Tag Archives: Free Market

Jay Richards: what should Christians know about economics?

Here’s a good basic introduction to the free enterprise system by Dr. Jay Richards:

Here is the description:

In this edition of the Evangel Guest Lecture Series, Jay W. Richards discusses his book on the capitalist system within the context of the Christian faith and examine how enterprise based on hard work, honesty, and trust fosters creativity and growth.

Jay W. Richards, PhD, is author of many books including the New York Times bestseller Infiltrated (2013). Richards is a senior fellow at the Discovery Institute, and executive editor of The Stream. In recent years he has been a distinguished fellow at the Institute for Faith, Work & Economics, contributing editor of The American at the American Enterprise Institute, a visiting fellow at the Heritage Foundation, and research fellow and director of Acton Media at the Acton Institute.

It turns out that the best system for lifting the poor out of poverty – by work or charity – is the economic system that creates wealth through human ingenuity and hard work. That system is the free enterprise system.

Something to read?

If you can’t listen to the lecture and don’t want to buy the whole book “Money, Greed and God?” Then I have a series of posts on each chapter for you.

The index post is here.

Here are the posts in the series:

  • Part 1: The Eight Most Common Myths about Wealth, Poverty, and Free Enterprise
  • Part 2: Can’t We Build A Just Society?
  • Part 3: The Piety Myth
  • Part 4: The Myth of the Zero Sum Game
  • Part 5: Is Wealth Created or Transferred?
  • Part 6: Is Free Enterprise Based on Greed?
  • Part 7: Hasn’t Christianity Always Opposed Free Enterprise?
  • Part 8: Does Free Enterprise Lead to An Ugly Consumerist Culture?
  • Part 9: Will We Use Up All Our Resources?
  • Part 10: Are Markets An Example of Providence?

Parts 4 and 5 are my favorites. It’s so hard to choose one to excerpt, but I must. I will choose… Part 4.

Here’s the problem:

Myth #3: The Zero Sum Game Myth – believing that trade requires a winner and a loser. 

One reason people believe this myth is because they misunderstand how economic value is determined. Economic thinkers with views as diverse as Adam Smith and Karl Marx believed economic value was determined by the labor theory of value. This theory stipulates that the cost to produce an object determines its economic value.

According to this theory, if you build a house that costs you $500,000 to build, that house is worth $500,000. But what if no one can or wants to buy the house? Then what is it worth?

Medieval church scholars put forth a very different theory, one derived from human nature: economic value is in the eye of the beholder. The economic value of an object is determined by how much someone is willing to give up to get that object. This is the subjective theory of value.

And here’s an example of how to avoid the problem:

How you determine economic value affects whether you view free enterprise as a zero-sum game, or a win-win game in which both participants benefit.

Let’s return to the example of the $500,000 house. As the developer of the house, you hire workers to build the house. You then sell it for more than $500,000. According to the labor theory of value, you have taken more than the good is actually worth. You’ve exploited the buyer and your workers by taking this surplus value. You win, they lose.

Yet this situation looks different according to the subjective theory of value. Here, everybody wins. You market and sell the house for more than it cost to produce, but not more than customers will freely pay. The buyer is not forced to pay a cost he doesn’t agree to. You are rewarded for your entrepreneurial effort. Your workers benefit, because you paid them the wages they agreed to when you hired them.

This illustration brings up a couple important points about free enterprise that are often overlooked:

1. Free exchange is a win-win game.

In win-win games, some players may end up better off than others, but everyone ends up better off than they were at the beginning. As the developer, you might make more than your workers. Yet the workers determined they would be better off by freely exchanging their labor for wages, than if they didn’t have the job at all.

A free market doesn’t guarantee that everyone wins in every competition. Rather, it allows many more win-win encounters than any other alternative.

2. The game is win-win because of rules set-up beforehand. 

A free market is not a free-for-all in which everybody can do what they want. Any exchange must be free on both sides. Rule of law, contracts, and property rights are needed to ensure exchanges are conducted rightly. As the developer of the house, you’d be held accountable if you broke your contract and failed to pay workers what you promised.

An exchange that is free on both sides, in which no one is forced or tricked into participating, is a win-win game.

