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God and the Economy: Is Capitalism Moral? Part 1


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Collectivism is in retreat around the globe, but it still retains some support in the American religious community. If recent events demonstrate that Marxism does not work in practice, many religious idealists still believe that capitalism is immoral in theory. And the criticism has long been ecumenical: Catholic liberation theologians have dressed Marxist class analysis in religious clothing while left-wing evangelicals have equated markets and materialism.

Some observers have seen virtually every human ill arising from capitalism, a system ultimately based on the simple principle of free exchange. For instance, Danny Collum, an editor of Sojourners, complained in the early 1980s that

“the gross inequalities of wealth and poverty in the U.S. are the natural result of a social, political, and economic system that places the maximization of private profit above all other social goals. The human, social, cultural, and spiritual benefits that would result from a more just distribution of wealth and power will never show up on the all-important quarterly profit and loss statement.”

Britain’s Andrew Kirk wouldn’t even accept the claim that capitalism promotes liberty. A market economy, he wrote, “certainly increases the freedom of some, but always and inevitably at the expense of the freedom of others.”

Christianity poses a radical challenge to the appropriateness of every human action and institution. “Do not love the world or anything in the world,” wrote the Apostle John in his First Epistle. “If anyone loves the world the love of the Father is not in him. For everything in the world — the cravings of sinful man, the lust of his eyes and the boasting of what he has and does — comes not from the Father but from the world. The world and its desires pass away, but the man who does the will of God lives forever.” (I John 2: 15-17)

Capitalism is therefore not exempt from scrutiny. It is an imperfect institution, one in which sinful men participate, just like any other institution. But the harshest critics suggest that a market economy is not just defective but also fundamentally inconsistent with the Christian faith. For example, in the view of John Cort, author of Christian Socialism, “A Christian could, not to mention should, be a socialist.” Further, he writes,

The “spirit of Christian love” cannot be reduced to a political imperative, granted, but it most certainly has a political dimension. Feeding the hungry and clothing the naked are not precisely identical with a systematic redistribution of wealth, but in the present situation, of gross inequality, obscene wealth and wretched poverty, they most certainly cry to heaven for both systematic and unsystematic redistribution.

Is he right? Is capitalism fundamentally immoral?

Despite John Cort’s emotional appeal to the “spirit of Christian love,” the Bible does not specifically speak to the proper degree of government intervention in the economy. There is no explicit endorsement of any type of economic system, no equation of capitalism or socialism with the Kingdom of God. Old Testament Israel placed some restrictions on debts, interest, and property transfers but allowed relatively free economic exchange. The so-called Jubilee laws were tied to the Israelites’ special status as God’s people — secular America is therefore not a good analogue to religious Israel — and did not transfer property ownership from people to the state.

The Gospels and Epistles of the New Testament are remarkably free of any economic policy recommendations. Indeed, wrote the late Paul Heyne of the University of Washington, “What we do find in the New Testament is an extraordinary disregard for almost everything in which economists are interested.” In the absence of a holy ideology, one must answer a more subtle question: Which system is more consistent with Biblical principles?

Economic systems and Christianity

In discussing capitalism it is important to distinguish a competitive market economy from systems that merely involve some private property ownership. Kleptocracies and crony capitalist regimes exist around the globe; particularly obscene are many Latin American governments, where an elite has long used political power to exploit the rest of the population. Such systems are far closer to socialism than capitalism, however, since they involve pervasive government economic control.

Christ’s message is clear: believers are not to place their faith in Mammon or any of the other idols of this world. But while the Bible is long on injunctions involving man’s relationship to God and his neighbors, it says far less about the role of the state. The fact that people are not to trust in material goods does not mean that economic decision-making should be placed in the hands of a coercive institution such as government.

The early Christians, at least in Jerusalem, freely shared their material goods with the needy in the community of faith. However, these voluntary followers of Christ never attempted to forcibly redistribute the assets of non-Christians or even fellow believers. Indeed, the Apostles consistently taught that giving was not mandatory as it was under the law of the old covenant. Peter stated that members of the Jerusalem church had no obligation to sell their property and turn over their proceeds to the body; Paul refused to order the members of the Corinthian church to provide assistance for the believers in Jerusalem. Of course, both men expressed the hope that Christians would behave generously. Said Paul: “Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.” (II Corinthians 9: 7)

A faith that refuses to order its adherents to give not surprisingly provides little support for using the state to make others give. And the commandment against theft should raise at least some questions as to when collective action exceeds Biblical authority. Moreover, there are other scriptural reasons to be more skeptical than supportive of proposals to concentrate economic power in the government’s hands.

Most important, the Christian faith recognizes that all human institutions are flawed, and that sinful men are likely to misuse their power. Consider the Apostle John’s vision in Revelation of a hideous “Beast” state with expansive power, including power over people’s economic affairs. (No one could buy or sell anything without the Beast’s mark.)

Less apocalyptic but nevertheless equally striking is the prophet Samuel’s warning when the Israelites ask God for a king:

“He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. He will take your daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants. Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. He will take a tenth of your flocks, and you yourselves will become his slaves. When that day comes, you will cry out for relief from the king you have chosen, and the Lord will not answer you in that day.” (I Samuel 8: 11-18)

Most religious critics of capitalism respond that they opposed Stalinist communism and instead advocated some variant of democratic collectivism. But economic liberty is a prerequisite for other freedoms. Countries such as South Korea and Taiwan used market reforms to prosper, and demands for political reform then naturally grew. Economic reforms in China have helped to create a more prosperous population, which has grown increasingly restive under traditional communist political controls.

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    Doug Bandow is vice president of policy at Citizen Outreach, the Cobden Fellow in International Economics at the Institute for Policy Innovation, a senior fellow at the Cato Institute, and serves as adjunct scholar for The Future of Freedom Foundation. He is a former special assistant to President Reagan; he is also a graduate of Stanford Law School and a member of the California and D.C. bars. BOOKS BY DOUG BANDOW: Leviathan Unchained: Washington’s Bipartisan Big Government Consensus (forthcoming) Tripwire : Korea and U.S. Foreign Policy in a Changed World (1996) Perpetuating Poverty : The World Bank, the Imf, and the Developing World (1994) The Politics of Envy : Statism As Theology (1994) The U.S.-South Korean Alliance : Time for a Change (1992) The Politics of Plunder : Misgovernment in Washington (1990) Beyond Good Intentions : A Biblical View of Politics (1988)