Ethics, government, and the economy

Should a human government follow the ethical principles described by Jesus in the Sermon on the Mount? The answer, in a word, is, no.

Jesus calls his followers to love their enemies, to turn the other cheek and to go the extra mile, to forgive those who sin against them and do good to those who persecute them. But the government is established by God to protect its citizens, to punish those who do wrong, to uphold the law. Instead of forgiving the sinner, the government must punish the wrongdoer, “eye for eye and tooth for tooth,” rendering justice on behalf of all its people.

During the Baroque Era (or Enlightenment), European philosophers described human rights and said that governments exist to protect those rights. John Locke wrote about rights to life, liberty, and property. (Thomas Jefferson, writing the Declaration of Independence, would fudge the third right to “pursuit of happiness.”) Governments protect the rights of their citizens—they take life only from enemies who attack the country or from the worst of criminals who threaten the lives of others. Governments protect the liberty of their citizens, only depriving criminals of freedom, and then only for a term that fits the crime. Governments protect the property of their citizens. They may claim some property as fines for misdemeanors, other property as fees for services, other property as taxes, and still other property to provide services such as roads. In general, though, governments take no more than they must take from their citizens. When they become overbearing, when they stop respecting the rights of their citizens, the citizens are entitled to change their government, to find new leaders who will respect and protect their rights.

Philosophers spoke of a social contract between citizens and their government. Citizens agree among themselves what they want the government to do, and they use their property and their energy to help the government accomplish these goals. If citizens want public schools, they agree to pay taxes to support those schools, and they agree to send their children to those schools. For protection from foreign enemies and domestic criminals, citizens are willing to limit some of their own freedoms and property. For other services from the government, some citizens are willing to accept further limits. Among any group of citizens, a range of opinions will be found: some want the government to do more, and they are willing to pay more for those government services; others want to cede less to the government, and in return they are happy to receive fewer government services.

To some Americans (including Franklin Roosevelt and Bill Clinton), some problems are so big that only the government can address them. To other Americans (including Ronald Reagan), the government is the biggest problem and life improves when government is reduced and limited. Pure capitalism demands that the government not involve itself in the economy—capitalists say laissez-faire, leave it alone. Even Adam Smith in Wealth of Nations acknowledged that some government regulation is necessary for the good of all citizens. Under socialism, the government controls more aspects of its citizens’ lives; in return, it demands more property and restricts more freedom of those citizens. In a free market economy, the government regulates what must be regulated but leaves more freedom and more property in the hands of its citizens.

The question remains: which economic system is better for all the citizens of a nation: socialism, or a free market economy? J.

The richest Americans

A frequent complaint against capitalism is that it permits the rich to get richer, even at the expense of the poor. Capitalists reply that the success of rich business leaders helps all people, providing jobs for workers and products for customers. Over the years, who have been the richest American citizens, and how did they make their money? For this study, I chose to take a snapshot of the country’s wealthiest citizens every fifty years, beginning in 1820.

Stephen Girard was one of the richest citizens of the United States in 1820. He made his first profits from shipping, and then increased his wealth through banking. John Jacob Astor is another wealthy American alive in 1820. His initial wealth came from the fur trade, but he then increased his fortune through buying and selling real estate. Banker Thomas Willing and real estate mavin Stephen Van Rensselaer were also among the richest men in the country two hundred years ago.

In 1870, Cornelius Vanderbilt was one of the richest people in the United States. His money came from railroads, as did that of another wealthy American, Jay Gould. Alexander Turney Stewart became wealthy from selling textiles and dry goods. In 1870 Frederick Weyerhauser was beginning to build his fortune from the timber industry.

One hundred years ago, John D. Rockefeller had become one of the wealthiest citizens of the United States through his profits from Standard Oil and the petroleum industry. Henry Ford was one of the richest Americans due to the automobile industry. Brothers Richard Mellon and Andrew Mellon began as bankers but increased their fortunes through steel, oil, and railroads. Andrew Carnegie barely misses the cutoff of 1920, having died the previous year, but his fortune came from railroads and the steel industry.

H. L. Hunt and J. Paul Getty both gained wealth through oil. But by 1970 the richest American was Howard Hughes, whose wealth came from air travel and the movie industry. Another wealthy American in 1970 was Sam Walton, the founder of Walmart.

