Tag Archives: Wealth

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

Why should a woman marry a man while she’s still under 25?

Married men seem to enjoy a boost in earnings from age 23-43
Married men seem to enjoy a boost in earnings between age 22-45

I saw a bunch of pro-marriage friends were tweeting about this article from the St. Louis Federal Reserve which talks about how well married men do financially compared to single men, and using it as a reason to argue that men should get married. The article from the St. Louis Reserve doesn’t have much commentary, but this article from the far-left Washington Post by Brad Wilcox has a lot to say.

Excerpt:

Marriage has a transformative effect on adult behavior, emotional health, and financial well-being—particularly for men.

[…]Men who get married work harder and more strategically, and earn more money than their single peers from similar backgrounds. Marriage also transforms men’s social worlds; they spend less time with friends and more time with family; they also go to bars less and to church more.

[…]Our research, featured in a recent report, “For Richer, For Poorer: How Family Structures Economic Success in America,” indicates that men who are married work about 400 hours more per year  than their single peers with equivalent backgrounds. They also work more strategically: one Harvard study found that married men were much less likely than their single peers to quit their current job unless they had lined up another job.

This translates into a substantial marriage premium for men. On average, young married men, aged 28-30, make $15,900 more than their single peers, and married men aged 44-46 make $18,800 more than their single peers.

That’s even after controlling for differences in education, race, ethnicity, regional unemployment, and scores on a test of general knowledge. What’s more: the marriage premium operates for black, Hispanic, and less-educated men in much the same way as it does for men in general.

For instance, men with a high-school degree or less make at least $17,000 more than their single peers.

So, what about these differences between married men and single men? Are men able to earn more if they have a wife to support them and care for their needs? Or is it just that women prefer men who are already able to take care of themselves?

Well, in most cases, it’s the former:

2. Married men are motivated to maximize their income. For many men, this responsibility ethic translates into a different orientation toward work, more hours, and more strategic work choices. Sociologist Elizabeth Gorman finds that married men are more likely to value higher-paying jobs than their single peers.

This is partly why studies find that men increase their work hours after marrying and reduce their hours after divorcing. It’s also why married men are less likely to quit a current job without finding a new job. Indeed, they are also less likely to be fired than their single peers.

3. Married men benefit from the advice and encouragement of their wives. Although there is less research on this, we suspect that men also work harder and more strategically because they are encouraged to do so by their wives, who have an obvious interest in their success. One study appears to buttress this point, finding that men with better-educated wives earn more, even after controlling for their own education.

4. Employers like married men with children.  There is evidence that employers  prefer and promote men who are married with children, especially compared to their childless male peers and to mothers. Married men are often seen as more responsible and dedicated workers and are rewarded with more opportunities by employers. While illegal bias and long-held stereotypes appear to play a role in this historic preference, it nonetheless helps explain why married family men get paid more.

Now what’s the purpose of me writing this? Well, I’m actually NOT writing this to pressure men to get married. Why not? Because although marriage was a pretty good deal 100 years ago, it’s not as good of a deal under the current laws and policies, e.g. – no-fault divorce, the threats of false accusations, the Sexual Revolution, etc. So I wouldn’t advise a man to rush into marriage to just anybody in order to get the financial (and health) benefits of having a wife. Marriage is only safe when you choose a woman carefully.

But I am writing this to women who are being told by the culture to delay marriage, and especially to delay marriage to use your youth and beauty to “have fun” with boys who won’t commit to marriage. If a woman loves a marriage-focused man and really wants to take care of him and support him, then early marriage is one of the very best ways to really help him during the years (22-45) when it really makes a difference. Marrying a man who wants marriage when you’re still young means that he will have many, many measurable benefits.

It’s important to marry a man when the marriage has the potential to do the most good for him in areas like health, career, finances and children. Men typically don’t want to marry women who are older, because they have more sexual experience and because they get used to giving a man sex in order to get him to do what she wants. Once a woman gets used to doing this, it becomes much harder to trust a good man to lead, and to give a man respect as a leader.

In addition, men know that women never change who they are really attracted to. If a woman chooses superficially attractive men who won’t commit over and over, then even if she “settles” for a man later on, she probably won’t be able to be attracted him. Men know not to choose women who won’t value them for their traditional moral values, conservative politics and ability to perform traditional male roles like providing. Men know that a woman who feels that she is “settling” for less than she deserves is more likely to disrespect him, and to withhold sex from him.

Now pro-marriage parents and pro-marriage pastors will typically tell you that they want to let their daughters decide when to marry, so that they will be happy having “fun” before marriage, and happy being provided for after marriage. But when those women are done playing the field and in their mid-thirties, their relatives and pastors are not thinking about what men’s interests are. They’re thinking about how to get this woman married, regardless of the man’s interests. And men know that. So they aren’t going to be bullied or shamed into a marriage after the window when it benefits them has closed. If parents and pastors want their daughters married AT ALL, then they need to encourage women to be self-controlled and marriage-focused EARLY.

