Economics 101 & Theology 101

Working Together – In the Church and in the Market

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We usually don’t object to trade or organization on a small scale. In fact, we see local operations like small businesses or farmers’ markets as good things.

But what about when we start signing contracts? What happens when people organize themselves into potentially large institutions and organizations? Should we be suspicious of these things? Are they inherently corrupt or unjust in any way?

This blog series is trying to answer the question, “Are markets just?” by examining three key features of the market economy. The first two posts looked at property rights and voluntary exchange. Today’s post finishes up the series by discussing the final aspect of the market system: contracting for voluntary action.

What Is Voluntary Association?

By recognizing the broad nature of voluntary arrangements in a free market economy, we look beyond simple bilateral trade to a wealth of human voluntary contracting institutions. Included in this world then must be the limited liability equity corporation, the not-for-profit corporate form supporting most churches, the club, the homeowners’ association, and of course, the family. By such voluntary associations, Christians created monasteries, great universities, denominations, and organizations for social good such as the Salvation Army.

Is It Biblical?

Recall from Richard Turnbull’s post the importance of the voluntary principle in alleviating poverty. It was shown that before the government waged its “War on Poverty,” the church and other voluntary organizations were working at the ground-level to help their neighbors. Turnbull showed the importance of such voluntary organizations and indicated that such groups were more equipped to assess the needs of the poor.

Thus, the market economy and the poor benefit from the key feature of contracting for voluntary action. By including this element in the foundation of the market economy, the market bolsters the voluntary principle, allowing for more effective poverty reduction.

An example of the voluntary principle as played out in Scripture is in Acts 4 and 5. The members of the church voluntarily sold their property to participate in a collective process of aiding the less fortunate. When there was squabbling about whether the Greek-speaking or non-Greek-speaking widows should receive more aid, the church established deacons to put a halt to the discord. Free market advocates should not attempt to explain away their practice, and instead say “more power to them!”

Rather than having an overarching institution take care of the poor of their community, the people in the church came together to help one another voluntarily. When they found their system imperfect due to sin, the people who knew the situation best were able to come together and find a solution to the problem. People voluntarily serving one another is not only biblical, but also an important facet of the market economy.

Markets are Everywhere in the Bible…

The many references to trade, markets, buying, selling, prices, voluntary action, and related topics in the Bible provide examples that help to develop a biblical understanding of the functioning of markets and implications for justice.

  • In Genesis 23, Abraham seeks to purchase a burial plot for Sarah. The transaction takes place not as a pure barter exchange but rather for cash; further, Abraham rejects the hosts’ offer of the plot as a gift.
  • In Genesis 37, Joseph’s brothers sell him into slavery for silver coins. This act is clearly depicted as sinful (the brothers later repent), because it steals Joseph’s right to his own labor. This act shows that a voluntary association which purposefully enacts injustice on another – is itself unjust. This example shows that sin can exist in the market, but it does not imply that the institution itself is sinful.
  • Exodus 21:35 talks about a market in livestock. And Exodus 22:25 indicates there was a credit market.
  • Exodus 35:10 provides evidence for specialization of labor, referring to skilled craftsmen who work on the construction of the Tabernacle.

What Does This Tell Us?

Having built the case for the advantages of a market economy, one must end on the note that it is a human institution, not a direct representation of the divine. From a biblical perspective, some institutions (child sacrifice to pagan gods, for example) are universally condemned. On the other hand, I believe that free markets fall within the realm of mundane institutions that have the potential to achieve much good. But like any realm of human activity, they are subject to infection by sin.

The Bible is full of daily stories about property rights, trade, and voluntary activities. The economist can read these stories and recognize the immense potential for these institutions to improve the lot of humankind in our own time. But the biblical narratives also show that any human institutions are to unfold within certain limits prescribed by God. For there can come the potential for productive and thought-provoking discussions among economists, pastors, theologians, and Christians in general.

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  • evaddoyt

    I would contend on a fundamental level that the marketplace IS NOT a human institution but rather one established by God in the created order (see “Eden’s Bridge: The Marketplace in Creation and MIssion). The corruption of the marketplace is not due to human invention but rather to human participation. Marriage and governance, both also institutions of God, are inherently corrupt from the same cause.

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