If you do get the book, be sure and skip the chapter on usury. It’s just not as engaging as the others, in my opinion.

Why you should read “Up From Slavery” by Booker T. Washington

Lately, my friends have been very excited that I’m a non-white conservative. They want me to answer the grievances of BLM people, and explain from my own experiences what Christianity and conservative policies have to say about making the lives of non-whites better. My friend Wes recommended “Up From Slavery” by Booker T. Washington to help me focus my thoughts.

Here’s a summary of the book:

Dignity through Labor

Over the course of Up From Slavery, Washington develops the idea and ideal of dignity through labor. For Washington, the gravest aspect of the institution of slavery is the denigration of labor for both blacks and whites. Because the enslaved had no personal investment or return on their labor, they did not complete their work with an attitude toward improvement. Likewise, whites, largely deprived of meaningful labor, were robbed of the ability to achieve self-sufficiency. In both races, this produced personalities and characters that seek to escape labor. Washington emphasizes labor as the only way to make oneself useful in an interdependent, modern society. Throughout the whole of Up From Slavery, Washington searches for and obtains work. Further, once he obtains it, Washington completes all labor to best of his ability, no matter how lowly the task. At the Tuskegee Institute, Washington makes this idea and ideal a foundational ethos. All students who study at the Tuskegee Institute must learn a trade or industry alongside their more traditional academic pursuits. In addition, many of the buildings, most of the furniture, the wagons, and the materials used at the school are produced by students. This level of practical skill and diligence also acts as the foundation of Washington’s theory and program for racial uplift.

Selflessness, Desire to Be Useful to One’s Community

The people that Washington most admires and models himself after are those he labels selfless. Washington defines this as the willingness to work on the behalf of others. For Washington, this is not only about duty or labor, but also about the willingness to do one’s best for the benefit of the collective good. Washington believes that racial prejudice can be overcome if black people make themselves indispensable to their communities and their nation. The brick-making episode provides an example. Though the brick-making enterprise at Tuskegee felled three kilns before successfully producing bricks, the venture eventually proved successful and the school began to sell its bricks on the open market. Washington describes how whites who were unsympathetic or apathetic to the education of blacks and the overall project of the Tuskegee Institute were willing to purchase Tuskegee bricks due to their quality and convenience. Washington suggests that if black race can find their niche in society by fulfilling a need, then they can co-exist peacefully and productively with whites.

Impracticality of Political Agitation

Throughout Up From Slavery, Washington defends his ideas about racial advancement and uplift by subtly undermining the proposals of his critics. Though Washington does not explicitly state his objection to the strategies of specific thinkers like W.E.B. Dubois or even his predecessor, Frederick Douglass, he nevertheless highlights the wastefulness of political agitation for equal rights at every chance he gets. To do this, Washington shows that political agitation results in worse relations and outcomes than those that existed before. For example, when he goes home to Malden after his second year at the Hampton Institute, Washington finds that both the salt-furnace and the coal-mine are not in operation due to worker’s strikes. In Chapter IV, Washington describes how strikers usually spent all their savings during the strikes and returned to work in debt, but at the same wages. He raises the impracticality of political agitation again after his controversial Atlanta Exposition speech. After the success of his speech, he hypothetically asks if a black man would have been invited to give a speech had people agitated to put a black person on the program. He answers in the negative, saying that such opportunities can only arise through merit.

And here’s a summary of his most famous speech:

On September 18, 1895, Booker T. Washington was selected to give a speech that would open the Cotton States and International Exposition in Atlanta, Georgia. The speech, which is often referred to as the “Atlanta Compromise,” was the first speech given by an African American to a racially-mixed audience in the South. In it, Washington suggested that African Americans should not agitate for political and social equality, but should instead work hard, earn respect and acquire vocational training in order to participate in the economic development of the South. By doing so, eventually, he stated, African Americans would gain the respect of white society and be granted the rights of full citizenship.

There’s a free full audio version of the book, and the full text is online. I recommend this book to people of all races, because as the sexual anarchy brought on by feminism becomes widespread, the majority of the children of tomorrow will face the same kinds of challenges.

