Literature Review: Christian Economics

Abstract

Within economics, theology, and Christian Social Ethics there is a group of people who are looking at the implications of Christian social teaching on economics. This paper will look at a number of sources and attempts to identify the major themes and perspectives.

If one surveys the definitions of economics, one can find a selection of common definitions below:

• The branch of social science that deals with the production and distribution and consumption of goods and services and their management
• Economics is the study of making choices
• Economics is the study of how individuals and groups make decisions with limited resources as to best satisfy their wants, needs, and desires
• Economics is a study of mankind in the ordinary business of life

These are significantly different definitions and diversity of this kind is not found in the defining of any other academic field of study - natural sciences or social sciences. This list would seem to define divisions within the discipline more than a broad all-encompassing definition of the field. In spite of this ontological problem in even defining the discipline, there exists a professional acknowledgement within neo-classic economics of what is (and what is not) acceptable economic study. The acceptability seems to be based on an a form of naturalism: an inexplicitly stated epistemology of accepting only rational thought processes supported by mathematical models and a methodology that is based on scientific method. These unstated assumptions on what makes valid economic study severely limit the scope of the subject.

Recent years have seen increasing interest, study and publications in economic work that does not fit into that “acceptable” class. This includes almost all of the flavors of heterodox economics. Some of these heterodox areas are excluded from the mainstream because they are based on an epistemology that entertains “non-scientific” ways of knowing such as trusting the source of the knowledge (including religious belief), personal inspiration or intuition (including personal values), or personal experience (a posteriori vs. a priori.) Because of these basic issues, most of these publications are in non-traditional, academically insignificant sources or journals beyond the scope of routine economic significance. An example of this in the context of this paper can be seen with Clive and Cara Beed’s publication of the book “Alternatives to Economics: Christian Socio-economic Perspectives” in 2006. This book is an organized compilation of papers presented in Journals such as Journal of Markets and Morality (all issues can be found at one university in Ohio and the resources are non-circulating),Review of Social Economy (available at WSU on-line), The Evangelical Quarterly (available at WSU, online),Journal of Interdisciplinary Economics (available at 3 universities in Ohio, all non-circulating), Christian Scholar’s Review (available at WSU, online), Journal of the Association of Christian Economists (not available in OhioLink), and The Forum for Social Economics (not available to WSU through OhioLink).

Yet another source of current literature on economics in a Christian context is church social writings, both policy and teachings.

A first consideration in looking at Christian Economics (Buddhist, Jewish, Islamic) is to establish that there is any connection between them. Robert Preston in his book Religion and the Ambiguities of Capitalism argued for “bringing the basic themes of Christian theology alongside a competent analysis of the economic issues of our day and letting the one illuminate the other in a reciprocal relationship.” (Preston, 1991, p. 1) Clive Beed explains this relationship of religion to economics and human actions as intimately inter-related since “God’s relations with humans are not held to be independent from people’s activities affecting each other.” (Beed, What is the Relationship of Religion to Economics?, 2006, p. 23) This would include economics. He continues:

From a Christian perspective, the correct relationship is argued to be one of religion encompassing economics or, more accurately, of theology encompassing or subsuming economics. In this perspective, economic theorizing and analysis of economic life are not seen to possess ontological or epistemological qualities sufficient to constitute economics as a self-sufficient or autonomous discipline existing independently from a requirement to assess the relevance of divine revelation—an integral part of reality according to social theology. (Beed, What is the Relationship of Religion to Economics?, 2006, p. 41)

It is important to address not only why the church would be interested in the field of economics and also why religious belief should be considered by economists.

Christianity is one of the three Abrahamic religions along with Judaism and Islam. All of these religions are based on a belief that God desires a personal relationship with each individual. This relationship is often anthropomorphized as a parent-child relationship which is full of unconditional love and a role of the Father as teacher. The teachings of the Bible are often instructional on how individuals and communities are to live their lives. As a response to that love and instruction, individuals are expected or at least encouraged to have real life responses that reflect their understanding of the teachings and incorporation of those teachings into their lives. All of these three religions have explicit teachings on the priorities in life and on what an individual’s relationships should be like with regard to possessions, wealth, work, family, church, community and society in its broadest senses.

