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An Expressly Biblical Approach to Economics

Years ago, when I was still a religious agnostic, I was opposed to Christianity because most of the Christians with whom I was acquainted adhered to a socialist/statist ideology. Some of the strongest expounders of this left-leaning statism were pastors of Christian churches.

  • Tom Rose,
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Author's Autobiography

Years ago, when I was still a religious agnostic, I was opposed to Christianity because most of the Christians with whom I was acquainted adhered to a socialist/statist ideology. Some of the strongest expounders of this left-leaning statism were pastors of Christian churches.

"If this is what the Bible teaches," I reasoned, "then I don't want anything to do with it!"

But, unknown to me at that time, the Holy Spirit was working in my life. A business associate where I worked was a "Bible thumper." He was always coming into my office to "needle" me about the Bible. One day he advised me that the various theological books I was reading in my search for an unchanging and everlasting righteousness were just leading me further and further away from Christ. Then he asked, "Tom, how much of the Bible have you read?" My friend's name was Seldon Brown, and we worked for the Associated Industries of Missouri in St. Louis.

I replied, "I guess I haven't been fair about this, have I?" So I went out at lunch time and bought a King James Bible at a downtown "5 and 10" store.

When my friend passed by my office after lunch and looked in, I waved the Bible at him, and he said, "I know exactly what you're going to do. You're going to read that Bible with the intent of disproving every word in it, aren't you?"

"Of course," I replied.

"You can't read it that way! You have to read it prayerfully," he replied.

"How can I read it prayerfully, Seldon? I don't even know if there is a God to pray to!"

But, instead of getting a rise out of him, as I expected, Seldon just looked me in the eye and sternly retorted, "That's your problem!" Then he spun on his heel and walked out!

That night I took the Bible, got down on my knees and said a prayer that was honest, though a bit different than the prayers I now pray: "Oh God, if there is a God, and if this is your word, speak to me through it."

God answered that prayer, and thus began a spiritual and intellectual journey of inquiry which was destined to change, not only my world-and-life view, but also my career.

I started reading at Genesis 1:1. And as I read, it became overwhelmingly clear that the collectivist ideology that so many of the Christians whom I encountered were espousing evidently did not come from the Bible! For I discovered that the Bible expounds, explicitly and consistently, a position that upholds man's individual freedom and self-responsibility before God. Accordingly, the Bible did not, as I had erroneously believed, come anywhere near to endorsing the centralization of power in the hands of civil authorities, but rather the opposite. Nor did the Bible look with favor on monetary inflation to "stimulate" the economy, nor manipulation of the economy through fiscal or monetary policies. Nor did it approve of government "transfer payments" to help the poor, to subsidize or assist other "needy" groups, business firms, or occupations. I found the Bible to be consistently adamant about the principles, "Thou shalt not steal" and, "Thou shalt not covet."

Finding in the Bible the unchanging and everlasting righteousness which I had hungered after for so long worked to lower my mental resistance to the truth of the Bible. God's word changed my hardened mindset, the Holy Spirit wooed my heart, and in short order I joyously discovered that I had been one of God's elect from before the foundation of the world.

What follows is an expressly Biblical approach to economics. It has gradually developed over the years by my constantly searching Scripture and then attempting to apply God's thoughts (2 Cor. 10:3-5) to the science of economics, which might be better defined as "man's work in God's world."

The Economic Question

It is naught, it is naught, saith the buyer:
but when he is gone his way, then he boasteth. (Pr. 20:14)

Some years ago I was invited to serve on a debate panel with two other economists. One was to speak on the Biblical basis of socialism. Another was to speak on the Biblical basis of, believe it or not, Keynesianism. And I was to speak on the Biblical basis of the free market. In my introductory remarks, I warned the audience that each of us would be presenting ideas that conflicted and that each of us would claim that the Bible supported the position that each speaker expounded. But I pointed out that the Bible could not support such diametrically opposed views; that some of us, no doubt, would be expressing Satanic ideas, and that it was up to the audience to evaluate and weigh what each of us had to say with reference to Biblical precepts.

