God is a Capitalist

  God is a Capitalist: Markets from Moses to Marx

  By Roger D. McKinney

  God is a Capitalist: Markets from Moses to Marx published by the Christian Capitalist, 25898 Lariat Circle, Broken Arrow, OK, 74014

  www.rdmckinney.blogspot.com

  © 2017 Roger D. McKinney

  All rights reserved. No portion of this book may be reproduced in any form without permission from the publisher, except as permitted by U.S. copyright law. For permissions contact:

  Table of Contents

  Preface

  Introduction

  Chapter 1 – What is capitalism?

  The hockey stick

  The role of institutions

  Bourgeois values

  Zombie theories

  Colonialism

  Education

  Commercialization

  Genetics

  Institutions

  Science

  A definition of capitalism

  Chapter 2 – How individualism broke the envy barrier

  The myth of primitive innocence

  Politics and envy

  Education and envy

  Kibbutzim – equality on steroids

  How the west won

  Envy’s resurrection day

  Individualism domesticated envy

  Culture rules

  Pseudo-individualism

  New Institutional School

  Changing rhetoric

  Conclusion

  Chapter 3 – The Torah economy

  The Egyptian economy

  Pharaoh

  The Egyptian economy in light of economic history

  The rule of law

  The Israeli economy

  Revelation

  Image of God

  No king

  Courts and law

  Property

  Jubilee

  The economy under the judges

  The economy under the kings

  Which economic system?

  Chapter 4 – The dark ages

  The monarchy’s legacy

  Greece

  Rome

  The immaculate conception of individualism

  Pre-industrial Europe

  Peasants

  The nobility

  Urban life

  The Church

  The University of Salamanca

  Chapter 5 – The Dutch Republic

  The republic

  Leonardus Lessius

  The first modern capitalist nation

  Pre-tribulation

  Birth pains

  The golden age

  Military innovations

  Freedom

  Dutch ingenuity

  Society – wages, poverty, education and morality

  Christianity’s contributions

  Calvin was not the father

  Dutch influence

  Chapter 6 – Fading Empires

  The French and English respond

  Legacy in the British colonies

  The Catholic Counter Reformation

  Spanish decline

  The Ottoman Empire

  Istanbul

  Honorable wealth

  Ottoman economic mind

  Ottoman superiority

  Ottoman agriculture

  Seventeenth century

  Eighteenth century

  Nineteenth century

  Early twentieth century

  The myth of Muslim supremacy

  Living the legacy

  What went wrong?

  Chapter 7 – The envy barrier resurrected and the decline of capitalism

  Adam Smith was a Christian

  Atheism and human nature

  Saint-Simon – father of modern socialism

  Socialism’s success in Germany

  Twilight of freedom

  Christianity’s vital role

  Chapter 8 – Christian Capitalism

  Human nature

  Poverty

  Charity helps, a little

  But the Bible condemns the rich

  The Biblical attitude to wealth

  Biblical government

  Christian money

  Inequality

  Progressive taxation

  Libertarianism and conservatism

  Immigration

  International trade

  War

  Chapter 9 – Romans thirteen

  What does Paul mean by submit?

  What authority do rulers have?

  Paying taxes

  God’s laws vs. man’slegislation

  Why did Paul write this?

  The difference between government and the state

  Bibliography

  Preface

  In his book, Jesus in Beijing, author David Aikman describes a lecture that he attended in Beijing in 2002. The speaker, a scholar from one of China’s premier academic research institutes the Chinese Academy of Social Sciences, said the following:

  One of the things we were asked to look into was what accounted for the success, in fact, the pre-eminence of the West all over the world . . . We studied everything we could from the historical, political, economic, and cultural perspective. At first, we thought it was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity. That is why the West has been so powerful. The Christian moral foundation of social and cultural life was what made possible the emergence of capitalism and then the successful transition to democratic politics. We don’t have any doubt about this.

  While college professors in communist and atheist China embrace the paternal role of Christianity in forming the culture that has made the West wealthy and powerful, few in the West itself hold even a suspicion of that truth. In fact, academia had taught a different history for the past three centuries in which Christianity bludgeoned progress after the fall of Rome and plunged Europe into the Dark Ages. Then the Renaissance and Enlightenment broke the chains of “monkish ignorance and superstition,” as Thomas Jefferson wrote, and allowed reason and science to burst forth. Scholars reached back to the wisdom of ancient Greece and Rome to issue on stage freedom, human rights and democracy.

