Chapter 4: Ownership and Responsibility
Updated: 1/13/20
Christian Economics: Teacher's Edition
If a man causes a field or vineyard to be grazed over, or lets his beast loose and it feeds in another man's field, he shall make restitution from the best in his own field and in his own vineyard. If fire breaks out and catches in thorns so that the stacked grain or the standing grain or the field is consumed, he who started the fire shall make full restitution (Exodus 22:5--6).Now when those hired first came, they thought they would receive more, but each of them also received a denarius. And on receiving it they grumbled at the master of the house, saying, 'These last worked only one hour, and you have made them equal to us who have borne the burden of the day and the scorching heat.' But he replied to one of them, 'Friend, I am doing you no wrong. Did you not agree with me for a denarius? Take what belongs to you and go. I choose to give to this last worker as I give to you. Am I not allowed to do what I choose with what belongs to me? Or do you begrudge my generosity?' (Matthew 20:10--15).
Man’s ownership is always delegated ownership. It is therefore an aspect of point two of the biblical covenant: hierarchy. The hierarchy is this: God > man > nature. It is part of the dominion covenant (Genesis 1:26–30). With respect to economics, this is trusteeship. Another term is stewardship. It is service to a superior. Ownership in the biblical worldview is a matter of delegated sovereignty from God to man. God possesses original sovereignty (point one of the biblical covenant). This is a legal category (point three). Delegated sovereignty (point two) establishes strict legal liability (point four). God holds each owner responsible for his stewardship of God's property (point two), including the life of the individual (Matthew 25:14--30). There is no self-ownership in the Bible, except with respect to God's ownership of Himself. All human ownership is derivative (point two). It is therefore judicially representative (point two). Original sovereignty belongs only to God (point one).
You may get tired of my constant references to the five points of the biblical covenant, but the five points are central to all explicitly biblical social theory, including economic theory. Christian economics is structured by God's special revelation and also by His original creation and His providential control in terms of the five points.
Delegated sovereignty establishes legal authority of individuals and institutions. Authority is a matter of God's designated legal jurisdiction. It is therefore legitimate. God mandates that people respect hierarchical authority (Romans 13:1--7). Authority means lawful control over something or someone, but only in a law-bound chain of command. There are legal limits to authority. There are legal boundaries: point three.
In the Exodus case law regarding legal liability, the owner of the cattle is legally liable for any damage they inflict on another owner's property. There are legal boundaries. In this case, these boundaries are geographical. The limit of lawful movement of the cattle is the boundary line separating the two plots of land. The cattle are mobile. They eat grain. They trample sprouts. Therefore, it is the legal responsibility of the owner to see to it that his cattle stay inside the legal boundaries of his ranch. One way to limit their mobility is to build a fence. Biblical law does not mandate that the cattle owner build a fence, but it clearly encourages this because of the threat of a restitution payment every time his cattle stray onto the farmer's land and eat grain or damage the crop. One thing is clear: there is no economic pressure on the farmer to build a fence to keep the cattle off of his land. The law's negative sanction threatens the cattle owner, not the farmer. Any attempt to lessen this liability in the name of humanistic economic theory must be rejected by Christians. I have in mind the Coase theorem. I wrote a 1992 book on this: The Coase Theorem. The book was an extension of a long appendix that I wrote in my 1990 economic commentary on Exodus, Tools of Dominion: specifically, commenting on Exodus 22:5--6.
In the case of Jesus' parable of the land owner who hires workers, it is clear that Jesus upheld the principle of the private ownership of the means of production. The man who hired the workers had come to an agreement with them earlier in the day. Now some of these workers grumbled about low pay. They had not considered this pay to be low before the work began, but the post-contract conditions for other workers re-framed the economic aspects of the contract in the thinking of these workers. Other workers who were hired later in the day had just been paid the same wage. But this subjective economic re-framing did not affect the objective legal terms of the original contract. The owner reminded them of this. He asserted his legal right to pay them only what they had legally agreed to. The authority of his ownership overruled their economic complaint. He had the legal and moral right to do whatever he wanted with his money. He asked what was in Israel a rhetorical question: "Am I not allowed to do what I choose with what belongs to me?" This is the strongest verse in the New Testament regarding the right of private property.
We learn from the two case laws of Exodus that there are inescapable legal liabilities associated with ownership: the threat of legal negative sanctions. We learn from the parable of the employer that there is a legal benefit associated with ownership: the owner's right to do whatever he wants with his money.
This provides the background of my analysis of the initial step in making a pencil. That initial step is to gain ownership of specific assets.
