Currency – Most Recognizable Aspect of Economics
and the Least Understood Element of Finance
I have subsumed finance and currency under the general subject of economics using the term, “tangible means” of control. I did this to maintain simplicity and to stay on the trail of economics as a means of control of people on a macro scale. However, simplicity can raise confusion by appearing to ignore and/or unaware of various influential elements.
So, this post will discuss one aspect of economics which most people associate with finance, the most tangible element of economics in everyday life. Yet, economics predates currency since Cain built cities, implying trade and control, before there was any discussion of finances or currency in the Bible (Ge 4:17-22).
Currency is defined as the use of tokens in a country which can take various forms simultaneously (Business Dictionary). However, this is somewhat unsatisfying because it does not define what is meant by “tokens”. What do the tokens represent? This requires an answer if we are to satisfy the “Law of Identity” in Aristotelian Logic or else we are just babbling like any respectable politician. I submit that currency, tokens, can only represent time. Time is the measure of the conversion of materials into currency, raw material into products and the measure by which people are paid for their effort, at least in the modern period. Time is everything since it is the one element that measures the passage of one’s life through this life being exposed to the truth of the Gospel even if only in the night sky (Ps 19:1). These tokens took various forms throughout history. In the Very Ancient and Ancient Kingdoms currency was in the form of valued products, usually by weight. This could include gold, silver, embalming spices, grains, etc. I do not want to overlook bartering but this was usually confined to a small-scale involving perishable goods for other goods and services. Then about 6th century BC coins made their appearance (Ancient History Encyclopedia).
Coins were, are, interesting as they are more than representations based on certain metals because they are imprinted with representations declaring the “glory” of the person, nation, or empire issuing the coinage. The Jews refused to acknowledged that they were no longer an independent political entity since their exile in Babylon. Thus, they rejected the usage of Roman coinage under the heading of idolatry. Yet, in their discussion with Christ over taxation the Jews clearly indicate that it was not idolatry but control that was the basis of their dispute with Rome (Mt 22:15-22). The Pharisees wanted Christ to decide whether to bow to Rome or bow to Judaizers through the false dilemma of paying taxes. Either direction would condemn Him either to Rome or to the Jewish people. Christ clearly saw the trap and turned it on them. He asked for a coin fro the tax. It was a Jew who produced the denarius, can we say hypocrite? Christ then showed them that they are under the control of Rome and obligated to pay its taxes but this does not negate their responsibility for obeying God’s moral law. This issue was never about paying taxes which so many preach about each April. This issue is about control as represented by the currency of the entity who has control. There is no control except as allowed by God {This is a New Testament restatement that any and all rebellion is sin, like sorcery} (Ro 13:1-2). However, currency is only a token, it is not wealth though people often conflate the two as the same.
Wealth is the Basis of the Tangible Means of Control
Currency is the Illusion of Wealth Without the Means of Wealth
Let us jump ahead to the Modern Period with the development of the Nation-State from the ashes of the failures of the Medieval Feudal system and the few remaining empires that have held onto power into the modern era. Paper currency was experimented with during times of national crisis when the tangible means of wealth; i.e., gold or silver were unavailable. These were quickly rejected after the crisis passed but they never went away. In America paper money made a comeback in the War Between the States and was finally adopted and accepted in the 20th century. Paper currency is called “fiat currency” in that the tokens are worth whatever the government and or marketplace determine they are worth. Now, this was also true of gold and silver backed paper currency but less obviously so to the common person. Today, all currencies are fiat and based on the ability of the issuing government to maintain economic parity with the world competition in the marketplace.
Ah, the marketplace, the holy grail of free enterprise in which God is the economic agent in charge ensuring freedom to those who adopted capitalism and rejected socialism/communism. Except that this is not borne out in history before the nation-state and certainly not without its own consequences largely forgotten today. Capitalism, Economic system based (to a varying degree) on private ownership of the factors of production (Business Dictionary). Though commonly called the free market system, it is neither free nor does it control the market. Adam Smith never envisioned it as free of government control and indeed, we went to work for the government and even violated tenants of his own philosophy to enforce government control over businesses. The post Civil War Republican governments experimented with government controlled industries, which performed poorly compared to capital venture monopolies to such an extent that Teddy Roosevelt had to popularize “trust busting” to use government coercion against these capital venture monopolies which were driving government controlled monopolies out of business (The Myth of the Robber Barons). Capitalism has produced a standard of living unknown in human history but it could only function under the early to mid nation-state entity. The problem with capitalism is its excesses which were well documented in late 19th and early 20th century photographs.
Pure Free Market Capitalism
Did Not Improve Standard of Living
This scene is repeated in every nation that has experimented with Capitalism, Communism, Socialism or any other form of economy developed by man. This reality, when published, became the impetus for labor unions, housing and health laws that are still in effect today. The issue is not about which economic system is better than another. This discussion is as fruitless as which governmental system is better than others. This is the same false dilemma the Pharisees tried to impose on Christ to trap Him into an answer that would condemn Him no matter how He answered their question. So, He did not answer their question but forced them to answer His to reveal the sin of their hearts. Christians of today need to be beyond these simple false dilemma issues that are posed by the News-Entertainment industry masquerading as fact-finding organs. We should be concerned with the only question that will improve people’s lives here and hereafter – the Gospel.
