Tag Archives: Economics

Commentary

Five reasons why Christians ought to care about economics

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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.

News

San Francisco book store closes after minimum wage increase

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Important story from the most leftist city in America.

ABC News:

Independent bookstores have faced tough times for quite a while. In San Francisco, neighborhood businesses have been passionately protected, so it’s hard to believe that an initiative passed by voters to raise the minimum wage is driving a Mission District bookstore out of business.

San Francisco’s minimum wage is currently $11.05 an hour. By July of 2018, the minimum wage in San Francisco will be $15 an hour. That increase is forcing Borderlands Bookstore to write its last chapter now.

[…]Borderlands was turning a small profit, about $3,000 last year. Then voters approved a hike in the minimum wage, a gradual rise from $10.75 up to $15 an hour.

“And by 2018 we’ll be losing about $25,000 a year,” he said.

It’s an unexpected plot twist for loyal customers.

“You know, I voted for the measure as well, the minimum wage measure,” customer Edward Vallecillo said. “It’s not something that I thought would affect certain specific small businesses. I feel sad.”

Though it’s caught a lot of people off guard, one group that wasn’t completely surprised was the Board of Supervisors. In fact, they say they debated this very topic before sending the minimum wage to the voters.

“I know that bookstores are in a tough position, and this did come up in the discussions on minimum wage,” San Francisco supervisor Scott Wiener said.

Wiener knows a lot of merchants will pass the wage increases on to their customers, but not bookstores.

“I can’t increase the prices of my products because books, unlike many other things, have a price printed on them,”

Wiener says it’s the will of the voters. Seventy-seven percent of them voted for this latest wage hike.

Unexpected!

Let’s review the facts on minimum wage, and then I can make fun of one of my friends in my conclusion.

Abstract from new National Bureau of Economic Research study:

We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. Methodologically, we show that our approach identifies targeted workers more precisely than the demographic and industrial proxies used regularly in the literature. Additionally, because we identify targeted workers on a population-wide basis, our approach is relatively well suited for extrapolating to estimates of the minimum wage’s effects on aggregate employment. Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.

That comes out to 1.4 million workers.

Harvard economist Greg Mankiw explains the top 14 views that a majority professional economists agree on, and here’s #12:

12. A minimum wage increases unemployment among young and unskilled workers. (79%)

OK, now the funny part.

I know someone who is a fairly committed Christian. He is also an unemployed graduate student. He doesn’t understand anything about politics or economics. He is also single, and looking for a girlfriend. He messages me periodically about new girls he is interested in, and he asks me “is she pretty?”. He asks that for each new girl. I try to tell him that there is more to women than just appearances, but this guy looked at my list of courting questions on Christian worldview and he thought it was a joke. Appearance is everything – he wants Barbie with a Bible.

He asked me what I thought of this one lady he liked. I went on her Facebook page, and I found out that she was in favor of minimum wage hikes. So I messaged her and linked her to some peer-reviewed studies by economists showing that minimum wage hikes hurt young, minority workers most – they can’t get an entry-level job to start themselves off. And she said, and I quote: “oh, that appeal to authority doesn’t work on me at all xD”. She is in high school, but wants to study philosophy. I hope she doesn’t borrow money for that, but I think that she probably will.

She writes:

it has barely effected (sic) price ranges at all for corporations who’ve been required to raise the wage. the fact is, corporations have never been trustworthy with voluntarily treating their workers well. our best years were ones where banks and corporations were very heavily regulated.

No evidence was provided for that statement, of course. The money comes from… magic beans! Or something.

I think my friend just likes attention from women, and that they like that he doesn’t ask them hard questions, or tell them when they are wrong about anything. He’s a good student, but I wouldn’t take his advice on anything real-world until he grows up. But I think his tendency to affirm anything a woman says to him will make him very popular with a certain subset of women.

News

As Christianity declines in Europe, churches are put up for sale

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This sad story is from the Wall Street Journal.

Excerpt:

Two dozen scruffy skateboarders launched perilous jumps in a soaring old church building here on a recent night, watched over by a mosaic likeness of Jesus and a solemn array of stone saints.

