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Adult non-fiction, Book Reviews, Economics
Economics in One Lesson
by Henry Hazlitt
1946 / 193 pages
Universal basic income, a four-day work week, and government-funded daycare are just a few big-ticket proposals that are gaining momentum nationally, and even within our own church circles. All these proposals boil down to getting more while doing less. Promises have been made that middle and lower class families will not have to pay a cent more in taxes but the wealthy 1% will do all the heavy lifting.
In Economics in One Lesson, Henry Hazlitt argues that all these policies can’t deliver what they promise. He argues that many of these proposals only focus on a special interest group in the present and fail to consider how the proposal will affect the general populace both now and in the future.
For example, when a government announces a multitude of public “make-work” projects, at first glance these projects seem like a good idea, or at least seem like they couldn’t do any harm. The citizens get:
-
- An employment opportunity
- Tangible infrastructure
But Hazlitt warns that although these benefits look attractive, there are many indirect consequences that are not considered.
First, someone must pay for these employment opportunities. For every dollar spent on a public work project, a dollar will be taken away from a taxpaying citizen. Not only are the citizens as a whole worse off, there is now less money for them to create new jobs.
Second, now that the infrastructure exists it is easy to assume that without that piece of infrastructure the country would be worse off – having a bridge would seem obviously better than not having a bridge. But in reality, one thing has been created instead of others. Instead of the government-built bridge there could’ve been citizen-built houses, or cars, or dresses and coats. All of these items are unrealized because the bridge is now standing.
Although Hazlitt wrote this over 70 years ago, many of the issues he deals with are just as relevant as ever. We should be wary of governmental promises to ease our daily tasks. Our sinful nature yearns for an easy life; that is why these promises are so alluring to us. However, as Christians we are not called to an easy life. That does not mean that we should always seek out the hard way, but we shouldn’t become entangled in false promises of an easy way.
To get Economics in One Lesson as a free pdf book, click here.
Adult non-fiction, Book Reviews, Economics, Uncategorised
Christian Economics in One Lesson
by Gary North 2015 / 268 pages Henry Hazlitt’s Economics in One Lessonis what its title suggests, just one economic lesson explained in the first chapter – that we focus on the obvious impact of a government program, and don’t consider what otherwise might have happened with those dollars. It’s the seen vs. the unseen. That one lesson is then repeatedly applied to different situations in the 24 chapters that followed. In chapter 4 it is applied to public work projects: when the government builds a new sports stadium we can see the job created by its construction. What’s unseen is all the jobs that might have been created by businesses if they hadn’t had to pay the taxes to build that stadium. Overall, Hazlitt is making a general argument for less government and more economic freedom, but is making it on the basis of practicality: that a free market approach will make us all, overall, more prosperous (download the book for free). Effectiveness is the fruit, not the goal In his Christian Economics in One Lesson, Gary North makes his argument for free market economics on a very different basis: obedience. He also thinks the free market is the most effective way of making us all richer, but he sees that, not as a goal, but as a side effect – the fruit – of being obedient to God’s commands do not covet, and do not to steal. As his title suggests, he is riffing off of Hazlitt, and his chapters are reworking of each of Hazlitt's. Economics is sometimes treated as a being simply about the math, about some sort of neutral accounting, pitting the different economics systems against each other to find out which creates the greatest benefit for society. Both socialists and capitalists could even agree that economics is about dealing with the problem of scarcity – there is only so much to go around, so how do we make the most of it? But North is arguing that economics is really a matter of ethics, and applying God's guidance on money, work, property, and covetousness to the real world. Then the better way is the way that obeys God’s commands. Now, like Hazlitt, North thinks the best system is the free market, and not the sort of so called capitalism that involves getting government contracts and special favors. None of that crony "capitalism." This is, instead, a free market where people make exchanges voluntarily, and consequently both sides benefit. No temptation to tweak But even as Hazlitt and North both hold to the free market system, it is significant that they got there very different ways. Hazlitt got there because the free market works – it is the most prosperous of all systems, doing more to raise people out of poverty than any other economics systems before it. North arrives there because the free market is what results when we are obedient to God, respecting our neighbors property and pushing back against our own covetousness. So, both support the free market. But those like Hazlitt who arrived there for practical reasons, there will always be the temptation to tweak, and in doing so, succumb to socialism. If capitalism works best, whose to say if capitalism plus just a smidge of socialism might not be better? Maybe just 5%? Or 10? How can we know unless we try? But there isn't the same temptation to tinker for Christians who choose the free market for its alignment with God's Word. We won't want to be 5% or 10% less obedient. And it is worth noting, it is no coincidence that the economics system that most aligns with God's Word is also the one that best raises people out of poverty. That's simply God's love – He knows what is best for us, and when we obey, especially when we do so on a societal level, it goes better for us. Conclusion North's insight – that economics is about ethics, not efficieny; it is about obedience, and not prosperity – is a brilliant insight, and worth the reinforcement that comes in the repeated applications that follow. If this isn’t the most important book I’ve read this year, it is certainly in contention… and it can be downloaded for free here....
Economics, Human Rights, Satire
On achieving equality...
I was recently confronted with the disturbing statistic that evidences the ultimate case of gender inequality: the life expectancy of males is 6.1 years lower than that of females. This phenomenon must be properly discussed. What is a more valuable commodity than life? Nothing, I would say. And yet females habitually possess over 8 percent more of it than men. It is clear that when it comes to life, there is no level playing field in our society between males and females. I, therefore, call upon the government to take measures to empower men to overcome this glaring inequality. What we need is legislation, programs, and lots of funding. First of all the government should enact human rights legislation which will unequivocally state that males have the right to the same life expectancy as females. This legislation will empower the government to make proactive adjustments in Health, Social, and Education programs. I would like to share with you the following suggestions for such adjustments. An immediate transfer of medical research dollars from female diseases to male diseases. The inclusion of a mandatory life expectancy rights component to be taught in all our schools starting at the kindergarten level. The appointment of kommissars (also call commissioners) for each federal and provincial ministry who are to scrutinize all proposed legislation for life expectancy bias. Mandatory sensitivity training for all our judges to ensure that crimes against women are not more discouraged than crimes against men. Mandatory affirmative low-stress jobs action for all businesses employing more than 10 people to ensure that men will be employed in at least 50 percent of such jobs. The creation of Men's Issues Department at both the federal and provincial levels. Thus far my suggestions. If we do not want to lose the image of Canada as a caring and nurturing society we had better implement these suggestions regardless of costs. Of course, some naive people may suggest that it would help if men changed their lifestyle by smoking, drinking, fighting, and fornicating less, and by being more spiritual and less macho. However, though in the past this might have been a solution, we now know that we can only lead fulfilling lives if we are true to ourselves. Since institutions of education and our public media zealously indoctrinate the populace with this new gospel, it would be futile to appeal to "the man kind" itself to heal the wound of life expectancy; the government is our only hope. This post first appeared way back in the May 1999 issue, but doesn't it seems like it was written for today? As Christians we believe God calls us not to be partial to rich or poor, black or white, young or old – He calls us to equality. But what kind of equality does God call us to? Is it an equality – as is called for in this article – of outcomes? Or is the equality meant to be in how we treat people? The world says the former, but God is calling us to the latter (Leviticus 19:15, James 2:1-9, Acts 10:34)....