Jay Richards: How to end poverty in 10 tough steps

I saw that Stand to Reason’s Amy Hall blogged about a lecture by Jay Richards, a Christian expert in economics. Amy linked to this post by Justin Taylor which summarizes the talk (above).

Summary:

  1. Establish and maintain the rule of law.
  2. Focus the jurisdiction of government on maintaining the rule of law, and limit its jurisdiction over the economy and the institutions of civil society.
  3. Implement a formal property system with consistent and accessible means for securing a clear title to property one owns.
  4. Encourage economic freedom: Allow people to trade goods and services unencumbered by tariffs, subsidies, price controls, undue regulation, and restrictive immigration policies.
  5. Encourage stable families and other important private institutions that mediate between the individual and the state.
  6. Encourage belief in the truth that the universe is purposeful and makes sense.
  7. Encourage the right cultural mores—orientation to the future and the belief that progress but not utopia is possible in this life; willingness to save and delay gratification; willingness to risk, to respect the rights and property of others, to be diligent, to be thrifty.
  8. Instill a proper understanding of the nature of wealth and poverty—that wealth is created, that free trade is win-win, that risk is essential to enterprise, that trade-offs are unavoidable, that the success of others need not come at your expense, and that you can pursue legitimate self-interest and the common good at the same time.
  9. Focus on your comparative advantage rather than protecting what used to be your competitive advantage.
  10. Work hard.

His book “Money, Greed and God” is a perfect introduction to economics and how it relates to the Christian worldview. I always encourage Christians to move beyond good intentions to good results by studying economics. We are supposed to be helping the poor, but how should we do it? Economics is the science that allows us to understand which policies we should support to do that.

New study: being raised by married parents has huge positive effect on economic well-being

Marriage and family
Marriage and family

Here’s some of the findings from the Institute for Family Studies.

Excerpt:

Wilcox and Lerhman found that growing up in a two-parent family correlated with many positive outcomes for kids, well into adulthood. For example:

  • Growing up with both parents reduced the probability for dropping out of high school by 15 percent for men and 9 percent for women.
  • Growing up in an intact family reduced women’s chances of becoming single mothers by 12 percent and men’s chances of being nonresidential fathers by 5 percent.
  • Both men and women who grew up in intact families enjoyed substantial marriage premiums. Young men who grew up in intact families earned, on average, more than $6,500 more in personal income and more than $16,000 more in family income than their peers who grew up in single-parent families. Young women from intact families earn more than $4,700 in personal income and more than $12,000 more than their peers from single-parent families.
  • Growing up with both parents also increased young adults chances of marrying themselves. Men who grew up in intact homes were 10 percent more likely to get married than their peers who grew up in single-parent families. Women who grew up in intact homes were 12 percent more likely to marry.

Individuals who grow up in intact homes are more likely to marry and once they do, they are the recipients of a host of benefits associated with being married.

  • Married men age 28–30 earn nearly $16,000 more, on average, than their single peers. Their family income is nearly $22,000 higher than their single peers. And the marriage premium for men extends to less-educated and minority men who are often at a disadvantage in the work force. Married young men with only high-school educations, for example, earned more than $17,000 more than their single peers.

I don’t like to blog about these things without solutions. I have some of my own (school choice, abstinence education funding, repeal no-fault divorce, defund Planned Parenthood, double the child tax credit for married couples, provide a carry forward tax credit to each married parent for ALL income earned by children before age 21, etc.).

But the new study has some solutions too:

Wilcox and Lehrman do make recommendations for strengthening lower and middle-class families. They recommend eliminating marriage penalties from the tax code, while increasing the child credit and the earned income credit maximum. They also recommend improving vocational training and launching a national campaign that encourages young adults to follow the ”success sequence”: education, job, marriage, children.

I think a lot of kids of my generation should be reading studies like this and wondering “what did the party of premarital sex, no-fault divorce, abortion and gay rights do for me?”. If your political party embraces policies that encourage people to see sex as recreational instead of a way of producing creatures who then become the responsibilities of parents, you are in the wrong political party. The Democrat party is the part of selfishness, and that’s why they attack marriage. Marriage is about restraining adults so that children benefit, and every selfish Democrat policy that damages marriage damages children.

As Dennis Prager says:

Even today, after decades of feminism, most Americans agree that it is better for women and men — and society — when women and men marry. Yet when women marry, it is bad for the Democratic Party; and when women do not marry, even after — or shall we say, especially after — having children, it is quite wonderful for the Democratic Party.

Married women vote Republican. Unmarried women lopsidedly vote Democrat. It is both silly and dishonest to deny that it is in the Democrats’ interest that women not marry.

They have no reason to strengthen marriage, and their policies (sex education, no-fault divorce, single mother welfare, gay marriage, etc.) don’t strengthen marriage. It sounds like such a nice thing to want to not shame people for premarital sex and divorce. After all, we want people to feel good no matter what they choose, right? But there is a price to pay for this “tolerance” of adult selfishness – it’s paid by their children. That’s what happens when we put feelings about moral boundaries.

