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Income Inequality: A Third Option

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By on Featured, Personal Finance, The Social Order

cupped_hands, charity, poorThe fiftieth anniversary of The War on Poverty has reignited a flurry of discussion over what to do about the poor in America and around the world. This coincides with some interesting recent statistics on an increasing gulf between what the poor and rich are earning each year. Unfortunately, these disparities are nearly always approached from the perspective of economic policy, seeking solutions through markets, taxes, or regulations. The debate usually boils down to some form of “markets will fix it” vs. “government will fix it.” This simplistic conflict is the root of too many modern conversations on the economic state of our nation.

Ideas like those promoted by author Ayn Rand often feature prominently in these discussions. Rand proposed two primary types of people: the self-interested self-made man (or woman) focused on success as a form of self-actualization vs. the greedy parasite who envies the success of the self-made man and wants to steal his wealth. Dig deep enough, and these two basic characters are nearly always the source of the conflict in our modern “inequality” discussions among pundits and the talking heads of cable news. One side will argue that the government needs to intervene for the good of all while the other side retorts that you have to let the rich work unimpeded so that jobs can be created – the wealth will inevitably trickle down!

There is a significant third solution, however, that typically goes ignored: Christian charity. (Rand lumped charitable Christians in with all of the other parasites, but those passages aren’t typically quoted by the average libertarian.) Throughout the Bible, Christians are reminded again and again to help the poor and needy. It is not presented to them as in their own personal financial self-interest. They are not guaranteed that their aid will maximize the happiness quotient of all people. And they are not allowed to offload their charitable duties to the government. No, the Bible is replete with exhaustive, explicit commands to each Christian to care for the poor and needy.  And since 73% of Americans (over 220 million people) claim to be Christians, these imperatives have big cultural implications. In doesn’t get much clearer than James 1:27: “Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world.”

It is particularly difficult and onerous to freely use your own time and money to help other people. It’s much easier to believe that the market will solve most problems. No one really needs to worry about their neighbor – just let the rich man build a bigger business, which will provide more jobs, which will allow poor people to work their way out of poverty… you’ve heard the argument. Self-interest will solve everything! And that argument is valid, to a point – many great things are accomplished through basic self-interested market forces, but these successes do not eliminate the duty of Christian charity and the selflessness it requires.

Nor will it do to abdicate this responsibility to the government. This is the other easy out: Just pass your duty along to the government and it becomes some bureaucrat’s problem. You can sit back, pay your taxes (which you have to do anyway), and whine that someone in the government needs to do a better job whenever you hear about the plight of the poor. You’ve done it! You’ve dodged selflessness and sidestepped a personal moral burden by turning it into a universal legal requirement.

Real personal charity is hard. As Dutch statesman and theologian Abraham Kuyper explained:

[T]he holy art of “giving for Jesus’ sake” ought to be much more strongly developed among us Christians. Never forget that all state relief for the poor is a blot on the honor of your savior. The fact that the government needs a safety net to catch those who would slip between the cracks of our economic system is evidence that I have failed to do God’s work. The government cannot take the place of Christian charity. A loving embrace isn’t given with food stamps. The care of a community isn’t provided with government housing. The face of our Creator can’t be seen on a welfare voucher. What the poor need is not another government program; what they need is for Christians like me to honor our savior.

Imagine if all professing Christians actually practiced personal charity. Imagine if every Christian gave 10%+ to their churches, compared to the 2.3% Christians gave in 2011. An increase to 10% would create an additional $165 billion in funding. Such a sum would transform the ability of Churches to care for the needy. Church leaders would be scrambling to catch up. Of course, giving is not capped at 10%. Imagine Christians giving 10% to their churches and another 5% to a combination of private charities and community groups.

But the duty of Christian charity extends beyond giving money. In loving their neighbors, Christians are to give of their own time and resources to their neighbors and communities. Among the various social duties given to the Israelites was the command to that agricultural people to leave the corners of their fields unharvested so that the poor could come and take freely of the food. This is a far cry from the modern credo that the corporation’s only moral duty is to maximize shareholder profit! Business owners were to care for the poor directly, at their own expense. This wasn’t a nice public gesture to be extended in a particularly profitable year. This was the way business was always to be done – continually providing some help to the needy at the expense of your own bottom line.

