Truth Really Matters

The heart of free enterprise is that we are individually made in the image of God.  “Our creative freedom reflects that divine image,” writes Jay W. Richards in his 2019 edition of Money, Greed, and God:  The Christian Case for Free Enterprise.  Market economies feature competition, private property, and rational self-interest.  But the heart  of free enterprise is our God-given capacity to create wealth, to defy zero-sum thinking whereby someone wins only if someone else loses.  Poverty can only be overcome by the creation of wealth.

So what is the source of material wealth?  Richards argues that the source is spiritual.  Free societies produce inventors, producers, problem solvers, and creators who use their imaginations to transform material resources into new and useful products and services.  “Man, not matter, is the ultimate resource.”  The more people in the free society, the more creators, the more the economy grows.  Labor-saving devices are invented to increase individual productivity, which was described by philosopher Luis de Molina as “the fruit of our ingenuity.”

It was more difficult for me than usual to pull out a few choice nuggets from Richards’ book because there are just so many!  But let’s try.  Do pick up this book and have your children read it, too, before they finish high school.

“Marxism has not only failed to promote human freedom, it has failed to produce food.”  — American novelist John Dos Passos

Karl Marx had predicted that contradictions in capitalism would produce a workers’ revolt, but that this would be a necessary step in social evolution.  Then private property would be abolished and a just socialist state would be created, on the way to a communist utopia in which the state would “wither away” and we all would live in prosperity, peace, and freedom.

Reality clashed with Marx’s 19^th century prophecies, even during his lifetime when workers’ wages were rising.  When the socialist / communist revolution finally did succeed in Russia in 1917, it was led by power-lusting intellectuals in an agrarian culture that had no association with either democracy or capitalism.

Harvard historian Richard Pipes:  “Communism did not come to Russia as the result of a popular uprising; it was imposed on her from above by a small minority hiding behind democratic slogans.”

I see striking parallels in America and the rest of the West today.  Today’s political and corporate elites work hard to impose a socialist tyranny on the middle class whose hundreds of millions of people simply want to be left alone to live their lives in freedom.  The socialists of today work to emulate Lenin who set up a one-party state that “filled every nook and cranny of Russian society.”  He politicized everything.  Sound familiar?

Lenin centralized most of the Russian economy, “from industry and trade to education and transportation.  This required secret police, a massive bureaucracy, and the widespread use of terror.”

Productivity tanked.  Industrial production in 1920 was 18% of the level in 1913, there were half as many workers employed, and living standards fell to one-third of their pre-war level.  I won’t go on regarding the economic disasters, slaughters, and famines of the Stalin period, but if you’re not familiar with that history, you should shore up your education.  Richards’ overall conclusion in this historical section is that, against Marx’s expectations, revolutions do not spring up in advanced industrial societies with a strong rule of law, but rather are enabled in poor agrarian cultures where despots can flourish.

A group of scholars led by Stephane Courtois documented the communist death toll in a tome called The Black Book of Communism, published in 1999.  As many as 100 million human beings died due to communist policies and atrocities during the 20^th century.  Richards:  “Never has an idea had such catastrophic consequences . . . Extreme moral passion minus reality equals mass death.”  Beware of such political leaders.

Thomas Sowell:  “Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.”

Richards mentions the experience of the early church in Jerusalem in Acts chapter 4, which is sometimes described as a communist experiment.  It was no such thing, of course.  The sharing was entirely voluntary and the state was nowhere in sight.  (Other than in persecuting the new Christians who then responded with charitable sharing in order to survive.)

When Ananias gets judged in Acts 5 it is clear that his sin was lying.   His property and its proceeds were his to keep or to give, in part or in whole.  But he lied and the Holy Spirit needed an example to insure that His church started out on the right track.  Furthermore, this early church experience was not normative for future church life.  The circumstances (persecution) were special.

Ronald Reagan:  “Socialism only works in heaven, where they don’t need it, and in hell where they already have it.”

Mao was the worst of the worst socialists in history.  See my essays on both Mao and Stalin.  Richards suggests Mao’s communist dystopia “tried to draw heaven down to earth.  They brought up hell instead.”  In socialism, he points out, it’s not that no one controls the property.  Rather, it means the state must confiscate or control whatever property is held privately.  This is what the Great Reset is about in today’s world, illustrated by the efforts to squash the Canadian truckers and the Dutch farmers, and the generations-long American leftist efforts to monopolize education under the state, making war against Christian, private, and home schools.

Richards describes the Nirvana Myth promoted by Marxists:  “It’s the delusion that we can build utopia if we try hard enough, and that every real society is intolerably wicked because it doesn’t measure up to our ideal.”  And in the Marxist version, thou shalt never mention God, sin, Jesus, or an afterlife.  Everything is here and now and politics is the only religion.

