The Source of All Blessings (and Curses)

Email Print
FacebookTwitterShare

I made a
big mistake in my report, “Count
Your Blessings
.”

I forgot
about members of one of the largest religious organizations in
America, Slogans for God. The SFG crowd let me have it, good and
hard. One reader complained:

HELLO,
WHAT WORLD ARE YOU TALKING ABOUT FOR THESE BLESSING. SEEM LIKE
YOU LEFT OUT SOMETHING. THESE SEEM LIKE MAN’S BLESSING AND NOT
GOD’S BLESSING.

When you
belong to SFG, grammar is not a top priority. Self-confidence
is. Maggie was among the more self-confident.

You left
out the First Commandment: “Thou shalt have no other gods before
me” — neither capitalists and capitalism — or any
other “… ism.” You also left out the part about the natural
resources of the world so generously provided by our Maker.
These fueled the industrial revolution, which could not have
taken place without them. You and I take not one breath nor
enjoy any other gift in this life if God does not will it.

The very
thought of thanking capitalists and capitalism for my blessings
instead of God makes me shudder. It obvious that the modern
West has completely lost its spiritual bearings and are once
again worshipping golden calves. However, I did not expect you
to lead the degenerate parade to this altar. If capitalism is
your god, please quit masquerading as a Christian.

I sometimes
wonder if these people send outraged letters to physicians who
praise modern medicine’s role in increased life expectancy, telling
their targets that it is God who keeps people alive, and that
“medicinism” is a false God. The critics probably believe this,
but I suspect that they have restrained themselves.

The libertarian
publicist Leonard E. Read used to say that the average person
has no strong opinions about chemistry, but he has lots of opinions
about economics, which are usually wrong. Read never had to deal
with SFG. I do.

WHAT
CHANGED IN 1750?

History has
meaning, contrary to Eastern mysticism. The world is not maya:
illusion. Reality is not an illusion. There is cause and effect
in history. There are also non-causes and effects.

For SFG,
the cause is God. The effect is everything else. This doesn’t
get us too deeply into the issues of economic cause and effect,
does it?

Prior to
the advent of capitalism, poverty was nearly universal. The rich
were a tiny fraction of the total population. There were famines,
plagues, and widespread ignorance. There was little literacy prior
to 1450. The printing press had not lowered the cost of books
and pamphlets to such levels that it paid the average person to
learn how to read.

Economist
Julian Simon and author Stephen Moore made this point in a
1999 article
:

The roughly
fourfold rise in the living standards of Americans in this century
is particularly impressive when we consider that for thousands
of years human progress occurred at a glacial pace. For the
thousand years before the Industrial Revolution, incomes were
virtually flat, growing by about 0.5 percent per year.

Life expectancy
was not much greater in 1700 than it was at the time of the
Greek and Roman Empires.

Was God in
control in 1400? Yes, say SFG. Problem: Was the world that God
governed prior to 1500 a world in which anyone reading this report
would like to live? Would the skills of any reader have found
a ready market in, say, 750 A.D. in what is now central Germany?
No? Why not? What was missing?

I’ll tell
you what was missing: capitalism.

History has
meaning. Today is better than 1700, as I argued in “Count Your
Blessings.” How should Christians explain today’s wealth and still
uphold God’s providence? What is different today?

I have been
trying to answer this question since 1960. I have written approximately
12,000 pages on the topic. It may be more. I lost track years
ago. I have written 8,500 pages of Bible commentaries that are
exclusively devoted to economics. I have posted them for free
on-line. You can get a list by sending an email to: commentaries@kbot.com.

But for the
Maggies of this world, all of this is irrelevant. To understand
this requires thought, historical knowledge, and the ability to
deal with cause and effect — what used to be called natural law.
SFG members dislike such complexity. Economics is much too complicated
for them. It’s so much easier to say, “God gave us health and
wealth.” He did, indeed. But what about the bad stuff? How about
sickness and poverty? How about sickness and poverty for all of
man’s history until 1750?

NATURAL
RESOURCES

Maggie pointed
out the following:

You also
left out the part about the natural resources of the world so
generously provided by our Maker. These fueled the industrial
revolution, which could not have taken place without them.

Apparently,
in Maggie’s mental universe, these natural resources came out
of heaven, like the manna (Exodus 16). They were not there in
(say) 1400. Then, wonder of wonders, they appeared in England
around 1750.

Maggie is
not alone in her explanation. I grew up on a public school ideological
diet of “resources made the West rich.”

Socialists
refused to explain the Industrial Revolution in terms of capital
markets, freedom of contract, the defense of private property,
and free trade. Natural resources: that’s what made the difference.
That was why Russia back in 1965 was going to overtake the West,
one of these days, Real Soon Now. Or South Africa would, if a
man like Nelson Mandela could ever gain political power. Or Rhodesia
would, if a man like Robert Mugabe could ever displace Ian Smith.

But there
was this nagging problem: Hong Kong, which has no natural resources.
Its people got very wealthy after 1945. Hong Kong was a bothersome
factor for the socialists of the world. Its success had to be
explained in terms of something other than natural
resources, which it did not possess. It also had to be explained
in terms of something other than socialism, of which there were
few traces.

So, the socialists
solved this problem by not discussing Hong Kong. “Hong Kong? Never
heard of it.”

Neither has
Maggie.

