Venezuela is Starving

Once Latin America’s richest country, Venezuela can no longer feed its people. Today, Venezuelans rummage through garbage dumps for food, an uncommon sight just a year ago. People in the countryside pick farms clean at night, stealing everything from fruits hanging on trees to pumpkins on the ground, adding to the misery of farmers hurt by shortages of seed and fertilizer. Looters target food stores. Families padlock their refrigerators. Literally…three out of four Venezuelans said they had lost an average of 19 pounds last year, according to the National Poll of Living Conditions, an annual study by social scientists.

Why the misery? The answer is simple. Socialism.

How did once prosperous Venezuela get here? Venezuela turned to socialism in 1998 when Hugo Chavez was elected president. The following year Chavez passed laws redistributing land and wealth, which he followed in 2005 with a land reform decree that would eliminate larger estates to the benefit of the poor in rural areas. In 2007 the government took control of important oil projects and kicked out two U.S. oil companies, furthering Chavez’s nationalization plans. Nationalization continued with the Bank of Venezuela and household fuels distributors and petrol stations.

The agricultural companies the government has taken over, including milk factories and distributors of fertilizer and feed, are closed or barely operating, according to economists and farm groups. “The system is created so you can’t win,” said Alberto Cudemus, who heads the national association of pig farmers. “The government thinks its survival is in communism, not in us, not with production. And that’s where they’re wrong.” The scarcity index produced by Venezuela’s central bank reached 28 per cent in January, meaning that one out of four basic products is out of stock at any given time. Sadly, thanks to socialist government driven inflation, toilet paper is now more valuable than paper money.

By the time of Chavez’s death in 2013, inflation had grown to 50%. Towards the end of 2014, the country entered into a recession. Present-day Venezuela is facing a tragic, humanitarian crisis and Nicolas Maduro, Chavez’s hand-picked socialist successor is continuing this tragic tradition. The heavily centralized state-run system inherited from Chavez is what is driving Maduro’s country to ruin. Ominously, Maduro has called for an election this week-end with only hand picked candidates on the ballet to re-write the Venezuelan constitution to give him more power.

So why are dictators attracted to socialism and communism? We will examine that in my next blog.

Sources

Venezuela Is Starving; Juan Forero, Wall Street Journal, May 5, 2017

Venezuela’s Failed Socialist Experiment; Ivana Iacob, Forbes Magazine, July 24, 2016

How Socialism Destroyed VenezuelaJuan Carlos Hidalgo, Cato Institute, Feb. 25, 2014

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ServiceMaster

I love to read Rabbi Daniel Lapin’s book Thou Shalt Prosper because I love his take on the Judeo Christian worldview and its alignment with Biblical economic principles. Here he talks about Service Master Corporation (pg.81).

“ServiceMaster Corporation in Illinois was founded by an evangelical Baptist, Marion E. Wade, in 1947. Its primary mission was always “to honor God in all we do.” Wade asserted that running a profitable business was not inconsistent with serving the Lord. He spelled out his notion of using the Bible as a guide to business in a book that for decades was given to every new manager. Yet in spite of and many would say because of its linking of God and profits, ServiceMaster quickly grew into a $6 billion Fortune 500 company that did well by doing good on everything from Merry Maids house cleaning to Terminix pest control and TruGreen lawn care. Early in 2000, ServiceMaster opened its web site on which customers could select, purchase, and schedule any of ServiceMaster’s services directly.

“During 2001, ServiceMaster brought in its first chief executive officer (CEO) from outside the evangelical fold. Nonetheless, new CEO Jonathan Ward was rightfully reluctant to modify the corporate culture that had worked so well for so long in this service-oriented company with its fleet of 23,000 vehicles. For instance, he retained the custom of calling corporate meetings to order by quoting from the biblical book of Isaiah. That may seem irrelevant to modern business, but this company schedules thousands of visits to customers’ homes. If ever a company needed to radiate a message of true commitment to service, this is that company. Even the company’s motto is “We Serve”; and this, coupled with its unabashed embrace of Christianity with its own tradition of service, has certainly played a role in its success. ServiceMaster’s very name proclaims its eagerness to serve.

I hope it continues to prosper because it serves as a useful reminder that to truly excel at service, some form of inner belief is necessary. If you cannot wrap yourself around the notion that other humans are worthy of your committed service and that you are not diminished but are instead elevated by providing that service, you will never really excel at what you do.”

Rabbi Lapin says it all. When we help to serve and lift others, then we ourselves are lifted…and the economic side of that is OK and Biblical as well. Governments would like to think they create jobs, but tell that to the over 23,000 employees of Service Master who are experiencing prosperity and raising their standards of living. As Steve Forbes is fond of quoting from Proverbs 4:7, “With all thy getting, get understanding”.

