Muller Capitalism (3)

Jerry Z Miller explains that unequal abilities become more significant as barriers to opportunity are removed.

If capitalism has opened up ever more opportunities for the development of human potential, however, not everyone has been able to take full advantage of those opportunities or progress far once they have done so. Form or informal barriers to equality of opportunity, for example, have historically blocked various sectors of the population―such as women, minorities and the poor—from benefitting fully from all capitalism offers. But over time, in the advanced capitalist world, those barriers have gradually been lowered or removed, so that now opportunity is more equally available than ever before.

The inequality that exists today, therefore, derives less from the unequal availability of opportunity than it does from the unequal ability to exploit opportunity. And that unequal ability, in turn stems from difference in the inherent human potential that individuals begin with and in the ways that families and communities enable and encourage that human potential to flourish.

The role of the family is shaping individuals ability and inclination to make use of the means of cultivation that capitalism offers is hard to overstate. The household is not only a site of consumption and of biological reproduction. It is also the main setting in which children are socialised, civilised and educated, in which habits are developed that influence their subsequent fates as people and as market actors. To use the language of contemporary economics, the family is the workshop in which human capital is produced.

Muller Capitalism (1)

Jerry Z Muller has published an important article called Capitalism and Equality: What the Right and Left get Wrong in Foreign Affairs (March/April 2013). Jerry Z. Muller is currently a Professor of History at the Catholic University of America. His message parallels that of Guy Standing, but whereas Standing leans towards socialism, Muller is a conservative. He is the editor of a book called Conservatism.

Muller is concerned about the link between capitalism and equality, and is worried that conservatives just ignore the problem.

Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, for the problem is more deeply rooted and intractable than generally recognized. Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it -- because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords.

Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism -- because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.

Jesus & Economic Life (18) Equality

God’s goal is equality. Joshua divided the land equally between families.

Joshua cast lots for them in Shiloh in the presence of the LORD, and he distributed the land to the Israelites according to their tribal divisions (Joshua 18:10).

Leviticus provided a method for ensuring that it remained equally distributed. When the Israelites gathered manna, some gathered more than others, but each one got what they needed.

The Israelites did as they were told; some gathered much, some little. And when they measured it by the omer, the one who gathered much did not have too much, and the one who gathered little did not have too little. Everyone had gathered just as much as they needed (Ex 16:17-18).

Everyone one got what they needed. Paul continued this pattern of equality continues into his New Testament letters.

Our desire is not that others might be relieved while you are hard pressed, but that there might be equality (2 Cor 8:13).

This is a radical vision. Paul encouraged serious giving and sharing according to the instructions for economic life would produce equality. We are a long way from Paul’s vision, because we have not understood that sharing wealth is a normal response to Jesus death on the cross.

Jesus confirmed the importance of equality in his parable of the workers in the vineyard.

The workers who were hired about five in the afternoon each received a denarius. So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. When they received it, they began to grumble against the landowner. These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day’ (Matt 20:1-16).

This employer had promised to pay “whatever is right”. The parable actions to increase equality are right/just (dikaios).

Jesus gave a solution to the problems caused by inequality of capital.

Sell your possessions and give to the poor (Luke 12;33).

Generous giving and sharing should be normal for Christians, particularly sharing of capital. Those who have plenty of capital should give to those who don’t have much. The outcome will be greater equality.

At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality (2 Cor 8:14).

When helping people give away unrighteous wealth, deacons should channel capital to poor people who have the capability to use it responsibly to be more productive. They will need training in conserving capital and using it wisely. Transferring capital to the poor by giving and sharing will move the world closer to equality.

People like equality, but few know how it can be achieved. Robin Hood tried to achieve it, by robbing the rich and giving to the poor. Modern governments use compulsory taxation to transfer income and wealth from the rich to the poor. This makes the rich angry and leaves the poor still poor. God also wants equality, but his way is by giving, sharing and giving away of unrighteous wealth.

God’s objective is equality, but his solution is unique as it does not require force or coercion. His solution to inequality is love, compassion and repentance that puts things right. God’s requires people with plenty to give generously to those who are hard pressed. He expects people who have prospered to demonstrate compassion for those who have not done so well. Compassion and sharing can create equality.

This full series of posts can be found at Jesus and Economic Life.

Economic Life (15) Land and Capital

Christians who dislike Leviticus miss out on one of the most important economic principles in the scriptures.

