Friday, August 31, 2007

Demand Deposits (13) - Bank Fees

Banks that accept these biblical principles will not be able to make money from accepting money on deposit for safekeeping. Therefore, it will be quite appropriate for them to charge a fee for the services that they provide. Depositors will look for banks that provide the best service for the most reasonable fee. They will be able to choose the level of service. Banks that provide better security and a wider range of transactions will be able to charge more.

Christians should not expect banks to pay interest on demand deposits.

The full series can be found at Bank Deposits and Loans.

Thursday, August 30, 2007

Demand Deposits (12) - Torn Donkeys

There are limits on the duty of care that is required when caring for something. The person providing safekeeping is not accountable for things that are beyond their control.

If a man gives a donkey, an ox, a sheep or any other animal to his neighbor for safekeeping and it dies or is injured or is taken away while no one is looking, the issue between them will be settled by the taking of an oath before the LORD that the neighbor did not lay hands on the other person's property. The owner is to accept this, and no restitution is required. But if the animal was stolen from the neighbor, he must make restitution to the owner. If it was torn to pieces by a wild animal, he shall bring in the remains as evidence and he will not be required to pay for the torn animal (Ex 22:10-13).
The principle is clear. The owner is the owner. The neighbour providing care is never the owner. If the animal is stolen, the neighbour must make restitution to the owner. If the animal is killed by wild animals, the neighbour does not have to make restitution, because this event was beyond his control.

The same applies to a bank. If it claims money that has been deposited as its own asset, it has committed theft. However, if the money is destroyed by a fire or war, the bank is not liable for the loss, because it was beyond the bank’s control. A bank must provide the best care possible for money on demand deposit, but it is not accountable for events beyond its control.

Tuesday, August 28, 2007

Demand Deposits (11) - Biblical Principle

Here is a biblical principle that applies to demand deposits.

If a man gives his neighbor silver or goods for safekeeping and they are stolen from the neighbor's house, the thief, if he is caught, must pay back double. But if the thief is not found, the owner of the house must appear before the judges to determine whether he has laid his hands on the other man's property…. The one whom the judges declare guilty must pay back double to his neighbor. (Ex 22:7-9).
When someone takes the goods of another for safekeeping and it goes missing, he is accountable for the loss. If the thief is found, the thief must make restitution. If not, the person caring for the property is accountable fro the loss. He must make restitution to the owner, because what his neglect is the equivalent of theft.

The other important thing to note is that the Bible refers to the person who presented the valuables for safekeeping as the owner, even when they are in the house of the other person. This confirms the principle that the ownership of property does not transfer to person who takes it for safekeeping. The owner remains the owner, until the goods are actually sold.

Applying this principle to banking, the bank that treats money that has been deposited for safekeeping as its own asset has misappropriated something that does not belong to it. If it was taken before the judges, it would have to pay back double to the owner. Paying back the amount that was deposited is not enough.

Monday, August 27, 2007

Demand Deposits (10) - Fungible Money

What applies to oil and wheat also applies to a demand deposit in a bank. Although the money is fungible, ownership does not transfer to the bank. Rather the depositors own a share of all the money in the bank. This is true regardless of the form of money. If gold is deposited in the bank, the depositor changes ownership of a particular piece of gold, for a defined share of all the gold in the bank. He can always get his gold back, because the amount he has put in has been added to the total amount in the bank. Each depositor’s share of the total amount of gold is equivalent to the amount that they put in.

The same applies if the money is notes and coins or electronic money. All the money on demand deposit at the bank is jointly owned by the depositors. Each one owns a share of the total, which is equivalent to the amount they deposited. If money depreciated in value, the loss is shared by all depositors. The important point is that none of the money in demand deposits is owned by the bank.

Sunday, August 26, 2007

Demand Deposits (9) - Fatal Flaw

Money is a fungible good, but the argument that the bank owns it still has a fatal flaw. The defenders of money argue that when a fungible food is put into a silo or tank, the ownership of the good passes to the owner of the storage. They say that the same applies to demand deposits at the bank. Because money is a fungible good, ownership passes to the bank. This logic is not correct.

