Money, Greed, and God: The Christian Case for Free Enterprise

By Jay W. Richards

A prominent scholar reveals the surprising ways that capitalism is actually the best way to follow Jesus’s mandates to alleviate poverty and protect our earth.

Christianity generally sees capitalism as either bad because it causes much of the world’s suffering, or good because God wants you to prosper and be rich. But there is a large, growing audience of evangelical and mainline Christians who are deeply uneasy about how to follow Jesus’s mandate to care for the poor and the environment while living with the excesses of capitalism.

Now, a noted Christian scholar argues that there is a middle view that reveals Christianity cannot only accommodate capitalism, but Christian theology can help explain why capitalism works. By highlighting the most common myths committed by Christians when thinking about economics, such as “capitalism is based on greed and over consumption” or “if someone becomes rich that automatically means someone else will become poor,” Money, Guilt, and God equips readers to take practical steps in their own lives to conduct business, worship God, and serve others without falling into the “prosperity gospel” trap.

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Jun 4, 2019
• ISBN: 9780062841018

Book preview

Dedication

To Gillian and Ellie

Contents

Cover

Title Page

Dedication

List of Figures and Tables

A Note on the 10th Anniversary Edition

Introduction: Can a Christian Embrace Free Enterprise?

Can’t We Build a Just Society?

Myth No. 1: The Nirvana Myth

What Would Jesus Do?

Myth No. 2: The Piety Myth

Doesn’t the Free Market Foster Unfair Competition?

Myth No. 3: The Zero–Sum Game Myth

If I Become Rich, Won’t Someone Else Become Poor?

Myth No. 4: The Materialist Myth

Isn’t the Free Market Based on Greed?

Myth No. 5: The Greed Myth

Hasn’t Christianity Always Opposed Free Markets?

Myth No. 6: The Usury Myth

Doesn’t the Free Market Lead to an Ugly Consumerist Culture?

Myth No. 7: The Artsy Myth

Are We Going to Use Up All the Resources?

Myth No. 8: The Freeze-Frame Myth

Conclusion: Working All Things Together for Good

Acknowledgments

Appendix: Is the Spontaneous Order of the Market Evidence of a Universe Without Purpose?

Further Reading

Notes

Index

About the Author

Copyright

About the Publisher

List of Figures and Tables

FIGURES

Figure 1: Federal Spending, 1789–2007

Figure 2: Correlation of Legal Property Protection and GDP per Capita

Figure 3: Moore’s Law: The Fifth Paradigm

TABLES

Table 1: Citizen Deaths by Communist Regimes in the Twentieth Century: A Minimum Tally

Table 2: Expenditures for Food, 2004: Comparisons by Country

Table 3: Countries with the Highest per Capita Wealth, 2000

Table 4: Countries with the Lowest per Capita Wealth, 2000

A Note on the 10th Anniversary Edition

I TURNED IN THE MANUSCRIPT for the first edition of this book on New Year’s Eve 2007. It was not released until May 2009. And during that lag time, something happened that made the book both timely and controversial: the 2008 financial crisis. Following the crisis, millions of people blamed the economic system that had given us so much prosperity. My book—a defense of free enterprise—dropped into the middle of the maelstrom.

As an author, the timing couldn’t have been better. But Money, Greed, and God was not a response to the financial crisis. I had written the book for another reason: I had started to worry about the growing fondness among Christians for socialist ideas that I hoped had died with the Soviet Union.

In the 1990s, almost everyone left, right, and center acknowledged that economic freedom was vastly better than the alternatives. But things started to change after the dot-com bubble burst in the late 90s. Christians and other people of conscience started asking: Aren’t greed, injustice, inequality, and materialism the poison fruits of the capitalist tree? Should Christians really support such a system?

These are all fair questions, and they deserved real answers. But I noticed that those who asked them were often deeply confused about basic economics. As a result, they didn’t really even understand the problems well enough to frame good questions. My book, then, set out to separate the chaff from the wheat. That is, to address the honest moral concerns while exposing the myths that prevent Christians from thinking clearly about the economy.