The land must not be sold permanently, because the land is mine and you reside in my land as foreigners and strangers. Throughout the land that you hold as a possession, you must provide for the redemption of the land.

If one of your fellow Israelites becomes poor and sells some of their property, their nearest relative is to come and redeem what they have sold. If, however, there is no one to redeem it for them but later on they prosper and acquire sufficient means to redeem it themselves, they are to determine the value for the years since they sold it and refund the balance to the one to whom they sold it; they can then go back to their own property. But if they do not acquire the means to repay, what was sold will remain in the possession of the buyer until the Year of Jubilee. It will be returned in the Jubilee, and they can then go back to their property…. Houses in villages without walls around them are to be considered as belonging to the open country. They can be redeemed, and they are to be returned in the Jubilee (Lev 25:23-28,31).

When Israel entered the Promised Land, land was the main form of capital. The land was divided up evenly between tribes and family groupings, so that every family had a piece of land. God organised the situation so that capital was evenly distributed. This is an important principle. God wants to see capital evenly distributed. In the Micah’s vision of the kingdom, every man has his own vine and his own fig tree (Mic 4:4). This is the same principle.

In an agricultural society, land was the main form of capital (in an economic sense). Distributing the land evenly ensure that every family had access to capital. It was distributed evenly, so that every family had an equal opportunity.

In reality, some people use their capital productively and do well. Others misuse their capital and get into financial difficulty. If a family gets into serious financial trouble, they might not need to sell their land to settle their debts. However the land could not be sold in perpetuity, because it belongs to God. All that could be sold was the crops that would be produced between the present day and the next jubilee. The jubilee occurred every fifty years.
If an debtor family has sold their land to a creditor to settle their debts, three things could happen.

1. A relative or neighbour to come to the aid of the debtor family and buy back the land from the creditor to whom it had been sold. The redeemer will pay the full price that paid by the purchase. This was a sacrifice as the relative or neighbour would receive very little. They might get some crops while they were getting the debtor family prepared to look after it again, but they will never own the land they have bought. This was essentially a gift from one person to another. It is generous giving at its best. The only benefit he gets is the benefit of living in a strong community.
   
   The Good Samaritan helped a man who was in a hole, perhaps due to his stupidity, by going places he should not have gone alone. The parable extended the scope of who is our neighbour to everyone that we encounter. It does not limit the scope of assistance to caring for sick people. The Torah teaches that being a Good Samaritan means recovering the property of a neighbour who has been forced into selling it to pay debt.

2. If no one redeems the land sold by a person in debt and he returns to prosperity again, he can buy his family property back at any time. The price will be set at the value of the crops that will be received between the sale day and the jubilee. He does not have to repay the full amount, because the buyer has received crops from the land.

3. If there is no redeemer and the person in trouble never recovers sufficiently to buy it back, the buyer can hold the land until the jubilee. This will affect the price paid for the land. The buyer is not really buying the land. He cannot because it belongs to God. He is actually buying the harvests that will occur between the purchase date and the jubilee. If he pays more than that is worth, he might be reluctant to return the land when the Jubilee comes. The benefit the buyer gets is the confidence that comes from being part of a strong community.

There were no penalties attached to this instruction, so it could not be enforced. It does not justify compulsory land re-distribution as some have claimed. This was a voluntary instruction to ensure that wealth and capital did not become too unevenly distributed. If one generation got into trouble and lost their capital, the next generation would get it back, and have a fresh start.

The prophets spoke against those who accumulated land and houses.

Woe to you who add house to house and join field to field till no space is left and you live alone in the land (Is 5:8).

These people were breaching God’s principle that all capital land should be evenly distributed. They would not have been able to do this, if they understood and applied the principle of the Jubilee.

This was not an individualistic concept of property. Land was assigned to the family group. It is held in trust for the benefit of future generations of the family. Losing the land was a failure of trust that cursed later generations. God protected the family line be providing a way to remedy a mistake that could affect future generations.

The classical economists like Adam Smith were concerned about economic rent. They saw it as a problem, because the aristocratic families whose ancestors had fought on the winning side in ancient battles controlled large blocks of land. They collected rent from their tenants with no need to give anything in return. The classical economists wanted to tax economic rent away. If God owns the land, the basis for economic rent disappears.

This instruction and the jubilee ensured that capital continued to be equally distributed, but this it only works in an agricultural society. In the modern world, most capital is plant machinery and equipment and other assets. Jesus put a twist on the jubilee laws that ensure that these will be relatively equally distributed too, but that is a topic for another post in another series.

