Economics in Biblical Perspective (1) - Introduction and First Principles

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Introduction

There is great need in the church—as well as in the wider culture—to understand the field of economics from a biblical perspective.[1] Why do I say this? For several reasons. First, because nothing is known as well as it ought to be known until it is known in its relationship to God. “In your light do we see light,” David said.[2] This only stands to reason. He is the creator of all things, and therefore the ultimate reference point from which all things must be understood. “For from him and through him and to him are all things. To him be glory forever. Amen.”[3]

Second, there are few things that either promote or retard human flourishing as much as a nation’s economic policies.

And third, economic policies are not morally neutral. They are either just or unjust, meaning they either meet with God’s approval or they do not.

At first glance, there might seem to be several plausible objections to what I have just said. First, does the Bible even speak to economic issues? Isn’t the Bible a book about spiritual matters, like faith and prayer and the salvation of one’s soul, rather than such mundane matters as work, wages, spending, saving, investing, ownership, buying, selling, trading, borrowing, lending, taxes, inflation, government spending, markets, prices, property rights, and so on? How can an economic theory be derived from the Bible if there is a paucity of information in the sacred text on the subject? But the truth is that there is a great deal in the Bible about these so-called “worldly” matters.

Perhaps so, someone might say, but the Bible only mentions these things to warn us of the corrosive effects of wealth. And they might cite such passages as these: “No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to one and despise the other. You cannot serve God and money.”[4] “It is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.”[5] “The love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.”[6] “Do not love the world or the things in the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world—the desires of the flesh and the desires of the eyes and pride of life—is not from the Father but is from the world. And the world is passing away along with its desires.”[7]

But this would only be a selective and highly prejudicial view of the Bible’s teaching on the subject. Many other passages present material wellbeing as a good thing and something God is pleased to give to those who please him. This is not to say that material prosperity (or the lack thereof) necessarily reflects a person’s standing before God. We should never make that mistake. Many rich men have been evil and many of the righteous have been poor. My point is that God is not opposed to wealth. In fact, I will go even further and say that he is generally in favor of it. He is not the miser and killjoy that some people make him out to be. “You shall remember the Lord your God, for it is he who gives you power to get [Heb., do, make, produce] wealth.”[8] Solomon observed, “The blessing of the Lord makes rich.”[9] It is said of Abraham that “the Lord had blessed him in all things.”[10] His steward spelled out the details, “The Lord has greatly blessed my master, and he has become great. He has given him flocks and herds, silver and gold, male servants and female servants, camels and donkeys.”[11] The Lord bestowed the same on Abraham’s son. “Isaac sowed in that land and reaped in the same year a hundredfold. The Lord blessed him, and the man became rich, and gained more and more until he became very wealthy. He had possessions of flocks and herds and many servants, so that the Philistines envied him.”[12]

Such blessings were promised to all Israel if they would faithfully keep covenant with God. “The Lord will make you abound in prosperity, in the fruit of your womb and in the fruit of your livestock and in the fruit of your ground… The Lord will open to you his good treasury, the heavens, to give the rain to your land in its season and bless all the work of your hands. And you shall lend to many nations, but you shall not borrow.”[13]

The Bible describes the peaceful, prosperous conditions under the reign of Solomon like this: “Judah and Israel lived in safety, from Dan even to Beersheba, every man under his vine and under his fig tree, all the days of Solomon” (1 Ki. 4:25). They were safe and secure in their own fruitful possessions, a set of life-circumstances the prophets describe as ideal, resulting from the blessing of God.[14]

Care should be taken to distinguish the view presented in this study from that of word of faith preachers who teach what is often dubbed the “prosperity gospel,” the “health/wealth gospel,” or the “name it, claim it gospel,” which in fact has nothing to do with the true biblical gospel. They teach that people who fail to experience the blessings of good health and prosperity do so because they harbor some secret sin in their lives, lack the necessary faith to “tap into” these blessings, or have not yet mastered the technique of using the power of a “positive confession” to “speak these blessings into existence.”

