Wealth⤒🔗

We are living in a prosperous country. The Netherlands belongs to the richest countries of the world. The exact spot in the top-ten or top-twenty is not all that important: who would be able to tell whether it is a few notches higher or lower? How this wealth is measured is a separate discussion, one that we will not occupy ourselves with. It is clear however, that the present riches and prosperity are not by definition synonymous to all-round wellbeing.

Especially after the Second World War, Western capitalism has brought prosperity and wealth to broad segments of society, unsurpassed in the history of the world. In all of this, in spite of everything, the Christian faith has played an important role. In this we may recognize that living according to God’s commandments will bring prosperity: shalom. Israel already learned this from the Torah: do this so that it may go well with you.

At the same time we recognize that Agur ben-Jakeh is justifiably concerned in Proverbs 30:9 about riches: the wealthy Christian Western world is almost suffocating in its prosperity...but has declared that God is dead. Although — or perhaps because — the West has come to know an unparalleled affluence, it is never enough. The study books about economics for high school already give evidence of it: in economics people strive for the maximum, obviously at the least possible cost. An enterprise aims at maximum gain, an individual aims at the largest potential income or the greatest possible benefits.

Against this background it is a self-evident matter that governments want to promote economic growth, i.e., they want to ensure that the national income is increasing. In itself, that is certainly not wrong; the improvement of living conditions is a good thing. But it changes when it begins to preoccupy our thinking. This materialistic spirit of our time has great appeal and it does not leave Christians unaffected.

The Other Side of the Coin←⤒🔗

Western prosperity and wealth also have a downside: pollution, stress, depletion of raw materials, individualization, overexploitation, welfare abuses, unemployment, disposable products, traffic jams, etc. We hardly pay attention to it anymore. That is how these problems belong to our everyday lives. Because they touch the Western lifestyle, they become prominent on the political agenda. From the same materialistic attitude, “well-understood self-interest”, diligent search is made for solutions. That, too, can dominate thinking and has an attraction for Christians.

There is a lot of attention paid to problems, but there are still few solutions. The interests involved are usually large and therefore solutions are not easy to find or to implement. If solutions are to be effective, a broad base is indispensable. There is little difference of opinion about the fact that there are problems. But when it comes to solutions, the views often differ widely.

One person or group wants to solve these problems through tight measures when it concerns the environment. Pollution must be tackled at the source. However, these measures limit the possibilities for economic growth or its size. This may mean that companies can no longer compete and go bankrupt. It may be necessary to take a step back, and the national income will grow less or even decrease. That in turn can mean that unemployment does not diminish, even though other measures in favour of the environment can also provide new and different activities.

Another person or political wing may instead want to solve the problems by promoting economic growth. After all, more enterprise is needed to reduce unemployment. More activity is also needed for the necessary extra income to be able to tackle the problems of economic growth thoroughly. In this view economic growth can soon start to function as a panacea for all problems.

In practice, the views are of course much more diverse and more nuanced than can be outlined here. The problems are therefore very complex. However, it is clear that there is a field of tension between both views: solving the problem through less growth (or different growth) or with more growth.

Economic Growth: a Dilemma←⤒🔗

What should be our response to this dilemma? In guarding ourselves against the spirit of the times, much can be said for either viewpoint. What should a Christian be thinking of when it concerns economic growth?

The answer can be brief: unfortunately, economic growth has to be! So this is by no means a choice for one view at the expense of the other. The issue is different: we have to go back to the origin of the outlined dilemma.

In our Western economic relations, economic growth has become an economic necessity. Whether it concerns the Dutch economy or the economy within the European Community, Japan or the United States, does not matter. Economic growth is an economic necessity, not in order to bring about improvement of the living conditions; these are already more than excellent in the Western world. This is often different for countries elsewhere in the world; there it requires growth to secure basic life needs are met. However, economic growth often has little chance there.

The Core of Capitalism←⤒🔗

Why has economic growth become an economic necessity? Credit and interest must be identified as the driving force behind economic growth. Economic growth is a necessity, because interest is. With this we have arrived at the core of Western capitalism.

Every “-ism” absolutizes something or someone that puts pressure on other things. That does not only apply to communism, socialism and fascism. It also applies to humanism, liberalism, Calvinism, evolutionism, etc. And it applies therefore also to capital-ism: there is something wrong with this capital.

