#87 Gross National Freedom

The Christian Economist

# 87 Gross National Freedom

The intersection of Christianity and Economics is freedom.  Freedom is favored by both the Christian worldview and the economic thriving it produces.

The intersection of Christianity & Economics is freedom.  I am recording this podcast during the week of July 4, Independence Day.  So it seems appropriate to address the subject of freedom. 

People Should be Free

“People should be Free,” is the first, and arguably the most important of the Ten Biblical Commandments of Economics that Sergiy Saydometov and I found while writing our book Biblical Economic Policy.  As a matter of fact, looking back on our research while writing the book, if we had to do it over again, we might use FREEDOM as the leading concept, then define how the other lesser commandments follow from freedom.  

There are many measures that attempt to replace Gross Domestic Product.  There’s the Genuine Progress Indicator and the United Nations has a Human Development Index.  There’s even a Gross National Happiness measure, which I explain more fully in podcast #43 Money and Happiness.  Arthur Brooks wrote a book about it titled Gross National Happiness.  

In his book Brooks makes it very clear, “Religion leads to material comforts. People who live in religious communities, do better financially than those who live in secular communities.  Economists have been interested in this finding for a long time.”

My preferred measure of “The Wealth of a Nation” to borrow a phrase from that guy –  is to simply count how many people have received Jesus Christ as their personal savior.  And, actually, I think I could make a pretty good argument about how that makes a country better off.  This is a brief podcast, not a research paper nor a book, so I will only touch on the concepts involved. 

In a paper I authored with Dr. Bobbie Martindale, years ago, the first sentence stated that Christian countries are richer than non-Christian countries.  While there are notable exceptions, the trend line is true.  The paper was titled Christianity & Capitalism: Correlation or Causality?  We kind of liked alliteration, as you may have noticed.  We argued that the effect was more than correlation, there were clear value systems in Christianity that produced greater wealth in Christian Countries.  

In his new book, Religion and the Rise of Capitalism, Benjamin Friedman develops this case much more in-depth than I have time for today.  A quick summary of his fine book is that freedom of religion correlates with freedom of the economy.  He provides painstaking detail about how Scotland’s relatively free church status in the mid-18th century led to the Scottish Enlightenment that produced Francis Hutcheson and his famous pupil, Adam Smith, that guy who’s been looking over my shoulder during this podcast.  

Christianity and Freedom

In The Great Debate Yuval Levin explains how Thomas Paine supported the US revolution in 1776, but not the French Revolution in 1789.  Edmund Burke supported both.  The implication is that revolutions have to be based in a cause.  The US revolution was based in religious liberty that saved religious freedom, the French revolution tossed out religion.  Further, Thomas Paine was concerned that the French revolution would have to be followed by successive revolutions, because it was just a scree against the ruling class and was not based on a sustainable philosophy.  This explains a lot about the different course taken by the United States and France since their revolutions.  I unpack more of that in podcast #13 No Crash Diets.  Sorry, that one is terribly mistitled.  I recorded it in January when many people typically go on crash diets.  The idea was that France would have to enter into a revolution on a regular basis to throw out the aristocracy, because one would always develop.  That’s the same problem with Black Lives Matter and their Marxist philosophy.  After the proletariat takes down the bourgeois, then THEY become the bourgeois.  Has anyone read Animal Farm?

Quoting once again from Gross National Happiness by Arthur Brooks, “America’s free market for faith has made American religion, a great engine of happiness, amazingly robust in the face of creeping secularism across the rest of the developed world.”  To extend Mr. Brooks very good idea, now secularism has crept across America, and threatens our freedoms this very week of Independence Day. 

In the famous painting by William Holman Hunt, Jesus knocks at a door with no handle on His side of the door.  The obvious implication is that He cannot open the door, only we can.  Revelation 3:20 reads, “Behold, I stand at the door, and knock: if any man hear my voice, and open the door, I will come in to him, and will sup with him, and he with me.”  

If God gave us the freedom to accept or reject His invitation, we have to believe he wants us to have as much freedom as possible in our economic lives. As Christians, we are not free to seek any end that satisfies our individual needs. We make a free, conscious decision to be guided by a “multitude of advisors” in making free choices. Don’t miss the point: We make a choice to limit our own freedom, and take direction from other Christians to whom we choose to give power. Friedrich von Hayek – yes, that guy –  was an atheist, so he made his case for economic freedom using a moral argument. If government assumes our moral responsibility, then we are no longer free moral agents.  If Christians really want to help the poor, they will, among other things, support economic freedom. Because the biggest poverty-reduction measure of all is liberalizing markets to let poor people get richer.

In a free economy in which wages, costs, and prices are left to the free play of the competitive market, the prospect of profits decides what articles will be made, and in what quantities—and determines how Christians love our neighbors by supplying them with the goods and services they demand.  

In a controlled economy – which we are seeing more of from the Biden administration – they take the opposite view and pose as humanitarians and sometimes even as Christians.  But their system strangles the personal freedom that undergirds the Christian worldview. 

So how does a human being flourish? The argument of Christians ranging from Augustine to Aquinas is that we do so in the process of free choice.   In economics, we often ask the question about the degree of freedom people should have. We believe people are fallen, so we have to institute some rules. But how many? And which ones? This is the road we travel as Christian economists, trying to determine what level of freedom the Bible commands us to enact. But we’re pretty confident that God wants us to have as much freedom as possible, because He gave us the freedom to accept or reject his offer of salvation.

For all the fancy left/liberal blather about diversity, unity without God soon becomes enforced unity, which is another name for coercion.  Under the guise of political correctness, the process is well underway in America.

