THIRD EDITION, REVISED Jeffrey E. Haymond Cedarville University FOR A FALLEN WORLD NO FREE LUNCH: ECONOMICS An Introductory Economics Text From a Christian Worldview
No Free Lunch: Economics for a Fallen World ISBN: 978-0-9967250-1-9 Editors: Rachael Carrington, Lauren Eissler Original Prototyping Design: April Bennett Layout Design Intern/Assistant Graphic Designer: Rachel Molstre Layout Design Intern/Assistant Graphic Designer: Melissa Johnson Layout Redesign: Lauren Eissler Copyright © 2020 by Jeff Haymond All Rights Reserved. This eBook is protected under the copyright laws of the United States of America. Any reproduction or other unauthorized use of the text or graphics herein is prohibited without the express written consent of the author.
TABLE OF CONTENTS CHAPTER ONE: Introduction to Economics 1 CHAPTER TWO: Fundamentals of Economic Behavior 35 CHAPTER THREE: Demand 62 CHAPTER FOUR: Supply 83 CHAPTER FIVE: Supply & Demand: Markets at Work 103 CHAPTER SIX: Applications in Markets 126 CHAPTER SEVEN: Production: Man at Work 150 CHAPTER EIGHT: Market Structure: From Competition to Monopoly 177 CHAPTER NINE: P31W: Enter the Entrepreneur! 198 CHAPTER TEN: It’s all About the Institutions! 224 CHAPTER ELEVEN: Money, Money, Money! 248 CHAPTER TWELVE: Money Mischief 274 CHAPTER THIRTEEN: Market “Failure” and the Role of the Government 298 CHAPTER FOURTEEN: Decision-Making in Democracy: Public Choice 321 CHAPTER FIFTEEN: Issues in International Economics 358 CHAPTER SIXTEEN: Valuing the Future - Concepts in Capital & Finance 389 CHAPTER SEVENTEEN: A Short History of Macroeconomics 419 CHAPTER EIGHTEEN: The “Macro” View of the Economy 443 APPENDIX A: Definition Index 471 SCRIPTURE PAGE OBJECTIVES PAGE REVIEW QUESTIONS RECAP BOX FURTHER INFO. SECULAR EXAMPLE BIBICAL EXAMPLE REQUIRED LINK LINK TO PLAY VIDEO SYMBOL INDEX
NO FREE LUNCH: PREFACE AND ACKNOWLEDGMENTS
No Free Lunch: preface and acknowledgments v PRAISE FOR NO FREE LUNCH No Free Lunch: Economics for a Fallen World brings a much needed foray into the myriads of introductory texts in economics. This text is based upon two platforms; one theological, the other economic. From a theological perspective the author examines economics from a conservative theistic world and life view. Economically, the author demonstrates a thorough systemic Austrian approach. The interspersing of relevant Biblical passages throughout the text help bring together this unique blend of a conservative economic and theistic approach to economic principles. The text is particularly strong in its discussion of public choice and monetary theory. The use of ample online resources helps keep it current and up to date. I have personally beta tested and taught the text for four years. I have found it to be substantive as well as a refreshing approach to conveying basic economic principles. – Galen Smith Professor Emeritus, Cedarville University One of the real blessings of being part of the community of Christian believers is the gifts that some give to others. Jeff Haymond is clearly one of those gift givers. His online text, No Free Lunch: Economics for a Fallen World, is an outstanding integration of a Christian worldview with sound economics. Haymond covers well the important concepts of an economics principles course and points out clear connections between scripture and the economic way of thinking. His text also treats topics not always included in introductory texts, such as the role of the entrepreneur, the importance of institutions and Public Choice. Economics professors at Christian colleges would be well served by considering Haymond’s text for their courses. – P.J. Hill Professor Emeritus, Wheaton College Senior Fellow, Property and Environment Research Center ABOUT THE AUTHOR Dr. Jeff Haymond is a professor of economics at Cedarville University, and the dean of the School of Business. He received his Ph.D. in economics from George Mason University in 2001, and holds bachelor’s and master’s degrees in engineering as well. A 1985 graduate of the United States Air Force Academy, Dr. Haymond served 25 years on active duty in various space and missile assignments, and retired as a colonel in 2010 as the vice commander of the Space Development and Test Wing. While in the Air Force, Colonel Haymond taught economics at the United States Air Force Academy, served on Capitol Hill as a legislative liaison to the House and Senate Armed Services Committees, and was an Air Force Fellow at The Brookings Institution. His economic specialties include monetary, Austrian, and public choice economics. He has a beautiful wife, Jennifer, three amazing kids, Amanda, Matthew, and Megan.