And in 2020, the wealthiest Americans include Bill Gates (Microsoft), Elon Musk (Tesla and SpaceX), and Jeff Bezos (Amazon). Another wealthy American is Warren Buffett, whose fortune came from the clothing and retail business.

Of course, all these wealthy Americans are white and male. Their opportunities for success were probably greater than potential competitors who were female or non-white. Looking beyond that impression, though, all of these men became rich by giving what consumers what consumers wanted. Railroads, cars, gasoline, steel, computer technology, and innovations in shopping mark the majority of these highly successful individuals.

Beyond that, most of them are known for philanthropy, for using their wealth for the benefit of others. Carnegie, Rockefeller, Walton, and other men on this list devoted much of their wealth to projects that helped others—combating disease and malnutrition, establishing opportunities for future entrepreneurs, and making libraries, concert halls, and museums available to the public. Most of these wealthy men and their families created foundations to continue their work beyond their lifetimes. Meanwhile, as they made their wealth by giving consumers what consumers wanted, they also created bountiful jobs for American workers.

Would railroads or automobile travel have been as affordable under government ownership and control? Would they have opened as many jobs as quickly as private investment made possible? If Walmart and Amazon were operated by the federal government, would they benefit as many shoppers? It is hard to imagine a scenario in which government control of these businesses would have been nearly as successful as they became under private ownership and control. J.

Blessed are the poor…

  Jesus says, “Blessed are you who are poor, for yours is the kingdom of heaven. Blessed are you who are hungry now, for you shall be satisfied. Blessed are you who weep now, for you shall laugh… But woe to you who are rich, for you have received your consolation. Woe to you who are full now, for you shall be hungry. Woe to you who laugh now, for you shall mourn and weep….” (Luke 6:20-21, 24-25)

What does this mean? Are poor Christians the only good Christians? Are wealthy people banned from the kingdom of heaven? Is money a sin and wealth a crime? Should all Christians give away their possessions and live in poverty until the Day Christ appears in glory?

Some Christians have taken the words of Jesus in that way. Others have read the rest of the Bible and have found more context for these sayings of Jesus. God has blessed the wealthy—he did not reject Abraham or David or Solomon or Lydia because they had worldly wealth. He allowed Job’s wealth to be stripped away from Job, but at the end of the test he gave Job twice as much wealth as he had at the beginning. If Jesus wanted all Christians mired in poverty, he could not expect us to give food to the hungry, clothing to the naked, or shelter to the homeless. If Jesus wanted all Christians to be mired in poverty, he would not expect his people to set aside money to help the poor, to do the work of the Church, and to support workers who spend their careers working for the Church and Christ’s kingdom.

At times, Jesus seems sympathetic toward capitalism. He tells parables about investing money, expecting a profit (Matthew 25:14-30, Luke 19:11-27). In fact, Jesus told more stories about money and investment and business than he told about planting seeds, tending crops, or taking care of sheep. Jesus knew that his followers would be involved in the world. He always intended to bless some of them with worldly wealth, making it possible for them to love their neighbors and to provide for the needs of the poor and the oppressed.

The problem is not with how much money people have; the problem is with how much money people want. A poor person can still be guilty of idolatry, dreaming about the wealth and riches he or she desires. The Ten Commandments close with warnings against coveting—wanting the property of another person. God blesses some people in poverty and some people in wealth. Being poor in spirit is not a matter of how much you own; being poor in spirit is a matter of how much your possessions own you.

The Bible endorses no economic system. Through history, most Christians have accepted whatever economic system surrounds them, doing their best to love God and serve their neighbors with any blessings God provides. When given a choice, though, the Christian does not only ask, “What is best for me?” The Christian asks, “What is best for my neighbor? Which system offers the greatest promise of helping the poor and oppressed, of making life better for all people?” In the rare instances where Christians may choose, their choice should reflect love for neighbors rather than greed and self-centered thinking.

Jesus said, “For it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” When those who heard it asked, “Then who can be saved?” Jesus did not answer, “the poor, and those who give away all their possessions to become poor.” Instead, he said, “What is impossible with men is possible with God.” Salvation comes only from the work of Jesus Christ. It is not earned by being poor or by becoming poor. Jesus endorses neither capitalism nor socialism; Jesus condemns neither capitalism nor socialism. He rescues sinners whether they are rich or poor or middle class; he rescues sinners whether they live in a capitalist country, a socialist country, or any other kind of country. The work of Jesus is for all people; Christianity transcends politics and economics. J.

