Science in Christian Perspective

The American Economic System in the Light of Christian Teachings*
A. ROBERT HEMMINGSON**

From: JASA 13 (June 1961): 6-11.

To survive as well as to improve his material wellbeing, man has long been concerned with economic activity. God gave to man the capacity to work. Further, He gave man command over the world and its resources. So it has been that man has worked, putting these resources to use to produce material goods to satisfy his needs and wants.

It was not long before mn began to order his economic activity. This was a necessity, since the resources needed to produce economic goods were not available in unlimited quantities. Choices had to be made to allocate these resources among their many alternative uses, and to try to insure that they would be used efficiently. Also, since resources were limited, the final goods produced were limited, too, and so some means of dividing these among men had to be devised. What we call an economic system evolved to answer these questions of what to produce, how to produce it most efficiently, and who would get what was produced.

Today our economic activity is guided by elaborate economic systems; our American free enterprise or so-called capitalistic system being one of the significant ones. Though we live our lives within the framework of this economic system and should be familiar with it, it will be well to pinpoint a few of its major characteristics, without making any evaluation at this juncture.

*Paper presented at the joint A.S.A.-E.T.S. meeting in Chicago, June, 1959.

**Mr. Hemmingson is head of the Business Administration and Economics Department, Augsburg College, Minneapolis, Minnesota.

The basic fact about our economy is that it rests upon free choice by individuals and business firms within limits set by law, custom, and an individual's personal situation. There is no one authority which dictates the operation of the system. Rather, this is dependent upon many individual decisions.

This basic fact can be seen in several ways. The term private enterprise is often used. It indicates that the decision to undertake a particular enterprise is privately and individually made with only limited public direction. The ownership of property and the uses to which it is put are also privately and individually made, with only few limitations. Consumer sovereignty is recognized. Consumers freely decide what they want to buy according to their desires and their ability to pay.

Aside from this fact of freedom, there are two other aspects of our economic system which should be mentioned. One is the profit motive. To a great degree individuals and business firms are stimulated to work and produce because of a desire for greater wealth and income. Further, arising out of the profit motive is the attitude of competition which exists within a free economy between both individuals and firms. This competitive profit motive is said to be a necessary stimulus in order to increase effort and efficiency.

The other characteristic is the price system. Price is the instrument by which goods and services are evaluated and exchanged, Pricing works as a system to determine what is produced. If a producer can sell goods at a price which consumers will pay, the goods will get produced and sold. It also works to dete mine who gets what is produced. Income received can be thought of as a price paid for services performed. The amount of income received will depend upon the price the economy will pay for particular services. Whatever income is thus received will determine what share of the goods produced can be purchased.

This is a very brief summary of the main elements of our American economic system, but it will help to fit the discussion which follows into context. The study of this system in action is the work of economists. It is their job to measure the success or failure of an economic system in meeting the needs and wants of people; that is, "to study all -of the decisionmaking forces, practices, and traditions, and to decide whether they are promoting the general welfare."'

The term general welfare immediately raises questions. What is welfare? Economists have no true answer to this question, since it lies in the realm of value. On the whole, economists respond to the question of values by accepting those of the culture in which they find themselves. Their analysis of the economic system will relate itself to this given set of values. Hence, economics per se deals with means not ends.

A Christian approach to economics, however, must raise the question of values. Christianity is concerned with ends as well as means. The intent of this paper then is to raise questions about the goals to which our economy is directed, as well as the means by which they are achieved, and to examine the cultural values on which these goals are based. The latter involves not only a consideration of cultural values as determinants, but also, how these values are shaped by the economic system itself. Admittedly, this entire analysis must be selective and brief because of the time available.

As a basis for evaluation, some of the ethical ideals of Christianity, which have a bearing upon economic activity, should be indicated. One of the principal elements is a depreciation of the importance of material wealth and riches. Many Scripture passages could be cited to substantiate this. The content of these passages would suggest that it is the worship of material goods which is wrong and not the material goods in themselves. In addition, men are identified as stewards of their possessions, which are really gifts from God, rather than as owners in any absolute sense.

Another element of the Christian ethic is the creation of a society based upon love and justice for all men. This must apply to the economic ordering of life. Economic activity should not be directed to benefit a few at the expense of others, nor should a concern for one's neighbors be neglected while promoting selfish personal goals.

The New Testament, however, clearly states that man because of his nature cannot achieve perfection. His nature leads him to alienate himself from God as well as his fellow men. His attempts to maintain ethical ideals will always falter to some degree. However, if the Christian faith has permeated a man's life, he will make every effort to show forth the love of God which has claimed him.