  Fortunately, academia began killing off the old history with its myths of the Dark Ages, Renaissance and Enlightenment beginning in the 1960’s as that history began to be viewed as less a history of progress and more of an apologetic for the white race oppressing the darker races. The old Western Civilization classes that introduced students to the classics were thrown out. Students have been left without a history of their culture and encouraged to be ashamed of it. The result has been, as Rodney Stark wrote in his introduction to How the West Won,

  They are in danger of being badly misled by a flood of absurd, politically correct fabrications, all of them popular on college campuses: That the Greeks copied their whole culture from black Egyptians. That European science originated in Islam. That Western affluence was stolen from non-Western societies. That Western modernity was really produced in China, and not so very long ago.

  Also, the lack of history of the West has led to dozens of theories from top economists that explain the massive increase in wealth in the West as the result a purely random accident. However, at the beginning of this new millennium a few Western scholars have exposed the charades. The Dark Ages were a myth. The fall of the Roman Empire launched Europe into a period of greater progress and prosperity. Church monasteries then universities preserved and advanced scholarship. The Renaissance and Enlightenment did not break with history but bore the fruit of centuries of progress.

  Ironically, academics in the West b
egan to abandon traditional Christianity on the eve of its greatest economic success, the Industrial Revolution. Even with the enormous reductions in poverty evident everywhere around them, atheists and deists invented socialism in the early nineteenth century. Socialism replaced Christianity as the religion of intellectuals as well as much of the rest of the population and today is the dominant paradigm for structuring the social sciences and humanities. Socialism gave us Nazi Germany where the state murdered over twelve million of its own citizens, and the U.S.S.R where Stalin murdered over thirty million. Then there were fascist Italy, communism in Eastern Europe, communist China, North Korea and Cuba.

  While residual Christianity thwarted the full instantiation of socialism in the United States and much of Western Europe, nothing barred China from getting drunk on the old wine. China fully implemented the most extreme versions of socialism under Chairman Mao Zedong. His desperate attempt to purify socialism in China of the 1960’s in what became known as the “Cultural Revolution” nearly destroyed the nation and caused death by starvation of more than thirty million people. The disaster of the Cultural Revolution cured many Chinese of their zeal for socialism and opened their minds and hearts to foreign ideas.

  A few Chinese scholars have become Christians as a result of their studies of Western history. Most Christian converts in China followed a different path to belief, as do most believers in the world, but the paths of those academics to faith in Christ differs little from those taken by C. S. Lewis and T. S. Eliot for whom the intellectual evidence pushed them toward reluctant belief. They demonstrate that an accurate history of how the West became great can be a powerful apologetic for Christianity.

  Christians in the West need to understand their history as the Chinese intellectuals do in order to bequeath that Christian culture to their children in the hope of restoring it to the nations of its birth because our children will create their own culture with their values and institutions. But they will not create it in a vacuum as so many humanists assume. They will borrow from competing ideas today, such as democratic socialism, Chinese communism or radical Islam. They will assert that their ideas are new, revolutionary, and scientific, but since they know little about the past they will have no clue that they are merely resurrecting philosophies that have failed miserably the many times they were tried throughout history. Only one culture has succeeded in rescuing humans from endless cycles of famine and starvation and it arrived just three centuries ago and only in the West, but our young people know nothing about it.

  This book is the outcome of about two decades of research. I did not start out trying to defend Christianity using the West’s history. The impetus came from years of reading articles in a prominent evangelical magazine in the 1990s that openly promoted Marxism as Christian economics. I had recently earned an MA in economics, but had taken no history classes. I discovered later that all history of economics classes had been removed from the economics curriculum of most schools a generation ago. Experts had decided that the best of the past had been incorporated into modern mainstream economics so there was nothing students could learn from the past. They were wrong.

  I began reading books on economic history and the history of economic thought in order to determine if the magazine was correct that capitalism was a gross distortion of God’s plan for humanity and that Marxism would restore humanity to the “Garden of Eden” as Marx asserted it would. The stakes were high. Europeans had speculated for centuries that mankind had lived in a state of innocence, peace and prosperity before the enforcement of private property. Marx, and the many socialists before and after him, promised that if we followed his system we would create a world without poverty or crime. Socialists assume that humans are born innocent and resort to evil only because something oppresses them. Private property is the worst oppressor of all so eliminating property would allow human nature to return to its natural state of innocence and evil would evaporate like shallow water on a hot summer day. At the same time, poverty existed only because some people hoarded more than their share of wealth. Spreading wealth more evenly, eliminating inequality, would make everyone rich. What is there not to like about socialism?

  The evangelical magazine seemed to think that Marxism was a shortcut to the Kingdom of God on earth. Evangelism was unnecessary. By the advent of the new millennium the magazine had changed editors and jettisoned its strident Marxism without embracing capitalism. The new editors followed the uncontroversial path blazed by most evangelical pastors and abandoned the field of economics completely except to complain once a year about the commercialism of Christmas. Few Christian leaders seemed satisfied with the reigning system, which everyone called capitalism. If the U.S. represented the pinnacle of capitalism, as the Western media proclaimed, then life could not get any better than it is in the U.S. and many people found that depressing.

