Update: 1/13/20
Christian Economics: Teacher's Edition
And that servant who knew his master's will but did not get ready or act according to his will, will receive a severe beating. But the one who did not know, and did what deserved a beating, will receive a light beating. 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 12:47–48).
This passage sets forth a biblical principle: with God’s blessings come responsibilities. Put differently, there is no such thing as a free lunch. God’s grace is free, but it wasn’t free for Jesus.
You have read Christian Economics: Student’s Edition. You have now read Christian Economics: Teacher’s Edition. If you have read both of them carefully, you now understand the nature of the confrontation regarding economic theory: Christian vs. humanistic. First and foremost, there are rival views of these fundamental covenantal issues: God, man, law, sanctions, and time. Second, these rival views have produced rival views of economics: ownership, trusteeship, standards, imputation, and inheritance. There is no way to reconcile these rival views.
They can and do come to similar economic outcomes despite rival assumptions about economic causation, rival methodologies, and rival theories of individual motivation. The Christian view of economic motivation is this: a producer serves the customer in order to be of service to God. He is a servant of God, so he becomes a servant of men. He seeks a profit in business in order to serve men better by capital reinvestment. He needs capital to reinvest. He needs a profit. In contrast is Adam Smith’s view of economic motivation: in order to serve himself, the producer must serve the customer. The customer is merely the producer’s means to an end: self-service. He seeks profits in order to increase his consumption. The former economic motivation is a manifestation of the worship of God. “But seek first the kingdom of God and his righteousness, and all these things will be added to you.” The latter is a manifestation of the worship of mammon: “more for me in history.” The outcomes are the same: customer satisfaction and profits.
I have demonstrated that the free market is a gigantic auction. It is governed by this fundamental legal principle: high bid wins. There is nothing immoral about an auction. There is nothing immoral about high bid wins. But the proper setting is the free market, which is governed by the dual principles of private ownership and the rule of law, especially this law: open entry. Wherever a person does not have a God-given right to sell an asset, the auction principle is not morally valid. These arrangements surely do not involve the right to sell: family, church, and state. Any economic analysis of these institutions that is based on the principle of high bid wins does not legitimately apply, and whenever it is attempted by an economist, this analysis produces bizarre conclusions.
If you understand these principles and their application in the marketplace, you understand economics better than 99.9% of voters around the world. If you understand these principles, you understand economics better than 99.9% of those people who call themselves Christians, or who have ever called themselves Christians.
The level of voters’ economic ignorance is appalling. Yet most people regard themselves as well-informed economically. People who have no opinions on the laws of chemistry are ready to discuss what they regard as the laws of economics. They are ready to vote for candidates whose campaigns are based on either meaningless rhetoric or incorrect economic slogans. You are now in a position to analyze these slogans in terms of a coherent economic theory. You may not yet feel confident about your ability to debate these issues in public, but this is because of your lack of debate experience, not your lack of knowledge.
If you still are insecure about your understanding of the economic logic of political slogans on economic policy, then you should read this book again. Once is not enough. In the first reading, you got a sense of what the issues are, but not the details. Most people do not have trained memories. They cannot follow long chains of reasoning. They do not instinctively apply the logic of the auction: high bid wins.
One of the best ways to master the details of any subject is to teach the subject. This is why this volume is a teacher’s edition. I have dealt with those issues that I think should be at the forefront of a course on economics. A student who cannot articulate the issues in this book needs a teacher. But maybe he cannot locate one. If so, he can become one. Any student will improve his understanding and his performance under pressure if he seeks out other students and teaches them.
Whenever there is an economic recession, there is new-found demand for courses on economics. People ask themselves: “What is going on?” They also ask this: “How can the government stop this from happening again?” The government never figures out what to do. The government is responsible. So, there is always another recession. There are always more government bailouts of the rich.
In an economic crisis, people promise themselves this: “If I can just get through this, I’m going to change my ways.” They mean this. After the recovery comes, they may forget their vow, but at least for a time, while they are under intense financial pressure, some of them are willing to change their behavior. This offers an opportunity to challenge them to re-think their central premise: “more for me in history.” They may be ready to re-think their level of consumer debt. This is why I created a free website: www.DeliveranceFromDebt.com.
