Christian Economics: Student's Edition
[Updated: 1/18/18]
As soon as Isaac had finished blessing Jacob, when Jacob had scarcely gone out from the presence of Isaac his father, Esau his brother came in from his hunting. He also prepared delicious food and brought it to his father. And he said to his father, Let my father arise and eat of his son's game, that you may bless me. His father Isaac said to him, "Who are you?" He answered, "I am your son, your firstborn, Esau." Then Isaac trembled very violently and said, "Who was it then that hunted game and brought it to me, and I ate it all before you came, and I have blessed him? Yes, and he shall be blessed." As soon as Esau heard the words of his father, he cried out with an exceedingly great and bitter cry and said to his father, "Bless me, even me also, O my father!" But he said, "Your brother came deceitfully, and he has taken away your blessing." Esau said, "Is he not rightly named Jacob? For he has cheated me these two times. He took away my birthright, and behold, now he has taken away my blessing." Then he said, "Have you not reserved a blessing for me?" Isaac answered and said to Esau, "Behold, I have made him lord over you, and all his brothers I have given to him for servants, and with grain and wine I have sustained him. What then can I do for you, my son?" (Genesis 27:30--37).
Point five of the biblical covenant is succession. It asks: "Does this outfit have a future?"
Esau was a liar and a thief. God hated him. God had hated him even before he was born. Paul wrote:
For this is what the promise said: "About this time next year I will return, and Sarah shall have a son." And not only so, but also when Rebekah had conceived children by one man, our forefather Isaac, though they were not yet born and had done nothing either good or bad--in order that God's purpose of election might continue, not because of works but because of him who calls, she was told, "The older will serve the younger." As it is written, "Jacob I loved, but Esau I hated" (Romans 9:9--13).
On reading this, most Christians are shocked. They cannot believe it. They ask themselves: Why did God hate Esau? After all, Esau had done nothing to be hated for. This is a theologically silly question. Esau was a covenantal son of Adam. God hates the covenantal sons of Adam. They are all covenant breakers, as Adam was. This is the meaning of the doctrine of original sin. God loves only those He has sovereignly elected to regenerate judicial status. A far more astute question is this: Why did God love Jacob?
Esau had foolishly sold his birthright to Jacob for a plate of stew and bread (Genesis 25:29--34). That was a valid transaction. It was not made under duress. Esau was intensely present-oriented. He feigned starvation to get a plate of stew from Jacob. Jacob took advantage of his brother's present-orientation. He sold Esau what Esau wanted more than his birthright. Then, after Jacob had gained the blessing from Isaac which his birthright entitled him to, Esau called his brother a thief. Esau had intended to steal the blessing from Jacob, who had bought it from him. His mother and Jacob had resorted to deception in order to persuade Isaac, who was spiritually blind as well as physically blind, to grant his blessing to the son who deserved it both theologically and financially.
Esau had disinherited himself. He was the elder brother (Genesis 25:25). He was entitled to the double portion of the inheritance, according to Mosaic law (Deuteronomy 21:17). But this was not worth a plate of stew and bread to him. He figured he could steal back the blessing from Jacob, since Isaac liked Esau's meals of meat (Genesis 25:28). He was incorrect. Jacob and their mother outfoxed him.
This is the pattern of inheritance in history. Covenant breakers believe they can steal the inheritance from the rightful heirs. Who are the rightful heirs? The people to whom God imputes both the perfect moral righteousness and the perfect judicial righteousness of Jesus Christ. Covenant breakers are not going to be the heirs in history. "A good man leaves an inheritance to his children's children, but the sinner's wealth is laid up for the righteous" (Proverbs 13:22). "But the meek shall inherit the land and delight themselves in abundant peace" (Psalm 37:11). Jesus confirmed this: "Blessed are the meek, for they shall inherit the earth" (Matthew 5:5).
The struggle between covenant breakers and covenant keepers involves a struggle for inheritance in history. The overwhelming majority of Christians have been taught that God has granted covenant breakers comprehensive cultural and political inheritance in the era of the church. Amillennialists, who have been dominant in the European church tradition, affirm that the political city of man will rule over the political city of God in history. Premillennialists say that this will be true only until Jesus bodily returns to earth to set up a 1,000-year political kingdom. Only postmillennialists interpret literally Jesus' promise of inheritance as applying to covenant keepers in history prior to Jesus' bodily return in final judgment.
