Capitalism and Christianity
Christianity and the Capitalistic Free Market System
Many people debate whether Christianity supports socialism because of the apparent selfless nature of sharing that it seems to support, or if Christianity is a proponent for a free market economy. In this paper, I will provide some reasons why I believe that Christianity supports a capitalistic, free market system.
There is never a better place to start than from the beginning, so to start with a foundational understanding I want to define Capitalism and the Free Market:
According to the Merriam Webster dictionary, capitalism is defined as:
“A way of organizing an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market”
A free market is defined as: “An economic market or system in which prices are based on competition among private businesses and not controlled by a government”.
In summary, the concept of a capitalistic free market means that the economy is most successful when business owners and entrepreneurs are able to freely start and own their own businesses, compete for that business and its success, and do so without much interference from the government.
In order to demonstrate how Christian belief supports this system, I will go through some main tenets of what comprises a capitalistic system. The points I will cover are: working for profit, owning property (private ownership), investment, and government involvement in the running of the economic system. In addition to citing Christian economists who have dedicated time and research to this topic, I will primarily support this belief with passages from the Bible, since the foundation of Christian belief comes solely from it.
Work for profit
In the beginning, God created the world, and He created it perfectly. The Bible says that He created the world in 6 days and that He rested on the 7th.
“By the seventh day God had finished the work He had been doing; so on the seventh day He rested from all His work.” Gen 2:2
This was explicitly done as an example for us. God did not need rest for Himself, but this timeline of a workweek followed by a day of rest was a template for His creation to duplicate.
Once God created the first man, He instantly gave the instructions to work and be productive. I found it interesting that the first recorded interaction between God and Adam, was God placing Adam in the Garden of Eden with the directive to work the land. We see this in the second chapter of the Bible.
“Now no shrub had yet appeared on the earth and no plant had yet sprung up, for the Lord God had not sent rain on the earth and there was no one to work the ground, but streams came up from the earth and watered the whole surface of the ground. Then the Lord God formed a man from the dust of the ground and breathed into his nostrils the breath of life, and the man became a living being…The Lord God took the man and put him in the Garden of Eden to work it and take care of it.” Gen 2:5-7, 15
The Bible also chastises the sluggard and discourages laziness. For example, in Proverbs 10:4 it says, “Lazy hands make for poverty, but diligent hands bring wealth.” (It’s ok to profit from your work). Also, in 2 Thessalonians 3:10 “The one who is unwilling to work shall not eat.” And in Proverbs 20:4 “Sluggards do not plow in season; so at harvest time they look but find nothing”.
Profits provide motivation to avoid laziness. The more you work, the more you gain. In his book “Economics in One Lesson”, Henry Hazlitt talks about this motivation. “If there is no profit in making an article, it is a sign the labor and capital devoted to its production are misdirected…one function of profits, in brief, is to guide and channel the factors of production…in accordance with demand.”
Profit can be monetary, or it can be anything we are willing to exchange for something else (e.g. time, goods). Clearly, from the beginning we were intended to work, for our own well-being, to maintain order, and to feed ourselves. Thus, from the moment of human dominion on earth, we were working for profit.
Does the Bible support private ownership?
In ancient times, kings, temples and rulers generally had control over mass areas of land. The Bible actually regulated ownership by individuals and families. It is also fundamentally against debt (see Ecclesiastes 5:5, Proverbs 22:7, Psalm 37:21, Numbers 30:2, Romans 13:8) and so God established what is called the Year of Jubilee in which people who had sold their land to remain free of, or to eliminate debt, would have it returned to them. This allowed families, communities, and friends to help each other to remain financially stable and also have the ability to keep land among families throughout generations. The buyer was aware the land would not permanently be his, and so what he was essentially buying was the profit, or crops, that the land would produce in the number of years he had possession of it. When the Year of Jubilee came around (every 50 years), he would return the land to the original owner who would then retake responsibility for governing it. The process is laid out in detail in Leviticus 25:8-34 and below I have included a segment of those instructions.
“Count off seven sabbath years—seven times seven years—so that the seven Sabbath years amount to a period of forty-nine years. ... Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you; each of you is to return to your family property and to your own clan… In this Year of Jubilee everyone is to return to their own property. “If you sell land to any of your own people or buy land from them, do not take advantage of each other. You are to buy from your own people on the basis of the number of years since the Jubilee. And they are to sell to you on the basis of the number of years left for harvesting crops. When the years are many, you are to increase the price, and when the years are few, you are to decrease the price, because what is really being sold to you is the number of crops...*
*(Notice above, this price adjustment discourages people who might think they can rack up more debt carelessly as the Jubilee year approaches. That would be foolish because they will receive less money for the land the closer the year is.)
