The Institute for Faith, Work and Economics | 1.23.18
By Alan Dowd

Would God prefer that our wealth be controlled by free people exchanging goods and services in a free market or by government? By a system that maximizes individual opportunity or by a system that minimizes the individual? By us or by the world around us? If you ask these questions of millennials (the 83.1 million Americans born between 1982 and 2000), you’ll get a surprising answer.

Harvard polling reveals that 51 percent of Americans between the ages of 18 and 29 (the bulk of the millennial generation) reject capitalism, which is another term for free-market economics—the economic system that has shaped America and fuels the world’s progress. Characterized by high levels of free enterprise and private ownership of property, this way of organizing the economy and meeting the needs of society, though imperfect, has proven better for the flourishing of individuals and societies than anything else humanity has tried.

Indeed, economic theories like socialism and its cousin, communism, have been tried and have failed repeatedly. Yet Pew Pollingfinds that more millennials hold positive views of socialism—an economic system characterized by high levels of state control, government intervention, and collective ownership—than hold negative views of socialism. Even more worrisome, only 55 percentof millennials think “communism was and still is a problem.” (Yikes! Communism was responsible for 100 million murders in the 20th century.)

Among all generations of American adults, 60 percent still hold a positive view of free-market capitalism, and 85 percent have a positive opinion of free enterprise. Still, the millennial generation is larger than the baby boomer generation, and millennials are only now coming into their own as a political-cultural force. In other words, millennials and their anomalous views on capitalism will be around for many decades to come, which means they will wield increasing amounts of political-cultural influence.

In light of this cultural shift, perhaps it’s time to make the case for free markets. As Christ followers, I believe we can make that case with a clear conscience.

Promises, Problems and Poverty

Let’s make it clear up front that the Bible never explicitly endorses free-market economics. It does, however, have much to say about freedom and work and property and wealth—and how we should manage and use those things to serve our fellow man, improve our world, and reflect our Lord.

Genesis tells us, “God created mankind in his own image” (Gen 1:27). He gave mankind a vast garden to tend. And he gave mankind free will. From this, we can gather that we, like our creator, are made to be creative and productive, to do good work, and to be sovereign and free.

In other words, in the beginning, freedom was the natural state of man, which helps explain why God so detests man’s tendency to usurp the freedom of his fellow man. God cares deeply about freedom. Indeed, the story of God’s people is one of freedom pursued, attained, misused, lost, and regained.He wants us to be free—free from the shackles of sin, free from Pharaoh and Haman and Caesar, free from Lenin and Hitler and Stalin, free to decide how he wants us to use the wealth generated by the work we do.

The more of that wealth that is universally taken from us, the less of it is under the stewardship of God’s people. To be sure, government has a role to play in helping those in need. The very idea of a safety net is to provide some measure of security when circumstances overwhelm us. But government doesn’t generate wealth. Individuals and businesses do. So, there must be limits on what government takes to maintain that safety net, or else government runs the risk of discouraging enterprise and driving creators to stop creating, producers to stop producing, builders to stop building. And there must be limits on the size of that safety net, or else government runs the risk of encouraging idleness.

Governments—some well-intentioned, some downright evil—have been promising to end poverty for centuries. All of them have failed. Why? The problem of poverty is surely a function of the broken, fallen nature of man. As a result, some people are poor because of their own terrible choices; some because of the selfish choices of others (including the state); some through no fault of their own and no direct or apparent fault of anyone else. There is an inherent unfairness and unjustness in our fallen world. As Jesus sighed when he gazed upon our brokenness, “The poor you will always have with you…” (Mk. 14:7). And so, one of the constants of scripture is a challenge to pursue justice and to help the poor escape poverty.

The redistribution of wealth by government fails on both counts. Consider that Washington has appropriated and redistributed some $22 trillion since 1964, waging war on poverty, and yet “the percentage of Americans dependent on government has remained virtually unchanged,” according to Heritage Foundation research.

