Prior to the Second World War, economists worried continually about the advent of the static economy. They were convinced that an era of stagnation had arrived. A decade earlier, they were speculating, as now, about long-term prosperity and how to maintain it. Topics of interest within the economics profession are quite faddish. Economists are not very good academic entrepreneurs; they never seem to know which topic will be the "hot" one five years down the road.
The concept of linear development is uniquely Western. It is a product of Hebrew-Christian philosophy. Time is understood as a process with a beginning and an end. Events in time are unique; they cannot be precisely repeated. Time is therefore irreversible. Christianity, with its doctrine of the final judgment, also holds that human actions on earth and in time have eternal consequences. History is not cyclical. There is no reincarnation. "And as it is appointed unto men once to die, but after this the judgment: So Christ was once offered to bear the sins of many; and unto them that look for him shall he appear the second time without sin unto salvation" (Hebrews 9:27-28).
Linear time, however, does not necessarily imply compound economic growth. St. Augustine believed in linear time. It was he who was most influential in restructuring medieval Christian philosophy's concept of the importance of time. But he argued that earthly kingdoms rise and fall, come and go. It is only God's kingdom, and His earthly institutional church, that develop. Development is therefore spiritual, not external. Rome, with all its wealth, might fall, but this does not mean that Christians caused the fall of Rome, he argued. All earthly cities rise and fall.
The idea of earthly linear growth came with the Puritans and Continental Calvinists. They held to a vision of the future which included external cultural and economic progress. They argued that spiritual progress would be rewarded by God with external social progress, on and on, until Christ finally returns in glory. The preaching of the gospel will be successful eventually in turning the hearts of millions, and this, in turn, will create the conditions necessary for extended economic development and the spread of wealth. They saw in Deuteronomy 8 the model of com- pound external development, something the modern economist might call "positive feedback" between spiritual maturity and economic blessings.
Deuteronomy 8:18 reads: "But thou shalt remember the Lord thy God: for it is he that giveth thee power to get wealth, that he may establish his covenant which he sware unto thy fathers, as it is this day." That is inescapably clear language. God gives His people the power to get wealth "that he may establish his covenant." The visible manifestation of men's wealth-producing abilities is a testimony to the validity of God's covenant. Wealth in a community that is faithful to God's law is a sign of the reliability of God's promises. There is a positive relationship between wealth and faith. Of course, Deuteronomy 8 and 28 warn men not to regard blessings from God as products of their autonomous power (Deut. 8:10-l7). If they do this, the blessings will become snares leading to destruction (Deut. 8:19-20). But there is no mincing of words here: long-term economic growth is basic to the holy commonwealth. This includes population growth (Exodus 23:25-25; Genesis 16:10).
A Finite World
This is a world of limited resources. The ground has been cursed (Gen. 3:17-19). Therefore, we must conclude that nothing can multiply forever. The process of compound growth cannot continue indefinitely. Any multiplying species eventually runs up against environmental limits, beyond which multiplication slows and eventually stops or reverses.
Let me offer an example. Assume that Judas had invested his 30 pieces of silver at 3% interest, compounded annually. Assume also that the coins were the equivalent of a dime. He invested, therefore, $3 (pre-1965 purchasing power, of course). If he did so in A.D. 30, at the beginning of the calendar year, and kept the money invested until the end of 1979 (1949 full years), his heirs could now withdraw a grand total of $31,400,000,000,000,000,000,000,000, or 31 septillion, 400 sextillion dollars. That ain't hay. If we assume that there are 4 billion people on earth today. then Judas' investment would leave every person on earth with an inheritance (before taxes, of course) of $7,850,000,000,000,000, or 7 quadrillion, 850 trillion dollars. Quite frankly, I could retire on that without any difficulty, as long as I didn't live extravagantly.
Doesn't this invalidate the concept of compound growth? Yes, but only if you assume that time is infinite. The modern evolutionist assumes that the earth has several billion years ahead of it, and he hopes that by the time the sun burns itself out that man will have discovered a way to get to another star system. So the consistent secularist knows that compound growth, on earth, must eventually end. Growth cannot go on forever, for even interstellar matter is finite. Some economists have begun to argue for zero economic growth, which probably would require state action to retard private economic development. The British economist, E. J. Mishan, is the leading spokesman for this position, one which has gathered momentum since the mid-1960's. It is still a minority position within the academic guild, and few politicians are willing to commit themselves to it. But it is a consistent position. It recognizes the reality that someday, the growth must stop. Why not now, Mishan asks, before pollution ruins the environment?
What is the biblical answer? Simple: time is finite. We do not have forever. The curse-restrained growth process will cease at the day of judgment. In fact, compound, linear economic growth points to an end, either of growth or of time. The modern humanist is committed to an evolutionary perspective. He sees time as virtually unbounded. Yes, time may be "curved," the same way that space is supposedly "curved," but in the day-to-day world, time is essentially unbounded. So growth cannot be linear. Given the example of Judas' silver, it is obvious that compound economic growth cannot possibly continue even during the tiny fraction of time men call a million years. In only a thousand years, Judas' silver at 3% would have become 2 quadrillion dollars - an unlikely sum, especially if everybody else's $3 were also being invested at 3%.
It is inconceivable that even a wholly regenerate and law- abiding world could attain rates of compound growth above 1% per annum for a thousand years. Above zero, yes, but not above 1%. For example, consider the expansion of population. Today there are an estimated four billion people on earth. At 1% per annum, the earth's human population would be 83.8 trillion people a thousand years from now. The compounding effect is staggering in its multiplication powers. Growth can achieve high rates for a time -- and 5% per annum, which modern economists expect from a 20th-century economy, is astronomically high and absolutely unsustainable for more than historically brief periods -- but then stagnation sets in, and more likely economic or population decline. The society-shaking rates of change that we have experienced over the past century are temporary. The numbers tell us that much. Either growth will slow down, or judgment day will come, before the next thou- sand years are over. Take your pick.
Buddhist Economics
The increasing appeal of the "Z" movements -- zero economic growth, zero population growth, zero pollution -- is based upon a misunderstanding of the Bible or else a rejection of it. The Buddhist economics of popular authors like E. F. Schumacher is offered in terms of a philosophy of time that is essentially Eastern. It is a cyclical view of life, a denial of linear growth. It is the idea that earthly affairs will never be judged at a final moment in history (or immediately beyond history). It is the idea that there is no covenant between God and men. It is the idea that there is no positive feedback relationship between the conformity by a society to God's laws and the external growth of that society.
Biblical economics is growth economics. It is an economic outlook which maintains that men are individually responsible before God and other men for their actions. This being the case, it is imperative that the State establish biblical norms of right and wrong, and then enforce the law code in a predictable manner. The State is to provide a systematic, predictable, universal law-code which is administered without respect to persons. It is not to assume any responsibilities for individuals that are not explicitly set forth in Scripture -- and very few positive State actions are established in Scripture. The State is an enforcer of righteousness, not an agency of wealth redistribution. The State is not the directing agency for projects of economic growth, economic retardation, or economic stagnation.
The vision of the Bible is that of conquest. The whole earth is to be subdued to the glory of God (Gen. 1:28; 9:1-7). Expansion is basic to biblical economics. The philosophy of economic stagnation is as foreign to the Bible as the concept of historical cycles. Long-term economic growth points to a final consummation of growth, a day in which the earth has been subdued and man's cursed-earth tasks are over. Linear history points to final judgment. Economic growth therefore points to final judgment. But it is the activity of responsible men, not the compulsory State, which is to produce this judgment-pointing economic expansion.
Biblical Economics Today Vol. 2, No. 3 (June/July 1979)
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