Christian employers ought also to care for their employees. Love of neighbor certainly extends to those working within a business, and charity in the business sphere will at times require a business owner, manager, or CEO to forego some profits in an effort to ensure the well-being and sustenance of his or her employees.

To the culture’s detriment, Christian charity is largely absent from the modern discussion on how to fix our economy. Our American ethos gives selfish people an easy way out. We are (or were) the land of opportunity, where self-possessing Lockeans could pick themselves up by their bootstraps and make something out of themselves. In such a land, if you aren’t making it, you just aren’t trying hard enough. Or if you are, then there must be something wrong with “the system” and the government needs to step in. The modern individualist American knows far too little of the Christian duty to give.

The beauty of charity is that it’s something you can do right now. You can give money. You can give time. You can encourage your friends, family, and business associates to do the same. You can challenge the businesses you buy from to give back. You can encourage your church to aim for more (and fund them accordingly). You can work with local community organizations. And all of these things will have a more significant and lasting effect on you and your neighbor than calling your congressman ever will. Christian charity will not eliminate poverty, but it will lead to a far more healthy and properly ordered society, where perhaps the poor aren’t so poor, where wealth is gained and used with more humility, and where people are given a better chance to move between income classes.

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  • CDville

    I am so tired of the false allegation that political conservatives are greedy and selfish. Compare the tax returns of Democrat and Republican politicians, and see who gives from their own pockets and who prefers to buy votes by handing out the taxpayers’ money.

    • Soliloquized

      Good point! Here’s an article that helped me understand liberals, it’s all about their feelings and not logic.

      http://www.americanthinker.com/2013/06/why_liberals_kill.html

      Excerpt follows:

      “Liberal institutions straightaway cease from being liberal the moment they are soundly established: once this is attained no more grievous and more thorough enemies of freedom exist than liberal institutions.” This quotation’s author, Friedrich Nietzsche, was no traditionalist himself; in fact, he was a harsh critic of Christianity who coined the phrase “God is dead.” Yet he knew that your republic would be dead the day liberals assumed enough power within it.

  • Soliloquized

    Root, hog, or die. In Jesus’ time, was a great effort made to sustain the poor and needy? Historically, was a great effort made to sustain the poor and needy? Whence came the desire in America to degrade the life of all to lift the life of the needy?

    America is a land of finite financial resources. Americans have always been generous, Conservatives with their own money, liberals are generous with the money of others. Leaving a corner of a crop to aid the needy is not tantamount to harvesting the crop for the needy, processing it, packaging it, and spoon feeding it to them. This is what welfare in America has become, the audacity for some to say that illegal immigrants do the jobs that Americans don’t want. Why should someone on welfare, when offered a job, have the right to decline it?

    There are indeed needy that cannot work, physically or mentally disabled, these should be the focus of Catholic and other Christian charity, and the Catholic Church and other Christian charities have a laudable record as such, but as I see churches (non Catholic) in my neighborhood that appear to be the center for aid to probable illegal immigrants, and other unknown organizations are cycling in a plethora of Bhutanese, I have to wonder why we are bringing indigent people to America and placing them on welfare. I have to wonder how that’s even legal.

    If we had a principle of Root, Hog, or Die, these people wouldn’t be here. It’s the charities that are creating a welfare state, and ultimately the charities will result in a decline in the standard of living of indigenous Americans and the loss of control over our political system.

    Maybe that’s the intent all along.

    • Bill_B

      You said, “Why should someone on welfare, when offered a job, have the right to decline it?” I know you are arguing against welfare, the redistribution of income, in your other remarks, but this question, which you seem to intend to pose as a rhetorical question, leads me to ask you (hoping the answer is “No”): Would you impose forced labor on welfare recipients?

      • Soliloquized

        Impose forced employment, yes. Why should a healthy person collect tax payer money without offering something in return?

        I’ve argued with my fellow unionized and well recompensed coworkers that being idle at work, especially when things to do are available, is theft, just the same as if they pocketed some item owned by the employer and walked out with it.

        Likely, all people on welfare won’t be able to work all the time, this is something we’ll have to accept, but if jobs become available, and are within the capacity of the welfare recipient to do, why should they have any option to decline it?

        Forced labor carries a negative connotation, breaking rocks with a sledge hammer while chained to a steel ball, but is picking fruit really forced labor or forced employment?