Economics
The art of the apology
In the middle of a leaders’ coaching session, focusing on how they engaged in difficult conversations with their teams, I began to notice a theme. These leaders were frustrated with the lack of ownership for bad attitudes on the part of some of their team members. I was also not “hearing” much, if any, sense of ownership regarding their own attitudes with these frustrating team members. I asked a couple of questions: Have you ever delivered a “bad” attitude in response to a team members’ “bad” attitude? What did you do when you realized your error (assuming you did)? Most in the group had not done anything regarding their own gap in attitude. Another question was asked: When is the last time you offered an apology to someone with whom you made a mistake? To my very great surprise over half of the group had never apologized – EVER!! Even the boss isn't perfect This was a group of leaders with spouses, kids, involved in the community and entrusted with the leadership of people in the business they were helping to lead. How could this be? This was a group in which almost all claimed faith in Christ and yet most had never owned up to their mistakes at work, home, or in their communities. It became clear that something was really wrong! The lack of character in this group was troubling. The feeling of unease became palpable as they realized the hypocrisy of what was just confessed. I felt for them. The planned agenda was dropped and I proceeded to “teach” this group the “Art of the Apology.” Until they were willing to model the way and “own” an error in judgment or attitude, there was little sense in teaching anything else. Before going further, I admit that in teaching the “Art of the Apology” it is not because I have it all figured out or find it easy to do. To be authentic and consistent has required much inner work on my part – and this work is surely a lifelong journey! Our egos, left to their own devices, crave being right, being in charge, being in control. However, the way of our God & His kingdom is so very different. His way is one of letting go of those human drives and humbling oneself before Him and others. His way is one of fully embracing one’s identity in Him. When we find ourselves in Him our sense of security and significance is bolstered. Our capacity to love, and not operate with fear, is strengthened. Because of Him we can own our mistakes and take the needed steps to apologize, forgive and potentially reconcile. 9 important words On June 15, 1985, my good friend Luch Delmonte spoke at my wedding. In his charge to me and my bride, he included 9 words. He repeated these same 9 words at the weddings of each of our 4 kids. How’s that for a legacy!! Here are the 9 words that can change your life should you choose to live them: “I am sorry, I was wrong, Please forgive me!” These 9 words have provided such a wonderful framework to help ensure relational ease at work and at home. I cannot imagine the impact on me and on others without them. Can you? A Deliberate application When is the last time you apologized for an attitude, words, and/or actions that were “offside”? How did you know they were “offside”? Describe what you were sensing in you and between you, God, and the other person? What does your internal conversation sound like when you work at avoiding an apology? What keeps you from living out Romans 12:18 – from taking responsibility in helping ensure peace between you and others? If you are responsible for any part of a relational disconnect, what is your part? When will you approach the person and offer the 9 words? This is the 7th in a series on “Leadership of People and Culture” that have been appearing on the DeliberateU.com blog, and it is reprinted here with permission. DeliberateU is a Christian business leaders mentorship group. ...
Economics
The hidden tax of inflation
Prices are on the rise in many countries around the world. Price increases are measured by a statistic called inflation, which expresses the percent prices have increased on average over some period of time. Canada saw its highest rate of inflation in over a decade in July when the annual pace of inflation hit 3.7%. Compared to the U.S., though, Canada is in a relatively good spot. The Consumer Price Index (CPI), which measures inflation by comparing a fixed group of goods over time, rose to 5.4% for the month of July. This ties with June’s numbers for being the largest rate of price increase since 2008. An alternative measure of inflation, the Personal Consumption Expenditures Index, reached its highest rate in 30 years. Economists have mixed feelings about how long inflation will last, but one thing is clear. Prices are on the rise, and you’ve likely noticed your money isn’t stretching as far as it used to. So why is this happening now? Well, Nobel-price-winning economist Milton Friedman famously commented, “inflation is always and everywhere a monetary phenomenon.” In other words, if you want to see why prices are rising, follow the money. Money-printing mania When a central bank prints more currency and puts it into circulation, those who get first access to the money are in for an unexpected payday. So, what will they do with this new money? Well, some of it will be saved, but some will be spent. Suddenly the newly printed money in your pocket might let you buy something you’ve had your eyes on for a while. The store then generates more revenue which can go to investors or paying new workers. So, spending increases, and this might not sound so bad so far. But this is when the problems began. As that new money goes into the pockets of new workers or investors, they spend some of it too. But, as demand increases while this new money circulates, prices begin to rise. There are more dollars in the economy, but the same amount of stuff. So, the value of dollars decreases relative to the value of goods and services. Money loses some of its value, and prices rise to reflect the money’s lower value. When the central bank prints money, it creates this process whereby money loses its value. This is exactly what’s happening around the world. In Canada, a common measure of the quantity of money in circulation shows an increase from $1.8 trillion at the beginning of 2020 to $2.2 trillion today. That’s approximately a 22% increase in the quantity of Canadian dollars in circulation in less than two years! As you might expect from the higher rate of inflation, the increase in the supply of US dollars has been even more alarming. The supply of US dollars has increased by 32% in the same period. Nearly one-fourth of all U.S. dollars in circulation today were printed since January 2020. This money printing, unprecedented in recent history, was in a large part to prop up economies being damaged by COVID-19 lockdowns. However, we’re beginning to feel the effects of this temporary solution, and Christians should recognize the consequences of money-printing. Inflation hurts savers… especially among the poor The problem isn’t simply that, after a period of having more money, consumers now have to face higher prices. Remember, the first person to receive new dollars is able to benefit from spending them. However, as the money circulates more, prices begin to rise. This means not everyone gets the benefit from this newly printed money. And this new money comes at a cost. As prices rise, the money in people’s savings account loses value too. In this way, inflation acts as a tax on savings. By taking future purchasing power from the thrifty, government can print money and give it to private banks to lend to businesses today. Inflation hurts savers. There are a few work-arounds to this problem. There are financial tools which help savers to shield the value of their money from the degradation to inflation, but, unfortunately, these tools and methods are costly to learn about and utilize. As such, we should expect inflation to be especially deleterious to poor and middle-class savers who don’t have time to focus on protecting their wealth since their weeks are consumed by making enough wealth to survive until the next paycheck. The problems don’t end there. While some have the luxury of a job where pay can be re-negotiated easily, this is not true for everyone. Many jobs involve contracts wherein workers agree to a specified wage rate for a definite period. In this case, not only is the savings account of these workers losing value due to inflation, but the weekly paycheck they receive will also be hurt. If you receive the same paycheck every two weeks, but the paycheck can buy you fewer goods and services due to price increases, you’re worse off. Economists call this a decline in the real wage. Why would the government inflate? So what is the benefit to government lowering the purchasing power of citizens? Well, there are a couple of benefits to government. First, a government can lower its debt burden. Governments often finance spending by selling government bonds. These bonds are promises to pay back the purchaser with interest. When inflation strikes, prices and nominal wages rise. As a result, the amount of tax revenue the government collects increases. This makes it easier to pay back debt which remains stagnant as prices and incomes rise. Second, remember that the “new” money maintains high value before it circulates widely. As a result, government can appease special interest groups in the financial industry by putting the newly printed money into banks first. The new money in banks provides access for large corporations to take the high-powered money out as loans for new projects. Be wary of the inflation tax Christians should be especially wary of the tax imposed via inflation for two major reasons. First, inflation disproportionately impacts the poor. When prices on everyday goods like groceries, energy, and transportation rise, this disproportionately hurts the poor. While 5% more expensive food is a relatively small increase for a millionaire, food can easily make up a huge percentage of monthly pay. Someone living paycheck-to-paycheck can’t afford a rise in prices. Further, the wealthy often receive income through financial assets like stocks. Stock prices also tend to increase during times of inflation, so the income of the rich stays relatively stable. The poor, often locked into prior wage agreements, don’t see their incomes rise immediately with inflation. Second, inflationary policies encourage behavior the Bible explicitly calls foolish. Proverbs 21:20 (ESV) tells us, “precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.” This verse is descriptive. A fool consumes all of his wealth, whereas a wise man saves it in his dwelling. However, remember that inflation destroys the value of savings. If someone was keeping $1,000 in savings, and a grocery store trip costs $200 before inflation, and $250 after inflation, the saver goes from being able to afford five trips to being able to afford four. If instead, the consumer had used the $1,000 to buy a new flatscreen TV, inflation would not have had any effect. This example illustrates an important point. Because inflation taxes savers, it discourages frugality and encourages consumerism. Why save for tomorrow if money-printing is going to make savings worthless? Unfortunately, monetary policy is hardly, if ever, discussed on political debate stages let alone Christian churches. However, if we believe our role as Christians in democracy involves looking out for the poor among us, we should watch out for policies which seem tailor-made to harm their interests. Peter Jacobsen is an Assistant Professor of Economics at Ottawa University and the Gwartney Professor of Economic Education and Research at the Gwartney Institute. He has previously written for both the Foundation for Economic Education and the Institute for Faith, Works, and Economics. References https://fred.stlouisfed.org/series/M2SL https://ycharts.com/indicators/canada_m2_money_supply...
