The Wealth of Nations

When God was preparing Israel for the Promised Land, He told them, “You may say to yourself ‘ My power and the strength of my hands have produce this wealth for me.’ But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today” Deuteronomy 8:17-18. He was preparing them to prosper and one way this happened was by teaching them about capital. When we read in the Bible the lessons that formed the early Jewish economic system and helped the Hebrews to identify a sense of “capital” which was separate from the individual, we do not automatically associate this with the economic system called capitalism.

It was up to a Scottish economist in the 1770’s by the name of Adam Smith to pick up on these Biblical principles and form the ideas for the economic system of capitalism. He wrote a monumental book called The Wealth of the Nations and today he is called the father of capitalism. Adam Smith was a Christian and he was brilliant. The Wealth of Nations is not an easy read; it reads like an old-fashioned college textbook and many today would struggle to finish reading it.

The book Smith published was originally called, An Inquiry into the Nature and Causes of the Wealth of Nations (usually shortened to The Wealth of Nations). Economics of the time were dominated by the idea that a country’s wealth was best measured by its store of gold and silver. Smith proposed that a nation’s wealth should be judged not by this metric but by the total of its production and commerce (the activity of people)—today known as gross domestic product (GDP). GDP is still the standard measure of economies today. Smith thought rational self-interest (a motive for a reasonable profit) and competition would lead to economic prosperity.

Alan Greenspan writes that The Wealth of Nations was “one of the great achievements in human intellectual history.” Adam Smith wrote about ideas of economic freedom that no nation of any consequence was using at the time. After England, America became the first nation to begin to systematically apply these principles and eventually became the most prosperous economy on earth. In future blogs we will be looking at the three pillars of capitalism that Adam Smith identified…incentive, property rights and freedom.

But isn’t capitalism too easily corrupted by greed you might ask? This is an important question we will examine in upcoming blogs as well.

 

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Like Taking Care of the Family Pet

Like many reading this blog, for many years I thought my only opportunity for income was a paycheck that I was receiving for my labor. When I discovered capital as a source of income it caused me to make some changes in our finances. I had to save and look for opportunity to invest to produce income. Actually God mentored me a little like he did the children of Israel, but more about that later.

To teach the Hebrews about capital, God put each and every Jewish family in charge of some land and they had to cultivate it and take care of it. In Harold Eberle’s book Compassionate Capitalism: A Judeo-Christian Value; he describes how it changes your thinking when you have something like capital that you have to take care of:

Compare this to two children being raised in two different modern families. One child is put in charge of the family pet. This child is taught to feed and water the animal, along with all the other responsibilities of taking care of a family pet. As the child develops they will become ever conscious of the needs of the family pet. On the other hand the child that is never put in charge of anything outside of himself will only be conscious of his own needs.

Taking care of the family pet taught the child to constantly think a certain way. In a similar way, becoming aware of how capital can produce income creates a desire to accumulate and manage capital…just like it did for the children of Israel. Harold Eberle says it like this:

“…the person who owns a farm can plant crops or hire laborers to plant crops that can be sold. Or the land could be rented to someone who will do likewise producing income for the farm owner. Someone who has accumulated money can loan out that money at interest. The idea that capital is productive changes the orientation of one’s life toward the goal of accumulating capital and making it productive.

The poor generally do not appreciate the value of capital and are not bothered to accumulate it. They might even see it as selfish or evil. On the other hand, more prosperous people feel like something is wrong if they do not have capital. I believe the Christian today should look for capital to produce income that is separate from any paycheck income they might receive. This is in keeping with how the Lord mentored the ancient Hebrews.

 

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Fish, Fishing or Own the Fish Pond

As we have been examining the Biblical Worldview for these months we have looked at the initial things that God was teaching the Hebrews in their early days as his adopted children. Many of these lessons formed the early Jewish economic system and helped the Hebrews to identify a sense of “capital” which was separate from the individual. In contrast, the pagans of the day tended to center their activities on meeting the needs of themselves and their families…working for themselves.

In contrast God planted the Jews in a Promised Land and each family was given a portion of land. It was something of value they owned and stewarded. They were to take care of it and improve it. They were directed by God to take care of their accumulated wealth or we could call it “capital”. It was their responsibility. This became a value embraced by the entire Jewish nation. They expected each other to take care of their land and to develop it as capital.

