A great episode of the Unbelievable podcast. This is a great debate. I really enjoyed it. All three speakers were excellent putting forward their points. It’s nice to hear an American voice, a British voice and an Australian voice debating an important issue. HIGHLY RECOMMENDED.
Wayne Grudem is a theologian known for his conservative approach to both doctrine and economics. His new book “The Poverty of Nations: A Sustainable Solution” (co-authored with economist Barry Asmus) makes the case that pouring aid into developing countries is a failed strategy. Grudem debates whether the Bible supports free market, capitalist economics with Australian economist and theologian Richard Glover who wrote a critique of the book for the Australian Bible Society.
- The Bible speaks to all of life, including economics, stewardship, government
- The study of economics helps us to understand how to take care of the poor
- My job is to apply the teachings of the Bible to all of life
- What’s your thesis in the book?
- A good system is one where the poor have the opportunity to earn and save from their labor
- Book is a response to a Kenyan couple Grudem met at a London conference on business and Christianity
- Book is not concerned with how individuals and groups can do charity to help the poor
- Our church already does that and we support individuals and groups doing charity
- The book is concerned with how should nations be transformed in order to grow economically
- What should the laws, policies and cultural beliefs of a nation be in order for it to not be poor?
- The book lists factors that have moved nations from poverty to prosperity in different times and places
- The thesis of the book is this: government should set their people free to be able to produce more
- We advocate freedom in economics: freedom to work, freedom to save, freedom to start businesses
- We believe that this free enterprise view is consistent with the Bible in a number of places
- E.g. – private property is good for prosperity (thou shall not steal) but forbidden by communism
- What about the church sharing in communities in Acts 2 and Acts 4?
- That is not redistribution of wealth among individuals and businesses by a secular government
- Those passages showed that there was voluntary sharing among Christians, which is not communism
- What’s wrong with Grudem’s book?
- The book emphasizes the Bible and the goal is to help the poor in poor countries
- Criticism 1: the book doesn’t engage with non-free-market perspectives on economics
- Criticism 2: the book doesn’t survey all that the Bible says about economics
- For 1) what is one of the views that is not considered?
- Jeffrey Sachs says that nations need a leg up before they can grow economically
- Ha-Joon Chang says that free enterprise was not how the wealthy nations became wealthy
- We do engage with other points of view, especially Jeffrey Sachs in the book
- The trouble with leftist views on economic development is that it does not work in practice
- NO COUNTRY has even been lifted out of poverty by foreign aid
- He says we don’t cite enough from the wisdom literature: we have 64 citations in the index
- He says we don’t cite enough from the gospels: we have 42 citations in the index
- He says we don’t cite enough from the epistles: we cite 22 of 27 epistles in the index
- Some economists won’t criticize cultural and moral values that hurt prosperity
- As Christians, we think that moral and cultural values are part of the problem that needs solving
- What about foreign aid?
- Foreign aid doesn’t help: a lot of the money goes into government and rulers can be corrupt
- Instead of encouraging people to start businesses, it tells people to go into government to get aid money
- Economists (lists 3) are saying that foreign aid entrenches corrupt government in power, does no good
- If it’s not working, should we keep doing it?
- When there is an immediate need, we should do it, even if it is not a long-term solution: we need both
- Should we stop foreign aid completely?
- Voluntary charitable giving from individuals and churches to help poor countries is good
- Me and my co-author are both active on our church board that helps poor countries with urgent needs
- Food and doctors are urgent needs, and we should help, but it doesn’t lift countries out of poverty
- We need a long-term solution that helps poor countries produce their own food and doctors
- We are criticizing 1) government to government aid and 2) IMF/World bank to government aid
- We have had pushback because 500,000 people make a living from this foreign aid industry
- No country has ever been lifted out of poverty into sustainable prosperity
- That’s the definition of insanity: continuing to do the same thing that has never worked
- Does the Bible support free enterprise as a way of creating sustainable prosperity?
- When I said the Bible was absent from his book, absent was a bad choice of words
- But the hundreds of references he listed were not dealth with *in depth*
- In the Scriptures, God is the one who provides (e.g. – in Ephesians, Sermon on the Mount)
- The Bible is less focused on his people making money, and more focus on sharing basics, like food
- Secular governments should just take it from people who have food and give it to hungry people
- In 2 Cor 8-9, Paul talks about voluntary sharing so everyone will be equal
- Does 2 Cor 8-9 undermine the free enterprise system you champion in the book?
- The sharing in the Bible solves cases of urgent need, it does not lift countries from poverty to sustainable prosperity
- Some older translations say “equality” in 2 Cor 8:13-14, but newer translations (e.g. – ESV) say “fairness”
- The Greek word is translated as “fairly” the only other place it appears in the NT (Col 4:1), in every translation
- God uses the means of human work and productivity to provide (daily bread is baked, doesn’t just fall from Heaven)
- In general, there’s no provision in Scripture for a person to be dependent on donations for their entire lives
- God promises Israel fields and mountains to tend and mine, but prosperity is from work, not depending on others
- Does the Bible support this focus on work?
- Working is highly praised in Scripture, (lists Bible passages that favor work over dependency)
- Countries that were exposed to this notion of work and productivity have been more prosperous
- Jeffrey Sachs and other development economists don’t say you can be prosperous through dependence
- They say that it is a necessary part of leading to nations out of poverty into poverty
- It’s never worked. What nation has become prosperous through foreign aid?
- There are lots of nations, especially in Africa, where foreign aid has helped lift them out of poverty
- Name one country in Africa where foreign aud has lifted them out of poverty into sustainable prosperity
- I can’t think of one right now.
- Our book contains a map of Africa and we looked at every nation’s per capita income
- No nation has been able to rise out of poverty through dependence on foreign aid
- The only close one is Botswana, but they have abundant freedoms, Christian morals, less corrupt government
- So Botswana is the best case and they became prosperous through becoming productive, not foreign aid
- Is he right to say that charity is a short-term solution, but that it’s not good long-term for prosperity?
- Yes, and work is a very important focus in the Scriptures as he says.
- But since the Fall work has been much harder, and may not have the outcomes that we would like
- I also believe in emergency aid for when catastrophies happen, like floods and famines
- But dependence on foreign aid enriches corrupt rulers and does not create the productivity that leads to sustained prosperity
- Can foreign aid be used to give poor nations a leg up on becoming prosperous?
- Dambisa Moyo, Oxford-educated economist from Zambia, says stop the aid, it’s doing more harm than good
- Jeffrey Sachs’ view is that foreign aid hasn’t worked yet, but just keep trying a bit more
- What works: limited government, rule of law, fair courts, documented property rights, low taxes, stable currency
- People are creative and want to work, we just have to get government out of the way and let people work, earn and save
- Is this free enterprise system supported by the Bible?
- The wealthy nations of the world did not become wealthy through productive work and free enterprise policies
- Ha-Joon Chang: free enterprise policies have never brought a country from poverty to wealth
- E.g. – wealth is created through tariffs (not by innovating and by economic freedom?)
- I’ve read Ha-Joon Chang’s book, and his examples are very selective and limited
- Index of Economic Freedom: the freest countries are the most prosperous, the least free countries are the most poor
- When you look at macro data, instead of very selective examples, the free enterprise system is best for prosperity
- The book doesn’t do enough to engage with leftist economists (he doesn’t say which ones)
- Just because nations who are free are rich, doesn’t mean freedom causes productivity
- There are parts of the Bible that doesn’t support the free enterprise system (he names none)
- The Bible is focused on work not dependency, and charity not government redistribution
- The best way to help the poor in other countries is by encouraging work and productivity
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