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Economics

5 things Christians should know about income inequality

Income inequality is still at the forefront of conversation for many people. Thankfully, there are biblical principles that help Christians understand whether income inequality is a problem, and if so, how we are to respond. At the Christian research organization I work for – the Institute for Faith, Work & Economics – we talk a lot about various aspects of income inequality and how to think about it. Today, I’d like to summarize this tough topic through these five points dealing with the best approach to bringing about flourishing, especially for the poor. 1. HOW INCOME INEQUALITY IS MEASURED Income inequality measures income differences across groups of people using a statistical tool called the Gini coefficient. It ranges between zero and one. A score of one indicates perfect inequality: one person makes all the income and everyone else makes zero. A score of zero indicates perfect equality: everyone earns exactly the same amount. The U.S. Gini coefficient is 0.45 according to the CIA World Fact Book. For the sake of context, the impoverished country of Bangladesh has less income inequality than the U.S. (Gini of 0.32). Meanwhile Hong Kong has slightly more income inequality than the U.S. (Gini of 0.54).  Alone, income inequality data doesn’t tell us that much about whether one country is “better” than another. 2. CRONYISM MAKES INCOME INEQUALITY WORSE, AND IT'S UNFAIR Cronyism occurs when corporations pursue the government for benefits, protections, or subsidies benefiting their business at the expense of competing firms and consumers. It is a growing trend evidenced by the hundreds of lobbying firms popping up on K Street. Politicians have responded quite favorably to these lobbying efforts and have created a culture in which the most well-connected win. This is inherently unfair. An unjust system is prevailing where ordinary businesses and entrepreneurs are failing because they lack the resources to buy off politicians. The unfortunate result is that they can’t succeed, and the well-connected rich get richer and stifle more opportunities for the poor. 3. DIVERSITY IS A BIBLICAL PREMISE OF CREATION. WE ARE BORN WITH DIFFERENT GIFTS, RESULTING IN DIFFERENT INCOMES. We are created in God’s image (Gen 1:27) and, while we bear many physical similarities, we are all distinct. That means that, by definition, we are unequal. God knew that our uniqueness makes our work and talents inherently dignifying and brings us into community with one another. Our interdependence makes us able to achieve things we never could on our own. We use our gifts and skills to provide goods and services that others need. We then trade for goods and services that we need but aren’t able to provide ourselves. The market return for our services is our income, and that income is based on the market supply of what we provide and the value people place on it. This means that our incomes will be different. However, because we do not operate in a vacuum, those who do earn high incomes tend to create lots of value for everyone, including lots of job opportunities. High incomes are not a sign that the rich have stolen from the poor. Quite the contrary, wealthy individuals have often innovated products and services that make us all richer and ease our way of life. 4. INCOME MOBILITY IS A BETTER MEASURE OF PROSPERITY Income mobility is quite different from income inequality. Income mobility tracks the lifetime income of a person. It’s a way of understanding if people are able to earn more income over their lives as a result of increases in their education, skills, and productivity. The trouble with the data on income inequality is that it doesn’t track individuals over time. If we look at the poorest income bracket in 1990 and again in 2014, we have no idea if the people who were poor in 1990 are still poor today simply by looking at the data. In fact, mobility data suggests that almost sixty percent of individuals who were in the lower income brackets moved into higher brackets in under a decade. 5. WE SHOULD FOCUS ON WHAT GOD HAS CALLED US TO DO, NOT ON WHAT OTHERS ARE DOING In a flourishing society, there are going to be lots of people who make high levels of income. Think how different the Congo or Vietnam would look if local entrepreneurs had the opportunity to create and innovate. The world would have a lot more people like Bill Gates and a lot more wealth and opportunity for all – not just the rich. It’s easy to want for ourselves what others have, but we can’t all be Bill Gates. God has gifted each of us to do something specific and special. We need to focus on our unique callings and do them with excellence rather than focusing on what others have. Unfortunately, some of the talk around income inequality is about coveting what others have rather than wanting more for the poor. I can tell you from living in a county with the highest per-capita income in the country that it is easy to want what others have: the newest car, the bigger house, the better wardrobe. It is a deceptive trap to believe that if we have these things, we will feel better or live better. WHAT CAN YOU DO ABOUT INCOME INEQUALITY? Be aware of the cronyism all around us that often shows up in seemingly benign programs like laws mandating certain light bulbs, sugar subsidies, and occupational licensing. Government is increasingly giving in to the entitlement culture of lobbying. We need businesses to stop asking for favors and political leaders who will stop the handouts. Furthermore, prayerfully discern the path to which God calls you and pursue it with integrity, hard work, and faith. No matter what income it brings, it gives you a chance to serve others in the here and now and achieve everlasting significance for God’s kingdom. This article is reprinted, with minor edits, with permission from the Institute for Faith, Work & Economics (www.tifwe.org). The original article appears here. IFWE is a Christian research organization committed to advancing biblical and economic principles that help individuals find fulfillment in their work and contribute to a free and flourishing society. Go here to subscribe to the free IFWE Daily Blog. Dr. Anne Bradley "is the Vice President of Economic Initiatives at the Institute, where she develops and commissions research toward a systematic biblical theology of economic freedom." RedPanel.com comic used with permission....

