12 Theses on a Christian Understanding of Economics, by Albert Mohler


Regrettably, many American Christians know little about economics. Furthermore, many Christians assume that the Bible has nothing at all to say about economics. But a biblical worldview actually has a great deal to teach us on economic matters. The meaning of work, the value of labor, and other economic issues are all part of the biblical worldview. At the same time, we must recognize that the Christian worldview does not demand or promote a particular economic system.

Because this is the case, Christians must allow the economic principles found in Scripture to shape our thinking while simultaneously recognizing that we can act in light of those principles in any economic, cultural, or generational setting.

1. A Christian economic understanding has God’s glory as its greatest aim.

For Christians, all economic theory begins with an aim to glorify God (1 Corinthians 10:31). We have a transcendent economic authority.

2. A Christian economic understanding respects human dignity.

No matter the belief system, those who work show God’s glory, whether they know it or not. People may believe they are working for their own reasons, but they are actually working out of an impulse that was put into their hearts by the Creator for his glory.

3. A Christian economic understanding respects private property and ownership.

Some economic systems treat the idea of private property as a problem. But Scripture never considers private property as a problem to be solved (see, for instance, the Ten Commandments). Scripture’s view of private property implies it is the reward of someone’s labor and dominion. The Eighth and Tenth Commandments teach us that we have no right to violate the financial rewards of the diligent.

4. A Christian economic understanding takes into full account the power of sin.

Taking the Bible’s teaching on the pervasive effects of sin into full account means that we expect bad things to happen in every economic system. A Christian economic understanding tries to ameliorate the effects of sin.

5. A Christian economic understanding upholds and rewards righteousness.

Every economic and government system comes with embedded incentives. An example of this is the American tax code which incentivizes desired economic behaviors. Whether they work or not is an issue of endless political recalibration. However, in the Christian worldview, that recalibration must continue upholding and rewarding righteousness.

6. A Christian economic understanding rewards initiative, industry, and investment.

Initiative, industry, and investment are three crucial words for the Christian’s economic and theological vocabulary. Initiative goes beyond action. It is the kind of action that makes a difference. Industry is human work done corporately. Investment is part of the respect for private property found in Scripture.

Investment, as it turns out, is as old as the Garden of Eden. That which accrues value is honorable, and the impulse to accrue that value is honorable. Thus, a Christian economic theory indicts anyone who will not work, not respect private property and not reward investment.

7. A Christian economic understanding seeks to reward and incentivize thrift.

In a fallen world, money and investments can quickly be distorted to idolatrous ends. For that reason, thrift is a very important issue in the Christian worldview. In a fallen world, abundance one day can turn into scarcity the next. Thrift may be what provides survival in times of poverty.

8. A Christian economic understanding upholds the family as the most basic economic unit.

When thinking about economic theory embedded in the beginning of the Bible, the dominion mandate is central, but so is the divine institution of marriage. The pattern of leaving and cleaving described in Genesis 2 is fundamental to our economic understanding.

Adam and Eve were the first economic unit. The result is that the family (biblically defined) is the most basic and essential unit of the economy.

9. A Christian economic understanding must respect community.

Most secular thinkers and economists begin with the community and then move to the family. However, thinking from larger to smaller economic units not only does not work in theory, it also fails in practice. Beginning with the family unit and then working out towards the community is a much smarter option. The doctrine of subsidiarity — which emerged out of natural law theory — teaches that meaning, truth and authority reside in the smallest meaningful unit possible.

If the family unit is deficient, no government can meet the need of its citizens. When the family is strong, government can be small. When the family is weak, however, the government must compensate for the loss. By focusing on the family, we respect and better the community.

10. A Christian economic understanding rewards generosity and proper stewardship.

Christians who are committed to the economics of the Kingdom and to the good of the next generation must live with a future-oriented financial perspective. We each have the responsibility, whether we have a lot or a little, to see that our generosity endures far beyond our lifespan.

Spirited generosity, which is so clear in Scripture, is essential to a Christian economic worldview.

11. A Christian economic understanding respects the priority of the church and its mission.

Christians must embrace economic priorities that the rest of the world simply will not understand. Christians must invest in churches, seminaries and international missions. These are distinctive Christian financial commitments. Our ultimate financial commitment is not to ourselves or to our own investments but to the Kingdom of Christ. Thus, Christians should always be ready to experience upheaval in economic priorities and arrangements because urgent kingdom issues can intervene at any moment.

