You Shall Not Steal (Exodus 20:15)

For Christians, the moral law provides us with a stable standard of justice. The eighth commandment is very clear that private property has biblical warrant and stealing both in its ancient and modern forms is a violation of this law. 

In Exodus 22:1-15, we see an exposition of the eighth commandment, the law on private property (Exodus 20:15). This exposition has specific regulations that touch cases of stolen animals (verses 1 to 4), restitution (verses 5 to 6), safekeeping (verses 7 to 13), and borrowing and hiring of animals (verses 14 to 15). 

The Old Testemant economy is described as pastoral. In that type of economic system, the role of animals, particularly domestic ones is very important. Like today, animals serve as source for food production such as milk and meat. Other uses of animals include as raw materials for garments and as means of transportation. It is no wonder therefore that wealth in the Old Testament is measured in terms of huge quantity of livestock. 

Photo Credit

Today, few examples of measuring someone's wealth include the size of your bankbook, the number of your paper assets, and total amount of your equities. Perhaps, people think that these types of wealth are secured from the hands of thieves. How about if stealing is institutionalized and acquired a legal status? How would you protect your property from such system?

With the widespread influence of various forms of socialism (interventionism, welfarism, central planning, progressive taxation, Statism, corporatism, and crony capitalism), the economy of theft, it is vital to understand the meaning of the eighth commandment and its application into the 21st century. This is because all these types of socialism are hostile to private property, and one way or another, direct or indirect, are used to steal other person's property. The most subtle form of stealing is by means of legislation, which the classical liberal, Frederic Bastiat, appropriately exposed in his book, The Law, as legal plunder. 

Unknown to many, legal plunder is widespread. The reason why most people cannot see it is due to statist indoctrination done through mainstream educational system. Both politicians and the people are concerned only with visible and short-term effects of economic policies. As a result, they fail to see the "unseen," the indirect and long-term consequences of laws made for the sake of the poor. Most people today, intellectuals included, are economically misinformed. No wonder, they embraced wholeheartedly the stimulus programs coming from central banks (of course, with the approval of governments), as solution to our economic ills. In reality, these are subtle ways to steal the property of others, in the name of redistributing wealth under the banner of "justice." 

Helpful References:

http://www.andreascenter.org/Articles/Sheep%20and%20Goats.htm

http://www.studylight.org/dictionaries/hbd/view.cgi?n=340

http://www.bible-archaeology.info/cattle.htm

http://lifehopeandtruth.com/bible/10-commandments/stealing-eighth-commandment/

The Search for Economic and Monetary Theories

Many church leaders and theological educators give public declaration concerning economics and finance, which Austrian economists considered fallacious. This unfortunate phenomenon is due to ignorance of vast literature on economic and monetary theories from this school and the widespread influence of socialist literature in the academe. 

Our goal therefore is to correct this anomaly by retrieving the works of economic and monetary theorists. We believe that economic theories related to praxeology, Keynesianism, and entrepreneurship will help us illumine this chaotic intellectual atmosphere. Moreover, the vast literature on monetary theory, which includes currency, business cycle, credit, inflation, banking, and the gold standard will provide us an analytical framework to critique the existing monetary system and to lead us to sound monetary policy. Furthermore, as theological educator, it is part of our goal to search the literature on Christian economics to know the answers to the following questions:

1. What does the Bible say about economics and business?

2. What does the Bible say about money and credit?

3. What does the Bible say about banking and business cycle?

4. What does the Bible say about inflation?

Seeking Wisdom Early

I love them that love me; and those that seek me early shall find me. Riches and honour are with me; yea, durable riches and righteousness. My fruit is better than gold, yea, than fine gold; and my revenue than choice silver (Proverbs 8:17-19 - King James Version).

How soon should men seek wisdom? Early. By seeking wisdom early, men are guaranteed success. The harlot (folly) calls to men in the twilight, to spend the night illicitly. Wisdom calls early, as at daybreak. The day is to be given over to seeking wisdom. He who is diligent in the quest will be rewarded.

By comparing the treasures of wisdom with the precious metals, Proverbs drives the point into the minds of men: the most valuable asset of all is wisdom. Solomon was already wise when he asked for wisdom; he recognized that he was asking for the most valuable of all assets. Wealth subsequently flowed to his kingdom (I Kings 10:14–21). The fame of this rule spread everywhere (I Kings 4:3–11). The powerful and wealthy came to him for counsel (I Kings 10:11–13). In short, he achieved indirectly, through wisdom, the goals that other men seek directly through intrigue, magic, and violence.

God speaks clearly to men. They can understand His words because they are made in His image. He communicates to them by means of analogies and metaphors. When He compares the value of wisdom with gold, He speaks a universal language. Like the pocketbook parables of Jesus, the economic language of wisdom personified can be grasped by anyone, in the day of Solomon or in the twenty-first century.

The universality of gold and silver as desirable assets to lay up in one’s treasury reinforces the words of wisdom. When men think about the universal forms of wealth, they think of gold and silver. Across the globe, men understand the value of the precious metals. Abraham’s wealth was counted in these metals (Gen. 13:2). When men speak out against the economic importance of gold and silver, they speak nonsense. When John Maynard Keynes spoke of gold in 1923 as a barbarous relic, and when Lenin suggested in 1921 that the victorious Bolsheviks would someday use gold for public lavatories, they proclaimed utopianism (“utopia”: no place). These two spokesman of their era spoke for both sides of the Iron Curtain. Both men had contempt for Christian society. Keynes the atheistic homosexual and Lenin the atheistic revolutionary knew enough about Christianity to prefer the harlot of the twilight.

Source:

Excerpt from Wisdom and Dominion: An Economic Commentary on Proverbs by Gary North pages 83-84.

Liberation from Modern Captivity

Liberation from modern captivity. This is the message of my esteemed author to Christian intellectuals in the position paper he wrote in 1994. Due to the "notoriety" of his writing style and tone and due to the "success" of smear reviews of his books, I decided to make his name anonymous(But of course, it's easy to find out who he is by simply cutting a portion of the excerpt and pasting it on your search browser). I think that by doing this somehow our attention will be on the importance of what he has to say.