Little did I know that ten years later, even in a booming economy with record low unemployment, these ideas would still be vigorously debated, the myths still perpetuated, and this book still not only needed but read.

If anything, the problem is now much more acute. A decade ago, hostility to free enterprise was mostly confined to the political left. It’s now almost as fashionable on the right as on the left. And, unlike 2009, there are now prominent elected officials and Christians who embrace not just the substance of socialism, but the label itself.

When I first wrote Money, Greed, and God, I thought I was responding to a current but temporary trend. Unfortunately, infatuation with socialism isn’t going away any time soon. As a result, the books arguments seem to be evergreen. So, for this tenth anniversary edition, I’ve tweaked some arguments and made some updates, especially involving statistics, references, and examples; and I’ve added more explanation where I thought it was needed; but I’ve changed little of the basic structure and arguments. There are no new arguments against free enterprise. Only old myths and mistakes that prevent us from thinking clearly about wealth, poverty, and markets. My hope is that this new edition will continue to edify readers, and that a greater grasp of the facts will help us see what’s truly broken in our culture and find truly helpful ways to fix it.

Introduction: Can a Christian Embrace Free Enterprise?

IN THE GREAT TWENTIETH-CENTURY BATTLE between communism and capitalism, capitalism won. But many of us still have serious problems with capitalism. Or at least what we think it to be.

Just turn on the TV and you’ll see capitalism blamed for almost every social problem. The Justice Department charges big banks like Citigroup and JPMorgan Chase for trying to manipulate exchange markets. Volkswagen is caught fudging emissions performance on their cars. A health-care company, Theranos, lies through its teeth to investors and the world about its flagship product. Apple slows down older iPhones so users will upgrade. Facebook purloins and sells private user data. Drug companies jack up prices on life-saving devices. Oil companies despoil waterways and precious habitats, use up limited natural resources, and resist efforts to find alternative sources of energy. A few lucky people get fabulously wealthy while grinding poverty persists, not just in third-world countries, but in great American cities. As one critic put it: The history of capitalism is a history of slavery, child labor, war, and environmental pollution.

Even if we write all of this off as media bias and bad philosophy, there’s still what we see every day: pressure from bosses and stockholders to increase profits at any cost. The frantic race to keep up with the Joneses that never seems to stop. Factories close and leave whole towns high and dry. Garish billboards spoil cityscapes and landscapes. Advertising companies find ever trickier ways to lure us to the mall and the internet to buy kitschy plastic stuff we don’t need, that nobody needs. Landfills piled high with computer monitors and keyboards that still work. You don’t have to be a socialist to find all of this distasteful.

Add to the bad press and our everyday experience the views of some champions of capitalism. More than two hundred years ago, the founder of modern economics, Adam Smith, said, 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. That’s not repugnant, but it’s not uplifting, either. More recently, the atheist Ayn Rand, revered by millions as the greatest defender of capitalism, seemed to take Smith’s reasoning to the extreme. She claimed that greed—which she called a virtue—is the basis for a free economy. Christian altruism, in contrast, is capitalism’s bitter enemy.

Rand’s philosophy reached a high-water mark in 1986, when investor Ivan Boesky told graduates at the University of California at Berkeley in a commencement speech: Greed is all right, by the way . . . I think greed is healthy. You can be greedy and still feel good about yourself. If Rand and her disciples like Boesky are right, this creates a big problem for Christians in capitalist societies.

Yet, as a practical matter, we take free markets for granted. We live and breathe them every day. We own cars and furniture. We work for and own businesses. We try to get the best salary we can. We take out mortgages to finance our houses and pay interest on the loan every month. We use Visa, MasterCard, and American Express. On eBay, we sell to the highest bidder, and we seek the best deal when we’re bidding on a home gym or that latest Hummel figurine we simply must have. We may even own ExxonMobil stock and Vanguard mutual funds. It’s hard to imagine an alternative.

