Free Enterprise: A Means to Achieve Biblical Goals
Free Enterprise: A Means to Achieve Biblical Goals
I have written previously that neither biblical prooftexts, nor appeals to freedom, nor the spectre of communism is adequate proof to warrant considering Free Enterprise an end in itself. Rather, as I will show this time, in my view, Free Enterprise, warts and all, if adequately restricted by government, is a means to achieve biblical objectives. Moreover, as far as I know, it is a better means than other economic alternatives to attain biblically-given goals.
As an aside, note that this contention is not absolute doctrine, as e.g., salvation by grace. Rather, it is a derivation; it can and should continue to be studied and tested against practice — regularly. If it can be shown that in specific situations these biblical goals can be better attained by a certain amount of government intervention, then, in that situation, we must accept interventionism as a preferred means.
However, in general, that is not the case, I think. I will attempt to justify this contention by using, as examples, three biblical ends: good stewardship, loving our neighbor and promoting a Christian lifestyle.
Stewardship⤒🔗
I contend that the market system generally allows us to use our resources more stewardly, more efficiently, than a group of bureaucrats. Under the market system, only those goods which are in demand will be produced; businesses producing unwanted goods lose money — no one will buy them. Goods that are produced, by and large, are produced as efficiently as possible. If not, some other company will produce them at a lower cost and put the inefficient producer out of business. As conditions change, the market will adapt to new needs, wants and technologies. Thus, basically, the market system discourages waste — while meeting the needs of most of us.
Such is not the case in a socialistic economy. There, central planners with inadequate information decide what is to be produced and where. State employees have no incentive to produce as efficiently as possible. The result is long lines for limited and scarce consumer goods of questionable quality and idle machines awaiting vital parts. For example, on May 25, 1987, under the headline, "Easier to get a rocket to Mars than a car that isn't a dud," the Globe and Mail's Moscow correspondent, notes the irony of a country which is able to design a rocket capable of flying to Mars and back but has an automobile industry "that cranks out about 100,000 turkeys a day" and that (admitted by the political minister in charge) "for 15 years has been producing cars inferior to those of capitalist countries in design, dynamic qualities, ergonomics, fuel consumption, etc."
The inadequacies of central planning are highlighted by the ongoing movement within communist countries to experiment with the free market. I'll note, as examples, some recent press stories:
The Globe and Mail of Dec. 29, 1987, describes the conversion of "the People's Revolutionary Republic of Guinea," to a free market economy after the death in 1984 of Sekou Toure, its president since independence in 1958. The report notes, as examples, that coffee production jumped from 250 tons in 1984 to 9000 in 1986. The number of cars doubled in two years. A state factory employing 1,500 people was reopened as a private company employing 87.
The Globe and Mail on Dec. 30, 1987 described moves made during the past year in Russia itself to establish cooperative enterprises with worker profit sharing and the decentralizing of state industry. In fact, on March 9, 1988 the Globe reported that more than 9,000 cooperatives employing 90,000 people have started operations since last year. They range from cafes and restaurants to craft workshops, medical clinics and beauty salons. The previous week, Pravda published a draft law allowing the co-ops to issue shares and to set any price for their products.
Also on Dec. 30th, the Globe reported on Angola's switch from the Soviet model to a free market economy. Twelve years after independence the economy lies in ruins — empty stores, dwindling production, food imports to feed half its population and a largely worthless currency; foreign companies pay employees with consumer goods — largely imported beer — which Angolans use to buy food on the black markets. While some of these problems are obviously attributable to an ongoing war situation, the switch to free enterprise indicates obvious concern with the old system.
On Feb. 2, 1988, a report entitled, "India eyes Privatization" mentions 214 state enterprises saddled with too much government control, bureaucracy, project delays, outdated technology and machinery, labor problems and lack of incentives.
Prime Minister Ghandi himself is quoted: can we afford a socialism that, instead of generating wealth, is robbing and sucking up the wealth of the poor? Critics report that the public sector has spawned a "briefcase brigade" of bureaucrats who are concerned neither with profit nor with the country's economy but only with keeping their positions.
Such comments probably apply even in a mixed economy. Governments have a built-in bias towards inefficiency. Bureaucrats have no "bottom line." They tend to empire building — frequently being rewarded with higher titles and promotions for increased spending rather than for efficient use of existing staff.
