach a mutually acceptable deal.  Scripture is also laden with prohibitions against fraud in the marketplace (e.g. Prov 11:1, prohibiting rigged scales – a tool for unscrupulous merchants to cheat customers based on false weights and measures).

Capitalism, like every other form of economics, is a result of the Fall.  In the Garden of Eden, there was no scarcity.  All resources were available in abundance.  Some argue that land was scarce, as two people could not occupy the same ground at the same time, but I argue that the same could be said of the air we breathe.  And even though two people cannot share the same breath of air at the same time, this does not make air economically scarce, a commodity to be bought and sold or rationed by a state or a tribal leader.  In the Garden of Eden, there was no competition for scarce resources, including productive land, as all creation was declared by God to be “very good” (Gen 1:31).  All was perfect and in abundance. 

After the Fall, we see the economic problem emerge (Gen 3:17-19).  Adam is told that the ground is cursed, getting food was to be painful, thorns would interfere with his labor, and that he would work to make bread “by the sweat of [his] face,” that is, he would have to live by his labor mixed with the resources of the soil.  Here we see the classic economic transition from a “Robinson Crusoe” scenario to an economic community of people owning property, discovering the division of labor, and engaging in productive free trade so as to enrich everyone.

So in a nutshell, capitalism is simply living in a world of scarce resources by obeying the seventh commandment.

Articles like the Rev. Guyton’s piece perform a shell-game sleight-of-hand by properly criticizing human sin, dishonestly, and fraud, but falsely labeling those things “capitalism.”  But once again, capitalism is simply private property and its voluntary trade.  Capitalism is simply the seventh commandment in action.

In each of his six citations of “capitalism” and its “failures”, it isn’t capitalism that is failing, but rather sinful man.  For there are God-pleasing ways to use one’s property, and God does not compel, but rather entreats.  God loves us, but He also allows that love to be unrequited.  God is not a rapist.  Human beings are not robots.  God allows men to have property, and to make choices regarding that property.  The ethics of the decisions we make concerning our property are not an indictment against property itself any more than the fact that there is violence in the world is proof that the fifth commandment, the ethical assertion that life is sacred, has failed the church.  The problem is not God’s Word, the problem is us.  The problem is sin.

Moreover, if capitalism “fails the church,” this implies that a non-capitalist economic system might be a more attractive alternative.  This was Marx’s view.  He believed that private property and free trade is exploitive, and that by abolishing private property and free exchange, and by reconditioning mankind to no longer be motivated by profit, then a return to Edenic life was not only possible, but inevitable.  And as a transition to this Paradise Restored, Marx believed that a period of state socialism was necessary.  In socialism, the state takes property from the one who has, and redistributes it to the one who has not.

But the seventh commandment remains: “You shall not steal.”  The fact that the stealing is done by an elected or appointed henchman, the fact that violating the God-given paradigm of private property is being carried out officially for some pie-in-the-sky hope for something good down the road, not only doesn’t excuse it, but turns the state into a false god.  And this is exactly what we have seen in communist countries that accept this Marxist dogma of a restoration of Eden without Christ and the cross, seeing an alternative pathway to redemption instead by a hammer and sickle.  According to Marxist (communist and socialist) ideology, the problem is not sin, but capitalism.

Guyton repeats the error of Marx and recapitulates the communist and socialist critique of private property, which is itself a critique and repudiation of God’s Law.

Another economic alternative to capitalism is fascism, which is not the complete abnegation of private property, not state ownership of the means of production as in Marxism, but rather it is state control of these means.  It attempts to split the baby of private property between the owner and the state.  It tries to reap the vast human benefits of voluntary trade and the innovations and incentives provided by the price system and the profit motive, while holding onto state central economic planning and skimming the profits for the benefit of the state (and its “cronies,” hence the term “crony capitalism”), in wealth and power.

But this is just more of the same.  Under fascism, there is no real respect for the seventh commandment.

Modern western states function under a “mixed” economy – which is sometimes portrayed as capitalism (with “reasonable” state regulation), when in fact, it is actually more of a mix between socialism and fascism.  Some economic sectors are completely socialized, such as government roads, “public” schools, parks, military, police, judges, Social Security, welfare, etc.  Other sectors are private, but subject to government regulation and central economic planning, such as health care, insurance, transportation, utilities, etc.  Even one’s private home and income are subject to ever-increasing taxation and regulation as to how they can be used.  Very few parts of the economy are truly privatized.  Even labor is subject to federal and state regulation and multiple price controls.