No Free Lunch: preface and acknowledgments vi AUTHOR’S PREFACE Why a Christian economics book? I was asked this question many times by friends as I described this project. Some asked out of curiosity. Others asked with an implicit judgment that I was wrong to do this. Some thought that God doesn’t teach economics in the Bible; “You’re just trying to impose your economic views on us and putting a God-approved stamp on it to silence debate.” Some of the most thoughtful and wise critics warned against bringing my own presuppositions into Scripture; what I found biblical might be without merit. There are certainly dangers in approaching this task. Yet God does reveal truths about how to live our lives in the Bible. I believe this truth is comprehensive, if not exhaustive, and extends to all disciplines—including the field of economics. The reader of this text ought to understand the theological perspectives that underlie my presentation of the material. As an evangelical Christian, I believe in the complete authority and validity of Scripture. Further, I believe that Christ should reign in every facet of our lives and our society. I disagree with a distinction between the religious and the secular, in terms of how Christians live and think. Secular scholarship by definition can only include truth that is available to the natural mind; it purposely ignores any possible truth from what Christians call “special revelation”; therefore, a Christian approach to the study of any discipline will have an expanded basis of truth to communicate. A Christian worldview is essential, and that includes how we approach the study of economics. One of the keys to my view of economics is how God relates to us on the issue of choice. From the beginning we see that God allows us to choose. Adam and Eve had a choice to trust and obey God, or to choose to disobey. We are admonished in Scripture to choose life, as God sets before us blessings and curses. The Bible also shows us consequences of this choice; to disobey God leads to negative sanctions, while obedience leads to positive sanctions. Disobedience or obedience can be in response to either His offer of a covenant relationship with Him, or to biblical principles of how we should live. Since God is sovereign and providentially guiding every event (to include how our choices work out in His plan), some might raise the age-old debate over whether our choices are truly free or whether we are predestined to do what we do. However, for our purposes, it is not necessary to go very far down this path. What is clear from Scripture is that we will be judged according to the choices we make, however “free” we are to make them, based on our knowledge of the truth. God wants to be chosen. Our choice is not simply to choose this or that; but when we choose wisely, we are choosing to follow God’s will (whether we realize it or not)! Augustine suggests an even stronger parallel: when we choose wisely, we are choosing Christ himself! As he says in the City of God, “the tree of life is the holy of holies, Christ; the tree of the knowledge of good and evil, the will’s free choice.” And as we choose to follow God, he is progressively changing us more into the image of His Son—He is sanctifying us (Romans 6:19).
No Free Lunch: preface and acknowledgments vii This suggests that economics and Christianity have a relationship. The central task of economics is to understand how we make choices. Properly defined, economics studies what a person does, while Christianity has prescriptions for what a person should do. Economic textbooks often make the point early in chapter 1 on the difference between positive and normative economics (as we will do also). Positive economics explains “what is,” while normative economics explains “what should be.” Yet, as much as economists try to keep economics purely a positive science, the results of economic analysis are most often applicable to public policy choices and invariably have normative implications. Economic analysis lends itself to answering the question: what should we collectively do? Further, the assumptions made to make models tractable and even the very nature of economic goals (e.g., efficiency) have subtle normative assumptions embedded. Since we will have embedded morality, the approach in this text is to make that morality explicit with a Christian worldview behind every economic principle. PRINCIPLE OF REAPING AND SOWING This book also emphasizes that our choices fit into God’s economy through what some like to call the Principle of Sowing and Reaping. I have received very good counsel during the review process of this book to be very careful in avoiding presenting what is clearly a false gospel—the “health and wealth” gospel. I’ve tried to ensure no misunderstandings in the text, but it’s useful to more fully describe what I mean, and what I do not mean here, so when the reader sees my comment, he or she can understand the broader purpose in my more limited text statements. Fundamentally, I believe there is an ethical “cause and effect,” whereby our actions that are consistent with God’s revealed will generally lead to good results in this life (often even good material results) and always lead to good results for eternity (when done in faith). We see this in both Scripture and in our everyday life. As it says in Galatians 6:6-9, “6The one who is taught the word is to share all good things with the one who teaches him. 7Do not be deceived, God is not mocked; for whatever a man sows, this he will also reap. 8For the one who sows to his own flesh will from the flesh reap corruption, but the one who sows to the Spirit will from the Spirit reap eternal life. 9Let us not lose heart in doing good, for in due time we will reap if we do not grow weary.” Jesus also tells us to seek first his kingdom and righteousness, and all else (the material things we need in this world: food, clothing, etc.) will be added to us (Matthew 6:2733). Further, we see in life that people that are honest, work hard, save and invest, are kind to others, etc., generally have good things happen to them. For example, if someone graduates high school, does not have a baby out of wedlock, gets married (and stays married), and gets a job (and keeps it), he or she is highly unlikely to end up in poverty. This is consistent with someone that lives a life according to what we see in wisdom literature; Proverbs gives all of us sound wisdom as to godly behaviors that
No Free Lunch: preface and acknowledgments viii lead to a successful life. Proverbs should not be viewed as something that happens in all situations, but rather gives principles that are generally applicable. In His sovereignty, God may choose to direct outcomes that seemingly go against the principles of Sowing and Reaping (e.g., what happened to Job). While the principles still apply, the blessings and positive outcomes may be delayed. In some cases, the promises of God are fulfilled in eternity, as we see in the description of many of the Patriarchs in Hebrews 11: “13All these died in faith, without receiving the promises, but having seen them and having welcomed them from a distance, and having confessed that they were strangers and exiles on the earth. 14For those who say such things make it clear that they are seeking a country of their own. 15And indeed if they had been thinking of that country from which they went out, they would have had opportunity to return. 