        • Bill_B

          I don’t think you want to be one of the people promoting the servile state. But by making suggestions as to how to make welfare financially feasible, it seems to me you inadvertently imply that “welfare”, income/wealth redistribution, is a more-or-less permanent part of the structure of our economy. And look what you end up saying, in effect: “If he doesn’t get a job within 2 years, someone ought to pick a job for him and make sure he gets to work on time.”

          If we can’t implement a structurally sound economy, one based on the principles of economic justice, soon many more of us will suffer the degradation of being FORCED into working jobs that we don’t want. It’s very bad as it is, for those already pushed onto the dole. This may be where our disagreement is. I think people have been more-or-less forced onto the dole, just as I have been more-or-less forced onto the credit cards (on which my creditors are not charging interest due to my inability to pay interest).

          As to the improvement of our economy, here I will only try to make this one point: Since the mid-to-late-1700’s machines began replacing labor and doing things that labor could never do, yet mainstream economics is still not based on this fact. Paraphrasing what Robert Ashford wrote, in Binary Economics*** (University Press of America, 1999) on page 100-101, J. B. Say’s most important objection to Adam Smith’s approach may be this: Adam Smith was ignorant of the principle that it is not man’s labor alone to which should be ascribed the power of production; it is to man’s labor/industry COMBINED WITH those agents which nature and capital furnish him that such power should be ascribed; and this “ignorance precluded him from establishing the true theory of machinery in relation to the production of wealth.”

          (As you probably know, Adam Smith, known by many as the father of modern economics, wrote Wealth of Nations in 1776, during the period when “the tools of agriculture and industry were still small and the increases brought by technological progress were five- or ten-fold rather than the hundred- and thousand-fold increases in per-capita output that were to come.” J. B. Say wrote A Treatise on Political Economy in 1830, at which time those increases were more apparent.)

          *** – Mr. Ashford points to Louis Kelso as the man who offered the first statement of the economic paradigm referred to as binary economics. In 1958, The Capitalist Manifesto, by Kelso and Mortimer Adler was published, the first of Kelso’s published writings on the subject.

          • goral

            Adam Smith is considered the “father of modern economics” in title only. The real “father” of modern macroeconomics is Maynard Keynes. It is his gov’t controlled economic thinking that was adopted by virtually all capitalist nations. He gets the big prize for deficit spending. He was a banker, bureaucrat, intellectual lefty. Essentially, what we would consider a liberal Democrat, presently.
            We, in the capitalist world, are at the mercy of big gov’t, big buss. and big bankers. Their slogan is: no credit, no problem! we’ll create money for you.
            Modern “wealth” is created by the treasury. So… before Adam Smith has his titular distinction made real, there will first be major civil upheaval.

          • Bill_B

            Yes, modern “wealth” is a house of cards, the house that Keynes and FDR built by allowing the government to create money backed by debt. But, as I am starting to learn, whether it is Keynes on the left or Hayek on the right, they all emphasize “Labor productivity” as the key to growth and prosperity. This ratio, of the dollar amount of goods and services produced (GDP) to the number of labor hours spent in the production of those goods and services, does not seem to give us an accurate indication of the prosperity of any given country, especially ours where so much productiveness can be attributed to non-human inputs to production (capital). Nor does an increase in labor productivity cause an economy such as ours to grow nearly as much as would widespread ownership of capital assets.

            And yes, the banks create money for consumption purposes, backed by consumer debt, as a supplement to government handouts. It’s part of the game they have devised for us (er, I mean that we have let them devise for us). But the rules do not allow people without savings to obtain credit for the acquisition of capital assets, even though financing mechanisms could be adjusted to allow us to do so on free-market principles.

            Today’s post on the Just Third Way blogspot: http://just3rdway.blogspot.com/2014/02/its-called-myra-iii-better-idea.html Own or be owned.

          • Soliloquized

            Thanks for the response. I use an Android tablet, when I write something this long, I always use a word program, then transfer it to the text window.

            We have common ground on at least one point, that being the evils of automation. as U.S. manufacturers continue to export manufacturing and automate domestic jobs, more and more people loose the ability to easily find gainful employment. I’m not sure where manufacturers think people will get the money to buy their products when no one is working.

            Another issue I have is the disposable nature of everything. I stopped buying disposable razors, now using an old fashion cup with cake soap and brush, and have a nice German made razor handle. But irony still abounds, since I’m saving the world one razor at a time, I’m also denying the need for some manufacturer to make disposable razors, so fewer people work. Oy vey! My head hurts.