Guyton acknowledges that in addressing the question, “Has capitalism failed?” one must define the term.  And while he does acknowledge that capitalism may well be defined as “the free market system itself,” he goes on to criticize the “worship of the market.”  And here is where he begins a series of self-contradictions, wrongly labeling what he calls “worship of the market” as “capitalism” and then knocking down this straw man that he has created.  He criticizes many things by calling them “capitalism” when they are not capitalism at all.

He writes: “It’s possible to navigate the free market system without worshiping the market.  The problem is that passive participants in the capitalist market do end up making it their god insofar as they allow the market to determine the value of the created objects in our world in place of God.”

But in no place in Scripture does God assign “the value of the created objects.”  Value is a subjective and temporal matter, not an objective and eternal matter.  Oranges cost more after a freeze because the supply is less than the demand.  Computers are more powerful and cheaper today because of innovation and changing technologies.  The costs of slide rules and oil lamps have changed radically because our world has changed radically.  Prices adjust organically to these changes.  To the ancient Israelites, yokes and swords and potter’s wheels were high-demand objects, whereas in our day, the vast majority of people will never own any of these things.  The same variation exists for labor.  The demand for blacksmiths and telegraph operators isn’t what it used to be.

So what determines something’s value – be it material or labor?  It’s a matter of supply and demand and how badly an individual wants something.  To a coffee drinker, it may be entirely reasonable to pay $4.95 for a latte, but he might not be willing to pay ten cents for a cup of tea.  Others would not be willing to pay a penny for a cup of coffee, because they don’t drink it.  A coffee shop owner takes all of this into account, and sets a price that will enable him to stay in business and hopefully prosper, and at the same time, he serves his neighbor by providing beverages for customers who voluntarily make purchases.  If his product or service is not worth the price, he will adjust his prices accordingly, or may go out of business.  Competing businesses provide feedback, and incentivize the shop owners to work hard to please their customers based on value and desire to do business.  And customers can opt to buy coffee or tea, or may opt to save their money for something else.

None of this is evil.  None of this “fails the church.”  This is the biblical and civilized way for human beings to live together peacefully in society.  Anything else is aggression.  A bank robber enriches himself by fear and intimidation.  A government-granted monopoly has no concern for pleasing customers.  A fascist system sets the price of coffee regardless of what is best for buyer and seller – and being necessarily authoritarian and bureaucratic, is also unable to flex efficiently between shifts in supply and demand (e.g. a fad for drinking tea instead of coffee, a freeze in the areas where coffee is grown, a sudden glut in dairy products, rising costs of heating and air conditioning, etc.).  It is doomed to fail even under the best of intentions with the brightest minds calling the shots.

The six “failures” cited by Guyton have nothing to do with capitalism.

His first critique is: “Capitalism fails the church when discipleship becomes an industrial complex.”  He cites “a monster Christian publishing industry” that “desperately needs to sell its books and videos in order to grow.”  He cites a shift in Christian culture from true discipleship to a desire for “results” and an emphasis on “stewardship campaigns.” 

But this has nothing to do with capitalism.  The problem is not the freedom to trade.  The problem is not that the state doesn’t own the means of production.  The problem is not that there isn’t enough government regulation or central planning.  He is actually complaining about the way people use their God-given freedom.  The problem is not the God-given freedom (which manifests itself economically by the free market), but rather with human sin.

If people believe the Holy Spirit isn’t “good enough,” this is a sin problem, not an economics problem.  If people don’t understand discipleship in a capitalist-leaning economy, the problem would not be fixed by changing to a communist economy.

In fact, godly stewardship presumes capitalism.  It depends on “cheerful” givers (2 Cor 9:7) voluntarily sharing their time, talent, and treasure with the church and in giving alms (Matt 6:2).  In a non-capitalist system, there isn’t the freedom to support a church or a chosen charity – and it may even be considered “criminal” to do so.  Such matters are planned by the state and overseen by bureaucrats for the supposed common good, precisely to avoid “misuses” of freedom and resources of the type complained about by the Rev. Guyton.  In a non-capitalist system, Christian book publishers are simply shut down.  I don’t think this is a good alternative, and I don’t believe this would fix the discipleship issue complained about by the author. 

