Is Capitalism Biblical? (Part 2 of 5)
- Philip Massey
- 7 hours ago
- 7 min read
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 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 2, we consider the Biblical value of human worth 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 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.
Which system does the best job of treating all people as having equal human worth without showing partiality?
Why is this question important? We know from Scripture that God hates favoritism and partiality.
James 2:1 – My brothers, show no partiality as you hold the faith in our Lord Jesus Christ.
Acts 10:34 – Truly I understand that God shows no partiality.
Romans 2:11 – There is no respect of persons with God.
Deuteronomy 1:17 – You shall not be partial in judgment.
Therefore, we must judge economic systems based on their record of treating all people as having equal human worth without showing partiality. To have any hope of creating a system that treats all people as having equal human worth, a society must have a strong rule of law. This rule of law must be one to which even the powerful are subject. Therefore, we naturally ask which societies have generally done the best job of promoting equal human worth under a strong rule of law.
Historically, the western democracies that operate under varying degrees of capitalism have shown the most resilience in this regard. In England, the Magna Carta established the principle that even the king is subject to certain laws. This gave rise to the maxim, “Lex, Rex”—the law is king, in contrast to older notions of kings having divine right by which they can do as they please.
Image Credit: Biblical Christian Worldview
In the United States, we are well acquainted with the stirring words of the Declaration of Independence that I quoted a moment ago (see previous post): “We hold these truths to be self-evident: that all men are created equal.” Although the US had to travel a journey of nearly two centuries before achieving full realization of that proposition, the principle of the equality of all men has been present since our nation’s founding.
We must then ask how capitalism is consistent with the rule of law. A capitalist economic system is built on such principles as recognizing legal title to property, recognizing intellectual property through copyrights and patents, upholding labor laws, financial regulations, workplace safety regulations, and so on. Moreover, many of these provisions, such as labor laws and workplace safety regulations, implicitly recognize the equal human worth of all individuals. They place a premium on the value of human life and treat individuals as possessing human capital that must be protected, rather than treating individuals as slave labor to be exploited.
[Editor's note: This portion of Prof. Massey's lecture has been redacted simply for ease of blog reading. In this redacted portion Prof. Massey illustrates his research with examples of how capitalism has improved the economic status of various nations, such as India; the difficult challenges even moderate socialist countries create for themselves, such as France; and where socialism turned communism has devastated various nations, such as Cambodia.]
. . . In this first biblical value, I have been talking about all people having equal human worth, but not equal economic worth. The former is indispensable, but not the latter. All people must have equal human worth, but there is no requirement that they must all have equal economic worth.
To illustrate this in simple and practical terms, a child has as much human worth as his or her parents do, but obviously lacks equal economic worth. Likewise, a college graduate starting his or her first job will not possess anything remotely close to the economic worth of a person who has spent thirty or forty years working in a career. The college graduate only has equal human worth as the senior career employee.
This misunderstanding about economic worth, I believe, is what lies behind one of the most common complaints we hear about capitalism: the issue of growing income inequality. We are constantly being told that there is a growing gap between the rich and the poor, and that, like the social democracies of Europe, we must level the playing field by taking from the rich. However, I believe the key question to ask is not whether there is a growing gap between those at the top and bottom of the income scale.
Rather, the key question we should be asking is twofold:
1. Are those at the bottom, by their own standards, comparatively better off than they were at some earlier point in time?
2. Are those at the top increasing in wealth in a manner that does not come at the expense of those at the bottom?
If the answer to both of these questions is “Yes,” then growing income inequality is not a moral tragedy. If those at the bottom of the income scale are better off than they were at some earlier point in time, it does not matter if their rate of growth has lagged behind those at the top of the income scale. There is no requirement that everyone must grow at the same rate. Some may grow faster than others do, but as long as everyone is growing, we can still say that a society is treating its members justly. By way of analogy, in schools, the best students receive A grades, while other students receive lesser grades. However, as long as all students are learning and passing, the school is educating its students properly.
One reason some people say that wealth inequality is unjust is that they make the fallacy of assuming a zero-sum game. That is, they assume that if one person grows richer, it must mean that someone else has grown poorer. In other words, they believe there is only a finite pie of total wealth; and if one person gets a bigger slice, someone else gets a smaller slice.
If this were in fact the case, growing income inequality would indeed be a moral tragedy, for the answer to both of the above questions would be “No.” That is, those at the bottom would be becoming worse off and it is at their expense that those at the top would be increasing in wealth. In such a case, there would be a moral injustice, a type of inequality the Bible clearly condemns in passages such as these:
James 2:6 – Are not the rich the ones who oppress you, and the ones who drag you into court?
Matthew 23:14 – Woe to you, scribes and Pharisees, hypocrites! For you devour widows’ houses.
In these passages, the rich are clearly exploiting the poor to grow richer, and without question that is unjust. However, in a capitalist society, wealth is not a zero-sum game. Over time, the entire pie actually grows larger, so that it is entirely possible for both those at the top and those at the bottom to have bigger slices than they did before. That is to say, living standards rise across all income levels.
There is a huge difference between “absolute poverty”—not having a place to live or lacking food and clothing—and “relative poverty”—not having as much stuff as more affluent people do. For the most part, poverty in capitalist societies is defined by relative poverty, not absolute poverty. Therefore, in such cases, if growing income inequality is due to honest differences in the level of industry someone has exerted without exploiting others, we should not be troubled by such inequality.
A glimpse of this is in Jesus’ Parable of the Talents. Note that I concede at the outset that the point of the parable is about stewardship, not income inequality. Nevertheless, we can see an aspect of income inequality in the parable. At the outset of the parable, the first steward had five talents, and the second steward had two talents. This was a difference in wealth of three talents. Since one talent was equal to 20 years’ wages, this translates to an income inequality of 60 years’ wages. At the end of the story, after these two stewards have doubled their stewardship to ten and four talents, there is an income gap of six talents, or 120 years’ wages. Yet Jesus does not condemn the income gap; what He condemns is the laziness of the third steward who took his one talent and buried it in the ground.
We conclude, then, that equal human worth is what matters most. Therefore, which economic system does a better job of treating all people as having equal human worth without showing partiality? I believe the historical evidence shows that capitalism is the most effective system in this regard.
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Join us next week with Part 3, where Prof. Massey explores the question, "Which system does the best job of respecting free will?"
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