Christianity and Economics
For good reason economics is traditionally labeled “the dismal science.” Even the best economists in the world radically disagree with each other about how best to predict a society’s economic future and how best to program its distribution of goods so as to promote universal well-being.
One reason for that is radically differing presuppositions about wealth (defined here as the “goods” of a society). For example, is wealth limited or can it grow? Is distributive justice a zero-sum game or can new wealth be created? Economists disagree, but what you believe about that makes all the difference in the world. It might appear that wealth is being “grown,” but zero-sum game economists argue that is always illusion (on paper only). Zero-sum game economists argue that the only “real” goods are physical ones—land and what’s on it and in it. Everything else is “only on paper.”
There are numerous other, profound differences of presuppositions about economics and distributive justice. But this one is basic. “Distributive justice” is where economics and ethics meet. For example, if you believe wealth can be increased, you will tend to hold a different opinion about distributive justice than if you believe it cannot be increased. If wealth can be increased, then you might be less concerned about managing distributive justice than if you believe wealth cannot be increased.
Still and nevertheless, even if wealth can be increased, not everyone is going to be able to share in the wealth of society due to various kinds of disabilities such as infancy and youth, physical or mental challenges, even simple bad luck. Distributive justice—whether religious or secular—is the determination of how best, if at all, for society to distribute its wealth.
Everyone is aware of the simple (even simplistic) “spectrum” of economic beliefs about distributive justice—from “far right” to “far left.” At the “far right” of the spectrum is the belief called Social Darwinism popularized by philosopher-novelist Ayn Rand (d. 1982). Many philosophers of economics regard her Social Darwinist view called “objectivism” as supported by Harvard ethics philosopher Robert Nozick (d. 2002). In this view, to which many Christians also subscribe, society ought not to redistribute wealth. Capable individuals create wealth or discover wealth and society’s “weak” must fend for themselves. To “take from the rich and give to the poor” in any way is against nature and reason. Of course, individuals are always free to engage in acts of charity, but society itself has no obligation to the weakest and poorest among them. Government redistribution of wealth requires enormous government machinery that inevitably detracts from individual freedoms. Also, helping the weak and the poor corrupts the gene pool and creates dependence. It also undermines incentives to discover and invent.
At the “far left” of the spectrum is communism supported by philosopher Karl Marx (d. 1881) and those inspired by his social theories. According to this belief the wealth of society ought to be relatively equally distributed: “From each according to his ability; to each according to his need.” The secular argument for communism is that any other program of distributive justice inevitably leads to class warfare and eventual anarchy. Communism prevents class warfare and is more humane than Social Darwinism.
The weaknesses of those two “ends of the spectrum” seem obvious. Social Darwinism and its accompanying laissez faire capitalism leads to a social underclass composed not only of those who do not care to work but also of those who are, for various reasons, unable to work (i.e., contribute to the discovery and/or creation of wealth). Communism leads to dependence on the government and lack of incentive to discover or create wealth. Therefore, most Western economic theorists have attempted to create economic programs of distributive justice somewhere between these two extremes.
*Sidebar: The opinions expressed here are my own (or those of the guest writer); I do not speak for any other person, group or organization; nor do I imply that the opinions expressed here reflect those of any other person, group or organization unless I say so specifically. Before commenting read the entire post and the “Note to commenters” at its end.*
Socialism comes in varieties all of which attempt to combine systems of incentives and rewards (to encourage participation in invention, discovery and creation of wealth) with systems of government managed redistribution of wealth. In much of Western and Northern Europe, for example Denmark, “democratic socialism” is considered the norm. There people and corporations are taxed very highly (about fifty percent) and the democratically elected government manages the economy to redistribute wealth according to John Rawls’ “maximin principle”—maximizing the minimum of standard of living without abolishing freedoms or incentives. One example of this is a very high minimum wage; another example is free education for all citizens from birth through graduate school. Yet, individuals and groups are relatively free, with some government regulation and oversight, to start businesses and even become wealthy. But nobody is allowed to become “super wealthy.” The government provides jobs in order to keep “being on welfare” from becoming permanent. Universal employment is the ideal and the goal even if that means the government employs a very large percentage of the population.