Capitalism or socialism–you make the choice

In 1980, a few Cuban citizens sought refuge in embassies, seeking to leave Cuba. After Fidel Castro announced that anyone who wished was welcome to leave, the number of emigrants swelled to more than 125,000. Cubans living in south Florida arranged boats to transport emigrants to the United States. Many of the migrants had to be housed on military bases in the United States until sponsors were found for them all—many of whom were relatives of the migrants, while others were charitable organizations offering help.

One young man from Cuba was taken in by his uncle and aunt in Miami. After a few days, he startled them at the breakfast table by announcing that he was ready to go pick up his Nikes. Further conversation clarified what he expected. The government of Cuba gave one pair of shoes to each Cuban citizen once a year. Now that he was in the United States, a much more prosperous country, this young man thought that he would receive a pair of expensive sports shoes from the government rather than the less luxurious shoes offered by his former government.

His uncle and aunt explained to him that the United States government does not pass out Nikes, or any other shoes. In the United States one works, saves one’s money, and then buys the shoes one wants and can afford. Those who want to save up for a pair of Nikes can do so; those who want to buy more affordable shoes sooner may do so. People in the United States can buy as many shoes as often as they want, provided they have the income to pay for their shoes. This is part of the difference between capitalism and socialism.

Discussion question: Which do you prefer: one free pair of shoes a year, provided by the government, or the opportunity to buy the shoes you want when you want them, provided you have the money? Explain your answer.

In the movie Moscow on the Hudson (1984), Robin Williams plays a Russian musician who defects to the United States. Shortly after his defection, the musician offers to stand in line to buy coffee for his American host family. He finds himself instead in a grocery store aisle surrounded by dozens of different brands and styles of coffee, which results in an emotional breakdown.

Discussion question: Which do you prefer: one style of coffee, chosen and distributed by the government, or the opportunity to buy the kind of coffee you want when you want it, provided you have the money? Explain your answer.

These two examples are not cherry-picked from an array of comparisons between free market capitalism and socialism. Both of them portray the real differences between life in the American free market economy and life under a socialist government. Once again, which do you prefer? J.

Rescuing capitalism

Under capitalism, the rich try to become richer. In the process, they provide jobs for workers and products for consumers, stimulating the economy. As businessowners compete with one another for customers and for workers, they try to achieve the best balance of price and quality for their products. They try to find the right wages to pay their workers, high enough wages to keep the best workers, but low enough wages to keep their products affordable.

The Industrial Revolution offered a glut of workers because the population was growing, agricultural workers were being pushed off their land, and machines were making it possible to accomplish more work with fewer laborers. Socialists (and other enemies of capitalism) recognized the problems that the system contained; they saw the poverty of the working class. At the same time, industry and the growing population of the cities led to other problems not directly due to capitalism, such as pollution and disease. Blaming all these problems on capitalism, socialists assured their audience that changing economic systems would fix these problems and would offer workers a better life.

Karl Marx predicted that the workers would violently overthrow business owners, along with political and religious leaders and others who supported the status quo. He further predicted that the overthrow would happen earliest at the places where the Industrial Revolution began—the British Isles, followed by western Europe. Marx could not foresee a response to capitalism that would fix its problems from within. But certain things were already happening in Marx’s lifetime that would rescue capitalism from its dangers by improving the lives of the working class.

Even Moses and the prophets pronounced laws against greed, oppression, and unfair practices. They denounced cheating weights, scales, and measures; they spoke against mixing the chaff and the sweepings with the grain. According to the Bible, government represents God’s authority among people to enforce the laws, to protect the people, to limit the power of greed and other sinful tendencies. Governments in western Europe used their authority for the good of the people. They inspected stores and businesses to make sure their practices were fair and honest. They restricted pollution of the air, land, and water, establishing sewage treatment plants, water purification plants, and other needed responses to the pollution caused by industry and by urbanization. Governments placed limits upon the age of factory workers; they also limited the number of hours that could be required of workers. In many ways, governments used the force of the law to reduce the problems within capitalism, industrialism, and urbanization—and they did so without seizing the means of production, without taking farms and factories and stores out of the hands of their capitalist owners.