There is a growing awareness among Christians that the secular world has a deep-seated and profound opposition to Christianity. They are beginning to perceive that the secular world has a hidden agenda when it demands religious neutrality in tax-funded education. The Left has begun to substitute a new curriculum in the nation’s schools, especially high schools. College education has been in their hands since at least the end of World War II. Keynesianism has been dominant in universities ever since 1950. Keynesians are in the seats of power all over the West. With each recession comes another opportunity to remind people that Keynesianism is false, which is why the recessions keep occurring. The next recession will leave Keynesians holding the bag. There will be a greater readiness of Christians to re-think Keynesian doctrine in the next recession.
How can you get someone interested in what you have to say? I suggest that you begin with a statement. “I finally read something based on the Bible that shows how the economy got into this mess.” Then wait for an answer. If you don’t get one, drop it for now. Wait another week or two. You can try again when some other bonehead move by the government hits the media. You may not have to wait long. “I recently read something that said this would happen. It’s based on the Bible, but it’s not about prophecy. It’s about basic economics.” Wait for an answer. If there is interest, give the person a link to the student’s edition: www.bit.ly/cestudent. Mention that you are putting together a weekly book study group.
It is best in such a group to lead by asking questions. “What does the Bible say about . . . ?” If people discuss an issue, they will get committed. Also, the group will remember more than an individual does. If you can ask provocative questions, the group will respond. The members are more likely to come back the next week. You want them to come back.
You want them to invite friends. Even if these friends come into the group late in the book, you will still be able to share part of the book. You can start another group after this group has finished. Make it clear to visitors that you are in this for the long haul.
After you have taught the student’s edition twice, it will be time to produce an online version of your course. Get a free WordPress.com site for this. Get a free YouTube channel. Buy a copy of Camtasia. Buy an inexpensive lapel microphone. Buy PowerPoint or learn the PowerPoint knockoff in Libre Office. Use the presentation program to produce a series of outlines for screencasts. Be sure every image you use in the presentation is public domain or royalty-free.
The more versions of these courses on the student’s edition there are, the larger the number of people who will be influenced. More people will find them by online searches. The idea here is to flood the Web with materials.
I now come to a consideration of the uncertain future.
The most important development of the twenty-first century is what is known as Moore’s law. Moore’s law was first mentioned in 1965 by Gordon Moore, later of of Intel, the company that invented the computer chip. He remarked that the number of transistors on a chip had been doubling every year. He said this would continue for a decade. In 1975, he said this would continue for a decade. It continued much longer. Before the year 2000, this doubling time had been reduced to 18 months.
Moore’s law is not a stand-alone law. It is the fifth of a series of developments. The cost of digital information has been declining steadily by 50% on a regular basis since at least 1910. The time required was every three years until about 1950. Then it sped up to every two years by 1966. It continued to speed up until 2000. There has been some slowing since then, but the compounding process is still high. It has been higher for a longer time period than anything else in the history of man. This has changed the world. The adoption smart phones since their invention by Apple in 2007 has been more rapid than any technology in history. This cost of communications continues to fall. The division of intellectual labor is increasing at an unprecedented rate.
This process is bringing Third World villages into contact with the rest of the world. Smart people with innate technical and commercial skills who would never have had an opportunity to develop their intellectual skills in a village are now entering international production. They are competing for jobs. This is putting downward pressure on wages. But it is also increasing the output of labor to the advantage of consumers everywhere. Poverty is disappearing. Fewer people face the threat of malnutrition and what we sometimes mistakenly call absolute poverty.
There have been warnings of widespread unemployment as the result of artificial intelligence. These warnings are old. They have always accompanied automation. The predictions have never come true. New products and services always keep economic growth moving upward. New careers are invented. But there is now the threat of widespread elimination of jobs through artificial intelligence. The speed of the development is accelerating. As the supply of cheap, accurate information moves upward, it is becoming exponential. The magnitude of this increase is like nothing in history. There is no indication that it will slow. Social institutions have always had time to adjust in the past. Today, there is little time available before the changes in employment are upon us around the industrial and post-industrial world. Entire professions could disappear within a decade. Truck drivers are an example. Fleets of self-driving trucks will be widespread by 2030. Millions of drivers will lose their jobs. Where will they find replacement jobs? No one knows. At what wages? No one knows.
