I was struck this morning that only days after the last Chilean miners were rescued, mining accidents happened in Ecuador and China killing 21 and trapping others. No one in the media seems to recognize our own connection and complicity in these disasters.
They mine because we buy.
Copper mines in Chile help make our air conditioners run.
Coal mines in China fuel the energy demands of their booming economy fueled primarily by the cheap we goods we continue to gobble up even in this down economy.
This gold mine in Ecuador is still mining for the precious metal which our economy is only tangentially based on anymore, a leftover from the sordid colonial history of Latin America.
An excellent article titled Capitalism didn’t save the miners points out that even though the drill bit that rescued them was crafted by All-American ingenuity and made in the USA, capitalism also created the very conditions that forces poor people to continue to pursue one of the most dangerous jobs on the planet.
Rather than continue just reporting these tragedies as tragic human disasters and ignore the reality that continues to make them happen, why don’t we take these disasters as a chance to question the prevailing assumptions and economic order that places these people in peril in Chile, Ecuador, China and Appalachia.
Photo from FT.com
Transforming the Body 
Allison Kilkenny seems to forget that her job exists because of the profit motive. Huffpo pays journalists & bloggers while selling advertisements. Their management makes sure that the revenue > cost, hence earning a profit. Ariana Huffington’s fortune was the result of the profit motive, and hence, so is the Huffington Post– just like the Wall Street Journal. The WSJ’s point about the drill bit is true– no government commissar told the company to make that drill bit or how to design it. It did it because they estimated the cost of producing it would be less than the price someone would be willing to pay for it. That’s not evil.
It’s no secret why fewer miners died when the price of copper was low– fewer miners were working in the mine. Demand for copper was less, the wages the miner could pay was lower, and people went to work doing other things.
From what I saw on the news, several of the miners say they’re going back to the mines because it’s what they know how to do. No one is putting a gun to their head to work there. They’re doing it because they estimate the benefit they get (wages, benefits, etc.) are higher than the benefit they could get doing something else. It’s that simple. Some say they’d have been willing to take lower wages in exchange for more money spent on better safety. But some of them say they would rather have had the higher wage without the safety and take the risk. That was their choice, why does Allison Kilkenny, or you, or me, need to make a different one for them?
The car you drive in, the airplane you’ll fly to Boliva in, the banking system that will allow people to donate to you, the techniques you’ll use to farm, were all developed by people responding to incentives (called profit).
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As always I appreciate your thoughts and comments, but this seems to have touched a nerve. You seem pretty worked up about a lot of things I didn’t say. Just because I’m critical of capitalism, doesn’t mean I expect the world to suddenly be different when I wake up tomorrow. That would be silly.
My main point was recognizing our own connectedness to these things happening in other parts of the world. Most people watched the news about Chilean miners and had no thought whatsoever about their connection to those miners. Regardless of whether you think the system is right or wrong, at least you’re aware of the connection. Most North Americans are not.
Maybe it was just because it was a HuffPo article that got you all worked up. They’re not a regular news source of mine, but the article sparked some thinking about the way these tragedies are reported and the ways we ignore our connection to them.
In your analysis I think you ignore a lot of what we know about poverty and choices people make. It’s kind of circular to say the system works because miners choose something that they don’t have a choice about. The “no one is putting a gun to their head” argument is not a good one. Doesn’t economics tell us that people behave in certain ways for a reason (rational choice theory, i think). Drug dealers are responding to the economics of their situation and making it work. It’s not a good thing, but it’s a rational choice given the circumstances. Mines are not safe and no one in our privileged context would choose to do it, but people in Appalachia and all over Latin America do it, because it is a rational choice given the circumstances. How does that mean that it’s a good choice or the best choice? Mexicans and others choose to cross the Arizona desert risking their life in order to gain some economic benefit. These are choices we can encourage or discourage by the way we make the rules.
Glad to hear your response.
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It was mainly the article that touched a nerve, but your comment that capitalism “forces” people to do certain activities and that we should “question the presumptions and economic order” is also problematic. You are correct in pointing out that it’s our consumption that creates demand and drives up the price of copper, creating incentives for more more people to choose to enter into a dangerous profession. But that doesn’t lead me to question the basic presumptions of the economic order (capitalism, the price system) — namely that people respond to incentives. The price system really is creating higher standards of living in Chile than countries without it.
My point and your point about miners responding to incentives (rationally) is the same. The “rules” of the game are basic property rights–which is what allows people to respond to those incentives. You can’t eliminate the dangerous copper mining without eliminating those incentives, and hence capitalism. Yes, capitalism (the price system) created the incentives that led those miners to choose to mine. But why is that a thing for which we should question or look to change the “rules?” Computers, air conditioners, x-ray machines, telephone switches and indoor plumbing all use copper. If we change the “economic order” we would presumably have to eliminate those things. (I’d also point that a lot of people died in mines in the USSR as well, where people didn’t have a choice to move or do something else. Changing the rules from the price system to a central planning system doesn’t seem to save lives or alleviate poverty).
The workers in the mine were working there because the benefit was greater than what they could have earned elsewhere. So, one worker can earn and provide and save, and hopefully his children will be able to have a better life than he had, and find a higher-paying and safer job (probably b/c he’s more educated and more skilled). But he understands the risk involved.
So, what needs to be in place are those “better” jobs and perhaps an education system that allows people to become more productive. Chile has much more of that in place than most other South American countries because they’ve had a longer history of enforcement of property rights and allowing the price system to work. But there will always be high risk jobs or low-paying jobs (and workers in those jobs). Those jobs need to exist for the “better” jobs to exist. We have to ask, which economic order best allows people to move from low-skilled to high-skilled jobs over time, which system best improves the lot of the ordinary person? The evidence of history, with Chile as a decent example, clearly answers “capitalism.”
The HuffPo author chooses to not mention that had the mine collapse occurred in another country the outcome may have been very different. Chile has had one of the most “free” markets in South America for some time, and consistently higher economic growth and higher standards of living. This has led to stronger infrastructure and buildings that have been more able to survive earthquakes of similar magnitude that devastated a poorer country like Haiti that has not sought to protect basic property rights and hence no one has much incentive to produce. That same infrastructure helped save the miners, which is worth mentioning.