The world before Christianity did not have centers of healing (hospitals). Your illness was Kismet, fate, Allah’s will or Karma to name a few of its acronyms. Yet, Christ spoke against such beliefs (Jo 9:1-3). Christianity became lost society’s conscience until it co-opted the Gospel into a “social gospel” robbing Christ of His glory for their own. This has become the impetus for the Great Society so that government may be seen as the savior of people and not God. Yet, while they give with one hand they rob with the other acting as Pharisees, avoiding the very people they claim to love and cherish.
Economics is a tool; as such, it can help you and it can hurt you. This is true of all that man does. Sinful man cannot develop a system free from sinful effects or influence, no matter how well intended. Sin contaminates everything. We are to expose the sin while doing the good. We are not to be overcome by the sin. Americans have, for the most part, enjoyed the “good life” compared to most of the peoples of the world. They give credit to capitalism, democracy, and other such factors. However, they have come to despise their “good life” because it has no power to erase the inner turmoil of sin. The events and systems of this world will be decided by spiritual forces beyond our empirical perception. We are commanded to “Stand Until Relieved” (Ep 6:10-13). The Lord can fight His own battles but for now He is showing mercy and long-suffering bringing more souls to repentance for His glory (Ro 2:1-11). Let us be conduits of His Gospel and not warriors in a lost cause that promotes Satan’s kingdom here on earth (1Jo 2:15-17).
Just above the picture of the run-down shack with a man sitting you state: The problem with capitalism is its excesses which were well documented in late 19th and early 20th century photographs. Your attack on capitalism is misplaced, for it is not the source of the problem. The cause of these excesses is man’s greed. And capitalism cannot be blamed for not controlling these excesses as it is not the agency appointed by God to restrain or punish evil. Punishing evil is the role of government. That there were many excesses means that government was not doing its job. To explain the reasoning supporting this statement, I will start with defining Capitalism as personal ownership of property. Because if you own property then you also have buying and selling. The principle of Capitalism permeates all of scripture. There are almost too many examples to list. The first mention starts at the very beginning in Gen 1:26 where God gives man dominion or ownership for all the earth. This is reinforced later in Gen 2:19,20 where man names all the animals. Only someone who has ownership has the authority to name something. If Adam did not have dominion then God would have just told Adam the names of the animals. But then Adam sinned and God’s judgment was that in dying he would die. And as a result he lost dominion because the dead do not own property. This dominion then defaulted to Satan which is why he is called the “prince of the power of the air.” Eph 2:2. But Jesus Christ obedience and death on the Cross defeated Satan and Jesus became the second Adam who now has the dominion that was lost by the first Adam.
But what does this dominion entail? Is it communal ownership by group of people or is it personal individual ownership? This can be answered in Joshua chapters 14 to 21 where God gave the land to Israel and it was divided up to each tribe and to families in each tribe. Because this is recorded in God’s word that never changes or fails, this is forever. And in addition each family was commanded to never sell their property. It was to be kept in the family forever. This means personal property with rights of inheritance. And government has no rights to this personal property, as demonstrated with Ahab vs. Nibboth’s vineyard. The reason that this property was never to leave their personal possession was that it was looking forward to the Messiah who would rule over them. And we now know this means the Millennial Reign of Jesus Christ. The conclusion is then that there is personal ownership of property in the Millennial Kingdom. In other words Capitalism. If Capitalism was a source or cause of evil, then God would have never permitted personal ownership nor commanded Israel to never sell their personal property.
The most important example of Capitalism is in Salvation. Believers are bought with a price of Jesus Christ death on the Cross and adopted into God’s family. The words in the original language are marketplace transactional words and images. And only those that have been adopted into lineage of the Second Adam will have a dwelling place in heaven and the new earth. All others cannot claim anything as they are still in the First Adam who lost the dominion. The culmination for the believer is in heaven where Jesus gives each believer a new name. We are His personal possession and He has the right to do so.
The only “issue” with Capitalism is its efficiency with money. This is a technical term meaning that there is little waste or loss of money with transactions or buying and selling. Because of this an honest person with hard work and circumstances allowed by God can become very wealthy. And with great wealth comes great responsibility. Because a wealthy person almost always employs many people and has business dealings with many people. If there is any sin in this persons life, then it adversely affects so many people. An example of this is Abraham. He was the richest man of his generation because he had something no one else on earth had, and that was a promise from God for uncountable descendants. He is declared righteous by God because of his faith. But he was human and made a few sinful choices. The one choice where Abraham tried to do God’s job by having a child with the handmaiden is one where the effects of this sin are still being felt today with the descendants of Ishmael. Capitalism provides the environment and conditions where some can become very wealthy. But capitalism is not to blame for evil as it is only a mechanism for generating wealth. The blame lies with the sin in man’ heart. Just as God was not to blame for Abraham’s sin even though God was the One to make him rich in blessings.
