Christian Economics: Student's Edition
[Updated: 1/18/18]
The Lord will command the blessing on you in your barns and in all that you undertake. And he will bless you in the land that the Lord your God is giving you. The Lord will establish you as a people holy to himself, as he has sworn to you, if you keep the commandments of the Lord your God and walk in his ways (Deuteronomy 28:8--9).But if you will not obey the voice of the Lord your God or be careful to do all his commandments and his statutes that I command you today, then all these curses shall come upon you and overtake you. Cursed shall you be in the city, and cursed shall you be in the field. Cursed shall be your basket and your kneading bowl. Cursed shall be the fruit of your womb and the fruit of your ground, the increase of your herds and the young of your flock. Cursed shall you be when you come in, and cursed shall you be when you go out (Deuteronomy 28:15--19).
God's dominion covenant had to be modified after the fall of man. Mankind became subject to death. This meant that God would have to renew the dominion covenant with each new generation. This transformed private property into what we call a leasehold. Delegated ownership was no longer permanent. Each generation died off.
Before the fall of man, there would not have had to have been detailed leasehold agreements. People would not have stolen from each other. Any disputes over ownership would have been settled amicably. There was no need for the civil government to intervene. There would have been no civil government had man not sinned. But man did sin, and this meant that God's arrangements with mankind had to be modified. This was because of the effect of sin in the lives of men. Leasehold agreements had to become far more specific than before the fall. Disputes were constant. Disagreements were not ordinarily amicable. The terms of each agreement would have to be spelled out in detail. This was true of the covenantal agreement between God and mankind. It was also true of the agreements among mankind. Boundaries had to be specified. Rules governing the use of property also had to be specified.
Deuteronomy 28 and Leviticus 26 are leasehold agreements. They are parallel passages. They are long chapters. They contain promises of blessings and curses. The sections that deal with the curses are three times as long as the sections that deal with the blessings.
Written contracts have terms. The parties agree to the terms of a contract. There are specified penalties for any violation of the contract. There are usually benefits listed for performance according to the terms of the contract. But the penalties are the crucial section. Both parties to the contract understand that the terms must be fulfilled, and fear of the penalties serves as a motivation for both parties to the contract to perform as promised.
One of the insights of the field known as behavioral economics is this: people fear a loss with greater intensity than they desire a comparable amount of gain. This has been demonstrated in numerous psychological experiments. This is reflected in the story of the forbidden tree. Adam was told that he had access to all of the trees of the garden, including the tree of life. But God did not go into details about these benefits. The negative sanction of death was the focus of the agreement. God did not even mention the fact that the tree of life would guarantee eternal life to Adam. He never did tell Adam that this was the case. But, after the fall, He placed a barrier around the garden so that Adam could not re-enter the garden, eat from the tree, and gain eternal life. It was sufficient that the contract specified that a violation of the terms of the lease would result in death. That threat did not impress Adam, so he came under the curse. He came under a whole series of curses. So do we.
A leasehold agreement has this crucial goal: to keep the tenant from exploiting the property that has been transferred to him. The owner knows that the tenant will be tempted to misuse the property, thereby reducing its market value. For example, if he does not rotate crops or otherwise fertilize land, the productivity of the land will decline over time. He benefits from the productivity during the terms of the lease, and then he turns the property back to the owner in a depleted condition. He de-capitalizes the owner. Therefore, the owner is careful to specify what the tenant is allowed to do with the property. The owner wants the property returned to him in its original condition or even in a more productive condition.
A lease is not the same as a permanent transfer of property. A lease is not full ownership; it merely establishes the right of someone to use a specific piece of property for a limited period of time. Because of Adam's sin, all humans occupy for temporary time. We die. The lease ends when the tenant dies. It may be a transferable lease, but the terms of occupancy do not change. This is how the owner of the property preserves the value of the property.
There is no question that the terms of the leasehold for the dominion covenant are rigorous. They are overwhelmingly ethical. They do not change except when the owner authorizes such a change. The tenants do not have the authority to modify the terms of the lease.
Modern theologians assume that the terms of the lease which God granted in a series of revisions from Adam to Christ do not extend into the New Covenant. They assume that Christians can safely ignore the terms of the original lease. They assume that God has quietly and without any public announcement modified the lease agreement in such a way that almost none of the Mosaic economic and civil laws persevere in the New Covenant.