Economics, Movie Reviews, Watch for free
Love Gov: Breaking up with government is hard to do
Here's something new: an economic argument for small government presented as a comedic drama. And Love Gov is a romance too, sort of. Alexis is thinking of quitting college to start her own business, but then she meets the strangely charming Scott Govinsky (known as "Gov" to his friends). To compliment her ideas, ambitions, and drive, Gov is so very caring and supportive. And eager to help. And he never seems to runs out of advice. Perfect material for a boyfriend? Alexis thinks so...at first. The problem is, Gov's advice isn't nearly as helpful as it seems. If you haven't figured it out yet, Alexis' boyfriend Gov is a stand-in for our government, which wants to mind our business because it cares for us so deeply. But as much as the politicians and bureaucrats might mean well, that doesn't mean they are doing well...which is what Love Gov tries to show. CAUTIONS The series' producer, the Independent Institute, is not a Christian organization. So, even as they are for limited government, they might be for less moral restraint too, as evidenced by the little boy at the very beginning (who has only the briefest of roles) wearing a shirt with a transgender rainbow on it. A more notable quibble: because Love Gov is humorous, some of its serious points are made in an over-the-top manner, which could prompt the cynically-inclined to discount those points entirely. So it's important to pitch this to friends properly: introduce it to them as the light-hearted discussion-starter it is, and don't present it as any sort of weighty "final word" on the issues it raises. CONCLUSION The overall argument being pitched is for smaller government. While the group pitching it isn't Christian, there's a lot here for Christians to love, since we should also support limited, and thus smaller, government. Why? Because God has given different responsibilities to different types of "government." The "governments" we're talking about here are not of the municipal, provincial, or federal sort but rather family government, Church government, and yes, State government too. We can throw in self-government as well. These types of government are all appointed by God to take on different roles, and while who should have exactly what role can sometimes be difficult to discern, one type of government can only gain more power and influence at the expense of the others. Which type of government is the most expansionist? The State. Its influence in our family life, the education of our children, regulation of business, management of healthcare, direction of the economy – that reach is already enormous. And just as the State's expansion into education came by shrinking the parental role, so too its expansion into other areas comes at the expense of other levels of "government." That's why Christians should want a limited government; because we know that God didn't intend for us and the other types of government to abandon our roles and responsibilities to the State. Another reason for a limited government? When the State takes on jobs God never intended for it they will tend to mess things up. Good intentions simply aren't enough (Prov. 27:14); a good dose of humility about what the State can do, and shouldn't even try to do, is also vital. Episode 1: An education in debt (6 minutes) Alexis wants to quit school to start up a business and start paying off her student debt. Then she meets Gov, who encourages her to stay in school "because there's nothing more important than your education." What about that student debt? Gov assures her, "You are going to have a lifetime to pay off debt...a lifetime!" The Bible likens debt to slavery (Prov. 22:7) – it limits your ability and freedom to do what you otherwise might want to do. Episode 2: Protection from jobs (5 minutes) After Alexis graduates college she decides to pursue her small business idea. Gov is, once again, happy to help, though this time coming to the "aid" of employee Libby. Regulations are brought in with the intent of protecting workers. But regulations also make it harder and more expensive to hire workers: One estimate concerning Canada's tech industry had a 1% increase in regulations leading to a 5% decrease in business startups. The tradeoffs that come with government "protections" are often overlooked. Episode 3: A remedy for healthcare choices (6 minutes) Alexis is looking for a new healthcare insurance plan, and Gov knows best. Meanwhile, Libby argues that choices and options and free market competition could produce healthcare for less. In his documentary Wait Till It's Free, Reformed filmmaker Colin Gunn makes that same argument. Episode 4: House poor (6 minutes) Alexis goes house-hunting and mortgage-hunting too, only to discover that Gov has been spending her money, putting her tens of thousands in debt. In Canada accumulated provincial and national debts average out to $40,000 CDN per citizen while in the US just the national debt works out to more than double that at $80,000 US per citizen. Episode 5: Keeping a close eye on privacy (5 minutes) While Alexis and Gov aren't together anymore, he's still keeping tabs on her – breaking up with "the Gov" proves very hard to do. This series came out soon after Edward Snowden revealed that the United States' National Security Agency (NSA) had been spying on its own citizens, though generally in aggregate – it viewed all the captured data as a whole, not tying it to specific people. But Snowden also shared that should the government want to look at your specific data it could do that too after getting a judge's approval...which was always given....
Economics
Thinking in terms of tradeoffs rather than solutions...
In a June 2 Facebook live discussion with fellow Conservative MP Garnett Genius, Arnold Viersen outlined two very different ways that politicians tend to approach problems. “One of my friends points out that the progressive vote thinks in terms of solutions, and the conservative thinks in terms of tradeoffs. And you can see that even in the COVID response. The progressives: ‘We have got to stop the spread of COVID!’ The conservative will much more think: ‘We have to trade off one health concern for another health concern.’ For example, in Alberta we’ve had, I think, just about 150 deaths from COVID. But in the same time period we’ve had 37 deaths from a lack of heart surgeries. And that’s a tradeoff that we’ve made. It’s not necessarily talked about. But that is the tradeoff.” That’s a fantastic point. And while Viersen framed it as a conservative vs. a progressive way of thinking, it might better be framed as a Christian vs. secular way of thinking. It is the Christian, after all, who knows why we should be acknowledging that our best efforts will always be trade-offs, rather than solutions for all. It comes down to our more accurate understanding of the world and of our own capabilities. For the secularist, G.K. Chesterton noted, “Once abolish God, and the government becomes God.” Refusing to turn upwards, the secularist is forced to look sideways for a savior, landing on the government because there is no more powerful human institution. But fallible, fallen, limited Man isn’t savior material, no matter what level of power he attains. So the secularist can only continue placing their hope in government by disregarding the limited nature of Man’s capabilities and character. Then they look for solutions rather than trade-offs because it has become their habit to overestimate what Man can do. The Christian, on the other hand, has no need to gloss over Man’s limitations. We also understand that time, money, and every other resource, are limited too, such that we need to count the cost before setting out on an endeavor (Luke 14:25-34). And, finally, we know that in this sin-stained world perfection is impossible. That’s why anything we do will always be a tradeoff, with one of the most common being that resources used for one purpose, can’t then be used to some other end. As Viersen pointed out, when most governments first proposed the lockdowns, we didn’t hear about the other health costs that would come along with doing so. Overall the situation was presented as being lives vs. money, and given that sort of tradeoff, then the choice was clear. And even as an economic tradeoff was noted, the government had their “solution” to that too – they were going to hand out money and lots of it, and we didn’t hear of any downside to doing that. However, it wasn’t just lives vs. money. The reality was that it was lives vs. other lives. There was a predictable, but overlooked cost that would come from heart surgeries, and other vital medical treatments, that were cancelled or delayed due to our COVID-19 response. There was also the physical and mental health concerns that come with unemployment on such a massive scale. Those weren’t widely acknowledged tradeoffs. Going forward, one hard-earned lesson we can take from this strange spring is to question whatever “solutions” we are offered (Prov. 18:17). As Christians, we can apply our God-given insights about the nature of Man, and our world, and help those around us by posing the important questions that spring from our better understanding. We can gently yet firmly ask: “What is the trade-off?” and “What are the costs you haven’t yet mentioned?” Because there will be such costs. In this finite, fallen world every proposal will always involve tradeoffs. ...
