The Religious Left Speaking Nonsense to Power

Much criticism is made of religious conservatives for prooftexting cherished positions. Frankly, much of it is deserved. I have seen this with everything from gender roles, to financial management, to church government. But the prooftexting is not just the work of the Religious Right. The Religious Left is every bit as guilty. In this lengthy post, I want to highlight three stories in recent days that illustrate this beautifully.

Jubilee 2007

First, there was a story at Beliefnet.com last week about Jubilee 2007 called New Campaign Revives Push for Debt Relief. It is about a bill being proposed to Congress that would require the Treasury Department to advocate with IMF and World Bank to cancel debts to developing nations. It based explicitly on this reasoning:

The group has timed its campaign to coincide with a new biblically based Sabbath year, which calls for debts to be forgiven once every seven years. After seven cycles of seven years, a Jubilee year, when debts should be forgiven and land given back to the poor, is mandated. The last Jubilee year was in 2000.

Actually, scholarship I have read suggests that payment on debts was “suspended” every seven years, not truly “canceled.” Payments on debt resumed after the Sabbath year. All debts expired (not canceled) at the Jubilee.

The Jubilee code is given in Leviticus 25. Verses 14-16 make clear that the land transactions outside of city walls were essentially lease agreements not loans. The price was determined by the number of crops expected between the transaction and the next Jubilee. Consequently, when the Jubilee year arrived there was no “debt” to cancel. The lease simply expired.  Verses 39-41 describe labor arrangements in the same way.

Furthermore, it is not true that land was “given back to the poor.” Everyone had an inherited land claim and everyone returned to their ancestral land. This was not land distribution to help the poor. It was mechanism that, among other things, placed a cap on lending and borrowing.

Now all of this says nothing about the merits of canceling debts to developing nations. The article says, “The bill calls for debt cancellation for every country that needs additional funds in order to meet the United Nations' Millennium Development Goals.” This may indeed by a prudent move but it has nothing to do with the supporting biblical prooftext.

Moses and the Minimum Wage

Second, the Athens, Georgia, Banner Herald ran an opinion piece by an Episcopal priest, justifying her advocacy of the minimum wage:

Why do people of faith need to raise the minimum wage? Because Moses led the Hebrew people out of slavery in Egypt. He received a covenant that empowered living life as a free people: physically, socially, economically and spiritually....

That's why God led the people out of slavery in Egypt and sent the prophets to the kings every time they began to make it hard for ordinary folk to survive. So, if we love this God, we will want for our neighbors the same good things that God wants for us: to live in health and safety with enough to eat, and a day of rest to enjoy and give thanks for all our blessings.

Right now we have a perfect opportunity to live this out by supporting an increase in the minimum wage and to continue to do so until it becomes a living wage.

First, businesses have a responsibility to pay a just wage. A just wage consists of whatever two uncoerced parties agree to. In an open economy, if the worker does not like the wage, he or she has the option to seek employment elsewhere. No employer can compel a worker to worker for any rate. The comparison to slavery is ludicrous.

Second, it is not a business’ responsibility to pay a living wage. By way of analogy, suppose you have 16 year old in your neighborhood who will mow your lawn for $20. He takes the job to earn some spending money. Now suppose you have 26 year old who is married with two kids who will cut your yard but needs $80 to have a “living wage.” He is no better at his work than the 16 year old. Are you morally obligated to pay the older man a “living wage” for the same level of productivity you can pay an unskilled 16 year old?

Now let us create a minimum wage of $40 an hour for mowing yards of your size. What is each of us likely to do? Some of us will continue to pay the higher rate. However, many of us will opt to mow our yards ourselves. Others will choose to cut less frequently. Others may opt to grow ground cover that does not need mowing. Still others will pay a lower price “under the table” to get a cheaper rate. The net effect is that, while a few get a higher rate, fewer 16 year olds have the opportunity to earn spending money and fewer men like our family man will be able to find any work because people will cut back on hiring and use other options.

Now, instead of you hiring someone to mow your lawn, imagine a business owner hiring workers. Wages are not paid based on providing a living wage. Wages are based on the level of productivity a worker brings to a business and the relative supply of similar workers in the labor force. Whether the worker is single and childless, or married with ten children, is irrelevant to the employer. Pay is according to the economic contribution the worker makes to the business. If the worker needs more pay, then he or she hsabeen given the economic signal that he or she needs to look for another job or improve his or her skills and gain experience.

