Introduction to Part 1: Creation. Chapter 1: Ownership.
Christian Economics: Student's Edition
This book is explicitly biblical. Unless you have read one of my previous books, you have never read a book on economics that is structured in the way that this one is. It is structured in terms of the five points of every biblical covenant. You may be unfamiliar with the five points of the biblical covenant's structure. They are as follows: God's transcendence, a hierarchical system of authority, ethics, sanctions, and time. By time, I also mean the world beyond the final judgment.
My thinking about the biblical covenant was re-structured by a book that my Institute for Christian Economics published. It was written by Ray Sutton, That You May Prosper: Dominion By Covenant (1987). You can download it here for free: www.bit.ly/rstymp. It introduces the five points.
This structure governs the structure of God's creation of mankind: God, man, law, sanctions, and time. I have written a detailed book on this: Unconditional Surrender: God's Program for Victory (2011). It is published by American Vision. I published the first edition in 1980, but that edition had only the first three points. I added sanctions and time in later editions.
In my 1987 book on economics in the ten-volume Biblical Blueprint Series, I adopted a variation of the structure that I use in this one: Inherit the Earth: Biblical Principles of Economics. You can download it here for free: www.bit.ly/gninherit. I have written a far more detailed book, The Covenantal Structure of Christian Economics (2015). Download it here for free: www.bit.ly/covstruc. I have also written a short book, God's Covenants (2014). Download it here for free: www.bit.ly/gncov.
I have used a variation of the five points to explain social theory in general: sovereignty, authority, law, sanctions, and time. I have used these five points to structure my two-year high school course in the history of Western literature. I have also used it to structure my one-semester course in government. These courses are available on the Ron Paul Curriculum.
I used the five points to re-write a famous economics book written by my friend Henry Hazlitt. His book was called Economics in One Lesson (1946). Mine is called Christian Economics in One Lesson (2016). Access it here: www.bit.ly/CEIOL.
By adopting the five-point covenant structure, I am attempting to reconstruct all of economic theory. The same categories that govern Christian economics govern all forms of economics. Economists do not recognize this, but that is because they either do not understand the biblical covenant structure (likely) or else they don't think it applies to economics. But it does. The content of economics and social theory in general will differ in terms of the presuppositions regarding sovereignty, authority, law, sanctions, and time, but every comprehensive social theory has to include all five of these points.
Part 1 applies the five points to the days of creation and the brief period in which man had not sealed a covenant by eating from either the tree of life or the tree of the knowledge of good and evil. That was the age of innocence. In Part 2, I discuss the modern secular foundations of economic theory. In Part 3, I discuss economics in the age of redemption. This covers the crucial question: "What has God revealed to Christians that will enable them to get back much of the world we have lost?"
I begin my study of economic theory with the biblical doctrine of creation: creation out of nothing. Obviously, this separates my approach from all other approaches by all other economists. Christian economics offers an exclusively and explicitly creationist economics. God spoke the cosmos into existence. The universe is not autonomous. It never was. Man is not autonomous. He never was. The laws of economics are not autonomous. Economic growth is not autonomous. The doctrine of autonomy is the product of the fall of man.
The earth is the Lord's, and all its fullness, The world and those who dwell therein. For He has founded it upon the seas, And established it upon the waters (Psalm 24:1--2).
Point one pf the biblical covenant is God's transcendence, yet also His presence. This is the biblical concept of God's soveregnty. It asks: "Who's in charge here?"
The Bible begins with this: "In the beginning, God created the heavens and the earth" (Genesis 1:1). This fact conveys a message: all thought must begin with the Bible's account of God's creation of the universe out of nothing. The Bible's unique concept of creation out of nothing categorically denies the validity of all versions of the doctrine of cosmic evolution.
Every area of thought must begin here. This includes every academic discipline. The first chapter of Genesis makes this point clear: the universe is personal, not impersonal. It was created by God. Christianity adds this: God is in three Persons. The creation was the work of Jesus, the Second Person of the Trinity. Paul wrote:
He is the image of the invisible God, the firstborn of all creation. For by him all things were created, in heaven and on earth, visible and invisible, whether thrones or dominions or rulers or authorities--all things were created through him and for him. And he is before all things, and in him all things hold together. And he is the head of the body, the church. He is the beginning, the firstborn from the dead, that in everything he might be preeminent. For in him all the fullness of God was pleased to dwell, and through him to reconcile to himself all things, whether on earth or in heaven, making peace by the blood of his cross (Colossians 1:15--20).