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This is why people like you and me need to continue to be in conversation. It is important to hear the realities of the system and how it does sometimes improve lives. There are plenty of counter examples where the push to get countries into the global economy has been detrimental, indebting them to International Financial Institutions and attaching strings to loans that force countries to behave in ways that benefit their trade partners more than themselves.
As an economist, I am glad you have such faith in capitalism as the best system we have. As a theologian, I believe there must always be a prophetic voice that challenges the injustices and imperfections of that system whether it’s capitalism, socialism or any other system we choose to dream up. You don’t have to bash capitalism or throw it out to admit that our current system causes plenty of injustice around the world. If we only shrug our shoulders and say. “Well, this is the best we can do,” then we have lost the biblical vision of the kingdom that calls us continually to a different order and a different way of living.
That is… unless you really believe capitalism is either ordained by God or will get us to the Promised Land. If so capitalism has become an idol, as I think it has for many, especially those who benefit most from it.
Note: Before you say it… Talking about capitalism as a monolith may not be helpful or accurate. I’m talking about the current state of the global economy, not the theories of Adam Smith. There are many nuances to consider in any economic system, but that’s not really my point.
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I agree about the conversation. It’s one I wish I could have with many people on my own campus currently. And with guys like Shane Claiborne.
Capitalism isn’t clearly visible in Scripture but there’s definitely a theology of work and definite expression and defense of property rights in both OT and NT. Property rights with the understanding that God is the ultimate owner.
I find most people who rail against capitalism aren’t actually railing against capitalism but rather dishonesty and corruption by people in the system. Her talk about Wall Street, for example. Believing that every person taking out a home loan would a) repay or b) not repay but it doesn’t matter because the value of their house is always going to go up, isn’t very good business sense but it’s what the financial banks were basically believing. It’s sort of like saying “I’ll make a profit by selling winter coats in the summer.” Capitalism says you should be free to try it and fail. The investment banks tried it and failed and being such a large & important part of our economy caused the rest of the economy to take a hit, too. But there is no regulation that can solve that problem, other than discouraging entrepreneurs from taking risk altogether.
Bernie Madoff wasn’t actually selling/producing anything– he just said he was and went to jail for the lie. There is no regulation that can completely prevent people from lying or stealing.
Here’s an application where someone could criticize the system:
The mine owner might have market power– basically, the ability to make profit in the long run due to a monopoly power (maybe he owns the only mine or has protection from competition). He violated workplace safety laws because he didn’t want to incur the cost of compliance. Perhaps the workers agreed to this, they’d rather have the higher wage than see more money spent on safety. But perhaps they did not. Perhaps the cost simply would have shaved a little off his profit but wouldn’t have affected their wages. In doing so, he risked their lives in order to maximize his profit.
The cost to upgrade safety should be incurred only if the benefit (reduction of probability of the life saved multiplied by the value of a life) outweighs the cost. If indeed the benefits outweighed the cost and he didn’t do it just to pad his pockets, he was being greedy and murderous and sinful. So, it’s not capitalism to blame but the greed of someone with monopoly power.
Adam Smith’s answer to this problem would be “competition.” The more jobs there are in Chile, the more alternative jobs competing for workers and bidding up the wage. If the miner wants to keep workers he’ll have to pay them more or upgrade safety or give better benefits, etc. so that everyone is better off. He didn’t want to upgrade, but now he pretty much has to by that “invisible hand.” Competition means in the long run he can’t make the same level of profit. It’s the free market that creates those opportunities–entrepreneurs have incentive to start new businesses.
Scripture’s answer is that even without competition the mine owner shouldn’t be greedy and murderous and that God will judge him for doing so. The Christian mine owner can demonstrate that he’s different by putting more emphasis on safety and less on his bottom line. If the mine is publicly owned, then Christian shareholders should encourage the CEO to do the right thing.
That’s how I look at it, anyway.
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While I might not agree with every detail, I think your response is hellpful and instructive. I’m not sure scripture’s definition of property rights so easily supports our understanding. Jubilee is a much more flexible understanding of property rights. If God has ultimate ownership, then it seems to suggest that redistribution is sometimes okay if it promote economic opportunity for more people. There are countries struggling with this right now, including the one that will soon be our new home. The indigenous in Bolivia were displaced and systematically dispossessed of their land. How does the free market system deal with historic and systemic oppression that has created inequalities? If you slap the free market on top of those historic and systemic injustices it only exacerbates the problem.
Your example about mine owners and safety is a good one. I’m not sure that Massey Energy has monopoly power, but their safety practices caused the deaths of 29 miners in Appalaichia. Some of that can be attributed to personal greed and sin, but I think we should also consider the profit motive as a potentially (if not often) negative force. You’re right in pointing out that the profit motive could be used for positive or negative purposes. Part of the problem I see is that we’ve created a dualism where things are seen as primarily individual or primarily collective. The truth is that these are not separate forces. The mine owner makes his own decisions and must be held responsible through regulations or market forces, but he does not make those choices in a vacuum. There are systemic, corporate, social forces that shape us and pressure us to act in certain ways.
This may be hard for you as an economist, especially as one who teaches (or has taught? what are you doing now) economics to others, but what would an ideal economy look like shaped by your faith as well as economic ideas? I feel like economists are sometimes so bogged down in the facts of reality that they can’t see creative new possibilities for the future that might deconstruct the current paradigm. Now, the struggle to get from here to there is a difficult one, but if you don’t try and imagine what there looks like, you aren’t going to get very far. So what would Justinomics be?
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Justinonomics would have to look like Leviticus 25. (I would note that Israelites displaced a lot of indigenous peoples as well, just as an aside).
1. Affirmation of private property rights. We can buy and sell land and use that land. (People
2. A command to be mindful of the poor. The fallow laws and allowing them to pick up what is dropped, for example.
3. A reminder that God is ultimately the owner. In Jubilee we give the property back to its original owners. That means we hold things loosely.
The DISincentives facing rational people in this chapter are astounding. What incentive do I have to take care of the land if I just have to give it up at Jubilee? What incentive do I have to lend money to someone when they know the debt will be canceled in a few months (if it’s close to Jubilee, for example)? I’d be much better off picking up my dropped grain and selling it.
So, God is clearly calling people to behave spiritually and not rationally.
This system works well if everyone agrees God is the King, as they did in Leviticus 25, and as they would in my ideal world. But in our actual world, very few people agree that God is the King.