Harold Eberle says it like this, “Consider the often quoted advice, ‘Instead of giving a person a fish, teach them how to fish’. The second – teaching him how to fish – will provide for the persons present and future needs. However, neither being given a fish nor teaching them how to fish, were Gods way of dealing with the Jews. He had a third option. God wanted to teach the Jews how to own and manage the fish pond. Then they could charge the fishermen for everything they caught. This was a huge transition in thought. Even today people with lower economic conditions tend to orient their lives toward obtaining food, paying bills and purchasing some desired objects for themselves. In contrast wealthy people tend to orient their lives toward maintaining and increasing their capital. They see capital as something separate from themselves.”

So for the Christian today…to have a sense of being a caretaker of capital, be it land or money, will in a practical way change their thinking and cause them to experience more of God’s promised prosperity. The accumulated capital will care for their present needs and the needs of others; but also exist beyond them and be passed on to others to manage.

This Biblical attitude towards capital allows the individual to be less emotionally attached to it and make less emotional financial decisions. And it allows the individual to see capital as something that produces income to be managed as a steward. More to come….

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Telegraph, Pony Express and John Wanamaker

Rabi Daniel Lapin states that the Jews had a sense of holiness in their personal business transactions. They were instructed to conduct their affairs in “the fear of the Lord.” Today the Christian and, in fact, all in the marketplace could benefit with this approach. The truth is I will not prosper in business if I am not honest. If I am not asking a fair market price for a product or service that has integrity, I might make one or two sales but I will not be in business for long. My customers will realize my lack of integrity and go elsewhere, and tell their friends to do likewise.

Society criticizes business for making a profit. But if there were no profit there would be no jobs to employ people. No margin (profit)…no mission! Businesses that make a profit pay employees, reward the owners risk and in many cases “give back” to the community in many charitable ways. But even the term “give back” implies that it was taken…that it was wrong to take a profit. We don’t seek to take advantage of others; rather we want to help them prosper. When the telegraph was introduced to replace the pony express this was considered a good thing. A new technology made it better for all.

Retailer John Wanamaker was a great example of making things better for all. Darren Shearer writes….“He is considered the “Father of Modern Advertising.” He once was asked, “To what, Mr. Wanamaker, do you attribute your great success?” Wanamaker replied, “To thinking, toiling, trying, and trusting in God.” 

Among his many innovations, he opened the world’s first major department store. He introduced price tags to the retail economy because he didn’t want people to worry about whether or not they were getting fair prices while they shopped. In addition, he started the first mail-order catalog and was the first to run a large advertisement in a newspaper.

Committed to taking care of his people as a reflection of the character of Jesus, Wanamaker was a pioneer in employee benefits programs. Long before these programs were considered standard in corporate employment, his company offered its employees access to the John Wanamaker Commercial Institute, free medical care, recreational facilities, profit-sharing plans, and pensions.”*

John Wanamaker not only planned for his future but he used his profits to plan for the future of his employees.

*May 3, 2015 Written by Darren Shearer

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Bread and Jeans

Are you thankful you do not have to bake bread every morning? I am. We take it for granted when we get up in the morning we can just grab piece of bread from the bread drawer and make some toast. Baking bread is something that is done for us and we are happy to pay for it. If the baker did not make a profit he would not bake bread, so we are happy to pay him more than his cost so he provides this service for us. What about when you need a new pair of jeans? Let’s start by planting some cotton plants…I think you get the picture! I am glad someone makes my jeans and happy to pay for them at a price that allows for a profit, because if their was no profit their would be no jeans!

The Hebrews had their worldview revolutionized by learning to plan for the future. Now it made sense that they could and should accumulate things for their families, and also to help the poor among them. They could make a profit by providing benefit for people. Their ability to solve problems, provide products or serve in some capacity helped both the buyer and the seller. From a Biblical perspective, profit is not obscene or profane, but a good thing and positively moral. In the Bible the occupation of business is both noble and worthy as noted previously in referring to the Proverbs 31 woman of virtue.

Scripture says we should love our neighbors as ourselves. We care about others so we seek to make a product or provide a service that will enhance other people’s lives. Since we care about our neighbors we do not want to make an inferior product that we ourselves would not be delighted to use. Since we care about others we do not want to abuse them as employees. We don’t want to steal from others because we want to be a blessing to them. A businessperson who is dishonest will eventually go out of business.