Inheritance necessarily involves disinheritance, just as historical sanctions are both positive and negative. There is a long-term pattern to historical sanctions. They are cumulative. They are also corporate, not just individual. This reflects (represents) God as Trinity, who is both corporate and individual. There are winners and losers in eternity. There are also winners and losers in history. This is because there is a war between two kingdoms. This war has two battlefields: heaven and earth. We do not usually think of heaven as being involved in warfare, but it is. The issues of history are of concern in heaven.
When he opened the fifth seal, I saw under the altar the souls of those who had been slain for the word of God and for the witness they had borne. They cried out with a loud voice, "O Sovereign Lord, holy and true, how long before you will judge and avenge our blood on those who dwell on the earth?" (Revelation 6:9--10).
Because covenant-keepers, including leaders, do not perceive the kingdom of God as a civilization, they do not see economic conflicts as being inherently covenantal. They see kingdom issues as applying to souls, families, and churches, but not beyond these tightly constrained personal bonds. In contrast, leaders among covenant breakers do perceive the kingdom of man as a civilization. They do see economic conflict as being covenantal. Thus, they are consistent in their pursuit of wealth, influence, and power. They understand that wealth is a tool of social and political change. They seek to change society through comprehensive reform. They seek capital to fund this. Covenant keepers seek at most to restrain the inroads of the broader culture into their lives: in education, entertainment, and individual moral behavior. But state-funded education is not neutral in any sense. Entertainment reflects the broader culture. Moral behavior is shaped by education, culture, and civil law. Communications technologies have opened the doors of every household to the debaucheries and temptations of the broader culture. Covenant keepers see all this as a cancer, but they offer no cures, only pain-killers. They lose their children to secular tax-funded education and the secular media. This is the heart, mind, and soul of the battle over inheritance: the loss of the next generation.
This is a battle over money, for money is capital. Capital is another word for tools. The super-rich fully understand that their wealth provides them with leverage culturally and politically. They can shape politics with money. They can make it more difficult for economic competitors to replace them. Yet technology waits on no one. The list of the five hundred richest Americans changes year to year. Also, they face a problem: taxation. If they do not find ways to transfer the money to non-taxable entities, the state will strip away half or more of their wealth when they die. So, they set up charitable foundations to promote their causes. This extends the kingdom of man, but in a less efficient way. Nonprofit organizations rarely innovate. They conserve. They fund conventional projects. They are run by bureaucrats.
There has never been a nonprofit organization with the dynamism of the institutional church. It gains the support of people without much money, but with dedication. It is decentralized. It crosses borders. It is truly international. It persists over time. It innovates. In terms of its millennia of success and systematic expansion, no other institution matches it.
So, the kingdom of man can prosper through voluntary exchange. The market makes covenant breakers wealthy. But there is no escape from this: the sinner's wealth is laid up for the righteous (Proverbs 13:22b).
Point one of the biblical covenant is God's transcendence, yet also His presence. This is the biblical issue of God's sovereignty. It asks: Who's in charge here? How does this apply to disinheritance?
The rich man faces the problem of succession. He builds a fortune, but his children will at best conserve it. The modern corporation provides continuity. His heirs will be owners of shares. Others can buy control of his legacy. The non-profit foundation provides continuity, but it will be controlled by upper-middle-class bureaucrats who cannot compete in a competitive market. The testator cannot control what will be done with his legacy.
This was understood by Solomon, the richest man in Israel.
I hated all my toil in which I toil under the sun, seeing that I must leave it to the man who will come after me, and who knows whether he will be wise or a fool? Yet he will be master of all for which I toiled and used my wisdom under the sun. This also is vanity. So I turned about and gave my heart up to despair over all the toil of my labors under the sun, because sometimes a person who has toiled with wisdom and knowledge and skill must leave everything to be enjoyed by someone who did not toil for it. This also is vanity and a great evil (Ecclesiastes 2:18--21).
The testator has a huge problem. He must see the future and control it from beyond the grave. He cannot do this.
In contrast is the Christian doctrine of the testator. "For where a will is involved, the death of the one who made it must be established. For a will takes effect only at death, since it is not in force as long as the one who made it is alive" (Hebrews 9:16--17). Who is this testator? The author of the epistle to the Hebrews is clear: Jesus Christ.
Next, consider Paul's doctrine of creation.