Why would God abandon virtually all of the economic terms of the lease without explaining why? Why does God expect Christian tenants to return His property in good condition, despite the fact that the terms of the lease have been abandoned, and therefore there are no negative sanctions associated with failure to comply with those terms? At the same time, why do modern theologians assume that the blessings of the original agreement have also been annulled by God? Why do they think that the specified benefits are no longer awarded to reward honest production? Why do they think that the whole program of dominion, which requires an increase of capital over multiple generations, no longer applies to covenant keepers?
There were positive and negative sanctions in the garden of Eden. There were positive and negative sanctions associated with the Abrahamic covenant. These were covenantal laws. For example, Abraham tithed to Melchizedek. Israelite land owners under the Mosaic law were required to tithe to the Levites (Numbers 18). There was covenantal continuity. Yet there are few theologians today who argue that God still requires the tithe payment to the institutional church. We are told that God has abandoned the requirement of the tithe, despite the fact that Jesus is a high priest in the order of Melchizedek and therefore deserving of a tithe (Hebrews 7). Isn't that strange? I don't believe it. I have written a book refuting the idea: The Covenantal Tithe. It's free: www.CovenantalTithe.com. I hold the position that the terms of the Melchizedekan tithe remain in force.
Point one of the biblical covenant is God's transcendence, yet also His presence. This is the biblical concept of God's original sovereignty. It asks: "Who's in charge here?" How does this apply to the leasehold?
God is the absolute Owner of the creation. He is the Owner because He created everything. He is not the God of pantheism. He is not part of the creation. He is transcendent over the creation. Second, He maintains His ownership as the providential administrator of the entire creation. He is not the God of deism. He is present with the creation.
God created mankind to exercise dominion over the earth. As the Owner of the earth, God established a contract between Himself and Adam. We correctly call this a covenant, but it had the characteristic features of any leasehold agreement. There was a statement of what Adam and Eve were required to do: exercise dominion and multiply biologically. There was also a representative test of Adam's capacity as God's caretaker. He had to avoid eating from a specific tree. There was a negative sanction associated with a violation of the leasehold agreement: death. That would certainly have ended the lease. But God in His grace did not execute Adam on that day. He extended the lease to Adam's heirs down through the ages. You and I come under the terms of the lease.
Point two of the biblical covenant is hierarchical authority. It asks: "To whom do I report?" How does this apply to the leasehold?
When Adam demonstrated that he was a thief, he made it clear to himself, his wife, and his heirs that he was no longer a reliable caretaker. He was willing to steal from the owner. He was therefore willing to extract part of the capital value of the leasehold in order to benefit personally. He would count as personal income the depleted value of the original capital.
This was exactly the opposite of what God had told Adam to do before the fall. They were required to administer God's property to God's advantage. Their heirs were also to serve as stewards of God's property. They were given a lease, but God did not transfer full ownership of the property to them. Therefore, they were not to deplete the value of the original capital assets; on the contrary, they were required to increase its value. But Adam could no longer be trusted to do this.
Biblical law sets forth the terms of the lease. The reason why there has to be this law-order is that mankind, now corrupted by sin, simply cannot be trusted to administer God's property apart from specified rules and the appropriate sanctions. There have to be rewards, and there have to be punishments. Without these, mankind would rob God blind. God is not blind, so He has specified terms of the lease. This limits man's authority.
The terms of the lease are part of the hierarchical structure of authority. There could be no safe transfer of this authority apart from the terms of the lease. The terms of the lease should be seen as benefits. The terms of the lease establish what man is required to do. This is the judicial foundation of man's authority in the hierarchy of dominion. God did not kill Adam. Instead, he extended the lease. This was an act of grace on God's part. If you are a covenant keeper, and therefore redeemed by the life, death, resurrection, and ascension of Jesus Christ, then you are a beneficiary. You should rejoice in the fact that you have been given this honor. But without the leasehold agreement, God could not trust you. For that matter, you could not trust you. "The heart is deceitful above all things, and desperately sick; who can understand it?" (Jeremiah 17:9). The sin of self-deception has been around ever since the garden of Eden. Basically, Adam and Eve committed suicide. They were involved in a suicide mission. They were successful.
The existence of the leasehold and its terms testifies to the legitimacy of our office as stewards. The leasehold testifies to God's grace. Never forget: grace precedes law. Adam was given life before he was told not to eat of the forbidden tree. The grace of God is vastly more powerful than the wrath of God. The grace of God extends to all eternity. It is progressive in eternity. It compounds. The wrath of God just sits there, burning covenant breakers. There is no progress in the wrath of God.