16But as it is, they desire a better country, that is, a heavenly one. Therefore God is not ashamed to be called their God; for He has prepared a city for them.” This passage helps illustrate how the “health and wealth” gospel goes awry. God does want our best (Romans 8:28), but sometimes the best thing for us is not prosperity and health in this world. Jesus tells us in this world we will have tribulation, but take heart, because he has overcome the world. The reader of this book should embrace the practice of applied biblical wisdom, confident that this will lead to God’s blessings on his or her life. Nevertheless, we should be under no illusion or false doctrine that God’s best for us is blessing in the here and now; His blessing will certainly come in eternity. As we see at the end of the hall of heroes of the faith… “32And what more shall I say? For time will fail me if I tell of Gideon, Barak, Samson, Jephthah, of David and Samuel and the prophets, 33who by faith conquered kingdoms, performed acts of righteousness, obtained promises, shut the mouths of lions, 34quenched the power of fire, escaped the edge of the sword, from weakness were made strong, became mighty in war, put foreign armies to flight. 35Women received back their dead by resurrection; and others were tortured, not accepting their release, so that they might obtain a better resurrection; 36and others experienced mockings and scourgings, yes, also chains and imprisonment. 37They were stoned, they were sawn in two, they were tempted, they were put to death with the sword; they went about in sheepskins, in goatskins, being destitute, afflicted, ill-treated 38(men of whom the world was not worthy), wandering in deserts and mountains and caves and holes in the ground. 39And all these, having gained approval through their faith, did not receive what was promised, 40because God had provided something better for us, so that apart fromus they would not be made perfect.” (Hebrews 11:32-40) Scripture will be applied in at least four ways in subsequent chapters. First, Scripture will be used for examples of the application of economic principles—not necessarily
No Free Lunch: preface and acknowledgments ix to prove the principle from Scripture, but simply to illustrate the application. Second, Scripture will be used for historical value…such as showing the use of precious metals as money prior to any nation/state creation. Third, Scripture will be used to outline general normative principles, which will then be applied to economic questions. For example, does “Thou shalt not steal” have implications for tax policy and income redistribution? Finally and most importantly, Scripture provides the overarching worldview of how man acts. The reality of living in a fallen world (where man is both sinful as well as created in “the image of God”), will guide our assessment of the best institutional arrangements for economies (such as, do we allow free markets or have social ownership of the means of production?). This book recognizes the intersection of positive economic science, public policy implications, and how Christian values might apply. It is written as an introductory student text, although the layman who wants a better appreciation for these relationships should find it useful. The scope will be focused on key economic concepts with applications for reinforcement. Each subject will also include a review of scriptures that provide insight into the unique Christian perspective of what “ought” to be. The intent is to provide the introductory student a solid foundation of basic economics to well prepare him or her for higher level classes, and for all readers to see how economic analysis is relevant to public policy decisions. The review of selected sections of Scripture will help shape our thinking of how to apply this knowledge while reinforcing a Christian worldview. “Because in much wisdom there is much grief, and increasing knowledge results in increasing pain…” - Ecclesiastes 1:18 WARNING: There is a danger to increasing your economic knowledge. As you better understand the economic implications of public policy choices our leaders make, you may become frustrated and angry. But ignorance is not bliss; increasing your knowledge is the first step towards being a positive witness to our nation. Christians are called to do just that, and it is my prayer that this text will make you increasingly able to influence our world. “The first law of economics is scarcity, and the first law of politics is to disregard the first law of economics.” -Thomas Sowell HOW TO USE THIS TEXT The text is created to be an online resource, with both PDF versions and an eBook. This not only saves the reader the cost of physically printing a book, but allows us to leverage the tremendous breadth of information available on the Internet. I have included
No Free Lunch: preface and acknowledgments x many hyperlinks for the readers’ use, falling in two categories. The first links are for reference, and will be seen in a stand-out color that is “clickable.” If you want further information, or a source to document a statement made in the text (especially scriptural support), clicking through to the underlying link may be helpful. The second category are links that the reader should watch/read to capture the intent of the text; these will be indicated by explicit direction to read or watch something, with the videos given a direct click from a picture (similar to what you’d see in an embedded YouTube video). While all links are subject to change, they will be updated frequently. A few words on the format: Every chapter will have an introductory Scripture section with appropriate discussion to relate it to the economic material of the chapter. This will be followed by a list of desired learning objectives; these should help guide the reader to ensure he/she is capturing the important points. Each chapter will end with a “Great Economist” history to help students understand more about the people who have created the economic science we have today. Finally, there will be summary questions for the reader to try and apply the information included in the text. ACKNOWLEDGEMENTS It is not too cliché to thank Jesus Christ for all He gives; for every good and perfect gift is from above. He has given me a passion for economic and biblical truth, which I have tried to communicate in this book. My wife is exceptionally supportive, and has sacrificed many hours of my partnership while I have worked on this text. My aspiring photographer Megan took time to take pictures for figures in the text, and all my children had to listen to much economics during too many meals to mention. Cedarville University (CU) provides an intellectual climate which highly values biblical integration; few schools would have welcomed the creation of such a text (although you can’t blame CU for the result!). Dr. Bert Wheeler painstakingly reviewed the entire text and Dr. Galen Smith “beta tested” it with students to provide feedback on its usefulness. Dr. Aaron James reviewed the text from a theological perspective; any remaining issues are undoubtedly my refusal to take all of his sound counsel. Five students in particular are to be thanked, as they suffered with not only the text but me for one semester in the initial trial: John Bennett, Lani Lear, Michael Lee, Michael Williams, and Zak Weston. They provided especially useful comments. CU’s Center for Teaching and Learning, led by Phil Schanely, has been a creative support for the book. Special thanks go to Rachael Carrington (editor), April Bennett (prototype design), Rachel Molstre (assistant graphic designer), and Melissa Johnson (assistant graphic designer). Finally, thanks are given to The Council of Christian Colleges and Universities (CCCU) who provided a mini-grant to fund some of the technical implementation of the book.