In spite of the many positive aspects that are connected to capitalism — prosperity for many, free enterprise — capitalism is characterized by a structural economical error, an architectural mistake: credit and interest. Capitalism is characterized by hiring out the means of exchange: by borrowing and loaning out money. In our relationships money is to be regarded as the most basic form of capital.

Lending and borrowing money leads to payments of interest. Interest proves to be a charge where nothing backs it up; there is nothing “earned” by it. Admittedly, in the course of time many theories have been developed to explain and to justify interest as a necessary economic measure. But none of these theories can stand. What remains is “the great economic riddle”, as Irving Fisher characterized rent already back in 1930 (“Theory of Interest”, New York, p. 56).

Interest←⤒🔗

Growth must be, because interest does. Capitalism cannot exist without growth. Entrepreneurs must not only earn back the costs of production — labour costs, materials and raw materials, equipment — but also the cost of interest. The proceeds from production are shown opposite the production costs. If things turn out well there is much profit, as compensation for your own entrepreneurial work.

There is nothing, however, to show for interest. Borrowed money cannot accomplish anything other than your own money can. Financing a business with credit does not automatically lead to higher sales, but it does lead to higher costs: interest. Interest is a levy without a counterpart, which must be paid regardless. That is something that is wrong with capitalism.

To ensure a proper understanding: when interest is an established and ubiquitous phenomenon, as it is in our Western society, then interest becomes compensation for the time that money is borrowed. And that is why we say: time is money. We are so accustomed to this, that it is very difficult for us to imagine that there is no counter representation for interest. The German word for interest is “Zins”, the same word as in our word “‘excise” or “levy”.

Due to the levy, entrepreneurs always have to look for an increase in revenues, for growth. This can be done in various ways: reduction of costs, applying new technologies, using cheaper materials, scaling up, more automation, searching for new markets and products, and so on.

Growth is necessary because each year the interest on the invested capital needs to be paid again — evidently on borrowed capital. But not only on the latter; it also affects one’s own capital. Otherwise an entrepreneur becomes a thief of his own wallet. The interest rate also establishes a return requirement on the capital that is owned.

When growth is not realized, businesses will eventually face problems. For example, it may mean loss of employment opportunities. That explains why economic growth plays such a central role in economic politics. 

Shifting the Costs←⤒🔗

Interest must be paid. In times of economic growth, there is no problem: although interest yields less freely disposable income, it is about “a little less to gain more”. We can usually still live with that. However, problems arise in negative economic times: loss, recession. Interest must be paid, at the expense of profit or other expenditures. Efforts will be made to prevent this, for example by limiting costs to the fullest extent. This actually leads to the interest being passed on, often unconsciously. Here are some examples:

• inflation: the euros on which the interest is paid are worth less, have less purchasing power, so that the costs are actually reduced; ultimately it is theft through currency devaluation;
• environmental pollution: the pollution costs are passed on to society as a whole;
• overexploitation of creation: e.g., the costs of reforestation that are passed on to the country and the population in question;
• the third world: e.g., giving too low prices for certain raw materials, so that third world countries remain dependent, often at the expense of the population in those countries;
• the black money circuit: e.g., by evasion of sales taxes.

These are all matters that lead to the fact that the bill, or part of it, is being presented to others: those who are saving, society, creation, the next generation, the third world.

Inflation←⤒🔗

I would like to dwell for a moment on one of these examples: inflation. Capitalism can not operate without inflation. There is no production of goods over against the interest due to borrowing money. Interest is a levy that does not represent a value of goods or services. Insofar as passing or shifting these costs does not succeed, this sooner or later necessarily leads to inflation, which is a devaluation of money. The history of capitalism shows continuous inflation. Although it varies in size, it is a continuous process. However we may have become accustomed to it, inflation is detrimental to economic relations and development. How could it be different? It is a form of theft. In our world of today, Serbia has a hard time with it. Russia and Latin-American countries have inflation rates that exceed our imagination. The German hyperinflation in the 1920’s is almost proverbial: a wheelbarrow full of banknotes to buy a few eggs! The Germans suffered an inflation trauma as a result of it. These experiences with inflation have led to the fact that the prevention and combatting of inflation have become an important objective in the economic policies of the Western world. But banning inflation will not succeed.

