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Economics and the Bible: The New Idolatry

Imagine what it would be like to be able to write a letter each April to the IRS thanking them for the opportunity to participate in the tax program, but this year you were not going to contribute.

  • Ian Hodge,
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Imagine what it would be like to be able to write a letter each April to the IRS thanking them for the opportunity to participate in the tax program, but this year you were not going to contribute. And the IRS sent a letter of reply saying they were sorry you were not participating, and that they would be in touch next year to see if you might be willing to pay a new round of assessments.

Voluntary taxation is most certainly not the mark of any nation in the modern era, but we can go back in history to find that taxation at one time had neither the compulsion nor the regularity that are marks of the modern nation-state. The Magna Carta was one effort to contain the taxing powers of the king by asserting the priority of individual property rights over the assessments of the king. There could be no confiscation of property, including money, without adequate recompense.

A broad sweep of history allows us to see a window of opportunity that brought dramatic change to some parts of the world. An all-embracing political order, control of the courts, high taxation, slavery, control of money, and human sacrifice were the hallmarks of ancient civilizations. Whether in ancient Egypt, Greece, or Rome, the ideals of economic liberty for individuals always gave way to the high demands of the political order. While commencing with high ideals of republicanism and individual freedom, the Roman world, for example, eventually abandoned these ideals as the rulers extracted more and more wealth from those they ruled.

There is one period in history, however, that remains unique. For this period brought profound changes in the areas identified above as the marks of ancient civilizations. For a time in some parts of the world, there was no all-embracing political order; courts were localized and became centers for the administration of justice rather than the enforcement of political programs; slavery, though not abolished, was certainly reduced; human sacrifice eventually disappeared; and taxation was largely voluntarily.1

In theological terms, the ancient civilizations were all marked by the political order as being the highest and all-embracing law order. This made the political order a god, since it is clear in the Bible that it is God the Creator Who is the Source of all law and authority. Ancient Israel, therefore, stood in stark contrast to those civilizations around it. It had no political order that centralized authority in the same way ancient Persia or Egypt placed power at the top. There was no crime of treason against the political order in ancient Israel, but there was the crime of treason against God. Treason, it should be understood, helps us identify the god of any society.

It is a key function of the god of any civilization to make laws, and we need only determine the source of law to determine the god of that society. From creation to the time of Christ, all civilizations, with the exception of Israel or those around her that were influenced by the Holy Scripture, were identifiable by their idolatry: their refusal to have God, the Maker of heaven and earth, as their source of all law and authority. By having another lawmaking authority, these people were idolatrous, worshiping a false god.

The First Commandment, “Thou shalt have no other gods before Me,” is thus the litmus test of orthodox Christianity and the doorway that leads to a proper understanding of the remainder of Christian doctrine. It is also the key to understanding economics and the modern world, consisting of nation-states that are identified by the marks of the ancient world: an all-embracing political order, control of the courts, involuntary taxation at exceedingly high levels, slavery (now debt slavery), control of money, and a new wave of human sacrifice.

The Implication of Christ's Kingship
In the intervening period, something emerged from the ashes of the collapsing ancient civilizations that brought dramatic change to those who had known nothing except enforced slavery and compulsory taxation. The event that changed everything was the fulfillment of Old Testament prophecy concerning the Messiah. This Messiah would be a King, a Prince, a Ruler who would establish God’s standards of justice and righteousness to the extent that all the nations of the world would eventually bow down and recognize Him as Jehovah’s anointed. It was with great significance, therefore, that Pilate had nailed on the cross of Jesus the sign “The King of Jews,” a point the local Jewish leaders found offensive.

But this King of Jews was not just the King of the Jews only. He was the promised Messiah, the One who would bring about the changes foreshadowed in the Old Testament for the whole world. And almost immediately we see the repercussions. Men refused to obey those in authority who demanded that they stop telling others about this Jesus. Within a short time there were many punished, some with death, for refusing to acknowledge that the political order was god, the source of law and authority. “No,” said these early Christians, “we are Christians and we declare that Jesus Christ is the One Who alone has true power and authority to make laws, to delegate authority.” To become a Christian is to acknowledge that Christ alone is the only God, and therefore the true source of power and authority. “It is idolatry,” they said, “to acknowledge any other power with these attributes.” “Besides,” they argued, “the political order is made up of mere mortals, and what is mortal, part of the created order, cannot take on the attributes of Divinity, one of which is possessing the true prerogatives of law and authority, the essence of sovereignty.”