Modern managed capitalism (non-laissez faire capitalism) also comes in varieties all of which emphasize economic incentives for discovering and creating wealth, minimizing government intervention, management and welfare. Here the government functions economically primarily as an “umpire” to keep corporations and individuals from becoming too powerful (e.g., forbidding corporate monopolies) while at the same time encouraging wealth-creation by, for example, taxing investment income at a lower rate than earned income. Redistribution of wealth is usually restricted to free education, usually only at the primary and secondary levels, and to minimal welfare for the poor, especially the disabled.
Democratic socialism and modern managed capitalism overlap a great deal, but have different impulses which pull them toward one end of the spectrum of distributive justice or the other. However, both see the necessity of both incentives to discover and create wealth and some degree of government management of the economy and redistribution of wealth.
There are other modern theories of economics and distributive justice, but, when carefully examined, most, if not all, fall under one of these four “umbrella” categories.
It is easy to find Christian thinkers who support all of the theories—as “middle axioms” (whether they call them that or not) for implementing Kingdom ethics within the world that is not yet the Kingdom of God.
Some Christian thinkers strongly support communism without the Marxian atheism which they argue is not part and parcel of communism as an economic theory. Some of them argue that communism ought to begin within the church and then spread out from there into society outside the church. Others think Christians should “jump” directly into the political-economic debate and even struggle and link arms with secular communists to help bring that system about through, if necessary, revolution. Their argument is that in the Kingdom of God there will be no differentiating wealth, so we Christians cannot be comfortable with it here and now. (Mexican liberation theologian Jose P. Miranda in Marx and the Bible.)
Some Christian thinkers strongly support laissez faire capitalism usually without calling it or even recognizing it as Social Darwinism. (Many would deny that it is based on that philosophy.) These Christians usually believe original sin and human depravity require strong incentives to work and that government “big enough” for any other economic system will inevitably trounce on individual freedoms including religious freedom. (U.S. Catholic theologian Michael Novak in The Spirit of Democratic Capitalism and Protestant Marvin Olasky in The Tragedy of American Compassion. These Christian thinkers believe the churches, not the government, should care for the poor, although they make certain exceptions in emergencies.)
Note that it is possible to be a communist with regard to how the church should practice distribute justice within itself and not be a communist with regard to how the social-economic order outside the church should function.
Some Christian thinkers strongly support democratic socialism as a compromise position that takes seriously the human tendency to become dependent on government welfare programs but also recognizes that the churches cannot take care of all the poor by themselves. Many of these Christian thinkers argue that churches should practice a form of socialism within themselves with or without Christian pressure on government to help. Many of them believe Christians should speak out passionately in favor of socialism as their societies’ policies of distributive justice. (Examples: Stanley Hauerwas for the church to practice a kind of socialism within itself and Walter Rauschenbusch and his contemporary heirs for Christians to pressure society to adopt socialism.)
Some Christian thinkers strongly support modern managed capitalism (non-laissez faire capitalism) as a compromise that takes seriously both humans’ sinful greed and sloth. For them, the Kingdom is definitely “not yet” and modern managed capitalism is the best social public policy that takes that reality seriously while at the same time taking care of the destitute (“deserving poor”). Whether the church should be involved in implementing or sustaining this social system differs among Christian thinkers who support it. Most Christians who support it regard it as the United States’ basic system in the 21st century and only seek to defend it from change into another system. But they differ among themselves about how well it works and how best to “fine tune it” to preserve it in a changing world and make it work better for everyone.
