#180 We are God’s Creative Creatures

By D. Arnott | July 5, 2023
#180 We Are God's Creative Creatures | The Christian Economist

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As long as the fallen nature produces unlimited wants, and the creative nature has unlimited creativity, there will be unlimited employment.

 

The Bureau of Labor Statistics published a report last year, projecting huge losses in three occupational groups: Administrative assistants, production, and sales.    

Change is good.  The old adage, “You will get change from everything but a vending machine,” applies to the workplace.  Jobs are changing.  They always have.  They always will.  That’s good.  We call that a “dynamic economy.”  You would rather live in a dynamic, not a stagnant economy.

 

Wealth Migration 

My podcast #131 is titled Abraham and Wealth Migration.  It points out that when Abraham moved from Ur of the Chaldeans to “the promised land,” he was moving to a better land.  People have continued to move to “better land,” and that’s why we’ve seen the move from California and New York to Texas and Florida over the last few years.  People vote with their feet in a dynamic economy.  They will also change jobs that take them to “better land,” in an occupational sense.

When I did my Ph.D. dissertation on US-Russian joint ventures, I heard the phrase from workers, “They pretend to pay us, and we pretend to work.”  That’s an indication of a centralized, stagnant economy.  Even today, dynamic Americans make about $70,000 each, while the stagnant Russians make about $33,000.  Wouldn’t you rather live in a dynamic economy, like the US?  If so, you have to grow accustomed to job changes.

People who prepare for and anticipate change do better than those who don’t.  Before my mother died in 2001, she looked forward to changes in employment and asked, “What will my grandkids do for work?”  Well, the economics answer is pretty easy: Create value for your neighbors.  If you believe people are made in God’s image (the title of my podcast #32) you believe their creativity came from their creator.  Get it?  We are God’s creative creatures. 

In the little book Economics and the Christian Worldview, I wrote the following: As long as the fallen nature produces unlimited wants, and the creative nature has unlimited creativity, there will be unlimited employment.

 

Free Trade

While the Trump economy was much more dynamic than the Biden economy, their international trade policies are strikingly similar.  They both want to bring back manufacturing to the US.  I tell my college students, “If you’re offered a $75,000 job selling investments and a $50,000 job making cars, take the $75,0000 job.”  They don’t need my advice on that one, because they do what just about every self-interested economic maximizer does in a dynamic economy: They take the $75K job. 

Critics of free trade make the assertion, “We can’t all be stock traders and hamburger flippers!”  To which I respond, “Why not?”  We should do what society rewards.  If the South Koreans create more value in making cars, they should do it.  If the Vietnamese create more value sewing shirts, that’s what they should do.  David Ricardo called it the comparative advantage.  Of course, that means that we might not make cars anymore, nor shirts.  But there are lots of things we used to make that we don’t anymore.  Because we’ve moved UP the economic value-added ladder to items that create more value. 

When it became cheaper to make steel in Turkey, folks in Pittsburg moved to other jobs that create value for their neighbors.  When furniture became cheaper in Poland, workers in North Carolina moved on to other products and services.  And, that’s why we’ve moved from a product to a service economy.  Locals have an advantage in providing services because it’s hard to cut hair in Kansas, from Malaysia. 

“When I was a child, I spoke as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things”.  That’s Corinthians 13:11, and it applies to more than the earth vs heaven realms.

That scripture verse is about perfection, which we will NOT gain in this life.  We are East of Eden and West of heaven, where our charge is to use the resources God gave us, to supply products and services to our neighbor.  As adult economic thinkers, we need to find more advanced, creative, innovative ways to do that.  The old ways won’t work. 

Side note: That scripture reminds me of an enlightening phrase from the new book Manhood by Josh Hawley.  He says that a boy becomes a man when he produces more than he consumes.  Of course, there are other ways in which a boy becomes a man, but that’s a pretty good economic explanation.

 

Industrial Policy Does Not Work

Just this week, the Wall Street Journal carried an article titled The Lordstowns of Industrial Policy.  The article explained why the electric vehicle maker in Ohio went bankrupt, “Lordstown is another example of the peril of politicians allocating capital. Far too often, and despite taxpayer subsidies, the government picks losers.”