Moreover, politicians are rewarded at the polls, not for good economic policies, but rather, for choosing policies which create maximum visible short-term benefits. Costs are secondary; they are not immediately visible. They come home to roost only after the election, e.g. promises to increase spending and cut taxes just before election.
Increasing taxes is only possible when a government has just been elected with a comfortable majority. Even when the will was apparently there, Finance Minister Wilson barely dared to reduce the deficit in a probable election year. There simply is little incentive to choose the most stewardly policies!
As a dramatic example, the city of Chatham, Ontario a year or so ago, reduced its garbage collection costs from $600,000 to $200,000 a year — due to vastly improved productivity. Municipal crews averaged only 160 residential pickups per day; private crews averaged 360.
Love Your Neighbor←⤒🔗
In addition to providing better stewardship, Free Enterprise also allows us to better attain the biblical command to "love our neighbor" — in the economic context, to provide jobs, to assist the poor. It appears, if recent evidence is correct, that free market economies are basically better at this than the alternatives. Evidence of this can be found in the Schaeffer and Nash books1 although it is probably not as overwhelming as some free market proponents suggest.
While per capita wealth is certainly not a perfect indicator of the general wellbeing of "our neighbor," it gives some indication. The Globe on Jan. 11, 1988 reported that Canada enjoys three times the per capita wealth of the richest noncapitalist society. While unemployment is still a problem, in job creation the U.S. and Canada are ahead of all others. A half-million new jobs were created in Canada alone in 1987. On the other hand, Western Europe (saddled with more government intervention) has spent most of the past decade losing jobs. It appears, that Free Enterprise has created much more prosperity — even for the poor. America's poor are more prosperous than the middle classes in many socialist countries.
On the other hand, socialism or government intervention, while purportedly more caring for the poor and their needs, has not been terribly successful in this regard. The example of many socialist Third World countries is at least some indication that socialist economies have done little to improve the lot of the poorest. In addition, much of the money spent on "welfare policies" in mixed economies may have been misspent — serving only to maintain a bloated bureaucracy. For instance, Nash (in Economic Justice and the State, edited by John Bernbaum) quotes a 1979 study that claims the U.S. spent $250 billion a year to "fight poverty." He argues that had this amount simply been given to each family below the poverty line, they would have received $34,000 each. Also, in spite of years of equalization payments and government incentives for "disadvantaged regions," regional disparity remains one of Canada's major economic problems.
In fact, Ecclesiastes 5:8 even suggests that bureaucrats may not be best source of help for the poor — "if you see the poor oppressed in a district ... do not be surprised at such things; for one official is eyed by a higher one, and over them both are higher still."
By and large then, in economic issues, Free Enterprise is likely to be the most effective general means to comply with the biblical command to help the poor, to "love our neighbor!" However, it should be noted that, by itself Free Enterprise is unlikely to be totally adequate to meet the needs of the very poorest.
Christian Lifestyle←⤒🔗
Moreover, government intervention, through endless, cumbersome regulations and heavy taxation, is not conducive to a Christian lifestyle: e.g. — honesty, integrity, respect for authority. Rather, people are regularly faced with incentives to disobey laws and regulations which fosters disrespect of government. For instance, I am told that many trucking regulations currently are not enforced. If enforced, they would very significantly increase the cost of most consumer goods. In fact, Jean-Francois Revel, based on studies of Spanish, Peruvian and Italian economies, has noted that many "laws and regulations are so heavy-handed that a significant fraction of national production would be condemned to death if they were applied."
That is government intervention which works only because people do not obey the laws — a very unlikely circumstance to promote respect for the "authorities set over us."
Moreover, extensive government leads to high taxes, which leads to tax evasion, which creates a whole underground economy or "black market!" Therefore, Free Enterprise is likely to be more conducive to Christian lifestyle — there is less incentive to disobey the law, to flout authority, if there is less government, less regulation in the first place.
Thus, as a system, Free Enterprise is likely to be more conducive to a Christian lifestyle, allows us to better help the poor and to use our resources in a more stewardly fashion. That is, it is a good means to attain these biblical objectives. However, as we will see in a future article, it is not a perfect means.
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