In this episode Kurt talks about a Christian perspective of marcoeconomics, drawing upon verses from the Bible and from Dr. Jay Richards’ book “Money, Greed, and God: Why Capitalism is the Solution and not the Problem.”
Kurt: Good day to you. And thanks for joining us here on another episode of veracity hill, where we are striving for truth, faith, politics and society. Today is an exciting day today is October 21st… 22nd. I guess no yesterday, was the 21st. 22nd. And this is the potential Chicago Cubs pennant winning day. It all depends on how they do against Clayton Kershaw. Today, if you are new to the show, perhaps you’ll know that I am a big Cubs fan. I am emotionally invested in this team. And although I might end up being a little disappointed, I’m really hoping that this is the year. So we’re right now we’re streaming on Facebook Live. And we have what we believe is the audio working for them so they can hear the audio clips. And if we’ve got guests, that’s the first time we’ve been able to add that functionality, because this week, we spent time figuring that out. So for those of you that are following us watching us on Facebook Live, let me know if how the sound quality is if it’s really high or too low. Your input really helps us figure out how we can work the magic. in studio today we’ve got a Chris. And also we’ve got a new friend of ours who’s joining us for the first time John, who’s going to be screening calls. So thanks, gents for coming and looking forward to your thoughts today. So today, we’re going to be talking about economics.
Kurt: And on the show, we have the past few weeks, we’ve been focusing on political issues, because of course the election is upon us, it’s what maybe 16, 15 days away. And so while we haven’t been talking about the candidates, we are talking about issues, because some of these issues are things that we think about when when we think about who we’re going to vote for. And so economics is a a an area that really a lot of Christians don’t give much thought to. They may they may think about how it may affect their wallet, how the policies will affect their wallet, and sort of they think, at the micro level, but they tend to not think about the bigger issues at large in economic theory, in our society. So So I want to share with you some of my thoughts on this. And it only comes from just reading a couple books here and they are doing some writing, I am no expert by any means. This is not an area that I study academically. So let me start off by first telling you about my background in this. So when I went to college, I went to Biola University, and I studied philosophy and political science. And there were some lectures that I heard from different speakers, different economists. And one of those people that I became interested in following was a fellow by the name of Jay Richards. And he wrote this book called Money, greed and God, why capitalism is the solution and not the problem. And so in this book, he presents eight myths that people have believed about socialism, or communism, on how there’s a if there is a centralized government that is making economic decisions that affect the society. So we’re not going to be able to cover all eight myths today, at least I don’t think we will. It’d be great if we could, but I’m skeptical of that. And so but I’m hoping for at least four of them that we’ll get to four of them today. So but before we get into those myths, back to the story here at Biola. And so there were these different economists that would come and one of them was Jay Richards, and people had these discussions, and I heard a lot of these terms. And people using, one of the terms that you often hear is that, you know, the rich need to pay their fair share. Also, because Biola was a Christian school, there were discussions about what the Bible taught about economic theory. And so I’m going to share with you some Bible verses that people used to support their understanding of economics. And then we’re going to talk about those a little bit. Because here’s, I’m going to foreshadow here, I don’t think those verses support what people think they supported. So let me just load this up here for you.
Kurt: So here we have in the book of Acts, the early church has come together they are selling their their goods, and they are giving to each as each one has a need. So in Acts 2: 44, we read, and all that believed were together and had all things in common. Verse 45, and sold their possessions and goods and part of them to all men as every man had need. Boy, that sounds great. And that really is great. That’s awesome that the church did this, and Acts 4: 32, to 37. And the multitude of them that believed were of one heart and one soul. Neither said any of them that all of the things which he possessed was his own, but they had all things common, and with great power, gave the apostles witness of the resurrection of the Lord Jesus, and great grace was upon them all. Neither was there any among them that lacked for as many as were possessors of lands or houses, sold them, and brought the price of these things that were sold, and laid them down at the apostles feet, and distribute, and distribution was made unto every man according to as he had need. So, you can see here in the Bible, in the early church, people sold what they had and helped each other out, which is awesome, that is really helping the poor, helping those that are in need. Of course, you have from the teachings of Jesus in Matthew 25, about, you’ve got a number of parables about helping poor people, the sick people, I mean, parable of the Good Samaritan is an obvious example, where you are to help your neighbor and anyone that you come across as your neighbor, if they’re in need, you should help them you have in Matthew 6:24, you cannot serve both God and money.
