What Anticapitalist Christian Economists Get Wrong
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Almost any economist who has taught at a Christian college or operates in Christian academic circles has been asked the question, “What about the poor?” Most of the time, people ask the question in the spirit of dismissing any view of economics that favors free markets. Although there are a few Christian colleges where at least the economics faculty might look favorably upon a market economy, the hostility toward free markets is as strong at most Christian colleges as it is in the most left-wing institutions of higher learning.
In the first (and last) meeting I attended of the Association of Christian Economists in 2001, the session was dominated by a panel discussion of hard-left economists who sought to “practice shalom” in their communities in outreaches toward poor people in their area. At one point in the session, the economists all enthusiastically agreed that because of free markets, poverty in the United States had been rapidly increasing, which made it “necessary for the government to step in” with the antipoverty programs of Lyndon Johnson’s Great Society initiative.
That poverty rates were increasing in the USA in the post–World War II era is patently untrue, even if Christian economists swear fealty to such a belief. Indeed, poverty rates were falling rapidly long before Johnson’s “War on Poverty” and the numbers bear out that claim, but these economists stuck to the narrative that the state must forever be rescuing the poor from the hellish existence of free enterprise.
All of this might come as a surprise to people who think of evangelical Christians as being politically conservative (certainly, many, but not all, are politically conservative), and certainly evangelicals have been one of the most important and reliable political bases for the Republican Party since the election of Ronald Reagan in 1980. That should not be surprising given the absolutist stand by the Democratic Party on issues like gay and transgender rights and the availability of abortion on demand, issues that evangelicals who hold to the authority of the Bible deem to be important.
However, on economics, many evangelicals, while rejecting outright socialism, also have a hard time accepting free market economics and often call for a “third way” to economic life. Because of my experience teaching in Christian colleges, I believe I understand the source of the discontent: the very nature of economics, scarcity, and tradeoffs, which are fundamental to economic thinking.
In a recent Mises Wire article, I wrote that economists often are accused of being indifferent about social problems because they tend to look to reduce harm, as opposed to eliminating it (and risk) altogether. As one who has lived all of my sixty-plus years being part of evangelical circles, I recognize the cognitive dissonance that many evangelicals have when it comes to dealing with issues that have a “right or wrong” component and how to deal with them.
Take the drug war, for example. Most evangelicals I know believe that not only are drugs like heroin or marijuana bad, but that putting them into one’s body is a sinful act. (Evangelicals are more split on consumption of alcohol, and there still runs a strong prohibitionist streak in their ranks.) Thus, in their minds, if something is sinful, then it also should be illegal, and if it is illegal, then laws against taking drugs should be enforced to the maximum. If people refuse to obey the drug laws, evangelical Christians reason, then the state is justified in using maximum force, since drugs are bad, harm people, and their consumption violates the law of God and inflicts harm upon society.
For example, I have an influential Christian friend who believes free markets are good but that drugs are bad. He also believes the biblical admonition that the law “is a teacher,” so if the law says not to take certain drugs, then the law is engaged in biblical teaching and police and the courts need to enforce it. That the drug war itself has caused huge social harm, empowered the police to engage in violent acts, and has wreaked havoc in many communities is irrelevant; drugs are bad, and if people would be more virtuous and not take them, then there would be no police violence.
(I would be remiss to ignore the influence of Laurence Vance, a libertarian evangelical Christian who has been a loud—and often lonely—voice against the drug war, at least in Christian circles. While some have accused Vance of favoring drug use, he clearly draws the line between using drugs and advocating for their prohibition, and any accusation otherwise is false.)
In my recent article, I led off with a Henry Hazlitt quote from Economics in One Lesson that tends to separate economic thinking from the unambiguous views that people often have on many issues, and evangelicals certainly are among those who see much of the world in black and white. Hazlitt wrote:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
Many evangelicals take strong stands not only against the use of drugs, but also see the presence of poverty as a social injustice that needs to be righted. Now. This was not always the case, at least among people who held to the Bible as being inerrant truth. When the major splits in the Presbyterian Church came about in the 1930s, for example, the “liberals” (those who questioned the biblical accounts of Jesus and who doubted the authority of the scriptures) believed that their main focus should be on improving society, and that included helping poor people. However, because private enterprise, with its emphasis upon profitability, in their view was the cause of social and economic inequality, they turned either to socialism or to the welfare state as the “solution” that would most please God (if they actually believed in God).
Ultimately, there was a split between those who followed what Walter Rauschenbusch called the “social gospel” (from his book written in the 1890s), which emphasized secular progressivism (and later social activism) as the true path of Christianity, and those who called themselves Christian fundamentalists and chose to emphasize a spiritual side of Christianity that concentrated upon conversions to the faith. Not surprisingly, the mainstream Protestants who push the social gospel also gravitated toward progressivism and ultimately socialism, while the fundamentalists (and later the evangelicals) stayed mostly out of political and social disputes.