A similar stand had been taken centuries earlier by some captive Israelites. They refused to acknowledge the authority of the political order and were subsequently put into a fiery furnace for their refusal to acknowledge the self-proclaimed power of the political order. A little later, another Israelite in captivity refused to obey a 30-day ban on praying to any god other than the local ruler for the same reason: It is God alone Who makes rules, and when the political order makes rules contrary to God’s rules, then it is necessary to disobey the political order. Ancient Israel didn’t need any political order to tell it what to do. It had the Torah, God’s rules. And it had many prophets constantly reminding it that it had departed from God’s Torah and played the harlot with other gods. In short, it had rejected God’s rules in order to adopt someone else’s rules. This is the essence and hallmark of idolatry, or, in the words of Scripture, spiritual harlotry.

The early Christians, armed with the same Torah, the same prophets reminding them of their duty, also imbued with the new hope of the risen Christ and the empowering of the Holy Spirit, set about to turn the world upside down. And they did this by declaring that there was another authority in heaven and earth that could make law. And since it was always a function of the lawmaker to save the world from its problems, they declared at the same time there was no other way that men and women might be saved except by this Person, Jesus. Jesus Christ, they affirmed, is both Lord and Savior.

No wonder the Christians were not welcome in the Roman world. They were, in reality, treasonous to the political order. Another authority demanded and obtained their allegiance, and while at times they might appear to accept the rulings of the political order, they would disobey the political order when so required.

This is the gospel that became increasingly evident in the Roman world. The Roman solution to its problems was to centralize power in the political order, eventually in the Caesar. In order to finance its programs, it had to resort to massive taxation. When the people failed to pay the taxes — which was predictable since the taxes were based on the needs of the government rather than the capacity to pay — the only course of action was to debase the currency. This, in turn, meant government workers, especially the military, were paid in devalued money. Rome lost the support of its soldiers and therefore its capacity to rule. The Barbarians, offering lower taxes, were made welcome.

After the Fall of Rome
The implementation of Christianity following the collapse of Rome was a remarkable event. The collapse of the Roman world offered people an opportunity for another system of government. Christianity, the City of God, on the ascendancy, was able to provide an alternative to the ancient nation-states, the City of Man. It had no need of a centralized political order, for it was God’s prerogative to govern and rule His world. He ruled from heaven and had no need of high taxes, slaves, or human sacrifice. Centralized government was abolished. Taxation became local and, when paid, carried with it reciprocal duties and obligations between rulers and citizens. Justice also became a local affair, and it was rare for a king of the time to have anywhere near the power of the current politicians. They could not tax unless the people, often through their representatives, consented. Taxation, when implemented, was rarely permanent. Slavery and human sacrifice were severely restricted or abolished. Money was stabilized and, in the East, provided economic stability for 1,000 years.

The basis for all this was the Bible, and this is where the people obtained their ideas to rebuild civilization as Rome fell to the invaders. The establishment of a severely limited political order, however, meant that individuals could now have property rights, which form the basis for all economic thought, as von Mises argued so well.2 If the political order is to have all authority, it must be able to overrule the individual’s decisions concerning possessions — including money! Now, with property rights in place, people could reap the rewards of their productive endeavours.3

The practical results of this were outstanding. Improvements in agriculture provided improved productivity and a better diet. The water mill, and later the windmill, replaced human labor and gave a considerable increase in productivity. The combination of rotary and reciprocal motion led to the grindstone, grinding tools for wheat, and eventually the motorcar of the modern era. Man’s first flight was recorded in the eleventh century, and the principles of flight established at that time. Improvements in medicine, including the use of antiseptics, gave people improved health and longer life.4

Taxation, as indicated above, was difficult to implement, as King John found in 1215. Permanent taxation was not re-established in the West until the fifteenth century with the rise of standing armies in France,5 which helps explain the American hostility to standing armies in its War of Independence with Britain.

