Is trade good? How much does it reflect and shape our individual values?
In Matthew 19:16, Jesus encounters a rich young ruler and gives him the following advice:
Go, sell all that you have and give to the poor, and you will have treasure in heaven; and come follow me (Matthew 19:16).
Is Jesus condemning the goodness and justice of the market and the material wealth that it brings to us? To answer this question, let’s take a look at what trade is and how it reflects our values.
This post is part of a discussion that seeks to answer the question of whether or not the market is just. Last week we discussed property rights; today, I will highlight the idea of the voluntary exchange of that property, another important feature of the market.
Defining Voluntary Exchange
It is freedom of exchange that non-economists may most directly associate with the idea of the market economy. The fundamental benefit of free exchange to an economist is that an exchange will occur when both parties see that they will benefit from the transaction. The social implication of free exchange is that resources are moved to higher value uses through the voluntary decisions of both parties.
An absolutely critical extension of this argument, one that is often missing in theological circles, is that trade itself creates wealth. Or, in different words, trade takes us out of a zero-sum society. A quick and telling example is trade between a farmer and a fisher. The farmer could trade some of his grain for a few of the fisher’s fish. By trading, both the farmer and the fisher have benefited due to a more balanced diet that is healthier than eating just a single commodity.
Application of the Mutual Benefit
Even when both economists and theologians acknowledge the “mutual benefit” motivation of free exchange, there is nevertheless a potential and important parting of the ways when the terms of “benefit” are dissected. Benefit can become a rather subjective term that causes much debate about how far the idea of voluntary exchange should be allowed to extend.
What the theologian or pastor can bring under the microscope are our individual values that will motivate us to enter into exchanges based on subjective – but not biblical – benefit. Examples include designer clothes, or (literally) gold-plate desserts, or automobiles whose explicit meaning for existence is to advertise “I am wealthier than you.”
But is there not a counter-risk of a judgmentalism that is foreign to Christianity? If buying a Maserati reflects a non-just value, where does the slippery slope stop? At a BMW? At a Volvo? At a Lexus? A Subaru? What are the dangers in launching a debate over hyper-expensive “green” electric cars and what motivates people who buy them?
I believe that there is a way out of this conundrum, a way explicated by economist and moral philosopher Deirdre McCloskey. She explains that if a Christian revival swept the country tomorrow, causing an inward change in values placed on cars, houses, toys, entertainment, and so forth, the free market economy would continue to function. Resources would still be moved to higher values, except that now those values would be set by the new biblical values.
This is due to the fact that the market is run by thousands of people making choices out of self-interest. Thus, as the culture changes and biblical ideas are valued, each person will start making new decisions. And these decisions would affect market prices. These prices send signals to manufacturers and consumers, telling them how much to produce and how much to buy. Thus, the market would stay intact and provide the new culture with the goods they value.
One of the most important distinctions for studying a biblical view of markets is to distinguish between teachings about how Christians value wealth and possessions as opposed to judgments made on the market process.
As amazing as it may seem to a non-economist, I believe that this worldview is present in the story of the rich young ruler in Matthew 19:16.
Jesus is not condemning the market in this story. In fact by telling the rich young man to sell his possessions, he is asking him to utilize the market to help the poor. Imagine the rich young man showing up at a poor person’s home with a gold-threaded camel blanket. What would he or she do with it? Jesus recognizes that the rich young man can better help the poor by selling his goods, presumably in an organized market. This way, he can take advantage of the mutual benefit advantages of the marketplace, maximizing the value of the sales and thus having more money to give to the poor.
Therefore in this piece of Scripture, Jesus is not condemning the market system. He is instead assessing the heart of the young man. Jesus sees that the rich young man’s heart is primarily for his worldly possessions. Thus, Jesus is critiquing the man’s heart attitude, not the market in general.
This indicates that the market is not the source of injustice – the fallen world is. Culture is tainted by sin and can, therefore, use the market in a negative way. But, the market in and of itself is not unjust; it is merely a tool that can be used in whatever manner the culture wants.
Editor’s Note: This is a continuation of excerpts from IFWE’s forthcoming book, For the Least of These: A Biblical Answer to Poverty. This post is part of Dr. R. Mark Isaac’s chapter entitled “Markets and Justice,” which examines the justice of the institutions behind the market system.