When oil is put in a silo or oil into a tank, the ownership should not pass to the owner unless he buys it from the people putting it in. If I put wheat in a silo along with wheat that belongs to eight other people, I still own some wheat. The difference is that whereas, I previously owned my own wheat, I have now own a share of silo of wheat. The wheat in the silo does not belong to the owner of the silo. It is owned jointly by me and the eight other people who have put their wheat into the silo. The owner of the silo is not entitled to take some of the wheat for his only use, even if he put some other wheat back, before the owners demand it back.

Likewise, when several people put their oil into the same tank, the ownership of the oil does not transfer to the owner of the tank. Rather they have swapped ownership of a specific volume of oil for a share in a larger volume of oil. The owner of the tank can only claim ownership of oil if he has actually purchased some oil. He has no right to take the oil for his own use, even if he puts some oil volume back into the tank later. The owner of the tank or the silo has a duty of care to those who are paying a fee for the storage. That does not give him a right use what is being stored.

Saturday, August 25, 2007

Demand Deposits (8) - Fungible Goods

Some defenders of the modern banking system have argued that a bank is different from a warehouse, because money is fungible. A fungible good is one that becomes mixed when it is stored with more of the same good. An example is wheat. If my wheat is added to a silo containing wheat owned by other people, I will not be able to get my particular grains of wheat out. All that the silo owner is required to do is return any wheat of similar quality to what I put in a silo.

Oil is another example of a fungible good. Having a separate storage tank for each owner of oil would not be very efficient. It is better to store all the oil of a particular type in one tank. The operator of the tank will always be able to return oil to the person who put some in when he wants it, however he will not get exactly the same molecules of oil that he put. He will be quite happy as long as he gets oil of the same quality.

The defenders of the banks argue that money is a fungible good too. This is true. If you deposit gold coins in a bank, you may have an attachment to a particular coin, because you like the face that is printed on it, but most people will happy to get back any coin, as long it contains gold of the same weight and purity. Likewise, I don’t really matter what bank notes, I get when I with draw money from the bank, as long as they are not scruffy. I do not care, if I don’t get back the ones that I put in.

Friday, August 24, 2007

Demand Deposits (7) - Bank Records

The warehouse owner will keep an inventory of everything that is stored in his warehouse. He records the identity and contact details of the owner of each item. He can even transfer the ownership to another person, if instructed by to do so by the owner. However, this recording system will be separate from his assets register.

Banks should really be doing the same thing with demand deposits. They should be keeping an inventory of all the money being stored and the identity of the owners. This should be separate from their financial accounts. The money stored should not be able to creep onto the bank's asset register.

Thursday, August 23, 2007

Demand Deposit (6) - Two Owners

Having an asset with two owners might be fine for a while, if the real owner does not want to use the asset immediately. However, eventually problems will arise. If the owners of money in the bank want to withdraw it and the bank has done something else with the money, the conflict is obvious. If too many people want to withdraw money at the same time, the problem compounds. A bank run can occur, and the bank might end up defaulting on its obligations. This has happened to Countrywide recently, when depositors queued to withdraw their deposits, fearing that their money might not be there.

This problem does not arise with a warehouse. If all the people with stuff stored in a warehouse decided to take it out on the same, this would not matter. The warehouse owner would be very busy handing out stuff and he might be worried about his future income, but every person would get back what they owned. There is no reason why a bank should be any different. The solution to this is quite clear. If the warehouse owner claimed ownership of the stuff stored in his warehouse, he would be accused of misappropriation or theft. If a bank claims ownership of money entrusted to its care, the same applies. It has appropriated something that does not belong to it. It has stolen money from the owners.

The bible is clear that a thing cannot have two owners. If two people claim the same thing, the case should be resolved by judges.

In all cases of illegal possession of an ox, a donkey, a sheep, a garment, or any other lost property about which somebody says, 'This is mine,' both parties are to bring their cases before the judges. The one whom the judges declare guilty must pay back double to his neighbor (Ex 22:9).
If I say of my demand deposit ,'This is mine' and the bank is also saying, 'This is mine,' something is wrong. This is an issue that should be resolved by judges. If they find that the bank has claimed something that does not belong to them, they should be made to pay back double to the depositor.

