- the rule of law
- objective moral values to protect the innocent
- unalienable rights given by God
- equal treatment for all under the law
- private property rights
- encouragement of Christianity and its elements of mercy to others in society
- free enterprise without government distortion except to enforce the above
Applying these principles is not necessarily easy. But we need to try. Let’s analyze some areas as to whether the government should play a role:
• Welfare State? No. In general, the federal government’s continual attempt to socialize welfare programs is not biblical. While limited programs such as temporary unemployment compensation can have a positive economic stimulus during periods of recession, broad-based welfare benefits such as large scale unemployment compensation encourages sloth and failure. Government should not encourage people to sin. It should encourage people to work, to save, and to marry. Further, Marvin Olasky in his landmark book The Tragedy of American Compassion argues that a biblical model of compassion should be (1) challenging, (2) personal, and (3) spiritual. Civil government—especially the federal government— cannot deliver on this. President Bush’s massive federal government initiatives in education and prescription drugs, while well-meaning, are misplaced. This is becoming even clearer now, as these massive government programs have us in large budget deficits which restrict government’s ability to help when a very real crisis—like now—comes upon us. Indeed, I would argue that most of the federal bureaucracy should be disbanded.
• Social Security? Debatable. Social Security is not a situation whose purpose is primarily to arbitrarily save those who have failed financially. It is a broad-based insurance system. It is also a system that clearly has a compassion component for people who are too old or otherwise unable to work. Having observed how many senior citizens have benefitted from Social Security, I would say that the program is desirable even if it is shown to be economically wasteful. But in the name of freedom, citizens should have some options within the Social Security system. Or at least, the Social Security system should be strongly solvent and provide the citizen a positive return on his money.
• Progressive Income Tax? No. Using the power of government to take money from one person to benefit another is not justice; it is theft. Involuntary wealth re-distribution is neither morally defensible nor beneficial for the long run health of the economy. While Christians should desire to help the less fortunate, aid should be done voluntarily rather than by coercion. As Christian thinker Marvin Olasky concludes in his book The Tragedy of American Compassion, welfare when correctly applied should be (a) challenging, (b) personal, and (c) spiritual. Government cannot meet these criteria. But the church can meet them.
• Banking Regulation? Yes. Because of man’s sinful (greedy) proclivities, banks should be regulated to minimize financial disasters. It is all too true that massive bank failures can lead to widespread disasters to innocent parties. We learned from the Great Depression that margin rules for investors are reasonable restrictions. Likewise, the government should require down payments on home purchases and the government should set stricter rules about how much banks should be able to lend against their balance sheet. The government also has a role to play to punish loan applicants who do so fraudulently. Had such regulations been in effect, the current mortgage/banking crisis would not have occurred. The purpose of such regulation is not to protect any one company or industry or locale, but rather to protect the general welfare from systemic loss. In general, the banks are at the heart of the economy and thus the banking system must be kept healthy or the economy will not function.
• Zoning Laws? Debatable. I would argue that local zoning laws would be acceptable on the basis that they are local and thus close to the people. While in one sense they restrict freedom of enterprise, in another sense local citizens should have the right to set community standards.
• Environmental Laws? Yes. A company that creates “spillover costs” to some by dumping pollution into the air or water are violating the above rule that no one has the right to do wrong.
• Taking Control of Fannie Mae and Freddie Mac? Yes. These companies were creations of Congress and thus the federal government has at least some moral obligation to them. Because of man’s sinful proclivities to mess things up, business cycles can be overly severe, and massive damage to innocent parties can occur. Liberals are correct to observe that capitalism can have great swings to the downside that are unnecessarily destructive. Government intervention in the economy since the Depression has in fact smoothed out the business cycle. The purpose of saving Fannie and Freddie is not to save these companies specifically but rather to protect the general welfare and systemic loss.
• Government Support for the Auto Industry? No. This is a distortion of capitalism that should be avoided. We must resist such well-intentioned interventions. The primary purpose for such support is to support a particular industry rather than the general welfare.
• Nationalized Healthcare? No. This question is more difficult than the preceding one. The purpose of nationalized healthcare is not to save specific healthcare businesses, but rather to promote the general welfare. The answer in this case is mostly a question of logic. Those who support nationalized healthcare say that everyone has a “right” to healthcare. But by that logic, we could say that everyone has a right to food and housing as well. Should government take control of the food and housing industries too? We must be able to see that the logic is flawed and that the result of nationalized healthcare—just like nationalized anything—would be worse healthcare rather than better healthcare.
An excellent radio program on the Biblical Capitalism view can be found here.