This writer wrote "The Crisis of the Old Order," which is about the ideas of five men that shaped the modern world. He argued that the ideas of these men except one are now in decline, and as a result, the humanistic foundation of our civilization is also collapsing. He is calling for Christian intellectuals to provide an alternative worldview. However, to do this, liberation from the captivity of the ideas of these men is necessary. For many, perhaps, the message of this writer is old. But to me, it's new, and I am still not familiar with the writings of these men. 

Here is the excerpt: 

"We are in the midst of a WORLDWIDE REVOLUTION. It is peaceful, so we tend not to notice its revolutionary character. It is revolutionary in the sense of the public’s shift in commitment: from the OLD ORDER TO SOMETHING NEW. . . . Three things about this revolution are obvious. FIRST, there is not ONE POLITICAL LEADER of any real substance or following who is articulating it. . . . SECOND, there is no visible SPIRITUAL LEADERSHIP. . . . THIRD, the key Western institutions that the humanists have captured, most notably EDUCATION, are under constant fire from the public. There is a widespread loss of faith. . . . Only Nelson Mandella has anything like a leadership role (but he is now dead). . . . What has gone wrong? . . . . We are living in what appears to be the late stages of sensate culture, the civilization inaugurated by the Renaissance. . . . It is time for Christians to begin to think about their responsibility to offer an ALTERNATIVE WORLDVIEW, as well as working models of alternative institutions. But Christian intellectuals, to an extent that they refuse to admit, are the CAPTIVES OF FIVE MEN who gave us modern culture. . . . "

"We live in a world dominated by the theories of FIVE DEAD white European males: a physicist, Isaac Newton; a novelist, political theorist, and lying autobiographer, Jean Jacques Rousseau; an unemployed naturalist, Charles Darwin; an unemployed philologist, Friedrich Nietzsche; and a conservative politician, Otto von Bismarck. These five men created the modem world. Only Nietzsche’s legacy still seems to be in the ascent phase, and only in one area: culture. . . . "

"On the surface, NEWTON seems to be the untouchable master. His physics is still the physics of introductory textbooks. But thediscovery of quantum physics in the 1920’s ended his reign . . . . ROUSSEAU'S romanticism began the erosion of Newtonian classicism in the late 18th century. His theory of the General Will did not sweep Western political theory until the 19th century. . . . his theory of education -- not tested on his five illegitimate children, whom he turned over to public orphanages as infants, where most children died -- laid the foundations of modem education’s theory of the innocent child in need of State education. . . . DARWIN'S theory of evolution through impersonal, unplanned natural selection transformed Western religion and philosophy, as well as Western social theory. By 1880, Darwinism reigned almost supreme in every academic discipline . . . . But since the late 1950’s, Darwin’s specific explanations have been undermined again and again by those inside the camp. . . . This brings us to NIETZSCHE. His influence is still profound. Marx is now passe; Freud is suspect; and Carl Jung turns out to have been the founder of his own messianic secret society, with himself as god incarnate -- all very embarrassing for his humanist disciples. But Nietzsche, the great modem exponent of the death of God philosophy, still exercises influence through his existentialism and his control over the arts, especially rock music. E. Michael Jones has traced this cultural influence in his important book, Dionysus Rising (Ignatius Press, 1994). It began with Richard Wagner, a participant in the German Revolution of 1848-49, who subsequently used music to undemine the political and moral order. His disciple Nietzsche took this strategy one step farther: using philosophy in a cultural war against Christendom. . . . Finally, there is OTTO VON BISMARCK. It was he who, as Prussia’s political leader, put together the modern German state, from 1866 to 1871. . . . he successfully undermined the political platform of the liberals in the German parliament by proposing State-funded insurance: the first State-guaranteed pension system for all workers. This idea was adopted by the English, along with the income tax, in 1911. It was adopted in the United States in the late 1930’s: the Social Security system. . . . We do not normally think of the welfare State as the invention of a conservative, but its initial implementation surely was. For over a century, the promise of guaranteed retirement has been the most politically powerful lure of all government intervention, the basis of the most powerful organized constituency. To challenge Social Security is to touch 'the third rail of American politics' . . . . This is the most sacred of all sacred cows in Western politics. It apparently cannot be stopped through political action. There is only one way to reverse it: the BANKRUPTCY OF THE STATE. . . . "

"The modern world has placed its faith in the ideas of FIVE MEN. All of them constructed worldviews that, to one degree or other, deny the existence of the providential God of the Bible. Nietzsche was most vocal in his rejection of all gods, but intellectually and socially, all of them denied providence. . . . Our problem as Christians is that our spokesmen are, to one degree or other, dependent on one or more of these FIVE MEN. "

Source: Institute of Christian Economics

Christianity's Response

In Part 1 of "Christianity and the Class Struggle," I understand that Abraham Kuyper proposed a "form" of Christian social consciousness using the antithesis between nature and human will. However, he stated that human failed in its task to bring peace and happiness due to error and sin. In the 2nd part of his book, Dr. Kuyper explained how Christianity addressed the social problem caused by error and sin. In this article, I just want to share my overview and reflection on Kuyper's paper about the disintegration of the Roman Empire, the nature of Jesus' response to social problems, the meaning of usury, the assessment of Jesus' contribution, the role of the church, and the failure of the church. 

The Disintegration of the Roman Empire

Dr. Kuyper opened the 2nd part of his book by recalling the downfall of the Roman Empire. He saw similar symptoms that caused the collapse of the Empire, which were also evident in his generation. He described those symptoms as follows: 

"....the balance between the classes was lost: there was defiant luxury next to crying need; immense accumulations of capital and beggarly poverty concealed in the slums of Rome; and, necessarily following, there was corruption in government ; sensuality rather than morality setting the tone of public opinion; and the masses, carried away by need and passion, ready at any time for rebellion, murder and plunder" (p. 25). 