Economics, Watch for free
It's A Wonderful Loaf: why free enterprise makes bread in abundance
In the illustrated economic poem below, the author shows how the free enterprise system – with supposedly no one in control – can deliver bread in a great variety, and more cheaply than a socialist system. A socialist system would have some "bread czar" making decisions about what sort, and how much, bread would be made, but then he'd also have to decide how much rye or wheat would have to be planted, and also what other crops would have to be curtailed to make room for the wheat crops. To keep everyone happy, from the rye lover to the white bread aficionado, to the gluten intolerant chap, the number of decisions this bread czar would have to make would be beyond the ability of any single human being – or even a government department – to manage competently. The video is fantastic, but it's missing something vital – the author, Russ Roberts, doesn't see the Christian connection. He says that the ability of the free enterprise system to deliver hot, fresh, affordable bread in an abundance of varieties each and every day is something "no one intends" and "no one has to orchestrate it. It’s the product of our actions but no single mind’s designed it." The truth is different. No human mind designed it, but the foundational principles of the free market system – what makes it work – are Christian principles given by God. Do not worship other gods – Whereas the 1st Commandment (Ex. 20:3) teaches us not to turn to other gods, Socialism is dependent on someone at the top being near-omnipotent, knowing all the right moves to make for the betterment of everyone. Don't steal – The 8th Commandment (Ex. 20:15) make clear God's intent for us to be able to own property, while Socialism takes away property rights. Don't covet – Socialism wants to know what everyone makes while the 10th Commandment (Ex. 20:17) forbids us from looking over the fence to see what our neighbor has got. This commandment frees us to develop what God has given us (Matt 25:14-30) instead of minding our neighbor's business. Other biblical texts could be highlighted and explored but the point is, the reason the free market works as well as it does is that, in these commandments and more, it better lines up with what God commands. And when we obey these commands, then His is the "invisible hand" guiding farmers, mills, bakers, and consumers to arrive at this wonderful loaf. (h/t to Albert Van der Linden)...
Economics
Two tales of trade: how free trade creates wealth
As Christians we know that man is prone to all sorts of evil, but we often forget that man is also prone to all sorts of stupidity. Much damage is done by well meaning people who embrace a bad cause – they aren’t trying to do evil, just the opposite in fact, but evil is done because these “good” people are acting out of their ignorance. In Economics this well-meant ignorance often causes serious harm. One telling example involves child labor. We abhor child labor, especially when the alternative is sending these same kids to school instead. But some years back, when a compassionate campaign against child labor moved Nike and Reebok to close plants in Pakistan and lay off 50,000 child workers in Bangladesh, these children didn’t go to school instead. The reason they were working in the first place was because they needed the very basics of life, so when they were laid off, thousands of them turned to prostitution, crime or simply starved to death1. Compassion, coupled with ignorance, forced these children from a barely tolerable situation to one that was much, much worse. Youth are even more susceptible to doing the wrong thing for the right reasons. Enthusiasm combined with inexperience results in an ardent teen who just wants to “Do something!” and off they go, in exactly the wrong direction. Christian youth might be even more inclined to this, since they know that “the love of money is the root of all kinds of evil” (1 Tim. 6:10). That seems to leave them prone to a specific type of economic error – some are deeply suspicious of the rich and their own rich First World countries, convinced that when a rich country trades with a poor country, if the rich get a good deal, it must have been at the expense of the poor. This in turn leaves them leery of free trade. The truth is, it is not through trade, but through the lack of it that rich countries victimize the poor. Now, if there was only a fixed amount of wealth to go around, then any country that got more wealth could only have done so by taking wealth away from someone else. But wealth can be created – there can be more to go around. And trade is one important way to create more wealth. Create wealth via trade? How can that be done? Let me demonstrate by way of a couple of illustrations. How trade creates wealth One day, in his economics class, a university professor was trying to explain to his students the benefits of trade. After lecturing on the subject for an entire week he found his students were still unconvinced. Thinking about it over the weekend he had a flash of insight and headed down to the local dollar store where he bought a range of small inexpensive toys. He bought 20 different toys in all, ranging from a whoopee cushion to a bag of marbles. When the students entered their Economics 101 classroom that Monday they were each given one of the small toys. Most of the students thought their presents were kind of neat, all except for the girl who received the whoopee cushion. She wasn’t quite sure why, but she was offended. The professor then began the class by asking each student to rate their present on a scale of 0-5 with a 5 meaning they really liked it. The twenty students gave their presents a combined rating of 38. The whoopee cushion girl rated hers a zero. Then the professor allowed the students five minutes to trade their presents...but only with students immediately to the right or left of them. The unhappy whoopee cushion girl managed a trade with a frat boy to her right, for a pack of giant playing cards. She was much happier with the cards, and the frat boy was strangely ecstatic with his new possession. Five minutes later the students were asked to rate their presents again, and the combined rating improved to 56. The frat boy gave his whoopee cushion a five. Finally the professor allowed the students to trade with anyone in the room. Once again the overall score went up – the combined rating after this exchange was boosted to 72. From round one to three, no new products were created, and yet people rated their toy higher each round. To put it another way, after making trades they felt what they were left with was worth more than what they originally had. They were getting wealthier. And the freer the trade, the more students were able to obtain what they really wanted, by doing just as the whoopee girl did, offering in exchange something they didn't value as highly. With the trading completed, the professor was overjoyed – his students finally understood how trade could create wealth! He let out a contented sigh and dropped down into his chair…which then produced another, decidedly more rude, sound. The frat boy loved free trade. ****** When I first published this illustration in the Canadian Student Review some students responded by insisting that while trade might benefit First World countries, that didn't mean it was good for everyone. They argued it didn't help the poorest countries since they have absolutely nothing of value to offer in trade. This objection simply isn't true. Whether it is natural resources, or simply cheap labor (even cheap child labor), every country has something to offer. It is true that wars, and corrupt governments, may make it impossible for citizens of a particular country to engage in trade. But that doesn't underscore a shortcoming with free trade, but instead highlights the devastating impacts of wars and corruption. So, as a response, I ended up writing a second story to illustrate how free trade would help even when some countries have much less to offer than others. How trade helps even poor countries It was a regular lunch hour in Mrs. Embargo’s grade 6 classroom and the kids were trading their snacks behind the teacher’s back. One of the kids, Ulysses Sam Austin (USA for short) always had at least a hundred Oreo cookies. He had so many he didn’t value them like he once did when his mom only packed five or ten in his lunch. Canada’s mom (some kids have names like Dallas and Dakota, so why not Canada?) always stuck an entire banana bread loaf in his lunch. The other kids weren’t quite so well off, and had a variety of snacks ranging from a handful of chips to a couple of carrot sticks. The carrot stick kid desperately wanted some banana bread because his mom didn’t have an oven so she couldn’t make it. It took a bit of bartering but eventually he managed to trade one of his carrot sticks for a small slice. It wasn’t a lot, but it was more than he could have gotten any other way. USA was getting quite sick of Oreos and was practically giving them away. It wasn’t that he was softhearted – some even accused him of being the class bully – but he had a surplus of cookies, and they weren’t very useful to him. He traded ten of them to the carrot stick boy for his last carrot. The next day Mrs. Embargo decided to crack down, “You children are going to have to eat what your parents packed in your lunch!” That made all the children very sad: USA because he was now stuck with only Oreos, Canada because he had nothing orange to eat, and especially the carrot stick kid, because Mrs. Embargo’s protectionist stance prevented him from trading for the banana bread he loved so dearly. ****** The truth is, it is not through trade, but through restrictions on trade that rich countries victimize the poor. In this illustration, without trade the poor carrot stick kid/country would never have gotten a slice of banana bread, as he was completely incapable of manufacturing it at home. In the real world, poor countries in Africa can produce some agricultural goods at a lower cost than we can in the West, yet instead of allowing them to compete with us, we may well slap a tariffs on their goods, in addition to spending billions on subsidizing our farmers. As columnist Elizabeth Nickson puts it, “these barriers dramatically reduce what poor countries can earn from farming, which is what most of their people do." She went on to note that, back in 2004, it was "estimated that protecting our markets from African produce costs these countries $100 billion US a year, or twice what they receive in aid.”2 Free, fair trade is a win-win prospect for both sides – the poorer nations wouldn’t trade at all if they didn’t think they were getting a benefit. And if we as Christians want to help the developing world in a substantial manner – far in excess of any material good we can do through our charitable giving – one of the most compassionate things we can do is tell our government to reduce tariffs and agricultural subsidies that, while helping our own farmers, do so at the expense of the poor. End notes 1 “Green power, black death” by Elizabeth Nickson, National Post Jan. 9, 2004 2 “Green power, black death” This article was first published in Feb. 2004 in Reformed Perspective magazine...