Wednesday, August 22, 2007

Demand Deposit (5) - Modern Banking

What applies to gold coins applies to all forms of money. I get my salary paid into a bank because I do not want to carry around a whole lot of notes and coins. I put it there for safekeeping. I also use the bank because it provides an easy way of making payments to other people, by cheque or electronic transfer.

I am very clear about one thing. My money belongs to me, even when it is in the bank. I want to be able to spend it whenever I want. My cash in the bank is my asset. It does not belong to the bank. Therefore the bank should not record my cash on its balance sheet as an asset, even if also records a liability to me. My cash does not belong to the bank

This is the heart of the problem with the modern banking system. Banks claim ownership of the cash that has been deposited by their customers. They record this cash as an asset on their balance sheet. They treat the cash as if they owned it. This is problematic because the cash now has two owners. I think that I own it and the bank acts as if it owns it. When two people think they own the same asset, problems always follow.

Tuesday, August 21, 2007

Demand Deposit (4) - Bank of Amsterdam

The bank of Amsterdam operated in this way for more than 150 years from 1609 to 1779. Very few banks have remained sound for this length of time. The integrity of this bank was noted by David Hume and Adam Smith. The latter made the following comments.

The Bank of Amsterdam professes to lend out no part of what is deposited with it, but, for every guilder for which it gives credit in its books, to keep in its repositories the value of a guilder either in money or bullion. That it keeps in its repositories all the money or bullion for which there are receipts in force, for which it is at all times liable to be called upon, and which, in reality, is continually going from it and returning to it again, cannot well be doubted...... At Amsterdam, however, no point of faith is better established than that for every guilder, circulated as bank money, there is a correspondent guilder in gold or silver to be found in the treasure of the bank..... The bank is under the direction of the four reigning burgomasters who are changed every year. Each new set of burgomasters visits the treasure, compares it with the books, receives it upon oath, and delivers it over, with the same awful solemnity, to the set which succeeds; and in that sober and religious country oaths are not yet disregarded.

In 1672, when the French king was at Utrecht, the Bank of Amsterdam paid so readily as left no doubt of the fidelity with which it had observed its engagements. Some of the pieces which were then brought from its repositories appeared to have been scorched with the fire which happened in the town-house soon after the bank was established. Those pieces, therefore, must have lain there from that time.......

The bank cannot be debtor to two persons for the same thing.

(An Inquiry into the Nature And Causes of the Wealth of Nations, 1776).

The last sentence is the key to the longevity of the Bank of Amsterdam.

Unfortunuately, during the 1780s, the bank began to violate this principle, when the city of Amsterdam demanded that surplus deposits be loaned to the city. This marked the end of the bank's success.

Monday, August 20, 2007

Demand Deposit (3) - Gold Coins

When I put my salary in the bank, I am really just putting it in a warehouse for safekeeping. This was obvious in the days when gold coins circulated. Keeping the coins at home would be too risky, if I could not afford a safe. I would be very vulnerable to being robbed. Putting my gold coins in a bank for safe keeping would make good sense. The bank service would be even better, if the bank would act on my instructions to make payment to other people on my behalf when required. They would simply transfer the ownership of the right number of coins to the person to whom I chose to make payment.

The bank is just providing a warehouse service for the gold coins. The ownership of the coins does not shift to the bank, when I deposit them. The coins are still mine. They only change ownership, when I instruct the bank to make a payment to someone. At that point the ownership of some of the coins transfers to the person paid. The bank never owns the coins. Therefore the gold coins should never be recorded as an asset on the banks balance sheet. All that should appear on the banks balance sheet is any contingent liability for coins that are lost or stolen.

Sunday, August 19, 2007

Demand Deposit (2) - Warehousing

To make the nature of a demand deposit clearer, consider a parallel example. If I am going out of town for a while, I may engage a warehousing company to store my dining suite until I return. The warehouse will charge a fee for providing this service.

When my dining suite goes into the warehouse its ownership does not change. The dining suite still belongs to me. The warehouse owner cannot do what he likes with the table. He cannot bring it out and use it when he has guests for dinner. He cannot dance on the table top or use it for playing table tennis. The warehouse owner cannot decide how the table will be used, because he has no ownership rights to it. All he has is a duty to care for my dining table in the way specified in the contract.