Kurt: So how are we to understand these things? There are one interpretation of this is that, oh, well, capitalism is greedy, right, the basis of capitalism is money. And so then, if the basis of capitalism is money, and money, leads to greed, well, therefore capitalism is evil. One of the problems with that is that the scripture never says that money is evil. The worship of money is evil. And the love of money is evil, right? The love of money is the root of all evil. So money itself is not evil. It serves a very strong utilitarian function. And in fact, as we’ll talk about money, is the wealth that we can create in a society leads people out of poverty. And it is only through free enterprise that this happens, it is not through government intervention. And so as a as a testament to that, let me let me play a clip here for you from Bono. Who’s the lead singer of U2. He has spent years and years lobbying governments to give foreign aid to help poor people. But more recently, the past few years, he’s come to understand that foreign aid is a short term solution. There’s a long term solution, and I want you to listen to to what he says.
Kurt: All right, so there you have Bono, talking about how commerce is real. And let me phrase that another way. So there was a Dutch thinker by the name of Abraham Kuyper. He was a statesman and a theologian. And he said that there is not a square inch in the whole domain of our human existence, over which Christ who is sovereign overall does not declare mine. So if this is true, then this also is the case for economic theory, that there are not just moral truths that we can discover there aren’t just scientific truths or historical truths, but there are economic truths. Commerce is real as Bono said. And when we can discover these economic truths, it can help us To, to operate our society in a way that is beneficial to all people, not just some people, not just for the rich people or the middle class or the poor, but for all people, these economic truths benefit everyone. And it’s, it’s in a sense, it’s a beautiful thing. The invisible hand as Adam Smith called it. Other folks have called it.
Kurt: …called it spot spontaneous order. And for him, he didn’t credit, God’s providence, but a number of Christian thinkers very well might credit to the providence of God. Now, so that’s the case, let me say, again, there are these things called economic truths, and we can discover them. And so when we look at the Scripture, we need to be very careful to understand and interpret what it’s saying. Because if we think it’s talking about some economic truth, we need to make sure that it’s not talking about a particular instance. So let me give one example. In Matthew 19:21, Jesus tells this man, it would, if you want to be perfect, go sell all that you possess, and give it to the poor, and you will have treasure in heaven. Now, a number of scholars believe that perhaps it’s the case, if, if this man had struggled with greed, and that Jesus knew what his struggle was, and so he gave him an ultimatum, because he knew where he was at. So taking this passage and saying, well, all Christians, therefore should sell everything they have and give to the poor. Well, Jesus doesn’t quite say that. Now, the early church did some of this. But that’s the church as well, the church is an organization, it’s a community of fellowship of believers, it’s not saying that this should be the government. And also that people did this freely. It’s not because someone came along and coerced them to do it. It’s because they did it of their own goodwill. So we really need to be careful in how we understand these biblical passages, because there is not a precedent for applying them to macro economic theory for having the government coerce people into this.
Kurt: So let me move along here and say that we do find a welfare system in the Bible. In the Old Testament, we are told that in Leviticus 23:22, when you reap the harvest of your land, do not reap to the very edges of your field, or gather the gleanings of your harvest, leave them for the poor, or for the foreigner residing among you, I am the Lord your God. So, here in the Old Testament, there was a provision for people that were hungry, that they had to, they had to go into the fields and find the food, right to take the food from the edges of the field, and that the Israelites couldn’t go over their fields the second time, which pretty much meant you can’t be greedy. So whatever you get on your first try, that’s what you’ve got. Now, one of the key aspects here is that people that were hungry, had to go and work, they had to go get it themselves. This is a little bit different than our society today, which, in some cases, not all forms of government welfare, but in some cases, is merely a check distribution. So the Old Testament society had a different system. Now well, where are we to make people work? You know, why should we do that? Well, guess what, if we read it. Additionally, in 2nd Thessalonians, Paul has a warning against being idle. And so I’m going to read here for you this passage from Second Thessalonians three, in the name of the Lord Jesus Christ, we command you, brothers and sisters, to keep away from every believer who is idle, and disruptive and does not live according to the teaching you receive from us. For you yourselves know how you ought to follow our example. We were not idle when we were with you, nor did we eat anyone’s food without paying for it. On the contrary, we worked night and day laboring and toiling so that we would not be a burden to any of you. We did this not because we do not have the right to such help.
