Chapter 3: Property
Christian Economics: Student's Edition
[Updated: 1/18/18]
The Lord God took the man and put him in the garden of Eden to work it and keep it. And the Lord God commanded the man, saying, "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 2:15--17).
Point three of the biblical covenant is law. It asks: "What are the rules?" How does this relate to property?
God placed a judicial/covenantal boundary around this tree. The theological issue of boundaries is always the issue of ethics. Ethics is a series of boundaries: "Do not do this." There are no covenants without boundaries.
The issue of boundaries in the field of economics centers on the issue of property rights. The issue of property rights is inextricably connected to the issue of ownership. They are, as Americans like to say, a package deal.
The issue of ownership is also connected to the issue of responsibility. The owner of an asset is responsible for the use of the asset, including the effects on other people of whatever use the owner adopts for the particular piece of property.
Another important aspect of property rights is the definition of what constitutes a right. A right is legal immunity from interference by others, including interference by the civil government. In other words, there is a legal boundary around a particular piece of property. But the property is owned by somebody, so the issue of property rights is inescapably an issue of human rights.
Then there is the issue of specialization. When somebody owns a piece of property, including the property right associated with his own labor, he allocates it to a particular use. If he allocates it to one use, he cannot allocate it to a competing use at the same time. By allocating a piece of property to a particular use, he specializes in this use of the property. Specialization is an aspect of economic efficiency. People are more productive when they concentrate their time and effort and money on a particular production process. They get better at what they do over time. They buy tools that enable them to increase their output. In other words, they specialize. The civil government's guarantee of property, whether raw materials, tools of production, or the output of this production, increases the willingness of people to specialize.
In order to understand how these important issues are connected to each other, you must understand the biblical concept of boundaries. At bottom, these are ethical boundaries.
Point one of the biblical covenant is God's transcendence, yet also His presence. This is the issue of God's sovereignty. It asks: "Who's in charge here?" How does this apply to property?
The biblical concept of holiness has to do with ethics. It is a matter of ethical purity. Grammatically, holiness is based on the Hebrew word, qadash. It means to set apart or to consecrate. The English word used in the King James Version of the Bible, "hallowed," refers to this consecration. Theologically, to be holy is to be set apart by God in terms of ethical purity.
The original setting apart was God's setting apart of Himself. He is different from the creation. There is a fundamental distinction between the Creator and the creature. This has to do with the very being of God, but it also has to do with the ethical purity of God. He is the ethical standard. His commitment to purity is absolute. Jesus said: "Be perfect, even as your father in heaven is perfect" (Matthew 5:48).
Another word related to purity is "sanctification." It also means to be set apart. We speak of someone or something as being sanctified. This is related to the English word, "saint." We speak of someone as a saint because of the person's ethical purity. We regard that person as being different from the rest of us. We set apart that person in our own minds. We think to ourselves: "This person is special." Theologically, we are to begin with God as our model. God is uniquely holy. His holiness makes Him special. There is an English word, "sacrosanct." It is a combination of "sacred" and "sanctification." God is uniquely sacrosanct.
The biblical doctrine of creation leads to a conclusion: the universe is personal. We can call this cosmic personalism. The God of creation providentially upholds the entire universe. But because this God is uniquely holy, the universe itself is governed by the ethical standards that God has identified as required for personal holiness. The universe is both personal and ethical.
We do not think of the supposed two trillion galaxies, each with its hundred billion stars, as being related to ethics, but they are. They were created by God and are at all times providentially administered by God. This God is transcendent. He is above the creation. He is fundamentally different from the creation. He is the source of the creation. He has delegated to mankind the administration of the earth and any other place in the universe where men may eventually travel, either before or after the final judgment. God's dominion is inherently and inescapably ethical.
Every social science is at bottom ethical. Secular scientists usually deny this. They believe that the scientific principles that govern their area of study are ethically neutral. They search for causes and effects in history, and they insist that these causes and effects are governed by impersonal laws that have no connection to ethics. In other words, they deny the existence of ethical cause and effect that is transcendent to man in his institutions. Social scientists and historians acknowledge that particular views of ethical cause and effect do have effects in history. But they insist that these views were invented by individuals, and these theories have no connection to any transcendent source of social order. This is the atheists' view of society. It is dominant in academia. It is at war with the biblical worldview.
Point two of the biblical covenant is hierarchical authority. It asks: "To whom do I report?" How does this apply to property?