Drama, Movie Reviews, Watch for free

2081: Everyone will finally be equal

Drama 2009 / 25 minutes RATING: 8/10 “The year is 2081, and everybody was finally equal. They weren’t only equal before God and the law you see; they were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else…" In 2081 a “golden age of equality” has been ushered in by the “Handicapper General” whose job is to assess everyone’s abilities and, if they have any advantages, to then assigns them “handicaps” to take them away. In the film’s opening scene we meet George who, being a little stronger than most, is sunk down in his easy chair by the heavy weights he’s been assigned to sap his strength. He’s also outfitted with earphones that hit him with piercing sounds to make it impossible for him to use his higher than average IQ. Meanwhile, his wife Hazel sits comfortably on the couch, knitting. She hasn't been outfitted with any handicaps because she's been deemed to have no advantages. So they are equal. But is it an equality we want to have? Hazel and George are now just as fast, just as strong, and just as able to do math as one another. But this is an equality of the lowest common denominator. To bring this equality George's gifts had to be diminished until he was at Hazel's level. And for the government to bring about this type of equality, it had to treat them quite differently: Hazel is free, while George is in chains. Surely this isn't what we mean by equality, is it? There must be some other, better sort? While the film doesn't really direct us to the equality that is worth pursuing, the Bible does. In passages like Leviticus 19:15, Ex. 23:3, 1 Timothy 5:21, and James 2:8-9 we're pointed to a type of equality that involve treating all alike, not favoring the less advantaged over the rich, or the rich over the poor. Instead of endorsing 2081's equality of outcomes, God tells us to extend an equality of treatment. 2081 is so short I don't want to give any more of the plot away. But if you're looking for a great conversation starter, this is a fantastic film to watch and discuss, though be sure to do so with a Bible in hand. You can watch the trailer below, and to watch 2081 for free, follow this link (you do need to sign up to their email list, but they won't spam you, and you can always unsubscribe). Questions to consider In 2081 equality is said to have been achieved. But has it really? Are Hazel and George and Harrison equal to the Handicapper General? Can you think of any historical examples where governments brought a form of equality to the masses, that they didn't want to share in themselves? Does the Bible support an equality of outcomes or an equality of treatment (aka. an equality of opportunity)? See Leviticus 19:15, Ex. 23:3, 1 Timothy 5:21, and James 2:8-9. How is Hazel’s situation improved by George being handicapped? Why would she hate it if he removed his handicaps? How does Ex. 20:17 apply here? Is income inequality (2 Chronicles 1:12; Ex. 20:17) something that God calls on Christians to fight? Is poverty (Prov. 19:17)? What was Harrison Bergeron hoping to accomplish? If no one remembers his speech then did he die for anything? If we take an unsuccessful stand for what is right why could that still be worth doing? In what way is our measure of success different than that of the world's? In 2081 the government controls every aspect of people's lives. Why do governments grow? Who is it, that's asking them to do more? What are the dangers of governments that get too big? (1 Samuel 8:10-22) ...

News

Why do more today feel like have-nots?

Back in 1988 a Pew Research poll of Americans found that a majority thought they were doing quite well, describing themselves as “haves.” Just 17% said they were “have-nots.” Twenty years later there was quite the change: a 2011 Pew poll found that self-identified have-nots had doubled to 34%. So, why this pessimistic turn in Americans’ self-assessment? Is it because things have gotten so much worse? Well, no. Things have improved in big ways and little since 1988! Consider, for example, how many Americans had cellphones in 1988. It was under 5% of the US populace. Today 95% of Americans have a cellphone, and more than 75% of them have a smartphone. In other words, three quarters of the population are walking around with a device in their back pocket that their 1988 forbearers couldn’t even have imagined, but if they did, they would have thought this music-playing, direction-giving, movie-showing, call-anywhere, super computer would have to be a tool reserved for only the super rich. And yet we all have one. And when it comes to the basics, in 1988 necessities used to eat up 39% of the average American worker’s income. In 2013 that had fallen to just 32%, meaning more disposable income for most everyone. So, again, why do more people feel like they are bad off when, in general, things are actually improving? Well, maybe it has something to do with the growing popularity of the term “income inequality.” By one measure, this term is used almost twice as often as it was in 1988. And focusing our attention on how much more our neighbor has than us can make it hard to appreciate our own blessings (Prov. 14:30)....