Tag Archives: Free Market

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.

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

What's the best way to get up from slavery?
What’s the best way to get up from slavery?

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 20 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, and my net worth is now about $1.25 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.

Wayne Grudem debates Richard Glover on the Bible, poverty and foreign aid

Two horses fight it out, may the best horse win!
Two horses fight it out, may the best horse win!

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.

Details:

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 MP3 file is here.

Summary:

Grudem:

  • 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

Brierley:

  • What’s your thesis in the book?

Grudem:

  • 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

Brierley:

  • What about the church sharing in communities in Acts 2 and Acts 4?

Grudem:

  • 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

Brierley:

  • What’s wrong with Grudem’s book?

Glover:

  • 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

Brierly:

  • For 1) what is one of the views that is not considered?

Glover:

  • 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

Grudem:

  • 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

Brierley:

  • What about foreign aid?

Grudem:

  • 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

Brierley:

  • If it’s not working, should we keep doing it?

Glover:

  • When there is an immediate need, we should do it, even if it is not a long-term solution: we need both

Brierley:

  • Should we stop foreign aid completely?

Grudem:

  • 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

Brierley:

  • Does the Bible support free enterprise as a way of creating sustainable prosperity?

Glover:

  • 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

Brierley:

  • Does 2 Cor 8-9 undermine the free enterprise system you champion in the book?

Grudem:

  • 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

Brierley:

  • Does the Bible support this focus on work?

Grudem:

  • 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

Glover:

  • 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

Grudem:

  • It’s never worked. What nation has become prosperous through foreign aid?

Glover:

  • There are lots of nations, especially in Africa, where foreign aid has helped lift them out of poverty

Grudem:

  • Name one country in Africa where foreign aud has lifted them out of poverty into sustainable prosperity

Glover:

  • I can’t think of one right now.

Grudem:

  • 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

Brierley:

  • Is he right to say that charity is a short-term solution, but that it’s not good long-term for prosperity?

Glover:

  • 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

Grudem:

  • 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

Brierley:

  • Can foreign aid be used to give poor nations a leg up on becoming prosperous?

Grudem:

  • 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

Brierley:

  • Is this free enterprise system supported by the Bible?

Glover:

  • 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?)

Grudem:

  • 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

Glover:

  • 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)

Grudem:

  • 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