That would change in the early 1970s as a number of evangelicals tied to the Anabaptist movements and InterVarsity Christian Fellowship began to agitate for what they called “social action.” One of the leaders of this movement was an Eastern College history professor, Ronald Sider, who wrote Rich Christians in an Age of Hunger (published by InterVarsity Press [IVP] in 1977), and the book had a major influence in evangelical circles and especially at Christian colleges, where professors quickly adopted it for their classes, and it became the best-selling book in IVP history.
Sider’s book looked at poverty in the world at that time and concluded that the only reason that Third World countries were poor was because North America and Europe were relatively wealthy. These countries were gobbling up the world’s resources unjustly and leaving nothing for the starving masses. Capitalism was the culprit, Sider argued, and while he did not agitate for outright socialism, he did call for a central power in the world to oversee massive wealth transfers, a worldwide welfare state.
(In later editions Sider moderated the strident tone that characterized his 1977 book, but the theme itself is largely untouched, and the narrative—that capitalism creates poverty—remains.)
The book fed well into the evangelical mindset of seeing the world in black-and-white terms. It also provided evangelicals, who were likely to be ridiculed by elites in academe, politics, and the media for their faith, a way to be relevant and to try to earn favor with those same elites for their newfound compassion for the poor. The book itself presented a simple, black-and-white view of wealth and poverty; people who had wealth had stolen from the poor, and there could be no other explanation.
Sider’s central message was that unless Americans, Canadians, and Europeans gave up their wealthy lifestyles and agreed to adhere to a simple life—and stop using so many resources—poverty and starvation would expand throughout the planet and rates of poverty would accelerate. He even prophesied that unless this was done immediately, it would be maybe a decade before Third World countries like India that had nuclear weapons would use them to blackmail the West into giving up their wealth.
We know the rest of the story. The Soviet Union and its satellites collapsed and at least some countries joined the capitalist world. China shed its Mao straightjacket (giving lie to InterVarsity Press’s claim that Mao had performed an economic miracle there) and turned toward a market-based economy, and its poverty rates fell drastically. In fact, poverty around the globe diminished even as the world’s population increased well beyond the limits that environmentalists and doomsayers like Sider had predicted. To put it another way, most if not all of what Sider wrote in 1977 was discredited.
Even as the world became less poor, much of the evangelical world—or at least its academic side—failed to notice. In the mid-1980s, Calvin College (now Calvin University) put out a book, Responsible Technology, which read like a technocratic version of Rich Christians. In the chapter on economics, the authors presented one caricature after another and declared that economists’ tools such as incentives and marginal utility were illegitimate because, well, because people just shouldn’t act that way. As for the basic economic doctrine of scarcity, Calvin’s authors declared that scarcity was a fallacy invented by ignorant free market economists, since everyone knows God has provided the world with lots of wonderful resources.
Even in recent readings of Faith and Economics, the journal published by the Association of Christian Economists, it is like a 1970s time warp in which nothing has changed, with capitalism gobbling up the resources that should go to the poor, and so on. In the view of many Christian theologians, all economic activity is zero-sum, so any gain by one party can come about only because another party is made worse off. The notion of market exchanges making all parties better off simply is rejected out of hand. (I finally gave up in the early 2000s and dropped my membership with absolutely no regrets, nor have I attended any of their annual meetings since then.)
As I noted earlier, a mindset in which poverty is seen solely as a condition brought about by someone else’s wealth is not going to be able to comprehend what actually must happen for a society to grow economically and for the rates of destitution to fall. These things take place over time, and economies grow because entrepreneurs find ways to move resources from lower-valued to higher-valued uses, working within a market system directed by profits and losses. Positive change usually is gradual, and those who believe that people come out of poverty only via wealth transfers are not going to abandon their zero-sum viewpoints.
This hardly is to say that all Christian economists see the economic world in this crabbed sort of way. I know many Christians who are part of the Austrian school, and they have found ways to integrate their faith and their economic thinking. (Economists at Grove City College, for example, are a very wonderful exception to what seems to be the rule.) However, just as many evangelicals cannot conceive that there might be tradeoffs to police violently enforcing the drug war, many Christian economists, theologians, and academics are unable to comprehend even basic concepts of economic thinking and rely, instead, on terms like “stewardship” or “justice,” which without methodologies and foundations are just buzzwords, and then believe that they have “proven” their points by trotting out such words.
Perhaps, the saddest aspect of this ignorance is that these evangelicals have completely ignored the real reductions in poverty rates in the past forty years, reductions that are due to liberalizing economies that once were in socialist straitjackets. Instead, they insist that it still is 1977 and that unless the West immediately transfers vast sums of wealth to Asia, Africa, and South America, billions of people will starve. That this belief isn’t true no longer seems to matter in the current political climate.