God's covenant with mankind, which was made before either man or woman was created, is a covenant of service. Mankind is dependent on God. God upholds mankind and man's environment by means of providence. God created mankind in order to serve Him as His corporate agent in extending the kingdom of God across the face of the earth. Man is a legal agent. Man is also an economic agent. God holds individuals and institutions responsible for the administration of the assets He has delegated to them, including their own lives.
This system of service to God mandates service to the creation. Men represent God to the creation, and they also represent the creation to God. What mankind does as God's agent influences what happens in the general creation. When men rebelled against God in the garden, the world came under negative sanctions. This was taught explicitly by the apostle Paul in the eighth chapter of the epistle to the Romans.
For I consider that the sufferings of this present time are not worth comparing with the glory that is to be revealed to us. For the creation waits with eager longing for the revealing of the sons of God. For the creation was subjected to futility, not willingly, but because of him who subjected it, in hope that the creation itself will be set free from its bondage to corruption and obtain the freedom of the glory of the children of God. For we know that the whole creation has been groaning together in the pains of childbirth until now (Romans 8:18--22).
Men are to serve as stewards over the creation. But this is only part of the story. Covenant-keeping people are also to serve as stewards in their relationship with others in God's church. Jesus was explicit about this.
You know that the rulers of the Gentiles lord it over them, and their great ones exercise authority over them. It shall not be so among you. But whoever would be great among you must be your servant, and whoever would be first among you must be your slave, even as the Son of Man came not to be served but to serve, and to give his life as a ransom for many (Matthew 20:25--28).
This principle of service is fundamental to a correct Christian understanding of the free market economy. In order to prosper in a free market, producers must serve the desires of customers. Producers dare not lord it over customers. Customers, because they have money, lord it over producers. Money is the most marketable commodity. Everybody would like more money, but at zero additional cost, of course. This is the basis of consumer authority in the free market.
If someone wants success, he must learn to serve. This is fundamental to the free market social order, and it is fundamental in nonprofit institutions. This is a matter of ethics. God built this into the social order from the beginning. There is an ethical cause-and-effect system that is inherent in the human condition. It did not come from man. It came from God.
Point three of the biblical covenant is law. It asks: "What are the rules?" How does this apply to property?
God gave Adam and Eve unrestricted authority over the entire creation, with only one exception: the tree of the knowledge of good and evil. That alone was closed to them. As we learn in Genesis 3, that was the exclusive focus of their attention. What they were not allowed to have, they soon wanted. They were tempted by a serpent to violate this law, and they succumbed to the temptation.
God placed a judicial boundary around that tree. This was an assertion of ownership. The tree belonged exclusively to God. The human race, meaning Adam and Eve, was not allowed to violate this judicial boundary. The tree was sacrosanct. It was sacred. It was set apart. It was part of God's covenant with mankind. This tree was representative of mankind's relationship to God. Would mankind remain loyal to God, or would mankind become disloyal? This tree was a representative token of mankind's loyalty to God.
Yet there was another covenantal token in the garden: the tree of life. We first hear of this tree in Genesis 2:9. It is mentioned along with the forbidden tree. It was a covenantal tree. Why do I say this? Because there was a positive sanction associated with it: eternal life. This is why God placed a flaming sword at the entrance of the garden after the fall: so that Adam and Eve could not get back to it to gain its positive sanction (Genesis 3:22). Had they taken their first communion meal at that tree, the tree of the knowledge of good and evil would no longer have posed a threat to them, either because they would not be tempted to eat from it or else because the test would have ended. Adam and Eve had three choices, not two: (1) avoid eating from the forbidden tree, (2) eating from the tree of life, or (3) eating from the forbidden tree. Yet with two righteous options available, they chose the third.
God established the dominion covenant before He created mankind. Then He placed Adam in the garden. There was a negative sanction associated with one tree, and a positive sanction with the other. These two trees were oath-signs. They had covenantal importance. Man could seal the dominion covenant by eating from the tree of life: loyalty. He could also break the dominion covenant by eating from the forbidden tree: disloyalty. At some point, they would have eaten from one or the other. Mankind could not have lived in an oathless world for long. This was a world without an implicit "yes" or "no" to God's covenant. This was a covenantally provisional world. It was open-ended. This was the only time in history when such a world existed. It was a world left incomplete by God until they decided whether to affirm the covenant of God or else attempt to establish their own autonomous covenant, in which they would test the accuracy of God's promise of death. They failed the test. We failed with them. They were our covenantal representatives.