  A few Christian economists have written to defend capitalism, but I know of no prominent evangelical theologians who have done so. Most have declared that God is above concerns about economic issues and is neither capitalist nor socialist, implying that God’s way must be somewhere between the two extremes. Without knowing it or having given it much thought, and certainly without having put any study into the subject, they have endorsed the democratic socialism popular in the West since World War II.

  I thought that Adam Smith would provide quick answers to my questions about the origins of capitalism because he is considered its father. So I read his book, The Wealth of Nations. I had not read it in school, which is a sad admission for someone with a postgraduate degree in economics. But Smith only deepened the mystery. He does not say where he got his ideas. He assumes they are just sound reasoning based on solid observation. One thing stood out, though. Several times Smith referred to the Dutch Republic as the best example of his system of natural liberty.

  So I plunged into the history of the Dutch Republic. It became clear that the Dutch had invented capitalism. They had achieved the highest degree of protection for private property; their workers were the first in European history to enjoy rapidly rising standards of living; they had very limited government, honest courts and respect for business. Dutch individualism, freedom and love of business scandalized the rest of Europe even as their wealth inflamed envy in England and France. They quickly became the wealthiest and most powerful nation in Europe and that defied the reigning wisdom about how nations grow rich and powerful. The Dutch had won their independence through eighty years of war against the West’s superpower – Spain. The wisest people at court had assumed that Spain would only grow more powerful as it stole shiploads of gold and silver from the New World. Yet Spain grew poorer in spite of its plunder.

  The contrasts between the Dutch and the rest of Europe were striking and other Europeans wrote about it frequently. Unfortunately, the Dutch wrote very little economic theory and did not seem as surprised by their success as were other Europeans. Why were they so different? The great sociologist Max Weber speculated a century ago that the Reformation gave birth to capitalism, so I investigated the economics of the major reformers, especially Luther and Calvin, only to learn that they had opposed the free market principles of the Dutch. Calvinists in the Dutch Republic wanted the church to control prices, labor standards, quality, interest rates and most other aspects of the market. Puritans absorbed Calvinist economics and made their colonies in the New World as constrained as any in Europe in economic terms.

  Before long, I discovered the writings of the theologians at the University of Salamanca, Spain, from the sixteenth and seventeenth centuries. In some ways they continued to cling to the principle of state and church controlled markets of the past, especially regarding charging interest on loans which they called usury. But in most ways they championed the freest markets in the history of writing about business and wealth. After more than a decade of searching, I finally discovered what the Chinese intellectuals had learned three decades before: God is a capitalist!

  If any scholars read th
is book they will find plenty to pick apart because I did not write it for scholars. To write for a scholarly journal one has to pick a very narrow topic, say, how many angels can dance on the head of a pin, then survey the history of it, provide the arguments on both sides and make a small, innovative contribution. Such articles are tedious to read and that’s why no one reads them. If I treated all of the controversial topics as required by an academic journal, this would not be a book but a set of encyclopedia volumes. I wrote for the average reader who wants to get to the heart of a matter quickly. I have tried to become as well informed on each issue as possible and present to the reader what the truth is. On theological issues I take the conservative evangelical side and on economics that of the Austrian school, not because I am unaware of opposing views but because I am convinced they are closest to the truth. For those who want a more scholarly debate, I have provided my sources and most of them offer both sides of the controversy.

  Introduction

  The physicist who is only a physicist can still be a first-class physicist and a most valuable member of society. But nobody can be a great economist who is only an economist - and I am even tempted to add that the economist who is only an economist is likely to become a nuisance if not a positive danger." Friedrich Hayek, “The Dilemma of Specialization.”

  Economists who aspire to be good economists must learn something about history, culture, religion, anthropology, technology and other subjects because good economics is about the totality of humanity, not just their money. The great Austrian economist Ludwig von Mises emphasized that point by naming his most important book Human Action.

  One example of the danger of specialization shows up in attempts to explain the polarization of voters on the left and right. Commentators respond to this development like a calf looking at a new gate, as if it magically appeared out of nowhere. But the origins of the left/right divide are ancient, more ancient than people think. Most pin it on the Enlightenment in France. For example, Hayek tracked it to the father of modern socialism, Saint-Simon in France in the early nineteenth century. Some, like Murray Rothbard trace the origins of the right to Daoism in medieval China. Others recognize the leftist policies in Plato’s Republic and the right in Aristotle’s opposition to his mentor’s philosophy.