We see capitalism denounced on TV and in newsprint, of course; but we also hear the same in churches and Bible study groups. Churchgoing businesspeople endure sermons that show little knowledge of business. Many thoughtful Christians suffer pangs of doubt. Or they feel guilty when their lives contradict what they hear from the pulpit. Few have ever heard a homily that dignifies business as a calling. Few have heard their pastor or priest extol the virtues of the free market for spreading prosperity and reducing poverty. Most assume that they just have to live with the tension.

Of course, there is the opportunistic name it and claim it prosperity gospel, whose evangelists preach that God wants everyone to be rich, RICH, RICH. But this view remains the exception rather than the rule. And it’s an exception that makes it all the easier for most Christian intellectuals to hold capitalism at arm’s length or even reject it. The popular 2005 book by evangelical Jim Wallis, God’s Politics: Why the Right Gets It Wrong and the Left Doesn’t Get It, is one example. While Wallis admits that the market economy is efficient and perhaps unavoidable, he nevertheless attacks it on moral and biblical grounds. More and more Christians share his views.

I used to be one of them. In fact, for a while I denounced capitalism and all of its works. As a young college student in the 1980s, I struggled with the conflict between Christ’s ample warnings about money and the rank materialism of American life. When I read the Bible, it seemed to brim with passages designed to make the capitalist squirm:

You cannot serve both God and mammon, Jesus said. Well, then, I thought, where does that leave the almighty dollar?

It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven. Well, then, judging by historical standards, most of the American middle and upper classes probably won’t get to heaven.

Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also. That seems to scotch all those well-laid plans to invest and save for the future.

The love of money is the root of all evil. But isn’t capitalism based on the love of money?

These interpretations seemed right at the time. As a college freshman in 1985—before the full results were in from the Soviet Union—I had a vaguely Christian and sophomoric infatuation with Marxism. When I learned about the many problems with Marxism, I moved on to democratic socialism. That sounded much nicer. The more serious I became as a Christian and as a student of economics, however, the more I came to believe that a free-market economy was practically if not morally superior. This is where many thoughtful Christians end up. But after several years of graduate school and still more struggle, I discovered that I could embrace and even defend the free economy on both practical and moral grounds.

Sure, if every bad thing we’re led to believe about the free market were true, I would join the critics at the front of the line. But the problems we hear about, the ones that shape how we see the economy, are not the whole story. They’re not even the real story. Free enterprise will not usher in a utopia, of course. We’re all sinners, even in the best of circumstances. Get a bunch of us together, and there’s bound to be plenty of sin all around. But many Christians confuse a caricature of capitalism with the real thing. To make matters worse, we often make serious mistakes when we turn our attention to economics.

If we want to know the truth, though, if we want to order our economic and social lives justly, if we want to help people rather than merely feel like we’re helping people, we have to learn the economic terrain. Rich Karlgaard, the Christian publisher of Forbes magazine, has complained that listening to a pastor or priest preach on business is like hearing a eunuch lecture on sex: He may have studied the topic but really knows little about the mechanics.¹ Why is that? No serious Christian writing about natural science would ignore the basic facts of chemistry or astronomy. But too many Christian leaders feel free to ignore the basic truths of economics. This is a huge mistake. Economics is not just a bundle of baseless opinions. The twentieth century was one big lab experiment for the economic theories of the eighteenth and nineteenth centuries. The results of that experiment are in. It’s time for Christians to take an honest look at the economic facts and get acquainted with capitalism.

I Do Not Think That Word Means What You Think It Means

THE FIRST ORDER OF BUSINESS is to define terms.

Much of the trouble Christians have with capitalism is due to the word itself. It has a benign dictionary meaning, but who checks the dictionary? In real life, people use the word to refer to all sorts of things—mostly bad. That’s been true from the beginning. Like Quaker and Big Bang, it’s a label coined by its critics. Karl Marx used capitalism to describe a system that oppressed and alienated workers and predicted that it would self-destruct and give rise to socialism. In fact, he misunderstood it in almost all of its details. But the name he used for it stuck.

