Austinomics

Economic Background of Christian Teaching

I had to recently write a paper for my history of economics class about either an economist or school of thought. I chose to do the economic background of Christian teaching and focus on the Austrian school of thought. My paper is below.

Abstract

The aim of this paper is first, to explore the economic conditions at the time of Jesus Christ, then to explore what Christ taught in relation to the economic conditions of the time. Lastly, the paper will discuss current economists that intertwine economics, Christianity, and morality.

Economic Climate During The Life of Christ

It has long  been debated among men, Christians and non-Christians alike,  what Christ meant when He spoke; however it has never been disputed that no matter what Christ’s teachings were, that it had real and practical meaning to those listening at the time. In order to get the most complete understanding of what Christ’s teachings were about, we must first examine the economic and social conditions that were taking place at the time of His teaching. (Christ lived from about 6 B.C. – 30 A.D.)

Palestine, a small country by today’s standards (about the size of Vermont) had little economic use in way of production during Christ’s lifetime. The country was mostly agricultural and produced little in manufacturing other than garments made by women. The country was more fertile during Christ’s time and should not be judged by its recent barren state. During the time of the Gospels (the books Mark, Matthew, Luke, and John in the Bible), Palestine was reasonably self-sufficient, producing crops such as grain, vine, fig, olive, and palm (Stamp 9). Occasionally, goods would be imported and were typically done so on camel caravans, often of great length (Jeremias 31). While the country appeared to produce a good amount of agriculture, this does not mean much in way of estimating the standard of living at the time. For this, we must have a better understanding of the population, as the products of agriculture are obviously finite. The population was probably numbered somewhere around 3 million people and very dense (Stamp 13), and supply was typically just enough to keep up with demand.

At the time of Christ’s life, Palestine was controlled by the Roman Empire, which means the country was subject to burdensome unfair taxation (both direct and indirect) by controlling forces. According to Stamp, the Romans, “exacted a water tax, a city tax, a tax on such necessities as meat and salt, a road tax and a house tax, and of course frontier taxes and many ‘octroi’ [tariffs] duties. It has been estimated, on a very broad lines of course, that the total taxation of the people was forty percent of income or higher, having regard to the standard of living, this was very oppressive.” It is widely concluded by many scholars that because of the population and oppressive tax rate, real poverty was a common sight in this time period.  In addition, the country had no real common currency and the Roman government prohibited coin debasement, so barter was the most common form of trade. It is clear then, that the picture going into Christ’s ministry was of an overpopulated country, stricken by a low standard of living due to any lack of real payment system, and high taxes. It is with this in mind that we must interpret Christ’s teachings regarding economics.

Christ did not preach on macroeconomics as we know it today, but rather more on personal finance matters, as well as morality of larger macroeconomic problems such as poverty, inequality, and distribution of wealth. This next section will look at a variety of Christ’s teaching in regards to economic and financial issues of the day.

Examination of Christ’s Teaching On Economics

Taking the Gospels as a whole, it is clear that Christ had both positive and normative views when it came to economics. When talking about larger issues, such as poverty, Christ was very positive. For example, when a women anoints Jesus with perfume, Christ says (in response to questioning by Judas), “Leave her alone, so that she may keep it for the day of my burial. The poor you always have with you, but you do not always have me.” (John 12:3-7). Here Christ accepts the reality of poverty and even suggests that it is not curable, “The poor you always have with you”.  In addition, Christ never condemns the economic institutions and relationships of his day but rather suggests on reaching the highest personal morality within the system you are in. Perhaps Christ accepted this fact as Christianity is a religion where one is transformed through the inside out, and relies on voluntary action rather than economic or social sanctions. Joseph Stamp puts it beautifully, “A piece of charity that is prescribed is tax, or rate, or levy [not charity].” (Stamp, 33)

On the personal finance side of economics, Christ was much more normative, giving instruction on how lives lived in submission should be carried out. Christ never condemned wealth itself, but rather the risks associated with that wealth, and was not too concerned with how wealth was acquired, but gave much instruction on the proper disposal of wealth. We see an example of this in the story of a widow giving all she has, “Then a poor widow came by and dropped in two small coins. ‘I tell you the truth,’ Jesus said, ‘this poor widow has given more than all the rest of them. For they have given a tiny part of their surplus, but she, poor as she is, has given everything she has.’” (Luke 21:2-4) Much of Christ’s teachings could be examined as if He were talking about being poor in spirituality, rather than material wealth. While this is probably true (when examining economic passages in light of the rest of the Gospels), it is still fact that Christ never suggested the rich man was an economic or moral evil.