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 Testator is divine. He is the Creator. He holds title as a Trustee for God the Father. For how long? Until history ends. Paul taught that this trusteeship will expand in influence and dominion in 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).
This is his interpretation of Psalm 110.
The New Testament is clear: the false heirs will be displaced in history. The Testator remains in charge. He will deliver the inheritance to God the Father. Yet He is the Son, the cosmic heir. Covenant keepers will inherit as adopted sons.
Point two of the biblical covenant is hierarchical authority. It asks: "To whom do I report?" How does this apply to disinheritance?
History is a struggle over trusteeship. Who acts on behalf of the heir? Who is the heir? Is there more than one?
As we have seen with respect to the testator, the heirs are sons. But whose sons are they? The false heirs claim that they are heirs. Yet they also claim that the state is sovereign, unless they claim this for the free market. Only a handful of economists have claimed this: anarcho-capitalists. The state has the greatest power in society. It is the accepted trustee. It acts on behalf of the masses. But, as we know by now, the super-rich and well connected gain control. They may act in the name of the masses, but in fact they act on behalf of themselves and their class. This is described in the book by David Rothkopf, Superclass (2009). This is the international Old Boy Network. It is humanistic to the core. In terms of wealth, about a thousand people possess wealth equal to that possessed by the bottom 2.5 billion (p. 66).
This wealth is based on market competition, though the market is not entirely a free market. These people were not made rich by civil governments initially, but they maintain wealth that they gained through competition by means of political competition: domestic tax favoritism, regulation that keeps competitors out of certain markets, and international tax haven nations. They do this through tax strategies devised by skilled lawyers.
Over time, markets change. Demand changes. New technologies replace old ones. Prices change. Large pools of wealth cannot be maintained permanently in the free market. Consumers are in charge. The Superclass maintains control at the margin, but at the core is market competition: buyers vs. buyers, sellers vs. sellers. This keeps the existing hierarchy from attaining anything like security from market forces. The members come and go. The system of trusteeship is constantly changing. Men in power would like to maintain it, but history does not permit this. Death does not permit this. Power-seeking men would like to call a halt to all change they do not control. They seek omniscience. They seek omnipotence. They seek omnipresence. But these are noncommunicable attributes of God. To seek them is demonic. It is also futile.
Point three of the biblical covenant is law. It asks: "What are the rules?" How does this apply to disinheritance?
The rich and powerful in any generation seek a safe haven from tax collectors. Yet they also seek to use the state to protect them from the relentless competition of consumers, who keep demanding higher quality, lower prices, and better terms of payment. Humanistic elitists want a smaller state with respect to taxation and a stronger state with respect to protection. They cannot achieve both.
They have great control nationally with respect to political influence. Their money helps candidates get elected. Politicians then grant favors to large donors that the voters will not perceive as special-interest legislation that favors the rich and well-connected. Politicians hide arcane tax breaks in tax bills that are 2,000 pages long and written incoherently on purpose. But this strategy ends at a nation's borders. There is no international civil government that possesses meaningful political sanctions. The superclass seeks to create such an entity, but this has always failed. Empires rise and fall, but international civil governments are always weak. Voters do not favor surrendering national sovereignty. This greatly hampers the international superclass.
Market competition across borders is increasing. This weakens the ability of national civil governments to establish the terms of trade. As wealth becomes the product of services, and as services become digital, tariffs and import quotas cease to shape the domestic markets around the world. As production becomes computerized, it becomes local. This decentralizes physical production. National governments cannot easily regulate local production. That is the province of local governments. National governments can regulate interstate trade, but as local production becomes more efficient, there will be less trade across state borders. Cross-border trade is the product of huge factories that supply the nation. Factory production is under assault by 3-D printing. This will continue. It will escalate.
The power of nation-states to regulate markets is declining. When the nation-state can no longer meet its obligations to millions of retired voters, which is actuarially inevitable, the ability of the nation-state to extend its power will cease.
Point four of the biblical covenant is sanctions. It asks: "What do I get if I obey? Disobey?" How does this apply to disinheritance?
As the nation-state extends its regulation of business, it reduces productivity. This will eventually reduce the power of the nation-state, which is supported by taxes on successful individuals and businesses. Economic growth will slow.