Economics
A sad tale of a wealthy millennial’s moral confusion
A few years back my wife heard a young woman share that she had felt guilty for being able to go out to dinner with friends in Chicago. She knew her mother, still living in South Africa, wasn’t able to dine out like this. When she later told her mother about her feelings during a phone call, her mother was having none of it. She told her daughter that gratitude, not guilt was the appropriate response to God’s blessings. The young woman was told that she should thank God for how she’d been able to immigrate to America, and she could also pray and work for a time when South Africans, and others around the world, would enjoy blessings similar to those she was experiencing now in America. Is wealth immoral? I remembered that story the moment I began reading about Adam Roberts, a Millennial who in his Vox article “Is wealth immoral?” expressed his sense of guilt and injustice at having inherited over a million dollars as a child of wealthy parents. “As I got politicized around things like wealth inequality, climate change, war, and the forces connecting them, I didn’t connect it too much with my own family or history,” he wrote. But then he came to understand things differently. He confessed, as if they were sins, that his family had gained wealth through the oil industry, banking, and stock in companies that built things for the military. His parents had given him stock in ExxonMobil, BP, and Chevron – another reason for guilt. As he became active as a “community organizer” in Boston, “no longer surrounded by wealthy peers,” it “felt absurd … to have access to so much when so many others didn’t.” “As a result,” he wrote, “I got real weird about money. I’d barely spend any of it.” He’d walk instead of taking Uber. Spending of $300 a month for prescription drugs for his mother-in-law was okay, but he was conflicted about putting down $30,000 on a house or spending $6.99 for a bag of popcorn at a theater. So he offset those two by contributing $30,000 to a land trust and declining to get a soda refill. But such things, he believes “are imperfect, individual actions.” The whole system that allows people to amass such wealth while others struggle is “immoral.” Everyone, he thinks, should have a modest first home, but nobody should have a “$20M mansion in Newport, RI,” a second home if anyone else is homeless, or a third (or fourth or fifth). Nobody should buy a new $799 sofa when he could buy a used one, and nobody should have a yacht – at all. “Is it moral to hold any excess private wealth under capitalism?” he asks – and later reveals that it’s not. “Does it matter how that wealth was accumulated?” He offers four examples: fossil fuels, medical doctor, useful invention, or stocks. He draws toward his conclusion by writing: “In a system that produces a handful of people with billions of dollars while hundreds of millions of people still lack access to basic human needs like health care and affordable housing … the question isn’t what billionaires should do with ‘their’ money. It’s how to enact policies that prevent any one person from concentrating that much wealth and power in the first place.” He recommends “taxing wealthy families like mine a whole lot more” because it’s “totally happened in the past,” it’s “part of the Green New Deal,” and it’s “widely supported.” At the level of individual choices, he reports that he’s donated roughly a third of what he inherited to charitable causes and intends to donate another third. “For me, it feels like part of becoming more connected and alive on this planet,” he says. Good motives; bad conclusions How should we respond to such thinking? Certainly not by condemning Roberts’s motives. It’s refreshing to see someone born rich who cares about those who weren’t. His charitable giving is to be commended, as is his self-restraint. And, frankly, as I read his article (accompanied by brilliant illustrations that drive home his points), my heart went out to him. Nonetheless, there are serious problems with his thinking. Is “wealth inequality” unjust by definition? Why, then, hasn’t he already divested himself of everything he owns except what would equal the average net worth of people around the world? How can anyone buy a used sofa – or any sofa at all – if nobody buys a new one? What constitutes a modest first home – something typical of Corinth, Mississippi, where median home value is $105,900? Or of Boston, where Roberts lives and the median home value is five-and-a-half times as much, or Manhattan at eleven times as much, or San Francisco (tack on another hundred grand)? Or – let’s get real now, and care about the whole world, not just wealthy America – is $1,000 a square foot, common in Boston, “modest,” or $99 (7,000 rupees) a square foot, common in Bengaluru (Bangalore), India’s “silicon valley”? Or next to nothing for the cardboard shacks in which millions of the poor of Africa, Asia, and Latin America live? And what’s the dividing line between a moral system and an “immoral” one that allows people to amass such wealth while others struggle? Is personal net worth of $10,000 okay, but not $11,000? Or $250,000 but not $300,000? What objective standard justifies where Roberts draws the line? And what is “excess” wealth? Consider millionaires and billionaires – the sort of persons Roberts thinks “the system” should disallow. What do millionaires and billionaires do with their “excess” wealth? Well, they might buy stocks or bonds – providing the capital to pay workers, equip them with expensive tools that enable them to produce the food, clothing, shelter, transportation, medical care, and other benefits still other people need. They might buy a second or third house (or a yacht, or a private jet), construction of which employed workers whose wages provided food, clothing, shelter, transportation, medical care, and other benefits to themselves and their families. Maybe they’ll just stick it in a bank account – from which the bank will make loans to companies that will employ people to make things that benefit others. About the only thing they can do with it that will be of use to nobody is hide it under the mattress. (Let me know if you run into a millionaire who does that. I’m curious to meet such an eccentric.) It’s pretty clear that Roberts thinks there’s something particularly immoral about accumulating wealth from fossil fuels. Yet using those fossil fuels has lifted billions of people out of the poverty that breaks Roberts’s heart by providing not only energy but also plastics that prevent foods from spoiling; fertilizers that allow farmers to grow more food on less land to feed the growing human population while leaving land available for wildlife; pharmaceuticals that heal diseases; and literally thousands of other products derived from them. And when he bemoans fossil fuels’ contribution (however great or small) to climate change, does he weigh that against all those other benefits from them – plus the roughly $3.2 trillion in extra crop yields the CO2 emitted from them added to global crop yields (making food more available for the poor) from 1960 to 2012, with another $9.8 trillion expected by 2050? Medical doctors, whose method of accumulating wealth it seems Roberts favors over fossil fuels, would be severely handicapped without fossil fuel-derived medications (maybe including some his mother-in-law takes), not to mention the electricity that lights their operating rooms and powers their refrigerators to preserve their medications, their MRIs, and every other high-tech invention that enables them to restore people’s health and prolong their lives. How many of the things that raised human life expectancy at birth from about 27 or 28 years before the Industrial Revolution to about 70 today worldwide (and 80 in developed countries) would have been developed if no inventors, innovators, or entrepreneurs could have received any more rewards for their efforts than those who dug ditches (an honorable task but not highly rewarded) or just sat on their haunches? For some, wealth is a problem When a rich ruler asks what he must do to inherit eternal life, Jesus tells him to obey God’s commandments – something the man says he has done from his youth up. “One thing you still lack,” Jesus says. “Sell all that you have and distribute to the poor, and you will have treasure in heaven; and come, follow me.” The man leaves sad, prompting Jesus’ remark, “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” – i.e., impossible. But, He explains, “What is impossible with men is possible with God” (Luke 18:18–27). So does that justify Roberts’s feeling guilty about his inherited wealth, and demanding that “the system” be changed to prevent anyone’s