Kurt: But in order to offer ourselves as a model for you to imitate, for even when we were with you, we gave you this rule, the one who is unwilling to work shall not eat. So in this case, we have Paul talking about this concept of idleness and not being lazy. If, if a man wants to eat, he’s got to work. And this is the principle This is the teaching that he taught to the early church. So this idea of of work, right so you see this concept of work in the Old Testament. And in the New Testament, and so you don’t have here just mere distribution, you don’t have people just for lack of a better term, a handout. Now you, the Bible doesn’t prohibit us from giving handouts to people, but to take from the scripture, and to then build a macro economic theory upon these verses, I believe is unwarranted. The Scripture does not say that at all. And, interestingly enough, there’s one passage that really puts a damper on for some people. In Luke 12. So here’s the context in Luke 12. So, two brothers come to Jesus. And they asked him, Well, how should we divide our inheritance. And, interestingly enough, Jesus replied, man who appointed me a judge or an arbiter between you. So here, Jesus was saying, I’m not going to tell you how you should divide the inheritance. Which is fascinating, because Jesus is saying, Hey, I’m staying out of it. So again, we have this instance where, you know, we need to be careful from the text from the biblical text to make some acro macro economic theory from that. And I think to say that the Bible supports a socialistic economic theory, which by that I mean that the the goods of a society are shared amongst each other.
Kurt: The Scripture does not support that concept. It supports a concept of what I’ll call micro economic socialism, where we as individuals can freely choose to, to provide a benefit to others, we can share to those that are in need, we can sell our, our houses our land, if we have if there is a need, so that so that people are without need, specifically Christian believers are without need. But even then, when we do that, the Scripture teaches that we shouldn’t just give to people that aren’t doing anything, these people need to do work. So I think that’s, that’s going to cover sort of, that’s a brief introduction to the biblical basis here, or rather, what I call a refutation of a number of passages that people use to seemingly support a macro economic theory of socialism. Okay, now, I want to get to these myths, because these myths about capitalism, because in conjunction with those Bible verses that are sometimes used to support socialism, as a macro economic theory, people often believe mistaken ideas about what capitalism is. So this is where Jay Richards really was a benefit to me, because he took the time to study this, and then made this great book called Money, greed and God, why capitalism is the solution and not the problem.
Kurt: And so I’ll read off for you here the list of the eight myths, and I’m not sure if we’re going to get to all eight today. But we’re definitely going to get to a few of them. So the Nirvana myth is the idea that it contrasts capitalism within an idealized unrealized ideal rather than with its live alternatives. Which is to say that some people think capitalist that there’s a better solution, right? There’s a Nirvana out there. There’s a utopia out there. And the way we get to utopia is through government intervention. government intervention in the marketplace. The problem is that this is false. And if the 20th century showed us anything, it’s that socialism is a failure. Central government planning of the marketplace is a colossal failure. You see this with the USSR. You see it in East Germany, you see it in communist China, the only way that you see the wealth of a nation is because of the free market. And the free market exists even in socialistic and communistic, states or nations. Let me explain why capitalism still exists. Because capitalism is broadly speaking, the exchanges of goods and services for each other. That’s what capitalism is. And in our advanced society, we use money to denote value for these goods or services.
Kurt: Right before there was currency, people traded goats and sheeps and cows, right. I’ll give you three cobs of corn if you give me some cow’s milk. So it was an exchange of goods, but now we have money that represents the value for these things. So even in these socialistic and communistic societies capitalism still existed, because you had scenarios where people would still have a black market, they would provide their goods or services, even government laborers would say, Well, if you don’t, if you don’t report it, then you know, I can do it for you for cheaper, right? We actually have that today. We have it today. Cash is king, right? If you don’t cut a check, or if you don’t pay with credit card, right? If there’s no paper trail, I’m sure you you have had this experience like I have. If you have cash, I don’t have to charge your taxes. Right. All right, you know, I can do it cheaper. And some of that’s because that’s the way capitalism functions at the base level. Now, there are questions of morality, whether or not people should do that, right? Because they’re kind of not reporting their income. But that’s a separate, distinct question.
Kurt: The issue I’m pointing to here is that there’s that capitalism exists. Commerce is real, even apart from the government intervention, it still happens, which to me, speaks to the testament that this is reality. Capitalism is the way that society functions, even if there were no governments, so modern philosophers. And by that, I mean from the past few centuries, not contemporary philosophers, but modern political philosophers often talked about the state of nature. What is man like before government, and in my view, and the view of many other modern philosophers, especially John Locke, Adam Smith, in the state of nature, capitalism still existed, it was there, it’s foundational to society. Okay, let’s move along. So the Nirvana myth contrasts, this idea of the utopian society, the piety myth, which is one we’re talking about today. It’s the focusing of our good intentions, rather than focusing on the consequences or the unintended consequences of our actions. Let me give one example here, before we jump into it, so the piety myth would be like, well, if a plane is about to, if both pilots have become unconscious, and you need someone to fly the plane, I have no flying experience. So you would, despite my good intention to help land the plane, the fact that I lack knowledge in this area means you should not have me try to land the plane, you need to find someone who is perhaps more experienced, even if at first they are unwilling. Because if they are more experienced and more knowledgeable, then that’s going to be better, that’s going to have a better outcome for everybody. So we’re gonna look at a few economic theories and a little bit about how the piety myth, it’s a very popular one that people buy into.