How is it that three economists, each claiming to be a Christian, could look to the Bible for support of such opposing "brands" of economics? Is it that any system of economics can legitimately be defined as harmonious with Biblical precepts, and that the real issue depends on the economist's presuppositions? (As economists, we were all aware of the warning: "Don't accept an economist's model without first checking out his assumptions!")

Or, perhaps, is the real truth concerning economics that the Bible has nothing at all to do with the so-called "science" of economics, since the study of economics is purely a matter, as some economists claim, of searching for cause-effect patterns through the positivistic process of applying the scientific method?1

For example, I once attended an economics seminar in Chicago. During a coffee break, one of the speakers overheard some of us discussing a "normative"2 economic issue. At the next session the speaker digressed a few minutes to make this assertion:

Look, I'm a professional economist. As such, I don't get involved in choosing or weighing the moral or ethical aspects of the projects I'm hired for. If I did so, I would immediately lose my status as a professional. Thus, it's up to my employers—a business corporation, foundation, or government—to choose the ends they desire. As a professional economist, my only job is to show those who hire me the most efficient means of achieving the ends they have already chosen!

After his talk, I approached that positive practitioner of economic science and engaged him in conversation. After verifying that he really meant to say what he did, I asked, "But haven't you just accurately described the viewpoint of a professional prostitute when she sells her services?" He, of course, was highly offended that a fellow-economist would suggest that his line of operation resulted in his prostituting his services. This true story helps us focus on just one of the problems that practitioners of so-called "positive" economics must deal with, that is, the false dichotomy that modern science attempts to establish between man-the-economist and man-the-moralist. It simply cannot be done if one values moral integrity!

Lastly, when considering the Bible and economics, is it possible that the Bible perhaps does have something to say about economics, but only in the "normative" aspect of economics in which the economist is confronted with evaluating choices that directly impinge on moral issues? I have often advised my students that "man-the-moralist" must always look over the shoulder of "man-the-economist," to make sure that he is headed in the right direction!

The Fundamentals of Economics

In order to adequately answer the question "What is an expressly Biblical approach to economics," we must start with fundamentals. First, we must remind ourselves what the study of economics deals with: it deals with man. It deals with how man acts economically in the world that God created. Second, we must define it. I define economics as the science of choice: the science, or study, of how man values alternative choices, and how he acts in implementing those choices in order to maximize his sense of well-being. You will note that this definition is somewhat broader than the dictionary definition of economics, that economics is "a social science concerned chiefly with description and analysis of production, distribution and consumption of goods and services."

Since the study of economics deals with man and how he chooses, we should take yet a third step in order to answer the question, "What is Biblical economics?" That is, we should see what the Bible has to say about man—his origin, his role in life, as well as his destiny. In short, we must always remember that God is the Author and Controller of all economic law, and that man's role is to discover and to apply God's law in God's created universe!

Now, at this point, fairness requires that I make some of my implicit assumptions explicit for all to see: I accept the Bible as the God-breathed word of God, and that it speaks authoritatively to every aspect of man's life, including the study of economics (2 Tim. 3:16-17). Furthermore, I operate from a presupposition that the Bible has worthwhile light to shed, not only on the aspects of normative economics, but also on the positive aspects as well.

In answer to the question of whether or not there is such a thing as "Christian" economics, my answer is both yes and no. It is no in the sense that a Christian economist will use many of the theorems,3 theories,4 and economic models that his secular counterparts customarily use. My own leaning on this question, perhaps, can best be discerned by the titles of two texts I have written on economics. They both are entitled: Economics: . . . from a Christian Perspective rather than "Christian economics."5 Let's take a couple of ordinary-life examples: Before my wife, Ruth, and I accepted Christ as our personal Saviour, she used to bake biscuits for breakfast two or three times a week. After we were saved, she continued the same practice, but she didn't change her biscuit recipe. Thus, her salvation didn't affect her practice of baking one iota. Of course, there were other areas of our household management that did change after we became Christian, especially those dealing with value orientation.