The Kind of Hope that Jesus Offered

While such imperial disintegration was occuring, the hope for humanity dawned in Bethlehem through the person of the Son of God who took a human form. Dr. Kuyper explained the nature of this hope so as to distinguish it from the misapprehension of the socialists and the revolutionaries. Jesus was neither a "social reformer" nor a preacher of revolution. "Savior of the world was his higher and much richer title" (p. 26). 

The hope that Jesus offered to humanity was important both for the future and the present life, though the primary emphasis was always on the importance of eternal life (p.26). In relation to combating error and sin, Jesus opposed them by truth and by giving up His life. Dr. Kuyper explained this kind of social response: 

"And if you ask then what Jesus did to bring rescue in the social need of those days, here is the answer. Since he knew that such defiant abuses arose from the evil roots of error and sin, he placed the truth over against this error, and He broke the power of sin by shedding His blood for this sin and pouring out His Holy Spirit unto His own" (p. 26).

Dr. Kuyper further explained the social response of our Savior in terms of "moral motivation" and his "personal life." Jesus had a word for both the rich and the poor. He did not hate the wealthy. What he hated was the corrupt means in obtaining wealth. 

"In Jesus' heart there dwelt no hatred against the rich, but rather a deep sympathy for their pitiable state....Only when possession of money leads to usury and harshness is Jesus angry..." (p 27). 

What is Usury?

I just want to expand this idea about corrupt means to attain wealth. Kuyper specifically mentioned "usury," and He asserts that Jesus is angry with such financial practice. Usury is commonly defined as charging excessive interest to a loaned money. Granted that Kuyper's assertion is correct, then Jesus would be very angry with the existing monetary system since it is far worst than usury. I think it is Edward Griffin who coined a new definition of usury. To him, the existing fiat money is actually made out of thin air, and then it is loaned as debt to earn interest. If charging an excessive interest to an actual and existing loaned money is usury, how will you describe the interest asked from a money made out of nothing?

Following the information Abraham Kuyper shared in the first part of his book about the influence of the intellectuals and the wealthy using the government "to build systems which licensed injustice" (p. 20), I cannot avoid to think that the existing monetary system is one of those systems. I first heard this idea of "licensed injustice" from Frederic Bastiat, a classical liberal political economist, but he used a different term, "legal plunder" and applied it in not to the financial but to the legal system. These systems that Kuyper, Griffin, and Bastiat described during their time are still prevailing up to our time. And we wonder now why the global economy is like this?

Now if Jesus is angry with such a usurious and "licensed injustice," how come the contemporary church is not? Does it mean that the church lost its connection from her head? Or does it mean that the church believes that a neutral ground exists in this matter? What should take place before the church will realize that the myth of neutrality never exists?

An Assessment of Jesus' Contribution

Dr. Kuyper mentioned other details that require longer attention. I agree with most of his statements except for at least three that I think need further clarification. Subjects, which I have reservation are related to capital accumulation, the understanding that Jesus is on the side of the poor, and about the financial life of the apostles. What does Kuyper mean by "to cease his accumulating of capital...?" Are all kinds of capital accumulation prohibited by Jesus? Is Kuyper biblically correct? How about economically? If all types of capital accumulation is wrong, how can we reconcile this with biblical material teaching about wealth as outcome of God's blessing? Surely capital accumulation is a legitimate way to attain such wealth. Weren't there specific historical factors that we need to take into consideration? How about the status of those poor? Doesn't the Bible qualify those who are "poor in spirit"? Were the poor during Jesus' time the same with modern day poor? How about the financial situation of the apostles? Are they temporal or permanent? Are they normative or descriptive? Do modern day ministers have to follow their financial lifestyle?

Dr. Kuyper mentioned another feature of Jesus' response that though brief, is worthy of attention. This is related to his explanation of fighting error and sin with truth and the life of the Lord. As already mentioned, the nature of Jesus' response was classified as a kind of "moral motivation" both through his teaching and his personal life. Connected to this are his qualities of "devotedness, self-denial," and "divine pity" (p. 29). As a whole, this is Dr. Kuyper's assessment of Jesus contribution:

"Such a presence, such a preaching, such a death, would already have exercised an influence for good in social relations. The overthrow of the idol of Mammon and the transplanting of the purpose of existence from earth to heaven must even by itself bring about a complete revolution in the self-consciousness of the peoples" (pp. 29-30). 

The Role of the Church

The response of the Lord Jesus Christ to the social problems was not confined in his teaching and personal life. It is also done through the ministry of the church. Dr. Kuyper identified at least three: ministry of the Word, organized ministry of charity, and instituting the equality of brotherhood. He explains: 

"But Jesus did not stop with this. Jesus also organized. Did He not cause His church to go out among the nations; a church which was destined to triply influence the life of society? First, through the ministry of the Word, insofar as the Word constantly fought against greed for money, comforted the poor and oppressed, and in exchange for the suffering of the present time pointed to an endless glory. Then, second, through an organized ministry of charity, which in the name of the Lord, as being the single owner of all goods, demanded community of goods to this extent, that in the circle of belivers no man or woman was to be permitted to suffer want or to be without the necessary apparel. And, third, by instituting the equality of brotherhood over against difference in rank and station, through abolishing all artificial demarcations between men, and by joining rich and poor in one holy food at the Lord's Supper, in symbol of the unity which bound them together not only as "children of men," but, more importantly, as those who have collapsed under the same guilt and have been saved by the same sacrifice in Christ" (p.30).

