Time For Truth

A place to grow in the Grace & Knowledge of our Lord Jesus Christ

Social justice does not mean socialism – so stop it!

The National Council of Churches and the World Council of Churches, supported by most mainline denominations including the PCUSA has a clear liberal/progressive socialist agenda and they do so under the auspices of this being Christian. It has become quite fashionable, even for many evangelicals to think of quasi-economic socialist policies as more Christian than Capitalism. They therefore feel justified for supporting liberal/progressive politicians and political policies. When did this become fashionable? It is clearly not biblical. Dr. Douglas Groothuis on his blog linked to an excellent 1985 article by Dr. Ronald Nash, titled Socialism, Capitalism, and the Bible”. Here is an important portion of the article:

One dominant feature of capitalism is economic freedom, the right of people to exchange things voluntarily, free from force, fraud, and theft. Socialism, on the other hand, seeks to replace the freedom of the market with a group of central planners who exercise control over essential market functions. There are degrees of socialism as there are degrees of capitalism in the real world. But basic to any form of socialism is distrust of or contempt for the market process and the desire to replace the freedom of the market with some form of centralized control. Generally speaking, as one moves along the continuum of socialism to capitalism, one finds the following: the more freedom a socialist allows, the closer his position is to interventionism; the more freedom an interventionist allows, the closer his position is to capitalism. The crux is the extent to which human beings will be permitted to exercise their own choices in the economic sphere of life.

I will say nothing more about that deplorable economic system known as interventionism, a hopeless attempt to stop on a slippery slope where no stop is possible. The only way the half-hearted controls of the interventionist can work is if they become the total controls of the socialist. Anything less will result in the kind of troubled and self-damaging economy we have had for the past several decades in the United States.

It fascinates me that in the year 2009, we have reverted to interventionism once again. In our arrogance that we are doing something new and our fervor for change, we have neglected to learn from history, and are therefore doomed to repeat the same mistakes.

I shall attempt to get a clearer fix on the real essence both of capitalism and socialism and then see which is more compatible with the biblical worldview. The best starting point for this comparison is a distinction made most recently by the American economist, Walter Williams. According to Williams, there are two and only two ways in which something may be exchanged. He called them the peaceful means of exchange and the violent means of exchange.

The peaceful means of exchange may be summed up in the phrase, “If you do something good for me, then I’ll do something good for you.” When capitalism is understood correctly, it epitomizes the peaceful means of exchange. The reason people exchange in a real market is because they believe the exchange is good for them. They take advantage of an opportunity to obtain something they want more in exchange for something they desire less. Capitalism then should be understood as a voluntary system of relationships that utilizes the peaceful means of exchange.

But exchange can also take place by means of force and violence. In this violent means of exchange, the basic rule of thumb is: “Unless you do something good for me, I’ll do something bad to you.” This turns out to be the controlling principle of socialism. Socialism means far more than centralized control of the economic process. It entails the introduction of coercion into economic exchange in order to facilitate the attainment of the goals of the elite who function as the central planners. One of the great ironies of Christian socialism is that its proponents in effect demand that the State get out its weapons and force people to fulfill the demands of Christian love. Even if we fail to notice any other contrast between capitalism and socialism, we already have a major difference to relate to the biblical ethic. One system stresses voluntary and peaceful exchange while the other depends on coercion and violence.

Some Christian socialists object to the way I have set this up. They profess contempt for the more coercive forms of state-socialism on exhibit in communist countries. They would like us to believe that a more humane, non-coercive kind of socialism is possible. They would like us to believe that there is a form of socialism, not yet tried anywhere on earth, where the central ideas are cooperation and community and where coercion and dictatorship are precluded. But they provide very little information about the workings of this more utopian kind of socialism, and they ignore the fact that however humane and voluntary their socialism is supposed to become after it has been put into effect, it will take massive amounts of coercion and theft to get things started.

Dr. Nash is absolutely correct. The naive attitude that claims that coercion does not occur in a socialistic system, forget that by its very nature it coerces a “redistribution of wealth”.

To that paradox, add one more: the fact that socialists need capitalism in order to survive. Unless socialists make allowance for some free markets which provide the pricing information that alone makes rational economic activity possible, socialist economies would have even more problems than those for which they are already notorious. Consequently, socialism is a gigantic fraud which attacks the market at the same time it is forced to utilize the market process.

But critics of the market try to shift attention away from their own embarrassing problems to claims that capitalism must be abolished or restricted because it is unjust or because it restricts important human freedoms. Capitalism is supposed to be unchristian because it allegedly gives a predominant place to greed and other unchristian values. It is alleged to increase poverty and the misery of the poor while, at the same time, it makes a few rich at the expense of the many. Socialism, on the other hand, is portrayed as the economic system of people who really care for the less fortunate members of society. Socialism is represented as the economics of compassion. Socialism is also recommended on the ground that it encourages other basic Christian values such as community.