Since all economic systems are the devices of men, they, too, are not perfect instruments of love and justice, but bear in their operation the marks of human sin. No system has been created and carried cut by man which conforms to the perfect will of God. But as stated by Rufus Cornelsen in the book, Life in Community:

... the purpose is not the negation of life. Veiled in the dark cloak and the iron -hand of law is the positive function of leading and impelling man to order his life at least in a minimal way according to the will of God embodied in His creative act.²

With this introductory background we turn to one of the chief goals of our economic system. This is the goal of producing an ever-increasing flow of goods and services. Certainly, the free enterprise system has succeeded in the long run in organizing production so that Americans have been supplied with an increasing quantity and variety of material goods. When a comparison is made of the average American at the turn of the century with his counterpart today, there is little doubt that his possessions have vastly increased. In the eyes of most citizens this is a pleasant situation, and they point with pride to this success of the free enterprise system. This success, however, is not without ethical implications.

As has been suggested earlier, the automobiles, refrigerators, etc., that people have are not in themselves an evil, as long as they remain only a means of improving human existence. It is hardly wrong in itself to lift life from the level of bare necessity.

It seems, however, that for many people the accumulation of goods soon becomes more than a means to better enjoy life. Rather, it becomes an end in itself. This appears to have happened to a great degree in our own American situation. Many expend their entire thought and effort to improving their material comfort. The fact that the Smiths have a new car means that they, too, must shortly own one above all else. An insatiable desire for more and more becomes their obsession.

When this is the case, there is little doubt about the effects upon human values. Men become engaged in a struggle over the available goods, and thoughts of brotherhood and charity are relegated to academic discussion. The idea of stewardship of goods is not generally recognized. As E. J. Urwick said in an article, "Ethics of Competition.":

2. Rufus Cornelsen, "Christian Faith and Economic Life," Life in Community (Philadelphia, Muhlenberg Press, 1957), 111, p. 76.

Surely, the simple fact is that an acquisitive society is also a sick society, and its sickness is of the soul rather than of the body. It does not so much matter whether or not its competitive activi,ties fill all our stomachs withthe sort of food we want or whether they satisfy some or many of our shifting desires. Its real curse is that it trains us and even compels us to become more insatiable in our desires with no goal before us except the goal of more.³

It must be admitted further that the economic system as such has helped promote this perversion of values. Driven as it is by the desire for private profitable business success, the system requires continuous expansion of the consumption of goods. Unless newly created goods are taken from the market, a business decline may well result with its attendant effects upon all areas of the economy. Hence, consumers are told it is un-American not to desire and buy more goods, Advertising is used to create demand where none previously existed. This pressure upon consumers promotes the tendency to make more possessions the all-prevading ambition,

Related to and intensifying this alienating desire for material goods is the concept of private property. It is not my intention here to argue whether it is or is not God's will that men have private property. Rather, given this fact, it is true that goods become even more attractive when individuals can privately own them. This tends to emphasize concern over them.

However, there is another side to this. The private ownership of property seems necessary if individual Christian stewardship of goods is to have meaning. A person who recognizes this stewardship can only exercise it to the degree that he possesses property.

Closely associated to this discussion is the matter of the profit motive. The profit motive refers to the driving force of individual economic endeavor in the accumulation of profit. It is this motive which deserves ethical scrutiny. What has already been said about the accumulation of material goods as an end in itself has as much application in this context. The moral effects of seeking profit for its own sake are about the same.

Would this suggest rejection of the profit motive? Such rejection hardly seems possible. It is yet to be proved that other nobler motives can be substituted successfully, taking man's imperfection into consideration. A change in the profit system does not bring the desired result either, as evidenced by the Soviet Union. What is necessary is that Americans develop a sense of stewardship over all wealth. This relates both to profit and to the general accumulation of goods. If individuals accept Christian stewardship as a means of voluntary discipline, they will be less preoccupied with the pursuit of gain.

As indicated previously, the price system operates to determine what share of goods each individual has; this being based upon the income the economy supplies to him for the services he performs. In the free functioning of the system no ethical evaluation is made of the distribution which results. Again a Christian economic evaluation must go the additional step.

The effect of income distribution may be noted in several ways. Production, to some extent, tends to be directed to meeting the luxury demands of the wealthy, while the basic needs of the poor sometimes are not satisfied. In a free market economy the desire for goods must be backed up by money demand, if the production of these goods is to result. Along the same line, certain services in a free economy are not justly remunerated.

There are social consequences of the distribution of income, too. Opportunities, education, and legal justice are often tied to an individual's wealth and in come.

Various methods have often been advocated for bringing about a more equitable income distribution. it is difficult, however, to determine how much equality is advisable. Too much may reduce incentives and efficiency and place restrictions upon freedom which are not consistent with democratic ideals. On the other hand, since the level of income for an individual is often a matter of inherited ability, good luck, or other fortuitous circumstances, gross inequality cannot be maintained as an absolute individual right.