As a result of the presence and ministry of the church, society experienced great trasnformation compared to its previous condition. For Dr. Kuyper, this is an established fact: 

"And indeed it is a fact that, as a direct consequence of the appearance of the Christ and of the extension of His church among the nations, society becomes markedly different from what it was in the pagan dispensation. The Roman society of that time was strikingly like what Jesus once called a "whited sepulchre which on the outside is beautiful, but inside full of dead bones," and that whited sepulchre crashed into ruins. And without wishing to say that the new social order which arose as though spontaneously from these ruins corresponded in any sense at all to the ideal cherished by Jesus, we may nevertheless gratefully acknowledge that more tolerable social conditions were born. Earthly welfare no longer weighed heaviest in public estimation; eternal well-being also had weight. Slavery was broken at its root, and underwent a moral criticism which demolished it as an institution. Men began to be concerned about the care of the poor and of orphans. The accumulation of too much capital was checked by the opposition to usury. Higher and lower classes approached each other on a footing of freer association. And while the contrast of surplus and scarcity was not erased, the antithesis between overweening luxury and pinching poverty was not so sharp" (pp.30-31). 

The Failure of the Church

Unfortunately, the church lost her way since the time that she gained influence and affluence through the conversion of Constantine the Great. Dr. Kuyper reminisced such lost opportunity:

"Man had not yet arrived at an ideal state, but at least he was started on a better path; and had not the Church gone astray from her simplicity and her heavenly ideal, the influence of the Christian religion on the state and on social relationships soon would have become dominant" (p.31).

Dr. Kuyper narrated further how the witness of the church started to deteriorate: 

"But, first of all, the Christianization of Europe went too quickly, and the folk-groups which had to be assimilated were altogether too massive. And the conversion of Constantine was for the Church the signal to wed itself with the power of the world, thereby cutting the nerve of her strength, and from then on there was in consequence an infiltration again of the world into the church. Instead of disciples who went out without purse or food, richly endowed princes of the church, housed in magnificent palaces ; and as the heirs of the Galilean fisherman at the head of the Church, a series of popes displayed a royal pomp, and in a Julius II or a Leo X seemed more bent on paganizing Christianity than on Christianizing the life of the world. So the salt lost its savour; and social corruption regained its ancient strength; a corruption which was checked, but not conquered, in the lands of the Reformation ; and in that portion of Europe remaining Catholic, speedily spread in such fashion that finally royal absolutism and aristocratic pride evoked the unbearable social tension which issued in the French Revolution, revolution, therefore, which broke out on Catholic territory"(pp. 31- 32).

Dr. Kuyper discussed in the next part of his book the lessons we can learn from French Revolution. 

Source: Kuyper, A. (1950). Christianity and Class Struggle. Grand Rapids, Michigan: Piet Hein Publishers.

A Reformed Christian Social Consciousness

Abraham Kuyper's "Christianity and the Class Struggle" was published by Piet Hein Publishers in 1950. Though 64 years away from us, I find the message of the first chapter relevant to contemporary social issues. In it, he dealt issues like economic inequity, socialism and state interventionism (of course he did not use this last term but the essence is there). In this article, I just want to share the growing recognition during Kuyper's time for the lack of social consciousness among Christians, Kuyper's lament for delayed response, and his suggested form of Christian social consciousness. 

Photo Credit:

http://stevebishop.blogspot.kr/2011_08_01_archive.html

Absence of Social Consciousness

John Gritter honestly accepted that many Christians including the Reformed community "seem to realize absolutely nothing of the implications of their religion in the social realm" (p. 7). This is despite of their zeal for Christian Education and Christian Mercy. He believed that "the application of Christian principles to the social problems is sorely needed!" (ibid.). He was not alone in that conviction. Many intelligent young people who were "impressed with the beauty and the urgency" of Calvinism confirmed that the absence of such application was indeed a serious situation (ibid.). And so for John Gritter, the appearance of Abraham Kuyper's book was timely. 

"In the political sphere we are doing almost nothing; in the matter of social justice we are not doing much better. We have a principles also in the social sphere, will have to start again from the bottom up. We are as yet pretty much at sea as to just how we are to proceed. We are baffled by many practical questions to which we have no answer. In seeking such answers Kuyper can help us. The thoughts expressed in this book were first set forth almost sixty years ago, but they are today as fundamental as they were at that time. Many of the practical questions which Kuyper faced are with us now" (pp. 8-9). 

It was Gritter's prayer that this little book would find its way to receptive readers and would somehow result into a movement for social change. 

"May it be widely read and earnestly studied. May the assimilation of it produce an urgent consciousness of our calling, our God-given duty, to apply the truth of God also in the social sphere. May it blossom forth in a strong movement to fling out the banner of our Lord also in that domain of life" (p. 9).

Kuyper's Lament for Late Response

In the opening pages of the first part of the book, Kuyper described the gathering of Christian leaders in the Netherlands to discuss the economic issues of that time. Kuyper acknowledged that none of the delegate was an expert in economics. However, despite of their limitation, their goal was to seriously tackle what they should do about the social ills of their time. His regret was that compared to Christian leaders in other parts of Europe, their response in Netherlands was delayed. 

Christian leaders outside Netherlands held their own meetings in search for solution to the social challenge. Instances of these were the meetings of Christian Workers Party in Berlin, Christian Socialists in London under certain Rev. Headlam, Christian Society for Social Economy in Geneva and the Catholic initiative under the influence of Le Play and Von Ketteler. They held series of congresses in Germany, France and Belgium. Also Pope Leo XIII issued an encyclical about this issue. 

And then Kuyper recalled the past. He reminded the delegates that delayed response was not a usual feature of Dutch Christianity. Under the intellectual contribution of Bilderdijk, Da Costa and Groen van Prinsterer, they had always been ahead when there was a social problem. Bilderdijk, an advocate of traditional liberalism, exposed the false theory of charity as early as 1825. Kuyper quoted him saying, "'Whenever a people is destined to perish in sin. It's in the church that the soul-leprosy begins'" (p. 15). Da Costa, in his Song of 1840, denounced Plutocracy, the "'rule of money'" (ibid.). For him, Luxury turns into a "'sap-destroying like a cancer, and as it were, destroying the balance between the classes'"(ibid.). He actually lead a meeting for this issue "at London in 1864 a quarter of a century before Karl Marx" (ibid.). Groen van Prinsterer in 1853 called Dutch Christians to extinguish the fire of socialism believing that "'socialism finds its source in the French Revolution'" and "'is conquerable only by Christianity'"(p.16).