12. A Christian economic understanding focuses on eschatological judgment and eschatological promise.

This life and its resources cannot deliver ultimate joy. The Christian worldview reminds us that we must live with the recognition that we will give an account to the Lord for our stewardship of our resources. At the same time, Christians must look to the eschatological promise of the New Heavens and New Earth as our ultimate economic hope. We must lay up treasures in heaven and not on earth.

Source: Albert Mohler

God’s Forgotten Libertarian | Foundation for Economic Education

Machen saw liberty as God’s intention for humanity and would not abide the presumptuous claims of earthly governments to diminish it “for our own good.”

Source: God’s Forgotten Libertarian | Foundation for Economic Education

Book Review: Money, Greed and God, by Jay W. Richards

There is an idea abroad that capitalism is a system of greed and exploitation. It is a system where rich land or resource owners employ poor and needy individuals, set them to work tirelessly like slaves for hours on end, and pay them peanuts for their efforts. ‘Down with such a system’, is the cry. And indeed, no Christian can support a system that derives its spirit from greed and oppression. But is this the case with Capitalism?

This popular misunderstanding of capitalism has been around for so long (you even find it in Economics departments!). So it is always a relief to find a book (and there are so many) that attempts to correct it. And I think Money, Greed and God does a fine job.

It is authored by Jay W. Richards, a visiting fellow (as at publication) at the Heritage Foundation.

He notes on page 5 that the first step is to understand clearly that economics is not an esoteric science. It is about us.

Economics is about us- what we choose, what we value, what we represent in language and symbol, how we interact with each other in a market, and especially how we produce, exchange, and distribute goods,services, risk, and wealth

Then he looks at eight myths about capitalism which he goes on to dispel throughout the book’s chapters. His lively and learned discussions answer some very common objections such as:

Doesn’t capitalism foster unfair competition?

Isn’t capitalism based on greed?

Doesn’t capitalism lead to an ugly consumerist culture?

First he tackles the Nirvana Myth, which contrasts capitalism with a morally perfect society, and on the basis of this contrast rejects capitalism as deficient. No society is perfect. However, of all socio-economic systems, capitalism is the most compatible with the truth about man. Communism, as the history shows, does not come close to making human beings happier. Capitalism still holds out greater hope for the world than any system of complete state control.

The Piety Myth is the focus on our good intentions rather than the unintended consequences of our actions. A lot of modern ‘compassion’ (welfare, foreign aid, fair trade) are actually counterproductive. They cause more harm than good. How? They make people more dependent on the government and stifle individual initiative and creativity which are essential to economic growth.

The third myth is the idea that there is always a loser in trade. Actually, trade only occurs because each party derives some benefit from the transaction. And in the end they are both better off. Provided it is not forced or coerced and there is no deception involved, trade will always result in a win-win situation.

Capitalism allows individuals to create wealth and not merely distribute it. The wealth of nations isn’t static as the Materialist Myth assumes. It grows. A free market built on a reliable moral and legal system encourages individuals to create wealth thereby helping to alleviate the problem of poverty.

Contrary to the Greed Myth, the essence of capitalism is not greed. And contrary to some supporters of capitalism, greed is not a virtue. It destroys individuals and destabilizes society.

In closing, the author condenses all his foregoing arguments into ten steps for creating wealth, which I summarize below:

  • Establish and maintain the rule of law
  • Focus the jurisdiction of government on maintaining the rule of law
  • Implement a formal property system
  • Encourage economic freedom
  • Encourage stable families
  • Encourage the belief in a purposeful universe
  • Encourage the right cultural mores
  • Instill a proper understanding of the nature of wealth
  • Focus on your competitive advantage
  • Work hard

This is a much-needed book, and I thank God he has made it available!

Book Review: Business for the Glory of God














Is business a necessary evil?

Contemporary spirituality tends to think ‘yes’. But this little book by Wayne Grudem argues otherwise. And he does so from Scripture.

According to the author, business is a calling that not only caters to man’s good, but also brings glory to God.  Essentially, business is the process of creatively using the physical and intangible resources supplied by God in meeting the needs of society.

All aspects of business, whether ownership of property, transactions, competition, or profits, are rooted in God’s created order and so are morally good. True, the presence of sin in the human heart often plays out in each area. Nevertheless, this does not alter their fundamental character as worthy activities. And he goes on to show why.