The land must not be sold permanently, because the land is mine and you reside in my land as foreigners and strangers. Throughout the land that you hold as a possession, you must provide for the redemption of the land…If one of your fellow Israelites becomes poor and sells some of their property, their nearest relative is to come and redeem what they have sold. 26 If, however, there is no one to redeem it for them but later on they prosper and acquire sufficient means to redeem it themselves, 27 they are to determine the value for the years since they sold it and refund the balance to the one to whom they sold it; they can then go back to their own property. 28 But if they do not acquire the means to repay, what was sold will remain in the possession of the buyer until the Year of Jubilee. It will be returned in the Jubilee, and they can then go back to their property.
This passage goes on to explain regulations in detail, including how to handle a home built within a walled city versus in the country, passing land to descendants and special rules for those within the tribe of Levi. This amount of planning, regulation, and detail expresses strongly the value of land ownership in the Bible.
If land ownership is so important, and Christianity is fundamentally against selfishness shouldn’t we all share equally and therefore support a socialistic view? No. One of the most popular passages to cause confusion is in Acts.
“After they prayed, the place where they were meeting was shaken. And they were all filled with the Holy Spirit and spoke the word of God boldly. All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had. With great power the apostles continued to testify to the resurrection of the Lord Jesus. And God’s grace was so powerfully at work in them all that there were no needy persons among them. For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need. Joseph, a Levite from Cyprus, whom the apostles called Barnabas (which means “son of encouragement”) sold a field he owned and brought the money and put it at the apostles’ feet.” Acts 4:31-36
Notice that this is all done voluntarily by communities and individuals, due to changes of heart prompted by their conversions and acceptance of the Holy Spirit. The church, or leaders of the communities, did not dictate that everyone split what they own equally amongst each other – rather, those who had the ability voluntarily helped those in need. I believe this is an example not of socialism, where people are coerced into giving up their resources, but of people freely working together in a free market system.
You must own property in order to give it, and you must make a profit in order to share it. This being the case then, capitalism is the most effective system to allow this type of behavior to manifest itself, and would be in line with Scriptural teachings.
Investment can be defined as sacrificing something now, with the hopes of profiting from it later. Someone can invest time in order to cook a good meal, or energy in order to stay in shape, but most commonly in economics we think of investing money to earn interest from a bank, or profit from a company we invest in or purchase stock from. Can this too be Biblical?
While the specific principle of investment is not widely discussed (although there are a few examples we will see) the wise management of money is a prominent topic in the New Testament. In fact, Jesus discussed money more than He even discussed Heaven. There are many references to money management in general, and there are some references to investment as well, e.g. Matthew 25: 14-27, (that not only supports the idea of working for profit, but also the concept of investing what you have to earn interest), Luke 19:11-26, and Ecclesiastes 11:1-3.
One of the most recognizable parables that comes to mind when thinking of investing money for greater return in the future is found in Luke 19:11-27.
“…A man of noble birth went to a distant country to have himself appointed king and then to return. So he called ten of his servants and gave them ten minas. ‘Put this money to work,’ he said, ‘until I come back...He was made king…and returned home. Then he sent for the servants to whom he had given the money, in order to find out what they had gained with it. The first one came and said, ‘Sir, your mina has earned ten more.’ ‘Well done, my good servant!’ his master replied. ‘Because you have been trustworthy in a very small matter, take charge of ten cities.’ The second came and said, ‘Sir, your mina has earned five more.’ His master answered, ‘You take charge of five cities.’ Then another servant came and said, ‘Sir, here is your mina; I have kept it laid away in a piece of cloth. I was afraid of you, because you are a hard man. You take out what you did not put in and reap what you did not sow.’ His master replied, ‘I will judge you by your own words, you wicked servant! You knew, did you, that I am a hard man, taking out what I did not put in, and reaping what I did not sow? Why then didn’t you put my money on deposit, so that when I came back, I could have collected it with interest?’ Then he said to those standing by, ‘Take his mina away from him and give it to the one who has ten minas.’…”
This parable demonstrates the value of investing. The servant that was least risk-averse profited 10x what his master had charged him with. Another was perhaps a little more conservative, and earned 5x what his master has given him. The final servant had a high level of risk aversion and instead of saving it in a bank, he kept it to himself. The moral of this parable is to be wise with what you are given, and multiply it if you can.
We see in Matthew a very similar parable that ends with the statement, “Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.” Matthew 25:27.
And also, Ecclesiastes 11:1-3 “Ship your grain across the sea; after many days you may receive a return. Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” This passage is reminding us to be conscientious in diversifying our investments, because you never know how they may succeed or fail.
In Gary North’s book “Christian Economics in One Lesson”, he devotes a chapter to interest and rent. He delves into the Greek translations and discusses how Christians are to use their talents (aka human capital) to make the most of what is given to them. He states, “He [God] provides us with capital, He expects us to increase it for the sake of His kingdom...God’s people were assured that their position as interest-seeking lenders was valid. What they were to avoid was becoming indebted foreigners.”