Former British citizen Samuel Gregg made a nice presentation that touched on this topic at the recent Acton Institute in Grand Rapids, MI.  I mentioned to some assembled friends afterward, that I would like to get the address of Mr. Gregg’s parents in the UK, so I could send them a note of thanks for reducing the cost of my airplane trip the next day.  You see, Airbus forcibly took tax dollars from the citizens of the UK, France, Germany, and Spain to build the company.  Their tax dollars subsidized my airplane trip.  Even if I rode on a Boeing plane!  That’s because Airbus forced down the cost of Boeing’s planes. 

You see, the typical response to industrial policy is to try to compete with the other country’s industrial policy.  Milton Friedman had the opposite response, and he was correct.  So, if China taxes their citizens to build lawnmowers, we should just raise the metaphorical bullfighter’s cape and say OLE!, come on in!  We’ll take all the subsidized mowers you’re willing to ship us.  And, by the way, what else would you like to tax your citizens to subsidize so that our US consumers can buy it cheaper? 

So, as you think about it, smart industrial policy should tell us what industries to GET OUT OF, not which ones to enter.  Look, this is simple Sun Tzu stuff.  His book is called The Art of War.  The basic idea is to win without fighting.  Use the opponents’ strength against him.  I suppose it’s taught in karate also, but I don’t understand it well enough.  I DO understand American football.  If the defense is blitzing up the middle, let them through the line and throw a little screen pass out into the flat.  Go where they’re NOT!  Economic strategy is that simple.

Dumping is a subject for another podcast, so I will ask only one question, “Why does our government prevent suppliers from selling products in our country at too LOW a price?”  A Christian economist who is concerned about the poor would allow the importation of cheaper products, she wouldn’t stand at the border and say, “These products are too cheap!”  Gee, I’ve never said that as I was buying something, have you?  But, your tax dollars are being spent to prevent dumping of products in the US, that are too cheap.

They are trying to protect domestic industries.  It’s a fool’s game.

People Are Creative 

Folks think that when self-driving trucks displace truck drivers, we will find them sitting on the side of the road, wringing their hands and crying.  My Dad was a truck driver.  To make that assumption about him is insulting.  And it’s insulting to current truck drivers.  I assume the opposite: They are creative people, made in the image of God, who are energetic and innovative enough to find some other way to provide value for their neighbors in a dynamic economy.  The important part of creative destruction is found in the first word: Creative.  It’s good, and it expects folks whose jobs are destroyed to be creative in finding another one.

The little book Who moved my cheese?  by Spencer Johnson sold 28 million copies.  It made a good point and encouraged people to accept job changes in a dynamic economy.  But, it was based on demand economics, and I’m a supply-sider, so I write a little response titled Who MADE My Cheese?  It encouraged readers to think more about supplying a demand.  It’s pretty simple economics:  If you just keep supplying demand, changes in employment will be fine.  As the Christian economist, I say, “If you love your neighbor, you will supply her with the products and services she demands.  If you love yourself, you will make a profit while doing so.”  In economics, we call the first part “consumer surplus” and the second part “producer surplus.”

 

Food Comes First

In 1800, 90% of Americans worked on farms.  By 1900, it was 60%.  It’s now 2.5%.  Every person who leaves a farm moves to the production of something else, and that enriches the country.  If 2.5% are making food, that means 97.5% are providing other products and services, like that computer you’re staring at right now, the desk it’s on, the shoes on your feet, and the shirt on your back.  I know, you’re saying, “We don’t make ANY of those things in America anymore.”  You’re right, and that’s good.  In our dynamic economy, we have moved UP the economic ladder, from making simple goods that provide little economic value, to higher-level goods that create greater value.  As we continue to move up, we all get richer. 

The United States of America is the greatest economic engine in the history of mankind.  It gained that position by rewarding a dynamic economy that welcomes job change.  

 

FEAR GOD
TELL THE TRUTH
EARN A PROFIT

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