The fact is that about 5% of the working population earns less than the new proposed minimum wage and only about half a million people work at the minimum wage. Half of minimum wage earners live in households with more than $40,000 in annual income. Only about 15% live in poverty households. Minimum wage is a temporary wage for most people as raises come with experience and increased productivity. Significantly raising the minimum wage will benefit some earners currently in the workforce. However, just like the lawn care analogy, many jobs that otherwise would have been created will not be created as employers opt for more cost effective ways to achieve the same ends. They will be less inclined to take chances on unskilled and unproven workers. Meanwhile, as some workers earn more, business owners raise prices to compensate for the mandated wages. Inflation heats up and inflation usually has the biggest negative income on the low income. Their higher wages by less and less. You can no more wish away the law of supply and demand than you can suspend the law of gravity.

Third, the Episcopal pastor is right that societal justice should have as its goal for everyone “…to live in health and safety with enough to eat, and a day of rest to enjoy and give thanks for all our blessings.” But she conflates the mandate of society with the mandate of business. Business is one institution of society that has a responsibility to pay a just wage as defined above. But society consists of other institutions like family, church, charitable institutions, and government. Some people will never be able to care for themselves and society's institutions have a responsibility to care for them. Some need assistance to become productive members of the community with skills and experience that will command a living wage. But this is society’s role, not the role of businesses as one sphere within society.

Now there may be some valid reasons for having a minimum wage at some level (Especially in trade negotiations with nations that do not have economic freedom.) That is debate worth having. But to suggest that raising the minimum wage is the equivalent to lifting people out of slavery is just silly.

"Law of the Commons" Stewardship

Last month, Beliefnet did a story about a movement to boycott bottled water. It is heavily backed by the National Council of Churches and Mainline social justice groups. The campaign objects to commodification of water becasue they believe access to water should be a basic human right. Here are some excerpts from the article Groups Hope to Make Bottled Water a Moral Issue:

Rooted in the notion that clean drinking water, like air, is a God-given resource that shouldn't be packaged and sold, a fledgling campaign against the bottling of water has sprung up among people of faith.

.......

In the developing world, Carmichael said, water is being sold as a commodity where the resource is scarce. With the rationale that bottling water takes water resources away from the poor, Carmichael said the environmental issue has become an important one for people of faith.

"The moral call for us is not to privatize water," Carmichael said.
"Water should be free for all."

.......

But Rebecca Barnes-Davies, coordinator of Presbyterians for Restoring Creation, said bottled water companies encourage a culture in the U.S. that is comfortable with privatizing a basic human right.

She said she hopes boycotting bottled water will put pressure on bottled water companies to behave responsibly in the U.S. and the rest of the world.

"As people of faith, we don't and shouldn't pretend to have ownership of any resource -- it's God's," she said. "We have to be the best steward we can be of all those resources."

Let us start with the concept of “steward.” The word itself originates from the combination of two Old English words “sty ward.” It refers to the keeper of the pigs. The herd of pigs was often the most valued possession of an English lord so he placed his most trusted servant in charge of the herd. Steward is the word used in older English versions of the Bible to translate the Greek oikonomos, or household manager. (Oikonomos is the word from which "economics" originated.) The owners of large villas would frequently take extended leave of their estates and place them in the hands of an oikonomos. This is the imagery Jesus draws on in his Parable of the Talents in Matthew 25. The steward of the estate had direct control, exclusive of the claims of others, in the management of those resources.

The idea of stewardship as common ownership is not the biblical concept. The Old Testament law is filled with laws about respecting property rights and just systems in exchanging property. The Jubilee code is a prime example of God setting up each Israelite as a steward of a commodity (i.e., land) apportioned to the people.

Second, the advocates’ position invokes the time tested and repeatedly discredited economic idea of “the law of the commons.” In short, when everyone owns a commodity, then no one owns the commodity. Because no one experiences direct personal loss by squandering the resource there is no incentive to conserve and better allocate the resources. The Economist ran an article last November called Clean Water is a Right. The article began with this anecdote:

Growing up on the shores of Lake Victoria in the 1950s, Anna Tibaijuka would earn a couple of cents by sorting coffee beans for her father. With one of these coins she would buy a sweet from an Indian shopkeeper. With the other, she would buy potable water from a kiosk.

But when she returned to her hometown in early 1960s, the kiosk was no more. Julius Nyerere, Tanzania's first president, had declared water free. When it cost a cent, not a drop was wasted, Mrs Tibaijuka recalls. But when the tap ran freely, water was squandered, and—inevitably—stopped.

This is not a particularly new insight as was observed recently at the Acton PowerBlog:

As Thomas Aquinas observed, “It is lawful for man to possess property.… Human affairs are conducted in more orderly fashion if each man is charged with taking care of some particular thing himself, whereas there would be confusion if everyone had to look after any one thing indeterminately.”