As to fairness and justice, scripture’s repeated message is that it is wrong for a neighbor or even a king to take what is not his. In the Ten Commandments, God tells his people, “You shall not steal…And you shall not covet your neighbor's house, his field, or his male servant, or his female servant, his ox, or his donkey, or anything that is your neighbor's” (Exod. 20:15, 17). There are no qualifiers on these commands; they apply to the rich, poor, and in-between.

Proverbs adds, “He who tends the fig tree will eat its fruit” (Prov. 27:18). Likewise, Paul writes that “It is the hard-working farmer who ought to have the first share of the crops” (2 Tim. 2:6). In short, the one who works the land, catches the fish, makes the sale, designs the operating system, repairs the air conditioner has earned the right to enjoy the fruits of his labor.

Although I am advocating here on behalf of the wealth creator, this is not a rationalization for selfishness. Selfishness is a sin against God and against our fellow man, especially against the poor. God cares deeply about helping the poor and promoting justice, which means we should as well.

Deuteronomy calls on God’s people to “Be openhanded toward your fellow Israelites who are poor and needy” (Deut. 15:11). Proverbs 29:7 declares, “The righteous care about justice for the poor.” Jesus equates himself with the hungry, the thirsty, the naked, the sick and the poor (Matt. 25:34). He asks us to see him in their needs—and to use our wealth to help them. Importantly, he doesn’t compel us to do this; he asks us, invites us.

Consider the church of the book of Acts. In Acts 4:34-35, we learn that “From time to time those who owned lands or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone as he had need.” Acts 11:29 adds, “The disciples, as each one was able, decided to provide help for the brothers and sisters living in Judea.”

As socialists often point out, these verses are echoed in one of Karl Marx’s most famous slogans: “From each according to his abilities, to each according to his needs.” What they fail to notice or note is that Marx envisioned the state—the “dictatorship of the proletariat”—compelling people to hand over and redistribute wealth, while the early church simply asked people to give freely out of love for God (2 Cor. 9:7).

There’s an enormous difference between these worldviews. Just as God wants us to love him because we choose to do so, he wants us to share our blessings because we choose to share them.

How to Help and How to Hinder

If government-mandated redistribution fails the test of justice and fails to help the poor, shouldn’t we consider a paradigm shift in our approach to alleviating poverty? History shows there’s no better answer to the challenge of poverty than the free market. “No other system has so quickly and so globally lifted the poor out of poverty,” the late theologian Michael Novak wrote of capitalism.

Consider that a billion peoplehave escaped extreme poverty since 1990, owing to the embrace of free markets. It’s no coincidence that this dramatic decline in poverty occurred as the Soviet Union’s Marxist-Leninist experiment imploded. Indeed, it is capitalism—not communism or socialism—that has lifted some 500 million people out of poverty in China in the past 30 years.

No government—no matter how benevolent or powerful—can meet all the needs and wants of all people. Consider the Soviet Union, Venezuela, and North Korea. These regimes have tried various forms of socialism. And they have failed to meet the basic needs of their people. But don’t take my word for it.

Mikhail Gorbachev recalls how, as the Soviet Union collapsed around him, “I was ashamed for my country—perhaps the country with the richest resources on earth, and we couldn't provide toothpaste for our people.”

Communist North Korea’s annual GDP is $28.5 billion (placing it somewhere below 133rd in the world), per-capita GDP $1,700 (215th in the world) and average life expectancy 70 years.Capitalist South Korea chose a different path: free markets, free enterprise, and free government. The opposite trajectories are hard to miss. South Korea’s annual GDP is $1.93 trillion (15th in the world), per-capita GDP $37,700 (48th in the world) and average life expectancy82 years. As James Morris noted when he headed the World Food Program, “The average seven-year-old North Korean boy is eight inches shorter, 20 pounds lighter and has a ten-year-shorter life expectancy than his seven-year-old counterpart in South Korea.”

