Book Review: Money, Greed, and God

“Money, Greed, and God: Why Capitalism is the Solution and Not the Problem” by Jay W. Richards

Can a Christian be a capitalist?

This is an important question, and it is how Jay Richards opens his book. Many Christians would, of course, answer “yes”, but how many are able to logically defend that answer from Scripture in the face of so many challengers who argue that free market capitalism is inconsistent with Christian charity? Don’t passages such as Acts 2:42-47 depict a form of Christian socialism in the early church?

Even many of the free market’s biggest supporters seem to confirm this disconnect  between capitalism and Christianity. Philosopher and author Ayn Rand — one of capitalism’s biggest proponents — considered greed and selfishness to be virtues, and charity a waste of time… hardly compatible with a biblical worldview!

The clash between economic philosophies is at the root of nearly every political disagreement (which should come as no surprise to Christians, given Scripture’s grave warnings about the importance placed on money), yet few of us — even many of the most politically active among us — ever undertake a serious study of economics. Because of this lack of study, there are several economic myths that are rampant in our society; myths that are believed by those on the political left and right. Richards’ book aims to address eight of the most common myths, and to present Scripturally-founded answers to economic questions in terminology that doesn’t require a course in macroeconomics to understand. And what a helpful book it is!

Richards’ claim is that “almost every mistake that Christians make in economics can be boiled down to eight simple myths.” Each of these myths is coupled with a question that we have all likely encountered, if not asked ourselves. Here are the eight myths and questions, along with a short summary of Richards’ points:

The Nirvana Myth (contrasting capitalism with an unrealizable ideal rather than with its live alternatives) — Can’t we build a just society?

One of the primary criticisms of capitalism is that it is not perfect. Because all people have been created with an innate sense of morality, we long for fairness and justice. In a perfect world, there would be no injustice and no need. The Bible tells us that such a time is coming, but it is not yet here. Socialism, Keynesianism, and other competitors of the free market are attractive because they promise to put an end to poverty and need, but is has been shown historically and empirically that these economic systems do not work. This is because they are based on an unrealizable ideal — unrealizable because this is a fallen world populated by sinners. Though capitalism is not perfect in comparison to Heaven (or “nirvana”), it is far and away the best means of reducing poverty when compared to its live alternatives.

The Piety Myth (focusing on our good intentions rather than on the unintended consequences of our actions) — What does God require of us as Christians?

Christians know that motivation matters. God cares about why we do things, not just what we do. Yet Richards writes, “Spiritually you’re better off a little mixed up about economics than indifferent to human suffering. Economically, though, only what you do is important, whatever your reason.” Christians are especially susceptible to believe that our good intentions to help the poor trump our methods, and so we often fail to consider the consequences (intended or not) of our efforts to alleviate poverty. Richards takes a look at a few of these well-intentioned actions (a “living wage”, fair trade, foreign aid, government-run welfare, etc) and shows that the net effect of these is almost always an increase in poverty. For more on this topic, check out Fikkert and Corbett’s When Helping Hurts.

The Zero-Sum Game Myth (believing that trade requires a winner and a loser) — Doesn’t capitalism foster unfair competition?

Richards demonstrates that the rules of free markets allow for trades in which all participants are better off than they were before. An exchange free from force, trickery, or coercion allows a win-win situation for trading partners. As the author states, “Understand this one simple fact, and you understand economics better than most critics of capitalism.” Because of the possibility of win-win transactions, competition is good. It drives prices down and wages up (after all, labor is a commodity), and motivates creativity, leading to new and more efficient ways to solve problems and meet needs.

The Materialist Myth (believing that wealth isn’t created, it’s simply transferred) — If I become rich, won’t someone else become poor?

Closely related to the Zero-Sum Game Myth, this myth is based in the idea that there is a fixed amount of “wealth” in the world, and that economics is all about how big a slice of that pie everyone gets. However, just as God created matter ex nihilo (out of nothing), so those made in his image are creators. Wealth is not fixed, but in a market economy can grow over time. Understanding this leads to the resolution of one of the biggest points of contention in economics. If there is a fixed amount of wealth, then it stands to reason that we ought to equitably distribute it among all. However, if wealth can be created, it matters little that there is a wealth gap between rich and poor; in fact, we should expect it. It should not bother us if the gap between rich and poor grows so long as everyone is better off than they were before. This is how poverty is truly alleviated, and it has been the net effect in societies in which markets are free. Wealth creation is the only known solution to poverty.

The Greed Myth (believing that the essence of capitalism is greed) — Isn’t capitalism based on greed?