No Free Lunch: preface and acknowledgments xi PREFACE TO THE 3RD EDITION In the 3rd Edition, the major change is to more explicitly ground the book in a biblical worldview with a comprehensive revision of the first chapter. In some cases the chapter simply reorganizes material in other parts of the book, but in other areas there is new biblical grounding that provides the foundation for the rest of the book. We hope that this additional biblical clarity in Chapter One will provide an excellent framework to understand the biblical integration in the rest of the book. If you are an instructor and would like additional support resources, such as powerpoint slides which provide a useful starting point for a lecture, you may access them here. Soli Deo Gloria Jeff Haymond 11 Sept 2020
CHAPTER ONE: INTRODUCTION TO ECONOMICS
Chapter One: Introduction to Economics 2 WHAT TYPE OF ECONOMIC SYSTEM DOES GOD FAVOR? Joshua 5:13-15 13Now it came about when Joshua was by Jericho, that he lifted up his eyes and looked, and behold, a man was standing opposite him with his sword drawn in his hand, and Joshua went to him and said to him, “Are you for us or for our adversaries?” 14He said, “No; rather I indeed come now as captain of the host of the LORD.” And Joshua fell on his face to the earth, and bowed down, and said to him, “What has my lord to say to his servant?” 15The captain of the LORD’S host said to Joshua, “Remove your sandals from your feet, for the place where you are standing is holy.” And Joshua did so. This is a very interesting passage of Scripture, with profound lessons for our perspective on economics. After all, there are many Christians who think God is in favor of free markets, with many others equally convinced that God must be in favor of socialism. This passage tells us that our opening question is the wrong question. Joshua’s question, “Are you for us or for our adversaries?” has to be one of the most absurd questions ever posed by a spiritual leader, which should give the rest of us hope! Joshua had seen the mighty hand of the Lord displayed powerfully time and time again in support of the Israelites: delivering Israel from their oppressors in Egypt, and promising to destroy their enemies in the promised land (Deut. 9:3). Of course God is for the Israelites and against the people of Jericho; the Israelites were His chosen people, and God had already condemned the wickedness of the people that possessed the Land (Deut. 9:4-5). What a silly question for Joshua to ask: are you for us? The man identified himself as captain of the host of the Lord, and undoubtedly was a visibly impressive figure; Joshua should have known that he was an agent of the Lord even before he spoke. Of course, if he didn’t recognize the man as an agent of the Lord, why would he fear one man? One man would not be in position to oppose the Lord’s chosen people. Nonetheless, the man did not answer his question; he simply said, “no, rather I indeed come now as Captain of the host of the Lord.” He didn’t say who he favored, even though it should be obvious that God favored the Israelites. Or did he? This passage suggests to us that all of our human desire to have God favor us is misplaced. It is a man-centered focus, not a God-centered focus. We should never ask the question that Joshua did: are you on my side? The question we must always ask ourselves is am I on God’s side? Do I agree with God’s Word, not, does God’s Word agree with me? So what type of economic system does God favor? The answer should be clear from what was just said: God does not favor any system of man. The questions should be: which economic system is most consistent with God’s Word? Which economic system recognizes we live in a fallen world and minimizes the damage we can do to each other? Which
Chapter One: Introduction to Economics 3 economic system best enables cooperation and service to one another through positive and negative incentives? While I believe that a system of free enterprise is most consistent with a Christian worldview, it is not based on some vision of a free market utopia. It is almost the opposite. Given we live in a fallen world, what type of economic system will best meet the needs of men made in the image of God, but who unfortunately all too often act in accordance with the god of this world (2 Cor. 4:4)?
