At Work & Economics 101 & Public Square

Do Free Markets Inherently Lead to Exploitation?

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No one ever likes being misunderstood. The Institute for Faith, Work & Economics (IFWE) believes that’s happened to us in the latest issue of Christianity Today.

In a September 2014 article, author Kevin Brown, an assistant professor at the Howard Dayton School of Business at Asbury University, writes about what he sees as the negative consequences of capitalism.

Brown quotes from IFWE’s three and a half minute video “I, Smartphone,” released in 2012. The video depicts the seemingly miraculous aspect of the free market exchange process which brings together the gifts and resources of the people and nations around the world to produce something as advanced as the smartphone.

The video is a rendition of a famous essay, “I, Pencil” penned by Leonard Read in 1958. The essay has had a lasting impact on how many people think about the market process.

Why would IFWE care about how a smartphone is made, and why did we even make the video? Because we want Christians to better understand that God has given us the market process as a powerful tool to be used to bring about flourishing in our communities, our country, and the world.

The market process is a “common grace” gift that God has given to not only Christians but to all of mankind. Yet as Christians we have an important part to play in the process by being salt and light in a way that supports scriptural principles like rule of law, human dignity, honesty, and property rights that are necessary for the market process to operate effectively.

After the discussion of our video, Brown points out some of the greed, corruption and horrific abuses to innocent people that have surrounded some of the illegal mining and smuggling of certain minerals from the Congo by militias. These minerals are required for smartphones.

In the way he’s written the article, it appears that IFWE is among those who overlook these abuses in an effort to “deify” the market system. This could not be farther from the truth.

In fact, markets require a well-functioning rule of law. Market processes cannot operate well where rule of law is non-existent. It is not the voluntary trade between individuals keeping the Congo under militia rule. It is precisely that the people living in the Congo lack an institutional environment allowing them to use their gifts and skills to mine precious minerals in a legal way.

What is happening in the Congo is an illegal use of the market in the absence of the rule of law.

Markets have not exacerbated poverty in the Congo. It is the lack of markets and rule of law keeping the militias in power and keeping people poor. The unique question at hand is how to best help those living under such circumstances. One way to do this is to find ways to trade and do business with legitimate Congolese businessmen and women.

Like Brown, IFWE sees that the market is not perfect. Yet it is the best known way to lift entire nations and peoples out of poverty. Based on current data from the World Bank, the percent of the world’s population living in extreme poverty has decreased from 52% to 21% over the last thirty years.

The World Bank report goes on to suggest if this trajectory continues, extreme poverty will amount to about 3% of the overall population (known as transitional poverty) by 2030. This is happening because of the expansion of free markets in a number of countries around the world.

However, this market system is as fragile as it is robust. We must remember that we live in a fallen world, and although the market system may be the best system, it is far from a perfect one. We strongly agree on this point with our friends at Acton Institute:

Markets display both the virtues and vices of a people. It is important to avoid the temptation to either idolize the market or to suppose that virtue is something that can be politically implemented by bureaucrats. Strengthening the moral content of a people through civil society is the best response to vice, rather than burdensome regulation that inhibits human freedom and stifles innovation and creativity.

That’s why we at IFWE focus on your work so much. We want believers in Christ to know and understand God’s call to them in the workplace and how it advances God’s coming kingdom. You play an essential role in promoting these Godly virtues of hard work, integrity, honesty, and caring for the dignity of every human being.

We are glad to see Christianity Today’s special series of articles on these topics depicting a Christian view of market systems such as capitalism and how to best serve the least among us. The issues raised are complex and there are no simple answers.

At IFWE, we aim to analyze these issues first and foremost through the lens of Scripture. We also seek productive and respectful dialogue with those well-intentioned Christian brothers and sisters who, like us, are seeking to find solutions but may end up with different conclusions.

In an effort to shed more light on this topic, we have asked a number of Christian professors across the country to speak to these issues. You’ll be hearing from them later this week, when we feature them in an online forum here on the blog.

We’d love to hear your thoughts, too. Feel free to leave your comments below.

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  • “The video depicts the seemingly miraculous aspect of the free market exchange process which brings together the gifts and resources of the people and nations around the world to produce something as advanced as the smartphone.”

    “What is happening in the Congo is an illegal use of the market in the absence of the rule of law.”

    These sentences appear contradictory. If what is happening in the Congo is “an illegal use of the market” then does its consequence deserve to be called “seemingly miraculous”? If a significant part of the “gifts and resources” being brought together to make a smartphone are in fact stolen and the product of slavery and injustice, then does the end product deserve to be called a product of the “free market exchange”?