Kurt: Another one I’m hoping we’ll talk about today is the zero sum game myth, believing that trade requires a winner and a loser. Now, there are some presidential candidates that have in history past perhaps present today, talk about how we’re getting bad deals, and we’re losing on deals. Now, that may be the case. But is that inherent to capitalism? Is it inherent? I don’t think it is. And I’m going to talk about why the materialists myth, believing that wealth isn’t created, it’s simply transferred. So this, this is related to the zero sum game that well, some pieces of the pie, which is an often an analogy used about a pie represents wealth, some people get a bite of the pie more than others. And you can’t create more pie. There’s only so so few pie left. And so if you want to give people pie, you’re transferring it over, you’re not creating anything. The greed myth, this is one we’re definitely talking about today, the belief that capitalism is inherently greedy, that people are greedy. We’ve got three more here, the usury myth, believing that the working with money is inherently immoral. So even just any money any currency, it’s immoral, can’t touch it. The artsy myth is confusing aesthetic judgments with economic arguments, we won’t be looking at that one today. And the freestream myth, which also we won’t be looking at believing that things always stay the same. For example, assuming that population trends will continue indefinitely, or treating, for example, that oil is going to run out eventually, and then we’re never going to be able to get around again. So that’s a myth as well just briefly, people adapt societies adapt the price of oil due to the lack of goods would increase. This is supply and demand. And when it increases so much, then our society our entrepreneurs and investors will come up with an alternative way. And we are already doing that, right with electric cars, for instance, that’s an alternative means of travel. Now it’s a different means of travel because the battery eventually runs out But this is where we see the market moving. And also other forms. So there’s like, hydrogen is one form of fuel energy that we’re trying to come up with.
Kurt: So okay, so those are the eight myths and these come from, from the book by Jay Wesley Richards, money, greed and God, why capitalism is the solution and not the problem. So, we’re going to be looking at a few of those. But before we do that, we’re going to take a short break from some of our sponsors. And if you want to call in if you’ve got a question, or a comment about economic theory here, if you disagree with my interpretation, that I’ve briefly presented to you about what the Scripture says, Give us a call. So the number is 505. To strive, that’s 505-278-7483.
Kurt: Well, thanks for sticking with us through that break. Before the first half of the show, I briefly presented to you some of the economic theories out there, and how some Christians interpret the scriptures in a certain way that I think is unwarranted from the text itself. And chiefly that some people are applying micro communal practice with macro economic, coercive practice by the government. That is to say, Why should we apply a principle the way I act by myself when I do it of my own choice freely, versus the government mandating everybody to do something. So I want to make mention for you, if this is the first time you’re listening to the show, we do a Facebook Live. And I appreciate the comments and questions that I get from from there. And the feedback that I get, we’ve had some technical difficulties, putting the audio stream in there. So we’ve, we’ve taken that out for this show. But we’ll keep working on that. So thanks for your patience with us. For those that are watching live. I also want to make known here that we’re going to be opening up a text messaging plan. If you’re a listener, and you want to engage, if maybe you’re a bit more timid, and you don’t want to call into the show, if you want to send me a text message. So here’s how you’re going to do it. All you have to do is text the word veracity to 555888. And I’ll start getting your text messages. And what I’ll do is I might send out a text once a week maybe, and let you know just what the show is going to be about. And that’ll give you a heads up for, you know, some questions or comments that you may have. And it’s really easy, then all you do is you reply to that text message with your questions or comments, and I’ll see them and then I’ll talk about them on the show. So if that interests you go ahead and text the word veracity, VERACITY, to the number is 555888. And then we’ll get you going here and in the texting plan that we have. So previously, we had that open up to some of our patrons from our website. But we decided in order to generate a little bit more of the conversation for to just open this up to any listener that wants to participate. So I hope to hear from you. Okay, so we’re talking about these economic myths. And eventually I want to bring in Chris here and maybe John if you’ve got any thoughts on some of these myths, so first I want to talk about the piety myth. So there’s really three that I want to talk about the piety myth, zero sum game and greed. So the piety myth is well labeled here by Dr. Richards, that people have these good intentions. But that good intentions don’t always lead to good policy.