Chapter One: Introduction to Economics 4 DESIRED LEARNING OBJECTIVES At the conclusion of this chapter, the student should be able to... § § Understand that God’s support of any economic system depends on how closely it aligns with His will as revealed in the Bible. § § Explain that economics is grounded in human choice, which guides human action through each individual’s assessment of costs and benefits. § § Extend the implications of man’s fallen nature to economics § § Summarize the meaning of methodological individualism § § Differentiate between objective and subjective knowledge § § Understand the role of coordination for successful economic action § § Contrast the differences in how free markets, Socialism, and Communism view private property § § Explain why Christians view private property rights as individual stewardship responsibilities § § Provide examples of how fallacies distort economic reasoning
Chapter One: Introduction to Economics 5 TOWARD A BIBLICAL ANTHROPOLOGY When thinking about economics, we gravitate toward things such as money, markets, and people exchanging things. But the most basic part of economics is about individuals making choices—how human beings decide one action over another. It could be what show I stream in Netflix or what job I take. Since any choice picks one thing over another, the concept of cost comes immediately into play: what must I give up to get what I want? There are necessarily tradeoffs inherent in any choice, a recognition that comes naturally to us. From our earliest ages, our parents would give us “if you do this, then this will happen” descriptions of both positive and negative outcomes. If I eat all my dinner, I would get a piece of pie. Incentives—positive and negative—shape our actions; we are seldom actually forced to do something. The incentives usually lead us to do what “others” want. Each of us has our own internal valuations (subjective preferences) that guide our evaluation of tradeoffs. Each choice we make forces us to mentally compare alternative futures based on the choice. We have an expectation that any action will lead to a better future than would otherwise happen. That’s our definition of rationality: people do the best they can in their choices to make their day or life go just a little bit better. Our individual choices also reflect our participation in social groups. To get what we want, we find that it is usually better to work with others than to do everything ourselves. As we focus our efforts, we can become very proficient. Bigger tasks can be broken down into smaller tasks, and many different hands can tackle those tasks they do best. Markets emerge as people find it beneficial to produce more than they need and exchange their surplus with others. These social exchanges are a major area of choice for each of us. Do we sleep in every day, or get up and work for others? What price would I charge to get out of bed by 5:30 a.m.? How much money would it take me to do the risky job of working on skyscraper construction? So the study of economics is a study of how humans choose. This suggests that to understand economics, you must understand humans. And this means people must look to the operating manual for humanity, the Bible, to understand who they are. We begin our study of economics by developing a Biblical anthropology, or understanding of man. GENESIS 1 In the beginning, God… This is the beginning—the beginning of all wisdom. The opening words of scripture point to a beginning of time and all reality. In this eternity past, prior to creation, there was God when there was nothing else. He is the uncaused causal agent, self-existent, and He alone is independent.
Chapter One: Introduction to Economics 6 GENESIS 1:1 In the beginning God created the heavens and the earth. God is outside time, He created time and everything that is. A God that could create all reality out of nothing, ex nihilo, is an omnipotent God. The book of Job shows the difficulty of comprehending this incomprehensible God. Responding to Job’s complaints, God spends four chapters elaborating on a small portion of His omnipotence. Consider just this initial portion: “Who is this that darkens counsel by words without knowledge? “Now gird up your loins like a man, And I will ask you, and you instruct Me! “Where were you when I laid the foundation of the earth? Tell Me, if you have understanding, who set its measurements? Since you know. Or who stretched the line on it? “On what were its bases sunk? Or who laid its cornerstone, When the morning stars sang together and all the sons of God shouted for joy? Or who enclosed the sea with doors When, bursting forth, it went out from the womb; When I made a cloud its garment and thick darkness its swaddling band, And I placed boundaries on it and set a bolt and doors, and I said, ‘Thus far you shall come, but no farther; And here shall your proud waves stop’?” With this brief introduction, we can pause to consider economic implications. Economics is a social science, since its subject matter is humanity. In a broad sense, economics is concerned with how human beings choose. Why do we choose one thing instead of another? Why are we even forced to choose at all? Why can’t we have our cake and eat it too? More narrowly, economics is concerned with how individuals choose in market settings. Some economists define economics as the study of how to allocate scarce resources among competing ends. But all of these ideas—that we choose, that there are limited resources, that we have desires which can’t all be satisfied, flow out of the material reality created by God. We must understand the idea of scarcity (which we’ll define later) and choice in the context of the sovereign plans of a Holy God. Further, we see the creative God is independent—there is no causal force that can act on him. Material reality only affects God to the extent He allows it according to His own plans and purposes. The corollary is that all of creation, including all humans, are necessarily dependent beings. As the Apostle Paul says, “in Him we live and move and have our being.” God’s independence is complemented by His infiniteness, and the parallel is that our dependence is complemented by our finiteness. God is everywhere; as the Psalmist says, Where shall I go fromyour Spirit?Or where shall I flee fromyour presence? If I ascend to heaven, you are there! If Imakemy bed in Sheol, you are there! If I take the wings of the morning and dwell in the uttermost parts of the sea, even there your hand shall leadme, and your right hand shall holdme.