So, who can live like God is king? Christians in community. I like the ideas spelled out in Rich Christians in an Age of Hunger for this and in Halteman’s Clashing Worlds of Economics and Faith for this. It’s working, it’s affirmation of property rights (which we still see in Acts, by the way), but it’s being very loose with what we have.
Now, what’s absent from Leviticus 25 is capitalism, which requires saving and investment for the purpose of capital formation. The loaning out at interest in Leviticus 25 is not the loaning out of interest that we see today. (ex: I borrow to start a business and return some of my profit to the lender as the price of having that start-up money). That idea didn’t exist until centuries after Christ. What people were doing in Lev. 25 was saying “I have more then enough money to eat. You do not have enough to eat. I will give you some of my money to eat but you have to pay me extra for it. And if you can’t repay you will be my slave.” That’s what God is condemning here, not loans for capital investment.
So, given that we have that idea today and that it’s beneficial to society, I include that capitalist concept in my ideal Justinomics society.
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I love the idea that our economics could be based on the concept of “holding things loosely.” I think that’s very biblical and not the way we hold things today. I think Matthew 5:42 points out our addiction to things and money by challenging us to give freely. Good stuff!
I’m not sure Leviticus 25 is an affirmation of private property rights as much as it is God’s acknowledgement of the reality of human existence and sinfulness. The Jubilee is a corrective to a problematic way of life, not an affirmation of it. Deuteronomy 15:18 recognizes that the Sabbatical laws were counter intuitive and addresses the exact problem you mention of DISincentives.
I don’t agree entirely with Halteman’s assessment that the current economic order renders biblical economics in some sense moot and pointless because we don’t live in that world. The Jubilee was never practical and was probably never practiced.
I agree that we should hold in tension the way things are and the way they should be, but I’m not sure we should add capitalism to the Jubilee as the way God intends for the world to be. I think they should continue to be held in tension. I think the principle you mentioned in Lev 25 applies today. I often get the feeling that our financial system is often a way to mask injustice or make it seem less than it is in reality. I have appreciated stories on the ground from NPR’s Planet Money about Haiti that point out their entrpreneurial spirit, but also recount their terrible history of that country and the injustices that continue there. Even though I respect your voice as an economist, I firmly believe that the voices of the poor must inform and maybe play the most important role in how we think about improving people’s situations. Simply increasing the G8 to the G20 does not accomplish lifting up the voice of the poor.
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I disagree with this take on Lev 25:
“I’m not sure Leviticus 25 is an affirmation of private property rights as much as it is God’s acknowledgement of the reality of human existence and sinfulness.”
But you think God established that people could buy/sell property, and have the right to it (“thou shalt not steal or covet”) sort of like he permitted people to divorce–out of the hardness of their hearts? That makes private property rights sound like a necessary evil. It’s a hypothesis, but not one I’m sure stands up well.
Paraphrasing from someone else’s textbook here:
Francis Wayland was a 19th century Baptist member, president of Brown University and summed up the Christian case for private property in his treatise on ethics, The Elements of Moral Science. The right to property in his mind is made to known to us 3 ways:
1. Our conscience. “It’s mine” never has to be taught to a child. Property is expressed by possessive pronouns in all languages. People naturally feel that whatever violates their private property is wrong.
2. Created order bears witness to the rightness of private property. Countries that do not protect private property rights have less capital stock, more poverty than those that do (no incentives to produce). Without private property, Wayland notes, the human race must perish or exist in wretchedness. Civilization develops and nature is better preserved where property rights are enforced.
3. Scripture teaches us in many places that the violation of someone else’s property is wrong. Stealing profanes the name of God (Proverbs 30:9). Acts 5:4 Peter tells Ananias that their property was theirs to do with as they saw fit. Judaic law forbid the movement of property boundaries (Deut 19:14).
Our property is a gift from God that we are to use to glorify him. Leviticus 25 illustrates that to me.
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The purpose of the laws were always a response to the sinfulness and brokenness of the people. To respond to the 19th century Baptist argument:
1. It is very difficult to scientifically prove that property rights are some how innate or genetic. Scientists have a very difficult time distinguishing between nature and nurture in these cases. My children pick up influences all the time from the culture around them and cues that we are unaware of. It should also be noted that this is not a very good argument for something being “right” or from God. If you believe that anything in our world is tainted by sin and brokenness then you can’t simply argue from nature that something is good.
2. Created order might be what happened in Gensis 1-2 whatever you believe about how that happened, but there has been a lot of human intervention between then and now. To argue that private property is divinely appointed because countries with private property are more successful is like saying that God ordained Bill Gates better than all of us because he has more money… obviously he’s doing something right.
3. Again I’ll refer to my previous statement. The law was given to help people live in a broken sinful world, not as a prescription for utopia. It makes sense that you should learn how to live in the world. I’m not going to live very long or get a long well if I act as if private property doesn’t exist, because it is a reality in the world we live in. It’s a pretty big leap to argue that it was God’s intention for the world.
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Your criticisms are all valid. If there was no fall, would there be private property? Probably not, because there would also be no scarcity (no scarce resources to allocate).
I believe that God laid things out in Lev 25 and other places in the OT law as the best for Israel. And that clearly included respecting other people’s property, with the view that ultimately it was all God’s. And I think the voice of history seems to speak loudly that civilization develops best where property rights are affirmed.
Rodney Stark (history prof, I think) there at Baylor wrote a book entitled The Victory of Reason. His thesis is that Christianity led to the development of capitalism and the rise of the West. He lays out a better historical argument of how Christianity has wrestled with the issues above.
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Lucas,
I think what most people that are pro capitalist forget, is the true driving force in the world. Hunger. It’s been that way since the beginning of man’s existence. Capitalism, in short, exploits that force. True, nobody is putting guns to peoples heads and forcing them down into the mines or other jobs, but when faced with hunger people will do what they need to do to survive. The more restrictive the local area, (lack of opportunities) the more ability the force of hunger will have to drive man to take any opportunity offered him in order to survive.