The intellectual discipline of economics must begin with the biblical doctrine of creation in order to be accurate. How does the doctrine of creation apply to economics? It establishes the doctrine of original ownership. This is asserted explicitly by Psalm 24:1--2. Therefore, every economist should begin his treatise or textbook on economics with the doctrine of God's absolute ownership of the universe. This is where I start.
Point one of the biblical covenant is God's transcendence, yet also his presence. It asks: "Who's in charge here?" How does this apply to God's ownership?
God is the Creator. This brings us to the most important single doctrine of the Bible: the Creator-creature distinction. This doctrine establishes that it is God and God alone who is the absolute ruler over the entire creation. God established the laws by which the creation operates, and He continually judges all the creation in terms of His law and His requirements. This is the doctrine of the original creation. God created the world; therefore, He owns it. He is the absolute owner of everything. As we will see later on, He has delegated the ownership of the earth to mankind. The child is made in God's image (Genesis 1:26), and this is why it's so easy for a child to learn the concept "mine."
The first principle of a biblical covenant is the principle of transcendence: God's absolute supremacy. God reigns supreme over everything. This means that He is high above the creation, and totally different from it. We deal with a sovereign God. In short, God runs the show.
This principle of transcendence relates to economics because ownership is ultimately theocentric (God-centered). He created all that exists, and He is at the center of the universe as its owner. This means that ownership is ultimately a theological concept. It cannot be properly understood without reference to God as the absolute owner of the creation. Similarly, it is impossible to discuss properly the responsibilities of ownership, which is what this book is all about, without also discussing what God specifically requires of men in their capacity as owners of property.
Biblical transcendence is unique. It also involves God's presence. The God of the Bible is not a deistic god who wound up the cosmic clock eons ago and then departed. He is present with the creation. Yet God is not a god of pantheism: immersed in the creation. He possesses absolute sovereignty over it. He is not struggling for control from inside it.
The doctrine of creation leads to a second doctrine, the doctrine of providence, meaning God's full-time maintaining and sustaining of the creation. God watches over and cares for the universe in a personal way. He sees everything. He knows everything: omniscience. "And no creature is hidden from his sight, but all are naked and exposed to the eyes of him to whom we must give account" (Hebrews 4:13). He has total control over the cosmos: omnipotence. "It is he who made the earth by his power, who established the world by his wisdom, and by his understanding stretched out the heavens" (Jeremiah 10:12). He is everywhere: omnipresence. "If I ascend to heaven, you are there! If I make my bed in Sheol, you are there!" (Psalm 139:8). It is through the power of God that the earth is sustained. God also sustains the universe. It is not autonomous. In short: no God--no universe.
God created and sustains everything. This is why the Psalmist announced that God is the owner of all the earth. The cattle on the thousand hills are His (Psalm 50:10). So are the hills. There is nothing on earth that God does not absolutely, completely own.
Point two of the biblical covenant is hierarchical authority. It asks: "To whom do I report?" How does this apply to God's ownership?
This book deals with Christian economics. Christianity preaches the doctrine of the Trinity. It preaches a unified God who exists in three Persons: Father, Son, and Holy Ghost. What about hierarchy? Hierarchy applies to the concept of the economic Trinity. To understand this concept, you should be also aware of the more familiar doctrine of the ontological Trinity, which is not hierarchical.
1. Ontological Trinity
What does "ontological" mean? It means "being." The doctrine of the Trinity is a twofold doctrine. The creeds of the church have always insisted that the three Persons of the Trinity are of equal importance, majesty, power, and so forth. In other words, they are one being. There are not three separate gods. In the language of the Nicene Creed, which was formulated in 325 A.D., speaking of Father and Son,
I believe in one God, the Father Almighty, Maker of heaven and earth, and of all things visible and invisible. And in one Lord Jesus Christ, the only-begotten Son of God, begotten of the Father before all worlds; God of God, Light of Light, very God of very God; begotten, not made, being of one substance with the Father, by whom all things were made.
This announced the doctrine of creation, and it immediately followed this with an affirmation of the equality of Father and Son: "being of one substance." Theologians call this the ontological Trinity. It has to do with the fundamental being of God.
2. Economic Trinity
Theologians have also insisted on hierarchy within the Trinity. Jesus insisted that He was subordinate to the Father. "For I have come down from heaven, not to do my own will but the will of him who sent me" (John 6:38). He also insisted that anyone who had seen Him had seen the Father (John 14:9). That is, He represented the Father. He still does. The doctrine of representation is an aspect of point two of the biblical covenant.