And then there’s “The Piety Myth” which involves “focusing on our good intentions rather than on the real consequences of our actions.”  Richards applies this to foreign aid, citing Bob Geldof:  “Something must be done, even if it doesn’t work.”  (This anti-principle has broad applications, of course, from gun control laws to stimulus packages to racial hiring and school admission quotas, etc., etc.)

In the foreign aid application, rich countries give all kinds of things to poor countries.  For example, the US overproduces cotton because of subsidies that inflate the price.  We have to dump the excess cotton somewhere, so we dump it on poor countries as “aid,” but that drives cotton farmers in those countries out of business.

Considerable “aid” goes to prop up dictators who waste the money on projects that maximize their power.  In one case refugees who had to flee from an “aided” dictator were also awarded “aid,” just to be fair.  Analysis has shown Kānt no correlation between the “aid” a country receives and its economic growth.

The myth creates havoc inside our country as well.  Peter Drucker once stated that by the 1960s “it had become accepted doctrine in all Western countries that government is the appropriate agent for all social problems and all social tasks.”  Well, of course.  Once you deny God’s existence and the way He wired reality, government fills the moral vacuum.

George Gilder wrote in Wealth and Poverty, “It is extremely difficult to transfer value to people in a way that actually helps them.  Excessive welfare hurts its recipients, demoralizing them or reducing them to an addictive dependency that can ruin their lives.” Taking the property or money from one group to prop up another is a lose-lose game.  You coerce one and degrade the other.  Urban America has been a disaster since the 1960s, when the welfare state began to destroy black communities.

In the Old Testament, God instructed the Jews to leave the leftover “gleanings” in the field at the end of the harvest to allow the poor or the sojourners to gather what they needed.  Such charity is practical, gracious, and limited.  You cannot grow widespread wealth in this manner.  To grow wealth across a society you need property rights, the rule of law, trade, enterprise and personal virtues like diligence, thrift, and ingenuity.  The culture must foster trust, delayed gratification, and a hopeful vision of the future.

Most of these factors are moral and derive from biblical principles.  The legal issues are for government to get out of the way and let people build their own businesses and their own lives.

Richards cautions Christian ministries to treat people in impoverished lands as “fully spiritual beings rather than mere mouths to feed.”  Instilling Christian values will transform the culture and reduce poverty far better than cool celebrity-led campaigns.

It should also be obvious to Christians in ministry that when people are truly converted, the indwelling Holy Spirit will provide wisdom, courage, and strength and the new believer can get prayers answered!

The Zero-Sum Game Myth . . . believing that trade requires a winner and a loser.

Richards does some short case studies to illustrate that free markets create new and bigger “pies.”  (Life is not just about political fights that divvy up a constant pie.)

In 1958 Leonard Read wrote an essay, “I, Pencil.”  A pencil is not as simple as it might seem.  Read explained (speaking as a pencil), “not a single person on the face of this earth knows how to make me.”  What goes into a pencil includes cedar trees in California, with saws and trucks and ropes and other equipment built all over the country.  There are trains to transport the wood, electricity from a dam to power the manufacturing plant, graphite from Sri Lanka, clay from Mississippi, other chemicals from who knows where, wax from Mexico, brass from copper mines to hold the eraser, factice from Indonesia and pumice from Italy to make the eraser.  Nobody on earth has all the skills and knowledge to go out and make a pencil from scratch.

The iPhone is the quintessential modern example.  I won’t go through the analogous description of its complexity and parts, not to mention the internet which facilitates a smartphone’s function, and the associated computers, servers, fiber-optic cables, satellites, etc., etc.  Millions of people are involved in the creation and production of smartphones.

Smartphones wouldn’t exist without free markets.  “We hear a lot about the brutish, competitive nature of capitalism, about the one percent and ninety-nine percent, winners and losers, survival of the fittest, and all that.  Some of us may even have downloaded a podcast on the subject right onto our iPhones.  We hear far too little about the miracles of free cooperation and interdependence that free markets have made possible . . . We should take no critic seriously who does not first recognize this virtue.”

Richards argues that the best way to get ahead for everyone is not by theft, fraud, and slavery, but by working to meet the needs and wants of customers.  “And everyone is a customer.  The logic of competition . . . is about serving customers better than your competitors.”  No other scheme comes close in producing wealth and well-being for multitudes of people.

The Materialist Myth . . . believing that wealth isn’t created, it’s simply transferred.

Winston Churchill:  “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”  Indeed, socialist cures are worse than the disease.  America’s tyrannical responses to COVID, for example, produced far more misery and death than did the virus.

A nation’s wealth is not a physical object to be divided up, Richards notes.  Wealth can and does grow, if simple conditions are met.  Compare what people have today with 100 or even 200 years ago.  In 2011 a study was done concerning what 30 million “poor” Americans (poor as classified by the U.S. Census Bureau) possessed:

• A car, air conditioning, two color TVs, cable or satellite TV access, and a DVD player.
• They were not hungry and had access to medical care when needed.
• They had more living space in their homes than the average (non-poor) European.