Capitalism, being driven by the profit motive, uses that force to absolutely exploit that need for survival in man. The arguments about capitalism being the best way to create opportunities for a better life for the masses is pure B.S. Capitalism, takes human dignity and sells it to the lowest bidder. Capitalism enslaves the working class. It cares nothing about giving opportunities for better lives. It only seeks to move into an area, consume that area’s resources then move on to another area to do the same thing. In a nutshell, capitalism is a virus. Trying to justify capitalism as a biblical concept is a joke, They’ve been trying to sell that line to Americans for years. Sadly the church bought into it.
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Justin- I don’t think we live in a world of scarcity. I understand the economic concept, but I think the assumption is not biblical and maybe the source of a lot of our probably. Related to Tony’s point hunger is not (and never has been) a problem of production, only distribution. The closer we live to the earth and to God’s economy the more I think we will realize there is abundance. If I don’t need my own everything, house, car, tools, mower, etc., but share things in common I begin to see the abundance I have in relationships and in resources. It’s our own self-sufficiency, which I think capitalism (more accurately consumerism) is fueling, that tells us the lie that we live in scarcity.
I read Stark’s Rise of Christianity in seminary. Very interesting, but also very controversial in the world of sociology of religion. I would be interested in this other book.
Tony- thanks for jumping in. good thoughts.
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I can’t take Tony G’s comments seriously. First because he gives a grossly inaccurate understanding of “capitalism” and second because it sounds that he claims to be “enslaved,” a word that shouldn’t be tossed around lightly. The vast majority of human history has been lived under despotism. If he wants to reject a price mechanism for distributing resources then what is his proposed alternative? Is he going to decide who should get what? Some other planner?
There have been experiments with other systems over the centuries, from China to European collectives to the early pilgrims here– the results didn’t work so well. I’ve lived in former Soviet countries, would be glad to show Tony G what happens when you remove price from the equation in an effort to make outcomes equal. Nobel laureate Amartya Sen points out that famines never occur under democracies. Why do you think that is?
I stand by my declaration that capitalism is the best system for improving the lot of the common man because the evidence is overwhelming. And no system this side of heaven is perfect.
We live in a sinful, fallen world. The Israelites with God as ever-present King struggled with following the intent of the law like with Jubilee. Is Tony G proposing a system where everyone in the world benevolently shares and justice exists without the world submitting to God? What alternative to a price mechanism does he propose?
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“I don’t think we live in a world of scarcity.”
Lucas, did you put gas in your car this week? Did you buy groceries? Why did you do that, if you already had plenty? Did you pay for it? Why did you pay for it if there’s an unlimited supply of gas and food to be found everywhere? Why are you going to Bolivia? They already have plenty of people with your exact skill set, they don’t need another. (I don’t think you understand the definition of scarcity.)
A community may have enough mowers, tools, people, etc. to be shared but there is still a limited number of them— that’s the definition of scarcity.
Suppose we have one chainsaw in the community and a large number of trees down. Who gets to use the chainsaw first, second, etc? Is it first-come, first-serve? Is it determined by need or by who is most deserving? If so, how do we determine who “needs” it the most or is the most deserving? That becomes subjective. We can have a central planner–someone who just says “he gets the chainsaw first,” but that concentrates power in the hands of someone we have to trust to be benevolent. We can vote on it, but chances are someone will be unhappy with the outcome and will be made worse off.
That’s a simple example of a scarcity problem. A price mechanism works well to allocate the resource to the maximum benefit of the society. (Doesn’t have to be “dollars,” can be anything that we agree upon for the exchange).
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Why does it always have to be one extreme or the other. We’re either capitalists or communists. Why cant we find a middle ground like democracy? Why can’t we have a regulated economic system that ensures fair labor practices, fair trade, equal opportunity for a comfortable life for all. I don’t have the answers nor do I ever think I will. I do know that capitalism exploits mans basic need for survival. I do know that it’s not founded in Scripture. I do know that the force that drives capitalism is the profit motive and the profit motive gives license for greed and greed is the root for the love of money and the love of money is the root for all kinds of evil.
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Tony G,
I agree that capitalism is not found in Scripture. There was no idea of saving for the purpose of lending for the accumulation of capital. Saving was simply foregone consumption. Borrowing was done to meet current consumption needs (like swiping a credit card because you don’t have the money) and the OT forbid Israelites to lend to each other in such a way.
But you do see in several places an affirmation of property rights. And you also see entrepreneurs earning profits (which comes when you have affirmation of property rights).
“Fair trade” means different things to different people. The most “fair trade” practice I would vote for the U.S. today would be the immediate elimination of all tariffs & quotas on foreign goods and end all subsidies for U.S. goods. That would do more to alleviate poverty around the world than any other single piece of action I could think of. And I would advocate other countries do the same. I think I’m a member of the coffee party.
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Good read. I am agreeing with Justin on most things. If democracy is the compromise between leaders and the people for the best possible, though imperfect, government, capitalism is the best possible, though imperfect, economic system. It doesn’t exploit human greed or behavior, but rather puts human behavior into a logical context and a simple well understood rule system (I am talking about basics, not the incredibly complex national and global systems that develop. Simple rules beget complex systems). It doesn’t degenerate human worth or value to say that most behavior and relationships are based on reciprocation and that this reciprocation is based on perceived value of objects or services.
If it is corruption that one is unhappy with, criticize the corruption, not the underlying assumptions of the capitalist system. The fact of the matter is, there will always be poor people. As Justin has said, capitalism maximizes the possibility that people can get out of poverty without coercive policies. NO other system has proved more successful and less corrupt (please understand these two go together. Any proposed system must take into account human behavior. Any “cheater” can exploit and then bring down any utopian vision of a better system.) Outside of prosecuting corruption, reducing monopolistic practices, supporting workers’ rights, and basic regulations (and maybe others), the poor should be taken care by charity and (since I fall left of center on most issues) social programs such as education, health, and others. Changing the economic system may actually bring more problems then it solves. I think it is a good question to ask what type of system one would propose?
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I think you guys read history with a very pro-capitalist slant. It’s just as easy to read the same history and see how it has in many ways been manipulated to the benefit of capitalism. I’m not advocating any particular economic system, just a more honest reading of history. It’s very triumphalist to look at history and say capitalism won, because it’s better. I’ve been reading up on the history of Latin America and the industrialist revolution which made it possible for capitalism to rise was fueled by the exploitation of South America. Potosi in Bolivia was the center of the silver trade that made it possible for industrialization to happen. It’s way more complicated than “capitalism won so it’s better.”