1. Ownership of possessions or property is established as valid by God’s prohibition of theft in Exodus 20:15 – “You shall not steal.” Stealing is one taking what belongs to someone else unlawfully. God gives us possessions (whether cars, land, skill, talent, money, etc) so that we can use them wisely and responsibly as  stewards. For everything ultimately belongs to God , and he merely delegates the ownership to us. (Psalm 24:1; 50:10-12, Lev. 25:23)

2. Productivity is rooted in what is known as the Cultural mandate:

“Be fruitful and multiply; fill the earth and subdue it; have dominion  over the fish of the sea, over the birds of the air, and over every living thing that moves on the earth.” (Gen. 1:28)

 Our ownership of resources allows us to use these resources or convert them into other products or services for use. This could be as basic as planting fruit trees in the soil that God has provided and selling the harvested fruits. We could use our God-given talent for music to delight and entertain others. Or we could make cutlery out of the tin or aluminium deposited in the earth’s crust. Production is everywhere and, when engaged in according to God’s principles, it truly brings glory to Him.

3. What about Profit? Surely this must be an exception. However, even this is morally acceptable. In the parable of the talents (Matt. 25: 14-28), Jesus condemned the servant who had received one talent. Why? Because he refused to put it to use and thereby reap a profit from it. He was not productive with the talent he had been given. Profit is proof of productivity. Profit is the evidence that we have made good use of resources in meeting the needs of others. And this is morally commendable.

Wayne Grudem also discusses Competition, Borrowing and Lending, Employment, etc. Though vulnerable to the withering presence of human sin, these activities are not sinful in themselves. Just as almost any good thing (be it money, authority, or sex) can be abused , so also can any of these business activities be distorted. Therefore, it requires that we take heed to our hearts, for this is the source of all our actions(cf. Prov. 4:23 ). God’s principles are summed up in one command:

“Love  the Lord your God with all your heart, with all your soul, with all your strength, and with all your mind,  and love your neighbor as yourself.” (Luke 10:27)

When we walk in love toward God and toward our neighbour, we maintain a proper motive for all business activities. Also, setting our hearts on God like David (Psalm 73: 25, also Psalm 62: 10) keeps us from that love of money and profits which has been the downfall of so many.

This is an excellent little book on developing a Christian perspective on business and economic matters, and I heartily recommend it to every believer.

A Biblical View of Economics, by Kerby Anderson

It has been my desire for several years now to understand how the Christian faith applies to life. And I give thanks to God that he has helped me in that quest by bringing my way several articles and books that point out what the truth of Christianity means for several disciplines, whether Law, Science, or Economics. The present article examines what a Christian view of Economics would be. It was written by Kerby Anderson. He is the President of Probe Ministries, whose mission is ‘to present the Gospel to communities, nationally and internationally, by providing life-long opportunities to integrate faith and learning through balanced, biblically based scholarship, training people to love God by renewing their minds and equipping the Church to engage the world for Christ.’ (Source: probe.org)

In this article we are going to be developing a Christian view of economics. Although most of us do not think of economics in moral terms, there has (until the last century) always been a strong connection between economics and Christian thought.

If you look at the Summa Theologica of Thomas Aquinas, you find whole sections of his theological work devoted to economic issues. He asked such questions as: “What is a just price?” or “How should we deal with poverty?”

Today, these questions, if they are even discussed at all, would be discussed in a class on economic theory. But in his time, these were theological questions that were a critical and integral part of the educational curricula.

In the Protestant Reformation, we find the same thing. In John Calvin’s Institutes of the Christian Religion, whole sections are devoted to government and economics. So Christians should not feel that economics is outside the domain of Christian thinking. If anything, we need to recapture this arena and bring a strong biblical message to it.

In reality, the Bible speaks to economic issues more than any other issue. Whole sections of the book of Proverbs and many of the parables of Jesus deal with economic matters. They tell us what our attitude should be toward wealth and how a Christian should handle his or her finances. The Bible also provides a description of human nature, which helps us evaluate the possible success of an economic system in society.

The Bible teaches that there are two aspects to human nature. First, we are created in the image of God and thus able to control the economic system. But second, human beings are sinful and thus tend towards greed and exploitation. This points to the need to protect individuals from human sinfulness in the economic system. So Christians have a much more balanced view of economics and can therefore construct economic theories and analyze existing economic systems.