Kurt: Right. So with that, I can think of a few examples here. One of the biggest ones that I can think of is LBJ’s war on poverty. So President Johnson started what has commonly been called this war on poverty, which is really a lot of federal redistribution of wealth. And when I say redistribution of wealth, let me clarify, when we talk about how wealth is created in a society. This is done through investment and entrepreneurial, the entrepreneurial spirit exploring ways to see how people might be willing to spend their money on certain goods, or services. So for example, let’s take Tesla, Tesla has created these electric cars, they are luxurious, they have massive lithium ion batteries, more so than other popular cars. So that way, the range on the vehicle can go like 200 plus miles. Now, this car is not made for the masses, but it’s made for the wealthy. I mean, it’s marketed I should say, toward the wealthy people that have a lot of money, and they buy the Tesla’s because it’s a nice ride. And, you know, there may be conscience, that they are worried about the climate, you know, so they think, Hey, this is renewable. So So Tesla here, has, has created a product a good that some people are willing to pay their money for. And this is how then wealth is created, because then Tesla has that money. And we can Elon Musk, who runs that company can use that money to pay his employees, but to also invest in future projects, which he think will also bring in more wealth. So that’s how wealth is created. And John here has a thought by bringing up Tesla. So what’s your thinking here, John.
John: With Tesla’s, you’re absolutely right, how he’s bringing in more, you know, income doing more things. But it’s also going to help a wider range of people, not just the wealthy, they’re coming out with future cars that are going to be in around the $30,000 range,
John: But he did that by starting off marketing to a smaller amount, but because of his success, it will benefit people who may not have been able to afford the higher end models, but now going to the more affordable models as well. So I think that’s really good and important to know as well.
Kurt: Yeah. Well, and maybe he, maybe he had to sort of market the wealthy first in order to get that money to then use for those more affordable projects, because he couldn’t yet explore how he can make it cheaper. So maybe that’s a possibility. But no, you’re absolutely right. Yeah. So the larger benefit, the long term benefit, shall we say, is that Tesla that Musk is hoping for to benefit a broader audience
John: Technology, as it gets perfected. It’s also becomes more affordable.
Kurt: Yep. Yep. We’ve got a comment here from Spreaker, just from Jonathan saying, Hi, thanks for listening. And, Jonathan, if you’ve got a comment or question, let us know or even give us a call. Okay, so Tesla there, has, has put up a good product. So let’s get back on track here. So so that’s when I talked about redistricting, when I talk about the creation of wealth, Tesla is creating wealth. By providing that good, you might also think of a service of a business that provides a service to you as opposed to a good now, what the government does, the government does not create wealth. The government takes the wealth from people through taxation, and then uses that money for various services or goods themselves, say like the military, right? You need the money there to buy certain weapons, right. So those are goods. Now, I’m not saying at this point, I’m not saying that that’s necessarily bad or good, right. We’re not talking about whether the welfare projects are a worthwhile venture. At this stage. I’m just saying that the government does not create wealth, it has to take or redistribute wealth, that’s really crucial to understanding the wealth of a nation. So getting back to the piety myth here, these well into mentioned, policies may have very unintended consequences. And so , I can think of a few here.
Kurt: One of these is, are what ultimately create rent shortages. So when you put a cap on rent in any neighborhood, and sometimes, you know, this isn’t the federal government, but it might just be a local government, when it puts a cap on how much someone can charge for rent. This creates a problem in the society in the in the micro society, because then the homeowner, and landlord may not have enough money to keep up the property. And so then the property loses value, right, because the homeowner, or the property manager, right, they have expenses that they have to cover. When you buy a house, you have a mortgage to pay. And so suppose someone has bought a second property as an investment, in order to try to make money, they’ve taken that risk by spending their own money. And then to cap off how much they can charge for rent means that they may not even have enough to pay their own mortgage. So that’s a real problem. That is created by a well intentioned policy, right, the Well, the good intention is, hey, we need to help out poor people. So let’s make rent more affordable for them. So that’s a bad, that’s a bad policy, because it creates a bad consequence. Now, I even though I tend to view myself as an idealist, I like to think of how we can best serve society, I want to also be practical. So even though I’m going to propose here, some, some of the problem is I also want to provide solutions. So now this isn’t a solution that I would necessarily agree with. But if there were a local government that wanted to provide a benefit to poor people, so that they could afford rent more. In this case, I would not say cap off the price of rent, but rather maybe provide a small fund for people in the neighborhood to have. And that way, the homeowner won’t take the loss.
Kurt: Now, we need to be really careful with this, because then all of a sudden, we find that homeowners might be benefiting from government welfare. And so you also get this problem, because you have wealthy people that are benefiting from government programs, because they know, and it creates a bubble effect. So what will happen in that scenario that I’ve even suggested here is that well, a bubble would would occur, because when the homeowners recognize that a government would, would provide money itself to cover rent, or at least partially rents gonna go up, because all of a sudden, the market has changed? Oh, well, I can get more from this, because the government would just give more. So let me transition this to a real life example. Well, there have been a couple of real life examples.