The very fact that it has ism at the end means people are bound to view it as an ideology—and a bad one at that. When many people hear capitalism, they think of that tuxedo-clad guy from the Monopoly game. (His name, by the way, is Uncle Pennybags.) You might say the word has a lot of, well, baggage. Europeans often use it as a synonym for greed or materialism. And many just use it to refer to whatever bad thing is happening in society.

What picture enters your mind when you hear the word? How about terms like global capitalism or just capitalist? Spend some time letting the images come into your mind. Reflect on them—because otherwise you won’t be able to separate the images from the reality. Whatever ideas and mental pictures you attach to these terms, you’ll need to set them aside to make any progress in understanding. Follow the advice of Oliver Wendell Holmes just this once: Think things, not words.

Don’t think of capitalism as a way to describe all of society. Don’t think of it as a worldview or ideology or political theory. Think of it as an economic system with certain institutions, habits, beliefs, and rules. A healthy capitalist economy is one that has clear private property laws, a stable rule of law, limited government, institutions that allow for credit and investment, and reasonably free markets. That means slavery and theft are banned, and price controls and production quotas are rare.

It also includes how people think and act. Do they save, invest, and plan for the future, or hide, deny, or consume any surplus they have left over? Do they think trade and commerce are good or bad? Do they see all gain as ill-gotten, or do they believe financial success can be wholesome? In capitalist economies many people save and invest; engage in trade, commerce, and banking; and pursue profit-making enterprises. And the wider culture supports them in doing so.

Michael Novak called all of this the spirit of democratic capitalism.²

Like Novak, I used to spend time trying to reclaim the word capitalism. Given its baggage and history, though, I now avoid it when I can. That’s why, in the following pages, I often refer to free enterprise, the market economy, the free market, or economic freedom, depending on context. When I do use capitalism, remember that I’m referring to a system with the features listed above. I’m not endorsing Marx’s definition or the bad mental images you may connect to the word.

The Fuzz and the Fog

OUR NEXT ORDER OF BUSINESS is to clear out the fuzz and fog in our minds. This is hard, since it means we have to do more than worry or care deeply. We have to think. Here’s the good news. We don’t need to study supply-and-demand charts and complicated statistics to do that. At its base, economics is about us—what we choose, what we value, what we represent in language and symbols, how we interact with each other in a market, and especially how we produce, exchange, and distribute goods, services, risk, wealth, and information. Understand these things, and you’re well on your way to knowing what you need to know about economics.

If you think about these matters at all, you’ve likely asked questions like these (no doubt using the problem word capitalism):

Can’t we build a just society?

What does God require of us as Christians?

Doesn’t capitalism foster unfair competition?

If I become rich, won’t someone else become poor?

Isn’t capitalism based on greed?

Has Christianity ever really embraced capitalism?

Doesn’t capitalism lead to an ugly consumerist culture?

Do we take more than our fair share? That is, isn’t our modern lifestyle causing us to use up all the natural resources?

These are all good questions. To answer them correctly, though, we have to separate them from common economic mistakes that easily creep into our thinking.

Fortunately, almost every mistake that Christians make in economics can be boiled down to eight simple myths. I know them well, since they once distorted my own thinking:

The Nirvana Myth (contrasting free enterprise with an unrealizable ideal rather than with its live alternatives)

The Piety Myth (focusing on our good intentions rather than on the unintended consequences of our actions)

The Zero–Sum Game Myth (believing that trade requires a winner and a loser)

The Materialist Myth (believing that wealth isn’t created, it’s simply transferred)

The Greed Myth (believing that the essence of free enterprise is greed)

The Usury Myth (believing that working with money is inherently immoral or that charging interest on money is always exploitative)

The Artsy Myth (confusing aesthetic judgments with economic arguments)

The Freeze-Frame Myth (believing that things always stay the same—for example, assuming that population trends will continue indefinitely, or treating a current natural resource as if it will always be needed)

These myths are easy to expose in the abstract; but they’re equally easy to believe anyway. Learn to spot them, though, and you’ll be immunized against a lot of economic folderol, even if you never take a course in economics.