If I decide not to return, I can write to the warehouse and ask that the table be delivered to my daughter and the chairs to one of my friends. The warehouse owner will do this provided I pay the cost of transport. He cannot refuse to carry out my request, because he has relatives to staying and is using the table. If this happened, I would accuse him of misappropriating my dinning suite. If he has moved it into his own home, he could be charged with theft. Everyone would understand that he has done something immoral.

If the word got out about what he had done, his warehouse would soon be empty, because people would stop trusting him. The service that he offers is skill at caring well for things that belong to other people. This service only has value to customers, if they can trust him to provide the care that he has promised to provide. He is really selling trust, so if he proves to be untrustworthy, his service has no value and people will be unwilling to pay for it.

The warehouse owner does not record the things stored in his warehouse on his balance sheet. The only asset on his balance will be the warehouse that he owns. He does not include the contents of the warehouse, because he does not own them and they are not his assets. The only way that they will appear on his balance sheet is through a contingent liability for inadvertent damage that might be done to something that is in his care.

Saturday, August 18, 2007

Demand Deposit (1)

The demand deposit is the most basic tranaction I can make with a bank. Most deposits in cheque accounts are demand deposits. The demand deposit is not very well understood, but it at the core of the problems of the modern financial system.

When I get paid, my salary goes into my bank account. I am not lending my salary to the bank. I intend to spend most of my pay in the fortnight before I next get paid. I want to be able to spend that money whenever I choose for whatever I want to buy. This is the benefit of a demand deposit. My money is available on demand. I can withdraw my money when I demand it.

When my salary goes into the bank, I have not transferred the ownership of that money to the bank. The money is mine. It does not belong to the bank.

The current accounting process is that the bank records the cash it has received as an asset and records it responsibility to me as a liability. This is wrong. The cash does not belong to the bank. It belongs to me. The cash will be an asset on my balance sheet, so it should not be on the banks accounts as an asset as well. An asset cannot have two owners. This is the root of the problems with the modern banking system.

The full series can be viewed at Bank Deposits and Loans.

Credit Crunch

The Fed has decreased their discount rate. I am not sure that pumping in more liquidity will solve the problem. Giving an alcoholic a bottle of wine will get rid of the DTs, but it does not deal with the underlying problems.

I am also puzzled why the Fed is accepting mortgage-backed securities. Does that mean that the banks do not have any better quality securities that they can give to the Fed? Or is the Fed taking over some of the risk with subprime mortgaged-backed securities?


If you are a subprime borrower and have bought an overvalued house with a small deposit and an ARM, and things go wrong, the bank will sell your house and you will lose everthing.

If you are a bank and you buy overvalued highly-leveraged securities with short-term commercial paper, and things go wrong, the Fed will come to the rescue.
That is government by the people, for the people.

Friday, August 17, 2007

Guidance or Law

Ted Gossard asked whether the Bible is God's guidance or a lawbook. My response is as follows.

We must be careful that we do not confuse laws and rules . The question is really asking if we should treat the Bible as a rulebook. I think the answer to that is No. Jesus never gave the impression that he was living by a set of rules. He focussed on doing what the saw the Father doing.

Nevertheless, there are plenty of rules in the NT. The reality is that rules can be helpful to new Christians. Do not lie, may be a useful rule for a new Christian who was a chronic liar. However, every Christian should quickly move beyond rules and onto doing what the Father is doing and following the voice of the Spirit.

I do not play golf, but it provides a useful analogy. A new golfer may focus on staying out of the rough. Avoid that tree. Avoid that lake. As the golfer increases in skills, their focus will move to going up the centre of the fairway, getting well placed for the next shot and landing on the green. Playing along the edge of the rough will not make you a good golfer.

Likewise, a new Christian may have a focus on avoiding doing things the things that controlled their old life. This may help them to make quick progress, but living on the boundary of the rules does not make an effective Chrisitan. They should quickly move to a more positive focus on seeing what God is doing in every situation. They should move to being motivated by love of Jesus, rather than fear of failing.