Because of man's rebellion, Christians and Jews focus on that forbidden tree. So did Adam and Eve. But what we should never forget is the other aspect of the covenant, namely, God's grant of the unrestricted use of every other asset in the garden and anywhere else, including the tree of life. God in his grace transferred the whole earth to mankind as an undeveloped capital asset. Individuals and institutions were allowed to produce whatever they wanted. In order to fund economic growth, which was required by God in the original covenantal document, which appears in Genesis 1:26--28, they also would have to be thrifty. They would have to become entrepreneurs, looking into the future as a guide to allocating capital assets in the present. But they could consume anything they wanted. This was a spectacular grant of wealth to mankind.
Their right to enjoy the fruits of the entire creation was a grant of liberty. They had liberty of action. They also had the liberty to accumulate wealth. This was part of the dominion covenant. Wealth is a capital resource. It necessarily involves responsibility, because wealth can be allocated in so many different ways. Liberty of action was crucial to the responsible accumulation of wealth. Again, this was a package deal: a grant of capital, a grant of liberty of action, the right to accumulate wealth, and the responsibility associated with ownership. It all rested on the judicial and ethical concept of private property rights.
Mankind paid no attention to this grant of capital, liberty, and the potential for building up an inheritance. Adam and Eve, as judicial representatives of the entire human race, went to the forbidden tree in order to enjoy the fruits thereof. The fruits thereof were deadly, just as God had promised.
The test of mankind's loyalty was the judicial boundary around the tree. The explicit test was based on the concept of private property. The tree was exclusively God's tree, and Adam and Eve were not to violate this boundary. It was an ethical boundary as well as a judicial boundary. Because it was sacrosanct, it was also an ecclesiastical boundary. Another tree could be appropriated by Adam and Eve as priests. They could lawfully participate in another communion meal. They could have gone right to the tree of life and gained eternal life through their participation in a communion meal at that tree, but they chose not to do this. They chose instead to participate in a communion meal of guaranteed death. That was the legacy, the inheritance, that they passed on to their heirs, including you.
The original test of mankind's loyalty to God was a test of their willingness to honor God's property rights. Their violation was inherently an act of theft. This should remind us of just how important ethically, judicially, and ecclesiastically the concept of private property is. The doctrine of property rights is an extension of the doctrine of God's original ownership, and therefore it is an extension of the doctrine of God-delegated ownership. It is manifested in the commandment: "You shall not steal" (Exodus 20:15).
Until that first act of theft, mankind had no need to allocate resources to defend individual property against thieves. There was only one thing that they could steal: the fruit of the tree of the knowledge of good and evil. There was no need to steal anything else. There was plenty to go around. Adam and Eve did not eat from the tree because they were hungry. They ate from the tree because they were sinners. They had already made the decision to violate the boundary. As a result, they came under the promised sanction. There was plenty of death to go around. Furthermore, there was not a lot of demand for it. The supply of death is always much greater than the demand.
God is holy. This holiness was manifested by the forbidden tree. It was set apart. That is the meaning of holiness. Mankind's act of theft was the supreme unholy act. But until the rebellion, mankind had free use of the creation. I use the word "free" in both senses: legally free and economically free. They did not have to buy the cornucopia from God. It was His gift to them.
Point four of the biblical covenant is sanctions. It asks: "What do I get if I obey? Disobey?" How does this apply to property?
There are always positive and negative sanctions in life. There are also positive and negative sanctions in eternity. There are heaven and hell (Luke 16). There are the lake of fire (Revelation 20:14--15) and the new heavens and the new earth (Revelation 21; 22).
God warned Adam of the negative sanction of death (Genesis 2:17). Adam later warned Eve. We know this because Eve knew about the threatened negative sanction when the serpent tempted her (Genesis 3:2). Other than the sanctions associated with death, there were no other negative sanctions in the garden. The whole world was a gigantic treasure chest of positive sanctions. Adam and Eve made a self-conscious decision to grab the robes of authority instead of dipping their hands deep into the cornucopia of wealth. When you read commentaries on the forbidden fruit and the fall of man, you will find very little about the positive sanctions that were all around them. The commentators don't talk about the grant of capital and the grant of liberty to put this capital to use. It was a grant of the right to consume anything in the general creation. This was the potential available to them for building the kingdom of God. The focus of the commentators is on the rebellion. This is consistent with the nature of the rebellion, because Adam and Eve also ignored the cornucopia. The negative sanctions were at the heart of the argument between Eve and the serpent. The loss of the positive sanctions did not come up in the record of their discussion.