It is the
creativity of man that turns natural resources into factors of
production. This includes the creativity of men who bid for the
output of such resources. In capitalism, the high bid usually
wins. This puts pressure on people to become productive, in order
to make high bids.

Don’t tell
me about God’s gift of natural resources. Tell me about how black
goo becomes gasoline, and why. Tell me about God’s gift of technical
knowledge and capital markets.

FIGHTING
POVERTY

Which would
be the better policy to fight poverty:

  1. Invest
    10% of all profits?
  2. Give
    10% of all profits to the poor?

We know the
answer: #1. Capital formation is the most powerful force in man’s
history for the elimination of poverty.

The Bible,
like all other religious books, does not command the reinvestment
of profits. It commands charity.

Is
there a cognitive disconnect here?

I regard
John Wesley as the person who did more to relieve poverty than
anyone in history. He showed the way to wealth to millions of
poor people who had not read Adam Smith. He
preached this of money
: Earn all you can. Give all you can.
Save all you can. (Sermon #50, “The Use of Money” [1744], Part
6.)

Wesley preached
to the poorest people in the British Isles. He spent most of his
adult life on horseback. He preached sobriety, hard work, and
thrift to those poverty-stricken people who came to be called
Methodists. He changed the face of England. Within a century of
his death, Methodists had become middle class. Then the denomination
went theologically liberal. This would not have surprised Wesley.
He had warned against the effects
of riches in Sermon 126
(1790).

His followers
experienced what religious orders and monks did throughout the
Middle Ages: they got rich by practicing systematic frugality.
That was why, every few centuries, there was a wave of religious
reform among the mendicant orders that had sworn vows of poverty.
Too much money was rolling in. The monks were enjoying the life
style of the rich and famous.

Thrift is
the key element in the reduction of poverty. Thrift capitalizes
the entrepreneurs and inventors whose ideas overcome poverty for
the masses.

The fact
that wealth corrupts some of those who create it and makes their
children feel guilty after four years at an Ivy League school
is a valid theological and moral issue. But as to how poverty
is overcome, capitalism has proven more effective than any other
system of ownership and production.

I argue in
many of my books that the worldview of the Bible presents the
case for private ownership, which in turn produces the capitalist
order. Socialists may disagree. So may Randians. But the fact
remains that the capitalist order is what has made the difference
historically in the conquest of poverty. Before capitalism, there
were many varieties of Christianity, but none of them produced
the society-wide cornucopia of wealth that has given us all of
those blessings to count.

THINKING
STRAIGHT

The ability
to think straight is not widely dispersed. The ability to think
straight economically is even less widely dispersed.

It was not
Adam Smith who convinced the poor Methodist in his hovel to decrease
his expenditures and start saving. It was a highly educated man
on horseback, who rose at 4 A.M., preached a sermon at 5 A.M.,
and rode off to the next town, year after year, decade after decade.
It was not the case for capitalism in the books of political economy
that changed the minds of the poor, but the simple words of a
complex man who said to earn all you can, save all you can, and
give all you can. He called dissolute people on the fringes of
society to straighten up and fly right. Millions of them did.

It never
ceases to amaze me that those people who say they follow the same
God that Wesley followed don’t understand the message of Wesley
and his original followers, just as they don’t understand the
logic of Adam Smith, which reinforced Wesley’s words. “Thou shalt
not steal” is a good place to begin economics in one lesson. So
are the words of the land owner in Jesus’ parable of the complaining
laborers, who groused that they had been paid exactly what they
had been promised. “Is it not lawful for me to do what I will
with mine own? Is thine eye evil, because I am good?” (Matthew
20:15).

We should
do our best to think straight. When we do, we will be better able
to count the costs, another message of Jesus (Luke 14:28—30).

In my original
essay, I spoke of capitalism’s blessings. The loudest of the SFG
crowd do not understand history, theology, or economics. Yet they
are the heirs of these blessings. We all are. And for maintaining
and extending this inheritance, we are responsible.

There are
no free lunches, capitalism teaches. If you do one thing with
your wealth, you cannot do another. There is a social function
of ownership. The owner decides whose demand to fill: the highest-bidding
consumer, the poverty-stricken child, or his own desire to consume.

There is
a price to be paid, in history and eternity. The free market imposes
historical prices most clearly, for it allows consumers and beggars
to make their bids and pleas for ownership. No system has empowered
consumers and beggars more effectively than capitalism has. Beggars
these days would have been rich people in Wesley’s day: used stereos,
used color televisions, and warm clothing. There is more wealth
in a Salvation Army thrift store than in most shops in London
in 1700.

This is not
random. It is also not the result of natural resources, all by
their lonesome.

CONCLUSION

To be grateful
for what we have, we had better understand how we got it. We got
it through free market capitalism. God was in charge in 1700,
but He has provided greater benefits to more people since 1750
than ever before in history. If those who claim to be Christians
cannot understand the difference between medieval guild socialism,
free market capitalism, Keynesianism, and communism as ways of
allocating resources and responsibility, then they are likely
to fall into error: the error of slogans at the expense of thought.

I recommend
that people say a prayer of thanks for capital markets. In the
providence of God, they keep us alive.

September
18, 2004

Gary
North [send him mail]
is the author of Mises
on Money
. Visit http://www.freebooks.com.

Gary
North Archives

Email Print
FacebookTwitterShare