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Money, Greed, and God:Why Capitalism is the Solution Not the Problem by Jay W. Richards David L. Johnson, Ph.D.

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About the Author

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Table of Contents

1. Is Capitalism or Socialism More Just? 2. But Who Will Help the Poor? 3. Does Capitalism Foster Unfair Competition? 4. Does Capitalism Take from the Poor and Give to

the Rich? 5. Is Capitalism Based on Greed? 6. Has Christianity Always Opposed Capitalism? 7. Does Capitalism Lead to an Ugly Consumerist

Culture? 8. Will Capitalism Use Up All Our Resources?

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1. Is Capitalism or Socialism More Just? Were the first century Christians communists?

Acts 4:32-35 Now the full number of those who believed were of one heart and soul, and no one said that any of the things that belonged to him was his own, but they had everything in common. And with great power the apostles were giving their testimony to the resurrection of the Lord Jesus, and great grace was upon them all. There was not a needy person among them, for as many as were owners of lands or houses sold them and brought the proceeds of what was sold and laid it at the apostles' feet, and it was distributed to each as any had need.

Key Differences Voluntary; no government confiscation No class warfare No hint that private property is immoral

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1a. Socialism’s Record

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it”-Thomas Sowell

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2. But Who Will Help the Poor? “Open your hand to the poor and needy

neighbor in your land” (Deuteronomy 15: 7-11).

“Those who oppress the poor insult their Maker, but those who are kind to the needy honor him” (Proverbs 14:29).

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2a. Does Welfare Help the Poor? The poverty rate had been declining before the war on poverty

began, dropping from 22% to 15% between 1959 and 1965

Great Society welfare programs of Lyndon Johnson in the mid-60s begin

The poverty rate has continued to fluctuate between 12 and 15% up to the present day

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The best predictor of childhood poverty is being in a single-parent household headed by a mother Studies show that a 10% increase in welfare benefits results in a

12% increase in out-of-wedlock births among low-income women aged 14 to 22

Since 1965, out-of-wedlock birth rates have soared

2a1. Unintended Consequences of Welfare

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2b. What about Welfare to Other Countries? Rich countries have sent $2.3 trillion to poor

countries in the past 50 years Over half $1 trillion to Africa. Has not solved Third World poverty. Often wasted or used to prop up corrupt dictators

who keep their countries poor

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2c. What Works to Help the Poor? Protect property rights Maintain rule of law Encourage economic freedom Encourage stable families Encourage the right cultural mores:

Trust in and orientation to the future Willingness to delay gratification Diligence and thrift

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3. Does Capitalism Foster Unfair Competition? Trading Game for 20 students

Trading freely can add value, even though the traded items remain physically unchanged.

The more trading partners, the better. Free exchange is a win-win game. Capitalism is not a zero-sum game that requires a

winner and a loser

Trade with No Student

Total Score 50

Trade with One Student

Total Score 75

Trade with Any Student

Total Score 150

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4. Does Capitalism Take from the Poor and Give to the Rich? Poor households in U.S. according

to the Census Bureau 40% own their own homes 76% have air conditioning 75% own a car 97% of color TV 78% have a VCR or DVD player Only 6% of households are

overcrowded

Poverty outside the U.S. 10 million children die of hunger and

preventable diseases each year Over one billion people live on less

than $1 a day 800 million people go to bed hungry

every day

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4a. Capitalism Creates More Wealth and a Higher Life Expectancy

South Korea 2009

Tanzania 2009

Source: http://www.gapminder.org

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4b. Wealth and Creativity

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5. Is Capitalism Based on Greed? “Take care! Be on your guard against all

kinds of greed; for one's life does not consist in the abundance of possessions” (Luke 12:15).

“You shall not covet your neighbor's house; you shall not covet your neighbor's wife, or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor's” (Exodus 20:17).

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5a. What did Adam Smith Say?

Adam Smith in 1776 wrote An Inquiry into the Nature and Causes of the Wealth of Nations. “It is not from the benevolence of the butcher,

the brewer or the baker that we expect our dinner, but from their regard to their own interest.”

Does he mean greed? There is a difference between selfishness

and self-interest

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5b. The Difference Between Self Interest and Selfishness Self interest is not in itself immoral.

Breathing, washing your hands, eating more fiber etc. is pursuing self-interest.

The Golden Rule promotes proper self-interest Jesus said, “In everything do to others as you would

have them do to you; for this is law and the prophets” (Matthew 7:12).

Our self-interest also includes friends, families, communities, coworkers, coreligionists and others.

In contrast, socialism alienates people from their rightful self interest It promotes selfishness like stealing, hoarding, and

government confiscation.

