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Category: Economics, Education, Family, Free Enterprise, Government, History, Law, Liberty, Monticello College, Religion, Uncategorized, Virtue Comments: 10

Does Anybody Understand This Stuff?: Part 2, Biblical Economics – A Thumbnail Sketch of 4,000 Years of Economics

Read Part One Here
Read Part Three Here
Don’t do it!  Don’t turn your brain off at the sight of the word “Economics”! Give me a chance to explain this in such a way that I promise—economics will be exciting.
Our modern understanding of economics comes from a long-term developmental process, albeit, most of us have heard little of this history.
Today, like most academic subjects, economics is so specialized that the average American cannot follow its intricate mathematical models and terminology.
This is absurd, as of all of the subjects taught in schools, none impacts us more than the economy, and none of our modern academic subjects is more inseparably connected to human action.
Before we start, it is important that we are all on the same page regarding the definition of economics.  When I use the term “economics,” I mean all or a combination of the these terms:

  1. buying and selling
  2. the monetary system
  3. a social system of exchange
  4. the study of human action
  5. the science of spending
  6. human nature
  7. political economy
  8. the study of credit and debt

Economics comes from the Greek oikos (meaning “home”) and nomos (meaning “law” or “order”), or the ordering of the home. That should give us a clue right there that this was never intended to be rocket science.
As humanity developed into political states, this term was expanded to “political economy” and was meant to express the laws of production of wealth at the state level.
Today, the science of economics is so convoluted that most of us are either completely oblivious of the science, frustrated with its inaccurate inane complexity, or afraid to talk about it for fear of showing our ignorance.
This is truly an injustice, as economics (outside of the application of mathematics) is what we do everyday.  Our collective everyday actions have real political and culture power.  If we fully understood this, we could have much more impact in our own governance.
Ok, now to our thumbnail sketch of economics. There are 10 stages of economic development we should be aware of:

  1. Biblical (Hebrew)
  2. Greek and Roman (Aristotle and early Christian Europe)
  3. Medieval (Aquinas, Feudalism)
  4. Mercantilism
  5. Physiocrats
  6. Liberalism, Classical Economics (Smith, Ricardo, Mill, Bastiat, Say…)
  7. Radical (Hegel, Marx, Marcuse, Lenin)
  8. Interventionists (Keynes, Myrdal, Galbraith, Samuelson, Marshall)
  9. Neo-Liberals (Friedman, Strauss)
  10. Austrians (Mises, Hayek, Rothbard)

Biblical Economics (2000B.C.-700B.C.)
Biblical economics declares charity to be a key to happiness and prosperity.  The rich giving to the poor (requires them to be somewhat involved and cognizant of the plight of the poor) and even the poor giving their fair share (the widow gives her mite).
Part of the charm of this economic truth is that it tended to lead to a simpler life and keeps people grounded to what is real. The idea was to seek a good life and adhere to that which brings happiness.
This is critical to the concept of having a well ordered home “oikos  nomos” and in turn a well ordered society.  Other cultures spoke of this with Confucius taking the lead in 500 B.C. teaching that well ordered societies required well ordered homes, which required well ordered lives and minds.
This is not to suggest that this place in history was free of  greed and avarice, but the lack of technology and developed infrastructure of the time seems to have diminished the ill effects considerably.
Almost all of the economic success of the Old Testament surrounds the year of the Sabbath and the year of Jubilee.  These laws were solutions to some basic negative human tendencies. Put in today’s terms, every seven years our consumer debt tends to exceed our savings and every 49 years our personal debt tends to exceed our assets.
Since this is a human nature tendency, God created this economic system to actually take advantage of this weakness and make it a strength.
As the Sabbath is a day of rest, so is the Sabbath Year a year of rest.  The entire economy rested from nearly all labor and did things (more celebrations, etc.) that it normally wouldn’t.
During the Sabbatical year all slaves (mostly bond-servants) were freed, all debts cancelled, and all crops were left untouched and the poor permitted to gather the harvest.  This of course occurred every seven years.
Although there is an seemingly obvious correlation with this practice and good civic will and prosperity, no hard data is available to explain why.
The Jubilee year occurred every 49 years.  It observed all the points of the sabbatical year and then some.
All land reverted back to its original owners. This protected the family inheritance from the previous generation’s potential folly or squandering.
This is the first indication of an economic cycle that expands and contracts on a regular basis.  More on this latter.
Another aspect of this ancient economy was being a worthy member of society (being worth your salt*) and living frugally. Consider the parable of the talents.  Historically, a true covenant people have always been highly prosperous.
The people were taught to save, prepare for cyclical bad times, and not go into debt.   This does not mean that they did not engage in speculation or venture capitalism, or that they always heeded this counsel, but it was simple to understand and easy to implement.

A Tithing Barn

The tithe is also a vital principle for successful economics. 10% of net income went to the religious institution of their choice. A vital component of this principle is that Deity is recognized in this action.
Today there is visible evidence that people who give 10% to God enjoy happier and more fulfilling lives than those who don’t.
The final biblical economic principle we shall discuss is that of morality.  Over time, morality always leads to true happiness and wealth.  Staying true to relationships, not giving in to temptations and weaknesses, and obeying the Golden Rule all lead to long-term happiness and tranquility.
These 6 principles are still the best keys to success and a stable economy.
* This phrase has Roman origins, to be worth your wages. The Romans served out rations of salt and other necessaries to their soldiers and civil servants. These rations were called by the general name of salt (sal), and when money was substituted for these rations, the stipend went by the name of “sal-arium” or salary.
To be continued………

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