I see Washington’s ideas as consistent with a Christian worldview, where we don’t expect to be treated fairly. We expect sinful people to treat us badly. What Christianity says is to be patient, and focus on your relationship with God and loving your neighbor. And one way to love your neighbor is to sell them something valuable that you made through your labor. Another way is to work and save, and give to charity.

Government solutions to problems like racism and poverty aren’t a top priority for Christians. Most of all, we need the freedom to be good, and to do good. That’s priority one. You may not make your life better by being moral and diligent, but it’s rare that doing so causes you to harm yourself. It’s very important that you not harm yourself.

So, this dovetails nicely with my own story. My married non-white parents were not smart enough or willing enough to monitor my education, but they were clear that they wanted me to do well in order to find good-paying work. So I completed my BS and MS in a STEM field, and went to work right away, and I’ve been at it continuously for 22 years now. I save most of what I earn for charity and early retirement.

I’ve never experienced any of the racism or police brutality that American blacks complain about. And that’s because I follow what Washington is teaching. I dress in a clean way that doesn’t communicate danger to others. I’m careful to spend my time reading apologetics, economics and military history. I don’t listen to popular music or watch popular TV or movies. I don’t hang out with people who blame other people for their lack of success.

I got my first job by volunteering to do it for free on Saturdays for 7 months. My first full-time job salary after college was $50,000. Then I got a raise of $6,000 and then a raise of $9,000. I used to work 70 hour weeks in my 20s. I graduated college with $9,000 dollars in the black, because I went to a small local college and lived at home, and never spent any money on alcohol. My net worth is now about $1.35 million. By the way, the secret to becoming wealthy is to not spend money on showing off. You can be very generous to your friends and still get rich. Just never buy anything that is designed to communicate “status” to anyone. And never spend money on alcohol or chasing sex outside of marriage.

At no time did I accept that the problems defined by the secular left were my real problems. And at no time did I accept their “solutions” as real solutions to anything. As black economist Thomas Sowell writes, the “solutions” of the left are not effective at helping people like me. The “solutions” of the left are designed to make leftists feel better, and look more virtuous to others. You are much better off reading the Bible, Christian apologetics, free market economics, American military history, etc., and then respecting what you learn from that in your decision-making. I think that reading the right stuff is even more important than having good parents or attending church.

Why you should read “Up From Slavery” by Booker T. Washington

Lately, my friends have been very excited that I’m a non-white conservative. They want me to answer the grievances of BLM people, and explain from my own experiences what Christianity and conservative policies have to say about making the lives of non-whites better. My friend Wes recommended “Up From Slavery” by Booker T. Washington to help me focus my thoughts.

Here’s a summary of the book:

Dignity through Labor

Over the course of Up From Slavery, Washington develops the idea and ideal of dignity through labor. For Washington, the gravest aspect of the institution of slavery is the denigration of labor for both blacks and whites. Because the enslaved had no personal investment or return on their labor, they did not complete their work with an attitude toward improvement. Likewise, whites, largely deprived of meaningful labor, were robbed of the ability to achieve self-sufficiency. In both races, this produced personalities and characters that seek to escape labor. Washington emphasizes labor as the only way to make oneself useful in an interdependent, modern society. Throughout the whole of Up From Slavery, Washington searches for and obtains work. Further, once he obtains it, Washington completes all labor to best of his ability, no matter how lowly the task. At the Tuskegee Institute, Washington makes this idea and ideal a foundational ethos. All students who study at the Tuskegee Institute must learn a trade or industry alongside their more traditional academic pursuits. In addition, many of the buildings, most of the furniture, the wagons, and the materials used at the school are produced by students. This level of practical skill and diligence also acts as the foundation of Washington’s theory and program for racial uplift.

Selflessness, Desire to Be Useful to One’s Community

The people that Washington most admires and models himself after are those he labels selfless. Washington defines this as the willingness to work on the behalf of others. For Washington, this is not only about duty or labor, but also about the willingness to do one’s best for the benefit of the collective good. Washington believes that racial prejudice can be overcome if black people make themselves indispensable to their communities and their nation. The brick-making episode provides an example. Though the brick-making enterprise at Tuskegee felled three kilns before successfully producing bricks, the venture eventually proved successful and the school began to sell its bricks on the open market. Washington describes how whites who were unsympathetic or apathetic to the education of blacks and the overall project of the Tuskegee Institute were willing to purchase Tuskegee bricks due to their quality and convenience. Washington suggests that if black race can find their niche in society by fulfilling a need, then they can co-exist peacefully and productively with whites.

