Economics 101 & Public Square & Theology 101

Cronyism and the Free Market

LinkedIn Email Print

Culture, then, may be either godless or godly, depending on the spirit which animates it.

– Henry R.Van Til

After looking more closely at the idea of redemption in my last blog, how can this third chapter in the Four Chapter Gospel help answer our questions about markets and morality?

Markets, Morality, and the Four Chapter Gospel

To recap:

  • In the first chapter, creation, we see God give man his job description. Biblical scholars call this the Cultural Mandate.
  • In the second chapter, the fall, we see that because of sin man has become incapable of fulfilling the Cultural Mandate as God intended.
  • Finally in the third chapter, redemption, we see that because of the work of Christ, those who are “in him” are restored to the place of Adam before the fall. They can know and obey the will of God.

It is through this redemption that we have been restored to stewardship. Through Christ we are called back to God’s original purpose, to live as his image and to “be fruitful and increase in number, fill the earth and subdue it. Rule over . . . every living creature that moves on the ground” (Gen. 1:28). We have been restored to the service of God as his vice-regents over the earth.

The Free Market: A Tool At Our Disposal?

God has given us many tools to help us fulfill this calling. Some have suggested that the free market is only one of those tools, and in of itself, it is neither good nor evil. They go on to suggest that it is the way the free market is used or misused that implies any moral significance.

Take a simple tool like a shovel. It can be used for good or ill depending on the person who wields it. It can be used to dig a ditch to drain water away from a flooded home. It can also be used as a weapon to hurt or even kill another person. It is not the tool but the person using the tool that establishes the outcome.

To some extent this is certainly true about the free market. In an interview with the website Patheos, Father Robert Sirico of the Acton Institute said this:

People who are virtuous will see the market as a means, not an end. Their moral formation will impact their economic choices and the institutions (whether charitable, cultural or economic) they build.

The opposite is also true: those who are morally corrupt can rig the system for their own selfish and dishonest gain. This is what happened in the collapse of the energy giant Enron.

Another even more destructive example of the way some take advantage of the free market system is something called “Cronyism.”

Cronyism and the Free Market

Cronyism occurs when an individual or organization colludes with government officials to get forced benefits they could not have otherwise obtained voluntarily. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government. This favoritism takes many forms, including tax breaks, government grants and other incentives.

The free market system will self-correct for greed and fraud. Many economists say that is what happened with Enron. But the market has no self-correction mechanism for cronyism, which is why it has such a negative, long-term effect. This is a growing problem that is damaging the free market economy in our country and restricting the opportunity for all of our citizens to flourish.

Free enterprise, limited government, and individual freedom form the bedrock of America’s prosperity and opportunity. They allow the American economy to flourish and its people to prosper. To strengthen these principles, we must root out cronyism, fraud and unbridled greed.

In my next post we will discuss the effect that Christians have on fraud and cronyism when they bring their values into the marketplace.

Have our latest content delivered right to your inbox!

Further readings on Economics 101 & Public Square & Theology 101

  • Economics 101
  • Public Square
  • Theology 101

Did you know that working is one way that we bear the image of God? We were indeed created for…

  • Economics 101
  • Public Square
  • Theology 101
Four Reasons to Persevere in Serving the Poor

By: Kathryn Feliciano

6 minute read

A few years ago, I sat down with Tony Casson, founder of Mission Muffins, a ministry of a D.C. men’s…

Have our latest content delivered right to your inbox!