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Buying Ink

I recently needed ink for our printer at home and I set out on my usual journey to compare the price at two stores at which I usually shop. I drove to one and bought the ink at some discount with a coupon, but then for good measure I stopped at the second store to compare prices thinking I would return the earlier purchase if it was cheaper. It was roughly the same price there so I did not. With traffic this whole venture took me over two and a half hours to get the ink. Just on whim, I checked the price on Amazon and found the ink there for the same price that I had purchased ink at bricks and mortar store. So I could have ordered the ink on line in five minutes and had it delivered to my door for free, and saved myself two and half hours. Lesson learned. Amazon just made my life better.

The beauty of the free market is that entrepreneurs seeking to grow wealth have to make their customers better off at the same time. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” Adam Smith wrote in the 18th century. In March Amazon celebrated 20 years as a public company. If you had bought a $100 worth of stock in the initial public offering of Amazon in 1997 is would be worth more than $49,000 today. Wealth creation is the business of capitalism. Amazon grew from a market capitalization of $660 million to $460 billion in 20 years.

Founder Jeff Bezos said Amazon employees focus relentlessly on what its customers need, even if they don’t know they need it. That might explain how a company that started out as an online bookstore has become the most popular U.S. supplier of consumer goods.

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Did Capitalism Promote Slavery In The United States?

The United States recently celebrated its independence day on July 4th as the day when the Declaration of Independence was originally written and published by the original 13 colonies in 1776. One only has to read as far as the second paragraph to see the original beliefs of its founders. “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” This was written in the context of seeing themselves enslaved by the King of England, however I believe America could only have been founded by Protestants who believed in the Biblical principle of individual freedoms that comes from God. This commitment to individual freedoms that was put in these founding documents would eventually be tested and subsequently apply to all who would be called Americans.

Although some suggest that racially based slave labor in the pre-civil war era was capitalism in operation and thus condemn capitalism as an economic system; slavery was in fact practiced by cultures for many hundreds of years in Asia and Africa before those in the West wrongly embraced it. Nonetheless it had to be rooted out of the West because is it was morally wrong and Christians led the fight to do so. In fact the West became a crusader against slavery in Asia up to the end of World War II because the Japanese were literally enslaving many of the other Asian nations at this time.

Biblically, slavery is morally wrong and a violation of the golden rule, “so in everything, do to others what you would have them do to you…” Jesus said this sums up the whole Old Testament and also in Mark 12: 31 He said, “…Love your neighbor as yourself…” To own a slave is counter to these two commands of Jesus. However, sadly many slave owners were Christians who attended church regularly. In fact Christians in the south (wrongly) quoted the Bible in support of slavery, while Christians in the North (rightly) quoted scripture to condemn slavery.

Slavery was never an expression of Biblical capitalism as we have defined it…“ an economic system that allows people to own personal property and benefit from their own labor…It is based on the understanding that an individual must be responsible for his or her own success. People should be able to use what they have accumulated – their capital – and have it produce more wealth for them (see complete definition below). To seize the labor of someone and not compensate them is theft, pure and simple. Slavery was not Biblical or capitalism because an individual needs to reap the reward of their labor.

From a purely economic perspective historians have asserted the slavery was economically unproductive. The most commonly mentioned reason that historians do not consider slavery a part of capitalism is the lack of wage labor. Frederick Law Olmstead traveled to the slave states in the 1850’s and argued that slavery made the south inefficient and economically backward when compared to the Northern industrialism and capitalism. The North’s view was that a free market for labor was superior and more productive than slavery. With the Civil War, the United States destroyed an economic system that was holding the country back and allowed the Northern capitalists to lead the country to a much greater prosperity.

Ultimately, many would say that it was the industrial strength of the North that allowed the North to win the civil war, which was ultimately fought over the issue of personal freedom for all.

 

Working definition of Biblical capitalism…

“When we say capitalism we are referring to an economic system that allows people to own personal property and benefit from their own labor, wisdom, education and experience. It is based on the understanding that an individual must be responsible for his or her own success. People should be able to use what they have accumulated – their capital – and have it produce more wealth for them. This means that a person who invented a tool should be able to use that tool to produce wealth…Capitalism is the economic system which has allowed individuals to be creative (in the image of God) and industrious, thus producing the abundance we see in the modern Western world today. It has allowed the human spirit freedom to release its potential, resulting in the advancement of society in almost every area, including agriculture, medicine, manufacturing, transportation, communication and technology.”

 

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Is Wealth Redistribution Biblical?

Someone recently commented that I am optimistic about the power of capitalism to create a “just” economy. Do I believe in capitalism to create a just economy? Not necessarily. I see it as the best opportunity people have to advance that is based on Biblical principles, especially as compared to socialism and communism.

Read the following definition of capitalism from Harold Eberle: “When we say capitalism we are referring to an economic system that allows people to own personal property and benefit from their own labor, wisdom, education and experience. It is based on the understanding that an individual must be responsible for his or her own success. People should be able to use what they have accumulated – their capital – and have it produce more wealth for them. This means that a person who invented a tool should be able to use that tool to produce wealth…Capitalism is the economic system which has allowed individuals to be creative (in the image of God) and industrious, thus producing the abundance we see in the modern Western world today. It has allowed the human spirit freedom to release its potential, resulting in the advancement of society in almost every area, including agriculture, medicine, manufacturing, transportation, communication and technology.”

