Economics 101

The Purpose of Business, Profits & Accumulating Wealth

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Editor’s note: Join Dr. Anne Bradley’s upcoming live webinar series, The Christian Economic Model. Register for the free webinar here.

Dr. Anne Bradley was featured in an interview with Praxis Circle. Below are a few highlights of that conversation centered around business and economics from a Christian perspective. You can watch the interview in full here.

Does wealth creation require self-limiting values?

Free enterprise or market-based society works because we follow certain codes of conduct—certain rules of ethics—at least most people, most of the time. You’re never going to have perfection. You’re always going to have theft, you’re always going to have greed, you’re always going to have violations of these norms. But the key is to get most people following them most of the time.

This is what Adam Smith was worried about. He wasn’t worried about perfecting human beings. He was being very wise because he knew that wasn’t possible. So society, to get it to run well, isn’t about finding the perfect people to run businesses or the perfect person to be the president or trying to find the Mother Teresas everywhere. Because we’re just going to fall short of that. People are not generally altruistic all the time. 

And so I do think that self-limiting behavior that is the key. I could steal from my neighbors and I could be temporarily better off, but I restrain myself from doing that. That’s a code of ethics that I hold myself to, and when most of us restrain ourselves in that way, there’s a lot more flourishing. 

So freedom isn’t about using the State to tell us what to do and what not to do. It’s actually about getting a deeper set of norms and ethics that encourage people to do that on their own. I make my own choices not to steal, because stealing in the long run is much more costly of a behavior for me than being productive. 

(Watch this part of the interview here.)

What is the purpose of business in society?

I think there’s a broad goal that business has from a Christian perspective. I hear people say, “I’m pro-business.” I don’t like that because I don’t know what it means. Does it mean you’re for big business? Or does it mean you’re for small business? 

I think what business is about is service. So entrepreneurship is what we really want to talk about. What do businesses do? Well, in theory, if we’re taking the biblical point of view and then we’re layering in the economic freedom point of view, then businesses are there to serve other people. And they only get rewarded, they only get that profit, if they do what consumers and customers want them to do. So business isn’t good for its own sake, it’s a means to an end. And the means to an end is giving us things that we couldn’t do on our own. 

So I mentioned George Washington earlier [in this interview]. This poor guy had one tooth left and he’s like a big, powerful guy. Why? Because he didn’t have Listerine and toothbrushes and toothpaste and all of these things that ordinary people get easy access to today. That’s because of entrepreneurship. It’s because people don’t want their teeth falling out of their head when they’re 25. It’s because people don’t want to die of a tooth infection that a root canal can fix when they’re 30. 

Business is about serving others. And in a commercial society, it’s the most effective way that we’ve figured out to date to serve strangers.

(Watch this part of the interview here.)

What’s a Christian perspective on profits?

Profits are great. That’s my short answer to that!

Profits are leftovers. This is what I always want people to think about when they think about the word profit. Profit means leftover. It means, what’s the residual? What’s left? And we always tend to think about profit financially, so we think about what’s left over in our Bank of America bank account at the end of the month. That’s fine, that is part of profit. 

But if we are created for a purpose, and if we are stewards of what God has gifted us with, then everything is for profit. You want to profit your time, you want to profit your talent, you want to profit your money. 

What does profiting your time mean? It just means I have leftover hours. I live a longer life so I have leftover years. Profiting my talent means I have more to give. So profit is inherently a good thing. 

Now—the only qualifier here—how do you obtain profit? We can’t have that conversation without having a conversation about capitalism, free markets, and what’s the role of the State. Because it’s possible in some societies for some people to “profit” or get something by stealing, by taking it, by oppressing others. That’s not what we’re talking about here. We’re talking about legitimately earned profit that can only come from serving. 

It’s the idea of the business guy/gal as the entrepreneur who serves, who’s filling a gap or filling a need. And when that person serves me, I have more time. I have more leftover. 

(Watch this part of the interview here.)

Is income inequality a problem? 

I really wanted to come at this idea of inequality from a Christian perspective, but also to help people walk through the question, “Should we even do anything about this?” That’s an open question so I wanted to try to address that. 

What we’re talking about here is income inequality. We’re not talking about inequality of dignity or something like that. I just made the case that if you believe scripture then we’re equal in dignity. So that’s our starting point here. 

So the question is, if we’re equal in dignity and we live in a society where people earn different amounts of money, is that a problem? What does it mean? And the answer is always, as any good economist would say, “It depends.” 

If we live in a market-based society with free enterprise and economic freedom, how do people earn their money? They earn it because people give it to them. The only reason Steve Jobs died a very wealthy man is because lots of people want to have Apple products. There was no coercion. And he had to compete with Michael Dell and Bill Gates and all of these other people to get that position.

The good thing for consumers is that I’m not forced to buy my iPhone, I could buy a Samsung or something else. Bill Gates and Steve Jobs have a massive amount of income compared to me. Is that a problem? Not in a society where they earn it because customers are buying their products. 

Now, income inequality can be a problem when it’s not earned income. When we’re using the State, when we’re using corruption, when we’re using bribery, when we’re using oppression to try to extract income from other people. It’s a sophisticated level of nuance we have to have here.

I think the answer is, “It depends.” The best chance you have for income inequality to not be a problem is when the rich only get rich because customers want and like what they’re doing.

(Watch this part of the interview here.)

Editor’s Note: Register here for Dr. Bradley’s free webinar series, “The Christian Economic Model.”

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