Kuyper continued his lament that Dutch Christian leaders had been positioned in the "rear guard" not only by other Christian leaders in other parts of Europe but also "by the Socialists themselves, who constantly appeal to Christ in support of their Utopias..." (ibid.). He described these Socialists as continually holding "serious mottoes from the Holy Word..." and had "not hesitated to present Christ Himself as the great prophet of Socialism..." due to what they believe to be a strong bond between "the Socialist need and the Christian religion..." (ibid.). 

And then Kuyper expressed the uneasiness of a certain Adolphe Naquet also from a traditional liberal school the way Socialism is advancing Christianity. Naquet said, "'You do the work of religion. . . when you put in the foreground exactly those problems in whose solution Christianity is so closely involved'" (p.17). Kuyper saw in this statement a commendation of the power of Christianity to aid the social ill. 

Kuyper then introduced a most illuminating statement from Fichte.

"'Christianity conceals in its womb a much greater treasure of rejuvenation than you surmise. Until now it has exerted its power only on the individual and only indirectly on the state. But anyone who, as believer or as unbeliever, has been able to spy out its secret dynamic, must grant that Christianity can exert a wonderful organizing power on society also; and not till this power breaks through will the religion of the cross shine before the whole world in all the depths of its conception and in all the wealth of the blessings which it brings'" (ibid.).

Dr. Kuyper concluded his litany by embracing the undeniability of the connection between the social question and the Christian religion. He affirmed, "...Christian religion and the social question, are intertwined. The conviction that such a relation exists is not enough. It must also take on form and shape for us. Only so can it speak to our consciousness." Again, his only regret was that the Dutch Christian leaders have not spoken louder and have not acted earlier. He was so ashamed for such inactivity. 

The Need for a Christian Social Consciousness

Kuyper then started to expound about his idea of a "form" or "shape" of Christian social consciousness by explaining the "antithesis" between nature and art. He ascribes power to both. By nature, he meant the power that lies beyond human reach. By art, he meant the power derived from human will to properly utilize nature. He gave several examples of this such as the breeding of horses, irrigation and the education of our children. The goal is "to unlock the power concealed in nature," (p. 19) and he believes that God is pleased with such exercise of the will. 

Unfortunately, man did not properly use this higher power derived from human will. Instead of experiencing peace and happiness through the appropriate use of such art, its misuse brought countless miseries. Kuyper describes this misuse as "series of misdirected actions" (p. 20) originating from "two-fold unchanging cause, error and sin" (ibid.). 

Concerning error, Kuyper explains, "Error insofar as there was ignorance as to the essence of man and his social attributes, and ignorance equally as to the laws which govern on the one hand human association and on the other, the production, distribution and use of material goods" (ibid.). And regarding sin, Kuyper mentions greed and ambition. These two "disturbed or opposed the sound growth of human society, whether through force or through vicious custom and unjust law, and sometimes for centuries abetted a very cancerous development" (ibid.). And then through time, both error and sin "joined forces to enthrone untruthful principles, which did violence to our human nature ; and out of these false principles to build systems which licensed injustice . . ." (ibid.).

Kuyper described such social ills with another name, "reckless play" (p. 21) that is done by the intellectuals and the wealthy, and through their influence, found way through the government. From this point, we read that Abraham Kuyper was not uninformed about the evils of statist interventionism though he did not use the term. 

". . . . actually there has never been a government in any land of the world which did not in various ways dominate both the course of social life and its relations with material wealth. It did this through the various enactment of civil laws ; through trade laws ; and indirectly through its criminal law and penal code; and as far as concerns the relation to material wealth, more particularly through inheritance laws, through the system of taxation, through regulation of exports and imports, codes for purchase and rent, agrarian regulations, colonial rule, control of coinage, and much more" (ibid.).

Kuyper further described the social and economic results from such a "fixed rule" (p. 22) used by those who are stronger for their own advantage. 

"The ineradicable inequality between men gave the stronger an advantage over the weaker, and as though an animal rather than a human society were involved, produced a world in which the fixed rule prevails that the stronger devours the weaker; and the stronger, almost without exception, have always known how to bend every usage and magistral ordinance so that the profit was theirs and the loss was for the weaker. Men did not literally eat each other like the cannibals, but the more powerful exploited the weaker by means of a weapon against which there was no defense. And whenever the magistrate did come forward as a servant of God to protect the weaker, the more powerful class of society soon knew how to exercise such an overpowering influence on the government that the governmental power which should have protected the weaker became an instrument against them. And this was not because the stronger class was more evil at heart than the weaker; for no sooner did a man from the lower class rise to the top than he in his turn took part just as harshly, and indeed more harshly, in the irreligious oppression of those who were members of his own former class" (ibid.). 

Kuyper ended the first chapter of his book with a solemn warning based on Biblical material.

"No, the cause lay in this, that men regarded humanity apart from its eternal destiny, did not honor it as created in the image of God, and did not reckon with the majesty of the Lord, who alone is able to hold in check, through His grace, a race sunk in sin. This unjust situation was already born in ancient times of which the Preacher so movingly complains (Eccl. 4:1) : "So I returned and considered all the oppressions that are done under the sun: and behold the tears of such as were oppressed, and they had no comforter; and on the side of the oppressors there was power, but they had no comforter. " It is a situation like that when Naboth was murdered so that Jezebel might add his acre to the royal park of Ahab; or, if you will, a state of affairs once and for all typified by our Lord in the parable of the rich man and the poor Lazarus; and against which James hurls his apostolic ban when he writes: "Go to now, ye rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted and your garments are moth-eaten. You gold and silver is cankered, and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days. Behold, the hire of the laborers who have reaped down your fields, which is of you kept back by fraud, crieth; and the cries of them which have reaped are entered into the ears of the Lord of Sabaoth' (p.23). 

Kuyper, A. (1950). Christianity and Class Struggle. Grand Rapids, Michigan: Piet Hein Publishers.

