Biblical Landmarks

Archive for the ‘Economics’ Category

If a Thief Hands You Stolen Money, What Should You Do?

Returning to Australia for my son’s wedding, it did not take long to be reminded of many of the issues that dropped out of sight while living in America.

At the top of the list is the Australian concept of socialism. Socialism is the idea that the government takes control of all resources within the nation and allocates them in some fashion. Frederick Hayek drew the distinction between communism and socialism when he observed that in communism, the government owns everything and allocates according to government plan. Under socialism, ownership remains in the hands of individuals, but the government determines the allocation of the privately-held resources. The Australian government pretends it is neither socialistic nor communistic. But as Ludwig von Mises argued so clearly, the middle-of-the-road policy is the road to full socialism. You cannot control part of the economy without controlling all of it.

The key issue here is one of ownership and the meaning of the idea of ownership. “Thou shalt not steal” establishes the right of private ownership, ownership being the right of dispossession. This is the key. If you cannot dispose the things you own in the manner in which you would like, you don’t own the thing. Whoever controls the dispossession is the real owner, even though there may be official papers giving title to the individual.

In the modern world, it is taxation, perhaps more than anything else, that determines the biblical framework of ownership. The government not only takes for itself the right to tax, but it also allocates to itself the right to determine how much tax it might be entitled to. This is important because it raises the question of property ownership in money. It doesn’t exist any more. But it did exist at one time, when the Bible provided the prevailing philosophy.

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The sky is falling. Doom is near. Buy this or that stock. Buy gold. Buy anything that is a hard asset. Get rid of paper.

Why?

The economy is falling.

Why?

Because house prices have fallen.

So?

Bankruptcies are up.

So?

Doom is nigh.

That’s funny, I thought you just told me that house prices are falling? This means the purchasing power of my money in relation to homes has gone up. How is that a disaster?

Silence.

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I know what you’re thinking. What would this Australian know about American politics? Right?

You may be right. I don’t know much.

But I do know my Project Director Carol. She’s almost my age , and one of the hardest workers in the company. She works to support her husband and daughter. Why?

For one thing: health insurance.

You see, Carol had her own consulting business. Making decent money, her husband, 10 years older, was in real estate. They had been paying their health insurance for 19 years. On time, too.

Then it happened. She had a car accident. Her back was broken in two places. Three months later, her husband had the first of three heart attacks. She sued for the insurance money, got paid, but had to settle earlier than was possible in order to get money.

Her husband was in hospital, ready for an operation, when the news came. Your health insurance has been canceled.

For an American, those six words are some of the deadliest it is possible to hear. “Your health insurance is canceled.” Now what do you do?
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“The primary cause of financial struggle is simply not knowing the difference between an asset and a liability.” So says Robert Kiyosaki in his book, Rich Dad, Poor Dad.

Economic categories are no longer what they were. It is now common to hear government officials say that the revenue they did not receive was a “cost” to the government.

Imagine going to the company accounting system and entering an amount in the costs of the company for revenue that was not obtained. “Let me see, we should have had another $10 million this year. Let’s put that in as a cost to the business. Better still, make it $10 billion.”

And you think corporate fiscal accountability is bad. Read the rest of this entry »

The first argument against the use of debt is that the Bible tells us very plainly to avoid it. In a passage in Romans 13:8, the apostle Paul, writing under the inspiration of the Holy Spirit, tells us that we should “owe no one anything except to love one another” (Rom. 13:8a).

There are some, however, who argue that this passage is not referring to financial debt. Commentators are divided on the matter, and when the scholars disagree it is often difficult for the layman to form an opinion. Their position, however, is usually presented as a statement without supporting evidence. Read the rest of this entry »