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5c. Does Capitalism Feed Greed? No, studies show that capitalistic countries are more

generous

Studies also show an inverse correlation between taxation and giving The more you tax, the less the people give Therefore, the freer the economy, the more people give

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5d. Why Is Capitalism More Generous? Capitalism discourages miserliness and encourages

enterprise Capitalism requires the following virtues:

Must set aside capital, not consume like a glutton Must risk capital, not hoard it. Must trust people to work and trade, not be a skeptic Must anticipate the needs of others, not be self-absorbed Must be disciplined, not impetuous Must be creative, not an automaton

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6. Has Christianity Always Opposed Capitalism? Is working with money inherently immoral or charging interest on

money always exploitative? “If your brother becomes poor and cannot maintain himself with

you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. You shall not lend him your money at interest, nor give him your food for profit” (Leviticus 25:35-37).

"You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest. You may charge a foreigner interest, but you may not charge your brother interest, that the LORD your God may bless you in all that you undertake in the land that you are entering to take possession of it” (Deuteronomy 23:19-20).

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6a. Lending Versus Rescuing

In ancient times most people Lived and traded within their extended families and tribes Trading was based on reciprocal needs Only a tiny minority had any excess money to lend Money was buried

In modern times people Lived and traded outside their extended families and tribes No longer lent a few unproductive coins to poor kinsmen to buy

food. More people had excess money Money was put to work, assuming risk and charging for it:

Banks made loans Insurance companies provided coverage

Money lent for capital is different from money lent to a poor neighbor out of need.

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6b. Christians Helped Invent Capitalism Rodney Stark in the Victory of Reason: How

Christianity Led to Freedom, Capitalism, and Western Success argues that finance and banking were created by monasteries in northern Italy's city states during 1100 and 1200 A.D. The monasteries through technological innovations, such

as water mills, windmills, wheeled plows, crop rotation, etc. created surplus products to sell

Surplus products were sold in distant cities Banking was needed to avoid carrying money (heavy to

transport and vulnerable to theft)

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6c. What Jesus Said

Jesus said, “Do not store up for yourselves treasures on earth where moth and rust consume and where thieves break in and steal; but store up for yourselves treasures in heaven…for where your treasure is, there your heart will be also” (Matthew 6:19-21). What counts here on earth is our relationship with Christ and

spread of the Gospel. Storing up is hoarding

However, investing is not hoarding, but making money available to other ventures

Jesus said in the parable of the talents “Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest” (Matthew 25: 27). The parable implies that charging interest is acceptable. The first two servants were rewarded for investing their money

and putting it at risk.

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7. Does Capitalism Lead to an Ugly Consumerist Culture? The Bible condemns gluttony and warns about the dangers of

wealth and overindulgence “Be not among drunkards or among gluttonous eaters of meat,

for the drunkard and the glutton will come to poverty, and slumber will clothe them with rags” (Proverbs 23:20-21).

Gluttony is a problem of excess and not restraining our appetites. The Bible also frequently treats bounty as a sign of God's

blessing. The Old Testament mandated feast days Jesus enjoyed the occasional party, although He was

falsely accused of being a glutton and a drunkard (Luke 7:34).

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7a. Capitalism and Gluttony

There is no evidence that a state controlled economy makes citizens more virtuous. Every social ill in modern-day America (from

widespread abortion and alcoholism to family breakdown) was much worse in statist and communist countries.

Capitalism promotes delayed gratification, which is the opposite of gluttony.

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8. Will Capitalism Use Up All Our Resources? Some say that Christianity exploits nature by

citing this verse: “Be fruitful and multiply, and fill the earth and

subdue it; have dominion over the fish of the sea and over the birds of the air and over every living thing that moves upon the earth” (Genesis 1:28).

However, the Bible says that man has dominion over nature, not that man should dominate nature.

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8a. Will Capitalism Use Up All of the Oil? Warnings are based on known oil reserves.

Before, known oil reserves did not include deep ocean oil or tar sands.

Now, it is possible to extract that oil due to technological improvements

In 1980 economist Julian Simon made a famous bet with biologist and environmentalist doomsayer Paul Ehrlich. Simon publicly bet $1,000 that over the next 10 years, the

real prices of any five commodities would go down, not up. Ehrlich and his team took up the challenge and picked five

commodities, nickel, tin, tungsten, chromium, and copper. Ehrlich's team lost the bet. All five commodity prices went

down in the 80s.

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8b. Doesn’t 20% of the Population Use More Than 80% of the World's Energy? What is meant by 80% of the world's energy?

The total available energy being produced AT THE MOMENT.

The total amount of energy used and unused is unimaginably high. At any time we’re using only the tiniest fraction. There's a whole lot of uranium, sunlight, wind,

waves, and river currents that were not using for energy.

We don't even know how much oil there is.

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