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Building Family Capital

While politicians talk endlessly about family values and hold babies for the cameras, the state is actively decapitalizing families.

  • Timothy D. Terrell,
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Theologian Ron Sider is well known for his book Rich Christians in an Age of Hunger, which established him as an icon among left-wing evangelicals. In that book, Sider makes a controversial call for a “graduated tithe,” with progressively higher tithe rates from the Biblical ten percent up to a hundred percent of additional (after-tax) income earned. The church then would be an agent of redistribution, using this wealth as a means of providing for the poor. Now, while we can all agree that the church should assist the poor, Sider’s charitable intent here seems to compromise the well-being of the family. His “graduated tithe” would eliminate the possibility that a family could attain any significant assets that would be used to start a business, relieve family members in severe distress, or provide an inheritance for children and grandchildren. Furthermore, family-directed charitable giving would virtually disappear, being replaced by church-directed charity. With family capitalization and charity thus compromised, the church and state may assume a more important role than they should.

Sider, while he argues that the family has a central societal role, does not seem to recognize the importance of family capital. At least, he wants to effectively eliminate the possibility of gaining significant amounts of it. But at least the “graduated tithe” is optional. A far greater threat to family capitalization is the expanding, increasingly hostile state.

While politicians talk endlessly about family values and hold babies for the cameras, the state is actively decapitalizing families. Heavy, progressive income taxes, like Sider’s “graduated tithe” but backed up with coercion, make it financially difficult for a family to provide charitably for its sick and needy while building up long-term capital. Property taxes add to the burden, while social security programs and inheritance taxes work to sever the bonds between older parents and their children.

Of course, the resources that taxes transfer from families to the church or the state will wind up back in the hands of families. In the aggregate, funds are simply moved from some families to others. So what is the problem? How do excessive transfers from families — through church and state — to other families act to decapitalize families?

Family Incentives
It is basic to human nature that we are temporally motivated by increases in our own well-being and the well-being of those for whom we have affection. We are able to have a strong affection for those within our household, as well as for a limited number of friends and relations outside the household. We can know those in that small group and conceive of how to meet their needs and desires. But because of our finite humanity, we cannot think of everyone in the world the same way. We are motivated to work hard for the direct benefit of immediate friends and relations, but the motivation declines when the benefit is dispersed across a large population. Therefore, if there is a disconnect between our productivity and the well-being of those in our own household, our incentive to produce is diminished.

This disconnect occurs whenever some of an individual’s income is taken by a third party for redistribution to others. In the United States, still one of the freest economies in the world, the civil government takes an enormous fraction of the total amount produced by families. The ecclesiastical government claims another ten percent, but actually receives far less. The civil government, in particular, is therefore responsible for weakening the connection between individual income and the well-being of that individual’s household. The incentive to produce is greatly reduced, and overall wealth-building slackens.

Building Family Capital, Practically
Suppose substantial reductions in tax rates are slow in coming. We must build family capital in spite of the discouragements of high taxes and burdensome regulations. What can be done now to build family capital in Christian households?

First, we should take a long-term view. We should realize that the payoff need not come in a year, or ten years, or even in the current generation. Yours may be the generation of laying foundations, just as King David made the preparations for the temple construction that his son Solomon would complete. Instead of spending your last dollar as you breathe your last breath, make it your goal to leave your children and grandchildren substantial assets at your death (see Proverbs 13:22).

Second, we should teach our children the value of entrepreneurial work. No child has to be taught to be a consumer. Rather, we should teach them how to produce — to perceive an unmet need and fill it. This could be learned through participation in a family business, or by apprenticing with a friend’s or relative’s business. Of course, this does not mean they are locked in to a business career. Their abilities and interests may suggest a calling in engineering, medicine, law, academics, ordained ministry, or some other occupation. Yet many of these other occupations can make use of a practical business education. Many people will find that even if their primary occupation is not a “business” (for example, teaching) there is room for starting and maintaining a side business.

Third, we should think of the work to build family capital as a legitimate part of Christian living. “The Lord’s work” does not consist exclusively of work done under the auspices of the church. Producing godly offspring with the capital necessary to do great good in the world is as commendable as serving as an officer in the church or supporting a missionary.

Finally, while this article focuses on material capital, remember that capital can be spiritual and intellectual as well. In fact, the most important forms of capital are unseen. Far better to have a righteous and wise generation follow you than a wealthy but foolish generation. “Better is a little with the fear of the Lord, than great treasure with trouble,” says Proverbs 15:16.

The Virtue of Family Capitalization
Christians often ignore the importance of physical family capital, and sometimes think little of those believers who have succeeded in building it up. Perhaps this is because the Bible is full of warnings to the wealthy. James 1:9–11 says,

Let the lowly brother glory in his exaltation, but the rich in his humiliation, because as a flower of the field he will pass away. For no sooner has the sun risen with a burning heat than it withers the grass; its flower falls, and its beautiful appearance perishes. So the rich man also will fade away in his pursuits.

There are many similar passages. These warn those who have wealth that material goods should not become an idol to us, that they are never to become the ultimate goal of our existence, and that they are not to be gained through fraud or theft (e.g., James 5:1–6). Riches are a tool, not an end in themselves. They are temporary, unlike eternal wealth that is built up by good works.

Scripture is full of examples of godly men and women who humbly used material blessings for great good. Acts 18:1–3 and 1 Corinthians 16:19 mention Aquila and Priscilla, who were tentmakers. These believers showed hospitality to the Apostle Paul during his visit to Corinth, housing him for an extended time, and apparently had a home large enough to house gatherings of a congregation of believers. So likewise did a Corinthian man named Gaius, mentioned in Romans 16:23, who may have been one and the same with the Justus of Acts 18:7. Justus had a house next door to the synagogue — probably expensive real estate — and God used that location to convert Crispus, the ruler of the synagogue, along with his whole family. Paul and Silas’s host during their visit to Thessalonica, named Jason, was able to post a bond to protect them and the other believers in his house from an angry mob. And of course many of the great figures of the Old Testament — the patriarchs Abraham, Isaac, and Jacob, as well as other men like Job — had received immense family wealth as blessings from God.

To build family capital is to acquire a powerful tool that can be used across generations for the glory of God. It is not to become an idol, but neither is it to be despised. Those who have capital ought to avoid its temptations and use it for good, as instructed in 1 Timothy 6:17–19:

Command those who are rich in this present age not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy. Let them do good, that they be rich in good works, ready to give, willing to share, storing up for themselves a good foundation for the time to come, that they may lay hold on eternal life.

  • Timothy D. Terrell

Timothy Terrell is associate professor of economics at Wofford College in Spartanburg, South Carolina. He is assistant editor of the Quarterly Journal of Austrian Economics and is an Associated Scholar with the Mises Institute.

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