Kurt: One has been the housing market. This is exactly what happened with the housing market, where the government would give out what were famously called, or infamously called ninja loans, no income, no job or asset, Ninja, no income, no job or assets, they would give out these ninja loans. And now it’s not the government giving out the loans, but it’s the government sponsoring and backing financial institutions that would give out these loans. And the government said, hey, if these loans fail, we’ll cover you will bail you out. And that’s exactly what happened. A lot of people in this great nation were unable to pay their mortgages, which they wouldn’t have had otherwise. And so they themselves wouldn’t have been put in this predicament had the government not incentivized that from happening. So incentives are crucial to understanding economic theory, because you got to know well, what motivates someone. What’s an incentive? So the housing crash was a result of the piety myth, everybody should own a home.
Kurt: We heard presidents talk about this, everybody should we need to, you know, make it affordable. And despite being well intentioned, there’s a really bad consequence. Now, here’s another example that hasn’t yet happened, but it will the education bubble. Everybody should go to college. And if you can’t afford it, we’re going to provide government student loans, federal financial aid, right? Here is one of the problems with that. When you do that, then universities realize, hey, we can charge students more because they’re willing to take on more debt because the government is willing to give them more. So now you’ve created an education bubble where the cost of education is now too high and eventually It’s gonna pop. And what will happen, then? Well, then universities are going to have to layoff employees, students aren’t going to be able to afford education anymore, they’re gonna stop going. So that’s less money. So you’re just going to create a havoc upon that industry education industry. And that’s a big problem that stems from the piety myth, this idea that, well, we can have good intentions. But we need to really recognize here, the bad consequences that result from them.
Kurt: Okay, so we’ve got to move along here. So that’s briefly the piety myth. And so I hope is this, if this is the first time you’re really thinking about economics, I hope that maybe you’ll consider when you hear political speeches, when you read articles about politics, pay attention, look, look for that, piety myth, look for that idea that we have to be holy in our policy, with a disregard for the outcome. Now, there’s a concept here of virtue called prudence. This is what we need, we need to be prudent, we need to be wise stewards. We don’t just need to be holy in the intentions that we have, we have to be wise the Scripture talks about that as well. Let me move along here to the piety myth. So to the zero sum game myth, believing that in trade, there are winners and losers. We all have played a board game. And board games or sports games are win lose scenarios. Sometimes, usually there’s a winner. And often times there are more losers than winners, sometimes, in rare cases, there are ties. The Chicago Cubs did have a tie against the Pittsburgh Pirates earlier this year. But the concern here with capitalism is that well, the rich get richer, while the poor get poor, the poor are losing, and the rich are winning. And that’s a problem in our society, and capitalism is the problem. Here’s the issue with that. As you’ll see, when the wealth of a nation grows, even the poorest of people benefit. This is why when we talk about poverty in America today, we are often not talking about abject absolute poverty. Sometimes maybe we are, but often we are not.
Kurt: And what I mean by abject absolute poverty, is that people do not have food, shelter or clothing, these absolute needs. Oftentimes, we’re talking about relative poverty, because even poor people today have cell phones, they have refrigerators, they have televisions, and perhaps internet access. How did all of these things come about? Well, the only way that the masses of society have these things is because of capitalism. And so even in that society, the poorest of the poor benefit, everybody is lifted out, when a society builds wealth in its in its nation. So capitalism is not a win lose, but it’s a win win. Everybody wins from the exchange of goods. If I give you three eggs for two cobs of corn, I want those cobs of corn, that’s a win for me, and it’s a win for you to get those three eggs. You’d rather get those three eggs than not get those three eggs, perhaps because you’ve got a two and a half year old at home, like I do that likes eating eggs. So capitalism is a win win. Now, sometimes some people win more than others. Okay? When you are a doctor, when you’re a neurosurgeon, you’ve got to go to school for many years, and you’re going to be paid a lot of money, because you’re an expert at something that has a lot of demand. When you mow lawns, for a living, you are not going to make as much money as a neurosurgeon. So in the first year, but let me give a hypothetical here. And I think this is really important, because a lot of people talk about the wage gap increasing, right? The wealth gap increasing.