In fact, some have tried to argue that Christianity and Marxism are compatible, that the “social gospel” is a way to gainsay capitalism while looking after the poor as we are commissioned to do by our Lord.  Some critics of capitalism point to the sharing of resources in the early church (Acts 4:32) and even Marx’s maxim: “From each according to his ability, to each according to his needs” is biblical (Acts 4:34).  The crucial difference is that Christian sharing with each other and with the poor is voluntary.  There is no state mechanism to compel “gifts” to the poor.  They are freely given.  And as is the case with Adam and Eve, freedom can be used properly or improperly.  And yet, God does not remove their freedom.  They must live with the consequence of their choices, but God never removes their ability and free will to disobey Him.  All attempts to create Utopia at the point of a gun have ended in abysmal failure, in gluts and shortages and poverty and concentration camps for dissidents.

Guyton’s critique of capitalism implies that Christians ought not support economic freedom and should examine the alternatives.  The twentieth century is a hard lesson and a bitter warning as to where such restrictions against freedom lead.

His second thesis is: “Capitalism fails the church when consumerism becomes a moralistic obligation.”

He decries people using their money not to support the kingdom of God (seen as grudgingly throwing “a bunch of money at God”) but instead spending the money on sports, entertainment, education, etc. “as part of a middle-class existence that is defined by a guilt-ridden moralistic consumerism” such as buying food that doesn’t have high fructose corn syrup or certain kinds of milk that might be healthier.

I agree that younger generations of people have a greatly reduced sense of stewardship and responsibility for their church and for taking care of the less fortunate.  But again, the problem isn’t capitalism – the freedom to make choices.  The problem is making choices based on a reduced priority of God in our lives (the first commandment, “you shall have no other gods” Ex 20:3).  The problem is not the economic system, but sin.  The problem isn’t the market, but idolatry.  This cannot be fixed by taking away economic freedom and having state compulsion any more than Marx’s Utopia can come about through forced redistribution of wealth.  The problem of a godless society can’t be fixed by godless communism.  The problem of a lack of respect for God’s Law can’t be fixed by we ourselves dishonoring the seventh commandment.  The solution is not in the abolition of capitalism, but in repentance.  Our freedom to make decisions is not to blame for our sin any more than the tree of the knowledge of good and evil was to blame for Adam and Eve’s sin.

His third critique is: “Capitalism fails the church when churches with bling build their membership on transfer growth from churches without bling.”

I agree that the “sheep-stealing” – especially by wealthy mega-churches with all the bells and whistles – over and against modest or even poor churches where God’s Word is proclaimed in truth and purity – is a great and vexing problem.  But again, the problem is not the money, but the love of money (1 Tim 6:10).  The problem is not in the freedom to attend any church, but in the human sin of selecting a church based on the color of its screens and cup-holders rather than on the content of its doctrine and practice.  In economies that lean more in the direction of capitalism, there is more relative freedom of religion and freedom to worship.  In societies with less economic freedom, there is more state restriction on churches and on the freedom of individuals to worship as they please.

If people are taken in by “bling” and by entertainment style (self-)worship, by phony faith healing and false teachings about “name it and claim it” theology, if people are allured by false prophets (Matt 7:15) and by what their own itching ears long for (2 Tim 4:3), the problem is not economic freedom, but faithlessness.  And heresy can and does happen in any economic system.  When Esau sold his birthright (Gen 25:29-34), the problem wasn’t that God allowed him to do it through private property and economic freedom, the problem is that he did it because he was faithless and foolish in that he “despised his birthright” (v. 34).  Esau’s sin was the problem, not the mechanism of the free market.

Fourth, the author writes: “Capitalism fails the church when people who don’t tithe say the church should take care of the poor.”

Here the author criticizes those who believe the role of government should diminish, and he implies that government should, in fact, be in the business of helping the poor.  He suggests that churches “could take some of the load off of the government’s hands.”

Here he has the problem entirely in reverse.  Before the Progressive Era, before the Federal Reserve Act (1913), before the alphabet soup agencies of the federal government created in the twentieth century, private agencies – including churches – founded hospitals, universities, orphanages, relief societies, and myriads of institutions to care for the poor and needy.  Today, the average American is taxed at the rate of more than 50% of his wealth in income taxes, property taxes, excise taxes, sales taxes, etc. at every level of government.  We live in a non-capitalistic system of mandatory Social Security, Medicare, Medicaid, and ObamaCare.  There are differing opinions about the value and efficiency of these institutions, but what we have today is certainly not free-market capitalism.  The average churchgoer is not in a financial position to tithe a full ten percent, and most churches can barely pay their bills and clergy salaries – let alone run soup kitchens and start schools as used to be the norm.