Chapter One: Introduction to Economics 7 God is not just everywhere, He is active and controlling all things: “in Him all things hold together,” and He “upholds all things by the word of His Power.” We can imagine God actively sustaining His creation at the subatomic level (or any level below that which might be there!) by providing the strong nuclear force needed. Creation needs sustaining and our dependent nature requires the superintendence of a providential God. While He is infinite, we His created beings are finite, i.e., we are limited in actions and knowledge and can only seek after God’s knowledge of His creation. As it says in Proverbs, “it is the glory of God to conceal a matter, but the glory of kings is to search it out.” We will explore more in a moment the implications for humanity, but for now, know that all creation is below an omnipotent, omniscient God who sustains all things. This demands humility on what we are able to do and accomplish. GENESIS 1:2 The earth was formless and void, and darkness was over the surface of the deep, and the Spirit of God was moving over the surface of the waters. God increasingly brought chaos into order throughout the first day. While the Bible never uses the word “Trinity,” it nevertheless describes God as three persons: Father, Son, and Holy Spirit. The three parts of the Trinity together were actively involved in creating this order. God the Son created everything according to the plan of God the Father, and God the Holy Spirit shaped and formed this order to the glory of God the Father and God the Son. God’s trinitarian nature is social, containing both diversity and unity, since the different functions of the Godhead are one in essence. And as God’s nature is social, and so too will be His image bearers. GENESIS 1:3 Then God said, “Let there be light” and there was light. God saw that the light was good; and God separated the light from the darkness. God called the light day, and the darkness He called night. And there was evening and there was morning, one day. When a sovereign, omnipotent God speaks, His will is accomplished. He spoke and what was in His mind became reality—for six days in a row. And everything that God created was good, according to the only standard to assess reality—Himself. When something is according to God’s plan, it is good. When it deviates from what God prescribes, it is not just bad, it is evil. God makes moral assessments, and before the Fall, everything was consistent with His perfect will. GENESIS 1:11-12 11Then God said, “Let the earth bring forth vegetation, plants yielding seed and fruit trees on the earth bearing fruit after their kind with seed in them” and it was so. 12The earth brought forth vegetation, plants yielding seed after their kind, and trees bearing fruit with seed in them, after their kind; and God saw that it was good.
Chapter One: Introduction to Economics 8 God not only creates ex nihilo, but He creates and changes one form to another, and increasingly brings order out of chaos. Shaping reality from one form to more completely align with God’s plan is good. Creating seeds with the potential to recreate and grow, to produce yet more, is good. Transformation from one form to a more productive form, consistent with God’s plan, is good. Each subsequent day of God’s creative activity leads to more diversity and order. The animals, like the plants, are created with the ability and command to produce more. God created plants and animals according to their kind, i.e., the kind that God had ordained. There is no randomness here—the master artist is creating His masterpiece. GENESIS 1:26-31 26Then God said, “Let Us make man in Our image, according to Our likeness; and let them rule over the fish of the sea and over the birds of the sky and over the cattle and over all the earth, and over every creeping thing that creeps on the earth.” 27God created man in His own image, in the image of God He created him; male and female He created them. 28God blessed them; and God said to them, “Be fruitful and multiply, and fill the earth, and subdue it; and rule over the fish of the sea and over the birds of the sky and over every living thing that moves on the earth.” 29Then God said, “Behold, I have given you every plant yielding seed that is on the surface of all the earth, and every tree which has fruit yielding seed; it shall be food for you; 30and to every beast of the earth and to every bird of the sky and to every thing that moves on the earth which has life, I have given every green plant for food”; and it was so. 31God saw all that He had made, and behold, it was very good. And there was evening and there was morning, the sixth day. God created man, God’s name for the male and female equally created in His image, as the crowning act of His creative activity. God says let us make man in our image, according to our likeness. This is another reference to the Trinity. God’s Spirit was introduced in v2, and the Son’s role in creation is revealed in John 1:1-3, Hebrews 1:1-4, among other places. Humans made in God’s image are not only individuals but are also social creatures. We were created to be in communion with God and others. As God says in Genesis 2:18, “it is not good for the man to be alone; I will make him a helper suitable for him.” We are socially members of families, community organizations, and most profoundly (if Christians), a part of the body of Christ. So humans choose as individuals, but they also have some consideration for the social implications of their actions. In so doing, they image their creator God, who is social in His trinitarian nature. To be created in God’s image or likeness (the Hebrew words are often used interchangeably) suggests that God’s attributes should be seen in humans, in a more limited sense. Many debate what it means to be an image-bearer, but it at least implies that we are unique in creation with special responsibilities. We are His representatives on this earth; in New Testament language we are ambassadors for Christ. It is this designation as image-bearers, or Imago Dei, that is the foundation of human dignity and why every human being is especially valued in God’s sight. Should we take another image-bearer’s life, God demands the life of the one who shed that blood, since striking an image-bearer is effectively striking at God Himself.