Remember this principle: grace precedes law. Life is a gift. This establishes a person's initial responsibility. He gains knowledge. He gains self-discipline: responsibility. This is an ethical process. Unless he is a slave or a legal ward, he eventually gains a legal claim to the God-delegated ownership of his person. At some point, he is designated by civil law or by custom as an adult. An adult is legally responsible for his actions.
Ownership establishes responsibility.
All of this follows from the biblical doctrine of delegated ownership: from God to individuals or institutions. God holds the recipients legally responsible as His stewards. Biblical economics begins with ownership and its implications. Why? Because Genesis 1 teaches that mankind is responsible to God. He uses mankind as His collective economic agent. But He uses individuals, too. God is one and many. Mankind, made in God's image, is also one and many.
Christian economics emphasizes the private ownership of property because this is what God has established. God has linked ownership and final judgment. Final judgment is individual. "Anyone whose name was not found written in the book of life was thrown into the lake of fire" (Revelation 20:15). It also deals with residence in the new heaven and the new earth (Revelation 21; 22). Jesus' parable of the talents appears as the second parable in His presentation of the doctrine of the final judgment: the parable of the virgins and their lamps, the parable of the talents, and the description of judgment day (Matthew 25).
Socialists have faded in influence because of the collapse of the Soviet Union in 1991. Their position is that the state, not individuals, should own the means of production. They undermine the idea of private ownership. They substitute politicians and bureaucrats for private owners. Socialism severs the concept of ownership from personal responsibility. It substitutes collective responsibility for personal responsibility. This was why it failed. People want to escape personal responsibility for plans that turn out badly. Adam and Eve attempted to evade personal responsibility for their sin. Adam blamed Eve. Eve blamed the serpent. This is typical throughout history. The biblically mandated system of private ownership establishes an unbreakable legal connection between ownership and responsibility. This system makes it easier to identify causation. It also allows paying customers to reward successful plans. This leads to an increase in the number and percentage of successful plans.
The politics of the welfare state has survived the collapse of the Soviet Union. The welfare state allows private ownership, but it sets up a rival system of state-administered rewards and punishments. This system elects politicians who pass laws that take wealth from sellers who have been rewarded by customers. It transfers this confiscated wealth--after high handling costs by the government--to people who have not been rewarded by customers. This political wealth transfer reduces the economic ability of customers to impose economic sanctions, both positive and negative, on sellers. Customers whose decisions rewarded those sellers who had served them well now see the incentives associated with these rewards reduced by the government. At the same time, customers whose decisions penalized sellers (reduced sales) who had not served them well now see the disincentives associated with these penalties reduced by the government. The politicians judicially veto the economic decisions of customers. This reduces customers' economic authority. It simultaneously increases the power of politicians and bureaucrats who enforce politicians' laws.
From this point on in Parts 1--4, I divide chapters into five parts: analysis, buyer, seller, pencil, and conclusion. The section on pencil applies the categories.
The buyer owns money, which is the most marketable commodity. He has a wide range of choices. He is limited only by the amount of money he owns. This means that he has considerable freedom. The defining evidence of freedom is a wide range of choices. This is why money and liberty are closely linked.
Because the buyer has so many choices, he has great responsibility. He must decide what to buy with his money. The ownership of money imparts liberty. Liberty in turn imparts responsibility. The decision-maker must decide the highest uses of his money. Here is where the spiritual battle begins. Mammon promises this to his disciples: more for me in history. Christ promises this: "But seek first the kingdom of God and his righteousness, and all these things will be added to you" (Matthew 6:33). Both promise blessings.
The owner of money is responsible for its use in four directions: upward to God, outward to sellers or non-profit fund-raisers who are constantly asking for his money, downward to anyone under his legal authority, and inward to himself. This four-way responsibility is inescapable. It is an aspect of all ownership. The more money that someone owns, the greater his responsibility. "Everyone to whom much was given, of him much will be required, and from him to whom they entrusted much, they will demand the more" (Luke 12:48b).
Some people forget this responsibility in their quest to accumulate wealth. They find when they are successful that the demand for their time and money increases. They find it difficult to say no. If they do say no, they feel guilty. They are not sure what to do with their money. The number of choices keeps increasing.
Jesus' parable of the former rich man in hell and the former poor man in heaven is a warning.