Economic Freedom

The Heritage Organization produces an annual report called the Index of Economic Freedom.  There are 12 measures for each country.  They clearly and plainly state in the introduction to the study, “Economic freedom brings greater prosperity.”  So think about it.  GDP looks back and tells you which countries have been the richest in the past.  My measure, that gives title to this podcast, “Gross National Freedom,” predicts who will get rich in the future.  It’s pretty simple.  It’s what Adam Smith explained so effectively in The Wealth of Nations.  245 years later, we have the Index of Economic Freedom produced by Heritage.org which makes a major contribution to my measure, Gross National Freedom. 

I don’t have time to unpack all 12 of the measures used by Heritage.  Here is a brief review, from a Christian worldview.

Rule of Law

In the category, “Rule of law,” Heritage lists,  Property rights, government integrity, judicial effectiveness.  This aligns with Christian Economics quite well.  The eighth commandment that reads, “Don’t steal” assumes private property as I point out in podcast #81 coincidentally named “Private Property.”  Government integrity is covered in podcast #40 titled “The Curse of Crony Capitalism.”  Judicial effectiveness is assumed in one of the ten Biblical Commands of Economics I discovered when I wrote Biblical Economic Policy with Sergiy Saydometov.  The Biblical commandment that applies in this case is Honor Those in Power.   

Government Size

In their second category, “Government size,” Heritage mentioned the three “pillars” of Government spending, tax burden, fiscal health.  God clearly wants a country to have a small government. I more fully explain that in my podcast # 48 Small Government is Beautiful.  Government crowds out God, in so many ways.  One of those is care for the poor.  There are many scriptures that call for individuals and churches to care for the poor, but I can’t find one that commands government to do so.  The word “take” is used 42 times in the Bible, according to a brief study by one of my grad students.  There is only one that has to do with taking economic goods, that’s when Jesus commands his disciples to take a colt.  The other 41 have nothing to do with economic goods.  Thus, there is no command to take.  But government must take before it can give.  When a student in one of my classes at Dallas Baptist University suggests that the government should do it.  I point out that the government has no money.  It must get it from someone.  This is worth repeating, “The Government has no money.”  I even call the Good Samaritan story “The Capitalist Good Samaritan” in my podcast #50 because the Samaritan earned money in a free-market capitalist environment and used it to help the man who had been robbed.  I have a lot to say about government debt in podcast #8 titled National Debt.   And, my third citation from Arthur Brooks in this podcast.  He ends his book with nine prescriptions for a happier nation.  His very last prescription reads, “Happiness is easiest to find in limited government.”

Regulatory Efficiency

The third category in the Heritage Index of Economic Freedom is “Regulatory efficiency,” which encompasses the subjects of business freedom, labor freedom, and monetary freedom.  Business freedom can be measured by how many regulations exist in a country.  In The Mystery of Capital, Peruvian economist Hernando de Soto had some business students attempt to start a small bakery on the outskirts of Lima.  Working full-time, it took them 549 days just to complete and file the regulatory documents.  This is clearly not consistent with the Christian worldview, which calls for people to be free in their economic dealings.  Labor freedom measures whether the suppliers of labor are free to seek work at any wage they choose, and whether the demanders of labor can do the same.  My very first podcast, #1 is titled The Christian View of Minimum Wage.  Monetary freedom determines whether the country’s central reserve bank has the freedom to change interest rates and money supply.  In the US, as in most developed countries, there is very little freedom today  That’s because the major central banks have cut interest rates to near zero, so there are no “bullets left in their gun,” to use the old metaphor of a six-shooter.  And, they have so over-supplied their economies with money, there is little freedom left to increase the money supply.  

Open Markets

The fourth category for Heritage is “Open markets,” including trade freedom, investment freedom, financial freedom.  This comes directly from Adam Smith’s The Wealth of Nations.  He made it clear that mercantilism would not work, and clearly that trading what you have for what you don’t have, makes a country richer.  Most people assume that nations are rich because of their physical endowments of oil and other minerals.  Not so.  Many of the countries at the top of the income list have very limited resources: Singapore, Japan, and Luxembourg are just a few examples.  While Argentina, Brazil, and Venezuela are among the most richly endowed countries, yet they are poor.  Venezuela has more oil and gas resources than any country in the world, yet over 20% of the population has fled because there is not enough food nor medicine in the country.  The only conclusion from the Venezuelan economic experiment is that Socialism is not only in violation with the Christian worldview of freedom, it’s also economically inept because it make the country poorer, not richer.  One of my favorite phrases reads, “Policies that promote production is the only thing that separates rich from poor nations.”  And, it’s the topic of podcast #27.  Countries who have relatively free trade, accept investment freely, and have financial freedom are predestined to become richer.  

As the Christian economist, I sometimes get caught between Christianity, which is concerned about inputs, and economics, which are more concerned with outcomes.  In this area of debate, Christians are concerned about the right to freedom, while economists are concerned about the ability to use it.  Freedom is favored by both the Christian inputs and the economic outputs.  

 

Books Referred Within This Episode:

Biblical Economic Policy https://amzn.to/3zrGano

Religion & the Rise of Capitalism https://amzn.to/3r0BGju

Gross National Happiness https://amzn.to/3hU8TsN

The Mystery of Capital https://amzn.to/36mgmM6

Animal Farm https://amzn.to/3knnHDo

The Wealth of Nations https://amzn.to/3wJWxJj

Christianity & Capitalism: Correlation or Causality 

 

 

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