Friday, December 5, 2008

Biblical Finance

All the news that is fit to print these days seems to revolve around our hobbled economy. The constant drumbeat of bad financial news is so heavy and insistent that it has become oppressive and, frankly, excessive. Once again, the media are taking every opportunity to scream at us that the sky is falling—or perhaps more descriptively, that our civilization is plunging into a bottomless pit of debt—and the government has responded by going into full crisis-mode. Wall Street investors are behaving like lemmings, running en masse over the nearest cliff every time another bad report comes out. So much for the buy-and-hold strategy.

A few economists and pundits are not as gloomy as the media, the government, and Wall Street. For the most part, these more optimistic observers are of a conservative stripe, faithful to the tendency of markets to correct themselves over time. They believe that the government should keep its nose, fingers, hands, and arms out of the private sector, and stick to its Constitutional role to "establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity." As for promoting the general welfare, the Founders would vehemently deny that they meant bailing out the banks and auto industry.

Obviously, Americans are caught between two rival and irreconcilable schools of economic thought. One side believes in increased governmental regulation, massive infusions of public monies, increased taxation, and a command-and-control economy commanded and controlled by Washington politicians and bureaucrats. The other side counters with decreased regulation, incentives for markets and businesses, decreased taxation, and allowing millions of consumers to choose how they will spend (or save) their hard-earned money. The former is essentially a European-style socialism, while the latter is trickle-down capitalism.

Neither approach is God-ordained, by any means. Both are human-devised systems of economic thought, but they begin with different premises. Socialism starts with the assumption that wealth should be divided equally among all but that the means of production and distribution of that wealth should be a function of the state. Capitalism, on the other hand, is founded on the principles of a person reaping—and keeping—what he has sown and of individual liberty. In the real world, socialism—especially its extreme form, communism—has failed every time it has been tried, while capitalism is responsible in part for the burgeoning economies of the British Empire, America in its heyday, the Asian Tigers, etc.

To repeat, neither of these systems has God's stamp of approval. What capitalism has going for it is that it incorporates several biblical principles into its basic structure, and further, it makes the most of certain elements of human nature. For instance, people like to win, to be "King of the Mountain." Capitalism unleashes the human competitive spirit, making the pursuit of wealth into something like a game—and may the best man or woman win.

However, it has downsides too. For example, perhaps its most egregious failing is that it inspires greed. Many supporters of capitalism fall for the well-known Gordon Gecko line, "Greed, for lack of a better word, is good," and they pursue the accumulation of wealth at all costs, leading to all sorts of grievous crimes in the name of profits.

This sin is certainly a factor in the present financial mess we are living through right now. Green-eyed investors gambled on bad home loans leveraged at 30 to 1. Corporations continued to expand beyond their means, even buying out struggling companies to pad their bottom lines. Thinking that the good times would never end, consumers continued to purchase whatever their hearts desired, maxing out their credit cards, signing on to new consumer loans, and taking out second mortgages. Now the piper must be paid, and the money is just not there.

What is God's take on all of this? Obviously, because of the sins involved—greed, dishonesty, theft, oppression, to name a few—He is not pleased, and in fact, we could say that the crisis itself is a predictable, inevitable judgment on the nation for breaking God's law in these areas. When men contravene a law of God, a penalty automatically goes into effect, and the only unknown factors are when and how hard it will fall. America's economic situation—not to mention what the rest of the world is experiencing too—is eliciting comparisons with at least the crisis in the early 1980s, and for some it resembles the Great Depression of the 1930s. Time will tell how severe it will be.

What does the Bible instruct us in these matters? Of course, the Bible is not an economic text, but it does include financial principles that all Christians should know and follow as well as they are able. Here are a few of them:

  • God commands that we tithe (Leviticus 27:30; Deuteronomy 14:22). Contrary to the worst aspects of capitalism, God's system is based on giving, not getting. Learning this principle, a part of God's very character, begins with giving Him one-tenth of our income to fund the work of His church. Doing this also helps us to realize what is most important.
  • In addition, God commands that we support the needy (Acts 20:35), particularly the widows and orphans, the disabled, the unemployed, and those who, due to circumstances out of their control, need a temporary hand up. This starts with our families, fellow members of the church, and as we are able, others in the world around us.
  • God instructs us to avoid debt. "The borrower is servant to the lender," counsels wise King Solomon (Proverbs 22:7). Debt makes us subject, not just to the lender, but also to misfortune and to the unscrupulous. If we have debts, we should have a plan to pay them down as soon as possible and resolve not to incur any new ones.
  • The Bible tells us to save so we can pass our wealth to our heirs. Solomon advises, "A good man leaves an inheritance to his children's children," (Proverbs 13:22). While this is not always feasible, it should be a goal nevertheless, inspiring us—contrary to our fellow American's spendthrift ways—to put a little money aside as often as we can.

The Bible contains other principles, but these are all that space allows. In times like the present, it would make a good Bible study to search the Scripture for them and meditate on their applications to our lives. Perhaps then, we can avoid the worst of the ongoing financial crisis.