Economics

Economics 101: Work

Be fruitful and multiply and fill the earth and subdue it, and have dominion ... Genesis 1:28

Man was created to work. The objective of that work, as seen in the cultural mandate of Genesis 1:28, was to prepare the world as a dwelling place for God and man. God provided the Garden of Eden as the starting place, but man was to take it from there, essentially turning the garden into a garden city that covered the world.

This transformation involves three related tasks that require three types of work:

  • Structural: fill the earth and subdue it and have dominion through procreation
  • Functional: fill the earth and subdue it and have dominion through discipleship
  • Physical: fill the earth and subdue it and have dominion through the work of our hands

All of these tasks existed pre-fall and still are in place post-fall. It is the third type of work of building the garden city, spread God’s glory through the work of our hands, that most concerns us when it comes to economics.

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How an Economy Grows and Why It Crashes by Peter and Andrew Schiff

Peter and Andrew Schiff wrote How an Economy Grows and Why It Crashes based on the book by their father, Irwin, How an Economy Grows and Why It Doesn't. It combines simple explanations and cartoon-like illustrations on almost every page to lay out clearly the effects of government intervention in the market.

It begins with three men on a Pacific-style island who work all day to catch one fish with their bare hands--just enough to survive. One of them, Abel, finally gets tired of sustenance living and his desire for more leads him to invent a net. Abel has to go without eating for an entire day (since it usually takes him all day to catch his food supply) to have the time needed to build his net. But his efforts paid off, as he netted two fish in just a matter of hours the next day with his new invention.

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Christian Economics 101

Economics often gets overlooked by Christians.

From one perspective, this makes sense. Economics is not the gospel. Understanding biblical economics won't save our souls.

On the other hand, economics is at the very heart of the Christian life. God commanded Adam and Eve to "Be fruitful and multiply and fill the earth and subdue it, and have dominion ..." Even before the Fall, God had provided economic means built around private property to enable mankind to carry out the cultural mandate. Resources were scarce (meaning work was required to obtain them) and man's knowledge was limited (even perfect man was not omniscient), so production utilizing natural resources through the division of labor and voluntary trade through markets with prices would have been required to increase the capital stock needed to feed, clothe, and house mankind.

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Christian Liberty and Economic Liberty

Christ came to set us free from the bondage of our sin:

The Spirit of the Lord GOD is upon me, because the LORD has anointed me to bring good news to the poor; he has sent me to bind up the brokenhearted, to proclaim liberty to the captives, and the opening of the prison to those who are bound.” (Isaiah 61:1 ESV)

Christian liberty, however, is not licentiousness; it has a purpose:

“For freedom Christ has set us free; stand firm therefore, and do not submit again to a yoke of slavery. … For you were called to freedom, brothers. Only do not use your freedom as an opportunity for the flesh, but through love serve one another.” (Galatians 5:1, 13 ESV)

Christian liberty is just like Christian worship; it cannot be confined to the inner, personal realm. It must be extended to every aspect of life. And not just in being kind to others and in giving to the poor. It must be extended to the sphere of civil government. Christians must make decisions as voters, government workers, and policymakers that reflect Christian liberty.

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Markets, Not the Governing Elite, Secure Life, Liberty, and Prosperity

A recent article by the Niskanen Center tries to make the case that regulations should be considered beneficial unless proven otherwise.

The thing is is that we don't need data to understand whether the effects caused by regulation are on balance good or bad. Liberty tells us that the cumulative effect of regulations will be harmful because they interfere with voluntary Image result for governing eliteexchange in the market. Humans act in their own perceived self-interest. Regulations seek to replace the outcomes of the billions of transactions and interactions market by millions of people with the outcomes preferred by a few hundred or thousand regulators and rent seekers.

Von Mises and Hayek both demonstrated the problem with that; in addition to the violence of forcing people to accept outcomes they do not want, regulation eliminates the vast majority of available information within a market, thus making the outcome much less efficient. That's why socialism doesn't work, and why the Soviet Union collapsed.

The opposite of the position of this paper is what is true: regulations should not be adopted or maintained unless it is proven there is a need for them. And determining the need for them should be based on whether they secure life and liberty. Then people--rather than a few intellectual elites--can use markets and courts can figure it out from there.

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Quote of the Week - Mises on the Religion of Government Spending and Credit Expansion

"No one should expect that any logical argument or any experience could ever shake the almost religious fervor of those who believe in salvation through spending and credit expansion." – Ludwig von Mises, in his book, Planning for Freedom: Let the Market System Work : a Collection of Essays and Addresses.

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Let’s Break Up Tiger Woods

In the aftermath of Tiger Woods’ dominant victory in the recent American Express Championship golf tournament, a number of Wood’s competitors announced they will be asking the U.S. Department of Justice to file suit seeking the breakup of Woods for violating federal antitrust laws.

“He’s dominating the game,” said Adam Scott, who finished second, eight shots back of Woods. “It’s not the first time he’s done it, either. We need to take steps now to ensure that the game remains competitive.”

After finishing in fifth place, Ernie Els, one of golf’s top players, joined in with those who said something must be done.

“Tiger just doesn’t understand how abusive he is of his monopoly position,” said Els. “He unduly pressures and intimidates competitors and potential competitors.”

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Inflation, Money Creation, and the Gold Standard

“In a social order that is entirely founded on the use of money and in which all accounting is done in terms of money, the destruction of the monetary system means nothing less than the destruction of the basis of all exchange.” – Ludwig von Mises, The Theory of Money and Credit, p. 202.

In a recent email chain, some of my friends said the gold standard was crazy and wrote of the need for the Federal Reserve to manage our money supply—relying on appeals to “experts” to make their case. I wrote the following to try explain the problem with central banking. I hope you find it informative:

The fact that most economists and "experts" think returning to the gold standard to be crazy should be another reason to support such a move, given the competence of most economists these days.

But lest I rely too heavily on ad hominem attacks against them to make my case, let's look at the facts.

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