Updated: 1/13/20
Christian Economics: Teacher's Edition
You shall do no injustice in court. You shall not be partial to the poor or defer to the great, but in righteousness shall you judge your neighbor (Leviticus 19:15).
Point four of the biblical covenant is sanctions. It asks: “What do I get if I obey? Disobey?"
This law is a specific application of one of the laws of Passover: “There shall be one law for the native and for the stranger who sojourns among you” (Exodus 12:49). These two verses are the biblical foundation of the principle of the rule of law. Hebrew or gentile, rich or poor, there was to be one civil law-order. This was crucial in the Mosaic law’s concept of justice. No one was exempt from the rule of law.
The Mosaic law was authoritative in pre-exilic Israel. The law was enforced by civil courts. These courts had to contain Levites and civil rulers. There was no separation of church and state in the civil court system. Levites were citizens as members of a tribe. They were the also teachers of the Mosaic law: specialists.
Civil courts were required by God to bring negative sanctions against convicted law-breakers. The whole nation was to understand the law. No one could legitimately claim ignorance of the law. Civil rulers were not legislators. They were judges. They could not legally multiply laws. The law code was short enough to be read to all the people every seventh year. God had declared it. The judges enforced it. Then Moses wrote this law and gave it to the priests, the sons of Levi, who carried the ark of the covenant of the Lord, and to all the elders of Israel. And Moses commanded them, “At the end of every seven years, at the set time in the year of release, at the Feast of Booths, when all Israel comes to appear before the Lord your God at the place that he will choose, you shall read this law before all Israel in their hearing. Assemble the people, men, women, and little ones, and the sojourner within your towns, that they may hear and learn to fear the Lord your God, and be careful to do all the words of this law, and that their children, who have not known it, may hear and learn to fear the Lord your God, a as long as you live in the land that you are going over the Jordan to possess” (Deuteronomy 31:9–13). The people of Israel were supposed to fear God and the negative sanctions of God’s Bible-revealed law in history. There was no concept of natural law in Mosaic Israel or anywhere else in Moses’ day. The idea of a universal natural law-order that supposedly can be discovered by all rational minds was an invention of Roman Stoic philosophers over a century after Rome defeated the remnants of Alexander’s empire. The Greek city states were gone. They had rested on local gods and rituals. Alexander’s empire had absorbed them. Greece was polytheistic. The civic gods were local. They had been defeated by the empire. Rome had the same problem: an empire based on local gods that had lost to the gods of the city of Rome. Roman legal philosophers invented natural law theory as a way to justify the legitimacy of Rome’s empire. This began about 150 years before the birth of Jesus. In Mosaic Israel, there was no theory that a universal civil law could be intuited or discovered by the common man or anyone else. The people had to hear the Bible-revealed laws of God. God’s law made it clear that there were covenantal institutions above the individual and the family: church and state. The individual is not autonomous. The economy is not autonomous. The Bible established a principle: theonomy, not autonomy. This was the legal foundation of self-government. It was self-government under biblical law. It was self-government under a chain of command: a bottom-up civil appeals court system. This hierarchical civil appeals court system was imposed by Moses in response to advice from his father-in-law (Exodus 18).
Christian economics cannot be based on the idea of an autonomous free market. Paul made this clear. The civil magistrate is a God-ordained minister. Let every person be subject to the governing authorities. For there is no authority except from God, and those that exist have been instituted by God. Therefore whoever resists the authorities resists what God has appointed, and those who resist will incur judgment. For rulers are not a terror to good conduct, but to bad. Would you have no fear of the one who is in authority? Then do what is good, and you will receive his approval, for he is God's servant for your good. But if you do wrong, be afraid, for he does not bear the sword in vain. For he is the servant of God, an avenger who carries out God's wrath on the wrongdoer. Therefore one must be in subjection, not only to avoid God's wrath but also for the sake of conscience. For because of this you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed (Romans 13:1–7). Every society needs and wants peace. Paul wrote: “First of all, then, I urge that supplications, prayers, intercessions, and thanksgivings be made for all people, for kings and all who are in high positions, that we may lead a peaceful and quiet life, godly and dignified in every way” (I Timothy 2:1–2). Peace reduces the costs of defending private property. This is a great benefit for society and also the individuals who make up the society. To gain and sustain peace, there must be civil government. Civil government is an inescapable concept. It is a God-ordained institution. It is supposed to be a terror to evil men. Without civil government, gangs would rule. These are criminal brotherhoods bound by blood oaths. The economic principle of the division of labor applies to the realm of violence. There is specialization. Some men are specialists in violent crime and extortion. They do not honor the libertarian’s principle: “Do not initiate violence.” They constantly violate it or else threaten to. If there is little or no resistance, they violate the principle with impunity. The cost of imposing violence falls. So, more of it is demanded. The gang leader may become a warlord. He extorts money from the masses, who have no official authority. The warlord society is not a free society. The ruler is not limited by civil law. His word is law. The answer to the warlord society is biblical civil government in which representatives of the people participate in law making and law enforcement. A civil government answers to the people. The people therefore have some say in the selection of rulers and the laws they impose. There is no such representation with a gang or a criminal syndicate. The legal system is endogenous: laws generated from within the government. It is not exogenous: laws imposed by a judicially independent agent, not ordained, e.g., a warlord or a gang leader. People in a biblical commonwealth are responsible for the actions of their rulers, civil and ecclesiastical. This is made clear in Leviticus 4, where the congregation offers sacrifices for the sins of their rulers. The people and their rulers are bound by oath and law in twin covenants: church and state. This is the judicial setting of