Economics has posited a model of man (homo economicus) that is rational and self-interested; economic man is “a being who inevitably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial with which they can be obtained.” (Mill, 1844) What is more, economic man makes these decisions after rationally weighing all of the perfect information. (Economists construe rational to mean optimization of the utility function and not reasonable or objective.)

It is understood that this is a naïve description of economic man however, as it is currently understood, this assumption of the behavior of man would eliminate virtually every practicing Jew, Christian and Muslim as these are not the criteria upon which they are called to make their economic decisions. Including Buddhists with this calculation, this would mean that substantially more than 50% of the world’s population is called to behave differently than economics would have them act. Patrick J. Welch and J.J. Mueller look at the relationship of economics and religion by postulating four possible scenarios: 1) economics as separate from religion, 2) economics in service to religion, 3) religion in service to economics, and 4) religion in union with economics. (Welch & Mueller, 2001)

Interestingly, in discussing economics as separate from religion, one of the arguments for keeping boundaries between the two disciplines was that they have very similar language and methodologies. The six points made under similar methodologies were 1) they both start with and depend on assumptions, 2) both assume that people are rational (understanding consequences and working towards ends). 3) both are based on maximizing behavior, 4) they both have rules for maximizing, 5) both are about choice, and 6) both assume that they are globally understood and pertinent. These similarities, the authors claim, make the economists uncomfortable enough to demand that the disciplines maintain boundaries.

In considering economics in service to religion, one argument made here is that economics has no identity separate from religious belief referring specifically to Polanyi. (Polanyi, 1968) Alternatively, “Nelson wrote of the widely held post enlightenment belief that, even without having direct contact with any specific religion, economic progress would reduce incentives to “act sinfully.” He wrote:

“Material scarcity and the resulting competition for limited resources have been widely seen as the fundamental cause of human misbehavior—the real source of human sinfulness. For holders of this conviction, to solve the economic problem would be, therefore, to solve in large part the problem of evil. (Nelson, 1991, p. xxi)” (Welch & Mueller, 2001)

Religion in support of economics refers to the dependence of economics on the institutions of trust and honesty inculcated by religion. This then puts economics in the position of being able to influence how people view the authority of a particular religious organization. There are also the recognizable abuses when one economic group uses the “authority” of the church to legitimate unjust actions. (Welch & Mueller, 2001, p. 194)

Welch and Mueller report (in the case of religion and economics working in unison) that both economics and religion deal with distinctly human aspects of man: perfectibility, retributive and distributive justice, responsibility to the poor and subsidiarity. Economics is concerned with means and religion is concerned with means but primarily ends. (Welch & Mueller, 2001, pp. 197-198) As one attempts to address the topic of economics from a religious perspective, it is necessary to decide the primary locus of perspective: economics or the church.

There would seem to be four viewpoints in conjoining economics and religion. 1) It is possible to stand in the religious school and look at economics as it might be formulated a priori from religious precepts. (Beed & Beed, Alternatives to Economics, 2006) This approach has been demonstrated in the literature for Buddhist, (Puntasen, 2008) Jewish (Tamari, 1998) and Islamic (Kuran, 2004) economics. 2) Also from a perspective inside the church, it is possible to look at economics as it currently stands and critically address it in terms of a particular set of religious beliefs. (Pope Leo XIII, 1891) (Pope Paul VI, 1967) (Pope Benedict XVI, 2009) 3) It is possible to critically look at the application, combined and separate, of economics and church social teachings to public policy. (Booth, 2007) This approach attempts to look at the important positive and negative points of each in a way to allow both sides to see things that are not often black and white. 4) Another perspective is to stand in the field of economics and justify or criticize current economic beliefs and policies using religious texts or teachings. (North, 1974)