The problem is not the capitalist paradigm, but the non-capitalist paradigm.  All charitable giving suffers when taxes rise, when government assumes an increasingly greater role in taking care of the poor.  And unlike churches and private charity, government gets its money through force. 

Here, Guyton has it entirely backward: Socialism and fascism have failed the church, failed society, failed the poor, and has crushed the ability of churches to care for the poor to virtually nil. 

Fifth, he writes: “Capitalism fails the church when ‘helping’ becomes a consumer product.”

He criticizes church-based charities that are subject to market forces, such as their stance on homosexuality.  But this is the nature of freedom.  If I start a charitable organization and I announce that I am in favor of practices explicitly condemned in Scripture, I can’t compel Christians to take part in it.  By contrast, government can, and does.  For instance, the federal government now compels Christians to pay for birth control and abortion contrary to their consciences.   While a specific agency that sponsors needy children may lose money by adopting one stance or the other regarding homosexuality, the free market ensures that any vacuum that happens as a result will be filled.  This is the flexible and adaptive nature of the market.  Entrepreneurs, motivated by the profit motive, find niche markets and ways to be more efficient and to please their customers and clients.  In the case of non-profit organizations, the “profit” is not monetary, but is what is termed by economists as “psychic capital.” 

For example, as a pastor, I am motivated to bring the Good News of Jesus Christ to the people in my parish and to evangelize those outside of my parish.  I economize my time and resources so as to seek “profit” – not monetary, but spiritual.  In other words, if the kingdom of God will “profit” more by my spending time writing or visiting shut-ins, over and against spending the church’s money on signs or in spending my time doing door-to-door “cold calls” to try to teach people the faith, it stands to reason that I will invest my time and money accordingly in a way that increases the “profit” that I’m seeking.  This is economics 101. 

The solution is to let people make choices according to the rewards they will reap for the kingdom.  Charities will have to decide what is more important, having a stand one way or the other on homosexuality or global warming or endorsing a particular political party or controversial doctrinal stance – and they will have to live with the results.  The best way for an organization to serve the church and to serve man is to be in harmony with God’s Word and to leave the trendy political stuff to others.  Again, the problem is not with freedom of choice, but the reality is that some choices are not as wise as other choices.  The solution isn’t to take away choice.

Finally, the Rev. Guyton argues: “Capitalism fails the church when God is defined as a banker instead of a shepherd.”

Here, the author criticizes the idea of sin as “debt” – although this is precisely how our Lord describes it in the Lord’s Prayer (Matt 6:12) and elsewhere (e.g. Matt 18:21-35).  Our Lord uses capitalistic illustrations in His parables explaining the kingdom of God, such as in the parable of the talents (Matt 25:14-30) and the parable of the laborers in the vineyard (Matt 20:1-16).  Such teachings are not opposed to the “shepherd” imagery of our Lord, as the author claims.

I think his point would be better made by recounting what actually happened in the church, when grace became seen as a scarce product that could be earned, bought, sold, and brokered by church bureaucrats as a commodity.  This manifested itself in the medieval sale of indulgences and the treating of salvation as a physical good to be obtained by labor and/or purchase.  This failure was not because of capitalism, but because Christians lost their rightful monergistic understanding of grace.

Grace is not a substance, like gold or silver.  Grace is not scarce.  Economically, it is like the air we breathe.  It is not for sale.  It is limitless and boundless.  It is not a commodity, but rather the disposition of our Lord toward us in forgiving our sins and restoring us to life through faith and delivered to us in Word and Sacrament – in a true Paradise Restored, without money and without price (Rev 22:17).  And He does this by virtue of a transaction, the ransom payment of the debt of our sins on the cross by our Benefactor, Jesus Christ, “not with… silver or gold” (1 Pet 1:18) but “with His holy, precious blood and with His innocent suffering and death” as confessed in Luther’s Small Catechism.

I think Guyton’s criticisms are not only misguided, but harmful.  If people buy into the myth that capitalism is not in harmony with Scripture, or to take it further, that capitalism fails the church, this may encourage more people to view aggression as a godly way for the church to exist in the world through embracing unbiblical economic systems, like socialism and fascism, that have proven themselves antithetical to the Lord Jesus Christ and His kingdom, the church.

Capitalism has not failed the church, sin has.  And the Rev. Guyton’s “cure” is more of the disease itself.  The only godly and biblical economic system, benefiting Christians and non-Christians alike, is capitalism. 

“You shall not steal.”


Cap'n Salty said...

Well said, friend.

Davey said...

This is fantastic. Thank you.