With respect to God's relationship with mankind, there is a hierarchy of responsibility. There is a hierarchical relationship within the Trinity insofar as the Trinity interacts with the creation. Jesus represented God to mankind in history, and He represents mankind before the throne of God as the high priest (Hebrews 4:14--16). This is basic Christian theology. It has to do with the very nature of God, and then God's relationship with the creation through mankind. The Trinity is a functional hierarchy, not an ontological hierarchy. We pray to God the Father in the name of Jesus Christ (John 14:14). Christ represents God to mankind and mankind to God.
History is about the representation of Jesus Christ. Psalm 110:1, which is quoted repeatedly in the New Testament, declares: "The Lord says to my Lord: 'Sit at my right hand, until I make your enemies your footstool.'" The apostle Paul wrote about the end of history.
Then comes the end, when he delivers the kingdom to God the Father after destroying every rule and every authority and power. For he must reign until he has put all his enemies under his feet. The last enemy to be destroyed is death. For "God has put all things in subjection under his feet." But when it says, "all things are put in subjection," it is plain that he is excepted who put all things in subjection under him. When all things are subjected to him, then the Son himself will also be subjected to him who put all things in subjection under him, that God may be all in all (I Corinthians 15:24--28).
3. Mankind's Ownership
God's required system of ownership reflects His Trinitarian being, which reflects both unity (one God) and diversity (three Persons). This is why God sets forth rules of ownership that are at the same time collective (unity) and individualistic (diversity). Some pieces of property are owned by individuals. Some are owned by families. Other pieces of property are owned by associations and corporations. Some are owned by churches, and some are owned by the civil government, meaning the state.
We also find in the Bible a system of overlapping ownership. Certain pieces of property are owned primarily by individuals but only secondarily by the state. In other cases, property is owned by individuals, but families also have rightful claims. In other words, property must never be defined as exclusively and absolutely owned by any single human being or any single human institution. This conclusion is implied by the very statement which begins this chapter: God alone is the absolute owner of all the creation. He, and He alone, possesses absolute rights of ownership. All other ownership claims are subordinate.
When we speak of human ownership, we should speak of God-given ownership. God is the absolute and ultimate ruler over all the creation, and therefore He is the absolute owner of the creation. We are told, however, that God has delegated to man the responsibility of caring for the creation (Genesis 1:28). Man is therefore a steward under the overall supervision of God. This means that man is responsible to God for the proper administration of everything that has been entrusted to him. This relationship is hierarchical.
Point three of the biblical covenant is ethics. It asks: "What are the rules?" There is no covenant without law. How does this apply to God's ownership?
God issued the command to Adam and Eve to be fruitful and multiply, and to exercise dominion across the face of the earth. This was not an option. The very definition of mankind rests upon this original command, which I call the dominion covenant. Built into every individual is the desire to extend his reign over the creation.
The second phase of the dominion covenant was God's transfer of ownership of the garden to Adam. He was to keep it and defend it. "The Lord God took the man and put him in the garden of Eden to work it and keep it" (Genesis 2:15). Third came the negative command and the negative sanction. "You may surely eat of every tree of the garden, but of the tree of the knowledge of good and evil you shall not eat, for in the day that you eat of it you shall surely die." (Genesis 2:16b--17). Fourth, Adam now faced a covenantal decision. Would he formally affirm this covenant or formally reject it?
The dominion covenant before the fall had a boundary: the forbidden tree. It has far more boundaries today. These boundaries are primarily ethical: right vs. wrong. They are also judicial: legal vs. illegal. They are also economic: profitable vs. unprofitable. When individuals and institutions violate these boundaries, God brings negative sanctions against them. Some of these sanctions are from within the creation itself, such as venereal diseases. Some are imposed by other societies: war. Some are imposed by civil magistrates. Some are imposed by the marketplace itself. Without sanctions, there are no laws. There are only suggestions.
Point four of the biblical covenant is sanctions. It asks: "What do I get if I obey? Disobey?" judgment. How does this apply to God's ownership?
These sanctions have to do with covenantal oaths: oaths of allegiance. A lawful covenantal oath invokes God's judgments in the form of sanctions, positive and negative, on the person who takes the oath. The oath ratifies the covenant. Without it, there is no covenant. How does this apply to the doctrine of God's ownership?
The dominion covenant was established before the creation of Adam. It was announced by God to God. Mankind must subdue the earth. But there was no ratifying oath from Adam. There was an implicit ratification by God in Adam's name as God's son. This was a representative oath. It had to be formally confirmed or rejected by Adam at some point in time. Adam lived briefly in a unique period of time: a covenant without formal ratification. That was the test period of his obedience.
