Is Capitalism Biblical? (Part 1 of 5)

We’re honored to present this series of five posts exploring the question, “Is Capitalism Biblical?” Originally a lecture given at Biola University in May of 2012, Philip Massey has graciously granted us permission to republish it here for the benefit of our readers. While some business references are dated to 2012, the principles remain timeless. In Part 1, we introduce the Biblical values by which to gauge an economic system.

Philip Massey earned his MBA in finance from the University of Chicago Booth School of Business, is a CPA with over 20 years’ experience as a corporate auditor, is on the faculty at the Crowell School of Business at Biola University, and is currently earning his Master’s in New Testament from the Talbot School of Theology. Prof. Massey is an ideal Better Capitalism collaborator–one foot solidly in business and the other solidly in theology–to offer his studied views on this important question.

The business headlines of the first decade of the 21^st century have not been the best advertisement for capitalism:

• Enron declares bankruptcy after massive accounting fraud.

• WorldCom admits to $11 billion in revenue misstatement.

• Bernie Madoff makes off with $18 billion of investors’ money.

• MF Global is unable to explain the disappearance of $1.2 billion in client holdings.

These headlines all cry out that something is badly broken. Capitalism, it would seem, has betrayed the trust of people time after time. Thus, we find ourselves asking:

• Do these headlines mean that capitalism itself is the culprit?

• Is there something immoral about capitalism?

• More to the point, what should a Christian’s attitude be toward capitalism?

The title of tonight’s event is “Is Capitalism Biblical?” I think a better way to phrase the question is “Should a Christian be a capitalist?” Note that I say “should,” not “can.”

Image Credit: Biblical Christian Worldview

As the apostle Paul famously taught in 1 Corinthians 8, just because we as Christians can do something doesn’t mean we should do so. In Paul’s case, he was explaining the issue of whether to eat meat sacrificed to idols. He concluded the chapter by saying, “If food causes my brother to stumble, I will never eat meat again, so that I will not cause my brother to stumble.” For Paul, the issue was not whether he could eat meat, which he clearly could, but whether he should eat meat.

Therefore, I believe that is the question we must ask in tonight’s discussion. We are not asking if Christians can be capitalists, but whether they should be capitalists. Jay Richards, author of Money, Greed, and God, writes that the big question is this: “Is the capitalist system consistent with Christian morality? If a free-market economy contradicts Christian ethics, Christians can’t be capitalists.” [Jay W. Richards, Money, Greed, and God: Why Capitalism is the Solution and Not the Problem (New York: HarperCollins Publishers, 2009), p. 7]

As we explore this question, I think we should start by recognizing one simple fact: the Bible does not seek to answer the question of economic theories for the simple reason that the two principal schools of economic thought—capitalism and socialism—did not exist at the time the Bible was written. Therefore, to say that the Bible teaches either capitalism or socialism would be to impose on the text our own presuppositions and make the Bible try to say something it does not actually say.

Given this, how should we try to answer the question before us tonight? The approach I will use is to explore what are some of the important values that the Bible clearly does teach and then try to show that capitalism does the best job of fulfilling those values. This is not to say that capitalism is perfect. We are sinners who live in a sinful world. No economic system is without its faults. Nevertheless, my thesis is that capitalism comes closest to living up to some important truths and values that the Bible does teach. Therefore, let us explore what those biblical values are.

Biblical Values by Which to Judge an Economic System

1. Which economic system does the best job of treating all people as having equal human worth without showing partiality? We might call this the “Declaration of Independence” question. Which economic system best lives up to the famous proposition found in the United States Declaration of Independence, “that all men are created equal”?

2. Which system does the best job of respecting free will?

3. Which system best promotes responsible stewardship of wealth?

4. Which system does the best job of promoting a proper sense of social responsibility to the poor?

I will attempt to show that capitalism does the best job of promoting these four biblical values. Before we begin to answer these four questions, however, I should provide a few stipulations to my thesis:

1. Capitalism does not equal an unbridled pursuit of wealth for wealth’s sake. That is, the intent of capitalism in its truest sense is not for someone to accumulate vast sums of money and hoard that wealth like a modern-day Ebenezer Scrooge. Rather, true capitalism is a vehicle for producing goods and services that meet people’s needs. The entrepreneur who succeeds in an initial venture then seeks to reinvest the fruit of his labor into yet more productive endeavors.

2. Capitalism needs the rule of law, for capitalism without moral restraint and the rule of law is anarchy. The headlines I listed at the beginning of this discussion should provide ample evidence of that fact. In each of the cases, one or more individuals acted without regard for what was morally right and became a law unto themselves. Moral restraint and the rule of law—and specifically ones that are based on what has historically been called “the Protestant work ethic” or “the Judeo-Christian value system”—are indispensable foundations to capitalism’s long-term survival. Capitalism will not survive if either one of those foundations is weakened or removed, or if it is built on the wrong set of values.

3. Abuses of capitalism by individuals are not necessarily an indictment of capitalism itself. For instance, when Eve ate the forbidden fruit, no one would say that her act of eating the fruit was an indictment of the fruit itself and of the Garden of Eden. Similarly, the fact that humans figured out how to extract the juice of grapes, ferment it to create wine, and drink it to excess is not an indictment of the grape. In both of these cases, the responsibility lies with the individuals and the moral choices they made. The same is true for capitalism. When we see scandals like Enron, Bernie Madoff, and MF Global, we should not be too hasty to say that capitalism itself is to blame. We should instead hold the individuals responsible for abusing a system and making wrong moral choices.

With these stipulations in mind, let us now proceed to explore the four biblical values.

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Join us next week with Part 2, where Prof. Massey explores the question, "Which system does the best job of treating all people as having equal human worth without showing partiality?"

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