This is possibly the most prevalent myth, and has been widely accepted by both opponents and proponents of free markets. Richards devotes a large portion of this chapter to refuting the aforementioned Ayn Rand, whose “praise of ‘greed’ is the reduction to the absurd of a bad interpretation of Adam Smith’s concept of self-interest.” Richards shows the distinction (which Smith himself understood when he wrote The Wealth of Nations) between self-interest and selfishness. Many capitalists flocked to Rand’s writings (which continue to be best-sellers today) because she rightly opposed communism at a time when few others did. Many of her insights and predictions were correct, but her philosophy has some critical flaws. Capitalism doesn’t need greed (no matter what Gordon Gekko might say). Rather, the rules of the free market channel both healthy self-interest (the basis of the Golden Rule) and unhealthy greed into outcomes beneficial to society. This is a nuance often missed by economists, and so critics and fans of capitalism buy into the myth. Nevertheless, says the author, “At the base of the capitalist system is not greed or consumption, but intuition, imagination, and creation.”

The Usury Myth (believing that working with money is inherently immoral or that charging interest on money is always exploitive) — Hasn’t Christianity always opposed capitalism?

“We must distinguish what the Bible actually says from what we assume it ought to say.” Richards shows that, on the whole, the Bible treats “risk, investment, and interest in a positive light”, and “describes enterprise as productive, not exploitative, and money as fertile, not sterile.” Moreover, the Church has historically played a significant role in the development of capitalism and free markets, distinguishing between exploitative usury and wealth-producing interest at a point in history when nearly everyone in the world believed all interest-charging to be wrong.

The Artsy Myth (confusing aesthetic judgments with economic arguments) — Doesn’t capitalism lead to an ugly consumerist culture?

Another myth as likely to come from the right as from the left, this one is extra tricky. It’s easy to look at “consumerism” as a scapegoat for many problems, but this term is rarely defined. The real problems are gluttony and envy, but these sins are not the same thing as simply using more than we need. As Richards says, “there’s no biblical rule that requires us to consume only what we need to survive. The Bible has a lot to say about the dangers of wealth and overindulgence, but it also frequently treats bounty as a sign of God’s blessing.” It is not capitalism that drives ugliness in our society, but sinful materialism, which is a condition of the heart and not always readily apparent. By misunderstanding this, Christians often squander their energy “pursuing the wrong villain”. Aesthetic solutions such as dealing only with small, local businesses are not real economic solutions, but luxuries which actually hinder the free market.

The Freeze-Frame Myth (believing that things always stay the same — for example, assuming that population trends will continue indefinitely, or treating a current “natural resource” as if it will always be needed) — Are we going to use up all the resources?

This is one of the most pernicious myths, and one we’ve all heard. At the root of this belief are the wrong assumptions that “resources” simply exist in finite amounts, and that people mainly consume resources like locusts. The reality is that resources are created, and “most people in free societies grow up to produce more resources than they consume.” Free markets encourage people to think creatively to solve problems in new ways; the market drives invention and entrepreneurship. For instance, people assume that if we run out of oil, society will break down, but they fail to consider that petroleum wasn’t used for energy until recently in human history. Even if (and it’s a big “if” with so many restrictions on finding and producing oil) petroleum becomes scarce, the scarcity will drive up prices (not like the currently artificially high prices caused by government intervention in the energy market) and lead entrepreneurs to create new ways to provide for energy needs, such as nuclear power… or something no one has thought of yet! This chapter also deals with “global warming” and other incredible claims based on this myth, and shows that laws respecting and protecting private property ownership are the best way to promote environmental sustainability. People take care of stuff they own.

The book concludes with a reference guide containing “The Top Ten Ways to Alleviate Poverty”, which is also available online in this article by Richards. The author’s conclusion is that “rather than despising the market order, Christians should see it as God’s way of providentially governing the actions of billions of free agents in a fallen world.” So can a Christian be a capitalist? Hopefully all who read this book will be able to answer with a resounding “yes”.

This is a book that I sincerely hope every thinking Christian will read, no matter their feelings on capitalism. I believe that everyone has something to learn from the arguments presented in it. Buy it here.

P.S. — Though Richards often quotes Austrian economist F.A. Hayek (“perhaps the greatest defender of capitalism in the last century”), he devotes an appendix to refuting Hayek’s claim that the free market produces order out of chaos, and is thus evidence for the feasibility of Darwinian evolution in biology. Richards argues that “the market order doesn’t just appear from nowhere. It happens only under the right conditions”, and that therefore, “it makes a lot more sense in a providential — a purposeful — universe.

Further resources:

An interview with Jay Richards

The author presenting his case for the two most important myths, the Piety Myth and the Greed Myth:

One comment on “Book Review: Money, Greed, and God

  1. […] in the government and many corporations today. Jay Richards’ book Money, Greed, and God (my review) makes this distinction clearer than any other resource of which I’m aware. Ron Paul also […]

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