The author was unable to find an example in the Christian literature comparable to the Buddhist, Jewish and Islamic examples. However, “Alternatives to Economics: Christian Socio-economic Perspectives” (Beed & Beed, 2006) approaches this from a slightly different angle. This book is a compilation of 14 scholarly papers published between 1991 and 2005. These papers contain a critical analysis of the ontology, epistemology, and methodology of neoclassic economics and its naturalist, positivist framework and then look at other options available in each area. The main thrust of Beed and Beed is that economics as it has been developed in the neoclassical stream, as a science is not legitimately defined and does not adequately address the issues and its model is inaccurate and produces faulty results in terms both of “scientific” prediction and analysis of reality. He then proposes a Christian framework for work organization as an example. The concepts of work organization in Roman Catholic and evangelical protestant strands of thought are analyzed and shown to be significantly similar enough to allow a single analysis. (Beed & Beed, 2006, pp. 25-55) (Beed & Beed, 2002) (Beed & Beed, 2002) In discussing normative concepts of distribution they develop a normative socio-economic intentional framework based on the Judeo-Christian belief system. Beed and Beed then present a case for normative economics in unemployment. Chapters 7-12 (Beed & Beed, 2006, pp. 154-298) give a rigorous critique of the ontology, epistemology and methodology of neoclassical economics in terms of how it proves irrelevant in light of the normative model of Christian economics and isn’t even very good science.

In the closing chapter the authors propose a methodology for a system of economics embedded in theology (Catholic and Protestant evangelical), Catholic Social Teaching that is not perfect but more a starting place for discussion and development. This methodology is rooted in establishing the Christian/Biblical intentions for Christian socio-economic life and then relating them to socio-economic contexts using a system that includes consideration for 1) technological/cultural context, 2) organizational, power and distributional aspects, 3) holistic, circular causation of change, 4) the system as dynamic and in a state of disequilibria, 5) interdisciplinary interactions, 6) the use of case studies, 6) empirical investigations rather than theoretical models, 7) the real value premises, 8) non-economic factors that impinge on economic outcomes, 9) both individuals and whole groups, 10) quality and function of practical problem solving, 11) the fact that economics is non-predictive, and 12) the fact that economics conforms with realism rather than relativism or constructivism. Examples are given of possible applications.

Christian heritage is replete with economic teachings even in its most fundamental documents, the Old and New Testaments. The Roman Catholic Church has a history of over one hundred years of papal teachings on human compassion and the dignity of labor. The first major economic Encyclical, that of Pope Leo III in 1891 (Rerum Novarum [On Capital and Labor]), set the basic agenda for following treatises. The first issue in this document is defining “the relative rights and mutual duties of the rich and of the poor, of capital and of labor.”(Pope Leo XIII, 1891, p. 1 par 2) The early introduction of the moral error of covetousness is a continuing thread through all of the writings reviewed on Catholic social policy. A second theme of man as God’s special creation is presented, first to substantiate the right of personal possession of wealth and capital.

These three letters address economics and development from a Christian perspective. They all acknowledge man’s fall from grace and the change in the path that mankind has a result however the primary perspective is based on a positive loving relationship with the Creator God. It always keeps central the belief that the most important act for man is personal development focusing ultimately on spiritual development. All other development should be in support of that. There is recurring emphasis on integral development. The overarching emphasis is placed on the fact that the relationship that God continues to foster with man is one of desire for a loving, caring communion and the development of man to a voluntary embracing of this. (This will be contrasted later with North’s perspective in “An Introduction to Christian Economics”). In spite of this positive view of the nature of man, all of the three writers acknowledge man’s great temptation to greed of both money and power and look at ways to mitigate its influence. The two most persistent themes beyond the establishment of this perspective are the concepts of subsidiarity and solidarity.

These documents are part of a huge corpus of Church documents that, to paraphrase Pope Benedict XVI, aim to illuminate new problems emerging in the world with an unchanging light.

There are both religious themes and economic themes that run through this series of encyclicals. Table 1 lists the most important of those themes and cites the first reference in each document.