If these claims were true, they would constitute a serious problem for anyone anxious to show that capitalism is compatible with the biblical ethic. But, of course, the claims are not true. People who make such charges have their facts wrong or are aiming at the wrong target. The “capitalism” they accuse of being inhumane is a caricature. The system that in fact produces the consequences they deplore turns out to be not capitalism, but interventionism.

Capitalism is not economic anarchy. It recognizes several necessary conditions for the kinds of voluntary relationships it recommends. One of these presuppositions is the existence of inherent human rights, such as the right to make decisions, the right to be free, the right to hold property, and the right to exchange what one owns for something else. Capitalism also presupposes a system of morality. Capitalism should be thought of as a system of voluntary relationships within a framework of laws which protect people’s rights against force, fraud, theft, and violations of contracts. “Thou shalt not steal” and “Thou shalt not lie” are part of the underlying moral constraints of the system. Economic exchanges can hardly be voluntary if one participant is coerced, deceived, defrauded, or robbed.

While I agree with Dr. Nash in how Capitalism has functioned in the past, there has been a significant shift in recent decades. Capitalism needs an underlying Christian ethic/character. As Western world has moved further away from a conservative Christian ethos, capitalism needs greater oversight and legal/regulatory control.

Once we grant that consistency with the biblical doctrine of sin is a legitimate test of political and economic systems, it is relatively easy to see how well democratic capitalism scores in this regard. The limited government willed to Americans by the Founding Fathers was influenced in large measure by biblical considerations about human sin. If one of the more effective ways of mitigating the effects of human sin in society is dispersing and decentralizing power, the conservative view of government is on the right track. So too is the conservative vision of economics.

The free market is consistent with the biblical view of human nature in another way. It recognizes the weaknesses of human nature and the limitations of human knowledge. No one can possibly know enough to manage a complex economy. No one should ever be trusted with this power. However, in order for socialism to work, socialism requires a class of omniscient planners to forecast the future, to set prices and to control production. In the free market system, decisions are not made by an omniscient bureaucratic elite but made across the entire economic system by countless economic agents.

At this point, of course, collectivists will raise another set of objections. Capitalism, they will counter, may make it difficult for economic power to be consolidated in the hands of the state; but it only makes it easier for vast concentrations of wealth and power to be vested in the hands of private individuals and companies. But the truth turns out to be something quite different from this widely accepted myth. It is not the free market that produces monopolies; rather it is governmental intervention with the market that creates the conditions that encourage monopoly.

As for another old charge, that capitalism encourages greed, the truth is just the reverse. The mechanism of the market neutralizes greed as selfish individuals are forced to find ways of servicing the needs of those with whom they wish to exchange. As we know, various people often approach economic exchanges with motives and objectives that fall short of the biblical ideal. But no matter how base or selfish a person’s motives may be, so long as the rights of the other parties are protected, the greed of the first individual cannot harm them. As long as greedy individuals are prohibited from introducing force, fraud, and theft into the exchange process, their greed must be channeled into the discovery of products or services for which people are willing to exchange their holdings. Every person in a market economy has to be other-directed.

New Religion of the Left

Finally, some examples of the way in which attempts to ground American liberalism and interventionism or Latin American liberationism on the Bible involve serious distortions of the biblical message.

For instance, consider how radical American evangelicals on the Left abuse the biblical notion of justice. The basic idea in the Old Testament notion of justice is righteousness and fairness. But it is essential to the Leftist’s cause that he read into biblical pronouncements about justice, contemporary notions of distributive justice. When the Bible says that Noah was a just man, it does not mean that he would have voted the straight Democratic ticket. It means simply that he was a righteous man.

Likewise, many Christians on the Left seek to reinterpret Jesus’ earthly mission in exclusively economic and political terms. In their view, Jesus came primarily to deliver those who were poor and oppressed in a material sense. But every member of the human race is poor in the sense of being spiritually bankrupt. Jesus came to end our spiritual poverty by making available the righteousness that God demands and that only God can provide.

It is heresy to state that God’s love for people varies in proportion to their wealth and social class. It is nonsense to suggest that all the poor are good and all the rich are evil. Once we eliminate the semantic game-playing by which some refer to a non-coercive voluntary utopian type of socialism, it becomes clear that socialism is incompatible with a truly free society. Edmund Opitz has seen this clearly: “As History’s vice-regent, the Planner is forced to view men as mass; which is to deny their full stature as persons with rights endowed by the Creator, gifted with free will, possessing the capacity to order their own lives in terms of their convictions. The man who has the authority and the power to put the masses through their paces, and to punish nonconformists, must be ruthless enough to sacrifice a person to a principle…a commissar who believes that each person is a child of God will eventually yield to a commissar whose ideology is consonant with the demands of his job. ”

And so, Opitz concludes, “Socialism needs a secular religion to sanction its authoritarian politics, and it replaces the traditional moral order by a code which subordinates the individual to the collective.” All of this is justified in the cause of improving economic well-being and in the name of compassion.

