Free Life 19, November 1993, Christianity and the Free Market, by Sean Gabb

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From Free Life, Issue 19, November 1993
ISSN: 0260 5112

Christianity and the Free Market
Violeta Felčiarová (Sean Gabb)

There are many Christians who are unable to accept the case for free markets. They believe that economic freedom is incompatible with the moral teachings of Christianity. They believe that it leads to materialism; and this they condemn on three grounds.

First, it is said to lead to unjust economic relationships. Regarding the inequalities of wealth to be seen in all free economies, see Christ's answer to the rich young man who asked how to gain salvation:

If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me." [Matt. 19:21]

See also:

It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God." [Matt. 19:24]

Second, the economic rationality that is at the heart of all market relations is seen as sinful in itself. On financial prudence, see:

Behold the fowls of they air: for they sow not neither do they reap, nor gather into barns; yet your heavenly father feedeth them.... 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." [Matthew. 6:26-34]

On all attention to financial matters, see: "Ye cannot serve God and Mammon". [Matt. 6:24] There is also the general principle, that only those things are good which have as their consequence the contemplation of God and His works. So far as materialism distracts people from that activity, it is considered bad.

Third, materialism is seen as bad not only in the negative sense, of distracting people from good. It is seen also as leading people into temptation. With the free market, it is believed, comes immoral personal conduct. Such conduct is condemned in both Old and New Testaments.

Yet, all this being said, it is not true that Christianity is incompatible with the free market. For, while the Bible must be considered the revealed perfect word of God, it must not always be taken literally. We know now that many passages in the Old Testament regarding the natural sciences are false if taken literally. We know, for example, that the Earth orbits the Sun, and care nothing for the verse in Joshua describing how the Sun was stopped in its path around the Earth to let the Israelites to win a battle before the evening. [Josh. 10:13]

Though the Copernicans once wer persecuted, the major Christian churches - most notably the Roman Catholic - no longer claim that the natural sciences can be learned from the Bible. This is now considered a work primarly of moral and theological instruction. It is accepted that those passages dealing with scientific matters should be read as allegories, not as the literal truth. When we desire to exercise the dominion that God has given us over the Earth and its resources, we look to the natural sciences. This is not blasphemy. For centuries now, it has been held that the laws of science are the laws of God.

It is true that many passages in the New Testament - especially those in the Sermon on the Mount quoted above - do seem to condemn all normal market behaviour. But we must apply to these the same principles of exegesis which we have long applied to those passages allegedly dealing with the natural sciences.

We must supplement the often ambiguous Word with the Spirit that is ever clear. And that Spirit is Freedom. When God made us, he made us free to choose. The notion of Divine punishment and reward is otherwise meaningless. Our actions can only be good or evil - and therefore capable of punishment or reward - so far as they are freely chosen.

We must seek, then, to create a stable political and economic environment in which we all have the greatest possible freedom to choose good and avoid evil.

That political and economic environment is the free market. We know this because the science of economics tells us so. And the laws of the market, no less than of the natural sciences, must be regarded as the laws of God. Any passages in the New Testament on economic matters must be understood in this light if they are to be understood properly.

Thus, when Christ told the rich young man to sell his goods and give the money to the poor, he was not saying that the State should create a big welfare apparatus to redistibute income from one person to another. He was teaching us the goodness of voluntary charity. It was not by the mere transfer of wealth that the young man could gain salvation: it was also his own wish to make the transfer.

Indeed, compelled charity does more than rob monetary transfers of moral virtue; it also tends to destroy the charitable impulse itself. Why should people give to others, they ask, when already they have been forced to give by the State?

Equally, in his fierce denunciations of the rich, Christ was not condemning riches and productivity in themselves, but, only the unjust economic relationships of a slave society.

The practical implications of this analysis ought to be clear. Any truly Christian politician who wishes to raise the living standards of the poor must pay close attention to the laws of the market.