Take, for another example: Mr. Brown is the manager of the produce department in a supermarket. His customers sometimes complain that his packaged fruit and vegetables often contain spoiled items. Mr. Brown now comes to know the Lord. After this heart-changing encounter, is it unreasonable to expect Mr. Brown to show more care in packaging his fruit and vegetables? Good business practice alone would suggest such improved care after customer complaints, but the leading of the Holy Spirit would practically insure it. This is a good example of how the application of Biblical theology, through changed hearts, leads to good economics and honorable business practices.

The point I am making in these examples is that a person's theology certainly does beneficially affect the practice of economics in every aspect of life: at home, in one's career, and in one's relationship with others.

My "yes" answer as to whether or not there is such a thing as "Christian" economics goes something like this: Christian economics is simply the application of Biblical precepts6 and insights7 to the study of economics. Having said this, let's recognize that the Bible can be applied, or misapplied, in many different ways, depending upon one's a priori8 and one's relative state of Christian maturity, which is always changing—one hopes, in the direction of bringing all thought captive to the mind of Christ. In spite of this potential "a priori hazard" and maturity problem, it is my belief that one can confidently rely on the Bible to shed meaningful light and give meaningful direction in the study of economics, both in the so-called "positive" and "normative" spheres into which the study has been artificially divided.

Let us, then, take Bible in hand and investigate in a practical way how God's word can indeed shed needed light on man, on man's purpose in life, and on man's economic activity while he temporarily sojourns in God's created world. Though there are many potential applications, we will select only a relatively few.

Man Was Made Free and Responsible to God

Genesis 1:26-27: Man is made in the very image and likeness of God. Man, therefore, is free and has a right to be free because he is God's image bearer. Also, for the same reason, man is an economic being. That is, he is able to think, to impute value, and to rank his imputed values on a comparative scale so that he can make intelligent choices. Man engages in the mental process in the very same way that God does. If man were not created in the very image and likeness of God, he would be incapable of making value imputations,9 and there would, therefore, be no such thing as the study of economics.

This observation, by the way, is a positive application of the Bible to the study of economics. Note, too, that God's dominion mandate to man was made in relation to man's covenantal role as head of the family. This, as well as other verses, brings us face to face with the Biblical concept of sphere law,10 which serves to decentralize social power structures into the separate spheres of self, family, church, voluntary organizations (like schools, business firms, clubs, etc.), and civil government. This Genesis passage, and others, therefore suggest a decentralized economic system which emphasizes man's right to individual freedom and self-responsibility before God.

Man is a Covenant Creature

Genesis 1:27-28: Man stands in direct covenantal relationship to God with respect to his role as vice-regent over God's creation. In order to exert dominion over God's creation, man must be free to do so. Without economic freedom to act, man cannot properly be held responsible by God for his actions. Thus, God's cultural mandate to man also calls for maximum economic freedom coupled with maximal responsibility to God. Maximal responsibility of self to God can best be achieved in a society in which voluntarism is practiced. This is nothing more than an operative "free market" system, which is defined as the voluntary exchange of goods and services between free and self-responsible individuals before God.

Man's Sin Leads to Lust for Tyranny

Genesis 3:1-19: Man sinned! Therefore, the natural economic scarcity (a result of man's being created as a finite being) that existed even before man's fall was exacerbated in intensity. Thus, man is condemned in this fallen world to continual economic struggle simply to survive. Civil rulers who attempt to build Utopias here on earth through economic intervention might well take this passage to heart; for rulers are not only finite beings with limitations to their knowledge and ability, but they are sin-burdened just as much as, if not more than, the citizens over whom they exert hegemony. As a result of both their created finiteness and sin burden, civil rulers cannot be trusted with the heady experience of centralized political or economic power. They would be sure to abuse it! The Kentucky Resolution, passed by the Kentucky State House of Representatives on November 10, 1798, and concurred unanimously by the Kentucky State Senate three days later, recognized the sinful tendency of civil rulers to tend towards tyranny:

In questions of power then let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.11

Civil Authority Must Be Limited

Jeremiah 17:5,7,9,10: Man's heart is deceitful and desperately wicked. Therefore, as we have already indicated, it is not safe to allow fallen men to rule over others. The dilemma is that all men are sinful and cannot be trusted. So what is the solution? The answer is a strictly limited civil authority which serves to repress the natural outworking of man's evil heart in society so that voluntary exchange will be maximized and the use of coercive force minimized. The very existence of evil in the world requires some sort of institutional arrangement which will deter the outworking of evil from man's heart and the fostering of voluntarism. For instance, it would be a breach of an important Biblical principle for me, or you, or the civil authority, or even the elders of a church, to dictate to someone else how he should spend his income or direct his tithe to God. To do so would be a pompous and blatant act of tyranny, for the control of another man's abilities, income, and wealth is solely his own responsibility before God. God reserves to himself sole authority for searching the heart and trying the reins of men's hearts. It is not a responsibility that can be legitimately or safely entrusted to any other earthly entity. Yet, how often do we see individuals, civil rulers, and sometimes even church leaders judging the spending and giving of others! It is this mindset and practice that fuels the growth of centralized civil government and the so-called "welfare state" which we have observed for most of this century in our American Republic.

Economics, Civil Government, and Sin

A few more words should be directed at this point to man's inner sin problem and God's outward provision for man's living in a sinful world without tyranny and utter chaos being the result. Consider this: yes, it is true that man's heart always turns toward evil, and that he cannot therefore be trusted in positions of authority (Gen. 6:5). Yet, God has made a unique provision to stem the outward working of man's evil heart. He has done so through a combination of man's very God-given nature in conjunction with the proper functioning of civil government, the only valid coercive social institution, which God himself instituted.

How does this God-instituted synergistic combination of sinful man and coercive civil government function? It works like this, and it depends upon a great big "IF." IF the civil authority faithfully performs its God-given role of maintaining lawful peace and order (2 Tim. 2:1-2; Rom. 13:1-7), then outward social harmony results, in spite of man's inward evil heart. As long as civil rulers faithfully fulfill their God-given responsibility to punish evildoers, then no person or entity in society will be able to tyrannize anyone else by wrongly imposing his will on another. The beneficial result of this proper functioning of the civil authority is that all men will then be forced by law to enhance their own well-being only through the peaceful process of voluntary exchange. And, each person, because he is self-interested, will agree to engage in economic exchanges in a free market scenario only if he perceives that he will be better off after an exchange than before the exchange takes place.

What does this mean in practice? It means that neither person in a potential exchange will proceed to finalize the exchange unless the perceived benefit of what he receives is greater in value than what he surrenders in the exchange. This guarantees that both parties to a voluntary exchange benefit from it. How can this be so? Because each party to the exchange process mentally imputes a higher value on what he receives than on what he gives in payment. If this were not so, then one or the other would abort the exchange process. Forced exchanges always benefit one party at the expense of another. Only voluntary exchange guarantees that both participating parties are better off after the exchange than before.

If civil rulers are truly interested in the economic welfare of the citizens over whom they bear rule (and is there any office holder who would deny that he does?), then they would be very careful to apply God's higher law evenly and without bias. Thus, voluntarism would abound, and unlawful force to tyrannize others would be quickly punished. In such a peaceful atmosphere, the general economic and social welfare of mankind would be fostered; and man's right and duty to stand self-responsible before God likewise would be maximized.

God Desires Social Decentralization

Genesis 10:8-10; 11:1-9: God's response to Nimrod's attempt at building history's first worldwide totalitarian State at Babel was to confuse the language, scatter the people, and divide the lands. Thus we see that God's plan for man in a sinful world is to move toward a decentralization of power and towards a one-to-one basis for economic exchange. This is a movement towards free-market exchange rather than towards a system of centralized economic control and government-directed exchange, which is exactly what we see occurring in the world today. The centralization of power leads inescapably to tyranny and to the subsequent loss of man's freedom and self-responsibility before God. This point is especially important for Christian patriots to be aware of and concerned about. Why? Because there are hidden forces in our own country and in other countries of the world that are in the late stages of quietly dismantling our constitutional republic with the objective of melding it into a one-world, fascistic State under the United Nations.