A biblical covenant requires oath-signs as ratifications. In the Old Testament, the oath-signs were circumcision (Abraham) and later passover (Moses). In the New Testament, they are baptism and the Lord's Supper. There were two covenantal trees in the garden: the forbidden tree and the tree of life (Genesis 2:9). Adam could eat from the tree of life. The benefit was eternal life. That was a crucial positive sanction. That would have affirmed the dominion covenant on God's terms: obedience. Alternatively, he could eat of the forbidden tree. That would have denied the dominion covenant on God's terms. It would have been affirmation of the dominion covenant on man's terms: autonomy (self-law). Adam at some point would have to affirm or reject God's covenantal authority. The means of either affirmation or rejection was a communion meal at a tree. Which tree would Adam choose?
He faced a choice: profit or loss, life or death. These remain men's choices. But in the garden prior to the fall, Adam initially deferred making a decision. He could postpone this by avoiding both trees. But it is clear from Genesis 3 that he and Eve did not consider eating from the tree of life. The forbidden tree was at the center of their attention.
It was judicially mandatory that Adam seal the dominion covenant or reject it by means of a communion meal. There had to be an oath-sign. He postponed making the decision. He let his wife decide which tree to approach first. He deferred leadership to her.
Economists acknowledge the existence of economic patterns. Free-market economists believe that most of these patterns are imposed by the market itself. They are imposed in a specific form: accounting profits and losses. Economists generally do not believe in the existence of economic laws that are outside the institutional sanctions of profit and loss. They do not speak of economic laws as the equivalent of gravity. They also do not speak of economic laws as the equivalent of a moral code. They speak only of market sanctions and their effects on behavior. They do not believe in an institutional order created by God, governed by His laws, and restrained by economic sanctions. They see the market's sanctions as autonomous, not imposed by God. When Adam Smith coined the phrase, "the invisible hand," he was not talking about the hand of God. The deistic morality that he proclaimed in his 1759 book, The Theory of Moral Sentiments, was completely absent in The Wealth of Nations in 1776. Yet the same phrase appears in both volumes.
The twin sanctions of profit and loss remain in force. They are the heart of the market order. Christian economics teaches that these sanctions are still governed by biblical law, not by self-proclaimed autonomous man's law, whether market law or state law. This makes Christian economics a matter of ethics primarily, not ethically neutral techniques. This sets Christian economics apart from humanist economics.
Point five of the biblical covenant is inheritance. It asks: "Does this outfit have a future?" How does this apply to the doctrine of God's ownership?
Adam and Eve were told to have children. Their adult children were then to have children. Through time, compound growth of the population would have achieved a rapid filling of the earth. No deaths, when coupled with a high birth rate, would have produced a large population within a half a millennium. A 5% per year birth rate for 450 years produces 6.5 billion people from the initial pair. The higher the rate, the shorter the time period required to do this.
Mankind is required to serve as God's steward. Prior to the advent of compound population growth and compound economic growth, which began approximately in 1800 in North America and the British Isles, the world seemed to be a very large place for mankind to occupy. Today, we hear cries of alarm about population growth and an unsustainable economy in a world of limited natural resources. World population is over seven times what it was in 1800. The economist Robert Malthus in 1798 anonymously warned against the belief that population growth could continue for long, because resources were too scarce. Most people believed Malthus. Malthus was wrong.
The Bible clearly teaches the doctrine of long-term economic growth. It not only teaches that this is possible; it mandates it. It is an ethical responsibility for each individual to work to extend man's dominion, under God, across the face of the earth. This is the explicit message of Genesis 1:26--28. Each generation is expected to leave an inheritance for the next. "A good man leaves an inheritance to his children's children" (Proverbs 13:22a). This would have compounded capital to match or exceed the growth of the population. Per capita wealth would have increased.
The biblical concept of ownership is centered in God. "For every beast of the forest is Mine, And the cattle on a thousand hills" (Psalm 50:10). God is the absolute owner of all the creation, and He sustains it by means of His supreme ruling power. He established man as a manager over His property, and He has laid down laws for the administration and transfer of property that must be obeyed if this work is to be profitable. They are to be faithful stewards to God.
Economic theory must begin with the doctrine of the creation. It therefore must begin with the doctrine of original ownership. It does not begin with the doctrine of self-ownership by man.
This leads us to a more detailed discussion of what I call the dominion covenant: the legal relationship between God and mankind regarding the extension of the kingdom of God in history.
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