On the issue of law, the Bible is not a law-book, but it does not contain law. Christians do not live by laws, but society does need laws. The Bible provides the laws that society needs. However, Christians should not be in the business of imposing God's laws on people who are not Christians

Thursday, August 16, 2007

Confidence and the Credit Crunch

Everyone is saying that investors have lost confidence, but what does that mean? Confidence does not just hang in the air. Having confidence is a transitive verb. You must have confidence in something. I presume that investors had confidence in what bankers were advising them about the quality and price of various assets. I presume that they had confidence in what the brokers and credit rating agencies were saying about the value of CDOs and other financial products. I presume that homeowners had confidence in the real estate agents who told them their houses were worth twice as much as they were a few years ago. I presume that people had confidence in the people that said that the markets will keep going up.

What has changed is that investors have found out that their confidence was misplaced. The assets they were lending money to buyers, were not worth as much as they were lead to believe. That is not lack of confidence. It is finding out that your confidence was misplaced, which is quite a different animal.

I am not that interested in what will work. I more interested in what is right or wrong, or just plain foolish. So far it seems that the bankers and brokers and credit raters whose valuations and assessments have proved to be wrong were unwise, or just plain foolish. Being foolish is not a sin. Trusting a fool is unwise, but it is not a sin. However, I suspect as time goes on that we will find that there has been some lying too.

Confidence has not disappeared into the ether. Rather, investors are looking for assets and institutions that inspire confidence. These are rarer than was previously thought, but at least we are getting closer to the truth and that must be good.

Wednesday, August 15, 2007

Credit Crunch

Economists and commentators are all talking about a credit crunch. They make it sound like a rare, but normal part of the workings of the banking system. It does not happen very often, but from time to time investors lose confidence and a credit crunch follows.

For most economists, a credit crunch is just a deficient process. Many think that this process can be corrected by central banks by pumping in more liquidity. Just put the process right and everything will be fine. Oil the cogs and they will turn smoothly.

I have a different approach. I want to know if the credit crunch was the consequence of immoral behaviour. Was the crunched caused by evil actions? Were those evil actions made possible by man-made banking laws. I do not know the answer yet, but I am determined to find out. Can anyone give me a quick answer?

Tuesday, August 14, 2007

Liquidity Infusion

Last week many central banks all round the world injected money into their banking system. The following are some of the larger actions last Friday

  • The E.C.B. injected another 61 billion euros ($84 billion) into the banking system, after providing 95 billion euros the day before.

  • The Federal Reserve added $19 billion to the system through the purchase of mortgage-backed securities, then another $19 billion in three-day repurchase agreements.

  • Fears of a shortage of money available to banks meeting demands for funds by investors as they sold assets had prompted the Fed to add $24 billion in reserves to the banking system on the previous day.

  • Responding to fears of a similar credit squeeze in Asia, the Bank of Japan said today that it added 1 trillion yen, or $8.4 billion, to money markets in Tokyo.

  • The Reserve Bank of Australia lent banks 4.95 billion Australian dollars, or $4.2 billion, its biggest such injection of liquidity since 2003.

  • The Bank of Canada injected 1.64 billion Canadian dollars ($1.55 billion).
    The Swiss National Bank lent two to three billion Swiss francs ($1.68-$2.51 billion).

  • The Monetary Authority of Singapore Friday injected 1.5 billion Singapore dollars (US$986.1 million).

And it did not stop there. The Fed and the ECB were busy injecting and pumping again on Monday.

The terms used by the news media to describe these invents sound very benign: injection, infusion, provide funding, pump in, add liquidity. They make it sound like an engineer squirting oil into the cogs of machine. It is assumed that the role of the central banks is to keep the system running smoothly, but am not so certain.

Clearly the central banks are loaning large amounts of money to the banks. Everyone just assumes that this is a good thing, but how can we be sure.

When assessing this type of action, most economists just want to know whether it will work. If something works, it must be okay. I have a different approach to economics. I am not that worried about whether an economic intervention will work. This is generally impossible to know. That is why economists argue so much.

I want to know if an economic intervention is moral. Is the action taken good or evil? These are questions that Christians can answer.

