Tag Archives: Economics

Why social conservatives should support free market capitalism

The free enterprise system should not be adopted simply because it is the best system for creating wealth. The best reason to support free market capitalism is a moral reason. Arthur Brooks, President of the American Enterprise Institute, and a Christian, describes the moral argument for free market capitalism.

Excerpt:

It might seem that the best case for free enterprise is the material one. Free enterprise lets people make more money, buy more and nicer stuff, and have a greater degree of comfort. The freer our economy is, the more competitive the US economy is vis-à-vis the rest of the world. And so on.

But these aren’t our best arguments. There is another reason, a transcendent reason, for which free enterprise matters most—and this is the case we all must be able to make today.

We all learned early on in school that the Declaration of Independence claimed for each of us the unalienable right to “life, liberty, and the pursuit of happiness.” Note that the founders didn’t assert a right to be happy; such is the domain of tinpots and crackpots, of 1984’s “Ministry of Plenty” and Josef Stalin’s aggrandizing self-description as the Soviet Union’s “Constructor of Happiness.” So what, in practice, does this right to pursue happiness mean?

It means the right to define and earn our happiness through our ideas, hard work, and gumption, to earn our success by creating value honestly, in our own lives and in the lives of others. It doesn’t mean the pursuit of a big lottery win or an inheritance. Those bring money, but not happiness. And a mountain of evidence shows that after a fairly low threshold, more money doesn’t make us happier. The best case for free enterprise has nothing at all to do with money or material goods or wealth. Those are just icing on the cake. We must stop talking about free enterprise as just an engine of wealth creation. It’s much more than that.

In short, the secret to the pursuit of happiness is earning our own success; creating value with our lives and in the lives of others. This earned success is the fruit of hard work and just rewards in a system built on merit. Only in a free enterprise system is effort and innovation rewarded over connections and predation. (And this means that we have to draw a distinction between free enterprise, which is based on opportunity and competition between ideas, and corporate cronyism, which is just another form of statism masquerading as free enterprise.)

Here are 3 reasons why I think that social conservatives should support free market capitalism.

1) Right to work

It’s very important for Christians to have an economic system in place that allows them to work without having to promote anti-Christians ideas. But when government gets too big, what happens is that Christians are no longer free to take any job they want, and still keep a clear conscience. In some states, you have to join a union which uses your union dues to elect Democrats, who very often are liberal on social issues. Or, you have big government forcing Christians to perform abortions against their consciences. Or, you have big government forcing Christian organizations to provide health insurance plans that cover abortions and contraceptives. That’s why Christians need to vote against big government regulations on employment – we need the freedom to work at a job that does not violate our consciences.

2) Right to earn

It’s very important for Christians to keep what they earn so that they have the maximum amount of money to make decisions that make sense for them, according to their consciences. Take the example of day care and education. The big government statist is constantly trying to to create more and more government-run day care and public schools. Why? They want to take money away from families so that they cannot afford individualized private and parochial schools, and lump them all into government run schools that are more “equal”. The problem is that this is bad for Christians who want more oversight into what their children learn. For example, what sense does it make for a Christian man to pay for day care and public schools when he marries a teacher who becomes a stay at home homeschooling mother for his children? He has to pay for day care and public schools he will never use, and it eats into the money he has to afford a stay-at-home homeschooling mom. Christians should oppose a day care and education system run by a secular leftist government. They will never reflect the values of Christian parents.

3) Right to spend

It’s very important for Christians to have the freedom to purchase products and services that make sense in their worldview. Take the example of health care. Secular leftists would love to force private medical insurance companies to cover things like abortion and contraception as health care. In some states, these things are specified as mandatory for every health care plan. That means that Christians who purchase health care are being forced to pay for services like abortion which they will never use themselves. This is nothing more than the redistribution of wealth in order to lower the cost of abortions for people, in order to encourage them to be sexually active before they are able to accommodate children. Christians need to oppose this – we do not want to have to pay for things that go against our consciences.

So, in addition to the reasons that Brooks mentioned (the happiness of earning your own way and serving others), it’s important for Christians to understand how free market capitalism fits into their plans. We do not want to support big government, especially when big government so often is not compatible with Judeo-Christian values. In the free market, it is much harder for ALL the businesses to conspire together to block Christians from working, earning and spending according to their consciences. We must resist top-down control of the free market so that we have the liberty to do what we ought to do in order to be virtuous.

Is there evidence of systemic racism in the United States?