Chapter One: Introduction to Economics 9 Adam and Eve’s stewardship task (alternatively called the cultural or dominion mandate) to rule over the earth and over every living creature is both their right and obligation as image-bearers. The Hebrew transliteration of rule, radah, means to have dominion, to dominate, or to subjugate. This is a very strong word, and it is appropriate that God’s image-bearers should tend the garden and the broader world such that they bring it into conformity with God’s purposes and plans. The completeness of this dominion is evidenced by other uses in the Bible, most notably in Psalm 110 which has God’s Messiah ruling over the nations. While the Fall has corrupted how we approach our stewardship task, our God-given mandate to rule over creation remains (as seen in Psalm 8 and quoted again in Hebrews 2). V27 shows that under the category “man,” God created males and females. Males and females are complementary—even with their differences, they are equally created in God’s image. Together, they image God more gloriously than either could do individually. And God Himself reflects those differences in males and females. Even though God is always presented as “Father” in Scripture, He also reveals himself as having the characteristics that a mother would have. God promises to meet their needs, providing them sustaining food in the form of green plants and plants yielding seed because dominion would be taxing and require both the male and the female to accomplish God’s purposes. In V31, we see that all of God’s creative activity was called very good. SUMMARY OF BEING CREATED IMAGO DEI As God’s image-bearers, we partially reflect His character and attributes to the created order as His representative and vice-regent on earth. Table 1 illustrates parallels between God and His image-bearers: God’s Attributes God’s Image-Bearer Attributes He is triune and, therefore, social in nature: “Let Us make man...” We are social; we want to cooperate socially He is creative We are creative; you were created to create! He works We work—it is intrinsic to our human dignity He makes moral assessments, ”behold, it was very good.” We make moral assessments—but under what basis? He creates order out of chaos, “the Spirit of God was moving over the surface of the waters” We subdue the earth and create order of chaos as we take Godly dominion
Chapter One: Introduction to Economics 10 God’s Attributes God’s Image-Bearer Attributes He makes and executes complex plans; plans that never need a backup We make complex plans and execute them, but in our finitude, we revise and adapt He blesses, “be fruitful and multiply” To the extent we are good stewards, we are a blessing to others He exercises sovereign responsibilities, “Then God said…” We exercise delegated sovereign responsibili-ties as we steward our lives, our church and creation. Table 1 GENESIS 2 GENESIS 2:1-3 Thus the heavens and the earth were completed, and all their hosts. By the seventh day God completed His work which He had done, and He rested on the seventh day from all His work which He had done. Then God blessed the seventh day and sanctified it, because in it He rested from all His work which God had created and made. God does not tire nor grow weary, unlike finite human beings, yet God rested on the seventh day, which provides at least two lessons. First, the Sabbath is testimony that man must walk in faith in God. There will always be tasks to do; things we think can’t wait—yet God says “wait.” Can we trust that God will redeem the time “lost” on a Sabbath where we rest and rejoice in Him? God says that six days per week is sufficient to accomplish our stewardship responsibilities. Though many of us value independence and the ability to do things without help, God says we must walk in complete dependence on Him. Second, finite beings need rest. Just as the nightly need to sleep is a reminder that we must depend on God, so too is the weekly reminder a time when our bodies and minds can relax. Indeed, the Sabbath is not merely “resting” but rather renewing, as we spend more of that time reflecting on God and His word. We will be more productive if we actually work fewer hours than physically possible. GENESIS 2: 7-9, 15-17 Then the Lord God formed man of dust from the ground, and breathed into his nostrils the breath of life; and man became a living being. The Lord God planted a garden toward the east, in Eden; and there He placed the man whom He had formed. Out of the ground the Lord God caused to grow every tree that is pleasing to the sight and good for food; the tree of life also in the midst of the garden, and the tree of the knowledge of good and evil…. Then the Lord God took the man and put him into the garden of Eden to cultivate it and keep it. The Lord God
Chapter One: Introduction to Economics 11 commanded the man, saying, “From any tree of the garden you may eat freely; but from the tree of the knowledge of good and evil you shall not eat, for in the day that you eat from it you will surely die.” Adam’s stewardship responsibilities are initially manifest in the Garden. Interestingly, God not only planted trees for food but also for beauty. God is the creator of beauty and art, and He shares this with us. Is there any masterpiece as beautiful as one that God paints in the evening sky? God delights to create beauty and display His glory to us. We are His image-bearers, and we likewise desire to make beautiful things. In v9, God implicitly introduces the concept of choice—two trees, two paths. The path is spelled out more clearly in vv 16-17, where Adam is told that he may eat freely of any tree, except the tree of the knowledge of good and evil. This choice is fundamentally about obedience, and obedience flows out of the recognition of dependence—who we are, and who God is. Would Adam choose to obey, and trust God and what has said? Or would he reach out to “do what was right in his own eyes?” Adam’s choice illustrates the concept of ethical cause and effect: Do this and live, or do this and die. Many of our choices seem trivial, such as what color of shirt will I wear today? Yet even choices such as these can have ethical impact: why do I choose one over the other? Am I choosing with a thankful and grateful heart? Am I considering how my attire might bring glory to God or shame to me? For Adam, his command was to “cultivate and keep” the garden. The Hebrew term for “cultivate” (`abad) means to work, serve or dress. The image is one of a careful gardener pruning a vine to ensure it grows to full potential. This is intended to be careful labor on behalf of the master. The other term, “keep” (Hebrew transliteration shamar) means to guard, observe, or to give heed, which suggests we must preserve and protect creation as a watchful servant. As we will see in chapter three, the garden will have threats that careful watch will avoid. GENESIS 3 GENESIS 3:1, 6-7, 17-19 Now the serpent was more crafty than any beast of the field which the Lord God had made. And he said to the woman, “Indeed, has God said, ‘You shall not eat from any tree of the garden’?” When the woman saw that the tree was good for food, and that it was a delight to the eyes, and that the tree was desirable to make one wise, she took from its fruit and ate; and she gave also to her husband with her, and he ate. Then the eyes of both of them were opened, and they knew that they were naked; and they sewed fig leaves together and made themselves loin coverings. Then to Adam He said, “Because you have listened to the voice of your wife, and have eaten from the tree about which I commanded you, saying, ‘You shall not eat from it’; Cursed is the ground because of you; In toil you will eat of it All the days of your life. “Both thorns and thistles