So in this case, I want to know where the money that the central banks are lending is coming from. I would also want to know how they got it in the first place. If they are lending money from their reserves, that would be okay. However, it places real limits on the extent to which they can support the banks in this way.

The Fed Frequently injects funds and rarely withdraws money. How can this happen? If the cash injections are simply book-keeping entries that increase both the assets and the liabilities of the central banks, I would be really worried. If someone counterfeits a hundred dollar note and spends it, they have stolen something that does not belong to them. If the central banks are just creating electronic money, then they are accessories to theft. That is wrong, regardless of whether or not it helps a credit crunch.

Monday, August 13, 2007

God's Law (9) - Application

God’s law is perfect. It is perfect in the principles it enshrines. People have not changed and the principles are still the same. The only thing that has changed is the technology. However, it is not that hard to work out that the law about a flying axe head, also applies to a speeding car. So the issue of translating into a modern environment is not as big a problem as we think.

There are two ways that we can apply God’s laws. The first is to use them as they are in the scriptures. Biblical law would then function in the way that judges apply common law, working back to the original principles and applying them to particular cases. The interesting thing is the English common can be traced back to a codification of biblical law by Alfred the Great in his Doom Book or Code of Laws.

The other way would be to codify God’s laws in modern language and relate them to the modern technological environment. This is what John Cotton did for the colony in Massachusetts in his "An Abstract of the Laws of New England” published in 1641. He took biblical laws and applied them to the situation in the colony. The danger of this approach is that God’s law can be corrupted or distorted in the process. John Cotton got some things wrong because he was stuck in his own context.

My preference is for the former method.

Another interesting point is that codification of God’s law is task that will be best done by biblical and legal experts. A democratically elected parliament is unlikely to have the skills needed for the task.

Sunday, August 12, 2007

God's Law (8) Blessing

God promised that if his people implemented and kept his law, then society would be blessed (Deut 28:1.2).

If you fully obey the LORD your God and carefully follow all his commands I give you today, the LORD your God will set you high above all the nations on earth. All these blessings will come upon you and accompany you if you obey the LORD your God.
This is fairly clear. God did not say, if you keep these laws, and introduce a whole lot of others for the common good, then you will have a perfect society. If that is true, then Deuteronomy 28:1,2 is wrong. I am not willing to accept that. The irony is that we have now had a century of hard out legislating by full-time legislators, legislating for everything that moves. However, rather than moving towards a perfect society, things are getting worse. This suggests to me that the belief that God’s law + laws for common good= perfect society is not true. I think we would be better to go back to Deut 28:1,2.

The LORD is our lawmaker (Is 33:22). I believe that, but I presume most modern Christians would say, “Okay God did make some laws, but they are antiquated and out of date. Congress is our Lawmaker. We just need to get them legislating for the “common good” instead of the pork barrel”.

Saturday, August 11, 2007

God's Law (7) - Economic Issues

With respect to economic issues, God’s law prohibits theft and the use of force against other people. Wages should be paid promptly and false scales should not be used to cheat people. God’s people should make interest free loans to those who are poor, but these are voluntary. However, there is nothing in God’s law that says that judges or politicians should set wage rates, or the price of anything else. There is nothing in God's law that forces businesses to become charities.

Therefore, minimum wage rate laws cannot be justified from God’s law. Anti-trust laws cannot be justfied from God's law. In my view, these are just another humanistic attempt to more than law can do.

Friday, August 10, 2007

God's Law (6) v Mediocre Law

A major problem with human laws is that they encourage mediocre behaviour. Because they provide a minimum standard for everything, people live just within the law, rather than thinking about what they should do. People drive to the speed limit, rather than thinking about the driving conditions. Employers just pay the minimum wage, rather than thinking about what their employees are worth. Business people just do the minimum the law allows rather than thinking about what is right in their situation.

Human laws often have unintended consequences. Many laws like (like anti-trust laws) are passed to correct problems created by other human laws (such as limited liability laws).

A key feature of God’s law is that it does not try to do too much. It restrains the worst evil, but that it all it can do. It cannot get rid of all evil, and it certainly does not make people good. God’s law is humble, but what it does do, it does perfectly.

Thursday, August 09, 2007

God's Law (5) Plus More?

