Economics is the social science concerned with the allocation of scarce resources among unlimited wants. Since resources are insufficient to meet all wants, something must allocate these scarce resources. This allocating mechanism can be price, government directive, brute force, first-come-first-serve, tradition, or a variety of other things. Whatever the mechanism, all societies must decide what, how and for whom to produce.
Business Insider reported than nearly 1 in 3 Millennials (aged 22-37) have a favorable view of socialism. Nearly half of Millennial Democrats identify as Democratic socialists or socialists. What is socialism? How does it compare with capitalism? How does it compare with other types of economic systems? Which of this world's economic systems come closest to biblical ideals? What is heaven's economy like?
The way in which a nation allocates resources is called its economic system. Economic systems range from market or capitalistic economies to command economies. Command economies include socialism, communism and Marxism. Many of today's economies are mixed versions of these theoretical norms.
Capitalism has private ownership of property. Socialism has government ownership of major industries. Capitalism uses price to ration resources, whereas socialism uses government directive to ration resources in major industries. Capitalism has freedom of choice, whereas socialism has little to no freedom of choice in major industries. Capitalistic economies tend to be efficient; socialist economies are more inefficient. Capitalistic economies foster smaller governments, but socialist economies have larger governments. Some argue that socialism can be a slippery slope to the more totalitarian communist and Marxist forms.
Theoretically, command economies appear attractive. Karl Marx's statement, "From each according to his ability, to each according to his needs," seems utopian. But in practice, command economies have been less successful. Command economies may result in more equality, but the size of the pie that they are sharing is usually much, sometimes very much, smaller. Less incentive to work, save, innovate and invest results in less output and a lower standard of living.
"Socialism is a wonderful idea. It is only as a reality that it has been disastrous. Among people of every race, color and creed, all around the world, socialism has led to hunger in countries that used to have surplus food to export. ... Nevertheless, for many of those who deal primarily in ideas, socialism remains an attractive idea—in fact, seductive. Its every failure is explained away as due to the inadequacies of particular leaders."—Thomas Sowell
In the interest of equality, command economies demand a loss of individual freedom and choice. A loss of religious freedom is not unusual as citizens are expected to exchange loyalty to God for loyalty to state. With equality as the goal, class distinctions and economic inequalities still occur often. These classes and inequalities tend to be based on loyalty to the state instead of economic productivity.
"A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both."—Milton Friedman.
"I have never understood why it is "greed" to want to keep the money you have earned but not greed to want to take somebody else's money."—Thomas Sowell.
The early church had all things in common (Acts 2:44-45) to the extent that there was not a needy person among them (Acts 4:34). However, it is not an endorsement of socialism, in which funding for governments is through mandatory taxes and laws. Church giving is voluntary. Government spending is often the result of secular political objectives. Church spending is (or should be) the result of prayerful decisions by spiritual leaders.
Scripture places a high value on freedom. Christ died for our freedom, we are called to freedom, and are expected to act as free men. Since capitalism is tied to freedom, it may come closest to biblical ideals as long as the poor and disadvantaged are cared for and greed is checked with a strong legal structure.
"Stand fast therefore in the liberty wherewith Christ hath made us free, and be not entangled again with the yoke of bondage" (Gal. 5:1).
"For, brethren, ye have been called unto liberty; only use not liberty for an occasion to the flesh, but by love serve one another" (Gal. 5:13).
"For it is the will of God that by doing right you may put to silence the ignorance of foolish men" (1 Pet. 2:15).
Regardless of the economic system, Jesus came that His believers would have an abundant life—in spite of how much money we have at the moment. He became poor so that we can become rich in the next life.
"The thief does not come, except to steal and kill and destroy. I came that they may have life, and that they may have it more abundantly" (John 10:10).
"For you know the grace of our Lord Jesus Christ, that though He was rich, yet for your sakes He became poor, that through His poverty you might be rich" (2 Cor. 8:9).
Dr. James Russell is a professor of economics at Oral Roberts University.
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