Monday, June 17, 2013

Is Keynesian economics actually Biblical?

I haven't studied much economic theory, but of late I've come to appreciate the writings of Paul Krugman, a columnist for the New York Times and an economics professor at Princeton University. Krugman has identified himself as a disciple of John Maynard Keynes, the 19th-Century British economist who, if I have my facts straight, supported government (read: political) involvement in the economy. Needless to say, Krugman gets a lot of flak from conservatives for that belief because of their dogma that government "meddling" can make things only worse.

But one thing that Krugman consistently writes is that the biggest threat to American economic well-being is the stubborn rate of unemployment, especially among the young. And his argument that present-day "austerity" programs that cut government spending are simply counterproductive in the long run makes sense to me.

Why is that? Well, one thing that cannot be denied is that a healthy economy has money circulating through it on a consistent basis, which is why Keynesians support government spending -- what's known as "priming the pump" -- when times are bad. Indeed, the primary difference between poor and rich neighborhoods is the number of times money "turns over" in a community before it leaves.

Of course, that doesn't go over well with critics of Keynesian economics -- "folks have to live within their means, and that includes government." But it misses the point that those with the means to do so need to invest -- to take risks, in other words -- for the sake of economic growth.

That simply isn't happening, however, especially with the 1980s advent of "supply-side economics" -- which not only didn't work but, I would submit, was never really supposed to work. It just allowed those with more means and power to sit on their cash and not release it for the sake of making more. But when you focus only on the bottom line you end up with a stagnant economy and the sclerotic politics that results from people focusing only on keeping whatever they have.

So what does this have to do with the Bible? Well, let's consider the year of Jubilee that was instituted in ancient Israel, at the end of the book of Leviticus. Every 50 years all debts were to be cancelled and land returned to the clan that originally owned it, so that no one became obscenely rich or, more importantly, desperately poor for long stretches. (There is no evidence, however, that this system was actually carried out.)

The basic principle is that long-term concentrated economic power is eventually ruinous to a society because, well, the more you get the more you want and you'll manipulate the system -- and pervert Biblical justice -- to keep it.

And in this country a lot of Christians are filthy rich. I'm not knocking that per se, only that the wealth can actually become a spiritual snare because then you can feel entitled to what only God gives for specific purposes. This is why "charity" doesn't suffice to help the poor, who under such a system are still at the mercy of the rich.

None of this is to say that the Scripture favors one economic theory over another, but Krugman and, by inference, Keynes hit on an important truth that we need to consider: Our culture of "hoarding" doesn't do anyone any good. So perhaps we need to change policy so that people who don't have can possibly "get."

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