Next, we have to think about these issues as Christians. The great Dutch statesman and theologian Abraham Kuyper once said that there is not a square inch in the whole domain of our human existence over which Christ, who is Sovereign over all, does not cry: ‘Mine!’ This holds for economics as well. Thinking as a Christian doesn’t mean we just slap a Bible verse on a policy or quote a pope or other church authority to justify it. It means we use the core truths of the faith as a lens to explore new territory. Not everything of economic interest is studied by, or even visible to, economics.

Economic truths are truths—whether we like them or not. Being a Christian doesn’t mean we can disregard them. At the same time, we should be eagle-eyed in sniffing out anti-Christian claims disguised as economics. Bad philosophy doesn’t become good by calling it economics.

Grasping economics doesn’t answer all the moral questions: Does Christian theology have anything to contribute to economics? Does capitalism fit with the Christian view of the world? And the big one: Is the system consistent with Christian morality? These are questions of theology and ethics, not economics. If a free-market economy contradicts either, that’s a big problem for Christians.

As it turns out, there’s no such contradiction. We suspect one only because many of free enterprise’s champions and critics miss the subtleties of the system: To prosper long term, an economy needs not just competition, but cooperation, rule of law, healthy cultural institutions such as churches and families, and virtues like cooperation, self-sacrifice, a commitment to delayed gratification, and a willingness to risk based on a future hope. These all fit nicely with the Christian faith.

There’s more. Despite what we’ve been told, the essence of the system is not greed. It’s not even competition, private property, or the pursuit of rational self-interest. These last three items, rightly defined, are key ingredients in any market economy; but the heart of free enterprise lies elsewhere. These economies work because they allow wealth to be created, rather than remaining a pie with a fixed size. Economies need not be zero-sum games in which someone wins only if someone else loses. Some of them allow human beings to create wealth in abundance. And only the creation of wealth can reduce poverty in the long run.

How is wealth created? Paradoxically, the key source of material wealth in a modern market economy is immaterial. It’s spiritual. When we can exercise our creative freedom, we can create new value, new wealth, for ourselves and others. This creative freedom should be no surprise to Christians. We believe that human beings are made in God’s image—the imago Dei. Our creative freedom reflects that divine image. This is one of the least appreciated truths of economics.

When we have all the facts before us, then we discover that Christianity and free enterprise are not bitter enemies. On the contrary, they are, or at least should be, friends. If you’re not yet convinced, keep reading.

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A POPE ON TWO MEANINGS OF CAPITALISM

"Can it perhaps be said that, after the failure of Communism, capitalism is the victorious social system, and that capitalism should be the goal of the countries now making efforts to rebuild their economy and society? Is this the model which ought to be proposed to the countries of the Third World which are searching for the path to true economic and civil progress?

The answer is obviously complex. If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy,’ ‘market economy’ or simply ‘free economy.’ But if by ‘capitalism’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative.

—Pope John Paul II, Centesimus Annus (1991)

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1

Can’t We Build a Just Society?

Myth No. 1: The Nirvana Myth

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The vicissitudes of history . . . have not dissuaded [leftist intellectuals] from their earnest search for a ‘third way’ between socialism and capitalism, namely, socialism.

—Richard John Neuhaus

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AS A YOUNG ADULT, I liked the rhetoric of revolution. It was more sophomoric rebellion than careful conclusion, but it was enough. In my silly eighteen-year-old mind, I imagined I had plenty to rebel against. I was born and raised in Amarillo, a place on the High Plains of the conservative Texas Panhandle so isolated we thought our town of 150,000 was a big city. It’s bounded on the west by the Cadillac Ranch—ten Cadillacs planted nose down in concrete, their tail fins neatly in a row. And to the east, there is the Big Texan Steakhouse, a restaurant where you can get a seventy-two-ounce steak free if you can eat it in one hour. In between are a bunch of great people and really big churches. In four blocks of downtown Amarillo, for instance, the First Baptist Church, the Central Church of Christ—where my best friend went—and St. Mary’s Catholic Church together claimed more than twelve thousand members.