Monetary Policy and the Philippine Economy - Biblical Critique of Inflation

This is the 4th and last part of my series in "Monetary Policy and the Philippine Economy". The content will be taken from Gary North's "The Biblical Critique of Inflation". I want to present North's material in four parts: 

• Identifying currency debasement as a concrete call to repentance

• The law commands honest measurement and money

• Consequences of inflation, and

• Multiple indebtedness

Concrete Call to Repentance

North started his critique by citing that unlike today's church leaders, Old Testament prophets confronted both the nation as a whole and their civil governments with a concrete call to repentance. Isaiah 1:22 is an example of such call. In this verse, prophet Isaiah declared that Judah was guilty of economic dishonesty. Currency debasement and deceiving the public about the quality of the products in the market were considered normal and ordinary.

Precious metals such as silver and gold were used as money both nationally and internationally during biblical times. North mentioned that you can find "over 350 references" showing various contexts where silver and gold were used. Example passages include 2 Kings 5: 5 and 2 Kings 12:13.

Honest Measurement and Money 

Since gold and money were used as medium of exchange, honesty in economic transaction was vital. North argued that the law's provision concerning honest weights and measurement was also applicable to honest money. He quoted Daniel-Reps' study to show the importance of honesty in economic transaction: 

"Exactness of weight was important not only for dealings in corn and other goods, but also as a guarantee of the soundness of the currency...The practice of weighing money rather than counting it was still general in the Palestine of Jesus' day, as it was all round the Mediterranean. The scales also served to ensure that the coins were of the true metal and that they had neither been filed nor clipped.; indeed, this inspection was one of the banker's and money-changer's chief tasks" (Gary North, Introduction to Christian Economics, 1973, pp.5-6).

During Isaiah's time, silver and gold coins were not yet in existence. They were used as money in the form of "ingots" (p.6). Exactly, the debasement of ingots with cheaper metals was the offence committed by the people of Judah during the prophet's time. 

For North, that was an act of monetary counterfeiting. He considered it fraudulent, an act of theft, and immoral. He then equated it with the use of legal tender laws. And he contends that not even the government is above the law concerning the use of honest money. North explains why this is so:

"...legal tender laws are immoral; currency debasement is immoral; printed unbacked paper money is immoral. To mix cheap metals with silver or gold and call the result pure gold or pure silver is totally fraudulent. Yet this is what was being done in Isaiah's day" (ibid.).

Such act of monetary dishonesty was not new in Isaiah's time. It happened long time before his day. Proverbs 25:4 clearly identifes the command "to take away the dross from the silver".

Consequences of Inflation

"Currency debasement is the oldest form of monetary inflation" (p.7). North warns about the destructive impacts of monetary inflation on the economy. He quoted four paragraphs from Murray Rothbard's "What Has Government Done to Our Money?". I gleaned twelve destructive consequences of monetary inflation from those paragraphs :

• Gain for counterfeiters

• Losses for late receivers

• Redistribution of wealth in favor of first-comers

• Distortion of business calculation (consumers' demands and operation cost)

• Illusory profits

• Suspension of free market's penalty for inefficient firms and rewards for efficient firms

• Business cycle

• Decline in quality of goods, services, and work

• Popularity of get rich quick scheme

• Penalizing thrift, saving, and lending

• Encouraging debt and spending

• Reduction of standard of living in the name of creating "prosperity"

 See how North concluded Rothbard's analysis:

"Rothbard's analysis indicates why God so opposes monetary inflation, whether practiced directly by the State or simply private fraud which is tacitly sanctioned by the State. Currency debasement is theft. It involves the redistribution of wealth. Those on fixed incomes suffer. The quality of production tends to decilne. Monetary inflation (currency debasement) is a fraudulent, invisible tax, and the Bible prohibits it. The nation which permits monetary inflation to persist, as if it were not a terrible moral evil, will suffer the consequences described by Isaiah and Ezekiel (22:18-22)" (p. 8). 

Multiple Indebtedness

Since monetary inflation promotes debt instead of thrift and saving, a corollary economic and monetary phenomenon occurred. North described this as "multiple indebtedness". He got this idea from Exodus 22:25-27.

The passage speaks about the use of interest in lending money and the use of a pledge or collateral. It is this use of collateral where North got this idea of multiple indebtedness. For him, the cloak as pledge serves as a protection for both the creditor and the debtor. The debtor cannot use the same cloak as collateral in multiple loans or transactions. He is confined by his immediate assets. This economic principle prohibits multiple indebtedness. 

1. Fractional Reserve Banking

After laying down the basis for multiple indebtedness, North claimed, "The entire public sphere of civil government rests on the violation of the principle. The whole structure of modern credit is based upon the idea that men should not escape from perpetual debt" (p.11). Particularly, "fractional reserve banking and the limited liability corporation" (ibid.) have violated this economic law. This violation was later organized and designated as "the monetization of debt" (ibid.). Notice how North described this economic phenomenon:

"The central bank of every nation...prints up the money to finance the deficits of the central government, and in return for this fiat currency, the government gives an interest-bearing bond to the bank...From a biblical standpoint, this is utterly corrupt: 'The wicked borroweth and payeth not again' (Psalm 37:21a). The civil authorities do not intend to reduce this debt and repay the principal. They favor perpetual indebtedness. Laws that are transgressed in God's universe will be found to contain their own built-in punishment...Massive national indebtedness is highly dangerous" (ibid.).

Concerning fractional reserve banking, its mechanism is unbelievable. It all starts with a citizen making a deposit either checking or savings account. And from that deposit, fractional reserve can create loans nine times the size of the original deposit. North referenced Wilhelm Roepke saying the same thing about fractional reserve banking as resting "upon the systematic violation of the biblical prohibition on multiple indebtedness" (p. 12). For Roepke, without understanding the mechanism of fractional reserve banking, we cannot understand also "the perils and the problems which currently beset our economic system" (p. 13). 

Fractional reserve banking violates the principle of multiple indebtedness for it indebts itself beyond its immediate assets by loaning money to borrowers. Banks do this for they assume that their creditors will not ask for their money simultaneously. The faulty foundation of this mechanism is exposed when a bank run occurs. 