amassing “excess wealth” while others struggle? Charity is good, and so is investment No, for in the very next chapter, when Jesus encounters a rich tax collector who says that he will give half his goods to the poor and restore fourfold anyone he has defrauded, Jesus responds, “Today salvation has come to this house, since he also is a son of Abraham” (Luke 19:1–10). So which is it? Must one give everything away, or half? Or is there a different point entirely – wealth takes the place of God for some people, and must be given away entirely, but not for others. After that encounter, Jesus tells a parable about a nobleman (who represents God) who entrusts money to each of ten servants and instructs them to engage in business until he returns. On his return, the servants report their performance. The first has multiplied the investment ten times, the second five times. He rewards them proportionately. The third servant says, “Lord, here is your mina , which I kept laid away in a handkerchief; for I was afraid of you, because you are a severe man. You take what you did not deposit, and reap what you did not sow.” The nobleman, ignoring the obvious lie that he was reaping where had not sown, responds, “I will condemn you with your own words, you wicked servant! You knew that I was a severe man, taking what I did not deposit and reaping what I did not sow? Why then did you not put my money in the bank, and at my coming I might have collected it with interest?” Then he instructs others to take the money from him and give it to the first servant. “Lord,” they protest, “he has ten minas!” And the master responds, “I tell you that to everyone who has, more will be given, but from the one who has not, even what he has will be taken away” (Luke 19:11–27). God condemns injustice, not wealth The Bible has much to say about the need to protect the poor from oppression and to give charitably to help those who cannot help themselves. But nowhere does it condemn wealth. Indeed, some of the most important of God’s people were wealthy – Job, Abraham, Isaac, Jacob, Joseph, David, Solomon, Joseph of Arimathea, and wealthy women who provided for Jesus and His disciples. The Bible condemns greed, selfishness, and injustice – but it never equates injustice with inequality. Adam Roberts’s confusion is sad, for it means he encourages not only envy and resentment toward many whom God has blessed but also false guilt on the part of many, including himself, who are blessed. By all means, whether you consider yourself rich or middle class or poor, give to the poor, and work to protect the poor from injustice. But don’t condemn all inequality as injustice, and don’t feel guilty for the gifts God has given you. Calvin Beisner, Ph.D., Founder and National Spokesman of The Cornwall Alliance for the Stewardship of Creation and a former professor of historical theology and social ethics at Knox Theological Seminary, is author of Social Justice vs. Biblical Justice: How Good Intentions Undermine Justice and Gospel. Questions to consider How does God's "equality" as found in James 2:1-4, and Lev. 19:15 differ with the sort of equality that Adam Roberts wants the government to bring in? How does equal treatment under the law differ from being made equal by the law? (See the comic below). Roberts feels guilty for two different reasons: 1) for being wealthy, and 2) for how that wealth was garnered. As Christians, which of those two could be a legitimate concern, and which is not? Why? Each time money is exchanged for merchandise both parties become "wealthier." When I pay $5 for a book it's because that book is worth more than $5 to me and the merchant gives me the book because the $5 is worth more than the book to him (or else neither of us would make the trade). Amazingly both of us came off the better for the trade. Thus, money gained via legitimate means (piracy and money laundering are both out) represents good that has been done and wealth that has been increased. How should that understanding color our impressions of billionaires and millionaires? How much "good already accomplished" does their wealth represent? The 10th Commandment (Ex. 20:17) says we're not to covet our neighbor's stuff. Is it still coveting if we support a political party that has plans for our uber-rich neighbor's wealth? Explain. Lord Acton's most memorable quote "Power tends to corrupt, and absolute power corrupts absolutely" is based on a biblical understanding of Man's fallen nature. Is this adage a good reason to want to diminish the wealth – and thus the power – of the very wealthy? Or does the 10th Commandment apply even to their power? In Luke 12:48 we read, "...from the one who has been entrusted with much, much more will be asked." Is this passage a good justification for higher taxes on the rich? Is this God speaking to government about what the wealthy need to do, or God speaking to the wealthy about what the wealthy need to do? ...
Economics
A multi-level warning about multi-level marketing
Multi-level marketing’s end is nowhere in sight. Years ago, my personal ministry was. Yours truly accepted the invitation of another minister to jump into the multi-level pool. I stayed just long enough to nearly drown. During that time (and the drying off period which followed), I’ve done much thinking about the nature of multi-level marketing (“MLM”), with particular concern as to whether it is compatible with a lifestyle of devout obedience to the Christ of the Scriptures. My conclusion? There is a way that MLM is commonly done that conflicts at many points with Biblical values. So in what follows I submit several cautions – several lessons I’ve learned – for you to consider if you are involved in or thinking about joining one of these organizations. These points could be summed up as how we don’t want to do multi-level marketing. 1. Competing with the Church The first and deepest caution concerns multi-level marketing’s competition with the Church. From this one grand problem flow many others. This competition is undeclared but it is quite real. Consider, for example, how MLM literature is often liturgical in form. It contains praises for the company and/or its leaders, thanksgiving for its products, testimonies to the greatness of both, confessions of doubts, and even songs of adoration (no kidding). “Church” can meet in small groups (devotionals?) or large auditoriums. In the latter, the atmosphere is truly reminiscent of tent revivals in both program and intensity. Of course, you are urged to bring anyone you can. Every day is “Friend Day” in MLM. Furthermore, their agenda includes fantastic goals which, if truly representative of the organizations’ objectives, are frightening. They are out to “change the world.” Having made a “covenant with life” they are seeking to “infuse…lives with some measure of grace and beauty and purpose and joy.” MLMers are told that they are the “comfort and hope, promise and dream” of the world. Despite attacks or setbacks, these organizations will “survive and prevail(!)” Their enthusiasm is positively postmillennial in intensity. MLMers will often call each other “family.” They are urged to make a 100% commitment to the organization (something God alone can demand). They are encouraged to believe that the more they devote themselves to the plan, the closer they will be to tapping into “a life force of unlimited power.” People claim to have been “born-again,” either through the use of the company’s products or through participation in the multi-level program. They have been “set-free,” made “brand new,” delivered from fears, and are no longer able to hide their joy. Small wonder they can’t resist “sharing the good news”! The list could go on, but this tiny sampling of MLM rhetoric is sufficient to show the Messianic self-consciousness of many of these organizations. They are out to save the world. The problem, though, is that in their view salvation is primarily economic. People are unfulfilled or repressed or depressed because they haven’t got enough money. And this MLM organization will show you how to get it! Their method is (allegedly) guaranteed…but if you don’t get saved, it’s your fault. The impression is certainly given that the method is faultless. When I confronted one MLMer with the fact that he seemed to be saying that his organization was perfect, he quickly retorted, “Oh, no.” But in hours of talking, he yielded no ground. He could not (would not?) see any drawback or downside to his company. The Church should only fare as well when scrutinized by even her most loving critics! To review our first point, Christians need to be wary of MLM organizations that set themselves in competition with the Church by claiming the same mission (they are out to change the world – cf. Mark 16:15), by borrowing heavily from Biblical evangelical terminology (grace, born again, set free, covenant, joy, hope, comfort, sharing the good news, etc.), by pushing an economically-based soteriology (another gospel, my friends – Galatians 1:9), and by presumptuously arrogating to themselves invincibility (“we will prevail” – cf. Matthew 16:18) and possession of the keys to omnipotence (“a life force of unlimited power” – cf. Ephesians 1:18-23). It might be said that the organizations don’t really mean these things, that this is just the kind of hyperbole required to be competitive. But if they don’t mean these things, they should not say them (and they say them over and over and over again). If they do mean what they say, it necessarily makes it exceedingly difficult for Christians involved with the organizations to distinguish between things that differ. Sharing so much vocabulary necessarily cheapens the meaning of the words. When we remember that it is by means of some of these words that we are saved and sanctified, the precarious position of the Christian in such an MLM group becomes clearer. 