Water may be a right but it is not as if water bottlers are sucking up all the water away from poor communities and then selling it to them. It simply isn’t physically present for more than a billion people and the water has to be delivered somehow. As the Economist article notes:

Whether or not water is a right, it is also a commodity which, unlike liberty of expression or freedom from torture, is costly to provide. If those costs are not covered, water will not be supplied. Moreover, unlike most human rights, a litre of H2O enjoyed by one person cannot be consumed by anyone else. If some people underpay and overconsume the stuff, there will be less of it for others. As the human development report puts it: “Underpricing (or zero pricing in some cases) has sustained overuse: if markets delivered Porsche cars at give-away prices, they too would be in short supply.”

But can the poor afford to pay the costs of supplying water? Not without help, the report argues. As a rule of thumb, it takes about $10 a month to supply a household in a poor country with the water it needs to subsist , according to Vivien Foster and Tito Yepes of the World Bank. They calculate that about 90% of Latin American households could afford a water bill that size, without spending more than 5% of their income. But in the continent's poorer countries, such as Honduras, Nicaragua and Bolivia, 30-50% of urban households could not stretch that far. And in India and sub-Saharan Africa, more than half of households would struggle to pay.

It goes on to say:

The poor would be puzzled to hear that the profit motive is in retreat. As the report points out, many of them rely on water freelancers—laying pipes, drilling wells, or trucking water—who sell water to people unserved by public utilities. In Latin America this “other private sector”—as Tova Maria Solo, a World Bank analyst, calls it—shows business acumen and sets surprisingly keen prices.

Once again, we can no more repeal the laws of supply and demand than we can repeal the law of gravity. The poor are paying right now to get clean water, bottlers or not. They always have been. But as much as 80-90% of the populations in developing nations have no legal title to their land and homes. Antiquated and corrupt property rights policies keep the real estate property of the poor in official limbo and you can’t effectively run public service lines to people who you can’t be billed and taxed. They don’t legally exist. Water delivery comes at the hands of entrepreneurs and freelancers operating outside the legal system.

There is no question that clean water is a staggering problem that needs the cooperation of market players, charitable organizations, Non-Governmental organizations, and governments. But the concept of boycotting bottled water to protect some idealistic and non-biblical concept of common ownership is thoroughly misguided.

Speaking Nonsense to Power

What these three stories illustrate to me is the overwhelming economic illiteracy of so many religious leaders. Have they ever bothered to open a introduction to economics textbook and inform themselves about the most basic dynamics of the problem they are working with? I doubt it. Just as some chide the Religious Right for their “plain reading” of Scripture and prooftexting, the Religious Left does precisely the same thing. Just as with a the Religious Right, there is a considerable amount of sanctimonious arrogance. But mostly there are good intentions poorly expressed.

What is paramount is to too many on the Religious Left is being “prophetic” and “speaking truth to power” on behalf of the poor and the oppressed. Actual consequences based on incontrovertible realities like supply and demand are ignored. Solidarity in intension and condemnation of dissenters is everything. Such is the practice of social justice among too many on the Religious Left. It is has become an exercise in speaking nonsense to power. And just as with the Religious Right, those truly interested in righteousness and justice would do well to ask hard questions.

Comments

[Virgil]

Just an awesome post Michael! This has to be one of your best entries I've seen so far :)

[Michael W. Kruse]

Thanks Virgil. This one has been building up for a while. I am finally getting some time to really focus again on writing some things.

[David M. Smith]

Hi Michael,

Great piece!

Someone on the left wouldn’t need to take an economic class to understand what you have written, they would just need to read what you have written with an open mind and while not on medication.

Forgiving the debt of a debtor who is unable to repay the debt due to bad fortune is a moral imperative. However, forgiving the debt of a corrupt military government in Zimbabwe is moral idiocy.

Do these religious leaders on the left have no compassion for all of the people who work hard and put a portion of the proceeds of their work into savings accounts that turn into loans for African nations?

[Quotidian Grace]

A most excellent piece, Michael! Your examples are well taken and analyzed. Thanks for this.

[Michael Kruse]

Thanks for your comments y'all. I am suprised you could make sense of it. I discovered I inadvertently deleted my final draft and posted an earlier uneditied draft. Hopefully it reads better now.

[RonMck]

A good post Michael

When people say that something should be free, they are really saying that someone else should pay for it.

[will spotts]

Excellent post Michael.

[Michael Kruse]

Thanks you guys. Ron I have been reading some of your posts. I want to go back and read free market posts. I like the way you explain things.