Impracticality of Political Agitation

Throughout Up From Slavery, Washington defends his ideas about racial advancement and uplift by subtly undermining the proposals of his critics. Though Washington does not explicitly state his objection to the strategies of specific thinkers like W.E.B. Dubois or even his predecessor, Frederick Douglass, he nevertheless highlights the wastefulness of political agitation for equal rights at every chance he gets. To do this, Washington shows that political agitation results in worse relations and outcomes than those that existed before. For example, when he goes home to Malden after his second year at the Hampton Institute, Washington finds that both the salt-furnace and the coal-mine are not in operation due to worker’s strikes. In Chapter IV, Washington describes how strikers usually spent all their savings during the strikes and returned to work in debt, but at the same wages. He raises the impracticality of political agitation again after his controversial Atlanta Exposition speech. After the success of his speech, he hypothetically asks if a black man would have been invited to give a speech had people agitated to put a black person on the program. He answers in the negative, saying that such opportunities can only arise through merit.

And here’s a summary of his most famous speech:

On September 18, 1895, Booker T. Washington was selected to give a speech that would open the Cotton States and International Exposition in Atlanta, Georgia. The speech, which is often referred to as the “Atlanta Compromise,” was the first speech given by an African American to a racially-mixed audience in the South. In it, Washington suggested that African Americans should not agitate for political and social equality, but should instead work hard, earn respect and acquire vocational training in order to participate in the economic development of the South. By doing so, eventually, he stated, African Americans would gain the respect of white society and be granted the rights of full citizenship.

There’s a free full audio version of the book, and the full text is online. I recommend this book to people of all races, because as the sexual anarchy brought on by feminism becomes widespread, the majority of the children of tomorrow will face the same kinds of challenges.

I see Washington’s ideas as consistent with a Christian worldview, where we don’t expect to be treated fairly. We expect sinful people to treat us badly. What Christianity says is to be patient, and focus on your relationship with God and loving your neighbor. And one way to love your neighbor is to sell them something valuable that you made through your labor. Another way is to work and save, and give to charity.

Government solutions to problems like racism and poverty aren’t a top priority for Christians. Most of all, we need the freedom to be good, and to do good. That’s priority one. You may not make your life better by being moral and diligent, but it’s rare that doing so causes you to harm yourself. It’s very important that you not harm yourself.

So, this dovetails nicely with my own story. My married non-white parents were not smart enough or willing enough to monitor my education, but they were clear that they wanted me to do well in order to find good-paying work. So I completed my BS and MS in a STEM field, and went to work right away, and I’ve been at it continuously for 22 years now. I save most of what I earn for charity and early retirement.

I’ve never experienced any of the racism or police brutality that American blacks complain about. And that’s because I follow what Washington is teaching. I dress in a clean way that doesn’t communicate danger to others. I’m careful to spend my time reading apologetics, economics and military history. I don’t listen to popular music or watch popular TV or movies. I don’t hang out with people who blame other people for their lack of success.

I got my first job by volunteering to do it for free on Saturdays for 7 months. My first full-time job salary after college was $50,000. Then I got a raise of $6,000 and then a raise of $9,000. I used to work 70 hour weeks in my 20s. I graduated college with $9,000 dollars in the black, because I went to a small local college and lived at home, and never spent any money on alcohol. My net worth is now about $1.35 million. By the way, the secret to becoming wealthy is to not spend money on showing off. You can be very generous to your friends and still get rich. Just never buy anything that is designed to communicate “status” to anyone. And never spend money on alcohol or chasing sex outside of marriage.

At no time did I accept that the problems defined by the secular left were my real problems. And at no time did I accept their “solutions” as real solutions to anything. As black economist Thomas Sowell writes, the “solutions” of the left are not effective at helping people like me. The “solutions” of the left are designed to make leftists feel better, and look more virtuous to others. You are much better off reading the Bible, Christian apologetics, free market economics, American military history, etc., and then respecting what you learn from that in your decision-making. I think that reading the right stuff is even more important than having good parents or attending church.