2. Using friends and family A second concern for Christians involves how MLM can impact the way we view our social relationships. There would be little or no problem with the simple retailing of the products offered by these companies. They are usually as good, or better (though more expensive) than comparable items available in ordinary retail outlets. But, as you’re quick to find out, retail ain’t where the money is. No, the pyramid is climbed primarily through recruiting. You see, in MLM you get a cut of the sales of those recruited by you, and potentially of those recruited by them, and so on, ad pyramidium. Needless to say, you are at least as concerned to bring in the salesmen, as you are to bring in the sales. One Christian MLMer told me it was “just like making disciples” (there we go again). So the danger, then, is, that we start viewing everyone as potential timber with which we can build our little empire. Family members and close friends become the prime targets for you to “bring in under you.” Friends you have not called for 10 years, and casual acquaintances, who have to be reminded how they know you, come next. In MLM, propinquity = profit. But, by grace, the Christian MLMer will know he is in real trouble when, upon making new acquaintances, he doesn’t know which gospel he should seek to share first. If the company’s “support system” has indoctrinated him properly, he will consistently choose to first tell them about his new life in MLM. He hopes that it might lead to an opportunity to share God’s good news sometime in the future. The rationalizations one offers one’s self for this infidelity to God are myriad: “I feel led to share MLM first” / “If this person is among the elect he’ll be saved anyway” / “I’m going to use the money I make for God’s glory” (that was my favorite) / “If we share a business interest I’ll have more opportunities to witness,” etc. A prostitute can be very creative when comforting her conscience (see Proverbs 30:20). To review: MLM is bad news when: 1) it seeks to usurp the role of the Church 2) relationships become exploitation-ships. 3. The god of Mammon Greed can be a temptation in any business venture, but in MLM the amount of money you could make is mentioned again and again. That means covetousness is a real danger (see Proverbs 21:6, 16:8, Mark 4:19, Luke 12:15, 1 John 2:15). It is rather remarkable how few MLMers will be frank about this (though some are). The money can be significant, though – even astronomical, (for a few) – and it is possible to build a profitable business rather quickly. This is because MLM, when the people “under you” make money, you make money. The more they make, the more you make. Everyone is constantly “encouraging” everyone else to go for it. Of course, the difference between greed and simple financial success is not in the amount of dollars amassed, but in what one has exchanged for those dollars. One MLM convention or large rally would reveal what some poor souls have lost to gain what they now, temporarily, have. Superstars in MLM are often unabashedly ostentatious self-aggrandizers. Many of them, sorrowfully, have given up, or reprioritized (which is, after all, the same thing – Ex. 20:3) their first love for baubles, trinkets and the way of death. It is very sad. 4. Competing with the communion of saints A fourth concern is that MLM devotees are drawn into an independent subculture. For Christians, MLM involvement is, in some respects, akin to membership in a lodge. MLM is intrinsically and increasingly esoteric. The fellowship of the saints is usually seen as inadequate. A new club is formed and the password is not the blood of Jesus but the name of your MLM organization. Man is ever finding new ways to put asunder that which God has joined together. Conclusion There is a solemn warning in 1 Timothy that tore at my conscience the whole time I was involved in MLM. I actually avoided looking at this passage because it got too close, penetrating my soul, judging the thoughts and attitudes of my heart. Rather than submit to this passage, I was considering leaving the ministry! Oh brothers, listen to the Word of God. Don’t give heed to the siren song, no matter how sweet, if its lyrics contain an invitation to disobey the tiniest commandment of God. The devil is seeking to devour us, but God has given us His Word for our good and for our protection. Obedience to God’s Word is life! “If we have food and clothing we will be content with that. People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. But you, man of God, flee from all this, and pursue righteousness, godliness, faith, love, endurance, and gentleness” (1 Tim. 6:8-11). Beware of giving heed to the voice of seducing spirits. God has called us to peace, which is found in the pursuit of Himself – not gold. By all means, work hard. By all means, bless Jehovah for the increase He grants the labor of your hands. But never make money your chief pursuit, or you’re dead. Abraham Kuyper was certainly correct when he said, “If you are truly subject to God, money will be subject to you and will not harm you.” But Kuyper demonstrated his balance and wisdom when he added, “If, on the other hand, you undertake to defend yourself against the fatal influence of…money and its seductive power, you are lost before you know it, and deeming that you are your own master, you have found your master in the money-power.” If you or someone you know is considering entering the world of MLM, wait. Before committing yourself to such a lifestyle (for that is what it is), take your time and pray. Consider the points made in this article. If they were made too strongly, modify them, but be sober and judge with right judgment. Look beyond surface claims; look for truth in the inwards parts. MLM organizations usually offer excellent products and most operate with a great degree of internal integrity. But product and corporate reliability, while important, are not the only factors which a child of the Living God should consider before biting at a ten-tiered carrot. If you’re not very careful, you may bite off more than you can chew. A version of this article first appeared in “Messiah’s Mandate: UPDATE, Volume 2, Number 2,” and is reprinted here with permission of the author. Rev. Steve M. Schlissel is the pastor of Messiah’s Covenant Community Church (Messiah.NYC) in Brooklyn, New York. Questions to consider 1. This article presumes Christians want to talk about God with whomever we meet. But is that accurate – are we eager to talk about God? What stops us from talking about God? 2. How are the article’s four cautions applicable to other business ventures? 3. Pastor Schlissel says we should be wary of messianic, save-the-world language because it competes with the real Messiah, and the real Savior. So how should we respond when we hear it elsewhere? Like presidential debates? Or discussions about plastic straw usage? Where else do we hear this kind of language? 4. How would a Christian involved in MLM do it differently than non-Christians? What would that look like? 5. In a report posted to the US Federal Trade Commission website, Jon M. Taylor detailed how, in the 350 leading MLMs he’d looked at, 99% of sales consultants lost money. Taylor suggests that before you join any particular MLM you ask them for: “the average amount of money paid by the company in commissions and bonuses to participants at the various levels in the compensation plan.” If the organization won’t provide this information he suggests, “you should consider that a red flag.” While this isn’t a question, it is worth considering....
