The notion "better" uses both principles of economics and experience to demonstrate that free market societies are more materially prosperous than these other economic approaches. Inherent in capitalism is greater personal liberties. Therefore, capitalistic countries have a higher GDP, are freer and thus, considered "better off."
If the results of an economic system is a higher standard of living and more people are lifted out of poverty, then we can arguably say that is a "good" thing. It may even be considered a more moral system because of the overall impact on people's living conditions and liberties. BUT, is capitalism consistent with the basic precepts of God's Kingdom as established by the Cross? If not, what is the Christian worldview of economics? Is it socialism because of the "greed factor" in capitalism and a "perceived fairness" in socialism?
OR
is the Kingdom economy very different than socialism?
does the Kingdom economy produce a "better" outcome than capitalism?
Let's start with a clarity on what an economy is. The Webster's 1828 dictionary, the first dictionary in America, defines an economy in terms of how a family orders itself, especially how it distributes its resources. The word economics does not appear. Economics has evolved in the last 100 years as a study of the transfer of wealth through systems of producing and distributing goods and services within society as a whole. A recent movement of thought, called behavioral economics, seeks to understand behavioral influences associated with how humans are motivated and naturally view risks and rewards.
For example, economies use influences of power to govern the amount and movement of products and services. So, understanding forms of power and the associated incentive systems for people's behavior can be a helpful way to evaluate performance of an economic system and what you might expect its outcomes to be.
Let's look at three different systems of power and the kinds of economies each would produce. In doing so, we can look at the motivation factors associated with each to understand its potential outcomes.
First, there is the power/greed model. In this case the one with power uses an economy that maximizes their own outcomes on the backs of those without power. However, the ones with power must satisfy the ones without power sufficiently for them to continue work at all for them. Motivation is only the effort needed to relieve fear in the workers and therefore total output is limited.
Second, power can be distributed to the people and everyone is free to produce goods and services as they choose. They are only limited by how others respond to their production. The power is placed in pricing mechanisms relative to the value the good or service brings to the purchaser. Supply and demand equilibrium, known as justice or reciprocity, governs the system. Rewards are contingent on what people do. People are less constrained than in the first example but they are still somewhat limited in their motivation to what they believe others will buy. This creates some concern for the welfare of those who cannot generate resources on their own to obtain what they need. The system must decide how to produce some goods and services that do not return economic value to the producer in order to support this greater need for goods and services. This is a taxation on the economy and reduces the potential return of the system to producers.
The third view of power is actually the Biblical view. Here all power is in a Sovereign will of one who both owns everything and chooses to share it with His subjects out of love. This is an unmerited favor where the distribution decisions belong to the one in power and the subjects participate solely out of thanksgiving. Subjects are willing to produce, innovate, and share from a heart sold out to the one with power. In generosity there is no coercion, no incentives, no quid pro quo, nothing that constrains the subjects' motivation to produce and share with each other.
When we teach our young people about economics, must we neglect the economic model of the Kingdom? Can we equip them to understand that Grace is not socialism, communism, or capitalism?
Can we trust that Grace is God's way and the best way?
About 50% of Christian students view their family's economic system as a power/greed or fair exchange system. The other half seem to believe their parents establish a grace based economy by how they handle allowances and other sources for their personal use.
In economics, must we settle for beings agents of justice when we can be agents of grace?
Certainly worth pondering ......
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