Then there is the question of robots. This problem has been in the background ever since Samuel Butler wrote his letter in 1863 and his novel Erewhon in 1872. In his letter, he wrote this:
What sort of creature man’s next successor in the supremacy of the earth is likely to be. We have often heard this debated; but it appears to us that we are ourselves creating our own successors; we are daily adding to the beauty and delicacy of their physical organisation; we are daily giving them greater power and supplying by all sorts of ingenious contrivances that self-regulating, self-acting power which will be to them what intellect has been to the human race. In the course of ages we shall find ourselves the inferior. . . .Day by day, however, the machines are gaining ground upon us; day by day we are becoming more subservient to them; more men are daily bound down as slaves to tend them, more men are daily devoting the energies of their whole lives to the development of mechanical life. The upshot is simply a question of time, but that the time will come when the machines will hold the real supremacy over the world and its inhabitants is what no person of a truly philosophic mind can for a moment question.
Was he incorrect? Today, this is becoming a hotly debated topic among intellectuals. Bill Gates, the world’s richest man, has warned against this. He made his money in technology: Microsoft. The British cosmologist Stephen Hawking has also issued repeated warnings. But these warnings are useless. There is no way for any government to stop individual projects in AI. These projects are all over the world. They will soon be using the services of geniuses living in villages or recruited from villages.
The algorithms are now teaching themselves. They are already the masters of games, which have specific outcomes and specific rules. There is widespread fear that they will replace mankind because of their greater knowledge by the year 2100. If not then, then in 2125. It is just a matter of time, given the exponential increase in digital knowledge. Humans cannot keep up.
This assumes that knowledge is digital. It is not. It is analogical. Men are made in God’s image. We are personally responsible. The universe is not impersonal, as digits are said to be. The connection between the mathematical logic in our minds and the operations of nature are, in the words of Nobel Prize-winning physicist Eugene Wigner, an unexplainable gift. He wrote in 1960: “The miracle of the appropriateness of the language of mathematics for the formulation of the laws of physics is a wonderful gift which we neither understand nor deserve. We should be grateful for it and hope that it will remain valid in future research and that it will extend, for better or for worse, to our pleasure, even though perhaps also to our bafflement, to wide branches of learning.”
Darwinian man now faces a problem. He sees that algorithms and robots are evolving far faster than man’s mind is. There is now an immediate threat of a new species with unimaginable intelligence. Knowledge is power. How can this new species be stopped? It is decentralized, but potentially unified through the Web. It is the one and the many, as the Trinity is. It appears to be God: approaching omniscience as a limit. But Darwinists have long denied the existence of any such God. Darwinists have also argued that man is the only being with purpose. This has made him God by default. But now a new being or beings threaten to overwhelm mere biological man with his biological mind, slow and forgetful. There is no Moore’s law for mankind.
This is point one of the biblical covenant: omniscience, with omnipotence and omnipresence within reach of the digits.
Then there is point two: servitude. Christianity teaches that man is subordinate to God. Darwinism denies this. There is no God, they assure us. They also argue the following. Today, the machines and algorithms are under the authority of individuals. But soon, there will be a great reversal. The machines will be on top. They will have greater power through greater knowledge.
Then there is point three: law. This means ethics. The Jewish atheist author Isaac Asimov was arguably the most widely read man in the 20th century. He was surely the most widely published. He wrote or edited over 500 books. He had at least one book title in nine of the ten Dewey Decimal System’s categories. No other author ever came close. He authored 38 short stories and five novels on robots, beginning in 1939 and ending in 1983. They are collectively known as I, Robot. In 1942, he first published the three laws of robotics. These are ethical laws that are somehow hardwired into the brains of robots.
A robot may not injure a human being or, through inaction, allow a human being to come to harm.A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.
This assumes that ethics is digital. It is not. Ethics is analogical, for men are made in God’s image. There is no way to program ethics into a digital device.
Point four is sanctions. Darwinian man now fears the sanctions of robots. Inventors have invented ways for robots to benefit individuals. Now these inventions threaten to enslave mankind, or even destroy the human race. The god of Darwinism is not the God of grace. Grace cannot be programmed.
This raises the issue of inheritance: point five. Who will inherit the earth? On what basis? Not the ethics of biblical law. The ethics of robots. Not the sanctions of biblical law. The sanctions of robots. This is the story of the sorcerer’s apprentice. The technologist is the sorcerer. There are many technologists. They are scattered across the face of the earth and occasionally in outer space. But they are about to be replaced if digits are the basis of purpose, planning, law, sanctions, and time.