Point three of the biblical covenant is ethics. How does this apply to the leasehold?
The fundamental principle of Christian economics is the creation. Secondarily, it is the providence of God in sustaining the creation. This is where economic theory should begin: original ownership and providence. But this is not where other economists begin. Far more often, they begin with the concept of scarcity and the division of labor. Scarcity is not the central principle of economic science. Neither is the division of labor. Adam Smith began with the division of labor, and this set back the cause of liberty for at least 180 years. He should have started with ownership. A socialist can claim to be in favor of the division of labor. A socialist is never in favor of widespread private ownership.
There is no question that the story of the fall of man focuses on an act of theft. So, theft should be the focus of all discussions of economic law. The overwhelming bulk of economic laws in the Old Testament and the New Testament focus on restrictions against theft. The laws specify what constitutes theft. In other words, the heart of Christian economics, after the doctrines of creation and providence, and after the doctrine of the dominion covenant, is the integrity of private property. If this were not true, this would not have been the only prohibition in the garden of Eden. That prohibition should make it clear to all of us: theft is the archetype sin of mankind. It is the alpha and omega of sin. Joseph's brothers stole his liberty by selling him to slave traders (Genesis 37). A subsequent Pharaoh enslaved the Israelites, stealing their liberty (Exodus 1). Jezebel stole Naboth's vineyard to benefit her husband (I Kings 21). Judas was a thief (John 12:6).
The details of Christian economics can best be found in the details of the laws against theft. If we study the laws against theft, we prepare ourselves for understanding the operations of the market order. Understanding ownership and property rights is fundamental to a correct understanding of all economics, and Christian economists have a moral obligation to make this clear. If they don't get this clear, who will?
Point four of the biblical covenant is judgment. How does this apply to the leasehold?
In a sharecropping arrangement, the owner is entitled to a share of the output of his property. This is also true of business income.
It is always difficult for an owner to police this aspect of the lease. A sharecropper can hide some of the output. The owner cannot monitor everything. This, of course, is not true of God, but the old adage still applies: "The best fertilizer is the owner's shadow." After God left the garden, Adam and Eve acted as though he were not present in their midst.
Every lease has to have success indicators. Every employment contract has to have success indicators. In businesses, the accounting concepts of monetary profit and loss are the most common success and failure indicators. These are monetary concepts. They are objective. But the problem with them is this: those who are closest to the system's local operations can cheat. The specialized knowledge which they possess is not possessed by the owner, who is more distant. This is especially true in a division-of-labor economy with extensive international trade. If the low-level employee or the business trading partner is in a position to take advantage of the owner, the owner is hard-pressed to monitor all of these opportunities for cheating. This is why the self-discipline involved in a refusal to cheat or to take advantage of an owner is beneficial for society. This is a matter of self-government. The owner cannot expend sufficient resources to police every transaction. Furthermore, people who are closer to the transactions have the ability to structure the transaction so as to benefit them. This is called "gaming the system." This is always the problem with objective success indicators. They can all be gamed. They are supposed to motivate decision-makers to do what is profitable for end users: the service function. Instead, they are used to benefit the employees at the expense of users and also owners.
Here is a familiar example of this problem. Parents tell their child to earn good grades at school. Grades are supposed to tell everyone how well the student understands the material. But what if the student cheats? Teachers tell the student not to cheat. But what if the student finds a way to cheat without getting caught? This undermines the purpose of grading. If it becomes widespread, this will undermine the reputation of the school. The cheating students who graduate will not be able to perform as expected in college . . . unless they find ways to cheat without getting caught in college. Over time, widespread cheating erodes trust in the performance of educational institutions. This is not a hypothetical problem. Cheating is widespread in higher education in the United States. It is far worse than it was in my college days in the early 1960's. There are online companies that sell term papers for students to submit as their own work. There is a large market for this service.
Ethical people who refuse to take advantage of the ignorance of trading partners will find over time that they have more opportunities to become involved in profitable ventures. But even here, it is difficult to gain the reputation, because the cheating is not observed. So, refusing to cheat is not observed. But God observes it. The battlefield of ethics is tilted against covenant breakers. An omniscient God is not fooled.