the market. The market is sustained by this covenantal arrangement. The state protects citizens and residents from private violence. This service must be paid for through taxation. There are no free lunches. The level of taxation must be predictable. In a free society, those who pay taxes have authority in establishing taxes judicially. The alternative to this system is private “protection”: regular payments to a gang or a criminal syndicate which promises to protect people from rival secret societies. Anyone who refuses to pay faces negative sanctions from the criminal syndicate. The common man has no voice in such a hierarchy. This is why the state is a blessing, not a curse. Taxation is an inescapable concept. It is never a question of taxation vs. no taxation. It is always a question of taxes paid to which organization: state or gang. The state is not an oath-bound gang. It is an oath-bound ministry authorized by God. The auction is never autonomous. It is always operating under the protection of civil government. The costs of defending the auction from predators is borne by the taxpayers. So, any analysis that deals with the auction as a self-sustaining arrangement among participants is incomplete and therefore erroneous. A buyer must get to and from the auction in peace. He wants safety from predators on the highways and byways of life. He wants to enjoy either his money or whatever his money can buy at the auction. The auction is better attended because the participants are protected. The costs of protection are not borne by either the buyers or the sellers. This means that there will be more auctions. He will have additional opportunities to buy the things he is interested in buying. A buyer also wants assurance that whatever he purchases at the auction will remain his after he pays for it. He forfeits his money for the sake of ownership. He therefore wants security of ownership. The auctioneer cannot guarantee this. He will not pay for this. At best, he can provide evidence of original ownership, which is transferred to the highest bidder. The auction process is therefore sustained by law-enforcement agencies that are not economically or legally connected to the auctions. This is true of every business, every nonprofit organization, and every other association. The entire auction system rests on a system of legal predictability. Without this support, there would be fewer auctions. There would be reduced specialization and therefore reduced production. People would be poorer. A buyer also wants protection against government confiscation. This can only be done by gaining political influence. He seeks justice. If he thinks the government is unjust, he wants to be able to protest legally. This is why civil government involves more than protection. It also needs legitimacy. It will not gain this if it is unjust.
A seller also wants the protection that a buyer wants. He wants safe access to the auction and then back home. He wants to be sure that the money he receives from a buyer is not counterfeit or stolen. He wants to know that he will be allowed to keep this money. He wants protection. But he also wants justice. As a producer, he wants to deal with other sellers in a series of exchanges. He wants protection from fraud. They also want this protection. The division of labor requires predictability of the enforcement of contracts. The auctioneer who serves as an intermediary wants the liberty to conduct the auction on the basis of this rule: high bid wins. He wants no interference from outsiders regarding the conduct of his auction. He does not want a gang asking for protection money. He wants a strong third party to keep the business free from extortion by criminals. In the complex division of labor, there must be peace. There must also be predictability. There must be confidence that participants will fulfill their contracts. If producers must resort to threats of violence to get contracts fulfilled, the system of multiple auctions will break down. There will be no pencils brought to market. The auction process depends on a low level of fraud and violence. But this cannot be paid for by a myriad of companies. There are too many products to protect. Why couldn’t there be insurance companies that provide such protection? The problem is the lack of protection for the uninsured. Criminals will prey upon these people. The level of violence and insecurity will remain high. This is bad for business. When there is minimal fraud and violence, the forces of free market competition lead to the production of more pencils, better quality pencils, and cheaper pencils. This has been the experience since the invention of the pencil in the late sixteenth century. It has been the experience of mass production ever since 1800 in the West.
One of the costs of production is protection from violence and fraud. A related cost of production is the provision of justice. When the public is persuaded that the law and the courts are just, they are willing to cooperate. They use self-government to restrain their own lusts. They know the justice system may bring negative sanctions against law-breakers. For any business transaction, there may be a sales tax. But buyers and sellers do not know what percentage of sales taxes go to law enforcement related to the legal issue of ownership. In the modern welfare state, this percentage is minimal. There is a benefit: reduced crime. But no one is sure about the expenses of crime prevention and the actual reduction of crime. How much money does the society save? No one knows. It is guesswork. Most people pay no attention to this cost-benefit analysis. So, governments get bigger and more expensive. Because there is sharing of costs, this leads to overuse of services. If people don’t pay directly for law enforcement, they will demand more of it. There will be more lawsuits. There will be more lawyers. This is sometimes called the tragedy of the commons, the title of a famous essay in 1968, written by Garrett Hardin, a biologist. Voters are willing to live in a statistical fog about costs and benefits in order to have a sense of security. They fear violence. They fear fraud less. They want to know that there are threats to criminals that are sufficiently fearful as to reduce the crime rate. They also want a sense of justice. They do not want to live under a court system that is perceived as no better than a gang. They want confidence that right makes might, not the other way around. They cooperate with civil governments in order to gain what they want. The problem comes when there is no widespread agreement in a society regarding what constitutes justice. This undermines the courts. People then seek their own forms of justice, which involves imposing negative sanctions. Insecurity increases. Predictability decreases. Protection costs rise. _______________________________________ For the rest of this book, go here: https://www.garynorth.com/public/department193.cfm
© 2022 GaryNorth.com, Inc., 2005-2021 All Rights Reserved. Reproduction without permission prohibited.