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P.S. I will be sad when I don’t have as much time for these conversations in Bolivia.
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It will be sad but I hope you participate as you can.
I am not going to reread everything, but I don’t think anyone has said or implied “capitalism won so it is better.” It is a bit more nuanced, I think. It is a false dichotomy anyways. What did it win against? I think initially, Adam Smith was describing a system and mechanism that was already present in history and the economy and then advocating that economies should be structured like this. And you may be right that capitalism has had a favored status when it comes to laws and regulations.
Exploitation, as you describe, is complicated. Is it capitalism? or is it greed? What does it mean to say capitalism benefited from the exploitation? Are you saying that it would have failed otherwise? This last point seems to be what is implied and I would contest that. I haven’t read up on this so I don’t know the nature of the exploitation, but to say that capitalism only succeeded because of this exploitation may be an oversimplification. If the exploitation had been removed and Bolivia allowed to trade silver according to its own economic needs wouldn’t the industrial revolution have stilled happened (even if a little slower)? Or maybe faster as competition for silver may have fueled the economy…This is just the example you gave and i am sure there are more, but I think capitalism works on the whole, despite this. If we are putting things in context to help improve the system or avoid future exploitation, cool. If we are putting things in context to demonize the system, I am not sure I understand.
Perhaps a good example of what you are talking about is the America system which benefited from the slavery, genocide of Native Americans and the appropriation of their vast land and resources, and influx of cheap immigrant labor. I agree that the all this helped propel America to one of the richest countries in the world. However, this was done in conjunction with the system of capitalism. These things were not necessary for capitalism to succeed (only sufficient); though they may have been necessary for America to become economically dominent (and two world wars also helped). In all, given the complexity of economic systems, I believe it would be hard to make a case that capitalism succeeds only when propped up by exploitation.
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Even before industrialism Latin America was being exploited by mercantilism. The idea being that you conquer a territory, ship its resources (gold/silver) back to the homeland, and try to accumulate as much of that gold/silver as you can with little regard for the conquered. Spain was good at that as well as quashing capitalism. Stark addresses Spain’s (and Catholicism’s) role in squelching competition both in Europe and Latin America in the aforementioned book. Well before Adam Smith.
In grad school we studied comparative economic systems, basically looking at the economic history of various regions of the world. But Latin America’s development is a little fuzzy in the memory. Sorry about that.
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It is funny you mentioned Mercantilism, because I was just brushing up on the history of capitalism on Wikipedia, in which mercantilism featured prominently. According to the article Adam Smith was a critic of Mercantilism precisely because it lessened competition and because a country could only get rich if it drained the resources of another.
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I can’t neglect my family to make longer explanations so my thoughts will be punchy and more provocative.
You guys are both saying capitalism would have won anyway, but that’s not being very historical is it? I’m saying you should be fair about your reading of history and at least recognize the forces that weighed heavily in capitalism’s favor. It’s similar to the argument Jared Diamond makes about civilization. We like to believe (and racism is founded on the idea) that our people succeeded because they were stronger, smarter and had better ideas. Diamond points out how much of it was due to luck, being born in the right place at the right time.
Justin- confused about your comments, because I was referring to the silver trade. Eduardo Galeano argues that it was this mercantilism that gave Europe it’s wealth (not Spain, because they squandered it) and the necessary capital to create industrialization…
You guys are too fast… Just saw Gary’s comment making my point.
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I don’t like your word “won.” 😉
It the grand scheme of things all sorts of factors contribute to all sorts historical coincidences; nothing is inevitable, sure. But the comparison with the theories of Diamond are not apt. Or, not applied accurately. Diamond does say that given certain geographical and agricultural conditions, it may have been inevitable that europe and asia would rise as superpowers (if the Americas or Africa had had these advantages, they would have risen). This has nothing to do with race, as you point out and he argues. In the same way, I may argue, that capitalism will succeed where ever applied, regardless of whether it was the beneficiary of exploitation or not. Taking race out of the equation, Europe and Asia still rose in prominence to those advantages; taking exploitation out the equation, a capitalistic system still works. Putting this in historical context doesn’t take away from its power.
I concede to the point that exploitation played in a role in jump starting industrialization (I said as much previously). My question, I guess, is do you see this as a necessary condition for capitalism in general or was it just a historical concurrence (the rise of westren capitalism was dependent on this exploitation)? This is hard to parse as the progress of history is a complex interplay of conditions.
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“capitalism will succeed where ever applied, regardless of whether it was the beneficiary of exploitation or not. Taking race out of the equation, Europe and Asia still rose in prominence to those advantages; taking exploitation out the equation, a capitalistic system still works.”
By making this statement you are taking it out of historical context and stating your own belief in capitalism. You believe these things to be true. That’s fine, but it is not necessarily based on history. The fact is that capitalism arose with exploitation, racism and oppression. I don’t think it’s as simple as untangling them and saying, “See, capitalism works on its own without those things.” What are you basing that on because it’s not history?
“This is hard to parse as the progress of history is a complex interplay of conditions.”
This is a much better statement, more accurate. My point is simply that you’re claiming something that doesn’t make sense. You’re both making an argument from history and then saying that history doesn’t matter. My point is exactly that capitalism is all mixed up with these problems so we should stop saying that it’s the best system. We should say, “It’s the system we have. How do we move forward?” Some of that should work within capitalism, because it’s not going away, but some should attempt to reimagine what’s possible and improve. It seems to me this is the way we make leaps forward, not by resting on our laurels, but by those who push us forward by believing that another world is possible. I believe capitalism can be a force for positive change, but I don’t think it’s going to save us.
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“The fact is that capitalism arose with exploitation, racism and oppression. I don’t think it’s as simple as untangling them and saying, “See, capitalism works on its own without those things.” What are you basing that on because it’s not history?”
Capitalism is rising in SE Asia, Eastern Europe and elsewhere without violent revolution, racist repression, slavery, etc. Is that not history? Estonia has been the fastest growing country in Europe without conquering the others with a military.
99% of slavery, genocide, and exploitation in human history has taken place in non-capitalist countries/civilizations. That’s because capitalism and democracy haven’t been around very long, and if anything capitalism helps put an end to those practices.