The system of double-entry bookkeeping does reduce the amount of cheating. The capitalist world has depended on this accounting procedure for half a millennium. It has given Western economies a tremendous advantage over the rest of the world. It has reduced the cost of monitoring cheating. It enables owners to know the condition of their businesses.
If Christians obeyed God's laws regarding theft, then they would possess a major competitive advantage in every society. If they were self-disciplined in not taking advantage of others, they would gain reputations of honesty that would increase the number of offers for joint ventures. This begins with self-government under God. Christians should be sufficiently afraid of the negative sanctions of God to persuade them to avoid cheating.
Point five of the biblical covenant is inheritance. How does this apply to the leasehold?
God promised to bless his covenant people if they obey His laws (Deuteronomy 28:1--14). This involved the economic blessings. This was an intergenerational promise. It was not just to the first generation of Israelites who would conquer the Canaanites. It was a promise to Israel through the generations. This promise ended in A.D. 70 when Rome destroyed Israel. The church then replaced Israel. It became the Israel of God (Galatians 6:16).
This is the issue of compound economic growth. Even a relatively low rate of growth transforms any economy within a century. The rate of economic growth in Great Britain and the United States began to compound around 1800. With only one decade of stagnation, the 1930s, the economy of the United States continued to grow at somewhere between 2% and 3% per annum per capita. This has led to the complete transformation of the world. There were about a billion people in 1800. There are over seven times this today. Never before in the recorded history of man has there been comparable economic growth and population growth. All of this has taken place because of the compound economic growth and compound population growth at or below 3% per capita per year. This steady increase, year after year, has led to a completely new world, a world of wealth so great that it would have been inconceivable in 1800. Yet, incredibly, this took place within three generations of one family: John Tyler (1790--1861) to his two grandsons, who were still alive in 2018. (I interviewed Lyon Tyler in 2010.)
The most important historical question that historians can conceivably answer by an appeal to historical records is this one: "What took place around 1800 that launched a period of compound economic growth that lasted for over two centuries?" So far, economic historians have not come to any agreed-on answers.
The texts of Deuteronomy 28 and Leviticus 26 testify to the fact that God promised something like this in the middle of the 15th century, B.C. Compound growth could have begun then. It did not. Historians want to know why a trend began in a particular location at a particular period of time. Why didn't this enormous transformation of the world economy begin in Israel sometime around 1450 B.C.? The biblical answer is simple: the Israelites did not remain obedient to the stipulations of the leasehold agreement that gave them control over the geography of the tiny nation of Israel. The nations around them also did not abide by these stipulations.
God was quite specific in His revelation to Moses regarding His law. It was a systematic law-order. It was supposed to be enforced by sanctions: self-government, family government, church government, and state government. This did not take place on a systematic basis in the history of Israel.
If the Mosaic system of economic and civil laws and sanctions is no longer in force, then there is no such thing as Christian economic theory or Christian social theory. Christians from the first century onward have denied that this system of law and sanctions is still mandatory in the New Covenant era. This has stripped Christians of their ability to come up with alternatives to the prevailing secular legal systems and social systems of the world around them. Whenever they have sought power, they have sought control over the existing social and political order. They have contented themselves to occupy the existing seats of power. Their social theories have always been some form of baptized paganism. There have been a few exceptions. The New England Puritans were exceptions. But their experiment lasted less than three generations (1630--1700).
Subsequent generations adopted the prevailing social theories of the time.
If it is true that all of the Mosaic laws governing economics and civil government were automatically annulled by the ministry of Jesus, even though Jesus never said that this was the case, then Christianity is impotent except for individuals, families, and congregations. This means that the kingdom of God should not extend outside the four walls of Christian families and Christian churches. This therefore means that the kingdom of man has been granted a free pass by Christ. Such an outlook relies on a theory of covenantal neutrality between the kingdom of God and the kingdom of man. This view of neutrality is not taught in the Bible, but it is assumed by virtually all modern Christian social and political thinkers. Jesus said this: "Whoever is not with me is against me, and whoever does not gather with me scatters" (Matthew 12:30). This is not the view of modern Christian social theorists. Therefore, Christians don't take biblical law seriously, and non-Christians don't take Christians seriously. Christians pose no threat to the prevailing social order. They are part of the "loyal opposition." This means loyal to the kingdom of man, not to the kingdom of God. As a result, modern Christians have voted for the modern welfare state. They have adopted this view of the eighth commandment: "You shall not steal except by majority vote."
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