Eyre Lines

On Friday 22nd January, one of the topics covered in the Global Christian Perspectives webcast, was one which the Energion Discussion Network had asked Elgin Hushbeck (my usual sparring partner on GCP) and myself to write contrary blog posts. Elgin’s appeared on the 18^th, and mine on the 19^th (neither is still online, but the master-post is here). What follows is an expanded version of my blogpost of the 19^th, expanded in the light of the fact that neither Elgin nor myself had seen the other’s post when we wrote our own.

The question asked is “Does Capitalism best express Christian economic values?” which I interpret as meaning free market capitalism, rather than (for instance) the nascent Chinese authoritarian-capitalist model.

So, what passages in scripture best enable us to see what Christian economic values might be? One might start with the account of the early Jerusalem church in Acts 2:44-45 “And all who believed were together and had all things in common, and they sold their possessions and goods and distributed them to all, as any had need”.

Having all things in common would be an expression of the second part of the Great Commandment from Mat. 22:36-40 “You shall love your neighbour as yourself. Selling their possessions and distributing them to all would seem to flow from the parable of the rich young man in (inter alia) Mark 10:17-31 “And Jesus, looking at him, loved him, and said to him, “You lack one thing: go, sell all that you have and give to the poor, and you will have treasure in heaven; and come, follow me””. He went on to say “Children, how difficult it is to enter the kingdom of God!  It is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” Also, of course, according to Luke’s version of the Beatitudes (Luke 6:20-26) “Blessed are you who are poor, for yours is the kingdom of God.”

Many reading this will immediately think that this had to be a short term situation, perhaps having regard to the expectation of Jesus’ imminent return and the institution of the Kingdom of God on earth, and some will think of Paul’s collection for the Jerusalem church referred to in 1 Cor. 16, 2 Cor. 8 and Rom. 15 and suspect that the Jerusalem church had effectively beggared themselves. Those who think this way should buy and read Roman Montero’s excellent book “All Things In Common”, which supports the idea that Christian communities were doing this for at least two centuries. I am, however, mindful that Jesus also said (Matt 6:25-34) “Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed?” and “Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.”

If there is a major fault I can see in the Jerusalem church attitude, it is that the evidence is that it shared equally only between its own members. Montero’s book indicates that this was not a complete picture, and that those outside the nascent church were also assisted. Implementing the principle of “love your neighbour as yourself” has guidance as to who your neighbour is in the parable of the Good Samaritan (Luke 10:25-37), in which it is clear that your neighbour includes those of another religion and race, and traditional enemies. These days, it should probably be the parable of the Good ISIS insurgent. Help should have been for the whole community, and not just the group of followers of Christ.

But, I hear said, this is just totally impractical, it cannot work. G.K. Chesterton however said “The Christian ideal has not been tried and found wanting. It has been found difficult; and left untried.” There have been some decent attempts (generally shorn of explicitly Christian content, for instance the anarchist communal enterprises during the Spanish Civil War), but never a widespread trial. I should underline that a statist controlled economy (which is often seen as the only alternative to unbridled free market capitalism) is not what I think is the nearest to a system Jesus might have approved of. However, something like the Jerusalem church might well be a halfway house to a truly Christian economics.

Let’s turn to free market capitalism. At first sight, a free market looks a wonderful idea. You produce something which someone wants, and you agree a price with them. If someone else sells cheaper than you do, you have to lower your price to compete with them, and without any conscious decision making other than everyone getting the “best buy” and, on the other hand, selling at the “best price”, prices are kept low and competitive.

This is very much the basis on which Elgin suggests that a free market is a magnificent system for ensuring things such as efficiency and cost-effectiveness. To a significant extent, he is right in that. He contrasts the free marketwith a centralised system fixing prices, a “command economy”, and rightly remarks that all experiments with command economies (chiefly in communist states) have been unmitigated failures. However, command economies are not the only alternative to an unregulated free market, as witness the fact that in a recent poll of the ten best countries for doing business, all of them were social democracies rather than fully free market states (and neither the UK nor the USA were on that list).

There are two major problems with free markets from a Christian perspective. The first is in the motivation it assumes on the part of both buyer and seller – the buyer is looking to pay as little as possible for as much as possible, the seller to sell as little as possible for as much as possible. Both are assumed to be working entirely out of self-interest. Self-interest is not a Christian value; it ignores the command to love your neighbour as yourself. It can be argued that it is realistic to assume the worst of humanity, and even Christians (given that most Christian denominations hold that mankind is in a fallen condition), but it is not something we can hold up as an ideal situation, as it rests, fundamentally, on greed. However, adopting more Christian principles of exchange might not completely destroy the ability of free markets to regulate prices (and supply) without central control.