Should the government be involved in the economy? Absolutely! There are certain common goods that we all share and use. One clear example is the military. Since the military is there to protect us as an entire country, taxes must be had, and the Bible certainly supports citizens paying their taxes. We can see this is Matthew 22:
“Then the Pharisees went out and laid plans to trap him in his words. They sent their disciples to him along with the Herodians. “Teacher,” they said, “we know that you are a man of integrity and that you teach the way of God in accordance with the truth. You aren’t swayed by others, because you pay no attention to who they are. Tell us then, what is your opinion? Is it right to pay the imperial tax to Caesar or not?” But Jesus, knowing their evil intent, said, “You hypocrites, why are you trying to trap me? Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose image is this? And whose inscription?” “Caesar’s,” they replied. Then he said to them, “So give back to Caesar what is Caesar’s, and to God what is God’s.” When they heard this, they were amazed. So they left him and went away.” Matthew 22:15-22
This is a common passage used to demonstrate the fact that Christians are not to be rebellious against government authorities, and we are to remain lawful, tax paying citizens. Elsewhere in scripture, we are told that God is in complete control of who is in political office at any time:
“Let everyone be subject to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2 Consequently, whoever rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3 For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and you will be commended. 4 For the one in authority is God’s servant for your good. But if you do wrong, be afraid, for rulers do not bear the sword for no reason. They are God’s servants, agents of wrath to bring punishment on the wrongdoer. 5 Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also as a matter of conscience. This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. 7 Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.” Romans 13:1-7
Beyond our obligation to pay taxes, and submit to governmental authorities, this particular passage brings up another point, and that is, what is the job of government? Essentially, it is to protect its people, and punish wrongdoers. This is an extremely simple concept and compared to how our government functions today, may even be considered radical in its simplicity.
It is my personal belief that it would be within Biblical principles and Christian beliefs, to deregulate some of the things that our government provides. One such example is welfare.
According to scripture, it is Christians and the church who are to provide for and take care of widows and orphans: “Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world.” James 1:27
And to the poor in our midst:
“If anyone is poor among your fellow Israelites in any of the towns of the land the Lord your God is giving you, do not be hardhearted or tightfisted toward them. 8 Rather, be openhanded and freely lend them whatever they need. 9 Be careful not to harbor this wicked thought: “The seventh year, the year for canceling debts, is near,” so that you do not show ill will toward the needy among your fellow Israelites and give them nothing. They may then appeal to the Lord against you, and you will be found guilty of sin. 10 Give generously to them and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to. 11 There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land.” Deuteronomy 15:7-11
As you can see, this scripture encourages generosity, and where some may be tempted to abuse that generosity by taking advantage of the 7th year of debt forgiveness (similar to the Year of Jubilee), that is frowned upon in many scriptures. In addition to discouraging debt, selfishness, and unwise financial management, the Bible says Christians are not to concern themselves with others’ motives, but they are to do what they are called to do, without wondering if the other person deserves it. God promises then to bless those people.
These verses are also interesting because they tell us that the poor will always be with us, with no command anywhere in scripture to try and eliminate the poor completely. Many countries have focused on eliminating the poor that live there by trying socialism and its counterparts and they have all failed because they also eliminate the motivation that people have to work harder so that they can profit more and provide for themselves a better life. In a socialistic economy, when it’s harder to see great personal success, the end result is that everyone stops working as hard. So in the end socialism creates more poor, not less. In stark contrast, when capitalism is instituted and Christian beliefs are allowed to thrive, then hard work and generosity are abundant and the poor are often taken care of.
I would like to conclude with some thoughts by Rev Robert Siraco. In his book “Defending the Free Market: the Moral Case for a Free Economy”, he states,
“When civilizational virtues are eroded from within, people lose the capacity to defend the good things those habits enables previous generations to achieve…We have come to believe that the government bureaucrat is a Good Samaritan…Can it be mere coincidence that we are beset by decline just as the Judeo-Christian worldview has retreated from the public square?...When the Judeo-Christian worldview is replaced by a vaguely formed and only partially acknowledged philosophical materialism, then all that matters is what we can get for ourselves today. What is lost is a sense of history as a meaningful and linear thing, as something moving toward a great consummation. When a person loses that, when a whole people loses that, when the institutions that serve to organize and govern a people lose that, the loss is severe and reverberating. When freedom is divorced from faith, both freedom and faith suffer. Freedom becomes rudderless, because truth gives freedom its direction…Freedom without a moral orientation has no guiding star. On the other hand, when a people surrenders their freedom to the government – the freedom to make moral, economic, religious, and social choices and then take personal responsibility for the consequences – virtue tends to waste away and faith itself grows cold…The link between economic liberty and public morality is not tenuous; it is clear and direct.”
· The Bible (NIV)
· CloseStyle: MLA APA Chicagohttp://www.merriam-webster.com/dictionary/free+market?show=0&t=1384445559
“The Bible, Homeownership and the Housing Crisis”, by Joshua Berman History News Network 2013 http://hnn.us/article/56906
· “The Bible mandates free market capitalism. It is anti-socialist” by Gary North
· “Biblical Economics Today” by Gary North
- “Christian Economics in One Lesson – Interest and Rent” 1996 http://www.garynorth.com/freebooks/sidefrm2.htm