Economics
Sales as a noble calling
We might not think of sales as a good job for Christians...but we should ***** Many years ago, when I first arrived in Australia, I was working for a dry cleaner who soon realized that I would never make it as a professional dry cleaner. One morning he asked me what I really wanted to do. When I told him that my ambition was to sell, and preferably clothing, he spoke to a fellow businessman and arranged for me to start working for him. That was my start in the menswear trade. Take a genuine interest The man I started with was a very hard taskmaster, but knew his trade inside out. The lessons he taught me have stood me in good stead. One of the first things I learned from him was to take a real interest in the customer. Customers soon know whether you are interested in them or only in the money they will leave behind. Taking a real interest means listening - taking the time to hear their concerns so you can best meet their needs. For a teenage apprentice that was sometimes a little difficult, especially on a Saturday afternoon when the beach beckoned and you really wanted to shut the shop but the customer had much to share. If I got distracted, or started giving the customer only half my attention, my boss would soon notice and let me know his displeasure immediately after the customer left. So my first lesson was to take a real interest in the customer. Sell only what meets their needs The next lesson: make sure that you sell what suits the customer. Far too often people try to sell what they want to get rid of, or what they have overstocked. Or, they take the attitude anything will do as long as I make a sale. Well, the best way of losing customers is to sell a product for the wrong reason. If you are not a salesperson, you might think this is self-evident. But when the opportunity presents itself to make a big sale it can be rather tempting to sell the product regardless of whether it suits the customer. And lets face it, some customers are far too gullible for their own good, and will buy whatever the charming salesman shows them. So this can be a real temptation. But not only is it wrong, it is shortsighted. You might be able to sell anything to them, but when the customer gets home that night his wife, or his friends will be sure to tell him he got snookered. Once he learns he has misplaced his trust in you, he will no longer be your customer. To meet your customer's needs you need not only to take a genuine interest, but you need to really know your product. That means studying, reading, and listening to others to learn more about what you are selling. I learned the necessity of that especially during the time I was in the insurance business. The client may trust you, but then you better make sure that that trust is warranted. The only way to do that is to really know your product. And it makes no difference what trade or profession one is in. The customer is turning to you for your knowledge, and your experience. The latter comes only with time, but the first can be increased with good effort. Service, service, service My boss also taught me about service. Many people have no idea what service is. It means giving of yourself, and making the other feel valued. This can be worked out in big ways and small. Many in sales, when they answer the phone fail to sound friendly, or they do not announce the name of the firm they represent nor give their own name. Small things maybe, but important ones. It is even important to smile when answering the phone. You don't believe me? Try it with someone. I did. We had a fellow working for us who always answered the phone in the most serious manner. When I tackled him on this he replied that it should not matter as the other person couldn't see his face. We decided to do a test. I picked up my phone in my office and rang him. I spoke to him in various ways and asked him later if he had noticed the difference. He had. He could tell when I smiled or when I was serious. Many people forget that the phone is often the first contact one has with a firm. So yes, service starts even in answering the phone. In a shop or showroom it is important to welcome people in a friendly and sincere manner. Let the customer know that you are there to help them. Even when you are busy serving someone it is often takes but a little effort to recognize another person and let him/her know that you will be with them soon. Go the extra mile. If you don't have the item the customer needs, offer to get it. Sure this sometimes can cause extra costs, but if you put yourself out the customer will generally appreciate it and become a customer for life. You might not be the cheapest in town but if your service is better than that of others, customers will even accept that as the price to pay for top class attention. A real estate agent will tell you that there are only three things that matter when buying property: location, location, location. Well, there are only three things that matter in sales: service, service, service. If you don't want to give service – friendly, well meant, genuine service – don't become a salesperson. How do Christians do sales differently? So far I have only dealt with matters that everybody can agree on. But is that all there is to it? What about the fact that you and I are Christians? Won't that affect the way we do things? That is a good question. The man I learned my trade from was not a Christian. The reason he did things the way he did was because he believed that it was the best way to build a business. So whether you are Christian or not, it is easy to see the benefits of having an honest, up front approach to serving the customer. Many salesmen do not use this approach, but the best will. What then is different about the way Christians might do sales? The difference comes down to why we do things. Our whole life should be lived in a Christian manner, to the honor of God and to the benefit of our neighbor. That means that we need to examine ourselves to see if we are doing our work out of a real desire to serve God and our neighbor. We need to remember it is not possible to wear one hat on Sunday and a different one during the rest of the week. You cannot be a pious godly Christian on Sunday and a hard, sharp businessman the rest of the week. Being a godly salesman means that even if no one will find out about a little untruth – some little subterfuge which can help to increase the bottom line, some little exaggeration, or some not quite honest spin – that can never be part of our thinking. People should know you claim to be a Christian, and they will watch you to see if you are true to your profession. Therefore it is imperative that a Christian businessman lives very close to the Lord and asks Him daily to direct his life, so that in selling, too, we may give glory to Him. A version of this article was first published in the January 2000 issue under the title "Salesmanship." Rene Vermeulen published more than 150 articles in the pages of Reformed Perspective from 1984-2010....
Economics, News
The $33/hr minimum wage?
As of January 1, the minimum wage in New York City was boosted to $15 an hour, a more than doubling of the $7.25 minimum wage of just six years ago. Three days later The New York Times published a piece with the provocative title: The $15 Minimum Wage Is Here. Why We Need $33 an Hour. Author Ginia Bellafante didn’t exactly demand $33 as a new minimum wage or at least didn’t set a timetable to reach that number. She did argue that the new $15 minimum wouldn’t do much to meet New York City workers’ needs and “the war” for an adequate living wage had to continue. Bellafante cited a report by New York’s largest food bank, City Harvest, which calculated that a “single parent with two school-age children…would need to make nearly $69,427 a year” which works out “an hourly wage of just under $33.” But is need a good basis for a minimum wage? If a single mom needs $33, a married couple with two kids could get by with just half that. So maybe $15 is a good number after all? But then what of that single mom? And what if, instead of just two kids, she had four? Then she would need a lot more than just $33, so should we be looking at a $50 minimum wage, or even higher? If you see a problem with that idea, you’re recognizing something that many minimum wage proponents do not – that the basis for wages isn’t employees’ needs. Consider our own buying habits. We don’t buy a car from Ford because Ford needs the money – that’s not a consideration. When we head to Safeway and find out that a dozen bagels are on sale for $5 we might buy them. But not at $10 a dozen – they aren’t worth that to us. So whether we buy them or not depends on what value they return to us for the money we have to hand over. It’s no different when employers buy labor. They aren’t buying our labor out of a charitable impulse – they are looking to get good value for their money. And like us, if something is overpriced, they aren’t going to buy. That’s why a minimum wage of $50 would be disastrous. Many of us aren’t worth $100,000 a year to an employer so if $50 were the minimum wage, we would be out of work. We would be unemployed because our labor was overpriced by government mandate. While $15 is a lot lower than $50, not everyone is worth that either. Unskilled workers might not be able to produce $10 or even $5 an hour of value, or at least not until their employer trains them. If the law says they have to be paid $15/hr that makes them unemployable. It may not even be the unskilled worker who pays the price. Take as example a business that employed high school students at minimum wage, and also employed a single mom who made a bit more. When the owner needed help running the business he began training the single mom to become a manager, and increased her salary to go along with the new responsibilities. Then the minimum wage went up and the owner had to increase the pay of all his high school students. That money had to come from somewhere and the end result was that the owner had to let his manager-in-training go, because he had to use her wages to pay the students. This government-mandated increase, legislated as a means of helping the poor, didn’t help her. High schoolers who had already been happy with their wage got more, but a single mom lost a good job. The government might have meant well, but they didn’t do well. There is a Christian case to make against the minimum wage and any number of verses could be cited. Prov. 14:31 tells us to be kind to the poor, and while that is the professed intent of the minimum wage, that is not its effect on the least skilled. Just as relevant is Prov. 27:14 which tells us that mere good intentions are not enough – we actually have to be kind. In the online discussions of this article Luke 6:31 was raised: "Do to others as you would have them do to you," as in employers should pay their employees what they would think fair, were their positions reversed. True enough, but this verse is applicable the other direction too. Don't want your job banned? Then don't ban other people's jobs. There are any number of reasons why someone might be happy to work for wages below a government-mandated minimum. Someone might want to work for free as an intern instead of spending thousands learning the same skills in university. Low-skilled or no-skilled workers might want to get a foot in the door so they can work their way up to higher paying positions. Some low-paying jobs have fringe benefits, like a parking lot attendant I knew who could do his university homework during his shift. Mentally handicapped people who can't do as much as others might still enjoy work. Elderly folks who can't move as quickly as they once did might appreciate a job that doesn't demand a high output. And students might prioritize flexible hours over big bucks. Do these sound like positions that need to be banned? Should it be the government's job to make working for less than $15 a crime? God warns against arrogance (Daniel 4:30) but when a government makes minimum wage laws it is making decisions for millions and presuming it can price the value of people's labor better than they can themselves, and better than individual employers can. Our governments are trying to manage our economy in a hands-on way that requires them to be near all-knowing and have miraculous powers. But they are not God, and they can not make everyone worth $15/hr. by government decree. In humility, our governments need to recognize that their powers and knowledge are limited, and they are simply not up to that task of running an economy. Is it any wonder, then, that God never asks them to? This article has been expanded by a couple of paragraphs to answer some of the questions the original version prompted. ...