In your smearing of Capitalism you confuse or confound several concepts in with economic activity and thereby create a straw man to falsely accuse Capitalism. The first is crony capitalism which is where government is either bribed or is getting some sort of kick back from businesses for favors. Along with this is Monopoly businesses that are allowed to operate with the blessing government. A monopoly means economic power to eliminate all competition through predatory business practices. All of this is by definition immoral, illegal and not Capitalism. It is taking advantage of others who cannot defend themselves. It is the same as not using honest scales in the market place or not taking care of the poor. Or the usury charged by the merchants thrown out of the Temple by Jesus. There were many laws given to Israel for fair and just business transactions and for making provision for the poor. One of which was to not gather all the grain in a field but leave some in the corners and edges of the field for the poor to gather. We also have laws against this. And government’s responsibility is to uphold these laws through punishment. And even if government does not punish, God will at the final judgment throne. Note that God ordained these laws to deal with sin, and in the Bible there was no mention of nor expectation that Capitalism would restrain evil.
Another concept that is confounded is the Laissez Faire philosophy as espoused in the writings of Ann Rand. This is the belief that in the economic domain, that Capitalism somehow has the magical ability to restrain evil and that governmental control is unnecessary. This is completely false because it tries to replace a God ordained function of government with a man made philosophy. Capitalism is just agreed upon terms between two parties for exchanging goods for money. But there is always a party that is disadvantaged and man’s sin will always take advantage of this. Only government is God’s ordained agency for punishing sin. An example of what happens when this false philosophy is followed is the actions of Allen Greenspan. There was a key person in the Finance committee in Congress who saw a problem in the new derivatives market. Many companies and banks were trading these newly invented debt securities and government had no oversight. This person lobbied hard to enact legislation so the government could see and prevent abuse in these transactions. But this bill was successfully blocked by Allan Greenspan who is a student or devotee of Ann Rand. As a result of the greed of man over-extending their debt position, it created a bubble which then burst and America had a financial collapse from which we still have not recovered.
The correct cause for all of the excesses that you list in your post is the evil in mans heart and government not doing its job and/or following after satanic philosophies. There is only one God ordained responsibility for government and that is to restrain sin. But government has taken on so many other agendas, like trying to control the economy by manipulating the money supply, like universal health care, and like retirement benefits for all. Just to name a few.
But the one which is often confused with Capitalism or the Economy, is the manipulation of the money supply by the FRS. Because government is trying to be big brother and fix all of societies ills, it is spending more money than it what it takes in, and has run a deficit for many decades. The only way to keep the game going is to invent money out of thin air. (They talk of creating IOU’s in the form of Federal bonds, but there is no intention of ever paying off this debt because they always kick the can down the road). In other words they are lying to us saying that something has value as long as you believe it has value. In other words “you must believe the lie”. And because the government needs so much money, it tells us another lie that some inflation is good for the economy so that it can inflate the money supply. But the result of this infusion of fiat money has ALWAYS been cyclical economy with booms and busts. And during each bust there is great pressure for the government to do something about the economy and they repeat the same solution of more fiat money that was the cause of the problem to begin with and the cycle continues. So the root of the problem of a cyclical economy is government manipulation the money supply. Capitalism has no influence over the money supply so no blame can be assigned to it for these cycles. (USA has a fractional banking system which only magnifies the cycles, but this is a factor that would take some time to explain)
The conclusion then is that Capitalism is in no way to blame for the excesses. In fact, Capitalism will be with us in the Millennium. The fault for the excesses lies squarely on man’s sin and how that sin has corrupted government.
Unfortunately, the internet devolves into responses that become little more than ad hominems. The use of terms such as “smearing” are connotations placed by the reader and not the author. We should be above such tactics in these discussions. As I stated, it is impossible to present complete discussions in the small space of these posts. I have merely discussed that economics is merely another means of control by: 1) the government and 2) Satan who is the Prime Mover behind all governments.
The author has committed the logical fallacy of personifying Capitalism. It is a methodology that needs a particular environment, set of circumstances, to function. The fact that capitalism, communism, socialism or any other ism functions as defined is: 1) man does not have the capacity to appreciate and control all the factors and 2) man can never appreciate or control all the factors since there are spiritual components of which we are unaware. The linking of Capitalism with Salvation cannot be sustained. According to Smith’s writings, capitalism is the voluntary transaction between two or more entities that are mutually beneficial. Salvation is none of these in that man is not free to chose. He is a slave to sin and dead in his trespasses. This has been proven by every person discussed in the Bible. God must actively intervene according to His will to bring a person to life “during” the process of salvation. Now, this linkage is a digression from our original discussion which had a more narrow focus.
I appreciate the effort jrs put into writing his objections and his passion. I have not actually stated my position on any economic stance. I have merely pointed out that capitalism could not have been developed before the development of the nation-state or it would have been. Capitalism has been the most efficient at providing the nation-state the power it needed to project power. It has provided its adherents with a standard of living unprecedented in history. I also agree that elements of capitalism have been present at various levels throughout history. I do not believe that any device of sinful man is good, it is just necessary for the present time. Indeed, in my next post I will show how it did not function until the underpinnings of Western thought were put in place. Sincerely.
LLS