Tuesday, July 17, 2012

Justice: Adam Smith and Christian Capitalism

Together, specialization and division of labor form the core of Adam Smith's Capitalism. This isn't just when it comes to producing products; it can also apply to services. Recently, a libertarian-leaning friend of mine implied that we wouldn't need police if everyone had a gun and the willingness to take action when wronged.

Although that line of thinking is consistent with the recent Libertarian reinterpretation of Capitalism, it is not in line with true Capitalism. In fact, that kind of thought completely discounts the core of Capitalism. 

Based on the simple concept of division of labor, a government police force is a great idea. 

I don't want to run around punishing people who injure me or take my stuff:  

  1. I don't have time. 
  2. I don't have the skills. 
  3. As the person wronged, I might be able to exact revenge (I’m not a bad shot), but without a neutral party, it is doubtful that real justice would be served.  

Adam Smith, the founder of Capitalism, devised a system based strongly on Biblical thought. 

He knew that God established Government to do exactly what Capitalism proscribes: to be the party that specializes in punishment of the wicked (Romans 13:4). I can’t personally enact punishment on my own behalf when my job is forgive and, in fact, give them my shirt if they steal my cloak (Luke 6:29). 

A Modern Christian Libertarian-minded person who prefers Ayn Rand to Adam Smith might point out that the Bible includes community judgment for crimes in the form of villagers stoning a convicted criminal. They might see this as support for citizens taking the punishment of criminals into their own hands.

I think that is a sloppy application of scripture. The parts of the Bible that contain village stonings also prohibit eating bacon. That part of scripture applied to the Jews under the Old Covenant (a time when they lived under a theocracy, and remember, the Old Testament theocracy ended in exile--it wasn't sufficient to save them).

Christ fulfilled the old Law (St. Paul explains this in detail in Galatians) and Jesus himself showed that Law's fatal flaw when he was asked to participate in one of those village executions and instead said “If any one of you is without sin, let him be the first to throw a stone at her.” (John 8:7).

St. Paul says, the Law of Moses is a schoolmaster to lead us to Christ (Galatians 3:24). It is not a model of what a government ought to look like. In fact, it resulted in "everyone [doing] what was right in his own eyes." (Judges 21:25). In short, the Law was designed to show that we are not good enough to rule ourselves. 

At its  heart, libertarianism denies any proper role for government. Like communism, it longs for the gradual withering away of the state. But government is something that God ordained to curb to our sinful natures and prevent us from harming our neighbors. Both libertarianism and communism deny that human nature is inclined toward sin.

God established Government to rein-in the problems with human nature. Adam Smith's Capitalism took the principles of human nature and applied them to society. I am amazed at how smart Adam Smith was. The Wealth of Nations contains a wealth of knowledge and I encourage anyone who is serious about economics to read what Smith actually says. Because of how Capitalism has been hijacked by Libertarian-minded theories, I found it greatly helpful to return to the source and begin rebuilding from there. Libertarianism strips away the moral foundation for capitalism, which recognized the human condition, and reduces capitalism to a social Darwinist economic model. That is not what Adam Smith advocated.

Post by Jeremiah Lorrig 

For more on Adam Smith check out our post on  Adam Smith and Farmer Boy.
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