Man's Duty Is to Be Free

Exodus 8:1: Man has not only the right to be free, but he has the duty to preserve his freedom. Why is this so? Because in no other way can man be held accountable to God. Note that the purpose of freedom is not freedom simply for the sake of being free (which would be nothing more than a license to sin), but rather freedom for the purpose of serving God (Ec. 12:13-14). Likewise, economic freedom isn't simply for the sake of enjoying unfettered license without any moral restraints; rather, its purpose is to allow mankind maximum freedom in enlisting all of his resources—his personal gifts, and his physical wealth and financial resources—in the challenging service of faithfully building the Kingdom of God until Christ returns. This is what Christian Reconstruction is all about.

Once I gave a lecture at a faculty forum at a Christian college. I spoke on the voluntary exchange of goods and services (the free-market process) and how it is the only system of economic exchange that squares with Biblical precepts. A professor in the history department took strong exception. He held to the idea that man, in his God-given freedom, had the free choice of opting for either a free-market system or one of the non-free systems like socialism, fascism, or communism.

I explained that God does not give man freedom, only to give it up in exchange for some form of totalitarian "ism" because, in doing so, he would pervert God's mandate that man is responsible for self to God. Totalitarian systems rob man of his duty to be responsible to God for all of his actions.

Civil Government Licensing Is Wrong

Exodus 31:1-5: This passage informs us that God gave Bezaleel, Aholiab, and "all that are wise hearted" the necessary gifts to construct the tabernacle. What implication does this passage have regarding government-imposed licensing laws which serve to restrict entry of would-be competitors to various licensed professions? Licensing laws serve economically to artificially raise the incomes and social prestige of the favored licensed practitioners above what they would otherwise be able to enjoy in a truly competitive free-market situation. Such protective laws are simply bald attempts to benefit a privileged few at the expense of the unorganized many. Also, such licensing laws always come about by planned collusion between the professional practitioners who are seeking to be licensed and the civil authorities who grant licenses.12 The push for licensing laws is often said to arise from the need to "protect the public from quacks." But this is the argument presented by practitioners who desire the special benefits that licensing laws provide; it never comes from the general public, who always prefer a wide choice of service providers at low prices. Licensing laws serve effectively to squelch competition from would-be competitors by using the power of the state on behalf of the licensed profession.13

Question: Since every person is a unique, God-created individual with special gifts that can be applied in economic service to one's fellowmen, is it then proper for the civil authority to hinder the use of gifts that only God is capable of bestowing? Does not the civil authority that passes such protective legislation arrogate a power to itself that belongs only to God?

Question: Are there other workable alternatives to government-mandated licensing laws? Yes, but none that bestow such large benefits on those who are licensed. One alternative that would adequately protect consumers while still giving them wide choices at much lower costs is this simple solution: Let "licensing" be done by each competing professional organization, but without the coercive backing of the civil government! In short, let each professional group—and there might be a number of competing groups in each profession—grant "certificates of approval" to those practitioners who meet various criteria established by their professional group. Then let each group advertise to the general public the advantages that are bestowed on consumers for choosing to do business with their members! This method is simple, fair to all concerned, and, best of all, competitive! I used to write a weekly newspaper column with the by-line, "The competitive free-market is the workingman's best friend"! That, in my opinion, is an unchanging truth, as long as the civil authority fulfills its God-given role of maintaining a peaceful environment in which citizens are free to seek their own welfare and no one is allowed to use coercion on another. Most people are familiar with the Underwriters' "Seal of Approval." Consumers have come to trust this "Seal of Approval" because it has stood the test of time. The same procedure can be used in the non-government "licensing" I am describing here. Is it time to try it? I highly recommend doing so! Already-licensed professions would fight the idea to protect their hard-won turf; but it would be a boon to consumers in the form of much wider choices and much lower prices. Look what is happening as a result of more competition in the communications industry, the gas industry, and in the electrical energy industry. In each of these, service is rising at rapid rates, and prices to consumers are falling!