Subsidiarity has been defined as “the principle that responsibilities should be devolved to the lowest viable level – the individual if possible. This stems directly from the Christian concept that the individual is of overriding importance because the individual is unique, born with free will, and is of infinite value to God.” (O'Brien, 2007) Under this principle, an individual is responsible for her/his own decisions and actions. If he/she needs help, first recourse is the family, then the church, social institutions, the local community, the local government and only as a last resort the national government. The ideal is to enable the individual to decide, act and function to the advantage of her/his personal development and not encourage dependence on others. Solidarity is based on the idea that individuals should not have to stand alone. It is the need and the duty of individuals to come together to achieve those goals that cannot be accomplished by a single individual.

“Rerum Novarum” (Pope Leo XIII, 1891) is an exceedingly tight presentation. The threads are introduced in the beginning and woven into a whole cloth. Pope Leo XIII states early that the goal of eternal happiness and a relationship with God is more important than riches. He then points out that without economic and social security, man is not free to pursue this spiritual development and that it is most important that all human institutions, economic, social and political are in support of man and his development. There is a strong discussion in this document that is focused on the social conditions of the time; socialism is denounced with a biblical based discussion of the natural right to the possession of private property. There is also a detailed analysis of those economic/business concerns that needed to be addressed to reduce the impact of the socialist movement. Those included discussions of a fair/living wage, moderation of taxes, distributive justice, and regulation of work hours.

As an interesting aside, Pope Leo XIII, in this document, discusses the fact that economic growth is dependent on social development and social development in turn is dependent on economic growth. This is a classic description of non-linear dynamics and chaotic systems. The first paper on these types of systems was by Poincaré (Poincaré, 1890), the year before the writing of this letter.

Table 1 Encyclical Themes

By 1967 much of Africa had been decolonized. The economic development investment had slowed considerably and was blamed on over-investment in the social sector and corruption. (Baah, 2003) These problems and the need of the African nations prompted Pope Paul IV to release “Populorum Progressio.” This encyclical deals generally with the problems of the world’s poor and development programs in developing nations. It addresses the widening gap in income in the world and the social unrest this engenders. The letter emphasizes that economics is in the service of man. There is a continued concern with denouncing socialism. It looks at industrialization, capitalism, and work, but carefully looks at the ideals and problem areas of each, all the while, shining the “unchanging light” of the Church’s moral stand.

Pope Paul IV is clear in proclaiming that the developed nations of the world have an obligation to the underdeveloped countries and suggests ways that that monetarily might happen. He also points out that there are solid practical reasons including self-protection that should encourage those who might be tempted by greed to be less than generous. Part of the obligation of the developed nations is monetary but there are also concepts of fairness that are addressed. These include extending the concept of a fair wage introduced in “Rerum Novarum” to fair Free Trade. He suggests that provisions should be considered to protect infant industries in developing nations. He also voices an early concern for the problems involved in “a one-crop economy … which is at the mercy of sudden, wide-ranging fluctuations in market prices.” (Pope Paul VI, 1967, p. 2 par 7) He showed extraordinary prescience in calling for the development of appropriate technology. (Pope Paul VI, 1967, p. 2 par 8) This letter also looks at the increasing problems of economic migration and the necessity to treat these workers with fairness and compassion.

“Caritas in Veritate” by Pope Benedict XVI was released in June 2009 during the middle of the global recession and after the collapse of the financial markets. With that major crisis clearly in view, it is not surprising that he addresses the field of finance. He talks about how finance has developed a focus on short-term, speculative, high-risk gains in search of large profits to build accumulated wealth rather than “being an instrument directed towards improved wealth creation and development. “ (Pope Benedict XVI, 2009, p. 38 par 65)

Pope Benedict XVI expands the discussion on economic migration dealing with the safety of people who are leaving countries with less economic opportunity to go to more developed countries often to be paid much lower wages than citizens of those countries will accept. These people are faced with myriad problems, among them discrimination, persecution, cultural challenges, and decreased social support. All of these threaten true human development on the part of all: the worker, the employer, and members of the host society.