What Can We Do About This?←⤒🔗

Economic growth. Credit and interest. Economic problems and injustice. What should we do about it? What can we do about it?

The answer is again brief: we cannot do much about this. In fact, we do not need to do much about this.

Everything to a lesser degree? Striving for clean and sustainable products? Preventing overexploitation? An economy of sufficiency? These are all important matters, in which everyone carries his own responsibility — each in his place and within his possibilities. In this way much has been accomplished already. Much social legislation has been introduced to grind away at the sharp edges of capitalism. There remains much that can and should be done. The present legislation in regard to the environment is an example of this.

It is indispensable for these things, however, to be aware of the fundamental cause of global economic problems, especially in the area of ​​the development of the so-called Third World. It is essential to see that all these important matters leave intact the essence of capitalism. They do not lead to the solution of the core problem: interest is needed, therefore growth is needed. This core problem is also not solvable for us. We cannot change the associated distorted economic and financial relations in the world. We should not want that either.

Economic Hope For the Future←⤒🔗

The economic situation is unsolvable — but not because of non-resistance or defeatism. Certainly not. Yet in sobriety and watchfulness we may conclude that there is hope for the world! There is also economic hope for the world!

Israel’s Messiah, our Lord Jesus Christ, will also take care of the solution of the global structural economic problems when he returns in the foreseeable future. According to the word of prophecy as found in Isaiah 2, the nations will travel and come to Jerusalem to learn the wisdom of the Lord; that includes his economic wisdom. A wisdom as expressed in the laws for his people Israel. Because the law will go forth from Jerusalem. And this law contains divine economic wisdom, summarized briefly in the refrain of Leviticus 25: you shall not oppress each other economically, but fear the Lord. The great commandment in reverse order! And in Romans 13, Paul writes, “Owe no one anything, except to love each other” (Rom. 13:8).

God himself will take care of the administration of this wisdom: Christ will be delivering us from all guilt! Also of all economic debt. The years of remission and the Year of Jubilee were foreshadowing it, also in an economic sense.

With this solution we do not ignore the real problems that exist. It is not a knock-out argument. On the contrary, it is very real. The signs of the times begin to speak ever more clearly, for all who are inclined to hear it and to see it. The return of the people of Israel is in this regard a central fact. The global problems have exceeded human standards. As the magician’s apprentice, man has unleashed powers that he can no longer master on his own. That too is a sign of the times.

What Are We Allowed To Do?←⤒🔗

What can we do in the meantime? We may live with what the Lord is giving us and handle it with care. Economics is prudent management of God’s goods. Not a niggardly kind of management, but responsibly and economically balanced. We have everything for free on loan, without interest (see, e.g., the words of Paul from 1 Timothy 6: 17). Interest, however, makes us behave like owners.

This managing of God’s goods can mean that we take a step back, being satisfied with what is enough. It implies that we do not live above our means by borrowing; that we borrow only if there is no other way. The saying, “cutting our coat according to our cloth”, remains a wise word.

Are we allowed to buy a house? Certainly, and this will mean that most people will have to take out a mortgage for that. It cannot be otherwise.

May I take on credit as a starting entrepreneur? It will have to be; not everyone comes from a wealthy family.

Can the government issue a government debenture? The government has to. But the interest costs weigh heavy and budget deficits turn out to be challenging: as a nation we often live above our means.

Can a director of a large company make investments on the basis of credit? It is not always necessary. The late Jean Paul Getty, multimillionaire, owner of the Getty Oil Company in the United States, hated the use of credit. If at all possible, he avoided it. His concern was therefore also recognized because of its financial strength and very high creditworthiness!

May we make use of student loans? Buy a car on down payments?...

We must not descend into casuistry and argumentation about what is and what is not allowed. Deal wisely with what the Lord gives us in terms of money and possessions. Remember well that Scripture sees loans as an economic evil: they are debts that must be redeemed. Gain insight therefore that capital-ism contains a fundamental economic defect in credit and interest. Look forward to the approaching return of Israel’s Messiah, who can solve these economic problems.

Wisdom for this time, also in the area of economics, is to be found in God’s Word. It is necessary for us to trust in that Word, even if it goes against common current beliefs.