One can easily find all four of these major options for economic distributive justice among Christians around the world. My own view is that, in God’s coming messianic Kingdom on earth, there will be no poverty but there will be differentiating wealth. Therefore, I find John Rawls’s (d. 2002) justice as fairness theory most compatible with the coming Kingdom of God and the not-yetness of that Kingdom. For me it serves as a middle axiom for helping me decide, for example, for whom to vote.
Rawls argued that under the “veil of ignorance” (a hypothetical convention developing a society’s social contract and policies where participants do not know their advantages and disadvantages, only that there will be such) every rational person would vote for a society that balances freedom and what he called the “maximin” principle. There would be incentives to discover and create wealth with its resulting differentiation of wealth based on abilities and effort. But there would also be built in programs to redistribute wealth. The “maximin” principle is simply the idea that whenever a portion of the population enjoys an increase in standard of living those “at the bottom” automatically benefit as well. The distributive justice system of economics is “built” to maximize the minimum without destroying incentives to discover and create wealth. This, of course, requires some system of redistribution of wealth such as a highly graduated income tax together with free education, free job training and welfare for those who cannot work. Exactly how best to implement Rawls’s theory is not detailed by Rawls himself. He simply laid out the principles. I think this theory of economic justice/distributive justice best fits with Jesus’ teachings about money and wealth, the reality that fallen people need incentives to invent and work, the not-yetness of the Kingdom of God, and the importance of working against systems that contradict and undermine the coming Kingdom of God. Personally, I think democratic socialism (e.g., “Scandinavian socialism”) is the existing economic system closest to Rawls’ intentions and to the spirit of the Kingdom of God in its “already-ness” and “not-yet-ness.” It combines realism and idealism. It serves as the most helpful middle axiom for Christian distributive justice in the economic realm.
Back, however, to the church. It is entirely possible to hold one of the four “ideal types” of secular economic theory and practice (distributive justice) for the social order outside the church and a different one for the church itself.
It seems to me that the church ought to practice a kind of communism within itself—not necessarily a “common purse” (no private property at all, the church holding all property “in trust” for the members and assigning it according to need)—but an ethos in which everyone’s private property is not really “private” but is at the disposal of whoever needs it. Every Christian church ought to be an “intentional Christian community” that practices distributive justice within itself by making sure no member suffers from loss or lack of goods needed to live a life of well-being and no member hoards wealth above and beyond what is needed for a comfortable life of well-being. Of course, the “devil is in the details,” but if each church followed this basic principle to the best of its ability it would come closer to being the “Kingdom outpost” it is meant to be.*
*There was a time when many Christian churches practiced something like this but often without a set of explicit rules for governing it and working it out in practice. For example, the church I grew up in from birth to age eleven openly called living in luxury and “conspicuous consumption” a sin. Member were expected to give their excess money to the church (or denomination) for support of the poor within the church and of the church’s various “outreach ministries” (especially “foreign missions”). I well remember a family of the church who became relatively wealthy and drove to church on Sundays in a new luxury automobile. The pastor paid them a “personal pastoral visit” and reminded them that greed and luxury are sins and that they should sell the car, buy a less expensive one, and give the proceeds to the church. He also preached occasionally sermons against “the sin of conspicuous consumption.” The wealthy family left the church. Whenever a church member fell into a poverty situation through no clear fault of their own, the church “took up a ‘love offering’” to meet their needs (not their wants). No member’s wealth, goods, was considered his or her “own” to dispose of in any way; it belonged in some sense to everyone in the church and ultimately to God.
*Also and furthermore, Martin Luther, among other great Christian leaders of long ago, believed that the ideal society would be one with a common purse. He never tried to enforce that, but he taught it as what ought to be the case in a truly Christian society. So “socialism” is not an idea that began with Karl Marx. Pietist leader Philip Spener believed and taught that it is the duty of government to guarantee universal employment. That was in the 1700s. Ancient Patriarch of Constantinople John Chrysostom taught that the luxuries of the rich should be redistributed to the poor. The idea that individualistic economics, economic libertarianism, is and always has been part and parcel of Christianity is simply ignorant.
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