Many Christians want to add to God's Law. They want laws to limit the power of business and remedy poverty.

People are still the same, and most of the behaviors that Christians want to legislate against existed in Moses time, even if they manifested in a different way. There would have been mean employers, but God did not give minimum wage laws. I am sure some people drove there donkeys through the camp in a dangerous manner, but God did not impose speed limits (Note, he made the owner of a bull accountable for any damage it did, he did not put in place speed limits for bulls). There would have been monopolies in Moses time, but God did not give anti-trust laws. So if his law was perfect, then these things are not part of a perfect system of law.

On the other hand, if a whole lot of extra laws are necessary for the satisfactory functioning of human society, then we cannot claim that Gods law is perfect. I prefer to believe that God got the coverage of his law right. If God's Law Plus More is perfect, the God's Law is not

Business is not new. There were plenty of business activity in Moses time. However, according to God’s law, provided they did not steal, or assault people, or kidnap people, or murder them, businesses could just get on with their busines activity. God did not seem to think that a whole lot of laws about how business should behave are necessary. We should be very wary about adding to God's Law.

Monday, August 06, 2007

Wilberforce to Waitangi

The film “Wilberforce” is currently showing in New Zealand cinemas. This film shows the impact on British society ofthe revival led by Whitfield and Wesley in the 18th century. Leaders that emerged from this movement were the key to the abolition of slavery.

What many New Zealanders have not picked from this film is that the same people had a strong influence on the early development of New Zealand. At the time when the first organised migration to New Zealand was being planned, James Stephen was the permanent under secretary in the Colonial Office.

His father, also called James Stephen was a friend of William Wilberforce. The senior James Stephen was a member of the Clapham group and the lawyer who drafted the laws against slavery. His sister later married Wilberforce after his first wife had died.

The younger James Stephen joined to colonial office to have an influence over policies for slavery in the colonies. He later became concerned about the negative impacts of colonisation. European contact had led to the collapse or near extinction of some indigenous societies, so Stephen wanted to avoid a similar pattern in New Zealand.

James Stephen drafted the instructions that were given to William Hobson when was sent to New Zealand in 1840. Part of the instruction was as follows:

All dealings with the Aborigines for their Lands must be conducted on the same principles of sincerity, justice, and good faith as must govern your transactions with them for the recognition of Her Majesty's Sovereignty in the Islands. Nor is this all. They must not be permitted to enter into any Contracts in which they might be ignorant and unintentional authors of injuries to themselves. You will not, for example, purchase from them any Territory the retention of which by them would be essential, or highly conducive, to their own comfort, safety or subsistence. The acquisition of Land by the Crown for the future Settlement of British Subjects must be confined to such Districts as the Natives can alienate without distress or serious inconvenience to themselves. To secure the observance of this rule will be one of the first duties of their official protector.
As an outworking of these instructions, Hobson signed the Treaty of Waitangi with the Maori people. This covenant between the British Crown and the Maori people was unique in colonial history. Without the influence of James Stephen, there would have been no treaty and New Zealand would have had a very different history.

Read more....

God's Law (4) - Perfect Coverage

Once we accept that God's Law still applies today, the next question to be answered is whether God’s law is complete. Clearly his law is good, but if it is not comprehensive, we can add to it to deal with things that are not covered. The issue is God’s Law v Gods Law plus More.

From my study so far, I cannot see any suggestion that God’s law is not complete. God never told the prophets or kings to add new laws as circumstances changed. The other problem is that if additions to God’s law are allowable, then anything goes, because the Bible gives no principles for identifying when and what new laws might be needed. So my conclusion is that God’s Law Plus More is not an option.

God gave a lot of detail in his law when that was appropriate. He specified the difference between manslaughter and murder with examples. He specified that setting fire to your neighbor’s wheat is the same as stealing it. Because God was so precise with the detail, I assume that he was precise with the coverage a well.

God said to Moses, “These are the laws that you must obey”. He did not say “These laws will do for now, but you will have to expand them as society becomes more complex.” God did not tell Moses to add more laws for the common good. The prophets never told the kings to add to God’s law for the common good. God’s law is perfect in its coverage.