Systemic racism is the idea that people can’t lift themselves out of poverty by making good decisions, because powerful groups in society that hold the poor down, regardless of their decisions. Do you think that America is a place where no matter what choices you make, you’ll never be able to be more prosperous? That’s what the leaders of Black Lives Matter think.

Here’s what Nikole Hannah-Jones, creator of the 1619 Project, says in the New York Times (a former newspaper):

To summarize, none of the actions we are told black people must take if they want to “lift themselves” out of poverty and gain financial stability — not marrying, not getting educated, not saving more, not owning a home — can mitigate 400 years of racialized plundering.

Got that? It doesn’t matter what individual choices a non-white person takes in America, they’re going to be poor. The “systemic racism” of the powerful whites will always keep them down. Single motherhood doesn’t make people poor, and marriage doesn’t make people wealthier. Dropping out of high school doesn’t make you poor, and getting a Masters degree in computer science won’t make you wealthier.

But let’s take a look at the data from the 2019 Census, and see the evidence:

Income By Ethnicity in America
Income By Ethnicity in America

White people are doing a bad job of keeping non-whites down

Well, it looks like at least SOME people of color are able to do well in America despite all the “systemic racism” that keeps non-whites down. And do you know what those non-white groups at the top have in common? They’ve made good decisions, they’ve worked hard, they haven’t blamed other people when they fail, and they’ve saved their money instead of spending it on shiny junk.

Let’s look at some decisions that the non-whites who are prosperous have made, that those further down have not.

Asians marry before they have children, so the kids have two parentsAsians marry before they have children, so the kids have two parents

Education and marriage

This article is written by the far-left radical Nicholas Kristof, writing in the radically-leftist New York Times (a former newspaper).

Excerpt:

A new scholarly book, “The Asian American Achievement Paradox,” by Jennifer Lee and Min Zhou, notes that Asian-American immigrants in recent decades have started with one advantage: They are highly educated, more so even than the average American. These immigrants are disproportionately doctors, research scientists and other highly educated professionals.

It’s not surprising that the children of Asian-American doctors would flourish in the United States. But Lee and Zhou note that kids of working-class Asian-Americans often also thrive, showing remarkable upward mobility.

[…]There’s also evidence that Americans believe that A’s go to smart kids, while Asians are more likely to think that they go to hard workers… Asian-American kids are allowed no excuse for getting B’s — or even an A-. The joke is that an A- is an “Asian F.”

One reason Asians students do so well is because their parents are usually married:

Strong two-parent families are a factor, too. Divorce rates are much lower for many Asian-American communities than for Americans as a whole, and there’s evidence that two-parent households are less likely to sink into poverty and also have better outcomes for boys in particular.

American blacks have a 73% out-of-wedlock birth rate. A huge difference compared to Asians.

So, when Nikole Hannah-Jones tells you that education and marriage don’t matter, she’s just wrong.

Compound interest

Education and marriage are important, but so is saving your money. The wealthiest people in America are typically the ones who are experts at saving money early, and investing it. They know about the law of compound interest. If you invest money early and leave it alone, then it will grow into a fortune by the time you are read to stop working.

This graph explains compound interest:

Don't trust people with non-STEM degrees to tell you how to get richInvesting $24,000 from age 21 to 41 vs investing $24000 from age 47 to 67

What does Nikole Hannah-Jones say when she looks at that graph? She doesn’t think that saving money makes a difference to having more or less wealth. She thinks skin color determines whether saving money makes you wealthy or not. The graph clearly shows what we should be recommending to young people of color. They need to stop spending money and start saving it, and the earlier the better. It doesn’t matter what your skin color is, saving money early JUST WORKS.

Similarly, when she says that home ownership doesn’t make you more wealthy, this is just terrible advice. It’s always better to pay down your own mortgage (at least when interest rates are low like they are now) than to pay someone else rent. You have to live somewhere, and paying for your own home is better because it costs about the same as rent, and then you get to keep the home when you’re done paying for it.

Communism

Nikole Hannah-Jones does have a “solution” to disparities in wealth. Her solution is communism. She wants to transfer money from those who earn, to those who don’t. But we already have tried that in the 20st century and it resulted in the deaths of over 100 million people. That’s not my opinion, that’s all documented in a book published by Harvard University Press.