2. Limited Liability Corporation 

LLC has been in existence for more than a century. North describes this institution as a creature that came out of the economic environment that promotes multiple indebtedness. Or we can also say that with the existence of fractional reserve banking and government intervention, LLC is another form of violation of the principle of multiple indebtedness. North describes three things about this institution. 

First, LLC works as follows: 

"The corporation...is responsible only for the value of its assets. Creditors can collect, in case of coporate bankruptcy, up to the value of the corporation's property, but they cannot gain access to the funds of the legal owners, i.e., the shareholders...Thus, the LLC tends to become a huge, impersonal structure in which effective ownership is separated from management" (p.15).

North's second observation is about the shift in responsibility. Here North relies on Rushdoony's comments:

"...the liability thus shifts responsibility away from the responsible to society at large...with limited liability, a premium is placed on profit irrespective of responsibility. The shareholder is less concerned with buying responsible ownership and more concerned with buying a share in profits. And then, as the state further protects the shareholder against liabilities in his irresponsible pursuit of profits, the shareholder becomes less and less concerned with the responsible and moral management of his company" (pp. 15-16). 

Finally, North identified the influence of government intervention preparing the way for socialism. The limited liability laws are actually one form of government intervention. They destroy personal responsibility before God and before men, they produce subtle people who know how to use bankruptcy laws, and they erode the very foundation of Western civilization. Notice how North explains the connection of limited liability laws to socialism:

"Limited liability laws have produced the era of the huge, impersonal corporations that have produced unquestioned material prosperity, but at the same time these laws are now producing something very foreign to free enterprise...The drift into socialism continues, for it is socialism, above all other systems, which destroys personal responsibility and removes power from ownership..." (pp.17-18). 

Conclusion

At last, after 15 days, I finished my series on "Monetary Policy and the Philippine Economy". So part 1 talks about Dr. Nye's lecture where he identified the economic problems of the country and offered a corresponding solution. Part 2 contains six recent news articles related to monetary inflation written from different perspectives. Part 3 deals with Mises' lecture on inflation. And this last part is about biblical critique of inflation.

In blogging this series, I recognize the existence of gaps. It is just a draft, which needs to be finalized to come up with a lecture format. At its best, this series and other related articles in this blog serve as an introductory overview in the study of monetary inflation.


Part 1 - Dr. Nye's Lecture

Part 2 - Summaries of 6 Related Articles

Part 3- Mises' Lecture

Reference: North, Gary. (1973). An Introduction to Christian Economics. The Craig Press. 

The Intelligent Woman's Guide to Inflation

I suspend my study of Bastiat’s “The Law” not only because the material is quite difficult to handle, but also because my reading interest shifted to Christian economics. The present article is a summary and reflection of Chapter 2 of Gary North’s “Introduction to Christian Economics”. North gave a very interesting title to this chapter, “The Intelligent Woman’s Guide to Inflation”.

Chapter 2 is all about inflation. For North, this is a very important subject that every taxpayer has to understand. To him, inflation is “the most pressing economic question” (Gary North, An Introduction to Christian Economics, 1974, p. 20). In chapter 3, he also said among the dangers to free market economy, inflation is the greatest both historically and theoretically (p. 29).

In explaining inflation, North deals with 6 interrelated subjects, but I only want to focus on 4 of them – definition of inflation, basic properties of money, origin of modern banking and inflationary policies.

Meaning of Inflation

North started his essay with a working definition of inflation. He identified two basic definitions:

1. An increase of the money supply; and

2. An increase in the prices of goods and services

Number 2 is the definition known by the public, but North used the term in his essay using the first definition.

Money’s Properties

North then enumerated the basic properties of money. These are durability, transportability, divisibility and scarcity. Understanding the importance of the fourth property is critical to see the illusory foundation of existing monetary system, which violates this important basic property of money.

Origin of Modern Banking

Third, North narrated a brief history for the origin of modern banking. He started with ancient history and then proceeded to medieval period.

During ancient time, says North, the Roman Empire practiced inflation by counterfeiting the existing gold and silver coins. The Empire did this by “adding cheap metals into the molten gold or silver, yet calling the resulting coins pure” (p.21). Such deception resulted to the reduction of value of coins and the loss of their purchasing power.

In the Medieval Period, the role of the Roman Empire was replaced by goldsmiths and metalworkers who were later known as “bankers”. They are the ones who introduced the idea of storing precious metals. The people trusted them and so the silver and gold coins of the public were given to them for safekeeping. The people received IOUs as “money substitutes” for their coins in the vault. However, people became more interested with money substitutes than gold or silver coins. Bankers devised a scheme to maximize their profit. They issued more IOUs than what they actually possessed in their banks believing that people will not take their deposits simultaneously.

Such simultaneous withdrawal is described as “bank run”. Bankers fear such event. Such panic on the part of depositors is occasioned by the loss of confidence in the ability of the banks to meet their responsibilities. The 1930’s is usually referenced as a typical example of such panic where 9,000 banks collapsed (p.22).

Inflationary Policies

North then describes what he called as “the central flaw of all inflationary policies” particularly in relation to the development of paper money. He explains it as follows:

“…citizens decided to trade certain money metals for scarce consumer goods and services. They later consented to use paper claims to money metals as convenient substitutes. But paper and ink are in large supply, unlike gold and silver; it is far easier to print an IOU for a thousand silver dollars than it is to mine the silver, smelt it, and form it into the actual thousand coins.” (p. 22).

This development destroys the fourth basic property of money, which is scarcity. Such violation results to devaluation of existing monetary unit or the increase in the value of goods and services.

The sectors of society that suffer the most in inflating the money supply are those who depend on fixed salary while the groups that benefit from inflation are politicians, bankers and the suppliers of goods and services to the government.