When we discuss the world we have lost, we should focus on the positive sanctions. That is because we lost them. Only through the grace of God, which was shown in the slaying of the animals in order for God to provide Adam and Eve with animal skins (Genesis 3:21), were some of the positive sanctions restored. The animal skins were covenantal tokens of God's continuing grace to mankind.
The post-fall appeal of great riches is based on the loss of great riches in Genesis 3. Men want riches, but on their own terms. They want a restoration of what mankind once had. We should never forget that people really did possess great riches, and they also possessed the liberty to accumulate even greater riches. They owned these riches. More important, they owned the liberty to accumulate even greater riches. Their liberty was a property right. But it could be lost through the violation of God's property right. What mankind possessed, Adam and Eve could forfeit. And they did.
God did not warn them of this about the forfeited wealth. He simply said that the penalty for violating his property rights was death. He did not say that He would take away their property. He said that He would take away their lives. That threat was greater than the threat of taking away their property, which included their liberty. If someone is not overly impressed by the threat of being executed, he is not going to be impressed by the threat of having his property taken away.
There is something else to consider. In building wealth, the most important thing you can do is to avoid losses. If you could just avoid the losses of life, your investments would compound over your lifetime. In the case of Adam and Eve, there was no limit on their lifetime, as long as they did not eat from the forbidden tree. There were no negative sanctions in the world prior to their theft of God's property. There could be various rates of profit, but there could not be losses, which are negative sanctions. When it came to capital, there was always more where that came from. There were no setbacks in life; there were only varying rates of success. This was the world we have lost.
Point five of the biblical covenant is succession. It asks: "Does this outfit have a future?" How does this apply to property?
God told Adam and Eve to be fruitful and multiply. Therefore, from the beginning, there was to be an inheritance. The sons and daughters of each generation would inherit capital assets from their parents. Their parents would not do this in order to be supported in their old age. There would be no setbacks as a result of aging. People would get wiser over time. They would specialize over time. They would increase their rate of productivity over time.
Nevertheless, parents would have provided their children with capital. They provided the capital associated with child-rearing. It would make no sense to send them into the world without capital. They would be provided with capital in the same way that God had provided Adam and Eve with capital. God had set the pattern.
By turning over capital to children, parents contributed to the extension of the kingdom of God in history. Their children would have specific skills and interests. They would specialize in the production process. This specialization would lead to greater output per capita. This would lead to more rapid economic growth and a more rapid extension of mankind across the face of the earth: the fulfillment of the dominion covenant. Mankind would multiply and subdue the earth for the glory of God. This would have been done within a few centuries. Then the preliminary arena of the administration of capital in the extension of the kingdom of God would be changed. The new heavens and a new earth would have come into existence, as described in Revelation 21 and 22.
There would have been a final judgment. We could call this a final accounting. The concept of accounting is appropriate in describing the final judgment. But the final judgment would not have involved the threat of what Revelation 20:14 calls the second death. There would have been different rates of positive return, but no one would have declared bankruptcy. Bankruptcy ultimately is spiritual and ethical. Without the fall of man, this would have been avoided.
The fall of man took place as a result of mankind's violation of God's private property rights. Adam and Eve violated the judicial and ethical boundaries that God placed around the tree of the knowledge of good and evil. God had warned Adam of the penalty for such a violation: death. Adam had warned Eve. Eve quoted this warning to the serpent. But the serpent's temptation prevailed. They decided to test the accuracy of God's warning. In running this experiment, Adam asserted his own autonomy. He would test God's word. God would no longer test Adam's loyalty.
This act of theft had enormous consequences historically. But Christians rarely think about the world that their covenantal parents forfeited as a result of that act of theft. The centrality of theft in the story of the fall of man should remind Christians of the magnitude of God's hostility toward theft. God's announcement of the sanction against such theft should have been sufficient to persuade Adam and Eve not to indulge themselves in violating the judicial and ethical boundaries that God placed around the tree of the knowledge of good and evil. But it did not suffice. Neither does the commandment against theft in the Ten Commandments.
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The rest of this book is here: //www.garynorth.com/public/department188.cfm