Socialism Communism Countries Per Capita GDP Income
Socialism Communism Countries Per Capita GDP Income

You don’t even have to read the book to know the truth – just look at countries that score low on the Index of Economic Freedom, and compare their GDP per capita to countries that score high on the Index of Economic Freedom. The more communist a nation goes, the less wealth there is for the citizens. That’s why people in Venezuela are eating zoo animals and selling their bodies in prostitution for food, while nearby capitalist countries like Panama and Chile prosper. Nikole Hannah-Jones wants to reduce economic freedom, but we know by looking at other countries that this reduces per-capita GDP over time.

There’s a lot more than could be said here, but the point is that we need to be telling American blacks to make decisions that match the decisions of other successful non-white communities in America. We need to start teaching young people basic economics so they don’t fall prey to charlatans.

Five reasons why Christians ought to care about economics

This is from the Acton Institute blog.

The five:

  1. The Bible Deals with Economic Issues
  2. Economics Helps Us Understand the Public Square
  3. It Expands Our Model of Discipleship
  4. It Enhances Our Theology of Work
  5. It Illuminates the Theological Implications of Politics

I want to choose just one of these, but I have to choose two, because they rock my socks off:

2. Economics Helps Us Understand the Public Square

Second, an understanding of economics and especially of political economy can help us understand what is going on in the world around us. The general election…is impossible to follow without some understanding of the implications of Obamacare and its impact on Medicare, the federal deficit, and the long-term effects of continued deficit spending. The posturing on the part of Republicans and Democrats sometimes seems like little more than rhetoric, but the one who understands what is really at stake can help lead people to a better understanding of their responsibility in the public square.

3. It Expands Our Model of Discipleship

Third, an understanding of economics can help us pastor our people more effectively by pointing to the need for a more comprehensive model of Christian discipleship. Many people in our churches just don’t grasp that wealth is produced through work, how that in itself is a blessing to others, and then what God calls them to do with their wealth, even if they have very little of it. Taking a money management course is important to becoming a mature steward, but what most need more than that is a framework for understanding how politics, economics, and citizenship responsibilities fit into a broader discipleship model of life stewardship. In other words, they need an introduction to biblical oikonomia (“the law of the house”). And this applies to pastors and seminary professors every bit as much as it does to members of the congregation. A good place to start is by imparting some understanding of supply and demand, of fruitfulness and pay, and of how investments work (just to give a small sampling), because this will help God’s people to grasp better the role they play every day in the broad sweep of God’s mission in the world.

And now a comment from me about 2 and 3:

I wasn’t raised in the church and I don’t think of God the way that church people do. I think of God as my boss. I don’t expect God to micromanage according to some mysterious plan that I can only sense through my emotions. What he does is communicate his character and his goals in the Bible, and then he leaves it up to me to decide how to steward my resources in order to produce a return on his investment. That’s why economics, business and investing are all important to me. If I can understand how the world works, then I know how to make decisions that will help me to achieve good results, like mentoring people and supporting Christian scholars. It’s just like fixing a car or building a house. The more you know about how things work, the better it is. Feelings and intuitions have no place in decision-making, it’s knowledge all the way.

Here’s Matthew 25:14-30.

Look:

14 “For it will be like a man going on a journey, who called his servants and entrusted to them his property.

15 To one he gave five talents, to another two, to another one, to each according to his ability. Then he went away.

16 He who had received the five talents went at once and traded with them, and he made five talents more.

17 So also he who had the two talents made two talents more.

18 But he who had received the one talent went and dug in the ground and hid his master’s money.

19 Now after a long time the master of those servants came and settled accounts with them.

20 And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here I have made five talents more.’

21 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’

22 And he also who had the two talents came forward, saying, ‘Master, you delivered to me two talents; here I have made two talents more.’

23 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’

24 He also who had received the one talent came forward, saying, ‘Master, I knew you to be a hard man, reaping where you did not sow, and gathering where you scattered no seed,

25 so I was afraid, and I went and hid your talent in the ground. Here you have what is yours.’

26 But his master answered him, ‘You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed?

27 Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest.

28 So take the talent from him and give it to him who has the ten talents.

29 For to everyone who has will more be given, and he will have an abundance. But from the one who has not, even what he has will be taken away.

30 And cast the worthless servant into the outer darkness. In that place there will be weeping and gnashing of teeth.’

He’s the boss, and we are here to freely decide what we are going to do about it. If you want to do a good job, then it makes sense to do what everyone else does – learn how things work so that you can make good decisions. If I could give one other piece of advice, it would be to not put mysticism and feelings on the same level as reason and evidence. It doesn’t work in the normal workday world, and it doesn’t work when you are planning out the overall course of your life, either. Cautious works. Cautious gets results.