Because economic freedom and political freedom go together. Capitalism says that an entrepreneur can take a risk and if he succeeds he can keep the fruit of his labor. In non-democratic countries moving into capitalism you see more and more people demanding political freedom and a greater say in what the government does with the fruit that it takes for itself. This slowly brings political change. You also have a sort of movement up Maslow’s hierarchy of needs, if you will,… the more wealthy a country becomes the more concerned it is about equality and the environment.
The more trade that countries do with each other, the more free that market is, the less likely they are to go to war b/c they become interdependent. Democracies don’t make war on each other, and neither do capitalist-oriented trading partners. (Crude example–You used to have the McDonald’s Theory of world peace–for a long time no countries with McDonalds happened to go to war with each other).
This is where people like Stark attribute the influence of Christianity. Christianity teaches that each individual is created by God and therefore important. That a king holds no more favor in the eyes of God than a peasant. And that property rights were something God’s law enforced. That means that it’s an injustice for a king to steal my land, my factory, my profits. As Christianity begins to permeate, those ideas take hold. While European thought may later have rejected God’s role, they hung on to the basic idea of individual liberty and that made a big difference.
The groundwork for capitalism doesn’t exist in every culture. Some cultures don’t have a concept of property rights. And those cultures tend to struggle to develop and struggle to keep their resources from collapsing (“the tragedy of the commons”). Anti-poverty and development work in those countries struggle too. (I’m thinking of some cultures in the South Pacific). I think some would argue that as Christianity permeates those cultures, their ideas toward liberty and property rights would change– just like cannibals who become Christians no longer eat each other. (That sounds really crude as I type this).
But India and China and Vietnam haven’t moved toward capitalism because “they’ve discovered protestant work ethic” (Chuck Colson actually said that a few months ago), but rather because as Deng Xiapeng said, “to get rich is glorious.” They understood that the socialism/communism/Maoism they’d tried in the past hadn’t worked so they tried something else. And it’s working, you have billions being lifted out of poverty. I don’t think we can deny that the average Indian or Chinese person is better off than they were 30 years ago. Here’s also a chart from a left-leaning Democratic economist, no champion of complete laissez-faire; this is how he presents the importance of the market to his Principles students.
So, yes, I think the evidence of history is clearly on the side of capitalism as bettering the lot of the ordinary people and in fostering political freedom. But it works best when more people involved in it are Spirit-filled.
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My point about taking it out of historical context is that as an economic system it works. Nothing stated so far contradicts this. That is my only point. It solves problems about supply and demand, movement of goods and prices, investment, and labor. Here is my historical context: at no other time in history has technology, education, food, and other goods been available to so many. At no other time in history have men and women been able to improve their status with this ease. This is relative, of course, to our times. There are inequalities. There is injustice. But capitalism is a big reason why these came about. It is not simply my belief. Capitalism is the best system to solve the problems I mentioned above. I am not saying it is the end or best possible solution. I have never said that. Only the best now. I am all ears, of course, to any solution that can be as successful as capitalism has been at everything that has been stated thus far.
I just saw that Justin commented again so I won’t continue. I would also add Japan to that mix (which incidentally is not Christian), has both a democracy and a capitalist system.
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I think that maybe Lucas is just expressing a similar thought as what many conservatives feel. The free market works well but it also creates inequality. Industrialization causes environmental impact (negative externalities). Those are facts. So, how do we deal with that? (just take those 2 issues as example)
Sweden deals with it by the government taking 50% of national income (GDP) in taxes and redistributing it and providing health care so that everyone is pretty equal. Some Christians call that stealing, but it’s what they’ve chosen to do as a society. On the other hand, their markets are free in other ways. Free school choice, privatized social security, privatized fire protection, things anathema in the States.
Best way to deal with environmental impact is to put a price on it. An emissions tax or a tradable permit system both work well. I’d much rather have cap-and-trade than the EPA giving out mandates.
Lucas’ thought that marketing creates demand where there is no need is considered heterodoxy (Veblen originated this thought, I think). Doesn’t mean he’s wrong, just means it’s not in the mainstream of thought. I agree that as Christians we should keenly be aware of what is fleshly desire and what is real need. I say the marketing and production of those goods isn’t wrong– I find squeeze bottles helpful. And people wouldn’t consistently buy them if there was no value in them. But I need to be conscious of what I’m consuming. Studies have found that marketing correlates with lower prices– which indicates it helps with competition. That doesn’t mean much if you think those products shouldn’t exist. But non-price (non-capitalist) systems create more goods that shouldn’t exist and doesn’t create others that there is real demand for than capitalism does for certain.
Lucas, Dr. David Befus spent 30 years in Latin America working to create thousands of businesses in areas the UNDP and others gave up on, I got to meet him last year. He has a book: Where There Are No Jobs (w/optional Scriptural study guide too). I think he would argue the best way to deal with the issues of poverty and inequality is to harness capitalism for the use of the common people– make sure they have equal opportunity to get started. That’s basically my argument for Chile above. He did that mainly through microfinance. He just came to mind– not sure the book would be applicable for you as it’s sort of a how-to guide for microenterprise development but you might Google him.
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Thank you for the clarifications. I actually went to a talk this evening by Dr. William Foege, a person in the public health field, who talked about trying to solve poverty. He was very passionate about it. He didn’t have any concrete solutions though he was very pragmatic.
I think any solution has to accept capitalism as the base for the economy. I just can’t see a way around it that doesn’t involve some sort of coercion or that is sustainable (both economically and without wide spread corruption). And this is coming from a liberal who believes in single payer health care, public roads, and education. Certainly it involves health, development, and education in those countries. Yet, even if global inequality was solved, locally, the natural inequalities of capitalism would still exist (I think any economic system is going to have inequalities, though). For me, if inequality is going to exist, it is better for it to exist under capitalism which provides an avenue of escape (no matter how narrow or selective) and for social programs (whether public or non-profit organizations) to provide support to the less fortunate. I guess I have come to accept that inequality will always exist (hopefully, in the future, to a lesser degree).
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I wish I had the time or energy to keep this conversation going, but I don’t. You guys both make good points and are helpful conversation partners. However, I lean more towards a pessimistic view of globalization and the effects of capitalism’s spread. I’m not denying positive examples, just more critical than you guys about its ability spread peace and harmony throughout the universe (I kid!).