Can blacks and Hispanics blame their troubles on racism by whites?

Does government provide incentives for people to get married?
The success of children is due to their parents’ choices, not from outside racism

If the underperformance of blacks and Hispanics in America were caused by racism by whites, then it follows that Asian-Americans would be underperforming as well. But Asian-Americans are outperforming whites. Let’s look at three reasons why, and see if blacks and Hispanics can learn how to succeed by looking at the Asian example.

Here is the summary of this post:

  1. Asian Americans marry before they have children
  2. Asian Americans save more of what they earn
  3. Asian Americans monitor their children’s educational progress

Now let’s take a look at each of these in order.

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

1. Asian Americans marry before they have children

This article is from Family Studies.

It says:

Eight in ten Asian-American kids live with married birth parents, compared with about seven in ten European-American kids, five in ten Hispanic-American kids, and only about three in ten African-American kids. Half of black children live with their mothers only, compared to three in ten Hispanic children, less than two in ten white children and less than one in ten Asian children.

Naturally, children who have two parents to look after them do better, because one parent alone cannot work and do household chores and monitor the children as easily as two parents can. The decision about whether to have sex before marriage is entirely under the control of the grown-ups. It cannot be blamed on racism, poverty and other non-moral pre-occupations of the secular left. Marriage is a moral issue, and Asian-Americans do the moral thing, and marry before they have children.

Asian household wealth set to surpass whites
Asian household wealth set to surpass whites

2. Asian Americans save more of what they earn

This article from CNN Money explains:

Asians have had higher median incomes than their white counterparts, according to a new study by the Federal Reserve Bank of St. Louis. The typical Asian family has brought home more money for most of the past two decades.

[…][Asians] will surpass whites in net worth in the next decade or two, Fed researchers said.

[…]In 1989, the median Asian family had about half the net worth of its white peer. By 2013, they had more than two-thirds.

The gap between whites and blacks and Hispanics, meanwhile, remained little changed over that time period.

Asians have similar financial habits to whites, in terms of investing and borrowing. Both groups are more likely than blacks and Hispanics to invest in stocks and privately-owned businesses and to have more liquid assets, which serves as a buffer against financial shocks. And, on average, the former have about half as much debt as the later.

As a result, Asians and whites have more financial stability than blacks and Hispanics, which also allows the former to build more wealth.

Everyone has to earn and save money, but in some cultures, it becomes normal to not save part of what you earn. That needs to stop. But it has nothing to do with discrimination due to skin color. In Asian culture, there is no glorification of consumer spending on sparkles, bling and other ostentatious wealth. Asians don’t want to appear to be wealthy, they want to actually be wealthy – by saving money.

Composite SAT scores by race and income levels
Composite SAT scores by race and income levels: Asians outperform at every income level

3. Asian Americans monitor their children’s educational progress

This article from Investors Business Daily explains how Asian parents don’t just make demands on their kids to learn, they actively monitor their progress and talk to their kids’ teachers:

Asian-American parents tend to oversee their children’s homework, hold them accountable for grades and demand hard work as the ticket to a better life. And it pays off: Their children are soaring academically.

[…]As a group, Americans need to take a page from the Asian parents’ playbook. American teens rank a dismal 28th in math and science knowledge, compared with teens in other countries, even poor countries.

Singapore, Hong Kong, South Korea, Japan and Taiwan are at the top. We’ve slumped. For the first time in 25 years, U.S. scores on the main test for elementary and middle school education (NAEP) fell. And SAT scores for college-bound students dropped significantly.

[…]Many [Asian students]from poor or immigrant families, but they outscore all other students by large margins on both tests, and their lead keeps widening.

In New York City, where Asian-Americans make up 13% of overall students, they win more than 50% of the coveted places each year at the city’s eight selective public high schools, such as Bronx Science and Stuyvesant.

What’s at work here? It’s not a difference in IQ. It’s parenting. That’s confirmed by sociologists from City University of New York and the University of Michigan. Their study showed that parental oversight enabled Asian-American students to far outperform the others.

No wonder many successful charter schools require parents to sign a contract that they will supervise their children’s homework and inculcate a work ethic.

You can see an updated image with the latest scores here.

It’s not enough to just outsource the education of your children to a bunch of non-STEM education-degree-holding teachers. Teachers can be good, and some work very hard. But the Democrat teacher unions prevent the firing of teachers who underperform. This is especially true in non-right-to-work states (Democrat states). So, you cannot depend on teachers to educate your children, and Asian parents don’t. That’s why their kids learn. Performance of children in school is not affected by discrimination against skin color, it’s affected by the level of involvement of parents.

Conclusion

We have learned that the success of Asian-Americans in America is all earned. And this proves that there is no such thing as “racism” that holds back non-whites. If blacks and Hispanics imitated the behaviors of Asians (not whites, but Asians), then they would achieve just as well as Asians do. It’s not a race problem, it’s a behavior problem. It’s not a “racism” problem, it’s a behavior problem. It’s an us problem, it’s not a them problem.