In his book Thou Shalt Prosper…The Ten Commandments of Making Money, Rabi Daniel Lapin states, “Jews became bankers to help others. Helping others succeed is a dignity enhancing task. Jews selected banking. It was because of their utter trustworthiness that they became successful bankers. Trust made commerce possible.”

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An African Entrepreneur Plans for the Future

Part of the Biblical Worldview is planning for the future. Even in our modern world there are still those that don’t plan for the future. This is true in the Western world as well as developing nations. One of my favorite examples from a developing nation of someone breaking out of this lack of planing for the future is a friend from Africa..

William Munyanya is in an African entrepreneur who lives in the Kitale region of Kenya. He told me the story of trying to teach some of his neighbors to think more prosperously by thinking long term instead of short term. Kitale is a rich agricultural area of Kenya and their biggest cash crop is corn which they call maize. The problem with selling the maize they harvest is that it is all harvested at the same time, and this creates a glut on the local market and drives the price of the corn down.

William explained to his neighbors that they could put their maize in storage for six months and then get twice the price for it. Of course it would cost them some money for storage, but they would still make significantly more than if they sell it at harvest time. William was ready to hire the storage space so they could all share that cost together. As he finished his proposal, his neighbors’ response was to laugh at him. In their minds they had never heard of such a stupid thing. They didn’t believe him because they were so used to getting all the cash right away at harvest. It didn’t matter to them that if they waited they would actually get more cash, almost twice as much. They couldn’t see it. There focus was only on today’s need. William ended up doing it himself to prove it to them. He wanted to demonstrate for them that long term planning is more prosperous thinking than just thinking for today.

Another example of this kind of long term planning for William’s neighbors to see is how he is prepared to get electricity to his house. He built a house in a rural area that has no access to electricity. In rural Africa, electricity is not available along every road but only comes where people pay for it to come. They knew when they built the house that the closest electricity was located miles away, and they didn’t have the money to pay for it to get there.

William’s plan was to research what kind of tree the electric company uses for electric poles, and he planted a stand of this kind of trees on his property. These tall slender trees grow fairly rapidly, however it still took 7-8 years for them to be large enough for him to trade or sell to the electric company for electrical service.

The Rest of the Story: On my recent trip to Kenya I found that William had the electricity at his house. His practical planning for the future worked out well. It took time but he got electricity to his home for his family.

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The Hebrews Learned to Plan for the Future

When God separated the Children of Israel from the rest of the world, he began mentoring them to think differently. God broke the Hebrews out of the cyclical, mystical thinking of the pagan world with the revelation and understanding of linear time and progress. If things in this world are advancing rather than cyclical, then people can plan, work, save and experience a better future. The Hebrews could now plan for the future with their family. It seems so simple to us now because it is assumed in the modern world, but planning for the future was not common in the ancient world and the primitive cyclical pattern of thought was quite crippling.

For an example of how God taught the Hebrews, we find this thinking early on in Joseph’s life. He had a dream of his brothers bowing down to worship him and he had a sense that this was in the future, partially because it didn’t seem likely in the present because his brothers despised him. Later, Joseph interpreted pharaoh’s dream correctly and knew from it that seven years of plenty would be followed by seven years of draught. To prepare for the seven years of draught, Joseph took the practical step of leading the Egyptians to store large quantities of food during the years of abundance. We read that Joseph had to store the food in the fields because there were no barns to store food. That is because up to this time people were fatalistic and just accepted that draughts came and when they did people would starve.

Joseph collected all the food produced in those seven years of abundance in Egypt and stored it in the cities. In each city he put the food grown in the fields surrounding it. Joseph stored up huge quantities of grain, like the sand of the sea; it was so much that he stopped keeping records because it was beyond measure.                     Genesis 41:48-49

Joseph’s wise actions saved the lives of many Egyptians and elevated him to a place of authority in the Egyptian world where he would see his earlier dream concerning his brothers fulfilled. It also provided physical sustenance for the Hebrews during the draught. Because the Egyptians had stored up food when no one else did, they accumulated great wealth, which was later leveraged when Moses led the children of Israel out of Egypt.

The Israelites did as Moses instructed and asked the Egyptians for articles of silver and gold and for clothing. The LORD had made the Egyptians favorably disposed toward the people, and they gave them what they asked for; so they plundered the Egypt.                      Exodus 12:35-36

God planned ahead so the Hebrews would have silver, gold and clothing when they left Egypt. They saw God planning for the future and realized he expected them to do the same. Thinking long term and planning ahead is crucial for the Christian to experience prosperity today.

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