The Bible is clear that increased wealth is a blessing from God (Deuteronomy 28:1--14). It requires obedience to God's law. Private property is fundamental to God's law. To the extent that special-interest groups gain the cooperation of the nation-state to defend their turfs, the economy is hampered. There will be less innovation. State-manipulated prices and markets will distort production. Consumers will have to pay more. They will therefore demand less. They will be paid less. They will then produce less as workers.
Over time, positive economic sanctions accumulate. Profits are reinvested. Output increases. Consumers buy more products. Profits send a clear signal to managers: "Keep doing this." This adds to the capital of a town, region, and nation.
The greater the intervention of the state to protect existing companies from competitors, the less likely that there will be innovation. Regulation is designed to reduce competition in most cases. It protects the procedures of the largest companies, whose lobbyists have the greatest influence because they spend the most money on political action committees. It favors the status quo.
Under these conditions, companies increase profits more from successful legislation than innovation. Political innovation becomes more profitable than product innovation. Companies spend less on research and development. They do not need to. The state protects their market share. Reduced investing in research and development then reduces economic growth.
The substitution of political control over markets works against consumers. This is common in regulated economies. The established sellers have an incentive to restrict competition. They have influence politically because they have campaign money. They also have employees. The substitution of bureaucracy for market competition transforms profit-seeking companies into extensions of government bureaucracies. The bureaucrats possess more power to threaten managers than consumers do. Consumers cannot impose fines. They cannot stop the production of specific products. State bureaucrats can and do.
The false heirs want to support the status quo. They possess capital. They have political power. They can pursue their agendas without the degree of competition that a free market offers. The state protects them. The result is de-capitalization.
Point five of the biblical covenant is succession. It asks: "Does this outfit have a future?" How does this apply to disinheritance?
Without capital accumulation, there can be no economic growth. New ideas require capital to implement them. Someone must save money. He turns it over to entrepreneurs, who use this money to fund development. Without this money, capital wears out. Innovation slows.
The greater the degree of control by bureaucrats, the less economic growth is likely. This is the result of an attitude of resistance to change. The present heirs have no intension of surrendering control. But to insure their safety from outsiders with better ways to serve consumers, the established firms enlist the state to place restrictions on innovation by those not already in the elite: the heirs of the combined economic and political system. This leads to stagnation.
The solution is for the state to limit its interference into the market to protection of life, limb, and property from physical violence and fraud. The state allows people to make voluntary economic transactions. Owners of legal rights to specific pieces of property, including their labor, are allowed to exchange these rights for money. Exchange is an aspect of responsibility.
Consider Esau. He exchanged his birthright for a plate of stew. There should be no question that he possessed this right of exchange. This led to a major benefit for his brother. Esau later regretted that he had made this exchange. He decided that he was entitled to a blessing from his father. This blessing was based on the birthright that Esau had sold to Jacob. This wealth transfer meant nothing to him. His word meant nothing to him. What mattered was his inheritance. The covenantal problem he faced was this: he had eaten his birthright. He wanted this decision overturned by his father. He wanted to seal a revised arrangement.
The legal right to transfer wealth to another person is basic to the free market social order. Such an exchange possesses authority. If it did not, property would be insecure. The right to own it could be revoked. That was what Esau wanted. Isaac knew better. He had wanted to bless his oldest son, but he stood by his word. He had spoken a blessing to Jacob by mistake. But this word was judicially binding. It was part of the family covenant: inheritance.
The biblical covenant extends to inheritance. It also involves disinheritance. The sanctions are both positive and negative. The Bible is clear with respect to inheritance in history. It goes to covenant keepers. This was not the teaching of the church until the seventeenth century. Some Puritans and some Scottish Presbyterians adopted this view. It transformed historical thinking from linear to linear and progressive. This introduced the concept of inter-generational economic inheritance. It laid the theological foundation for the concept of compound economic growth. This was a new idea. It rested on a new eschatology: postmillennialism.
There had always been postmillennialism: the postmillennialism of covenant breakers. They believed that the kingdom of God would not manifest itself as a systematic, self-consciously biblical worldview with power. That benefit was supposedly reserved for covenant breakers.
To defend their cultural and political turf, covenant breakers have made it difficult for covenant keepers to accumulate capital. With capital, they might redeem--buy back--the world. Covenant keepers accept such circumstances as normal. These circumstances are normal chronologically, but they are not normative. They are not permanent. They will be overturned. Psalm 110 says so.
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