A Free Market Generates Charity 

Leviticus 19:17-18: God requires us to fear him, to love him, and to serve him with our whole heart and soul, and to love our neighbor as ourselves. Thus, the application of economic enquiry must always be circumscribed and directed by God's law. This means that man-the-economist must continually delve into the Bible to make sure that he is always headed in the right direction; that is, that the economic ends man chooses to reach (a normative aspect of economics) are always in harmony with Biblical precepts. Also, the mandate to love our neighbor seems to require that the study of economics be directed toward the end of serving our fellowmen rather than manipulating them to achieve our own self-centered ends. This is a quite-contrary perspective from the perspective that most secularly-oriented economic textbooks present, because they focus mainly on Keynesian-oriented manipulation to induce the population to meld in with government-induced monetary and fiscal policies. At least that is the major focus of secular economic texts in studying what is called macro-economic policy. In short, God's mandate to love our neighbor as ourselves would seem to indicate that all government attempts to micro-manage the economy to achieve nationally-established goals (which is nothing more than fascism in practice) is unbiblical.

These forbidden activities and agencies would include such things as taxing and spending to finance so-called "transfer payments" (Social Security, welfare, business and farm subsidies, etc.), wage and price controls, special legislation favoring one group over another. Also included are the numerous fascistic government control agencies such as the Interstate Commerce Commission (ICC), the Federal Reserve Bank (FRB), the Federal Trade Commission (FTC), the Federal Communication Commission (FCC), the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), the Federal Emergency Management Administration (FEMA), and many, many others too numerous to mention. All of the above-mentioned practices and agencies serve to build a fascistic centralized State similar to what existed in Mussolini's Italy14 and Hitler's Nazi Germany. They are all totalitarian in nature and threaten the freedom of American citizens. Most Americans have succumbed to decades of government propaganda, so they have wrongly come to believe that such evidences of fascism are a natural part of living in an advanced industrial and technological society; but nothing could be further from the truth.15 Our challenge in this respect is to search the Scriptures to learn what God's word says about the limited role the civil authority is to play in society. Let us remember that only the Biblical system of voluntary market exchange serves to maximize the outworking of true charity and service to others in any society, but especially in a society of free and self-responsible individuals before God.

Monetary Inflation Is Evil Leviticus 19:35-36: Monetary inflation is immoral, whether it is effected by the government treasury's printing fiat money, or whether it is brought about by the central bank (read: Federal Reserve Bank) insidiously "validating" government deficits through sophisticated, hard-to-understand forms of credit creation. Monetary inflation, properly defined as the creation of new purchasing media (money), is immoral because it insidiously changes the measure of the monetary unit by debauching the currency that people use in their everyday transactions. Monetary inflation is what counterfeiters engage in when they create false money, and it is just as morally wrong for civil rulers to "legally" create false money as it is for counterfeiters to do it illegally. In short, it is a clear breaking of God's admonishment to maintain a system of just weights and measures.

Garet Garrett, in writing about the Federal Reserve System and World War I, said:

... after many years of blundering toward it, and only a few months before the beginning of the war in Europe [WWI], we had found the formula for the most efficient credit machine that was ever invented. This was the Federal Reserve System.16

We should evaluate this powerful, secret money-making machine in light of God's word and in light of a clear reading of the United States Constitution. At worst, it should be reconstructed; at best, it should be disbanded, for it is a threat to people's liberty.

The Federal Reserve Bank has provided the needed sleight-of-hand credit financing to involve us in every foreign war during the twentieth century. The net result of our getting involved in one foreign war after another has been a consequent steady decline in personal freedom; the growth of a highly centralized, bureaucratic and fascistic government; a horrendous rise in taxation; the planned destruction of the gold standard, which used to give some degree of protection to American citizens against an out-of-control, profligate, high-spending government in Washington, D. C.; and decades of planned monetary inflation which has brought the 1940 purchasing value of the dollar to less than 8 cents. Yes, 92 percent of the value of the 1940 dollar has evaporated as a result of the Federal Reserve's long-term monetary policy, which has quietly cooperated (i.e., colluded) with the federal government to finance government deficits with Federal Reserve credit.

