The 3 Economic Principles that Shaped & Propelled America -BLOG - February 2020
The interesting thing about America's founding is that the economic trial and error of one of its first colonies, Jamestown, forged a free system that would drive it to prosperity in the centuries ahead. At Jamestown it quickly became evident that its 'ideal socialist' setup didn't lead to surplus or even subsistence, but rather lack and poverty. A new system of personal responsibility was implemented, including aspects of all of the principles we'll discuss in a moment, and it transformed the colony from one that was deteriorating to one that was thriving. WATCH THE PRAGER U VIDEO BELOW FOR MORE ON THIS.
Prosperity, wealth, hard work, and even profit aren't bad words or bad ideas. All of these things are undoubtably Biblical. The myth that anyone is entitled to reap wealth without sowing the things necessary to get wealth must die.
This school of thought often confuses America's path to prosperity. Greed, power, and oppression are often the preferred variables. This isn't true, of course, and I'll prove it in this blog series. Generally, too, there has been an assault on our nation's history recently, one that seeks to undermine it, revise it, and villainize it. Don't be deceived by these plots, rather study the history objectively for yourself. One piece of advice if you go this route: please don't rely on headlines, editorials, or people's opinions, instead search for primary sources and first-hand accounts.
There are three main reasons why our country went from an overtaxed, overburdened, domineered colony to an economic powerhouse in the space of a few dozen years. These principles hold true still today, even though governing 330 million people is a bit different than governing 50 million. They are:
1. Unflinching private property rights – Economic theorists, since economic theory was even a practice, have held that private property rights are the most crucial element of both a free society and a strong economy. The classical liberals like Mill, Locke, Mises, & Hayek all agreed on this point, and economists long before them, like the famous Adam Smith (Wealth of Nations), held to this belief. History, too, has shown its application and importance in thriving societies. The importance of private property is a longstanding societal fact for those societies that aren't in chaos. It's an implied and obvious way of life and order in the Bible as well. You need not go past the 10 commandments to see that taking or coveting someone else's things aren't just improper, they're sinful.
2. Limited regulation – It’s just a rule of life, especially if you’re a business owner, that the more hoops you must jump through to comply with governmental bodies, the costlier it is to actually provide your product or service to the public. Extra cost and time, shouldered by the business, always equals less profit, less opportunity for employees, less cash to invest in improving the product or service, and less ability to lower the price of the product or service, which, of course, benefits the consumer. Excessive regulation is closely associated with big government, which is neither an effective system nor a Biblically feasible one. The best example Biblically for how things "ought to be" from a governmental standpoint is the picture we see in Genesis when God hands over the dominion of the garden to Adam. Adam doesn't get a mile-long list of rules, he gets a few guidelines and jobs, like naming animals and NOT eating from the tree of the knowledge of good and evil. This is an important lesson that freedom and limited government really do work by design.
3. Low taxes – The act of lowering taxes has ALWAYS benefitted the economy. And low taxes, as a general rule, always will provide more opportunity and financial freedom for consumers. As a consequence, too, lower taxes spark consumer spending, which helps businesses of all types. Although taxes are necessary, and Jesus did NOT suggest we shirk them, the obligation to limit the tax burden on society is a Biblical one. God only required a tithe (10%) from the Jewish people, who operated under a theocracy, and we see in Deuteronomy 30 that the financial obligation of the Jewish people was meant to be simple and easy. Compared to other eastern kingdoms in Biblical times, which required more from its people, often times to feed a lust for power or wealth, the Jewish system was uncomplicated and light.
BONUS - Having a Plan
“The art of economics consists of looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Henry Hazlitt
The above quote from American Journalist Henry Hazlitt has proved wise in American economics. It speaks of having a plan, considering counsel, counting the cost, and thinking of future generations. All of these things, I believe, are Godly qualities. In the famous verse, "Commit to the Lord whatever you do, and he will establish your plans," (PROVBERBS 16:3) it's clear that it's God's job to establish our plans, but it's our job to actually have those plans. Short term thinking is unwise, hasty, and lacks vision. Long term thinking, on the other hand, is wise, often fruitful, and a way of thinking that can leave an inheritance for children and children's children (see Proverbs 13:22).