The effect of the market economy as it has developed in The Netherlands is the topic looked at by Irene van Stavern in her article in The Forum for Social Economics. (van Staveren, 2007) She first looks at a number of critiques on the Dutch view of current economics, poverty, inequality and development all by Christian economists for civil society organizations. She summarizes indicating that all of these papers stand against neoclassical economics and the role of individualism emphasized in the dominant role of the market. They all called for an economic science, institutions and policies that do justice to the core values of Christian ethics. The second of her three prong study is to look at the four approaches to ethics and how they are distributed in the Dutch Christian churches. The first category she reports on is motivation. To be motivated to behave ethically by a responsibility to God and a sense of stewardship would best describe her use of motivation. The Bible has no shortage of laws for appropriate ethical behavior. The most strict and legalist use of values and norms as a description of ethics would look at for example the Golden Rule. Somewhat stricter would be the application of the principles of faith, hope and love and the strictest might depend on the Ten Commandments. This is to describe how values and norms define ethics. In this case, humans are choosing to learn about good and be good by exercising their free will. The third classification of ethics is institutions. Generally institutions that support ethics include the Bible, the Church and other faith based organizations. In The Netherlands this is even broader as the Dutch culture has developed a structure of faith based institutions that include schools, social and sports clubs, newspapers, radio and television stations, political parties, trade unions, employees associations, etc. The final of the four categories is instrumentalism.

Instrumentalism looks at ethics as an instrument to gain access to heaven; if you want to go to heave, you have to play by the rules. Of these, motivation, values and norms and the institutional approaches are all found in the Dutch literature where the instrumentalist approach is not seen. This is surprisingly especially considering the strong Calvinist history in the Dutch Christian church. Finally, she looks at the Dutch economics literature to see what the role of ethics is there. Looking at the response in the economics literature in terms of the ethics observed we will first look at motivation. The emphasis on personal responsibility to God was seen in dealing with the issue of privatization and liberalization. The argument was that the markets are morally neutral but the agents are ethical. Whether there are socially beneficial outcomes is not dependent on whether how much the economy is based on markets but rather on the motivations of the agents. This was also seen in the arguments for decreased state intervention as individuals should assume responsibility rather than the state. Another of the papers reported on regarding motivation driven ethics looks at modifying the definition of economic rationality from one that is driven by self-interest and utility maximizing to one that was an exchange of goods for money plus an interchange of values. This indicates a belief that markets do in fact have a moral dimension.

Perhaps one of the most interesting studies cited in this article was on the Dutch Jubilee 2000 that was to forgive debt for developing nations. This is in reference to the Jewish Jubilee Year where all land is returned to its original owner. Purchase of land are to be based on the number of years remaining until the Jubilee Year, effectively making all land transactions 50 year leases. Jewish families might sell their land when they had extreme circumstances and the Jubilee year was a redistribution to once again give production resources back to each family to allow them the opportunity to honorably work themselves into the community again. In the case of the Dutch literature, two sides were presented dealing with the proposal to forgive all development debt to developing nations. Three separate papers addresses this and all saw the efficiency promoted by this policy however one team of authors argued that markets were the best way to achieve this efficiency and that any forgiveness of debt had to be limited to forestall sending signals to financial markets that would make it even more difficult for these countries to obtain future debt. Another article argued not from the point of efficiency but rather that that the redistribution will have future long term benefits. The debt repayment schedules put the developing countries into the position of decreasing social investments, decreasing domestic savings and limiting the flow of technology and investment. Debt forgiveness would free funds to be used in these crucial areas resulting in increased economic capacity.

Under the umbrella of institutions, two strands of literature were investigated. The first dealt with the functioning of markets in terms of competition, efficiency and productivity. The second dealt with the household institutions. Looking at all of the literature in both strands, there was a strong split between those who thought that markets were ethically neutral with the social sector providing the ethical component and those who thought that the markets have embedded moral processes which do not allow the market to act neutrally.