The poor man died and was carried by the angels to Abraham's side. The rich man also died and was buried, and in Hades, being in torment, he lifted up his eyes and saw Abraham far off and Lazarus at his side. And he called out, 'Father Abraham, have mercy on me, and send Lazarus to dip the end of his finger in water and cool my tongue, for I am in anguish in this flame.' But Abraham said, 'Child, remember that you in your lifetime received your good things, and Lazarus in like manner bad things; but now he is comforted here, and you are in anguish (Luke 16:22--25).
The seller also has problems with setting priorities.
And he told them a parable, saying, The land of a rich man produced plentifully, and he thought to himself, 'What shall I do, for I have nowhere to store my crops?' And he said, 'I will do this: I will tear down my barns and build larger ones, and there I will store all my grain and my goods. And I will say to my soul, Soul, you have ample goods laid up for many years; relax, eat, drink, be merry.' But God said to him, 'Fool! This night your soul is required of you, and the things you have prepared, whose will they be?' So is the one who lays up treasure for himself and is not rich toward God (Luke 16:21--21)
The seller must pay attention to business. The details are complex. The pressures are endless. The time that it takes to deal with these issues is unrecoverable. There is no going back. This is the tyranny of the urgent. It is easy to get sidetracked.
Ownership links ability and performance. Consumers are constantly searching for better deals. They are not content with the status quo. Competitors are constantly improving their performance in order to retain their customers and also to attract competitors' customers. There is a saying, "There is no rest for the wicked." There should also be this saying: "There is no rest for the productive." Customers entice productive people to ever-greater levels of performance. How? By waving money in front of them.
The link between success and responsibility is a warning to those who would pursue wealth or success as an end in itself. There is a price to pay. There is no such thing as a free lunch, let alone a free banquet.
The market order is an engine of productivity. Yet there is no coercion involved. Sellers are not compelled to respond diligently to customers who wave money in front of them. They can post signs: "Closed--On Vacation!" "Going Out of Business Sale!" "Retired!" But they rarely do.
The purchase of one or more pencils is a peripheral skirmish in the war of the worldviews. Pencils are inexpensive. They are used as tools of production. There is nothing inherently immoral about owning a pencil. Using a pencil is not addictive. So, the shopper goes to a store and spends a few minutes looking for the aisle where pencils are on display. Then she buys. The cost is minimal. She is unlikely to notice this in her household budget category: miscellaneous. She is buying a box of pencils for her children. There will be no "buyer's remorse" afterward. It does not take her much extra time or money to complete the transaction. So, the degree of responsibility in buying pencils is low. This is not a major budget allocation decision.
The retail seller's degree of responsibility is also low. Pencils are a minimal inventory expense. They have to be on the shelves in the school supplies section. It would not look good if the store had no pencils. But the store will not make much money from the sale of a box of pencils.
In contrast, the pencil manufacturer has great responsibility. He must pay attention to rival brands, different hardness of "lead," new technical developments, customer demand, retail profit margins, borrowing costs at the bank, labor conditions, raw materials prices, and government regulations. There is considerable complexity in producing a pencil. The supply chain from beginning to end is vulnerable to disruptions.
Profits are minimal. Most of the technical aspects of producing pencils are known to all manufacturers. It is an old industry. Technical surprises are few. So are losses. Manufacturers know what to expect: who, what, why, when, where, and how. But the process of production must be monitored. Murphy's law is always lurking in the shadows: "If something can go wrong, it will." These disruptions can be expensive.
The Bible's first principle of economics is God's creation of the cosmos. He owns it because He created it. This is an economic implication of point one of the biblical covenant: sovereignty.
The Bible's second principle of economics is man's individual stewardship over God's property. This is an implication of point two of the biblical covenant: authority.
God's delegation of ownership to private individuals and groups affirms the connection between ownership and responsibility. Responsibility is basic to stewardship. It motivates individuals to serve God better by serving customers better. Customers pay for the privilege of having been served well. This establishes a motivation in sellers: to profit by serving customers. This motivation is the main source of economic innovation.
At the same time, the fear of loss hampers innovation. This is the primary source of economic continuity. A society needs continuity. It needs predictability. Most of our lives is based on familiar routines. Without these, we would live in turmoil. We want pencils that work. We are willing to try an innovation in pencils once in a while, but not often. We appreciate change at the margins of our lives, but we rely on custom and continuity to provide stability.
The free market offers us choices: new items and familiar items. Most of the time, we buy familiar items. The fear of loss is a major aspect of this familiarity, both for producers and sellers.
The legal connection between private ownership and personal responsibility is basic to a smoothly functioning but innovative economy. Write this down. You will not need an eraser.
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For the rest of this book, go here: https://www.garynorth.com/public/department193.cfm