Chapter One: Introduction to Economics 12 it shall grow for you; And you will eat the plants of the field; By the sweat of your face You will eat bread, Till you return to the ground, Because from it you were taken; For you are dust, And to dust you shall return.” Satan’s attack is always the same: God is not trustworthy; He’s holding out on something that you want. The challenge is to the truth of God’s word, and its applicability to our situation. Eve faced this battle first, but each of us faces the same challenge today to trust and obey. Each one of us still falls short. The Fall of Adam and Eve resulted in all creation being cursed; as the Apostle Paul says in Romans 8, the creation was subjected to futility (vanity) and is enslaved to corruption, waiting eagerly for its redemption just as we are. All of our stewardship is now cursed and labor is difficult. The ground now fights to release what it should have done willingly; our stewardship labor should have been joyful, yet now we perform it in toil. The economic concept of scarcity (more very soon) comes alive in a cursed world—nature now only grudgingly yields its fruits with much labor, and even its fruits are often marred. Further, worse than a cursed world, we now have corrupt hearts. Prior to the Fall, we were in the garden “naked and unashamed.” But as soon as the man and woman ate of the forbidden fruit, their eyes were opened and they knew they were naked. This is much more than, “hey, all of a sudden I look in the mirror and there are no clothes on.” Rather shame comes into the picture with the corresponding feeling of vulnerability that never leaves fallen humans. Adam and Eve tried to make coverings for themselves, but the problem of shame could only be covered—it was not removed. Every one of us has felt shame at not being what we wish we were. We introspectively understand the effects of the fall. Shame operates as an intense self-focus; any thought of others is in comparison: either to feel inferior, with resulting jealousy, or to feel prideful, which allows us to smugly denigrate others in our own feelings of superiority. Either way, our cursed fleshly hearts are constantly thinking about #1, with other people a means to our ends rather than being an end unto themselves. As we learn in Romans 5, our forefather Adam gave us an inheritance of a sin nature. This means we’re all capable of monstrous evils against one another. It’s easy to think of men like Cain, Herod, Hitler or Stalin as being monsters. But the reality of the Fall means that without the grace of God, we would be the same. Genesis 6:5 provides the terrible indictment of humanity: Then the Lord saw that the wickedness of man was great on the earth, and that every intent of the thoughts of his heart was only evil continually. This stark reality has profound implications for economics, as our choices in exchange are now excessively self-focused, and our prideful attitude often leads one to want to dominate rather than serve others.
Chapter One: Introduction to Economics 13 1 CORINTHIANS 12:12-20 12For just as the body is one and has many members, and all the members of the body, though many, are one body, so it is with Christ. 13For in one Spirit we were all baptized into one body— Jews or Greeks, slaves or free—and all were made to drink of one Spirit. 14For the body does not consist of one member but of many. 15If the foot should say, “Because I am not a hand, I do not belong to the body,” that would not make it any less a part of the body. 16And if the ear should say, “Because I am not an eye, I do not belong to the body,” that would not make it any less a part of the body. 17If the whole body were an eye, where would be the sense of hearing? If the whole body were an ear, where would be the sense of smell? 18But as it is, God arranged the members in the body, each one of them, as he chose. 19If all were a single member, where would the body be? As it is, there are many parts, yet one body. God is the master artist, and to magnify His own glory he created each one of us uniquely. He knit us together and numbered our days as we were fearfully and wonderfully made in our mothers’ wombs! As Corinthians shows (as well as similar passages in Romans, or in Ephesians), God makes us uniquely different that we may serve one another. God values diversity far more than a world that cries out for it. He gives different gifts to each of us, enabling us to serve one another better. Do not think this is simply speaking of spiritual gifts, although these gifts manifest in enhancing the spiritual organization of the church. Differences in individual interests lead some to pursue farming while others pursue shepherding, some choose to be musically inclined while others choose to work metal. In a fallen world, it is precisely our differences which provide the potential of a mutually beneficial exchange. This possibility fosters our cooperation with people who do not look or act like we do. If we were all identical, we’d have little reason to cooperate with one another. Our inherent God-given differences in abilities, interests and aptitudes creates the incentive for us to socially cooperate with others voluntarily in markets. I may not like to bake, but I sure enjoy a good pie. I might not even like you, but if you can do something I can’t, and give me something I want, I’m likely to be nice to you. My actions are therefore a reflection of God’s common grace to others. ECONOMIC SUMMARY OF CHRISTIAN ANTHROPOLOGY Our review of select portions of Genesis and 1 Corinthians leads to observations that drive our understanding of economics. There are four pillars that guide economic behavior: 1) We are individually created in the image of God, 2) we were created individually with different gifts that God intends us to use for His glory and the benefit of service to others 3) We are finite/dependent beings, and 4) We are fallen. Let’s review each of these in turn.
digitalcommons.cedarville.eduRkJQdWJsaXNoZXIy MTM4ODY=