Here are the eight myths about economics that Jay Richards says Christians regularly fall into:

1. The nirvana myth (contrasting capitalism with an unrealizable ideal rather than with its live alternatives)
2. The piety myth (focusing on our good intentions rather than the unintended consequences of our actions)
3. The zero-sum game myth (believing that trade requires a winner and a loser)
4. The materialist myth (believing that wealth isn’t created, it’s simply transferred)
5. The greed myth (believing that the essence of capitalism is greed)
6. The usury myth (believing that charging interest on money is always exploitative)
7. The artsy myth (confusing aesthetic judgments with economic arguments)
8. 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)

And this (finally) is the last post on the fantastic book: Greed, Money, and God.

Read Kevin DeYoung’s interview with him.

And HERE is Richards talking about the book on C-SPAN.

Whatever your opinion about the environment, it should be based on real data, not Datline NBC.  You’re always free to fear the future.  But remember: every predicted global environmental catastrophe based on current trends has proved false.  If we look at long term historical trends, in contrast, the evidence of declining energy costs, increasing energy abundance, and growing prosperity provides no basis for such pessimism.

Jay Richards: Money, Greed, and God

Feminist theologian Sallie McFague says in Life Abundant:

We do not love nature or care for two-thirds of the world’s people if we who are 20% of the population use more than 80% of the world’s energy.  There is not enough energy on the planet for all people to live as we do (and increasingly most want to) or for the planet to remain in working order if all try to live this way.

Jay Richards replies:

But what exactly does McFague mean by “80% of the world’s energy”?  Presumably the “world” refers to the earth, and not the universe.  But she can’t be thinking of all the energy in all the earth’s matter.  That amount of energy is almost unimaginably high.  At any time, we’re using only the tiniest fraction of that.  Besides, the earth isn’t a closed system.  We get energy from the sun.  Thus, she can’t be talking about all the currently feasible energy sources, since there’s a whole lot of uranium, sunlight, wind, waves, and river currents, for instance, that we’re not using for energy.  And she’s quantified the total so precisely that she can’t be referring to all the oil, since we don’t know how much oil the earth has.  So she must be referring to the total amount of available energy being produced at the moment.  And that one little verb changes the picture entirely since it begs the questions, Who’s producing it?

Usable energy isn’t just sitting in a batter somewhere, first-come, first-served.  Somebody has to produce it.  So unless the energy consumers are stealing from the energy producers, what’s the problem?  Some places produce, buy, and consume more energy than other places.  The problem isn’t that some places are able to produce or buy ample energy.  The problem is that other places are not.

Sometimes it makes sense to buy locally.  In the summer, I can get the best vine-ripened tomatoes at the Fulton Street farmers’ market about a mile from my house.  But applied to everything, the advice to “buy local” ignores most of the lessons of basic economics.  If correct, the United States would be better off if we had stayed separate colonies trading goods, services, and capital only within the borders of each colony.  And we’d be better off it the individual cities just traded within their borders, and still better off it the neighbors–wait–individual families–wait, individuals–just traded with themselves…

If you remember the trading game, you know that the larger the arena of free trade, the better off are its participants.

Six billion people trading only with themselves, or only with their families or closest neighbors, would not create 6 billion self-sufficient people.  It would create several billion dead people, and leave the rest to eke out a meager existence as subsistence farmers, hunter-gatherers, or scavengers.  Division of labor, in which individuals, cultures, and countries can specialize in area that give them competitive advantage (that is, in what they can do best, or at least better than many others) and trade for other things, has created vast wealth and allowed billions of people to live who would otherwise have died or never been born.

Jay Richards: Money, Greed, and God

From Jay Richards.

The three richest people in the world control more wealth than all 600 million people living in the world’s poorest countries.

This is the mother of all gaps between rich and poor.  If it upsets you, then it’s done its job.  It’s designed to make you react, to feel morally indignant–but not to think.

Let’s do some thinking anway.

What’s the point of the comparison?  Is it that some people have way to much money?  Are we supposed to think that if Bill Gates weren’t so rich, the 600 million wouldn’t be so poor? Or worse: are we to suspect that Gates somehow extracted that wealth from the 600 million poorest people on the planet?

We should worry about absolute poverty in the world, especially if we’re in a position to do something about it.  But worrying about gaps between different groups of people is not the same thing as worrying about absolute poverty.  In fact, most such gaps are distractions.  Complaints about gaps almost always reflect a basic confusion about the nature of wealth…

The verb betrays the bias.  Why does it say that the three rich guys “control” wealth?  Why doesn’t it say that they “own” or “earned” or “have created” wealth?  Let’s try it:  The three richest people in the world have created more wealth than all 600 million people living the world’s poorest countries.  That certainly sounds different, doesn’t it?

Even if the gap between the rich and the poor grows over time, it doesn’t mean that the poor are getting poorer, because the total amount of wealth may have gone up…

We rightly see poverty as a problem, just as disease is a problem. But the problem isn’t that some people are rich and some are poor, any more than the problem of disease is that some people are healthy. The problem is quite simply that some are poor. If we want to bask in the wasteful heat of self-righteous moral indignation, then by all means, let’s keep blathering on about income gaps. But if we really want to help the poor, we need to get our eyes off decoys and focus on the real problem—poverty—and its only known solution: creating wealth.

 

I don’t know much about economics, but Jay Richard’s book, Money, Greed, and God, has been fascinating.  Here are some facts from the US. Census Bureau about Americans classified as “poor.”

• Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
• Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
• Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
• The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
• Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
• Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
• Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.