Modern Economist’s View

Christianity, despite being the world’s largest religion, is notably absent of many economist trying to intertwine both economics and Christianity in modern day. Jörg Guido Hülsmann, an Austrian economist, is one of the few today that writes on economic theory that is strictly in line with Christian teaching. In his latest book, The Ethics of Money Production, Hülsmann questions the current state of macroeconomic monetary policy and argues that money should be a privately made good (such as clothing or food) in light of the teachings of the bible. In the book, Hülsmann writes largely on coinage production, fractional reserve banking, legal tender laws, and inflation, while backing up his assessments of the issues with scripture and quotes from various Catholic Popes. Arguing that the government as the sole producer of currency has no grounds in Christian teaching, Hülsmann writes:

According to a subtler argument for government monopoly in money, the government has the right to do to the money of the country whatever it wishes because at all times it owns the entire money supply. Thus the money that the citizens keep in their wallets and their bank accounts is not really their money. They are just stewards for the true owner: the government. The standard justification for this argument is the famous verse in Matthew 22:21. Here the Pharisees show Jesus a coin with Caesar’s image and he commends them to “repay to Caesar what belongs to Caesar and to God what belongs to God.” Some advocates of monopoly in money take this to mean that all coins belong to the government, in the present case to Caesar.

But this opinion is untenable, as the passage in which the verse appears clearly shows. The passage reads:

 …Tell us, then, what is your opinion: Is it lawful to pay the census tax to Caesar or not?” Knowing their malice, Jesus said, “Why are you testing me, you hypocrites? Show me the coin that pays the census tax.” Then they handed him the Roman coin. He said to them, “Whose image is this and whose inscription?” They replied, “Caesar’s.” At that he said to them, “Then repay to Caesar what belongs to Caesar and to God what belongs to God. (Matthew 22:17-21)

Thus it was not just any coin that the Pharisees presented to Jesus but a coin that was specifically used for the payment of taxes to the Roman Empire. Moreover, Jesus did not even say that the coin itself belonged to the government (Caesar); but that those sums of money that were owed to the government (if any) were to be paid to it. Oresme too explicitly rejected the opinion that governments somehow are the inherent owners of the entire money supply.

            Another notable Austrian economist who writes on both the subject of Christianity and economics is Thomas Woods. Dr. Woods in The Church and the Market argues that the means of economic prosperity is what matters, and that very few people will disagree with the goal. In true Austrian economist form, Dr. Woods issues deductive reasoning and a lack of mathematics in defending the free market:

If you read many expositions of Catholic social teaching, you find statements like: “It is good for families to prosper. Therefore, the following principle [antitrust legislation, attacks on big business, taxation on wealth, etc.] is morally obligatory.” In other words, we want X, so therefore we should have Y. (The connection between X and Y is often implicit, but it is there.) But what if either 1) Y moves you further away from X; 2) there are better ways than Y of getting X; or both? The corpus of Catholic social teaching is filled with such statements, so much so that it’s no easy thing to separate the basic principles from the recommendations. The problem, naturally, is that these are all debatable issues, though a great many expositors of the social teaching give the very unfortunate impression that they’ve all been decided, except for a few holdouts who for some reason obstinately refuse their assent.

            At the end of the day economics is all about giving the greatest number of people the greatest standard of living. With that said, it is surprising that more economists do not try to relate current economic conditions with Christ’s teachings in order to reconcile their economic line of thought.  The person of Jesus Christ had much to say on matters of finance and of broader economic principles; for those that identify with the Christian faith (approximately 2.18 billion worldwide) it is vital to achieve a better understanding of His position on these matters. Even for those that do not ascribe to Christianity, it could be argued that the economic principles encouraged by Christ are intellectually sound.

 

 

Works Cited

Stamp, Josiah. Christianity and Economics. New York: Macmillan, 1938. Print.

Jeremias, Joachim. Jerusalem in the Time of Jesus: An Investigation into Economic and Social Conditions during the New Testament Period. Philadelphia: Fortress, 1969. Print.

Life Application Study Bible.  New Living Translation. Second Edition. Carol Steam: Tyndale House Publishers, Inc. 2007. Print.

 

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