Wealth Problem: Hindering the Progress of Others
God’s Commands for Sound Money & Free Markets.
Acknowledgement: Thanks to Ryan Griggs of Griggs Capital Strategies for reviewing this article for economic accuracy.
There are many schools of economic thought that exist in our current world, including the Chicago (Milton Friedman), the Austrian (actually American but many of the economic thinkers were from Austria), and, most popular today, the Keynesian (John Maynard Keynes) school of economic thought.
What are God’s economic views?
In a prior article titled God’s Ingredients for Wealth Creation, I wrote about how God designed creation to function, the ingredients involved, and the role of people in creating abundant flourishing. God continued instructing His people in their co-creator role through His law given to them at Mt. Sinai:
- Leviticus 19:9 “‘When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. 10 Do not go over your vineyard a second time or pick up the grapes that have fallen. Leave them for the poor and the foreigner. I am the LORD your God.
God has given individuals the abilities to create real value and great wealth (Deuteronomy 8:18). As discussed in my article How does God Bless People [Financially]?, God typically blesses people through their faithful actions. A fruitful harvest is only possible from faithful sowing and tending. When honest, hardworking people produce real value, they intentionally, and sometimes unintentionally, benefit themselves and many others. Here God specifically commands His people to share their production with those in need, according to their own abilities and the outcome of the harvest. Furthermore, their accountability was to God alone.
The Visible Thief
All the value that is created through faithful people is sacred to God. God created people to be the managers of His resources to participate in His process of blessing ALL creation. Therefore, God also instructs against taking advantage of others, destroying the productive actions of people and therefore denying the blessings of God.
- Leviticus 19:11 “‘Do not steal. “‘Do not lie. “‘Do not deceive one another.
The very first labor saving device ever invented by people was theft. Some do not want to produce value and would rather take what others have produced to satisfy their desires. If theft becomes normalized, the incentives to produce decrease and therefore, so do the motivations and the actual production. Societal theft makes everyone poorer.
- Leviticus 19:12 “‘Do not swear falsely by my name and so profane the name of your God. I am the LORD.
Some may reference God’s name as a way to take the heat off of them and acquire trust. For example, someone suspected of theft may say something like, “I didn’t do it. I swear to God!” Throughout the history of the United States, witnesses in a trial place their hands on a bible and take the oath, “Do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God?” If our oath is broken intentionally or unintentionally, we have profaned the name of God (See Jesus’s teaching of this problem in Matthew 5:33–37).
- Leviticus 19:13 “‘Do not defraud or rob your neighbor. “‘Do not hold back the wages of a hired worker overnight…”
Another form of theft is to not pay what was promised. Borrowing from a neighbor and not returning, or hiring someone to do a job and deferring payment beyond the agreement is theft.
The Invisible Thief
Further in Leviticus 19, God warns His people of another hinderance that can be somewhat unseen (also see Deuteronomy 25:13–16):
- Leviticus 19:35 “‘Do not use dishonest standards when measuring length, weight or quantity. 36 Use honest scales and honest weights, an honest ephah and an honest hin. I am the LORD your God, who brought you out of Egypt.
At this time in history, and throughout most of human history, people utilized weights and measures as their standard of accounting for the exchange of goods and services. Abraham exemplified this concept in Genesis 23 where he wanted to acquire a plot of land to bury his wife Sarah:
14 Then Ephron answered Abraham, saying to him, 15 “My lord, listen to me: a plot of land worth four hundred shekels of silver — what is that between me and you? So bury your dead.” 16 Abraham listened to Ephron; and Abraham weighed out for Ephron the silver which he had named in the presence of the sons of Heth, four hundred shekels of silver, currency acceptable to a merchant.
The silver that Abraham had was not in a standardized form like a minted coin that was known to be a certain weight. It would have included jewelry, nuggets, clippings, bars, etc. and maybe some types of coins. Many people had scales with counter-weights to determine the weight of the “money”.
Imagine if Abraham would have used inaccurate counter-weights to weigh out the 400 shekels of silver. To secretly benefit himself, he would use lighter counter-weights, therefore giving less silver for the land he desired. Let’s assume it was actually only 395 shekels of silver, deliberately misrepresenting them as 400 shekels. Abraham would have intentionally engaged in an egregious form of theft by acquiring property under false pretenses. In essence Abraham would have committed fraud by subtly reducing Ephron’s expected income, stealing 5 shekels from Ephron. Ephron would have unintentionally accepted a lower price while perceiving it to be the same. Ephron would not have traded with Abraham if he did not perceive what he would gain to be of greater value than what he had. When Ephron turns around to buy other goods or services within the community, he would be able to purchase less because his purchasing power would be less. Some of Ephron’s purchasing power would have been intentionally shifted to Abraham. Abraham would be able to buy more than he otherwise could have. Fraud is a form of theft that is much more difficult to detect, especially when it is occurring in the devaluation of money.
All of these “Do not…” commands discussed are God’s warning against short sighted, selfish actions at the expense of others. All of these actions disincentivize creative and fruitful production that benefits society as a whole.