Along with the development of standing armies and permanent taxation also came the crime of treason, a Roman concept, not a Biblical one.6 That, combined with control of the courts, re-established the political order as the new lawmaker, the new god, replacing the God of Christianity.7 One ingredient was still missing, and that was control of money; and it took a few more centuries before the courts allowed the politicians to abolish property rights in money, severed money from its commodity basis, turned promissory notes into money by an act of parliament, and established fractional reserve banking to allow for the expansion of the money supply without resorting to the printing press.8

The ancient world had returned with all its attending characteristics. The Reformation, an attempt to turn back the clock, was too narrowly focused on ecclesiastical reform to notice the real problem: the establishment of the nation-state with the political order as the new god of society, replacing the Christian God as the source of all law and authority. Since this new god was human, it needed resources and power to implement its agenda. The result has been ever-increasing taxation, the gradual abandonment of property rights in most areas, and so many laws that no one can keep abreast of them.

The modern boundaries of the nation-states do no more than declare the taxing jurisdictions of the authorities. In return, the people are offered varying levels of defense in the case of military attack, but the price they pay for this is enormous. The boundaries also are used for the establishment of monetary and fiscal policy as well as the administration of public justice and control of the courts. Slavery, abolished so well after the collapse of Rome, at least in some parts of the world, has returned as financial slavery through debt, and human sacrifice has emerged in the form of abortion. Death of the unborn is used to allow people to pursue what suits their fancy without the burden of children while debt is the mechanism used to finance heaven on earth at the expense of the future.

Christian Economics
Any reform of economics from a Christian perspective, therefore, must deal with the reality of the nation-state as the true opponent of the Triune God of the Bible. A new Reformation is needed, one that will dismantle the political order and return it to its proper functions. This will require men and women of character and integrity, motivated by a determination to see the kingdom of God triumph on earth as it is in heaven. The result will be a very, very limited political order, a return of the courts to the local community, the abolition of permanent taxation and the return of voluntary taxation, the abolition of fractional reserve banking, the reestablishment of commodity-based money, the abolition of slavery in all forms, including financial, and a return to personal property rights. And that is just the beginning!

That such a reform has started is evident. Parents have been reclaiming their children from the clutches of the political order’s educational arm. Churches are refusing to be licensed. One church has even refused to withhold taxes from its employees, refusing to acknowledge the political order’s jurisdiction in these matters. Some judges in the United States have even had the audacity to hang the Ten Commandments in their courtrooms, declaring that ultimately it is God Who sets the standards of justice, not the President or Congress, Prime Minister or Parliament. This is the ultimate act of treason in the modern world: to say that our allegiance belongs to another person or entity rather than the nation in which we live.

Economic reform must begin, therefore, with the First Commandment; “Thou shalt have no other gods before Me.” Without a return to this proposition there is no solution to the world’s problems that, at heart, are a refusal to acknowledge God as the Creator and Source of all life, and therefore the One Who alone is the rightful Lawmaker. And He just happens to have a different way of looking at things than the political rulers past and present.


1. See, for example, William Carroll Bark, Origins of the Medieval World (Stanford, 1958).

2. Ludwig von Mises, Human Action (3rd ed., Chicago, 1966).

3. Harold J. Berman, Law and Revolution: The Formation of the Western Legal Tradition (Cambridge, MA, 1983), 322f.

4. See Lynn White, Jr., Medieval Technology and Social Change (Oxford, 1962). I have an expansion of these points in my book Making Sense of Your Dollars: A Biblical Approach to Wealth (Vallecito, 1995), Ch. 1.

5. Hans Delbrück, History of the Art of War, Vol. 3 Medieval Warfare, trans. Walter J. Renfroe, Jr. (Lincoln, NE, 1982), 510.

6. J.G. Bellamy, The Law of Treason in England in the Later Middle Ages (Cambridge, 1970). See Ch. 1.

7. Joseph R. Strayer, On the Medieval Origins of the Modern State (Princeton, 1970).

8. Mark Skousen, Economics of a Pure Gold Standard (2nd ed. Auburn, 1988), 21ff.

  • Ian Hodge

Ian Hodge, Ph.D. (1947–2016) was a long-term supporter of Chalcedon and an occasional contributor to Faith for All of Life. He was also a business consultant in Australia, USA, Canada, and New Zealand, and a prominent piano teacher in Australia.

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