“Catholic Social Teaching and the Market Economy” is a compilation of 11 papers by nine economists that draw from the earlier two Encyclicals above along with other church and secular resources. They were asked to use economic tools to look at social policy of interest to Christian with an economic perspective. These papers in fact provide critical analysis of both the church’s social policy when the recommended economic action might in fact lead to opposite results (Woods, 2007) and when the public and economics have something to learn from the Church. (Gregg, 2007) Woods presents the classic argument against a minimum wage and Gregg presents a case for subsidiarity in government intervention in public policy.

The Bible has many references to being fair to employees. The Lord was portrayed as the protector of workers. Pope Leo XIII in Rerum novarum addressed the situation of workers in modern capitalism directly indicating that the free negotiation of wages was tilted toward the employer due to inequality of power.

“… there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.” (XIII, p. par 45)

He goes on to indicate that the worker needs to be paid a wage that will support himself, his wife and children. Woods documents all of this history of Catholic Social Teaching and whole heartedly agrees with the intention and the goals. He then goes on to posit that a Catholic economist is professionally obligated to point out errors in economics when the action suggested or proposed by the Church will not only not accomplish the intended goal but will in fact have an opposite effect. He then goes on to present the traditional arguments against minimum wage legislation whereby the minimum wage is increase leading to lower employment (particularly for low level jobs) so that now, instead of getting some money, the employee gets nothing. Woods then refers to the following quote from Pope Pius XI’s Quadragesimo anno ‘social justice demands that changes be introduced as soon as possible whereby such a wage will be assured to every adult workingman.’ His suggestions then are that changes should me to remove all obstacles to investment and eliminate taxes on capital and excess profits. The end result here is that Woods is a neoclassical economist who reads the Church’s social teaching and explains how it will not work and provides the traditional answers.

Samuel Gregg starts his discussion in “Catholicism and the Case for Limited Government” with Christ’s declaration to render unto Caesar what is Caesar’s and to God what is God’s through the denial of the divine right of kings to a explanation and clarification of the Catholic church’s understanding of the roots of government. Because the church believes that each human has a natural call to freely pursue human flourishing, the government is called on to deal with coordination problems. The second role for government is the need for an institution to administer justice, both legal and commutative. Gregg follows this with an excellent clarification of how the church sees and defines “the common good.” The Catholic Church ties the government’s common good to the call to human perfection. This is to say that the Church views the role of government as assisting in the individuals in society to achieve human perfection. If one then combines this with the concept of subsidiarity, the Church’s position crystallizes. The role of government in providing for the common good is to ensure an environment where humans can work towards their perfection all the while allowing decisions and assistance to come from as low as possible in the hierarchy. Pope Pius XI is quoted by Gregg:

‘a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co-ordinate its activity with the activities of the rest of society, always with a view to the common good’ (Gregg, 2007, p. 264)

The lower communities referred to are the family, church and community organizations that humans build to help themselves. One can look back to the institutions that van Staveren referred to as being so effective in supporting people without the intervention of the government in The Netherlands. One can see that this argument for limited government is far different than the secular argument that is based on efficiency rather than concerns for human liberty and development.

The significance of this principle thus lies not so much in the autonomy that subsidiarity confers upon people, but in the fact that this autonomy is essential if people are to choose freely basic moral goods. Subsidiarity has therefore less to do with efficiency than with people attaining perfection under their own volition. A basic requirement for realising this perfection is to act and do things for ourselves – as the fruit of our own reflection, choices and acts – rather than have others do them for us. The principle of subsidiarity also reminds us of the fact that there are a host of free associations and communities that precede the state and which establish many of the conditions that assist people to achieve perfection. (Gregg, 2007, pp. 264-265)

There is one author I feel compelled to address even though he has published nothing in economics in even a single scholarly journal. His name comes up frequently on a Google search on Christian economics in large part due to the volume of his work and the free accessibility of it on the internet. He is an example of the fourth perspective, to stand in the field of economics and justify or criticize current economic beliefs and policies using religious texts or teachings. Gary North was the founder of the publishing firm, Institute for Christian Economics (ICE) which was disbanded and whose assets were transferred to Dominion Educational Ministries, Inc. in 2001. He has published more than 20 volumes of Christian/economic/Christian economic commentary largely published either by ICE, Dominican Educational Ministries, Craig Press, or Dominion Press. In the Acknowledgements to his book “Introduction to Christian Economics” he states:

“The following chapters appeared originally in The Freeman, published by the Foundation for Economic Education, …, a monthly free journal of free market ideas: 4-10, 20(b), 21, 23-27. Other journals are Coin Mart and COZNage, Behn-Miller Publishers, …; Numismatic News Weekly, Krause Publications, Iola, …; The Commercial and Financial Chronicle, …; Modern Age, …; International Reformed Bulletin, …; The Alternative, …. The Whole Earth Catalog is now defunct” (emphasis in original) (North, 1974, p. iv)

To give you a sample of the flavor of the writing:

“The essays that follow are repetitious, due to their publication in numerous periodicals over several years. Repetition, as I found in teaching, seldom loses a reader, and the failure of students to get things straight the first time is humbling to an instructor. The person who knows the structure of an argument, and who can predict what the next point in an argument is likely to be, is a person who has grasped the author’s theory. (sic) If he can reproduce the argument a year later, he has been educated. Most people, on most topics, are uneducated“ (North, 1974, p. xii)

The Christian Reconstructionism movement is also variously known as dominion theology, kingdom theology, and theonomy. Its creed can be summarized in the following six points:

• Christ’s kingdom will culminate at his Second Coming, a far-off event
• All institutions of all nations need to be reclaimed from Satan
• God has created perfect blueprints for all men and revealed them in the Bible, particularly through Mosaic Law
• This movement is a majoritarian movement that works through self-regeneration and conversion at the grassroots level.
• They believe that Christians have an obligation to be involved in politics as it is one major way to reconstruct the culture
• They believe that America has a special covenant with God whereby he will bestow blessings on this country as long as some undefined remnant of the citizens honors that covenant and obeys the Law. If America disregards the covenant, America’s blessings will be given to someone

This movement is legalistic in the extreme and views the relationship of man with God as one of estrangement that imposes penalties and limitations on man because of the original fall from grace in the Garden of Eden. This is what makes man’s lot a struggle. Only by diligently laboring can man hope to receive God’s blessings.

Reconstructionists embrace a radical libertarian economic stance founded basically in the Austrian School and aligned with Ludwig von Mises and Murray Rothbard.

As indicated by the author in the extract above, many of the chapters in this book are repetitive. The major economic topics dealt with are inflation, the characteristics of money and the gold standard vs. fiat currency, and government intervention into economic activities. These topics are all interwoven.

Biblically, the main topics are the fall of man , a basic understanding of sovereignty and particularly the sovereignty of God , God’s ownership of all , God’s reprimands of the people of Israel for monetary debasement , the role of intermediate institutions, and the separation of the kingdom of God from the kingdoms of man .

North contends that it is the fall of man that condemns humans to live in an economic world of scarcity. God, as the sovereign of all, established rules for the right relationship between man and God, man and man, and man and nature. Man’s primary obligation is to God and he is to act as a steward of all that belongs to God. He is to behave with honor in economic transactions and honor the limited sovereignty of earthly institutions such as the church and the government. It is in not fulfilling these obligations that man has brought harm to the economy and same to himself.

North and other Christian Reconstructionists are in favor of a gold standard based on the concept that that is the structure of money established by God and to debase money through inflationary policy is sinful and damaging to all of our relationships. He argues for open banking and denying government the sovereignty over money. It is this that tempts government to get involved in the lives of people where they should not because they are able to “make” money. It is in fact, these government interventions in the form of allowing fractional reserves, minimum wage lays, mandated hiring practices (the Federal Equal Pay Act), over taxation, and budget deficits that perpetuate the economic problems of people.

North is careful to point out the role of individuals and the church institutions to take back their responsibilities for caring for the needy and assisting each other, duties which are more and more abrogated to the civil government.