The Limited Role of Civil Government Romans 13:1-8; 1 Timothy 2:1-2: The Biblical role of civil government is simply to maintain law and order so that men can be free to pursue their legitimate economic interests in an atmosphere of peace in service to God and their fellow men.

When the civil authority goes beyond this very limited role by arrogating additional powers to itself, then it unlawfully invades other law spheres—the individual and home, the church, business firms and other voluntary organizations—and thereby becomes tyrannical.17 In essence, the corporate state then becomes a secular god which will not allow any other law sphere to exist in freedom and independence. We are seeing this ugly face of atheistic humanism on the rise in our own American Republic, as well as throughout the world.

Only a return to a Biblically-based concept of sphere law will be able to turn this ominous tide of social revolution. What people need to do is:

1) Study God's word to determine what the God-given role of civil government is in society. People who value freedom and who desire to remain free must rediscover the answer to this question: What is the proper sphere of operation, and what are the legitimate Biblical limitations to the power of civil rulers?

2) Study the United States Constitution and Bill of Rights to rediscover the clear limits of power that were so carefully delegated to the federal government by America's Founding Fathers. Also, it would be good to study the Anti-Federalist Papers to learn why certain Christian leaders like Patrick Henry opposed the Constitution of 1787 as giving too much power to the central government, and why certain Christian leaders, as now exemplified by the National Reform Association, favored an explicit recognition of Christ as King of kings and Lord of lords in our Constitution. In short, a good understanding of the historical setting which produced the Declaration of Independence and Constitution of the United States is in order if needed changes in civil polity are to be wisely implemented.

The Bible speaks in many other ways to the study of economics and to the proper role of civil government (which is a closely related subject). Paul, in Chapter 12 of 1 Corinthians, speaks about the diversity of spiritual gifts in the church. This same principle, applied to economics, teaches us that the diversity of gifts which God has bestowed on mankind is what makes economic exchange between individual men, as well as between countries, profitable and beneficial to all participants. Also, the Bible instructs man to rest one day in seven. Fallen man might choose to work seven days and refuse to rest on the Sabbath, but God's word clearly says, "no." We should obey, first, for the very sake of obedience, but also because of trust that God loves us and knows what is best for us, who are his creation. In conclusion, let me briefly summarize what is clear. The Bible:

1) Provides us with a clear guide for economic development (Dt. 28) and limited civil government (Dt. 17:14-20),

2) Stresses the dispersal of economic and political power in contrast to a concentration of power at the national or international levels (Gen. 10:8-10; 11:1-9),

3) Focuses on the inseparable concepts of individual responsibility before God, coupled with maximal personal economic freedom (Gen. 1:26-28; Ex. 8:1), and

4) Insists that, because of man's innate sinful nature, mankind must rely on God's providence through free-market exchange, rather than trusting in the goodness of men, i.e., civil rulers (Jer. 17:5,7,9,10; Ps. 118:8-9).


1. The "scientific method" is a thought process which involves five basic steps: 1) The searcher for truth collects empirical data. 2) Then he studies the data to discover uniformity to arrive at a generalization. 3) The searcher then forms a hypothesis, which explains the generalization. 4) Next, he take the hypothesis through controlled experiments, thus producing a theory. 5) Lastly, he applies the theory by making predictions and then checking to see if it really works by producing truly predictable results. See Tom Rose, Economics: Principles and Policy from a Christian Perspective, 2d                              ed. (Mercer, PA, 1987), 25.

2. ibid., 27. "Positive economics" is the so-called "pure science" aspect of economics which stresses the five-point thought process mentioned above. It focuses on the most efficient means of achieving predetermined ends. "Normative economics" is the broader aspect of economic study which deals with the ultimate ends and the directions toward which economic analysis is applied. Therefore, it involves the consideration of moral and ethical concepts.