The second is that it fails to work in practice except in very limited circumstances. What we actually see in unregulated economies (and in a lot of somewhat regulated ones) is developing monopolies (even on a very small scale you get those – there just is not room for two competing providers of some goods or services in my town, for instance) and, where there isn’t quite a monopoly, a cartel, agreeing not to compete on price. As time goes by without a cartel, one supplier becomes dominant because they can sell a little cheaper (or with a cartel the cartel becomes dominant), and then economies of scale kick in and they become cheaper yet, and you have another monopoly (which is then protected from someone else entering the market by selling at a loss until the new entrant fails, at which point the losses are recouped by raising the price). Adam Smith, who is cited ad nauseam by neoliberal economists, also wrote “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

On the back of monopolies comes an ever greater concentration of wealth in fewer and fewer hands (on the basis of a recent study, looking purely at moveable wealth, half the world’s wealth is currently in the hands of 62 people). As Adam Smith also pointed out (and I link to an article by David Brin discussing this at length), great disparities in wealth destroy the freedom of markets, via the huge disparities of purchasing power they produce.

As a secondary effect, the freedom of the market is compromised severely when less and less people actually have the money (or power) to enter into it, resulting in the removal of the mass decision making which makes the free market work, concentrating the power to make decisions in a very few hands. The result is close to a command economy, with all the abysmal track record that brings. As Brin remarks, in exchange for price setting by 10,000 civil servants, we get price setting by 5,000 golf buddies – and I add to what Brin says, that the man in the street has at least in theory the ability to elect politicians who will do something about the 10,000 civil servants, whereas the golf buddies are not removable except by people with immense wealth who can buy controlling interests in the companies they operate.

Free markets are thus demonstrated to be fundamentally unstable; they will eventually cease to be free unless they (or their effects) are regulated.

Another problem kicks in when talking about markets in, for instance, stocks and shares. What governs those prices is more what people think is going to happen to the price in the future than a dispassionate view of how well the underlying company is doing, so they are prone to boom and bust cycles, particularly since automated trading systems started to react to changes in the market more rapidly than human traders ever could.

Turning from markets to capitalism proper, except on a very small scale (without economies of scale), it is not a matter of a single person producing something. Elgin is correct to say that capitalism has produced a higher standard of living for masses of people, and the main mechanism is mass production, which demands major investment of equipment to work; this has been provided by mechanisms such as the joint stock company and by the banking system, which together give you capitalism.

I need to pause here to say that I have misgivings about both the joint stock company and the banking system as being in accordance with Christian principles.

The joint stock company allows people to risk only their initial investment through the principle of limited liability; the worst they can fear is the loss of their share value. What that actually does, however, is enable companies to fail to meet their obligations to others, either debts owed or liabilities for damage caused, by just declaring the company insolvent and winding it up. This enables people to support companies which will defraud or cause damage to people without fearing the full consequences.

The banking system lends money at interest, fundamentally. That is something which, for very many years, Christians believed was forbidden by scripture, basing this on Deuteronomy 23:19 “Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest”, first prohibiting it at the First Council of Nicea (325). This was the sin of usury (for over a millennium Christians left that practice to Jews, who used the parallel provision permitting interest to be charged to foreigners in Deut. 23:20). I am not convinced that our move away from condemning usury is warranted.

Beyond that, capitalism is a matter of an employer (usually a company) with multiple employees, it is a matter of needing capital from somewhere in order to set up the business; both separate the work of production from the sale of the product. But, I hear, workers contract freely to work for the capitalist, and there is again a free market. The fact that the employer or the provider of capital makes most of the money, and not those who actually produce, is fair because it is a free market.

This is just not the case. A free market demands that both seller and buyer are free from overwhelming need to contract at whatever price the other demands. Except in circumstances of labour shortages (which rarely arise except in the case of people with specialist skills and which the mass production through automation on which the modern capitalist economy depends constantly strives to reduce or eliminate), the employer can employ anyone while the worker typically fears starvation and the gutter and is compelled to accept what the employer is willing to give. This is good free market capitalist economics; it reduces the cost of production for the employer and increases the profit margin.

It is not, however, remotely Christian. The employer is not only failing to love the employee as himself, but is taking advantage of rather than benefiting the poor (for instance by giving them all his money…). In a truly Christian economy, the fear of starvation and the gutter would not be there, because the rich would be queuing up to give the poor money.