In between these mega-parking-lot congregations sat our church, First Presbyterian. It was smaller and prettier than the others—quasi-Gothic architecture, gray stones, and red tile roof. The church is now quite evangelical. But at the time, it was a comfortable, mainline church that was neither liberal nor conservative.

Things changed when I entered junior high and came under the sway of a firebrand youth pastor. He was a divorced former Southern Baptist (then a core Presbyterian constituency in Texas) who had an uncanny knack for illustrating Bible stories with lyrics from the Beatles and Simon and Garfunkel. I wasn’t always sure if his lessons owed more to the Beatles or the Bible. In any case, they were easy to remember.

He was always railing against nuclear weapons, war, and the indifference of Christians to poverty. Whether Jesus died for our sins was less of a priority. In any case, he must have railed a lot against the evils of wealth, because I remember the Bible verses on those topics better than any others:

You cannot serve both God and mammon.

It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven.

Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.

The love of money is the root of all evil.

New thoughts entered my mind: Is it right that some should be so rich while others remain poor? Should hordes of people have to work in unsafe conditions, barely eking by on their meager pay, while their bosses grow fat and complacent? Wouldn’t it be better if everyone had as much as they want, or at least as much as they need? Shouldn’t we do whatever we must to get rid of such injustices? These questions bothered me. I wasn’t sure what we were supposed to do about poverty or nukes other than feel bad about them. But still, to a teenager in a conservative Texas town, this was heady stuff. My youth pastor offered me a rare gift: a chance to rebel against authority and feel self-righteous doing it.

Exit Stage Left

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"Marxism has not only failed to

Reviews for Money, Greed, and God

[grlopez-99457 · Rating: 4 out of 5 stars]

An excellent and simple explanation and demonstration of how and why capitalism in a free market is the best economic and political system in the world, which enables the private sector to own and create wealth for itself. Though dated (pub. 2009), nothing has changed!The message in this book is for Christians to see how God has His hand in this economic system, and that they should naturally reject the world's ignorant view that capitalism is greedy, encourages theft, and that Christians can't be capitalists. Unfortunately, many Christians have adopted this worldview and falsely think the world can offer a better method of wealth creation and the impact on poverty. Hopefully, Mr. Richards can change some minds...and hearts!!!

[skybalon · Rating: 4 out of 5 stars]

This book is a really good primer on capitalism that doesn't attempt to run from the standard criticisms. He also does a decent job of biblical exegesis that brings insight in what the Bible really says about economics. So it is a nice intersection. Recommended.

[chris_el-1 · Rating: 3 out of 5 stars]

Some thought provoking stuff on why capitalism works and a moral evaluation of the economic system and how/why it frequently gets poor press. Not an area of expertise for me and not sure I agree with everything but more often than not the author made sense.

[adewoye-3 · Rating: 5 out of 5 stars]

A clear and powerful defence of the free market from a christian perspective.

[servuslibri_1 · Rating: 4 out of 5 stars]

Richards points out the Christianity has always seemed conflicted in its attitude toward wealth, if it is good or evil. In this short set of essays he sets out to show the conflict is not valid. He approaches the problem by resolving problems associated with errors that he organizes under eight myths. Along the way he describes his own maturing from a socialist, almost communist, and Rand objectivist to a conservative capitalist.Supporting his arguments with numerous biblical references he validates private property. With reference to many philosophers and economists he validates free-market capitalism. His major victory is to demonstrate that a good Christian can also be a good capitalist.While I agree with his approach, and found this an enjoyable read, I found myself in disagreement with a number of his observations about economics. This is very much a work for interested Christians. While it may help to improve an economist's view of some issues in terms of specific audiences, they will be mostly dissatisfied.