Christians should see the fallacy of such utopian economic theories because they fail to take seriously human sinfulness. Instead of changing people from the inside out as the gospel does, Marxists believe that people will be changed from the outside in. Change the economic base, they say, and you will change human beings. This is one of the reasons that Marxism was doomed to failure, because it did not take into account human sinfulness and our need for spiritual redemption.

It is important for Christians to think about the economic arena. It is a place where much of everyday life takes place, and we can evaluate economics from a biblical perspective. When we use the Bible as our framework, we can begin to construct a government and an economy that liberates human potentiality and limits human sinfulness.

Many Christians are surprised to find out how much the Bible says about economic issues. And one of the most important aspects of the biblical teaching is not the specific economic matters it explores, but the more general description of human nature.

Economics and Human Nature

When we are looking at either theories of government or theories of economics, an important starting point is our view of human nature. This helps us analyze these theories and predict their possible success in society. Therefore, we must go to the Scriptures to evaluate the very foundation of each economic theory.

First, the Bible says that human beings are created in the image of God. This implies that we have rationality and responsibility. Because we have rationality and volition, we can choose between various competing products and services. Furthermore, we can function within a market system in which people can exercise their power of choice. We are not like the animals that are governed by instinct. We are governed by rationality and can make meaningful choices within a market system.

We can also assume that private property can exist within this system because of the biblical idea of dominion. In Genesis 1:28, God says we are to subdue the earth and have dominion over the creation. Certainly one aspect of this is that humans can own property in which they can exercise their dominion.

Since we have both volition and private property rights, we can then assume that we should have the freedom to exchange these private property rights in a free market where goods and services can be exchanged.

The second part of human nature is also important. The Bible describes the fall of the world and the fall of mankind. We are fallen creatures with a sin nature. This sinfulness manifests itself in selfishness, greed, and exploitation. Thus, we need some protection in an economic system from the sinful effects of human interaction.

Since the Bible teaches about the effects of sinful behavior on the world, we should be concerned about any system that would concentrate economic power and thereby unleash the ravages of sinful behavior on the society. Christians, therefore, should reject state-controlled or centrally controlled economies, which would concentrate power in the hands of a few sinful individuals. Instead, we should support an economic system that would disperse that power and protect us from greed and exploitation.

Finally, we should also recognize that not only is human nature fallen, but the world is fallen. The world has become a place of decay and scarcity. In a fallen world, we have to be good managers of the limited resources that can be made available in a market economy. God has given us dominion over His creation, and we must be good stewards of the resources at our disposal.

The free enterprise system has provided the greatest amount of freedom and the most effective economic gains of any economic system ever devised. Nevertheless, Christians often wonder if they can support capitalism. So the rest of this article, we are going to take a closer look at the free enterprise system.

Capitalism: Foundations

Capitalism had its beginning with the publication of The Wealth of Nations, written by Adam Smith in 1776. He argued that the mercantile economic system working at that time in Great Britain was not the best economic foundation. Instead, he argued that the wealth of nations could be increased by allowing the individual to seek his own self-interest and by removing governmental control over the economy.

His theory rested on three major premises. First, his system was based upon the observation that people are motivated by self-interest. He said, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Smith went on to say that “neither intends to promote the public interest,” yet each is “led by an invisible hand to promote an end that was not part of [his] intention.”

A second premise of Adam Smith was the acceptance of private property. Property was not to be held in common but owned and freely traded in a market system. Profits generated from the use and exchange of private property rights provided incentive and became the mechanism that drives the capitalist system.

From a Christian perspective we can see that the basis of private property rests in our being created in God’s image. We can make choices over property that we can exchange in a market system. The need for private property grows out of our sinfulness. Our sinful nature produces laziness, neglect, and slothfulness. Economic justice can best be achieved if each person is accountable for his own productivity.

A third premise of Adam Smith’s theory was the minimization of the role of government. Borrowing a phrase from the French physiocrats, he called this laissez-faire. Smith argued that we should decrease the role of government and increase the role of a free market.

Historically, capitalism has had a number of advantages. It has liberated economic potential. It has also provided the foundation for a great deal of political and economic freedom. When government is not controlling markets, then there is economic freedom to be involved in a whole array of entrepreneurial activities.