Indeed, free market capitalist economics value people only as units of production or units of consumption. The less you pay in wages the better, the more they pay for what they buy (and the more they buy) the better. A Christian economics would value them as people and, I suggest, value them the more if they are poor (hungy,  thirsty or unclothed), a stranger, sick or imprisoned (Matt. 25:31-46). Capitalist economics, in other words, values only money. If you work for a capitalist enterprise, you are likely to be sacked for giving anything away or for selling it at a lower price than the employers demand; you are forever going to be pushed to produce more at a lower cost and sell more at a higher price. To make more money.  As Gordon Gecko says in “Wall Street”, “Greed is good”.

There lies the problem. Paul said “The love of money is the root of all evil” (1 Tim. 6:10) and Jesus said “You cannot serve God and money” (Luke 16:13). The word used for money there is “Mammon”, which Christian theology has traditionally seen as a false god or prince of hell (Gregory of Nyssa, Cyprian and Jerome certainly thought this way; Gregory equated Mammon with Beelzebub).

All this for something which you cannot eat or drink, which you cannot wear, and which has only the value we permit ourselves to be deceived into giving it unless and until it is converted into something real. If you consider that money has real value, think of inflation, and particularly hyper-inflation which has affected some economies in the past. The pound (or dollar) in your pocket is really only worth to you what someone is prepared to give you in exchange for it, and that can vary wildly (if, for instance, someone just doesn’t want to sell you something, or work for what you offer, or just isn’t interested in having more money) or, in hyperinflation, collapse completely. Money, and therefore wealth, is a fiction, given value only by the belief of those who have faith in it. That’ to my mind, sounds very much like a minimalist definition of a god… or, at least, a false god.

In addition, if you consider Maslow’s hierarchy of needs, while the lowest level (physiological) can be attended to fairly readily with money in normal circumstances, safety requires more than just money, and having more money does not correlate well (some would argue “at all”) with attaining any of  the higher needs of humanity (“Money can’t buy you love”), though we are deceived into thinking that money gives us security and others are deceived into esteeming us more for “having” more of it.

Indeed, while with most commodities we can readily see that, at best, “enough is as good as a feast”, and consumption of many things in excess can actually be bad for you, having reduced everything to money, i.e. wealth, we have produced a system in which you can never clearly see that you have too much.  In the quest to sell more (and produce more) we have developed marketing and advertising, the chief effects of which have gone beyond the initial aim of letting the buyer know what was available to inducing people to buy what they don’t need, and to pay more for it not because it is intrinsically better, but because it is seen as trendy, or high status.

It is also the case that in every free market capitalist system (and the more so the more nearly that approaches the ideal), the principle of “trickle down economics” (otherwise expressed as “a rising tide lifts all boats”) which benefits the poor because it benefits everyone, does not work unless there is a labour shortage. Marx got a lot of things wrong, in my eyes, but the one thing he got right was that free market capitalism concentrates wealth (and so power and the ability to choose what one does with life) in fewer and fewer hands. “Thus says the LORD:  For three transgressions of Israel, and for four, I will not revoke the punishment; because they sell the righteous for silver and the needy for a pair of sandals – they who trample the head of the poor into the dust of the earth and push the afflicted out of the way. “ (Amos 2:6-7)

So, capitalism gives us a system which results in us valuing each other by the amount of this Satanic fiction we consider each of us to have and concentrating that in fewer and fewer hands. We live in fear of not having it (which is a primary reason why we do not try a truly Christian economics) and are compelled into getting more of it, and letting others have as little of it as possible.

I therefore think that I was entirely justified in a recent Global Christian Perspectives webcast in calling Market Capitalism the “system of Satan”. It is the opposite of a Christian economic system. I am not the only theologian to have noted this, as an article in The Atlantic demonstrates.

The trouble is, just as Jesus observed when he said “render unto Caesar that which is Caesar’s” (Mark 12:17), we are stuck with this system. I am myself too consumed with the fear of destitution to go as far as I think I should towards a truly Christian view of economics, and can only chip away at the edges (by, for instance, not buying from companies which I know oppress workers particularly badly, and by paying more than I need to where a seller is plainly poor, as well as the normal charitable imperatives for which there is no justification in Market Capitalism, as well as by seeking to elect politicians who will curb the excesses of the system). The fact that we are stuck with it, absent a level of popular faith I can’t muster in myself, however, should not blind us to its “Satanic” character and the fact that we should aim at something better, or at least at using government (the people acting as a whole) to regulate and moderate its influence.

Free Market Capitalism is not a matter of “best expressing Christian values”, it’s a matter of turning the opposite of Christian values into a belief system which becomes the whole basis for society.