- Published: Wednesday, 08 February 2012 09:20
If helping the poor is the goal, then capitalism is the system that has been demonstrated to be the most effective.
And, to help the poor should be the primary concern of every Christian, according to the Bible, said P. J. Hill, professor emeritus of Economics from Wheaton College, Illinois, who attempted to answer the question “Can Capitalism be Christian?” during a two-day seminar recently held in Billings.
So, is Capitalism compatible with the tenets of Christianity?
The answer is “yes and no,” according to Hill – it depends on the morality and values within each system. Capitalism “can be” Christian, he said.
As to whether the Bible endorses Capitalism, it doesn’t – at least not directly, according to Hill. But the Bible does support some issues basic to Capitalism such as property rights and the value of work.
Ultimately, whether capitalism is Christian, comes down to what kind of system it is, said Hill…”whether it satisfies certain Biblical principles…” and if “it provides a reasonable framework for human flourishing.”
Slavery was a part of the early day system in the US, and that was not “a capitalism that embodies God’s justice,” explained Hill, to those attending the seminar which was sponsored by Big Sky Worldview Forum at the Holiday Inn Grand.
It is certain that “crony-Capitalism,” which “I think we do have,” is not Christian, according to Hill.
Crony-Capitalism “comes about when government has lots of favors to give out to special interest groups in ways that are unjust and harmful to the economy,” defined Hill who pointed to the funneling of money to Solyndra as “one case study.”
He suggested that we need “to get the government out of being in the favor business.” “People will compete for favors,” said Hill, “and the well-off are better at competing.”
Hence you come to issues of “too big to fail” – when very large financial firms or General Motors were considered too big to fail and taxpayers bailed them out. “I don’t think we should have bailed them out,” he said. Under Capitalism, “If you don’t make it, you don’t make it.” Bankruptcy was designed to deal with those who don’t.
Bailouts are about “privatizing gains and socializing losses,” he said, and it affected “large firms’ decisions” about what they invested in and in evaluating their chances to succeed.
There are issues about Capitalism and its morality that “are subject to debate,” said Hill, but if helping the poor is the ultimate goal of Christianity then socialism is not the answer. Hill said that socialism has a very poor record in helping to sustain the poor, in any of its many applications over many years – while, there is much evidence that the application of capitalistic principles has resulted in increasing the standard of living for the poor across the board.
It’s not about equity at any one point in time, said Hill , but more about a long-term trend that shows an improvement in the quality of life for everyone. And, that is something which Capitalism has certainly delivered for many countries in the world.
There was tremendous equality in the 1800s – as everyone – including the upper incomes – hovered near the bottom in terms of standard of living. But since then the standard of living for all classes, around the world, has steadily risen.
“Income inequality is much greater, but there is greater equality in personal well being,” said Hill. He pointed out examples such as in the early 1900s in the US when most people did not have indoor plumbing – and now everyone does. “The increase in equality has advantaged people at the bottom, far more than at the top.”
“While I wish it wasn’t,” it is true that the gap between rich and poor has gotten wider since the 1980s – but, said Hill, “It is probably not a long term trend.”
Hill said that there is “no particular evidence,” that under Capitalism “the rich get richer and the poor get poorer.” While there are fluctuations in income disparities there is “no discernable pattern” in the rising and falling of inequities.
Throughout the history of capitalism in the world the primary trend line is that the well-being of all income groups has steadily risen.
“Economic growth occurs unevenly,” said Hill, “but we have become much more equal over time.”
And, if you look at one segment of society – say the 20 percent middle income group in 2009 – and think that in looking at that same segment today, you are looking at the same people, you would be wrong, said Hill. Individuals, within the groups, are not constant.
Hill went on to say that “income equality cannot be gained through redistribution.
“It is hard to change distribution systems,” Hill continued, “We change it by tax structures.” “We may wrestle with issues of income redistribution, but changing the system is surprisingly difficult because people change behavior. .. It can be dangerous.”
“People are creatures of nature. If you take more money from us, we don’t work as much” – and “people don’t take as much risk; they take longer vacations.”
“Income distribution is the result of choices,” underscored Hill, “and since it is the result of human choices you have to interfere with human choices” continuously and to a very great depth, which requires that government has “lots of power. “In order to maintain equal incomes we would have to give up much,” said Hill. What we give up is “the rule of law.”
The new health care law is an example. It is “onerous for small businesses, who say they aren’t going to have insurance. But you can get a waiver, and over a thousand waivers have been given out to people “in favor.” Such practice “is not the rule of law.”
At the root of most disdain for Capitalism is envy, according to Hill. People are routinely encouraged to think of people who have money as not having gained it through honest means and that Capitalism is “driven by greed.”
“Steve Jobs earned his money,” said Hill. “Disliking people who have earned what they have is a product of envy”
He also pointed out that only three percent of the people in the top one percent of the wealthy, inherited their wealth.
Hill further stated “I don’t think our debt crisis is our biggest problem” - - children born to single parent homes, is. He pointed out that the number of children in single-parent homes has risen from four percent in 1930 to 41 percent in 2008.
He went on to say that that has “the biggest impact on income inequality. .Children raised in single parent homes are more likely to be raised in poverty and stay in poverty.” Only six percent are college graduates and only 44 percent make it to high school graduation.
It creates “a huge economic impact, but also a cultural and moral impact,” said Hill, “The family is where culture is transmitted.”