Compared with America’s upper class, they might be considered poor . . . relatively speaking.  But really poor people suffer around the world today, living on a few dollars per day, many going hungry.  About 11 million children die before they are five years old.  The reasons include tyranny, tribal conflicts, corruption, no property rights, and no hope to change any of the above.

Most of the complaining about the economy in America derives from envy about the really wealthy in their country.

In America opportunities abound to increase personal or family wealth.  Most people change their income class dramatically as they age.  One legal factor mentioned before is property rights, that enable you to establish a home or a business.  These rights are purely conceptual, represented by a title that establishes in the minds of others that you have exclusive rights over an asset.  This gives you the freedom to invest and build without fear of arbitrary confiscation.  “In general, the more a country protects private property, the more prosperous the citizens of that country will be.”  Property taxes work against this principle.  If the taxes grow too onerous to pay, the government will foreclose, effectively making the government your landlord.  With property taxes, no one really owns their own property.

How fast can markets create wealth?  Consider the inventions, innovations, and development around telephones, lightbulbs, jet aircraft, rockets, computers, MRIs, and antibiotics over the last century.  The growth is exponential.

The Greed Myth . . . believing that the essence of free enterprise is greed.

Free markets derive from the Golden Rule, Matthew 7:12.  Our decisions must include care for others, but we are most responsible for our own family, our own neighbors, and our own community.  We’re not omniscient and so cannot agonize over everything, from a kitten thirsty for milk in Mumbai to an old lady needing help to cross the street in Buenos Aires.  So we cannot predict the consequences of all our actions everywhere.  The complexity of free markets might invoke the butterfly effect as much as weather forecasting does.

Accordingly, we necessarily pursue “self-interests” due to limited knowledge.  The success of free markets involves multitudes making rational and fair choices about value and prices.  The ‘analog computer’ consisting of networks of billions of consumers and producers works best at generating wealth for the multitudes when most people do what seems right and just to them personally.

Richards:  “Any system that requires everyone always to act selflessly is doomed to failure because it’s utopian.  People aren’t like that.”  Socialism does not fit the human condition.  It defies reality.

Adam Smith’s invisible hand is illustrated by the idea that even if the butcher is selfish, and that he would love to sell you spoiled meat in exchange for everything you own, he cannot make you buy his meat in a free economy.  In his own self-interest he has to satisfy your desires if he wants to stay in business.  Win-win.

In contrast, when a government controls all health care, it is extremely expensive, you have no choice but to buy it (you pay the taxes), and the resulting monopoly inevitably provides poor service.  Real people suffer and die unnecessarily.  Dictating lockdowns and vaccine mandates have demonstrably caused economic suffering, health disasters, and increased death rates far beyond what would have ensued if people had been allowed to make their own informed choices.

In free markets, entrepreneurs create in competition with other entrepreneurs to see who can best satisfy the needs and wants of real people in the market.  They do it to make money, of course, but they only make money if they are in touch with what people want.  This is simple stuff!  And yet the elite in politics, industry, and academia strive for socialism, as long as they get to be in charge.

Are people selfish in a free market?  Richards cites statistics that free economies correlate with the most charitable giving and that the higher the taxes, the less people give.  I’ve always believed that if welfare programs were zeroed out and taxes were reduced accordingly, that charitable giving would more than make up for whatever safety net is needed.  Furthermore, with more people working because they can and must, tax revenues would increase even as rates decline.  This was demonstrated dramatically in the 1980s in the Reagan presidency, in the 1920s under Treasury Secretary Andrew Mellon, and in the 1960s under JFK.

The Bible has a lot to say about private property and treating our neighbors honestly in business.  The 10 commandments tell us not to lie, steal, or even covet what does not belong to us.  Instructions in Proverbs, Ecclesiastes, and the parables of Jesus speak to the virtues of honest and fair business dealings with others.  If we obey God’s commandments at the micro-scale, person-to-person, it is evident that He has designed human reality to work effectively at the macro-scale.  At the macroscale, governments and nation-to-nation, God also has much to say, of course; for example in 2 Samuel 23:3, “The God of Israel said, the Rock of Israel spake to me, He that ruleth over men must be just, ruling in the fear of God.”

In summary, free markets built atop a just system of laws that assure private property ownership and punishment of theft and corruption, are the natural outcome of a biblical worldview.  Richards’ book concludes with, “Seen in its proper light, the market order is as awe inspiring as a sunset or a perfect eclipse.  It might not be enough to convince the skeptic that God exists, but surely the believer should see in it God’s glory.  At the very least, it should settle the question we started with:  Can a Christian support free enterprise?  The answer is surely yes.”

This is a book I believe should be in every Christian’s library.  Read it with your children and discuss it in light of the news of the day.  It will help equip the young against the relentless and pervasive leftist indoctrination they will experience when they enter the fray.

• drdave@truthreallymatters.com