This fear of robots will increase among Darwinists. They cannot escape the five points of Darwinism’s covenant: (1) man is God, (2) man alone makes plans, (3) mathematics, not ethics, is the foundation of law, (4) judgment is digital, (5) digital knowledge is becoming exponential.
The other major threat to the plans of the masses is the Great Default. Western governments have made promises to the masses regarding their old age. They have been promised universal pensions and nearly free health care, paid for by existing taxpayers. No state has invested money in the private sector to fund these promises. The politicians have collected taxes, spent the money, and borrowed more. Now the statistical reality is imminent. There is no way that taxes on workers can pay the expenses of the welfare programs for the aged. All over the West, there will be defaults.
Professor Laurence Kotlikoff of Boston University is an expert in the Social Security Old Age Support program. In 2015, he testified to the Senate Banking Committee. He presented the following assessment. “I am honored to discuss with you our country’s fiscal condition. Let me get right to the point. Our country is broke. It’s not broke in 75 years or 50 years or 25 years or 10 years. It’s broke today.” He continued:
Economic theory is unequivocal in telling us what not to measure when it comes to fiscal sustainability and generational policy. It’s also crystal clear in telling us what to measure, namely the infinite-horizon fiscal gap. The infinite-horizon fiscal gap tells us whether the government has, over time, enough receipts to cover its projected spending. It equals the present value of all projected future expenditures less the present value of all projected future receipts. The infinite-horizon fiscal gap has five important properties. . . .The U.S. fiscal gap currently stands at $210 trillion. This figure is my own calculation based on the Congressional Budget Office’ s July 2014 75-year Alternative Fiscal Scenario (AFS) projection.
Constructing the infinite horizon fiscal gap from the CBO’s AFS projection takes less than five minutes. One simply needs to extend CBO’s projection into the future and engage, via Excel, in some high-school algebra to form the appropriate present values of expenditures and revenues. Yet the CBO refuses to make the infinite horizon fiscal gap calculation and continues to focus attention almost exclusively on official debt. In so doing, the CBO is, in my opinion, deliberately misleading the public and Congress about our nation’s true fiscal condition. The size of the U.S. fiscal gap—$210 trillion—is massive. It’s 16 times larger than official U.S. debt, which indicates precisely how useless official debt is for understanding our nation’s true fiscal position. U.S. GDP currently stands at $18 trillion. Hence, the fiscal gap represents almost 12 years of GDP. (http://bit.ly/KotlikoffTestimony2015)
This story is repeated around the Western democracies. The politicians spend present tax revenue, borrow more, and run up the future bills to taxpayers. They pretend that a guaranteed catastrophe is not facing the masses of voters. They pretend that they can kick the fiscal can down the road forever.
This catastrophe will strike. When it does, voters will look for reasons. They will look for scapegoats. They will not look for the culprits right where they are: in the mirror. The Psalmist identified the problem: “The wicked borrows but does not pay back” (Psalm 37:21a).
Christian economics rests on the five points of God’s covenant: God, man, law, sanctions, and time. When men understand that economics is the working out of this general covenant in history, they will better understand the basis of long-term wealth: covenant keeping. They will understand this: “But the meek shall inherit the land and delight themselves in abundant peace” (Psalm 37:11). The issue is ethics. The masses have re-defined the eighth commandment: “You shall not steal, except by majority vote.”
The Lord knows the days of the blameless, and their heritage will remain forever; they are not put to shame in evil times; in the days of famine they have abundance. But the wicked will perish; the enemies of the Lord are like the glory of the pastures; they vanish—like smoke they vanish away (vv. 19–20).
Because you have read this book, you understand the basics of Christian economics. You know what the problem has been: theft by ballot box. The bills are coming due. There will be a Great Default.
The world is not facing the triumph of the robots over frail mankind. The robots are not responsible to God or man. They are merely tools of men. They are digital tools. They will never be able to make decisions based on ethics. The laws of ethics are not digital. They are analogical. Men are responsible to God. Robots are not. Darwinists are afraid of the works of their own hands and minds. They would be wiser to fear God.
Are you ready to teach this by teaching the student’s edition?
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For the rest of this book, go here: https://www.garynorth.com/public/department193.cfm
For the student's edition, go here: https://www.garynorth.com/public/department188.cfm
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