It appears that justice, equality, and freedom must be weighed one against the other to arrive at what might be a reasonable distribution of income. Perhaps, these can only be brought together in the light of Christian love. There is little doubt that the more fortunate should be responsible to a degree for the less fortunate. That the government has and should help to level the inequalities of income and wealth, as well as directing the use of income to certain areas, is generally accepted. The question remains-how far should we go? Most economists admit that present inequalities could be alleviated further without damage to the economy.

Another feature of our economic system which deserves attention is the tendency for economic activity to follow a cyclical pattern, shifting from peri-

ods of expansion and inflation to periods of decline and depression. The effect of this business cycle upon the lives of Americans is considerable.

Recession and depression have plagued our economic system throughout its history. Though considerable progress has been made in understanding the causes of such periods of business decline, economists are not yet fully agreed about the initiating factors nor about the cures. However, the consequences are certainly measurable. Unemployment of the labor force, a declining income level, bankruptcies, bank failures, discouragement, and despair are all a historical reality.

During the last few years we have experienced the other extreme of instability, that of inflation. A demand for goods which has expanded faster than the supply, as well as other institutional factors, produced this inflation trend. It has had its effects, too. Those on fixed incomes have found their purchasing power declining or accumulated savings have lost their value. Continuous or hyper-inflation can destroy people's confidence in the economic system.

Inflation and depression have not only had shortrun effects, but have produced lasting changes in our social thinking. One of these developments is the security consciousness of American people today. One needs only to mention such things as social security, unemployment benefits, guaranteed annual wage, and many more to prove the fact. These demands for economic security in various forms have arisen because of the desire of individuals to offset the shifting tide of business activity.

Much has been written about the good and bad aspects of this security emphasis. Some writers have chided people for becoming so concerned about security and the elimination of all risk. These writers say people are too willing to obtain security at any price, including the price of freedom. Others have suggested that too much economic security breeds moral degradation. This relates to what was stated earlier about being too well-off as a nation. It has been said that a rousing depression is good for us once in a while to help clear the air.

On the inflation side, writers suggest that inflation is a necessary price paid for economic growth. A little inflation serves as an incentive mechanism for the economy.

Viewed from an ethical standpoint, extremes of depression or inflation are to be questioned. Reference to the depression of the 1930's will show how the lives of many individuals were permanently scarred by this economic crisis. It is hardly right to talk about "clearing the air" to a man whose family is bordering on starvation. Further, it is an open question wbetber people have higher values during such a depression period. The reformation of men is accomplished from within and not simply by changing physical surroundings. Extreme inflation is likewise to be condemned because it works hardship upon many, though it may be of advantage to some. To wipe out the value of savings accumulated from a lifetime of hard work does not seem justifiable.

To offset the extremes of the cycle our national government has come to have an increasing role in guiding economic life. This is another apparently lasting effect. Today the use of fiscal and monetary policies is accepted as a necessary approach to solving the cyclical problem. Our current government-sponsored welfare programs are also an outgrowth of depression-inflation concern.

The widening sphere of government influence has led some to protest. It is said that creating a welfare state to which individuals turn for the solution of their problems saps the strength of a nation. Man was meant to face many of the hard problems of life himself and not turn their solution over to an inanimate agency.

Once more the lines are not easily drawn. In our industrial society an individual cannot overcome his economic problems alone, since he is involved in an economic structure over which he may have little control. Thus, out of personal concern he must depend upon group action in certain areas.

It is also again difficult to reconcile justice and freedom. justice might demand the creation of a planned economy, where economic instability could be eliminated to a much greater degree However, such a planned economy would of necessity involve a sacrifice of freedom. The middle way is a mixed economy, such as we are presently attempting, where a compromise of justice and freedom is hopefully affected.

To this point the discussion has centered primarily on the economic activity of man as a consumer of goods. The picture is not complete unless man is also viewed as a producer of goods.

Production in this country results from the operation of a vast industrial complex. It is hardly necessary to point out that few goods produced today can be associated with particular workers. Products are created through the interrelationship of men and machi~nes and flow from an assembly line process which leaves unknown the individual identity of workers.

The development of this industrial society has resulted in man becoming a marketable commodity. Like a machine with interchangable parts, the industrial system can interchange workers. With efficiency of production set as an economic goal, both men and machines are manipulated to achieve this goal. Technological improvements, for example, will often require the shifting of various productive factors.

The existence of such an industrial society seems to frustrate man in his role as a producer. Man was meant to be creative according to his abilities. To be a creative producer, however, he must be able to express himself in that which be produces. Since the industrial system does not permit identity with production for the individual worker, he is left without the power of personal expression, and even more, without a sense of responsibility to his work.