            Further, our proclivity for digital media has denied employment to people that make CDs, the metal disk used in them, the plastic, the time to burn the data on them, packaging used to ship them, packaging them, delivering them. I’m sure I’m missing many employment opportunities lost. My son still only buys CDs, and loads them on his phone, so he’s keeping the job possibilities there.

            I don’t have the answers, but still believe those on welfare that are offered a job commensurate with their abilities should have to avail themselves of such offerings. One can hardly lament being unemployed and justify passing up offered employment.

            Thanks again for the exhaustive reply, I enjoyed reading it.

            Best regards.

          • Bill_B

            I was anti-automation, then I heard about the Center for Economic and Social Justice (Norman G. Kurland, President) and binary economics. Now I’m for-automation and widespread ownership of the the machines, etc., so people will have more time for (true) leisure (see Josef Pieper). Widespread ownership can be accomplished at the same time that the idea of private property is returned to prominence.

  • goral

    One can not serve God and mammon, Jesus admonishes us. We have two necessary authorities that rule over our lives – Church and gov’t. In any community, before there was gov’t,, the church was. The two can and must co-exist. The gov’t has Cain’s attributes while the church has Abel’s. It is the job of the citizens to make sure that Abel is safe and prominent. In the last generation Cain has won the hearts and minds of the populace. He has the largesse to dispense. The naturally lazy and greedy segment of the population is now paying homage, not to God but mammon.

  • Bill_B

    People must be given opportunity to acquire capital assets ON FREE MARKET PRINCIPLES. Capital assets are “independently productive” and widespread ownership of these assets would result in economic growth due to an increase in aggregate demand for goods and services. Capital assets pay for themselves, but, in effect, BANK LENDING TO FINANCE THE ACQUISITION OF CAPITAL ASSETS IS UNNECESSARILY RESTRICTED to the already wealthy. CAPITAL CREDIT CAN BE MADE AVAILABLE TO ALL CITIZENS THROUGH LOCAL BANKS AND THE FEDERAL RESERVE SYSTEM WITHOUT COMPRISING SOUND LENDING PRINCIPLES. This is a matter of justice. We need to modify our laws and institutions to a small degree so that they are just, so that they allow people this opportunity. Reading the ideas of people like Jean Baptiste Say, Harold G. Moulton, Louis & Patricia Hetter Kelso, Mortimer Adler, Rev. William J. Ferree, Norman Kurland, Michael Greaney, and Robert Ashford, we can all begin to understand that it is our duty, in charity, to fight for this revolution of ideas.

    Since the Industrial Revolution, jobs have been eliminated by capital assets (non-human factors of production), and conventional economists still talk of increasing “labor productivity” as the basis for growth. But as all of these great machines (etc) replace labor, and do more than what labor on its own can do, soon there won’t be enough demand for goods and services for anyone to thrive (unless we have what nobody wants: slave labor, with all people not owning the machinery being slaves).

    The only way to regain our freedom, our dignity as human beings, is for all citizens to be owners of capital assets to the extent that a large portion of family income is earnings from those assets.

    This
    is NOT SOCIALISM and it is not capitalism as anyone has ever known
    it. http://just3rdway.blogspot.com/2012/10/why-not-capitalism.html

    • Bill_B

      Kelso & Adler, on page 30 of The Capitalist Manifesto (1958): “Only if freedom from labor becomes freedom for leisure will the capitalist revolution produce a better civilization than any so far achieved, and one in the production of which all men will participate. Only if men thus use their opportunity for leisure will the capitalist revolution result in an improvement of human life itself, and not merely in its external conditions or institutions. As labor is for the sake of leisure, so freedom and justice for all are the institutional means whereby the good life that was enjoyed by the few alone in the pre-industrial aristocracies of the past will be open to all men in the capitalistic democracies of the future.”

      “Sleep, play, toil, and leisure represent diverse goods in human life. But they do not have the same moral value. As contrasted with idleness, indolence, or the wanton waste of human time and energy, sleep and play contribute to human well-being. But they contribute less than productive toil and leisure. All the goods that contribute positively to human well-being must be sought in the pursuit of happiness, but they must be sought in the right order and proportion. A man defeats himself in the pursuit of happiness if he places the goods of the body above the goods of the soul, or if he plays so much in his free time that he has little time left for leisure.”