God’s law demands perfection. Human law cannot mandate the same level that God requires. Food contamination laws permit a small amount of insect parts, rodent hairs, and other contaminations; reading those permissions can be stomach-turning. Questions are raised, and will always be raised, about how much regulation is necessary and how much is too much. The political system exists to address such questions, and negotiation and compromise will always be part of the answer to these questions.

Perhaps the most important laws prompted by the Industrial Revolution were those that permitted workers to organize labor unions, leaders who represented the workers and negotiated with business owners for higher salaries and better working conditions. At first, business owners tried to break the unions, but governments supported the unions and insisted that business owners hear their demands and negotiate with them for the good of the workers. This process, unexpected by Marx and other revolutionary socialists, preserved capitalism in western Europe and North America. Eventually, much of the rest of the world would be persuaded to follow the same economic system. People turned to capitalism because it works. J.

What’s wrong with capitalism?

Two principle complaints about capitalism are that it perpetuates inequity of wealth and that it both causes and worsens poverty. While these might seem to be two sides of the same coin, they are not the same complaint at all. In fact, when advocates of socialism combine these two complaints into one argument, they are working to undermine the very strength of capitalism, its reason for existence.

People once believed that wealth is stagnant, that if one person gains wealth, another person must lose wealth. Adam Smith demonstrated that labor adds value, and that wealth is not stagnant. When capitalism works as intended, everyone benefits. Competition between the wealthy business owners helps their customers to have more choices and also provides their workers with more opportunities to earn wages and improve their lives and those of their families.

God in his creation (or Nature, if you prefer) did not make all people the same. Some people are stronger than others. Some are more physically attractive than others. Some are smarter than others—and there are various kinds of intelligence, so that one person may excel in one kind of thinking while the next is better in a different intellectual field. To hold that all people are created equal is not to hold that everyone must have the same advantages and the same benefits. The fact that some people are born into wealthy families and others are born into poor families is neither the fault of capitalism nor a reason to abandon capitalism. We are all different in several ways; but still we maintain that we all are created equal.

Deuteronomy 15 teaches that, if all people followed God’s commands, there would be no poverty. The same chapter warns us that the poor will always be with us. Capitalism might seem contrary to Christian and humanist principles of loving one’s neighbor, helping those who need help, and caring for the needy and the oppressed. A wealthy capitalist seeks to increase his or her wealth. As selfish as that sounds, the capitalist actually is a servant to his or her neighbors. To increase wealth, the capitalist seeks to provide a product that consumers want or need. The capitalist seeks to make that product more desirable—higher quality, more affordable, or in some other way better. At the same time, the capitalist creates jobs, paying workers to create the product and so providing for those workers and their families.

As the Industrial Revolution emerged, wealthy capitalists found an excess of labor on their doorsteps. More and better food from overseas expanded the population, and enclosure of agricultural lands drove more poor families off the land and into the cities. Craftsworkers were overwhelmed with new competition. At the same time, business owners were using steam and steel to become more efficient, offering products that were both better quality than before and more affordable. Work moved from homes into factories. Only wealthy people could afford to maintain factories and to purchase the new machinery of steam and steel. Often they combined their wealth, creating corporations. The rich became richer, but it was not inevitable that the poor had to become poorer.

I tell my history students that, for every Jane Austen novel they read, they must also read a Charles Dickens novel. Dickens captured the problems of the Industrial Revolution vividly in his fiction. Women and children worked in factories, because they would accept less money for their labor and would cause fewer problems for their managers. A large underclass of unemployed men frequently turned to crime, both out of need and out of boredom. Cities were dirty, overcrowded, and dangerous. Disease ran rampart through the population. For these reasons, nineteenth century socialists predicted the overthrow of capitalism. They expected working people to rise up and demand their rights, including a larger share of the wealth to which their labor was contributing.

Before the Industrial Revolution, families worked together, whether raising food on the land or producing crafts such as shoes, clothing, and candles. Women often were members of guilds, equal to men active in the same crafts. Factories tore apart families. They separated adults from children and women from men. Over time, the dream of the Victorian family developed: the family in which the man was the sole worker and breadwinner, the children went to school and played at home, and the women stayed home to raise a family. This idyllic picture never represented reality for most of the population. But, over time, society and government began to work in that direction. Labor laws took children out of the factories and put them in schools. Other laws began to clean the cities, reducing industrial pollution and untreated sewage. The free market found means of regulating itself so that capitalism did not imply poverty for the working class. More about this will be said in a future post. J.