The view presented here is quite different. It is predicated on certain basic truths about God, about man, and about the world the world works, truths that inevitably result in certain unchanging economic principles that if properly applied lead to a nation’s prosperity and if ignored lead to its poverty.

Towards a Definition

What is economics? The term itself is derived from the Greek word oikonomikos, a combination of oikos (house) and nomos (law). In the ancient world, oikonomikos had to do with the organization and management of a household: managing its finances, overseeing its productive output (farming, raising livestock, maintaining a shop or some other business), buying and preparing its food, raising children, supervising servants, and so on. It is easy to see how this idea of individual household management might be extended more widely to the city, state, or nation.

You will get about as many different definitions of economics as there are economists. Some definitions are rather elaborate and, in my opinion, unnecessarily complicated. I would offer this simple definition:

Economics is a social science that studies how people interact with one another in the production and exchange of goods and services to provide for their respective needs.

At its root, then, economics is about human interaction, about human behavior. More specifically, human interaction or human behavior in the marketplace—in the production and exchange of goods and services as people seek to provide for their needs.

To put it another way, economics is about what motivates—or what incentivizes and disincentives—people to work, to produce, to purchase, to save, to invest, to consume, etc. Economics is not about production in the abstract, about buying and selling in the abstract; about business or taxes or international trade or monetary policy in the abstract. It’s about human behavior and what motivates people to act the way they do in the real world.

And because economics is a study of human behavior, we cannot get our economics right if we do not get human nature right. And because human nature is a given—an unchangeable constant—so are the laws of economics, regardless of race, ethnicity, nationality, geographical region, age, sex, or period of history. The laws of economics are what they are  because human nature is what it is. And both are as stubbornly resistant to change as the laws of physics, despite the hopes and best intentions of utopian dreamers to the contrary.

Economics is Inescapable

Doing economics is inescapable, which is to say that everyone thinks about economics, at least at some level. When you consider whether or not you can afford to buy a new car, you are thinking about economics. If you decide you have the resources to purchase it but wonder if there may not be a better alternative use of those resources, you are engaged in economic thought. If you consider taking a second job, opening a 401K, taking early retirement, calculating the additional costs of having a baby, opening a business, deciding between this candidate and that based on their tax policy, all these things—and a thousand others besides—have to do with economics. On this last point, Thomas Sowell writes,

Most of us are necessarily ignorant of many complex fields, from botany to brain surgery. As a result, we simply do not attempt to operate in, or comment on, those fields. However, every voter and every politician that they vote for affects economic policies. We cannot opt out of economic issues and decisions. Our only options are to be informed, uninformed, or misinformed, when making our choices on issues and candidates... The fundamental principles of economics are not hard to understand, but they are easy to forget, especially amid the heady rhetoric of politics and the media.[15]

It is fair to say that every human activity has an economic component to it. I am not saying, as Marxists do, that all of life is reducible to economic concerns, but “all of life has an economic aspect.”[16]

The Problem of Scarcity

The chief problem economic thinking seeks to solve is the problem of scarcity. The sad fact is we simply do not have everything we want.

Imagine a world in which all you ever had to do to have what you wanted is to wish for it and it magically appears. “I wish I had a bacon cheeseburger,” and boom, there it is in your hand! “I wish I had a house on a beach,” and boom, there is a house, and there is a beach!

In such a world, scarcity would never be a problem. In the real world, however, if you want a bacon cheeseburger, someone has to raise a cow for the beef. And that takes time and effort. Someone has to slaughter it and process it. And for the bun: someone has to grow wheat and harvest it. Someone has to grind the wheat to make flour. Someone has to use the flour to make dough, form it into a bun, and bake it in an oven that had to be manufactured from materials mined from the earth and developed into the components that make up the oven. The oven requires an infrastructure to supply gas or electricity to operate. All these things are done by different people. Similar processes are required to provide cheese, lettuce, tomatoes, onions, pickles, ketchup, mustard, etc. And the same—times ten—for a house on a beach.