The Chile–Venezuela pairing offers a similarly stark contrast, as economic historian John Steele Gordon details: “Since 1975, the Venezuelan economy has shrunk by 17 percent. Chile’s has grown by 287 percent.” The reason: Chile abandoned socialism in 1973, while Venezuela embraced it in 1999. This has transformed Chile (where the poverty rate has plummeted from 45 percent to 14 percent, the unemployment rate is 6 percent, the inflation rate is 4 percent, and per-capita GDP has jumped 276 percent in the past 40 years) and devastated Venezuela (where the inflation rate is a staggering 650 percent and only getting worse, the unemployment rate is somewhere north of 25 percent, the public-health system has collapsed, and some 10,000 Venezuelans are flowing into Brazil each month to seek food and medicine).

At both the global and the personal level, the free market—without coercion—meets society’s needs more efficiently and more effectively than the alternatives, thanks to what Adam Smith called “the invisible hand.” As Smith observed, “Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only.” In other words, we need each other, but we can’t always count on the generosity of others—and arguably shouldn’t, for that matter. That’s where the free market comes into play. “It is not from the benevolence of the butcher, the brewer or the baker, that we can expect our dinner, but from their regard to their own interest,” Smith explained.

Of course, God wants us to be benevolent, and he asks his people to use their wealth to help those in need. Where and when the free market falls short in meeting the needs of our neighbors is where and when followers of Christ must step up and step in.

Freedom: The Path to Progress

Yet it seems Americans are increasingly looking elsewhere—to government, to supra-national organizations, to NGOs—to help those in need and “make the world a better place.” This is understandable in the sense that God expects us to be good stewards of his creation, to be good neighbors, to be peacemakers. But again, the free market is more effective here than socialism and redistribution of wealth by the state.

For example, empirical evidence shows that economic freedom (a broad term for property rights, free markets, free enterprise, and free exchange) correlates with a healthier environment and cleaner air. The 20 highest-ranked countries on the Fraser Institute’s economic freedom index have air-pollution levels almost 40-percent lower than the 20 lowest-ranked countries. And it pays to recall that communist governments show nothing but contempt for the environment (see here and here).

Economic freedom also promotes social progress. The Fraser Institute has found that higher levels of economic freedom correlate with higher levels of civil rights,less civil strife, less corruption, higher life expectancyand higher literacy rates, and the Heritage Foundation concludes that higher levels of economic freedom lead to “more education opportunities, better health care and higher standards of living.”

Moreover, nations with high levels of economic freedom rate the highest on measures of political freedom and religious freedom—regardless of geographic placement, ethno-religious composition, or historical background.

And consider this:free markets reduce the risk of conflict. The expansion of free markets, according to a 2014 study, “marginalizes violence because it binds people meaningfully in a way suited to addressing the collective dilemmas stemming from violence.” With economic freedom, the study concludes, “people gain when they produce goods and services others desire in mutually beneficial exchange,” and competing groups “become customers, employees, employers, suppliers”—rather than enemies in a zero-sum struggle over scarce resources.

Better or Worse

Not only does the free market deliver better outcomes for society; but by allowing each person to pursue his or her God-given talents to the best of his or her ability, the free market delivers better outcomes for individuals. No, that doesn’t mean every individual will flourish and succeed under the free-enterprise system. Some will fail. Some will fail repeatedly. Some will have more success than others. But surely a system that allows individuals to pursue their talents, even if they fail, is better than a system that constrains or prevents individuals from even trying to pursue their talents in an effort to preemptively level the playing field.

The free market is anything but perfect. It has flaws and shortcomings, excesses and limitations—mainly because of its imperfect participants. But it’s more effective and more just than any other economic system. Our challenge is to help millennials see that free enterprise and free markets meet the needs of individuals—and society—better than the alternatives.

If people cease to recognize this truth—in America and in the rest of the world—America and the rest of the world will be worse off in the decades to come.