Economics 101 & Public Square & Theology 101

Critiques of Market-Based Poverty Alleviation

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In my previous blog posts, I have explained two important principles Christians have used in fighting poverty: the voluntary principle and the market. We looked at the stories of how Thomas Chalmers and Anthony Ashley Cooper, Earl of Shaftesbury, fought poverty in Britain using local, market-driven techniques, leading to much success.

Given these arguments for helping the poor through capitalism, what are some critiques of poverty alleviation using the market?

Alternative views

Some evangelicals take a different view of the best way to fight against poverty, which gives a greater role to government and to redistribution. These evangelicals appeal to a picture of Jesus challenging social norms, wealth, political and other authorities, and in essence being a social and political radical. The Bible, they claim, displays a bias toward the poor and so Christians should reflect this position and demand socio-political and structural change.

However, the means in which we fight social norms can be discussed. I would argue that we can more effectively fight social norms on an individual level than by going through the government. When utilizing local organizations, volunteers can work with each person to instill important values such as responsibility, hard work, and self-esteem into the culture. The government cannot mandate cultural change, cannot tell someone what values they should embrace, and thus cannot truly challenge social norms.

Another branch of people oppose economic growth altogether, claiming it is more damaging to society than beneficial. They believe it leads to rising consumption, which threatens the world. Unfortunately for its proponents, a lack of economic growth undermines the very basis of their own analysis of world need. A lack of economic growth would mean falling incomes and falling employment. Thus, without economic growth, everyone is harmed.

A final critique of the alternate views is particular to the redistributive tradition. I once overheard a popular bishop with an evangelical heritage criticize the voluntary principle and demand a scheme of international taxation.

But what if those taxes led to wasteful and excessive government expenditure or did not enhance fairness and opportunity? What if, instead, taxation stifled innovation and enterprise, suffocating all growth? This is the evidence we have seen in the past. And thus, there seems to be a moral campaign against, rather than for, excessive international taxation.

The unforeseen consequences of the redistributive tradition are that wealth creation is ignored, growth denied, philanthropy strangled, and the voluntary principal lost. We have shown that markets are essential to the poverty alleviation process. A lack of government intervention, or economic freedom, allows incentives to align with poverty reduction using self-interest for the common good and giving the poor reason to help themselves.

This argument can be taken even a step further. Professor Roger Scruton provides interesting insight into the debate when he says,

The first act of totalitarian governments is to abolish the charities through which people help themselves, and which are the main obstacle to creating total dependence of the citizen on the State.

The alternate view of poverty reduction, namely the redistributive tradition, can not only inhibit poverty alleviation but also lead to far more daunting circumstances.

Conclusion

As we have seen, though all Christians desire the reduction of poverty, there is much debate over how it is to be done. The problem for those that demand redistribution through the taxation system is that this position tends to have an elevated view of the role which government can play.

This series has provided evidence that the marketplace can serve as part of God’s good provision for creating wealth and encouraging enterprise. This, combined with the voluntary principle, lies at the heart of the evangelical prescription for poverty. Creativity, innovation, compassion, philanthropy, and enterprise are the historic evangelical answers to the question of poverty.

Editor’s Note: This post was adapted from IFWE’s forthcoming book, For the Least of These: A Biblical Answer to Poverty, due to be released in early 2014. 

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