Kurt: So suppose you make $100 in a year, maybe you’re a little kid raking leaves or something. And suppose there’s an old little kid that has a lemonade stand, right? And that little kid only has $20 from the summers service. So you’ve got kid A: 100 bucks. Kid B: 20 bucks, they do the same things. And now that the gap there is $80 They do the same things. Next year. And this time, kid A makes $120 and Kid B makes $25 So what was it 120? Let’s just say 125 and 25. So each kid increases. Right? For kid b It was he made five bucks more than the previous year for kid A it was 25 bucks more. Now, what’s the difference between their total wealth? Well, it’s increased now, hasn’t it? Right, it’s gone from 80 to whatever is now 100 And if you even add that up over the two years now it’s 180. So the the wealth gap hasn’t increased. So, but we need to ask ourselves, has Kid B lost? No, he still wins. And that’s why he did it again. That’s why he did the lemonade stand a second year in a row. So here, you’ll note that even if the wealth gap is increasing, that doesn’t necessarily mean the poor getting poor, it doesn’t mean people are losing.
Kurt: So if we are going to complain about how the wealthy are getting richer, you need to do it better. You need to argue, relatively speaking, the wealth, the wealthy are getting wealthier, at a disproportionate a vastly disproportionate rate than the other people are getting wealthy. That’s a more accurate statement, then the rich are getting richer, while the poor are getting poor. The poor are not getting poor in this nation. They’re getting richer over time over the long run. We cannot be short sighted and sometimes we are. David here writes, capitalism isn’t the problem. Capitalism, unrestrained by moral practices is? Well, to that. David, I want to say that it depends on what you mean by moral practices. In my view, I believe that the government hinders the wealth from being created in us in a society. When it taxes people, it takes away from the wealth that they might have, that they could invest to create jobs, to save up, which the banks then use to give out for investments to either business owners or for people to get a car or a home. So it really is a preventative. And if I can use a term, and I don’t mean to be politically incorrect here, but the government acts as an economic retardant, to wealth, it slows wealth down from being created.
Kurt: Jonathan here writes, that’s not winning more, it’s more that they are being paid relative to their skill. Well, I think that’s right, he continues to the people I do not like are those that become more rich only because they are already rich, not through any inherent skill that they have? Well, Jonathan, what I would say to that is, what do they do with money, the money just doesn’t sit under their mattresses. It’s invested. And when it’s invested, it creates jobs one way or another, right? Whether the people are creating the business themselves, or like I had mentioned, they give it to a bank, they save it up, they put it in various types of accounts that might make different, more money than others. So that’s how they’re creating their wealth. So for example, Warren Buffett does it from the stock market, because he’s creating wealth in his in his properties in the companies that he owns. So when the rich are getting richer, not because they’re doing hard labor, it’s because they’re willing to risk their money, they might lose their money. Now, you might think, well, when people lose their money, you’re losing in capitalism. Not so what happens when a business owner is, or someone who’s trying to build a business loses his investment. In fact, I thought something like eight out of 10 small businesses ultimately fail. That’s the fact that I’ve heard the statistic. Well, when business owners or investors lose that money, it still benefits society. Because where does that money go?
Kurt: Well, suppose for example, that you need a logo made for your company. So you pay an artist to design a logo. So you’ve just paid the designer, the artists to do work for you. So that money still goes into the marketplace, and it’s still a benefit to other people, because you are employing I mean, maybe not a part timer, but you’re you’re paying another company, which has employees do work. So that money is still beneficial, still beneficial. Mikayla writes here, some money may sit under some mattresses, well, that might be the case. Even my grandfather who lived through the Great Depression, actually, when he passed away, my folks discovered money laying around. So that might be the case for some people, but that money laying under the mattress or the couch or what have you, is not benefiting anybody by sitting there. Right? That currency would better benefit people if it were invested in some way, even if it were just in the bank than the bank could use it. So that’s why, when getting back here to the zero sum game myth, wealth is created in a society. It is not a win or lose. Everybody can win. So this is why when you talk about there’s oftentimes and back in the 90s, during the Bush Gore debates I recall the debate about the pie, maybe it was the Kerry run, there was talk about the pie growing. So in a society wealth is not just a pie that’s done being baked. It’s a pie that’s growing, it increases, everybody can get a piece of the pie. So that’s the beauty of capitalism. Now, let me get to greed here. And I want to play for you a clip. Just an excellent clip. From the Phil Donahue show, he invited the economist Milton Friedman. He’s one of my favorite economists. And here, he’s going to talk about what greed is about and whether or not greed is inherent to a capitalistic society.