    Capitalism and the industrial age has always benefited from ingenuity, hard work, and the economic efficiencies of division of labor. But they have also benefited from such things as colonialism, slavery, exploitation and environmental degradation. To label any economic system outside that of the kingdom of God as “biblical” or “God-ordained” seems problematic at best to me.

    As Wendell Berry has written, “We will not conceive the possibility of a better economy, and therefore will not begin to change, until we quit deifying the present one.”

    • The role of protecting life, liberty and property of citizens falls to the government, not the market. The market has no police power or any way to do the government’s job. Colonialism, slavery, exploitation and environmental degradation are all failures of government, not the market. To make those market failures is just stupid!

  • They didn’t misunderstand the video; they ambushed you. CT has promoted socialism for decades, sometimes Marxism. They are very anti-free market.

  • Very well said, Hugh.

    I read the article in CT when it first came out, and thought it was full of muddy thinking in general. The author gave the impression that he was being “balanced,” but in actuality he was failing to represent the market system accurately. This is a helpful corrective.

  • Jim Wilkinson

    I can not see the relation between market capitalism and Christianity–the two appear opposites. The kingdom God is usually opposite to the kingdoms of this world. The faulty logic seems to be that if the market is godly and God prospers entrepreneurial capitalists then the poor are cursed by God. This turns “Blessed are the poor…” on its head.

    • Mike Thornell

      Considering capitalism an “economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state). (2010). (The New Oxford American Dictionary Oxford University Press) and an economic system whereby wealth and means for creating wealth are privately controlled and owned. This economic vehicle is fueled by free enterprise in which an individual or individuals are free to create and operate businesses for profit with minimal governmental interference. In capitalism the government plays a relatively small role in providing goods and services, but does have the responsibility for upholding laws which protect rights to own property and for maintaining a stable currency. Comparing capitalism to all other systems recently used or proposed (socialism, communism, fascism), it is the moral choice.

      1. Capitalism is the only system consistently valuing and protecting the individual, thereby promoting the natural rights of life, liberty and the pursuit of happiness.
      2. Capitalism is the only system that consistently values and protects private property.
      3. Capitalism most efficiently moves raw material to finished goods and services thereby making the most effective use of created materials for the ultimate good of all.
      4. Capitalism is the only system that makes positive application of an accurate, realistic understanding of human nature.
      5. Capitalism is the only system equitably distributing increasing wealth over time.
      6. Capitalism is the only system thriving with just application of the rule of law derived from a constitutional form of government.
      7. Capitalism is the only system thriving with the application of self-government by consent of the governed thereby promoting individual independence.
      8. Capitalism is the only system not threatened by freedom of religion practices thereby promoting religious liberty.
      Capitalism serves as the best vehicle for implementing Biblical principals than other systems and as shown above, for using God’s creation efficiently for benefit of all. It should not be blamed for the shortcomings of different societies or segments of our own choosing to neglect rule of law and increasingly rewarding in various ways those who act contrary to rule of law.
      Do you think Jesus was referring only to the materially poor in “Blessed are the poor……”?

      • Jim Wilkinson

        No, but he was not leaving the poor out either which unrestrained “free” markets often do.

      • Jim Wilkinson

        Thank you for your reply—I didn’t think anyone would respond because of the lateness of my comment to the discussion. Two responses or critiques: One is that capitalism without government intervention makes no provision for the poor and those not valuable to the market. Second is that, in common with Marxism, capitalism is a materialistic system. By this I mean it makes no provision for things that cannot be apprehended by our physical senses. People without use to the economy are thus not important.

        I remember meeting with some East German Christians back in the late 1970s. They felt that we American Christians were more to be pitied than East Germans because they knew they were oppressed by Communism and had a clear “enemy”. In America, the material benefits of our culture are a very powerful distraction and can easily pull us away from spiritual matters. They can be as great a danger to faith, but are not as visible as a totalitarian government.

      • Jim Wilkinson

        Another issue is that capitalism does not seem to be working for most people in America as well as it did a generation or more ago. Instead of pensions people get 401Ks or no retirement benefits at all. Instead of full health coverage at workplaces, they get HMOs and co-pays or no insurance. Many have to work at 2 or more jobs to meet the same living standard that before could be achieved from one job.

        In contrast to these diminished rewards, many executives are getting salaries and other benefits far in excess of those earned in earlier years. They also are getting paid at a rate much greater than their line employees. The current income disparity in the US is a bad joke. I think these problems started with the Reagan changes to the income tax code in the 1980s. Supply-side capitalism does not seem to work for most people.

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