3. Theorem: An idea that is demonstrably true, or assumed to be true.

4. Theory: Systematically organized knowledge applicable in a relatively wide variety of circumstances, especially a system of assumptions, accepted principles, and rules of procedure to analyze, predict, or otherwise explain a specified set of phenomena.

5. Economics: Principles and Policy from a Christian Perspective, 2d ed., and Economics: The American Economy from a Christian Perspective.

6. Precept: A rule or principle imposing a standard of action or conduct.

7. Insight: The capacity to discern the true nature of a situation, an elucidating glimpse.

8. a priori: A preexisting viewpoint, which is largely determined by the world-and-life view that one holds.

9. Value exists only in a person's mind. To impute value is to mentally place a value onto: a person ("I love you"), an object ("I like chocolate better than vanilla"), or an available alternative ("I'm going to choose this route instead of the other"). Man has the mental capacity of imputing value because God has shared this capability with man, who thus shares in this aspect of God's nature. For more information on the Biblical application of value imputation, See Tom Rose, Economics: Principles and Policy, 21, 22, 39, 44, 90-91, 99-100.

10. The Biblical concept of sphere law teaches that each social sphere (the individual and family, the church, voluntary organizations, and the civil government) is directly responsible to God, our Creator, who rules in every sphere. No sphere thus has the right to invade the responsibilities of another sphere. To do so would be to commit an act of gross tyranny. Note: The modern humanistic state (civil government) errs through the unbiblical process of arrogating unwarranted powers to itself and thereby invading the proper domain of other God-established law spheres. It is pertinent here to point out that, Biblically, civil government is just one of various God-ordained social agencies. Civil government thus does not have open-ended power to do whatever civil rulers get a mind to do; rather, its rightful power is carefully limited by God's word. See Deuteronomy 17:14-20; 1 Timothy 2:1-2.

11. Virginia Commission on Constitutional Government, We the States: An Anthology of Historic Documents and Commentaries thereon, Expounding the State and Federal Relationship (Richmond, VA, 1964), 150.

12. For a more thorough discussion of licensing laws and where pressures originate for them, see Tom Rose, "An Economic Analysis of Labor Unions," in Economics: The American Economy (Mercer, PA, 1985), 20-24.

13. For those interested in this subject, look up information of the so-called Flexner Report of 1910. One source is Douglass C. North and Roger LeRoy Miller, "The Economics of Rising Medical Costs," in The Economics of Public Issues, 6th ed. (New York, 1983), 61-70.

14. The socialistic/fascistic state that Mussolini erected in Italy beginning in 1922 fascinated Franklin D. Roosevelt, who copied Mussolini's work when he fathered the National Recovery Administration in the early 1930s.

15. For a thorough discussion of the differences between socialism, fascism, and communism, see Tom Rose, "The Isms," in Economics: The American Economy, 115-146.

16. Garet Garrett and Murray N. Rothbard, The Great Depression and New Deal Monetary Policy (San Francisco, 1980), 5-6.

17. The fact that most citizens have been conditioned, mentally and morally, to accept such an expanded role of the civil government in society does not negate its tyrannical nature. The most efficient way of imposing tyranny on a population is to psychologically manipulate people, not only so that they will tolerate, but that they will actually embrace it and feel naked to the alleged dangers and exigencies of freedom if and when the tyrannical institutions were to be removed!

  • Tom Rose

Tom is a retired professor of economics, Grove City College, Pennsylvania. He is author of seven books and hundreds of articles dealing with economic and political issues. His articles have regularly appeared in The Christian Statesman, published by the National Reform Association, Pittsburgh, PA, and in many other publications. He and his wife, Ruth, raise registered Barzona cattle on a farm near Mercer, PA, where they also write and publish economic textbooks for use by Christian colleges, high schools, and home educators. Rose’s latest books are: Free Enterprise Economics in America and God, Gold and Civil Government.

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