Sunday, August 05, 2007

God's Law (3)

The discovery that the Old Testament contains a complete set of laws raised an important question. Does this legal and economic system still apply in Christian society? I looked to Jesus and found that not one jot or tittle of the law has fallen away.

Do not think that I have come to abolish the Law or the Prophets; I have not come to abolish them but to fulfill them. I tell you the truth, until heaven and earth disappear, not the smallest letter, not the least stroke of a pen, will by any means disappear from the Law until everything is accomplished. Matt 5:17,18
I went to the rest of the New Testament and found that God’s law is holy, spiritual, perfect and good (Rom 7). So I have to conclude that the political, familial, judicial and economic parts of the law still apply today. The foundation of a good society must be adherence to God’s law.

I note that Jesus fulfilled some laws (sacrifices, scavengers and sabbaths), so they no longer need to be applied. Other laws (Leviticus) only applied to the nation of Israel. Working out which is which is a challenging task, but I believe that this can be done with the wisdom of God.

Saturday, August 04, 2007

God's Law (2)

I have been studying and thinking about a Christian approach to political and economic issues for more than thirty years. After going around in circles for a long time, this is where I have ended up.

The New Testament does not provide a description of a political, legal and economic system. Jesus changed a few things, but never gave a full description of what a Christian political system would look like. Paul made comments with a political or economic implication, but he did not articulate a fully developed political or economic system. I can only conclude that it was not necessary for them to do this, because God had already done it in the Old Testament. (One reason that there is so much disagreement between Christians about political issues is that we try to do it all from the New Testament).

When I went back to the Old Testament prophets, I found that they had a lot to say about political and issues, but they mostly focused on what was wrong with the situation which had emerged in their nation. Again the prophets do not give a full description of how a good society should function. They did challenge their people for failing to honour God’s law, so that pointed me back to the law.

When I studied biblical law, I found what I was looking for: a complete set of laws that covered everything, including family life, business behaviour, social welfare, national defence and a system of judges. They only thing missing was guidance about parliaments and law making, but these seemed to be unnecessary, because God is lawmaker and he has already given his law.

Friday, August 03, 2007

God's Law (1)

A couple of people have recently suggested to me that I am an anarchist. I can understand why they might think this, because I am often critical of human governments. However, I am not an anarchist. I am an advocate of God’s law.
I start with the position that God’s law is holy, spiritual and good. I believe that God’s law is the best law.

I am opposed to human laws, because all human political efforts will be inferior in comparison to God’s law. I am especially opposed to human laws when they are dreamt up by Christians, who want to force non-Christians live by Christian principles. I really worry about Christians, who think that their political system can produce better laws than God.

I take seriously the command in the Psalms that we should love God’s law.

Oh, how I love your law!
I meditate on it all day long.
Your commands make me wiser than my enemies,
for they are ever with me.
I have more insight than all my teachers,
for I meditate on your statutes.
Psalm 119:97-99

These verses refer to God's law. They are not referring to the bible, as we often pretend.

I believe that loving God’s law is the key to wisdom on social issues.One reason that we struggle to deal with political and social issues is that most Christians hate God law, but love political laws. Most Christians have far more faith in human laws, than they have in God’s law when it comes to reordering society and restraining evil.

Thursday, August 02, 2007

Credit and Blame

Politicians tend to take credit for everything good that happens, even when they are not responsible. They tend to blame the opposition for everything bad that happens, even though they are often responsible thenselves. This distorted view of life tends to create rather dysfuctional personalities.

Wednesday, August 01, 2007

Jesus is Coming Soon

I am amazed at the number of Christians who just assume that Jesus is coming soon. This idea is so much a part of the accepted wisdom that it is never questioned. No one ever asks if this is what the scriptures actually teach.

Down through history, Chrisitans have believed that Jesus would be coming soon. Most believed the signs were being fulfilled in their time. They were all proved wrong by history.

The minority who believed that God has more to do on this earth before Jesus can return have been proved right by history again and again.

We should always be ready for Jesus to return, but my reading of the scriptures is that God has a lot of goods stuff to do, before he will be ready to send Jesus back to end the show. I will be disappointed if Jesus returns soon, because I want to see the Holy Spirit show us his full bag of tricks.

Read more.