Justice (20) - Equality and Mercy

The only place where equality of income is explicitly mentioned in New Testament is in 2 Corinthians 8:13-15:

Our desire is not that others might be relieved while you are hard pressed, but that there might be equality. At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality, as it is written: "He who gathered much did not have too much, and he who gathered little did not have too little.

The context is not justice, but giving. God does care about inequality of incomes. He hates seeing some people living in plenty and others starving. However, the cause is often not his solution is not government backed redistribution programmes, but generous giving.

Inequality has a variety of causes. Injustice can cause of inequality of incomes. Where injustice is the problem, Christians should be passionate about restoring justice. However, perfect justice will not produce equality of income. Most inequality has other causes. It is not the result on injustice.

The normal workings of life result in equality. Some people choose to work harder than others. They gather far more than they need. Others are more talented. Some people have extremely innovative ideas that earn them large incomes. Other people prosper because they inherited wealth from thrifty parents. Sometimes good people make bad economic decisions that lead to poverty. Some do not gather enough. This is life. No injustice is involved.

Life produces inequality, but it does not have to stay that way. As the kingdom of God advances, poverty should disappear. God expects those who have plenty to be generous towards those who have less. While life pushes in the direction inequality, love and generosity should be pushing society back towards equality.

Christians can also increase equality by helping all people to become productive to their full potential. A key responsibility of deacons is to teach people how to manage their income and how to use their time more productively.

The full series is here.

Justice (19) - Equality

The modern practice is to equate justice with equality. I think the idea came originally from Aristotle. People assume that justice will result in equal outcomes for everyone. This is not true. True just results in different outcomes. The unrighteous person is exposed and forced to make restitution. The person suffering the injustice is vindicated and their situation is restored. Thus, true justice improves the situation of the righteous person and harms the situation of the person who committed the unjust act.

God is the perfect judge, but his the final judgment will not produce equality. The parables of talents and minas suggest that people will receive different rewards (Matt 25:14-30: Luke 19:11-26). The parable of the rich man and Lazarus show that true justice results in different outcomes (Luke 16:19-31).

Even those with faith in Jesus will receive different rewards when they stand before Jesus.

But each one should be careful how he builds…... If any man builds on this foundation using gold, silver, costly stones, wood, hay or straw, his work will be shown for what it is, because the Day will bring it to light. It will be revealed with fire, and the fire will test the quality of each man's work. If what he has built survives, he will receive his reward. If it is burned up, he will suffer loss; he himself will be saved, but only as one escaping through the flames (1 Cor 3:10-15).

True justice produces just outcomes for all, not equal outcomes.

Caring for the Poor (7) - Equality

Most people feel that large variations in income or wealth are wrong. This is confirmed in the Bible. God’s goal is equality.

Our desire is not that others might be relieved while you are hard pressed, but that there might be equality. At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. Then there will be equality (2 Cor 8:13,14).

This is the same goal as the socialists, but the method of achieving the goal is different. Socialists use compulsory taxation to transfer income and wealth from the rich to the poor. This makes the rich angry and leaves the poor still poor.

God also wants equality, but his way is by sharing. The theme of the entire chapter is not compulsory redistribution, but generosity and sharing.

For I testify that they gave as much as they were able, and even beyond their ability. Entirely on their own, they urgently pleaded with us for the privilege of sharing in this service to the saints. And they did not do as we expected, but they gave themselves first to the Lord and then to us in keeping with God's will. (2 Cor 8:3-5).

Paul’s is a radical vision. He believed that if Christians grabbed hold of this sharing concept, the result would be equality. We are a long way from Paul’s vision, because we have not understood that sharing our wealth is the normal response to Jesus death on the cross. Generous sharing should be normal for Christians.

Inequality

According to Walking the Talk

Some 80% of people live in developing countries and have
to live off 20% of the planet's goods.

David Henderson has an interesting comment about this statement.

The impression is conveyed that the goods and services that people, businesses and governments currently buy are somehow made available by 'the planet' and then unequally - and hence inequitably - distributed among countries. In fact, rich countries are rich because their citizens produce more per head, not because they have secured privileged access to 'the planet's goods', or to its 'resources'. (The Role of Business in the Modern World p. 91).

We must do some careful thinking before deciding who has sinned in this situation.