Kurt: So there we have Milton Friedman, who is talking to Phil Donahue. And Donahue comes from this typical line, well, isn’t capitalism greedy? And Friedman says, well, well, who isn’t greedy? I mean, you think these communist countries aren’t greedy? Of course, greedy people are everywhere. Right? They’re everywhere in every society. Really, you don’t think there’s greedy people in the socialist countries. And in fact, the greedy people in the socialistic societies are ones that are cozy with the government. This is corporatism. And guess what guys, that’s what we have today. That’s what we have today. We’re various organizations that are buddy, buddy with those in Washington, get these pet projects, they get these government contracts, they get these donations, some nonprofit organizations, get them and others don’t. So, you know, greed is everywhere, guys, and there is no country where there isn’t. And so Friedman concludes what he’s saying here, he says, I wouldn’t even trust you to organize religion, to organize the economy. And it’s these were these angels, that you you supposedly think are here that are organizing society. So it’s really fascinating hear that people think, well, capitalism is greedy. But but really, any society is greedy. And so that’s, that’s a big problem here for people that affirm this myth, because they just don’t realize what greets everywhere. Now, the question really is well is is capitalism based on greed?
Kurt: Well, let me say even if it is even if it were based on greed, it capitalism is the best economic vehicle for harnessing that greed. Because it will take the greedy person’s motivation for money and use it for other people’s benefit. Because what would be required is that he benefits he would provide jobs for people, right, that he would invest in risk. on money, he would pay other people to, to build these goods that he might then sell wholesale. And so really, the greedy person still helps out the economy. Okay, now, let me let me close with this thought here. Capitalism is not about greed. It’s about self interest. Maybe there are greedy people in our society. Of course, there are there are greedy people everywhere. But capitalism is about self interest. So let me quote here from Adam Smith’s Wealth of Nations, he writes, but man has almost constant occasion for the help of his brethren. And it is in vain for him to expect it from their benevolence only, he will be more likely to prevail, if he can interest their self love in his favor, and show them that it is for their own advantage to do for Him what He requires of them. Whoever offers to another a bargain of any kind, proposes to do this, give me that which I want, and you shall have which this which you want, is the meaning of every such offer. And it is in this manner that we obtained from one another, the far greater part of those good offices, which we stand in need of 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.
Kurt: Really, capitalism is about self interest, hey, we want to have a house, hey, we have a we want to have a car? Well, what do you do to get it? What do you do to have that lifestyle because you in your opinion, that lifestyle is more advantageous than one where say you’re just renting a home instead of owning, or where instead of taking the bus, you want to commute in your car that’s more advantageous to you, some people might have different preferences. And that’s also key. When we’re talking about capitalism. Unfortunately, we don’t have time to get into that myth today. But, but that people’s preferences can be relative in a society. And in that sense, wealth itself is relative, what someone values an object and iPhone varies. And so that’s also why a government shouldn’t put price caps on products, because like with Tesla, you might get wealthy people buying those cars, you’re not gonna get poor people buying those cars. And the only way that they can that Tesla can make it is if they sell it at that price, because that’s the cost of the services to build the car and the cost for the goods to build the car. So yeah, so that’s, that’s another myth, which maybe we’ll get into if we do an episode like this again. So there we were able to cover three myths there, the piety myth, the zero sum game myth, and the greedy myth, the piety myth was the the having suppose it good, good intentions, the well intentioned, but poor outcome, the bad policy as a result of that, that’s the piety myth that occurs, you have this zero sum game myth, that well, wealth in a society is limited. And so there are the haves and the have nots. And there are winners and losers. That’s not the case. Well, capitalism is a win win society for everyone, even the poorest of the poor.
Kurt: And then lastly, the greed myth. Simply put, capitalism is not based on greed, but self interest. And there may be greedy people in our society, as there are in all societies. But at the very least, capitalism harnesses the greed, it’s the best economic system for doing so. It harnesses that greed and, and uses it for other people’s benefit. So I hope that you’ve enjoyed this episode. And the first half, we covered the biblical basis, the interpretation of verses that supposedly support socialism as an economic theory, but explain how that wasn’t the case. And people in the scriptures did things freely, instead of being coerced into it, and that’s different than the socialistic policy. And then in the second half year, we looked at these myths out of Jay Wesley Richards, good book, money, greed and God, why capitalism is the solution and not the problem. If you’ve never read any book on economics, I would highly recommend this book. It’s a very popular level, easy to understand read. If you have had no background in economic theory. It’s really great, easy to read too. So pick it up if you can. That does it for our show today. I want to thank our sponsors who have been strong in their support of the work that we’re doing here. Defenders media consult, Kevin, the sky floor rethinking hell, Illinois Family Institute, and evolution 2.0 and also a big thanks to our patrons out there. Our patrons, our people Will that just chip in a couple of bucks a month, maybe five, maybe $10 a month to support the ministry that we’re doing here at Veracity Hill. And then thanks to the the tech team today. So we’ve got Chris and John here. Thanks for their help today as well and for their comments. And I want to thank you again, for listening in, and for striving for truth on faith, politics and society.