Capitalism has also led to a great deal of political freedom, because once you limit the role of government in economics, you limit the scope of government in other areas. It is no accident that most of the countries with the greatest political freedom usually have a great deal of economic freedom.

At the outset, let me say that Christians cannot and should not endorse every aspect of capitalism. For example, many proponents of capitalism hold a view known as utilitarianism, which is opposed to the notion of biblical absolutes. Certainly we must reject this philosophy. But here I would like to provide an economic critique.

Capitalism: Economic Criticisms

The first economic criticism is that capitalism leads to monopolies. These develop for two reasons: too little government and too much government. Monopolies have occurred in the past because government has not been willing to exercise its God-given authority. Government finally stepped in and broke up the big trusts that were not allowing the free enterprise system to function correctly.

But in recent decades, the reason for monopolies has often been too much government. Many of the largest monopolies today are government sanctioned or sponsored monopolies that prevent true competition from taking place. The solution is for government to allow a freer market where competition can take place.

Let me add that many people often call markets with limited competition monopolies when the term is not appropriate. For example, the three major U.S. car companies may seem like a monopoly or oligopoly until you realize that in the market of consumer durables the true market is the entire western world.

The second criticism of capitalism is that it leads to pollution. In a capitalistic system, pollutants are considered externalities. The producer will incur costs that are external to the firm so often there is no incentive to clean up the pollution. Instead, it is dumped into areas held in common such as the air or water.

The solution in this case is governmental intervention. But I don’t believe that this should be a justification for building a massive bureaucracy. We need to find creative ways to direct self-interest so that people work towards the common good.

For example, most communities use the water supply from a river and dump treated waste back into the water to flow downstream. Often there is a tendency to cut corners and leave the waste treatment problem for those downstream. But if you required that the water intake pipe be downstream and the waste pipe be upstream you could insure less pollution problems. It is now in the self-interest of the community to clean the wastewater being pumped back into the river. So while there is a need for governmental action, much less might be needed if we think of creative ways to constrain self-interest and make it work for the common good.

We can acknowledge that although there are some valid economic criticisms of capitalism, these can be controlled by limited governmental control. And when capitalism is wisely controlled, it generates significant economic prosperity and economic freedom for its citizens. Next, let us discuss some of the moral problems of capitalism.

Capitalism: Moral Critiques

One of the first moral arguments against capitalism involves the issue of greed. And this is why many Christians feel ambivalent towards the free enterprise system. After all, some critics of capitalism contend that this economic system makes people greedy.

To answer this question we need to resolve the following question. Does capitalism make people greedy or do we already have greedy people who use the economic freedom of the capitalistic system to achieve their ends? In light of the biblical description of human nature, the latter seems more likely.

Because people are sinful and selfish, some are going to use the capitalist system to feed their greed. But that is not so much a criticism of capitalism as it is a realization of the human condition. The goal of capitalism is not to change people but to protect us from human sinfulness.

Capitalism is a system in which bad people can do the least harm, and good people have the freedom to do good works. Capitalism works well if you have completely moral individuals. But it also functions adequately when you have selfish and greedy people.

Important to this discussion is the realization that there is a difference between self-interest and selfishness. All people have self-interest and that can operate in ways that are not selfish. For example, it is in my self-interest to get a job and earn an income so that I can support my family. I can do that in ways that are not selfish.

Adam Smith recognized that every one of us has self-interest and rather than trying to change that, he made self-interest the motor of the capitalist system. And before you react to that, consider the fact that even the gospel appeals to our self-interest. It is in our self-interest to accept Jesus Christ as our savior so that our eternal destiny will be assured.

By contrast, other economic systems like socialism ignore the biblical definitions of human nature. Thus, they allow economic power to be centralized and concentrate power in the hands of a few greedy people. Those who complain of the influence major corporations have on our lives should consider the socialist alternative of how a few governmental bureaucrats control every aspect of their lives.

Greed certainly occurs in the capitalist system. But it does not surface just in this economic system. It is part of our sinfulness. The solution is not to change the economic system, but to change human nature with the gospel of Jesus Christ.

In conclusion, we may readily acknowledge that capitalism has its flaws as an economic system, but it can be controlled to give us a great deal of economic prosperity and economic freedom.

 Source: http://www.leaderu.com/orgs/probe/docs/bib-econ.html