This is the Arnhem Skate Hall, an uneasy reincarnation of the Church of St. Joseph, which once rang with the prayers of nearly 1,000 worshipers.

It is one of hundreds of churches, closed or threatened by plunging membership, that pose a question for communities, and even governments, across Western Europe: What to do with once-holy, now-empty buildings that increasingly mark the countryside from Britain to Denmark?

[…]The closing of Europe’s churches reflects the rapid weakening of the faith in Europe, a phenomenon that is painful to both worshipers and others who see religion as a unifying factor in a disparate society.

[…]The Church of England closes about 20 churches a year. Roughly 200 Danish churches have been deemed nonviable or underused. The Roman Catholic Church in Germany has shut about 515 churches in the past decade.

But it is in the Netherlands where the trend appears to be most advanced. The country’s Roman Catholic leaders estimate that two-thirds of their 1,600 churches will be out of commission in a decade, and 700 of Holland’s Protestant churches are expected to close within four years.

[…]As communities struggle to reinvent their old churches, some solutions are less dignified than others. In Holland, one ex-church has become a supermarket, another is a florist, a third is a bookstore and a fourth is a gym. In Arnhem, a fashionable store called Humanoid occupies a church building dating to 1889, with racks of stylish women’s clothing arrayed under stained-glass windows.

In Bristol, England, the former St. Paul’s church has become the Circomedia circus training school. Operators say the high ceilings are perfect for aerial equipment like trapezes.

In Edinburgh, Scotland, a Lutheran church has become a Frankenstein-themed bar, featuring bubbling test tubes, lasers and a life-size Frankenstein’s monster descending from the ceiling at midnight.

Jason MacDonald, a supervisor at the pub, says he has never heard complaints about the reuse. “It’s for one simple reason: There are hundreds and hundreds of old churches and no one to go to them,” Mr. MacDonald said. “If they weren’t repurposed, they would just lie empty.”

Many churches, especially smaller ones, are becoming homes, and that has spawned an entire industry to connect would-be buyers with old churches.

The churches of England and Scotland list available properties online, with descriptions worthy of a realty firm. St. John’s church in Bacup, England, for example, is said to feature “a lofty nave as well as basement rooms with stone-vaulted ceilings,” and can be had for about $160,000.

There are many reasons why Christianity has declined in Europe, but surely the widespread embrace of left-wing economic policies – even by evangelical Christians – is one of the largest.

Here’s a fairly recent paper (PDF) that explains it:

What accounts for cross-national variation in religiosity as measured by church attendance and non-religious rates? Examining answers from both secularization theory and the religious economy perspective, we assert that cross-national variation in religious participation is a function of government welfare spending and provide a theory that links macro-sociological outcomes with individual rationality. Churches historically have provided social welfare. As governments gradually assume many of these welfare functions, individuals with elastic preferences for spiritual goods will reduce their level of participation since the desired welfare goods can be obtained from secular sources. Cross-national data on welfare spending and religious participation show a strong negative relationship between these two variables after controlling for other aspects of modernization.

I have many friends in the UK who classify themselves as evangelical Christians. They almost all embrace moderate to leftist economics, and they complain to me about why the church is in decline, why there is no interest in apologetics, why they can’t find Christian girlfriends, why they can’t get speaking engagements. The answer is, of course, that by majoring only in theology and apologetics, they have crafted the rope that their secular allies in government are using to hang them. Leftism is embraced by European Christians in part because they don’t want to be like those dastardly Americans with their free enterprise system and their rule of law and their private property and their law-abiding gun ownership.

It just goes to show you why Christianity suffers when we focus on piety at the expense of practicality. Too much A. W. Tozer, not enough F.A. Hayek. I doubt my well-meaning UK Christian friends – who are so proud of their laughable NHS health care – even know who F.A. Hayek is. To think that Lady Thatcher ones brandished “The Constitution of Liberty” by F.A. Hayek and declared “this is what we believe!”. But ordinary UK Christians do not believe what she believes, and now they must reap what they sowed with their knee-jerk rejection of the free enterprise system. Ignorance of economics killed Christianity in Europe, and pious, risk-averse Christians were willing participants in the murder.