My point is, again, that the chief problem economic thinking seeks to solve is the problem of scarcity. In fact, many who have taken it upon themselves to define economics incorporate use the word “scarcity” into the definition. As Thomas Sowell notes, “A distinguished British economist named Lionel Robbins gave a classic definition of economics: “Economics is the study of the use of scarce resources which have alternative uses.”[17]

First Principles

I stated a while ago that the view presented in this study is quite different from the prosperity gospel. It is predicated on certain basic truths about God, man, and the world that inevitably result in certain unchanging economic principles that if properly applied lead to a nation’s prosperity and if ignored lead to its poverty.

The first principles in the study of economics—as well as in the study of everything else—is stated in Psalm 24.

The earth is the Lord’s and the fullness thereof, 

        the world and those who dwell therein, 

for he has founded it upon the seas 

        and established it upon the rivers.[18]

Here we find the first two foundational truths of economics. The first is found in verse one, namely, everything that exists (“the earth…and the fullness thereof” / “the world and those who dwell therein”) belongs to God. As the Lord himself says in Psalm 50,

Every beast of the forest is mine, 

        the cattle on a thousand hills. 

I know all the birds of the hills, 

        and all that moves in the field is mine.[19]

The second foundational truth is found in verse two and explains the reason why the world and all it contains belongs to God, “for he has founded it upon the seas and established it upon the rivers.” All things belong to him because he made them. He created “heaven and what is in it, the earth and what is in it, and the sea and what is in it.”[20] All things belong to him by right of creation. “Behold, to the Lord your God belong heaven and the heaven of heavens, the earth with all that is in it.”[21]

The third foundational truth of economics is the fact the Lord has delegated to man the responsibility of cultivating creation.

Then God said, “Let us make man in our image, after our likeness. And let them have dominion over the fish of the sea and over the birds of the heavens and over the livestock and over all the earth and over every creeping thing that creeps on the earth.”

So God created man in his own image, 

        in the image of God he created him; 

        male and female he created them.

And God blessed them. And God said to them, “Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.” [22]

And the Lord God planted a garden in Eden, in the east, and there he put the man whom he had formed…to work it and keep it.[23]

You have given him dominion over the works of your hands; 

        you have put all things under his feet,

all sheep and oxen, 

        and also the beasts of the field, 

the birds of the heavens, and the fish of the sea, 

        whatever passes along the paths of the seas.[24]

The heavens are the Lord’s heavens, 

        but the earth he has given to the children of man.[25]

From Scarcity to Abundance

As man fulfills his responsibility to cultivate creation, we move from scarcity to abundance, or to say the same thing in a different way, poverty to wealth. Scarcity is poverty; abundance is wealth. Cultivating the earth and its resources is what economists generally call “production.” The more material goods produced, the wealthier a nation becomes.

More to come…


[1] There is a great need for this in every field: education, business, the arts, technology, political science, psychology, etc.

[2] Psalm 36:9

[3] Romans 11:36

[4] Matthew 6:24

[5] Mark 10:25

[6] 1 Timothy 6:10. Compare Hebrews 13:5, “Keep your life free from the love of money, and be content with what you have.”

[7] 1 John 2:15-17

[8] Deuteronomy 8:18

[9] Proverbs 10:22

[10] Genesis 24:1

[11] Genesis 24:35

[12] Genesis 26:12-14

[13] Deuteronomy 28:11-12

[15] Thomas Sowell, Basic Economics,

[16] Dylan Pahman, Foundations of a Free & Virtuous Society, p. xvi

[17] Thomas Sowell, Basic Economics, p. 2

[18] Psalm 24:1-2

[19] Psalm 50:10-11

[20] Revelation 10:6

[21] Deuteronomy 10:14

[22] Genesis 1:26-28

[23] Genesis 9:8, 15

[24] Psalm 8:6-8

[25] Psalm 115:16

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