Another consequence of the industrial system is to place the fate of workers into the hands of business managers. When workers are viewed as a commodity to be added or subtracted as production or efficiency demands, the worker finds that his job affords him little security. Of course, the development of labor unions may be explained in part as an attempt to provide protection against such insecurity.

There is still another problem which will require greater concern in the future. The industrial system has reduced the working day from about seventy hours to forty hours per week. It appears certain that with more technological advancements or automation this working day will he reduced even more. Men are thus being provided with increased leisure time. It is questionable whether people have learned how to creatively use these free periods. To some it has been a personality-destroying factor. If the trend toward greater leisure time continues, this may well be one of the major challenges to be faced by our culture in the years ahead.

Considerable criticism has been directed toward industrial society in recent years because of its highly organized and regimented nature. "The organization man" is an expression of this idea. This criticism really revolves around the loss of identity and personality by management people. Everyone is to he a measurable quantity and conform to set standards and practices.

One final consequence of industrial society has been the increase in the pace of living. In a highly competitive and efficient world, men are forced to move at high speed. The ulcers and nervous conditi~ons are the price paid for this pressure.

In evaluating these consequences of industrial society, one would not want to suggest its destruction, if that were possible. Though many presently cannot express themselves creatively in their work, perhaps, relief lies in the fact that workers may be freed eventually from this position as automation continues. It would be possible then for man to be creative in his leisure time. Such creativity would not involve producing goods for the market, but only to provide the self-satisfaction of accomplishment. As far as business managers viewing workers merely as a commodity, this is not as serious a problem today, given the power of labor unions and the actions of government. However, the problem of conformance and the pace of life may be much more difficult for a person to cope with. To remove oneself from the active arena of life to a totally separated society does not seem to be an adequate solution. Christians are often tempted by such possibilities. Rather, the attempt should be made to live within the given framework of society and help to remold it where possible, but even more, it is necessary to learn to rise above the pace of life and view it in a higher perspective.

Though really a problem for sociologists to study, a few comments should be made about the social tensions which -have arisen as a result of the institutional arrangements of our economic system. These social tensions have had their effects upon our culture.

One obvious tension is between labor and management. Though we do not have a class struggle as Marx predicted, the labor unions and management do often represent conflicting interests.

Another tension may exist for economic reasons between the government and individuals or groups. This may result from some groups pressuring for concessions, or it may arise from others objecting to the concessions that have been given. The present farm problem involves conflict of both kinds, for example.

A tension may be recognized between consumers and business. Business firms are often able to create agreements which damage consumer interests, such as price fixing. Consumers as a group have not been able normally to defend themselves except through government action.

The distribution of income creates some tension between the haves and the have-nots. This is not of the proportion found in nations where extreme wealth is set over against bitter poverty.

Of course, the fact of competition itself creates social tensions. Business firms sometimes engage in battle tactics to overcome a competitor. Individuals compete with one another for better jobs or better income.

Such tensions as these are proof that our society is not perfectly ordered. It is further evidence of the basic alienation of man from man and man from God. Some Christian realists state that since such tensions cannot be fully resolved, we must work to structure our society so that competing groups have equal power, and then create standards based upon love and justice which these groups can attempt to follow in a particular situation of conflict.

Though all of the goals and characteristics of our economic system have not been covered, nor all of the ethical implications adequately examined, it is hoped that enough has been said to indicate some of the issues.

One point which has been emphasized throughout is that our economic system operates according to the values of the individuals within this country. Their lack of sensitivity to higher values creates the ethical issues of economics. The hope then for an economy which more perfectly reflects God's command to men must lie through reaching individuals with the message of God. This message can transform people, bringing them to see that they need to reorder their lives according to the basic command of love. Though this does not guarantee the solution of the tensions which exist in an industrial society, men committed to the Christian Gospel will reach a higher plane in resolving them.

The ethical improvement of our economy cannot come by legislation or by the creation of government agencies. By this means one evil may be corrected, but in its stead a new one is created. This often appears to be quicker solution, but not an acceptable one.

The words of Kenneth E. Boulding in his book, The Organizational Revolution, seem a fitting conclusion to this paper:

... there is also no substitute for the Word of God -the sharp sword of truth in the prophetic individual, the penetrating moral insight that cuts through the shams and excuses of even the best organized society. However clever we may become and however far we move toward betterment through cleverness and skill, there is always a place for wonder, for humility, for reverence, for sensitivity to the still small voice of the Creator of all men and all morals.⁴

4. Kenneth E. Boulding, The Organizational Revolution, (New York, Harper and Brothers, 1953), p. 220.