Advocates of wealth redistribution refer to Acts 2-5 to support their position, where early Christians sold their property to meet one another’s needs. But such sharing did not eliminate private property as socialist favor and was entirely voluntary. Early believers contributed their goods freely, without coercion, voluntarily. Elsewhere in Scripture we see that Christians are even instructed to give in just this manner, freely, for ‘God loves a cheerful giver’ (2 Corinthians 9:7). There is plenty of indication that private property rights were still in effect (remember Barnabas, Ananias, and Sapphira). This is neither communism (abolition of private property) nor socialism (state ownership and regulation of the means of production).

Proponents of wealth redistribution are wrong to argue that economic inequality is evil in itself. God hates injustice and oppression but not mere inequality. It is not true to say that all inequality is the result of injustice. Jesus spoke of giving different rewards to people based on their efforts. He also taught a high level of compassion for the needy. But there does not seem to be any justification in Scripture for governments seeking to attempt to equalize income or property between rich and poor, or to take from all the rich.

I have noted in these blogs the abuses of capitalism, however I have found it to be more Biblical than socialism or communism. The Biblical form of capitalism goes hand-in-hand with compassionate social values, including the care for widows, the elderly and orphans. God also instilled certain restrictions on capitalism to protect people from abuses and oppression. Capitalism must be governed wisely and incorporate compassion.

When people are exploited so that someone else can make a profit, that’s wrong, and we have grave problems with human trafficking and a good deal of sweatshop labor that goes on around the world. What about racially based slavery like the United States saw up unto its Civil War? More on that next week…

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The One Who Has Shall Be Given More

Jesus used parables for teaching truth that are recorded in the Bible. They are simple stories given to illustrate a moral or spiritual lesson. In reviewing the parable of the talents we find the same principles that we find expressed as capitalism today. In Matthew 25, Jesus described how those that traded their talents wisely and diligently were given more, and the one who didn’t was called “lazy” and was taken away.

For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. Matthew 25:29

Harold Eberle explains what it means, “to have” something in this context. He indicates that Jesus is talking about taking responsibility for something, and hence to trade or invest it as the two faithful servants did. So the one lazy servant did not “have” his talent in the sense of ownership and possess a willingness take responsibility for stewarding it.

Jesus said that the one who has shall be given more…what Jesus describes here is the exact opposite of socialism. Someone with socialistic tendencies would desire the government to take away from the one who has more and give to the one who has less…to redistribute wealth. Jesus is teaching that life wasn’t meant to be like that in the Kingdom. As Harold Eberle says, “He will only bless abundantly those who take responsibility for the possessions they have already obtained. “

For the Christian to embrace this principle today, they must look to see what God has given them. If all their resources have been spent in the pursuit of depreciating consumer goods and nothing is left for saving, investing, trading or even to earn interest; then they are not living according to this teaching of Jesus.

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Was Jesus a Capitalist?

Was Jesus a capitalist? I think it is foolish to say that Jesus was a capitalist because he is so much more. He is the resurrected Lord and King; the very center of world history and the Father’s interaction with humanity. However, the New Testament does indicate that Jesus taught capitalist concepts when he walked the earth.

Jesus told a very practical and easy to understand parable about a master who entrusted his three servants with various amounts of wealth in Mathew 25:14-30. One was trusted with five talents, the second with two talents and the third with one talent. The master told them to take the money and conduct business while he was away on a trip. Jesus explained, “the one who had received the five talents went and traded with them, and gained five more talents” (v 16). The second servant conducted business and turned his two talents in to four talents. The last servant did not obey and took his talent and hid it.

Upon the return of the master he asked each to give an account of their business transactions and returns. The first and second servants were celebrated and rewarded but the third was reprimanded by the master for his laziness since he hid the money and did not even put in the bank to earn interest (v 26).

Harold Eberle’s book Compassionate Capitalism: A Judeo-Christian Value points out several capitalistic principles in this parable.

  1. First the slaves were put in charge of capital, which was separate from themselves.
  2. They were told to do business and invest the capital.
  3. Putting money in the bank to earn interest was put in a positive light, though not as positive as investing through business and trade.
  4. Jesus expressed the Hebrew understanding of human nature: there are wise people and foolish people, there are hard working people and there are lazy people. Everyone should be rewarded accordingly.
  5. Jesus explained that those who traded their talents wisely and diligently should rightly be given more, while the talent of the lazy man should be taken away (v 29).

So we have connected what Jesus was teaching in the New Testament times to what is called the principles of capitalism today. It is a historic fact that the principles of capitalism are a part of the Judeo-Christian worldview. That means it was embraced as from God by the Jews in the Old Testament and embraced by Christians in the New Testament. Notice I am talking about the “principles” of capitalism and not necessarily capitalism as we see it today, which as I have noted can be corrupted by greed.

Why spend so much time on this? So the Christian today can know with confidence that not only is it Biblical, but also it is God’s desire to bring a sense of prosperity to their life and finances.

 

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