I think it’s important in conversations where there is some fundamental disagreements like ours, it is important to recognize that you are likely not going to convert the other to your position. If that is the point of the conversation I happily bow out and will find something else to do. Instead, I think the benefit is finding common ground with those whom you disagree and finding new perspectives (more balanced) on your own tightly held beliefs. So, for that I thank you.
I’ll be back soon enough, but moving to Bolivia and being with my family needs more of my time.
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Thanks Lucas, this has at least given me a chance to formalize some of my thoughts (sorry I hijacked your blog). I get paid to teach faith-integrated economics and finance, so I like to think about these issues.
I would point out that while political and economic openness is good for material well-being, Christianity tends to do better in their absence. The blood of the martyrs… That’s an irony I’ve not figured out how to reconcile with.
I think the NT and experience of the early church shows us that Christians should BE the change they want to see, instead of working to change the system politically or economically. To live in community in such a way that people say “There is something wonderfully different about them– I want to join.” Jesus said “render unto Caesar,” or, “pay your taxes” but didn’t comment on whether he thought the tax was immoral or not. It may well have been, but it doesn’t matter– our kingdom is not of this world, so let’s submit to earthly authorities and live out the Christian faith.
The early Christians were excluded from a lot of commerce because they wouldn’t make sacrifices to idols and such in Greece/Italy/Asia. They learned to do commerce with each other and to share their property. They didn’t sit around thinking about how they could change the political-economic system, near as I can tell, because that would have been like going to the moon. We’re blessed with the opportunity to vote, but in the end if we ARE the change we want to see that will have more impact. But very few Christians in our open economy live a deep faith in all aspects of their lives. I struggle with that in my own life every day.
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Lucas,
To reject Francis Wayland’s argument regarding private property in the way you do is to reject the historic Christian doctrine that God reveals Himself through general and special revelation. God teaches in Romans 1 that we are created with a natural conscience and as C. S. Lewis recognized, part of what natural conscience communicates to us is ideas about basic justice. People who have not had their conscience seared naturally know that when they steal from others it is wrong. That is why they so often try to justify it.
God also tells us in various places, such as Psalm 19:1; 50:6; that God speaks to us through his creation. Part of his creation is humanity that he made man in his image. Part of our being image bearers is our engaging in rational action. As people engage in rational action, different property institutions yield very different results. Societies that recognize and defend private property have been and are more prosperous that those that neither recognize nor defend private property. This is built in to creation as God made man and nature. It is certainly reasonable to conclude that God means for man to respect private property. This is NOT the same thing as saying that because Bill Gates has made a lot of money God ordains whatever he does as pleasing to him. However even here, in a setting of private property, the only way Bill Gates can reap a lot of money is by serving others better than his competition by better providing people what they want at prices they are willing to pay.
Regarding the law, it is not a leap at all to argue that the commandment against theft is God’s intention for the world. Jesus came down from heaven to keep and fulfill the law so that we could obtain salvation by repenting of our sin and trusting in him and his atoning death on the Cross. There is no indication that the moral law revealed in Scripture is merely constructivist and set of practical guidelines that allows us to better get along in this world. Far from it. Psalm 1 tells us that the man who delights in and meditates upon God’s law is blessed. Pslam 19:7 tells us God’s law is perfect. Psalm 119:44 teaches us it is a good thing to keep God’s law continually and forever and ever. 1 Peter 1:24,25 teaches us that the Word of the Lord remains forever.
Again the historic Christian understanding of God’s moral law is that it is eternal and not bound by time. Therefore, we have not justification to think that God’s law respecting property is not something that is to be obeyed for all time.
And even if God’s moral law WERE only to be applicable during our live in this fallen world, we ARE presently in a fallen world and, hence, are bound to obey the law, which means we are bound to respect and defend private property here and now. Societies that do so are societies in which voluntary exchange and the market division of labor flourish.
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Unfortunately I don’t have time for a thorough reply. Your argument seems to basically be that I’m outside of orthodoxy and therefore wrong. That’s not much of an argument. I haven’t said anything that would be controversial among the mainstream of biblical scholars. I’m not saying that they would all agree with my conclusions, but I’m not out of bounds as you suggest. It seems an inhospitable start to a discussion with a stranger to start by calling him a heretic.
Your final paragraph was basically the position I took numerous times concerning how to live in the world as it is, not as God intended it to be. Since you claim God’s laws are eternal and not time bound, you must abstain from trimming your beard and stone children who disobey their parents. Obviously you make distinctions between parts of the biblical text that are culture/time bound and those that are eternal. The question is really what your criteria are for choosing which laws you like and which ones you don’t.
As a side note… Matthew Henry is fine for your own personal devotion, but lacks much authority as a really good scholarly commentary. My profs in seminary would have laughed at me and given me an F for using him in a paper.
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I stand by the statement that Matthew Henry is not acceptable in biblical scholarship, but I realize my last comment was probably just as inhospitable and I apologize. This is why I’m not a big fan of these discussions online. It works well between people who already know each other, but the web has conditioned us to treat strangers in an unChristian way. Maybe we also entertain angels online and should treat them the way Hebrews warns us, with hospitality, even when we disagree.
Anyways… apologies for the tone.
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Lucas,
My argument is not that you are outside of orthodoxy, end of story, and I never called you a heretic. My argument that is that historic Christianity has regularly recognized that God reveals himself through both general and special revelation, that is in creation and in the Scriptures. Therefore, we cannot simply dismiss the argument that, because of the recognized distinction between mine and thine is universal and because of the generally observed positive consequences of private property, God teaches us of the ethical mandate for private property. To dismiss it out of hand is contrary to the practice of historic Christianity.
My claim is not that all of what has been called God’s law is permanent. I said God’s moral law is eternal. The issue is not which laws I like and which ones I don’t. My likes and dislikes have nothing to do with it. What matters is what God thinks and tells us.
Again, historic Christian thought recognizes a distinction between God’s moral, ceremonial, and civil law given to the Hebrews. It is generally agreed that the ceremonial and civil law of the Hebrews has passed away, but not his moral law. That is the law that is eternal. That is why, while we no longer are required to trim our beards in a certain way or stone our children for striking parents, it is still wrong for us to murder, hate, lie, worship false gods, fornicate, covet, and indeed steal. That is why you felt compelled to apologize for what you perceived as the inhospitable tone of the end of your previous comment.