Continuing our hypothetical illustration of Abraham and Ephron: suppose the people formed an organization to centrally regulate all the weights and measures of the land, and to punish anyone who manipulated them. PROBLEM SOLVED!
All that would be needed for the rest of time is for honest, incorruptible people to run this operation in protecting the people’s wealth from theft. EASY!!
Lord help the people if this organization ever begins to alter the weights and measures of the land to steal from the people and enrich itself.
The Financial System Today
Murray Rothbard, the famous Austrian Economist, explained how our current central banking system, in collusion with the U.S. Government, works in his book ‘The Mystery of Banking’:
“…the immediate result of the public’s depositing $2 billion of cash in the banks is that, while the total money supply remains the same, only changing the composition between demand deposits and cash, total bank reserves rise by $2 billion.”
“Receiving the new reserves, the banks then expand credit, lending new demand deposits which they have created out of thin air. They pyramid deposits on top of the new reserves in accordance with the money multiplier, which in our stipulated case is 5:1 (20% reserve requirement).”
“Thus, the public’s depositing $2 billion of cash in the banks increases reserves by the same amount; the increase in reserves enables the banks to pyramid $8 billion more of deposits by increasing loans and investments (IOUs) by $8 billion. Demand deposits have therefore increased by $10 billion from the reduction in the public’s holding of cash. The total money supply has increased by $8 billion since Central Bank notes outstanding (people holding physical cash) have dropped by $2 billion.”
Banks DO NOT lend our money. We still have full access to our deposits while they lend based on what we have deposited. The money from a loan did not exist before the loan was issued. Worse than that, banks lend out much more than they have on reserve. In Murray’s example 5 times more. Most of us today know that the reserve ratio has actually been 10%, which would mean banks could create 10 times their customers deposits.
It is true that central banks “print” money (inflation) to finance the excessive actions of irresponsible governments, creating unnecessary price increases. However, every commercial bank, as a member of this fractional reserve banking system, also “prints” money (inflation) that did not exist prior to a loan being created. Intentional inflation of our money shifts relative purchasing power to early recipients of the newly created money. The shift in purchasing power results in a relative concentration of wealth in the hands of the early money recipients. The person that benefits the most from counterfeiting is the counterfeiter.
As individuals, when we borrow money from a commercial bank, we are participating in this inflationary activity. We use the funds to buy what we need with money that didn’t exist before, prices continue to rise, encouraging us to borrow more. To shrink inflation would mean to shrink debt to banks. Does debt in the U.S. historically go up or down? Government and individual debt is at an all-time high in 2022. No wonder we are experiencing the highest inflation since the early 1980's.
“Banks lend money that does not exist, and that is evil.” — R. Nelson Nash
Unhindered spending by government (and many individuals) financed by the fractional reserve banking system manipulates markets and undermines the value of money. We currently do not have a completely free market nor sound money.
Fortunately, God has provided a way out of the evils of this thievery.
Anyone who has been stealing must steal no longer, but must work, doing something useful with their own hands, that they may have something to share with those in need. — Ephesians 4:28
God instructs people to honestly Create, Trade, Store, Invest, Share, & Leave wealth, according to their own individual abilities.
We also must not participate in the theft by utilizing the “products” of governments and commercial banks. Supply only exists when there is demand.
Many of our financial problems would disappear if each of us as individuals would take over the “banking” function and practice honest banking as it relates to our own individual lives.
“Economic problems are best solved by people freely contracting with one another and with government limited to the function of enforcing those contracts. The absolute best way to do so is through the magnificent idea of dividend-paying whole life insurance. It has more in common with banking than it does with life insurance. A better name would have been a ‘banking system with a death benefit thrown in for good measure.’ It has been around for over 200 years and stood the test of time. It is not compulsory. It is not a government sponsored idea. It preceded the income tax idea by a long time. It is Private Property! Also, the only people who participate in this idea are people who truly care about other people. What a great group of people to be engaged in business with.” — Excerpts from ‘Becoming Your Own Banker’ by R. Nelson Nash
Life Insurance companies cannot inflate the money supply. Owning a high cash value, dividend-paying whole life insurance contract, gives individuals complete access to uninterrupted compounding cash values over ones lifetime. Accessing cash values through policy loans is similar to full-reserve banking where loans can only exist if the capital is actually available through real deposits.
This is not some mystical dream to “end the Fed” or convert back to a “gold standard” from the top-down. It is a simple, bottom-up solution for anyone to solve many of the financial problems we all complain about. Controlling the “banking” function is also the most profitable thing anyone could do for themselves.
“Banking is the most important and most profitable business in the world. It should be controlled by you and me.” — R. Nelson Nash
It would seem God desires, for the flourishing of His people, a free-market capitalist system under His authority, and small, if any, government institutions. God’s economic view seems to support the Austrian school of economic thought more than any other. Rather, the Austrian school of economic thought seems to align more with God’s plan for the economic flourishing of His people.
Economic Liberty is only possible and sustainable for a people who truly love God & truly love other people (Matthew 22:37–40).