Economics 101

Is It Unfair to Others When You Succeed At Work?

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While it may seem surprising, income inequality is a fact of economic life that is derived from our uniqueness—our different God-given gifts and abilities and how we use them in the market. You may agree with this point, but may still have other questions regarding what is fair and just in the workplace. Specifically, does one person’s success in the workplace take away opportunities for others to succeed as well?

Stewardship: When We Succeed at Serving Others

God calls us to seek our true comparative advantage and pursue it with excellence. You may wash dishes, wait tables, or work as an administrative assistant. You may wake up every day thanking God for your job and doing it to your fullest, as you should. But you didn’t take an opportunity away from someone else by taking home your paycheck, did you?

Most of us understand that we are hired because of our skill set and willingness to do the work that the company or employer needs. Going to work reflects a voluntary agreement between us and our employers, and a paycheck represents the amount we have earned by creating value in our roles.

Through working, we are both giving our services and receiving our due payment. We work hard to create value, and we know that, though we aren’t perfect, God has gifted us with unique skills and talents that we are to use. Our gifts are not solely our own endowment; we are to use them to create more value than we are initially given.

God created the earth and everything in it, and he put us on the earth with a specific purpose: to use our unique creativity, skills, and talents to work as his sub-creators (Gen. 1:28).

This is stewardship, and it has eternal significance.

The work you do every day, whether it’s as a student, a waitress, or a CEO, is important, holy, and part of advancing God’s creation. It is what God has called you and created you for.

Suppose that when any one of us goes into the workforce using our God-given talents and skills, we are taking opportunities and income away from others. If this is true, Christians should argue against any income at all! It would imply that every income-generating opportunity takes or steals an opportunity away from someone else.

While we often don’t apply this criticism to ourselves or our jobs, we often apply it to the jobs and corresponding incomes of others, particularly the richest among us. It’s important we think both biblically and economically about how this all works.

Cronyism: When We Hurt Others’ Chances to Succeed

Rather than seeing the market as a zero-sum economy, we must see that markets are made up of millions of people who, through exchange, make each other better-off. God has given us the market mechanism as an efficient way to distribute resources. Market economies work well because they reward value creation and encourage us to trade with each other to increase flourishing.

For example, the farmer who raises hens to produce eggs frees those of us who do not have the capabilities to do this. Instead, we can purchase eggs and devote our time to activities in which we have a greater propensity to create value. That is part of how the farmer serves his customers. The only people who are rewarded in markets are those who effectively and, at the lowest relative cost, serve the needs of others.

It is important to make the distinction between free-market exchange and rent-seeking (cronyism).

The farmer who produces eggs by innovating and keeping costs down should be rewarded through profit by the market.

The farmer who produces eggs and lobbies the federal government for additional subsidies for the purpose of shielding himself from more productive egg producers is not serving his customers. Rather, that farmer is lobbying the government for money which he did not earn, and the “profit” he secures in this fashion is appropriated from taxpayers.

The result is that the farmer who benefits from a subsidy does not face the same incentive to innovate and serve his customers by competing to offer lower prices. Ultimately, these arrangements disproportionately hurt the poor by, in this example, raising the price of food.

Some amount of income inequality results from the uniqueness with which we are created. However, it is economically unwise and biblically unfair to make any natural level of income inequality worse by:

  • Not letting businesses fail when they deserve to (bailouts)
  • Protecting some businesses from competition (subsidies and tariffs), or
  • Letting some businesses succeed over others through protective legislation (licensing and other regulatory requirements).

All these policies choose certain groups of people to earn higher incomes than they normally might through market competition, which alters their incentives to truly serve consumers. The only way to do this is through coercive taxation that favors certain industries over others, and there is no moral foundation for tax policies that support one industry at the expense of another through political favor.

Thinking biblically and economically about income inequality helps us differentiate between legitimate efforts to invest our God-given gifts to serve others and selfish efforts to protect ourselves that only hurt others’ chances to succeed.

 

Editor’s note: How should Christians think about income inequality? Read more in Anne’s chapter in IFWE’s latest book Counting the Cost: Christian Perspectives on Capitalism. Get 15% OFF when you use the code: CTC15.

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