A Brief Defense of Free Markets

Why Capitalism and Christianty are eminently compatible

We've been having an interesting coversation over at Cent's place about a bishop in the Anglican Church who supports what amounts to infanticide. In the meta, frequent commenter David has posed some questions.

One of his more recent questions asks this:
If we assume that to live with believers as in Acts 2 should be normative for us, why do we want a govermental system that is so antithetical to that lifestyle?
(Note: this is actually a two-part question, because David then wants to apply it back to our debate about health care; however, I'm only going to tackle part one now.)

First, let's admit right off the bat that no system is perfect. The main problem with all systems is the same: sinful man always finds a way to abuse the system and use it to his own advantage.

With that in mind, then, we must ask ourselves "which system best takes into account and compensates for man's nature?" I would answer that capitalism is such a system.

At its core, Capitalism operates on a simple principle: it rewards people based on their contribution to society. Sound familiar? Paul said something similar in his second letter to the Thessalonians. In Chapter 3, he states that he didn't have any handouts, and worked for what he received, and then says of the lazy man "If anyone is not willing to work, let him not eat" (2 Thes 3:10, ESV).

Now, Capitalism certainly works better in a society founded on Biblical principles, and absent those principles, there can be lots of unhappy consequences. Take pornography, for example. In a free society, it is allowed. In a perfectly moral society, there would no demand for that product, and therefore the market would snuff it out of existence. As it stands, it is a huge blight on our society. (And though it is beyond the scope of this brief post, I would assert here the government's role here--passing laws to prevent sinful people from taking advantage of the system, but also in upholding moral standards--something that used to be taken seriously but now has become rather passe to most people.)

"What about the person who is unable to contribute to society," the astute observer will ask. And this is a truly excellent question. How do markets deal with people, and doe businesses have a responsibility beyond mere business? One of the most prominent free market economists, Milton Friedman, has famously stated it this way: "So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not."

We can certainly debate whether business has any responsibility whatsoever (and being newly self-employed has given me a new perspective on this, which perhaps I'll share at a future date), but on the whole, I think it is at least fair to say that business' primary responsibility ought to be business. I don't think it is the responsibility of business to take care of society; neither do I think it is the job of the government. It is the church's job.

Again and again, throughout the Bible, God's people are commanded to take care of the poor, and widows, and orphans. Those who can't effectively take care of themselves. Or, to put it another way, those members of society who aren't able to contribute.

See, if the church takes care of those who are less productive members of society, that frees up business to do its job (make money flow throughout society), and leaves government in the role of making and enforcing rules to protect society and prevent evil, including the evils perpetrated by sinful businessmen.

So these roles are perfectly compatible. And while some might argue that a passage like as Acts 2 tells us what kind of system we need to have, that must be qualified by understanding that it is speaking of believers that are in fellowship together--or to put it in modern terms, the church. Those passages have nothing to say about government, because at the time, the government was The Roman Empire. Rather, God institutes all governments (including evil, unbelieving ones) for His own sovereign purposes, and we are to submit to them fully (Rom 13), except in an area where the government would command us to do something that would be unbiblical (China's mandatory abortion policy comes to mind here).

Returning to Uncle Milty, I'll throw out one more quote: "What kind of society isn't structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system." I would qualify this by saying that this is true only to the extent that people are basically evil (sin nature), and that limits must be put in place for this, either through government, or ideally through the hearts of the people (via the church).