If, for example, he wishes to ensure a large supply of good food at low prices, he must not try to control prices. For the known effect of price controls is to reduce the quantity of goods brought to market. That is one of the most elementary truths of economics; and millions have starved to death all through history when their rulers have tried to ignore it.

Again, it is another established truth that minimum wage laws create unemployment. They make it uneconomic to employ young people, women and the unskilled - people who are unable to produce enough to cover the cost of their artificially increased salaries.

In general, the most Christian approach to economic questions is to give the widest freedom to market forces - to allow God's own laws of the market to establish a natural harmony between supply and demand.

The Editor writes: This article was received before publication of the Pope's recent interview with La Stampa. Therefore Miss Felčiarová  was unable to address the specific points made by His Holiness. Since it is not my habit to do more with articles than bring them into loose conformity with our house style, I will leave her article as it stands, and content myself with quoting from the interview those objections to free markets that would not have been made had Miss Felþiarov 's interpretation of Christianity been more widely accepted within her Church.

I quote from the interview as translated and published in The Guardian of the 2nd November 1993:

Communism has had its success in this century as a reaction against a certain type of unbridled, savage capitalism which we all know well. One need only take in hand the social encyclicals, and, in particular, the first, the Rerum Novarum, in which Leo XIII describes the condition of the workers of that time. [This powerful encyclical, issued in 1891, asserted the right of labour to just rewards and endorsed legislation, trade unions and co- operative organisations having this purpose (Guardian gloss.]

Marx too described it in his own way. That's what social reality was like, without a doubt, and it was a consequence of the system, of ultra-liberal capitalism....

[Leo XIII says] that there are some "seeds of truth" even in the socialist programme. It is obvious that these seeds should not be destroyed.... The proponents of capitalism in its extreme form tend to overlook the good things achieved by communism: the efforts to overcome unemployment, the concern for the poor....

[A]ccording to me, at the root of many of the serious social and human problems besetting Europe today are the distorted manifestations of capitalism.

Of course, the capitalism of today is no longer the capitalism of Leo XIII's times. It has changed, and in good measure due to the influence of socialist thought.

Today's capitalism is different, it has introduced social safety nets, thanks to the union movements; it has enacted social policies and is monitored by the state and the unions.

In some countries of the world, however, it has remained in its 'savage' state, almost as if it was in the past century.

Some of my readers, I suspect, will be inclined to dismiss the above as the rantings of an ignorant old cleric, no more entitled to our respect than the late Ruhollah Khomeini. This is not my view. Roman Catholicism is easily the most intellectual of the great faiths, and among the least hostile to the principles that underlie a free society. Our own civilisation, indeed, owes much to the vague separation of church and state that emerged in the later Roman Empire, and has ever since been the fundamental point of difference between Christendom and the Islamic world.

There is no case for ignoring - least of all for abusing - the Roman Catholic Church. It will not go away. It will not lose its influence over several hundred million minds. It is open to argument, and argument should be offered whenever appropriate.

I should note that His Holiness does not condemn free markets as inherently immoral. Here, as in his encyclical of 1991, Centesimus Annus, he gives them a firm if conditional endorsement. Also, I rejoice in his equally firm rejection of the nonsense currently preached as Christian economics by certain politicians in Central and Eastern Europe:

I fear that the idea of a third path is another utopia. On the one hand, we have communism, a utopia which, once put into practice, revealed itself as tragically flawed. On the other hand, we have capitalism, which in its practical side and at the level of basic principles would be acceptable in terms of the social doctrine of the Church....

Unfortunately, there are abuses of this acceptable practice - various forms of injustice, exploitation, violence, and arrogance - and some come to see these practices as acceptable in and of themselves. And that's when we arrive at forms of a savage capitalism. It is the abusive practices of capitalism which are to be condemned.

This explicit naming of the "third path" should cause a most enjoyable embarrasment to at least several Slovak politicians whom I always disliked and who are currently working so hard to marginalise Miss Felčiarová  within Slovak Christianity.

I look forward to the day when her views have become the consensus within her Church, when a Pope no more thinks of making ill-informed pronouncements on economic issues than he now does on scientific issues.