Jesus himself said we are to love our neighbor as ourselves, and indicates that not stealing from our neighbor is part of doing this. Paul tells the thief to stop stealing and instead work honestly with his hands. Peter told Ananias that his property was his to do with as he pleased and after he sold it the proceeds were his to do with as he pleased. This seems clear and straightforward to me.
What basis do we have to think that these moral requirements are contrary to God’s true intentions? How do we know how God intended things to be if He has not told us? In fact, in the revelation he has given us, God provides no indication that he really prefers that we don’t have private property but should live like we do right now.
Finally, I certainly grant that Matthew Henry’s commentary is not the most up to date scholarly work. However, I have every reason to believe he is sound on Acts 2 on the point I quoted.
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I don’t “dismiss it out of hand.” Your tone is condescending and negative, that is what prompted me to comment on your approach to a discussion with someone you do not know. I quickly tire of these conversations online, because the human element is left out. I appreciate rational discourse, but I like people more than I like being right about things. You’re not likely to convince me of something based on our conversations online, partly because I don’t know you and have little reason to trust you.
We all pick and choose the Scripture that we like and ignore the ones we don’t. As a pacifist I like Jesus’ words about loving or enemies and could do without the book of Joshua. If you already believe in private property being ordained by God you will gravitate toward passages and interpretations that support your view. There are plenty of other interpretations of Scripture that would disagree with yours.
I bristle when people speak as if there is only one interpretation of Scripture. I’d rather be more generous with my conversation partners. I concede that your interpretation is valid and probably held by many. I just disagree based on my own study and interpretation of Scripture.
As I’ve already said, my family and I are moving to Bolivia tomorrow. So, you’ll have to excuse me if I’m short with my answers. I appreciate the conversation, but it can’t be a priority right now. This is the element of relationship that makes my conversation with Justin different than my conversation with you.
If you want a point by point rebuttal or an in depth explanation of my thoughts with biblical references, quotes and logical arguments, you’ll just have to wait. Sorry.
Ok, I can’t help myself…just one comment. It is hard to square modern attitudes towards private property with the biblical attitude. As Justin mentioned previously, we are told to hold our possessions loosely. Jesus tells us to give to anyone who asks (Mt 5:42). Psalms tells us that “the earth is the Lord’s and everything in it.” The Jubilee in Lev 25 required that possessions were held loosely and given up once in a while in order to maintain an equality of economic opportunity.
Private property as a way of organizing our lives together in a broken world seems to be promoted in Scripture as you suggest, but the idea that it is divinely ordained, I believe, is a step beyond what is there in the biblical text. It’s also problematic considering the way private property is viewed as a “right” in the modern world. I don’t see that in Scripture considering the passages mentioned above.
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Forgive me if I don’t respond to any more comments. I will be travelling and don’t know what my internet access will be in Bolivia.
Thanks for all the thoughts and comments.
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Just to be clear, I invited Dr. Ritenour via his blog because I know Lucas isn’t alone in his thinking and I think that some of his criticisms are valid– at the very least worth thinking about. I thought more people might join the conversation.
“Private property as a way of organizing our lives together in a broken world seems to be promoted in Scripture as you suggest, but the idea that it is divinely ordained, I believe, is a step beyond what is there in the biblical text. It’s also problematic considering the way private property is viewed as a “right” in the modern world.”
I like the first sentence but am not sure what the second sentence means. I would call the way God has ordered things in Scripture ideal.
Maybe private property isn’t a “divine right” but it is something that God has described and seems to defend (“thou shalt not steal or covet”). The U.S. founders said that all men were endowed with certain “inalienable rights…life, liberty, and the pursuit of happiness.” Those are property rights in and of themselves. There is clear evidence of how the defense of property rights increases the welfare of a society, as we’ve outlined above. But Christians in societies that don’t have those rights should still submit to their authorities b/c we recognize we don’t live in a world that follows God or under authorities that seek to make things ideal. And as Lucas pointed out, when someone steals your cloak Jesus says let him have it– hold that cloak loosely. Recognize that you had a right to it but surrender that right (so don’t seek recourse, let God judge). I think maybe that’s what Lucas means in that 2nd sentence.
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I think you summarized it accurately, Justin. My main point of contention is the claim that Scripture absolutely supports the concept of private property as a divinely ordained institution. You can certainly read Scripture that way, but it equally makes sense to understand laws concerning our life in this broken world as a band aid, not a prescription for heaven. Passages in Isaiah picture the kingdom as something in which the order of creation is transformed, subverted, inverted and changed (the lion laying with the lamb). Jesus talks about such an upside-down kingdom. If we take his Sermon on the Mount seriously we will certainly come into conflict with the order of the world, including aspects of the reigning economic order.
I guess I would urge caution when promoting any economic system in the name of Christ, because our understanding of the kingdom is so limited. We should pursue humility when we start trying to solve the world’s problems. I understand a lot about globalization, economics, history and even theology, but I am, in all honestly, fumbling and stumbling toward something which I have only glimpsed. We should be humble enough to acknowledge that God’s reign will surprise us all when it comes. Our notions about the way it should be, even based on Scripture, will be turned on their head and we will all have our jaws on the floor.
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I guess I can’t promise not to respond. It’s a good conversation. But once I go to sleep tonight I will definitely not respond for a few days.
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Lucas,
I think I agree with everything in your last comment. I know that capitalism isn’t perfect (no system we’ve seen on earth is) but I believe it’s the best that’s been tried and it’s what seems to make the best of our depraved sinful natures. And strong enforcement of property rights > Some enforcement > no property rights as far as human well-being, which makes sense since that’s something God pointed out in the OT. But I wouldn’t read into a text like Lev. 25 that property rights are a divine right any more than I would read into that text that slavery is a divine right.
BTW — Have you read any Hernando de Soto (the economist, not the conquistador)? Peruvian economist that focuses on property rights as a means of alleviating poverty (scroll down to Main Thesis). I’ve not read his books (on my wish list, though), but you might find his observations of Peruvian life to be similar to Bolivia. Don’t know why I didn’t think of him before today.
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I really love it when a discussion comes full circle and you find some agreement and common ground. Nice!
I’ll check out the Peruvian economist you mentioned.
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