“Whatever you do, work at it with all your heart, as working for the Lord, not for men, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving.”
Colossians 3:23-24
In this month’s blog I want to talk about the relationship between earthly economic systems and the Christian faith. There is a lot of misunderstanding about what these economic systems are and what the Bible says in relation to them.
So, first, let’s review the 2 basic economic systems in the world today. They include free enterprise and government-controlled systems. Many nations have a mix of both, such as China, the USA, and most of Europe. There are no examples of a totally free enterprise system I can think of but there are a couple of examples of a totally government-controlled system, such as North Korea and Cuba.
The free enterprise system is where individuals and companies buy and sell in a free market where each can determine what they are willing to buy or sell and at what price. This has proven to be the most efficient system for distributing goods and services that people want at the lowest cost. It does so through competition in a free market. With the millions of participants in this market it results in the best outcomes for all involved as no one individual or company can dominate or control this market to set prices or production.
The government-controlled system is where the products and services and their prices are controlled by the government of a nation. That government must determine the products and services that are available, their prices, their quantities, and who will be allowed to buy what products or services. This system requires the planning of what is needed or wanted for an entire economy which is nearly impossible to determine. So, it is very inefficient and results in higher prices and the likely lack of the right products and services desired by the market (the people).
The free enterprise system is often called capitalism because capital (assets & finances) is needed to build and grow businesses. In this system, capital is also in the hands of private sector individuals and financial institutions, who invest and risk it to produce a return (profit). It is also called a private enterprise system because it means that individuals and businesses own the capital and means of production, not the government. This “risk & reward” system is best because it depends on a free market of exchange, not some government edict or ideology.
In the Russian Revolution in 1917, Lenin accused these private “capitalists” of exploiting the masses. At the end of World War I, he took over the government and instituted a government-controlled economic system. He confiscated all the farms and businesses and put the government in charge of them on behalf of the people. This system produced plant & farm closings along with product & food shortages instead of economic growth. It was a catastrophic economic failure for the Russian people. They all shared equally in this misery and over 25 million Russians died from famine as a result.
I was fortunate to visit the Soviet Union prior to its fall in 1989 and saw first-hand the lack of products and economic choices of the Russian people in this type of system. They all had the same basic income and housing (which they did not own), and they could not improve their standard of living. Working harder made no difference.
The difference between these two economic systems is that the government-controlled system provides equality of outcomes and living conditions for everyone while the free enterprise system provides equality of opportunity for everyone to determine their own outcomes and living conditions. This difference is essentially the freedom for the individual versus control by the government.
So, what does the Bible teach us about God’s view of economics? I believe that God’s Word lays out 5 basic economic principles as follows:
1. Freedom of Choice – God is the one who gives us our freedom. He gave us free will to make our own choices. This is inherent in His design of mankind (Genesis 2:16, John 8:36).
2. Private Ownership – It is relatively clear throughout Scripture that people owned land and had property and possessions (Matthew 19:21, Acts 2:45, Hebrews 10:34).
3. Work is Required – The Bible says in Genesis 3:17 that because of Adam’s sin man must now toil in his labor. Paul said that “If a man does not work, he shall not eat.” (2 Thessalonians 3:10).
4. Give to Others – The Bible says that we are to be generous and share what we have with others (Luke 3:11). This is voluntary and not compulsory.
5. Serve Others – We are called as followers of Christ to use our gifts to serve others (1 Peter 4:10), not to accumulate wealth for ourselves.
These principles are best displayed in the free enterprise system. In this economic system everyone has the freedom to make their own choices of what to buy and sell, not the government. Citizens are allowed to own property and have possessions of their own and use them as they each determine. Citizens must work to earn their own living and not rely on others or the government. As Christians, we are called to be generous and help those in need by giving of what we have and not relying on the government to provide those things. And finally, serving others is the foundation of every business when it starts. Someone sees a need not being met in the market and they start a company to serve that need. It is clear that the free enterprise system is better designed to benefit people individually and enable them to prosper according to their own choices and effort. A government-controlled system can never provide that. And while God’s Word does not prescribe a specific economic system we should use, it is abundantly apparent that the free enterprise system is more aligned with Biblical principles and is one that enables human beings to flourish