The Choice I Make

I think I have said enough to allow me, at least, to make a reasoned choice between capitalism and socialism on the basis of each system’s compatibility to the biblical worldview. The alternative to free exchange is violence. Capitalism is a mechanism that allows natural human desires to be satisfied in a nonviolent way. Little can be done to prevent human beings from wanting to be rich. But what capitalism does is channel that desire into peaceful means that benefit many besides those who wish to improve their own situation.

Which choice then should I, as a Christian, make in the selection between capitalism and socialism? Capitalism is quite simply the most moral system, the most effective system, and the most equitable system of economic exchange. When capitalism, the system of free economic exchange, is described fairly, there can be no question that it, rather than socialism or interventionism, comes closer to matching the demands of the biblical ethic.

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February 28, 2009 - Posted by | Uncategorized

7 Comments »

  1. Hey I love this blog. I can see the time and effort put into this.. Thanks!

    Comment by Emma | March 1, 2009

  2. Adel,

    I’ve recently learned about/met Dr. John Perkins, and it’s indeed refreshing to hear people talking about doing social justice the “right” way. Good work.

    Craig

    Comment by Craig | March 2, 2009

  3. Excellent job, Adel.

    Nash, in his excellent article cited stealing and lying as violations of the Ten Commandments. But he does not note that two of them, Thou shalt not steal, and thou shalt not covet what belongs to one’s neighbor, are both meaningless in the absence of private property. He also does not mention what I think is the best description of Kingdom justice in Scripture, the Prodigal Son who rightly and naturally suffers economic hardship from imprudent economic decisions. It is only after he repents of his folly that he is forgiven and welcomed into his father’s household. Yet, even then, there are consequences for him since the remainder of his father’s properties will belong to his brother who made good economic choices.

    I would disagee with one of your comments, however. You suggest that in recent decades capitalism has not operated as it has in the past and therefor needs more regulation. I think that there have always been bubbles and busts, starting with the Great South Sea Bubble and others of centuries ago.

    Nash clearly contemplated regulation in a free market economy to prevent theft, fraud and force, so that people’s economic choices can be truely voluntary. Regulation that allows a market to function better, and without theft, fraud or force, but which does not attempt to pick winners and losers, set prices or allocate resources is, and has always been, appropriate in a free market system.

    There is nothing inappropriate, or inconsistent with free markets, to use knowledge of what has happened in the last decade to improve the regulatory structure. In some cases that will mean more rules (such as regulation of systemic risks and bubbles), fewer rules(such as the repeal of the laws encouraging mortgage lenders to make loans to people who could not repay them), or simply better and more efficient regulation (such as improving our ability to locate and stop future Bernie Madoffs).

    The key to good regulation in a free market system is to ensure that economic incentives remain rational. That is, people should be encouraged to work hard, save, invest and be discouraged from making bad choices such as taking drugs, joining gangs, and dropping out of school. Successful people should not be punished or thought of as less moral. Those making bad choices should not be excused or enabled in their irresponsibility. Public policy should be centered not on redistributing wealth, but on giving everyone the opportunity to accumulate their own wealth.

    Comment by Whit | March 2, 2009

  4. Thank you Whit for your insightful and helpful observations and comments. My comment on the need for greater regulation has to do with what I perceive as the erosion of ethics and morality in accordance with a decline in a conservative Christian ethos. I believe that a decline in “obedience to the unenforcable” has forced us to require greater regulation and more laws. As David Wells put it in his excellent book “Losing Our Virtue”, “when moral principle breaks down, we are left with no other recourse than that of law.” While Nash does indeed include regulation and law to regulate free markets, more has been required as character has severely declined, which has created a greater need for even more regulation. At some point, as character declines even further (and it is happening at a faster pace) the system can become over-burdened with regulation, and freedoms will continue to be lost, as cost of regulation climbs. I believe it is imperative therefore that the problem be addressed in character formation and not in laws and regulation.

    Comment by Adel | March 2, 2009

  5. I agree. I would add that regulation itself, particularly when it punishes virtuous behavior, and enables bad behavior, accelerates the decline of character.

    Peter Berkowitz, in a recent excellent article entitled “Constitutional Conservatism” addressed the subject from a secular point of view. The burden of his article was that economic conservatives and social conservatives need to work together to preserve freedom.

    Comment by Whit | March 2, 2009

  6. Excellent post Adel! Iappreciated the comments posted by Whit as well.

    With respect to regulation, no amount of new laws can help to reform a system in which our leaders lack the moral and eithical backbones to enforce the laws that are currently on the books. It becomes even more discouraging when new proposals are made for political expediancy rather than out of a centrally held belief in or understanding of our economic system. It is said that “Locks simply keep honest people honest”, and laws simply serve as a guide to thouse who follow the law.

    Thanks once again!!

    Rob

    Comment by Rob Sayler | March 5, 2009

  7. Thank you Rob. You are right on the money, and have added a new and important insight — that is the moral corruption inherent in those who are in charge of regulation. Excellent point.

    Comment by Adel | March 6, 2009


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