To illustrate the economic destruction caused by inflation, North returned to Germany’s experience in the early 1920’s. Germany that time was operating “over 300 paper mills and 2,000 printing establishments” to print German marks, Germany’s money that time. We were told that the change in the value of Germany’s money that time was so fast that its original value in the morning was no longer the same in the evening. I think there is no worst case to illustrate how inflation destroyed Germany’s economy that time than the fact that a loaf of bread would cost 1.25 trillion marks. Unemployment became widespread, savings were wiped out and German marks turned worthless. Economic depression prepared the way for the rise of the Nazi dictator.

Personal Response

Do Americans learn from Germany’s experience? The existing economic situation of the US tells us that they did not learn from the past, but is actually heading towards similar path of economic destruction. When North wrote this essay, the price of gold was $41 per ounce and US national debt was $353 billion. After 44 years, gold now costs $1,598 per ounce and US national debt is closed to $17 trillion. I just wonder if Gary North’s analysis is correct, how come his predicted “economic collapse” is not yet taking place? Instead, we have been hearing from mainstream news that 2008 economic crisis has already been solved! Or maybe, “the day of reckoning” has just been extended due to Federal Reserve’s commitment to indefinite QEs.

Now, why am I interested in all of this? Why worry about American crisis whereas the Philippine economy is now experiencing a boom?

I am not an economist, but I am entitled to my own opinion. I suspect that our “economic boom” is not based on solid economic practices. It is a “spill out” of what’s happening both in the US and the EU. At least in their case, reality is setting in and I am hoping that economic illusion would gradually fade. But they are transporting such illusion into our shore and we welcome it with open arms.

I do not doubt that those at the top are ready to reap the financial rewards of living in economic illusion. But as all artificial “booms” end in “busts”, I think it is important that Filipinos should understand the role of “imported inflation” that drives the growth in our stock market for us not to be caught unprepared once this illusion starts to fade.

Note: Originally posted in Studies in Economics and mirrored in Acts of the New Commonwealth last April 2, 2013

The Role of Christianity in the National Development of South Korea

Following three forum threads and reading two articles from Ludwig von Mises Institute, I came up with different answers explaining the phenomenal growth of South Korea’s economy. The answers I received are due to government leadership, collaboration between the government and the chaebols, intervention of the US, an ongoing experiment between socialism and free market, and the chaebols using the government.

South Korea and Taiwan

Post War South Korean Economy

North Korea: A land of milk and honey

In Korea, Bureaucrats lead the technology charge

Coming from theological education, I am not satisfied with the above answers. I am looking for a connection between the growth of Christianity in South Korea and her economic development. And I find Kirsteen Kim’s paper, “Christianity and modernization in twentieth-century Korea: perspectives on new religious movements and the revitalization of society” helpful. The paper primarily focused on Protestant Christianity’s impact on Korea’s national development. And national development is incomprehensible apart from a robust national economy.

Kim is critical of developmental theory that left out the significant role of religion. Basing on the works of Scott M. Thomas, Kim claims that religion actually played a vital role in social development. The assumptions therefore of developmental theories leaving out religion are inaccurate. Those theories stigmatize religion as primitive, confined in institutional concepts and beliefs, and a matter of personal preference. Those theories fail to see the public importance of religion as a force to create change in the lives of people, the economy, and the entire society.

Kim identifies ten ways Protestant Christianity has impacted the country:

• Holistic view of life
• Developmental approach
• Transforming socio-cultural practices
• Correlation between Christianity and independence movement
• Church gatherings as avenues for resistance
• Witnessing through various social services.
• Influence of the corporate world in the way church leaders manage church ministries
• The development of Minjung theology
• Reunification of two Koreas as a concrete application of biblical Jubilee.
• Global mission

Protestantism shares the holistic view of life with Catholicism. Both of them offered vision of a better life than the one given by both Confucianism and Buddhism.  This vision of a better life goes beyond “spiritual’ concerns such as the salvation of soul. Christianity during its early stage in South Korea was understood as a force for change affecting family and the society.  It has power to solve political and economic problems. It is actually understood as an important component in nationalism. It even serves as an economic motivation for it provides a way to protect the living standard of the people and Christian connection offers diverse economic advantages.

The concrete application of establishing the kingdom of God through developmental approach is the second way Christianity impacted South Korea. Early Protestant missionaries established schools, hospitals, and churches. Through the influence of Nevius method, church leadership was nationalized and democratized. Consequently, Korean Christians were quick to imitate the example of Protestant missionaries resulting to the multiplication of schools, hospitals, and churches throughout the country. In fact, as of 2002, among the top five universities in the country, the roots of three of them could be traced in Christian tradition.

Socio-cultural practices especially related to gender and age underwent change through the influence of Christianity. Superstitious beliefs collapsed, domestic abuses were exposed, and Korean Christians developed a “social consciousness” resulting from emphasis on education.

The role of Christian leaders and churches in the nationalist and independence movement was the fourth way Christianity influenced the development of South Korea. Historically, Christians suffered a lot for their active participation in this independence movement.

Due to Japanese suppression, early Korean Christians found prayer and revival meetings as ways to resist Japanese cultural imposition. However, when the colonial government made Shinto worship compulsory in schools, resistance became public, which resulted to persecution, imprisonment, and death. Church buildings were even closed down.

Church ministries in South Korea have been managed like the corporate world. They invest on impressive buildings and cutting edge technology. Church leaders never criticize capitalism. In fact, the growth of Korean churches is closely associated with the growth of businesses.

Minjung theology consists of three threads: Catholicism’s liberation theology, insights of folk history movement of the 1960s, and re-reading of the Bible from economic and political perspectives. Minjung theologians played a significant role in the overthrow of Korea’s military government. They displayed openness to collaborate with other groups advocating the protection of human rights.

I find that there is no need for further elaboration on the sixth and the last two influences of Christianity – witnessing through various social services, reunification of North and South Korea, and missionary work around the world.

Based on Kim’s paper, it is now clear that Christianity indeed played a significant role in the national development of South Korea. And part of that development, I suggest that the economic boom of the country could never be explained completely apart from the religious influence coming from Christianity.

Source: Kirsteen Kim